Out of Town Supermarkets

John Pugh Excerpts

Tuesday 24th June 2014 Westminster Hall

[Mr Philip Hollobone (in the Chair)]

This topic is very important in the constituency of Kettering, and I am sure it is very important in Southport. We are about to find out why.

[John Pugh (Southport) (LD)]

I thought this debate might be of particular interest to you, Mr Hollobone, and I am delighted to see you in the Chair, as I am sure that quietly, at least, you will make your presence felt. The hon. Member for Rochdale (Simon Danczuk), a fellow member of the Communities and Local Government Committee, is here as well and he probably has concerns similar to mine. There are other Members who, recognising that this is a half-hour debate, have not deigned to turn up. None the less, they have precisely the same sort of issues in their constituencies as we do in Southport. These are not just Southport issues, but issues that affect people in general.

Town centres are a big political issue for the Government—DCLG Ministers have a lot of programmes afoot to revitalise and re-energise them—and for MPs, because nearly every Member has a substantial town centre in their constituency that they wish to see preserved, and full of life and vitality. Constituents routinely bring up the issue of town centres when they observe empty shops and some of the current dereliction.

Essentially, therefore, we are all on the same page. The Government want a revitalised high street, and we all, whether we are MPs, the Government or constituents, want to see community life pursued via the high street and the range of activities that take place there. That might involve some activities that are problematic, such as betting, but it usually involves shops, retail, businesses, cafés, restaurants and an awful lot of nail bars. It is extraordinary; I am not sure why they have grown up in such abundance, but it is all part of the way and purpose of ordinary British life, if I can put it like that.

We are also keen to see independent retail thrive, because there is a danger, even if retail were at its most vibrant, that every town centre will end up looking similar, with the same shops and offers but without any of the interesting and intriguing breakthrough companies that one can see when visiting a new place. I think we all acknowledge that such desires imply some form of restraint on out of town development—the characteristic sheds and tarmac that exist on the edge of pretty much every substantial town and elsewhere. If that is our ambition, the reality seems to indicate that we are far from achieving it.

My speech relies extensively on the Association of Convenience Stores report, “Retail Planning Decisions under the NPPF”. In that document and others, the association demonstrates that some of the prime retail movers—the supermarkets—are expanding more rapidly than ever in out of town developments, despite the various noises made by the Government and the apparent planning restraints.

If we actually believe that town centres are vital and that out of town development should be restrained, why does planning policy not deliver on those aims? After all, planning policy in that direction is well established. One has to go back to 1996, which, looking around the room, I think was before any of us were actually in Parliament, to find the advent of the “town centre first” policy. If we examine how it is panning out at the moment, we see that its effect is arguably weakening, supermarkets are becoming ever better at getting their own way and out of town retail is proceeding pretty well unabated despite everyone’s efforts.

How is that happening? A case must now always be made for out of town development, but the big retail movers, by which I largely mean the supermarkets, are pretty good at stating their case in a variety of clever ways. One is to minimise the impact of what they are doing. They typically say that their plans will have a limited effect on the town centre or that a new project will have an impact largely on the existing sheds in an out of town development. Such a case often carries weight in front of the planning committees of the land. However, the claims are not borne out by the figures. Monitoring of the post-hoc effects of various developments shows that the effect is greater and more significant on town centres than was initially claimed and that out of town developments experience a lesser effect.

When arguing for out of town development, big retail movers also tend to exaggerate the jobs benefit. A planning application for a project launch will often talk about the huge number of jobs, often in the hundreds, that will be created. However, that number is not a net figure and does not analyse the quality of jobs provided. The number does not state whether the jobs are part-time or casual or whether they will ultimately be replaced by automatic checkouts as systems become ever more mechanised. The manner in which such cases are put forward is extraordinarily effective and plausible, but they should not be taken as credible in the long run if the after-effects are monitored against the projections, which is rare.

[Simon Danczuk (Rochdale) (Lab)]

Does the hon. Gentleman agree that the Association of Convenience Stores research suggests that the situation has worsened since the introduction of the national planning policy framework, which calls into question the effectiveness of the “town centre first” policy?

[John Pugh]

That case is extraordinarily well argued in the document. The ACS is obviously an interested lobbyer, but it has undertaken effective monitoring, which the Government have not done, of what happens after the event compared with what applicants say when planning permission is applied for.

When applying for such permission, supermarkets go armed with persuasive, expert consultants, planners and researchers and can offer a view of the whole retail environment that the council hearing the application cannot really judge for itself, because planning departments are, by and large, severely under-resourced. The lack of resources is due to local authority cuts, but planning departments have never been particularly well resourced and are often short of independent data, which costs money. They are also unable to face up to the costs of refusal, leading to an expensive appeal process. Planning departments across the land are hurrying to get housing figures in place, but they are not doing much work, number-crunching or thinking about the retail environments that they often strive to protect.

Ultimately, planning departments are also vulnerable to what I was going to call “bribery”, although I do not want to use that word because individual bribery is not involved. However, a supermarket wanting to get its way, whatever the effect on the town centre, will normally present its case by suggesting that, due to some attractive agreement under section 106 of the Town and Country Planning Act 1990, something that the council wants, such as a traffic development, can be delivered as part and parcel of a new development. On one side is the threat of an expensive appeal and on the other is the bribe that granting permission may lead to some benefit that the council may not be able to accommodate through its own resources. That is generally what the monitoring of such developments shows.

I ask the Government to undertake some of their own monitoring, because two Government policies are not sitting together well at the moment. The national planning policy framework is leading to a weakening of the “town centre first” policy, but Ministers in the Department for Communities and Local Government are emphatic that that is their policy and are putting lots of energy into it, suggesting how it can be improved, engaging Mary Portas and so on.

A key element in the process is the mechanism that is supposed to be used to decide whether an out of town development should go ahead: the sequential test. Essentially, it is a question put to the supermarket or other developer that asks whether there could be a better in-town development that would have the same effect. Why should they go out of town when in town offers the same opportunity?

In the hands of developers, however, the question becomes rather trickier than it might first seem. Developers tend to say that there may be sites worth considering in the town centre, but that it is most unlikely that those sites will allow the replication of the format that they intend for out of town developments—town centre sites may be a possibility, but are not what they want. When that argument is pursued, a planning committee will often become nervous and find itself on unsteady ground.

As an illustration, I will describe the situation in Southport, about which hon. Members may or may not know. Southport’s attraction as a town that visitors come to and enjoy themselves in is probably based on two things. First, there is a leisure offer from the seaside environment and all that comes with it. Secondly—this is part of its enduring appeal—Southport has a distinctive retail environment. We have a long main street called Lord street, which is uncharacteristically stocked with shops along one side only. It is known widely in the north-west, if not further afield. Some even say that it inspired Napoleon III to construct the Champs-Elysées in Paris, which may be slightly exaggerated, but it is a distinctive retail environment none the less. In many retail environments, malls and town centres, one could be knocked unconscious and brought round in another and not notice the difference, but the distinctive smaller shop units of Lord street, with their canopies and Victorian charm, are part of what gets people to Southport in the first place.

In the downturn, the retail offer in Southport has, frankly, worsened. There is less retail and more shops are empty—13% of all shops in the town centre are now vacant. There is also less quality retail; some of the shops are not of the quality of years gone by. There are charity shops in Lord street now; they simply would not have got through the planning committee years ago. We have seen, as every town has, the withdrawal of the big chains, which have folded up and moved elsewhere, and there has been a general loss of independent shops, whether because of the economic environment, rates or high rent. We also have a series of absentee shop owners in Southport, who are not aware that the economic climate has worsened and are charging unrealistic rents.

Like every town centre, we have responded to that situation. Every town centre needs to get smarter. We need to look hard at click and collect, and we are reviewing parking. Recently, we set up a business improvement district. If possible, would the Minister take a message about that away from the debate? At the moment, the business improvement district is awaiting proper authorisation by the Minister’s colleagues in the DCLG. The council tells me it has not received a prompt response that would enable it to go ahead and develop the bid or allow the bid to go live. If the Minister would address that in passing or make inquiries about the correspondence with Sefton council on that issue, I would be grateful.

The actions I mentioned are things that we can all do and that Southport has done. What we definitely do not need in the town centre is reduced footfall. That is the prospect at the moment, however, because of a large application on the part of Sainsbury’s. If I detain Members a little longer to tell them more about the specific environment, they will understand the burden of my complaint. We have supermarkets in our town centre. We have a Morrison’s, a smaller Sainsbury’s, an Asda on the edge of the town centre, which was forced to be in that place—Asda wished to go elsewhere—a Food at M&S in the Marks and Spencer, and a big out of town Tesco.

Our problem at the moment is characteristic of the problems aired in the ACS report: Sainsbury’s wants to follow Tesco out of town. Retail studies have shown that there is unmet need, based on figures of overtrading—we can argue about those one way or the other, but let us accept them for the moment—and that we could do with another 4,000 square metres of retail food space. Sainsbury’s is proposing to build an establishment of 10,000 square metres, knocking down an existing Homebase to build a superstore.

There is a town centre plan that favours protecting the town centre, but to me it does not look robust or strong enough to prevent the demand for a very large superstore right on the edge of town. That development, in my view, would be detrimental to the life and vitality of the town centre, and ultimately to Lord street and the economy of Southport as a whole.

At this point, a planner would ask Sainsbury’s—or whichever company it might be—whether there was a site nearer to hand. This particular case illustrates perfectly my earlier point about how supermarkets react, because in fact there is: there is an old Morrison’s store vacated when Morrison’s merged with Safeway. There is a big council car park opposite it and a multi-storey car park above it, so there is no issue with parking. It has desperate owners, who want to rent it, and short-term tenants who will not stay there for long. It has been vacant for the bulk of the past 10 years, and is an attractive site for anybody who wants another supermarket in town. It is ripe for development, but presumably, in its infinite wisdom, Sainsbury’s thought that it would prefer to go outside and that it had a case for doing so.

In a case like that one, there is a vacant supermarket that the applicant will not use and a proposed out of town development that could be corrosive for the town centre. If such a case can get through a planning committee, we have what is almost a classic illustration of the techniques that, according to the ACS, are used right across the land.

[Julian Sturdy (York Outer) (Con)]

The hon. Gentleman is making a strong argument, and the case he is making about his own constituency reminds me of an issue in mine. Does he agree that we need local authorities to have detailed retail impact assessments in place, so that the impact of supermarket developments can be properly assessed, threshold levels can be defined and future sites identified? That way, local authorities would have at their disposal tools that they could use to refuse applications if appropriate and to defend appeals against what can be quite strong opposition from supermarkets, which have a lot of financial capability at their disposal.

[John Pugh]

The hon. Gentleman is absolutely right. The onus is on local town planners and councils to have a positive view of where their town is going, which aligns with what is commercially possible. I thoroughly endorse what he has said. To some extent, the problem for councils at the moment is that they are concerned—and the Minister is pleased about this—about finding forward-looking plans apropos housing, but are sometimes leaving retail and the commercial community to sort themselves out. They will not do so to everybody’s satisfaction.

Going back to the situation that I am confronting, I am certain that Sainsbury’s has thought about the sequential test—it is not so stupid as to put in an application and not think about whether that test will apply. But it must be fairly confident that if the test does apply, and even if there is a site available nearby in the centre of the town with adjoining car parking, which has previously been a supermarket and is bigger than the site it currently has, the sequential test will still not be an obstacle. Supermarkets do not waste their time when putting in applications. If that is the case, the sequential test is very weak indeed.

I have no grudge against Sainsbury’s—I am a Sainsbury’s shopper myself—but on a negative note, from where I am standing, it seems happy to destroy the Lord street environment; it must know it will have a severe impact there. That ultimately means that it is happy to destroy part of the town’s visitor base to get its own way. I do not blame Sainsbury’s for wanting to get its own way. In an article on the PoliticsHome website today, I compared supermarkets to the mafia. Now, they are clearly not as bad as the mafia—nobody gets killed—but the analogy works in a way, because they do the same sort of things. They make a promise, sometimes, of a development that the council will like alongside a development that the council is less happy about. They have the threat of the appeal. They do all sorts of community-minded things, such as having charity collections and so on. They carve up territory between themselves, bully their suppliers and have huge and deep-rooted political connections.

Supermarkets are pretty good at getting their own way and are pretty single-minded, but the outcomes they want are connected purely to their bottom lines. Now, I am not judging that; I do not expect commercial organisations to be automatically or naturally philanthropic. They do some good things, such as having recycling centres, making good environmental noises and all that sort of stuff. However, the one thing they will not do if they do not have to is care about town centres. I am not judging that—it is the way they are—but I think it is the Government’s job to manage that issue. We cannot have thriving town centres and gung-ho out of town developments. Even if the public think that is the optimum outcome, it is not possible.

[Simon Danczuk]

I have had many happy times in Southport over the years and I commend the town to others. What would the people of Southport conclude if they were consulted? What would be their preference?

[John Pugh]

That would depend on how the choice was offered. Sainsbury’s and other supermarkets carry out consultation among nearby residents. If people are asked whether they want a large supermarket nearby with every conceivable object they could ever wish to buy, they will say yes. If they are then asked whether they would like to walk round a town full of shops that are empty because no one goes there any more, or told that if they do not have a car they could not do any shopping, they will say no. The public may not always be as aware as we should be about the knock-on consequences of one development on another. I hope that the Government are, and that the Minister is, and I hope that he can give me some comfort that there is a rational solution to the problem.

[The Parliamentary Under-Secretary of State for Communities and Local Government (Nick Boles)]

It is a great pleasure to serve under your chairmanship in this important debate, Mr Hollobone. I congratulate my hon. Friend the Member for Southport (John Pugh) on securing it, on a subject that is obviously and evidently of great personal interest to him.

You will understand, Mr Hollobone, my anguish and dismay at having to admit that I do not agree with much of what my hon. Friend said. Coalition is strange and curious and I suspect that many of us—not least, I suspect, my hon. Friend—have at times found it trying, but it works best when we admit to some differences in starting points while nevertheless hopefully being able to reach consensus on how to move forward. It is with what I believe is my hon. Friend’s starting point that I am in greatest disagreement.

I am firmly of the view that supermarkets have been a powerful force for social and economic good in this country for the past 50 years. I am firmly of the view that people on modest incomes around the country, in his constituency of Southport and in mine of Grantham and Stamford, have the opportunity to buy a range of quality food and other items that were unaffordable or unavailable to all but the very rich when I was growing up, and probably when my hon. Friend was growing up.

[John Pugh]

I think the supermarkets, like coal mines, have been extraordinarily good for the country as a whole and an excellent development. My argument is not for or against supermarkets, but about their placing in a commercial environment. Just as a coal mine is a good thing, one does not necessarily want one nearby. A supermarket may be an excellent thing, but one wants it in the centre of town.

[Nick Boles]

I wish I could accept that that is what my hon. Friend was saying. He accused supermarkets of behaving like the mafia, and talked of them bribing and threatening. When he said supermarkets may do good, he then mentioned recycling as if the provision of high-quality, low-cost products to people on low incomes is not in itself a good thing, and employing thousands of people on flexible time scales that fit in with family life is not a good thing. I profoundly disagree with that characterisation of supermarkets.

Nevertheless, I am in agreement with my hon. Friend, as is Government policy, that it is important to find a way to encourage and promote development of new supermarkets to fulfil a vital and much appreciated need and the equally strong desire to preserve the range, vitality and diversity of retail uses in thriving town centres. That is the difficult balance that Government policy, as he observed, throughout the last Government and the present one—

--- Later in debate ---

[Nick Boles]

No one is wilier than the hon. Gentleman at putting words in my mouth that I did not say. For the record, I make it clear that I do not accept that the rate of approvals for out of town developments has gone up. We will look at the evidence that has been presented, and he is perfectly right to suggest that we should draw our own conclusions. I was not aware of the problem to which he refers, but we would all be interested to look at any evidence he has—systematic evidence, rather than episodic cases.

The three parties represented in this debate agree on the “town centre first” policy, and we all agree it is important that the sequential test is properly done and maintained, and that planning authorities should feel confident in making decisions on particular applications in accordance with what the sequential test and the impact assessment tell them about the effect of a potential out of town development on the vitality of a town centre. We hope and believe that planning authorities will have that confidence in the future.

I offer a small olive branch to my hon. Friend the Member for Southport by saying that I would be delighted to find out from the Minister in the responsible Department what is holding up the response to Southport’s businesses improvement district application and do anything I can to urge a swifter response than has been received to date.

[John Pugh]

I thank the Minister. I assure him that, despite my forensic character of expression from time to time, there is little that divides us on the main principle.

[Nick Boles]

On that note, I have nothing further to add. Coalition harmony has broken out once again.