Sunday Trading (London Olympic and Paralympic Games) Bill [HL]

Lord Bates Excerpts

Tuesday 24th April 2012 Lords Chamber

[Lord Bates]

My Lords, it is always a pleasure to follow the noble Lord, Lord Judd, who does us a great service by touching the soul of the nation as well as by giving the social and economic arguments that we are about to look at. I will focus more on the economic arguments, although this is a bit like going down memory lane. I recall beginning my political campaigning with the campaign “Keep Sunday Special” against the Shops Bill in 1986, so this debate is like “Adversaries Reunited”. There I was on one side of the gangway handing out leaflets to political conference-goers that said, “Families that pray together stay together”, while the retail consortium was, on the other side, handing out leaflets that said, “The family that shops together stops together”. I do not think that the debate rose a great deal above that, but I hope in my time today to focus on some core themes and zero in on them.

I very much enjoyed the opening speech on the Bill by my noble friend the Minister, who has an acute understanding of these things. I want to make an argument about the nature of this Bill and what it says about the direction of the economy. Effectively, it is saying that there is a great commercial opportunity. We are totally agreed about the opportunity. The Olympics and the Paralympics—even more the Paralympics, because they are very much coming home to London, where they were invented in 1946—are a tremendous opportunity and they have been fantastically well organised. They are going to showcase Britain to the rest of the world. All of that is a given.

My contribution will focus for a little while on whether we ought to be looking purely at deregulation and opening our businesses for longer, or whether we ought to be looking a little more deeply at where economic value actually comes from. Here I take my inspiration from my father, who ran a successful small business in the north-east of England for 30 years. He was absolutely rigid about not wanting to work for any more than 40 hours per week and he always wanted to have his lunch hour. He used to say to me, “Michael, you know the truth of the matter is that it’s not the hours you put in but what you put into the hours that counts”. I thought that that was a very profound economic message. It is not about saying simply that we need to fling open the doors of Britain and work every hour available. We need to think about what we are yielding in terms of product and profitability in the process of doing so.

To give an example, at the moment we are being told of the great need to liberalise opening hours, but what would happen if you asked anybody in the street, “Do you know for how long shops are allowed to open at present”? The answer should be 150 hours per week, while we are talking here about whether they ought to be able to open for what I suppose is the maximum of 168. There is only 18 hours’ difference. The reality is that businesses would be crazy to open for 150 hours per week, as they are allowed to at present, because of the diminishing returns that come from having long hours when there are no customers. What you need is to somehow tailor your opening hours to make sure that you are available to serve at the time when the majority of your customers wish to be served. That is a basic principle and we need to remember it, but businesses are making that judgment all the time.

In chasing longer hours, we need to be conscious of what that is doing not only to the social fabric—a very important point, which I would not diminish—but to the economic fabric of the nation, because as the cake remains the same, you simply divide it up over a greater number of hours. The greater number of hours that you are open, the more your costs increase and therefore your marginal utility and productivity reduce. That is what I want to put a marker down on, in the time that I have available. Our focus and passion should not be so much on or about being open all hours; it should be about productivity.

What do I mean by that? According to the Office for National Statistics, in 2011 a full-time employee in the UK worked an average of 42.7 hours a week. That was greater than his or her counterparts: in Germany the figure was 42, in France it was 41.1 and in Ireland it was 39.5 hours. However, the measure of productivity per hour is really what matters. Whether you are UK plc or JM Bates and Co in Gateshead, Tyne and Wear, the answer is pretty much the same: it is productivity that counts.

When you look at the hours worked you get one answer, but here is the one that really matters: where does Britain rank compared with its competitors in terms of productivity? There you get a different answer. We may be open longer, but our productivity per hour worked is 107.2, given a base of 100 as an EU average. The productivity in France, whose economic model we often sneer at from this side of the Channel, is 136—almost 30 per cent more. In Germany it is 123.7—20 per cent more. In Ireland it is 125.6—nearly 25 per cent more. Essentially, I am saying that in these times we have to ensure that we are focusing on the right thing. If we just focus on saying, “We need to ensure that our pubs, offices and so on are open for business for longer and longer”, but do not focus on the quality and the productivity of what goes on in them, we will miss the point about what is so desperately needed in the economy.

If I were looking to generate a bit of interest in support of this, I might look at how we conduct our affairs in this House. We were told, just before the Easter Recess in March, that there was not enough business for us to look at last week and therefore the House was not going to sit. The reason given by my noble friend the Chief Whip—who, of course, in all matters is absolutely correct—was that it costs £496,000 for your Lordships’ House to sit. As we did not have sufficient business, we were not going to be open. That is a fair point. The quality of our scrutiny of legislation is what counts, not the number of hours that we are open. Heaven knows what the response would be if we said that we would all be coming in to scrutinise the Sunday trading liberalisation Bill on a Sunday—there would be a hue and cry. We need to remember that we are legislators legislating for people who have to do just that. As much as we might say that it is a wonderful thing, having watched Usain Bolt achieve a world record time on a Sunday evening, to be able to rush out and buy a T-shirt or a beer or something, someone would probably have to miss the final in order for that to be made possible and for us to be served. We need to remember that.

The heart of the issue has to be the economic case, because it may have relevance further down the track. We have been given different figures. Research by the Centre for Retail Research tells us that this act of liberalisation will yield £189.9 million. We then have another piece of research, produced by the Association of Convenience Stores, that says that the Bill will actually cost the economy £480 million. That is a pretty wide discrepancy. That is why the impact assessment that my noble and learned friend Lord Mackay of Clashfern alluded to, and which I followed him into the Table Office in search of, is very important. We need to have sight of it, not necessarily to spoil the party around the Olympics and the Paralympics—not at all; it is going to be a great event—but to learn something about what the driver of our economy is, and how therefore we ought to legislate and make ourselves competitive in future.

We need to have the self-confidence and belief to say that the measure of the competitiveness of our economy is not in the fact that some tourist visiting the Olympics and Paralympics can go out at 10 pm on a Sunday after the 100-metres final and buy a tube of toothpaste, but in the quality of the work, the skills of our employees and the level of investment and of innovation present in our businesses. That is what we are showcasing in these Olympic and Paralympic Games and we should remember that.