Independent Retailers

Debate between Chris Ruane and Mike Weatherley

Wednesday 24th November 2010 Westminster Hall

[Mike Weatherley (Hove) (Con)]

I, too, congratulate my hon. and learned Friend the Member for Torridge and West Devon (Mr Cox) on securing the debate, and on a vibrant speech.

Adam Smith, the father of modern economic theory, asserted that Britain is a nation of shopkeepers.

[Chris Ruane]

I thought it was Napoleon.

[Mike Weatherley]

The Opposition may disagree about who said it first, but I assure them it was indeed Adam Smith.

It remains widely recognised that the small and medium-sized enterprise sector today will play a pivotal role in the recovery of our economy—and rightly so. All hon. Members will be familiar with tales of the local independent retailer who goes that extra mile to take care of their community. They provide essential services and fulfil the retail needs of those who are less mobile and most vulnerable. The idea that independent retailers are the heart of communities will not come as a revelation to most hon. Members present for the debate—if it does to any of them. Despite that, in February this year the Local Data Company reported in a study that one in eight high street shops lays empty.

The economic slowdown clearly had a role to play in the shuttering up of our independent high streets, but there are far more fundamental causes, which will not reverse with the advent of economic recovery. The report cited a combination of rising business rates, soaring rents and draconian parking restrictions as being to blame, and I know from speaking to my constituents in Hove and Portslade that the study paints a pretty accurate picture. However, my constituents would all add one key issue to the list: the massive over-regulation that the sector endures. Government’s role is to ensure that causes are identified and that there are market conditions that foster an independent retail sector. There is a balance to strike between deregulation and positive and protective legislation. I believe that the Government’s challenge is to sift through the deluge of regulation that we inherited.

Some hon. Members may know that I have recently been vocal about the tobacco display ban. To recap, that legislation was brought in without the benefit of a small business impact assessment. The cost to the independent retail sector of implementing it is assessed at £33 million. Independent analysis shows that in countries where the ban is implemented small shops are disproportionately affected and there is no health benefit. Indeed, it is estimated that 2,600 small shops may close as a result of that legislation alone. At the moment the Government do not have any plans to carry out an evaluation of its impact. Overturning that inherited legislation is but one example of the right and appropriate path of deregulation needed to protect our independent retailers. If we do not do so, our nation of shopkeepers will become a nation of clone towns, with local shop models of supermarkets replacing the traditional British independent offering. The Government are currently reviewing the legislation and I urge all hon. Members to speak to the Secretaries of State for Business, Innovation and Skills and for Health and to register opposition to that over-burdensome, soundbite regulation.

As late as July this year the London assembly added its voice to the many expressing concern for the sector in its report, “Cornered Shops”. The report indicates that 7,000 independent shops shut in the last 10 years alone—or 13 a week. That marks a long-term decline, exacerbated by the recent economic crisis and punctuated now by a continuing lack of access to credit, which we have heard about today. We all recognise the frustration at the fact that, after the bail-out of irresponsible bankers, those bankers are not doing their bit to lend to small businesses and kick-start the economy. Something needs to be done to ensure that access to credit is made simpler for independent and viable retail offerings—and quickly.

We have seen the rise of supermarkets in the past 10 years, and there has been an aggressive expansion in the past few years into the local stores format. Our planning law needs to recognise and cauterise that practice, which is slowly bleeding out our independent high streets. Planning law needs a sustainability test, under which multiple chains would need to demonstrate that any proposed application would not adversely alter the mix of small, medium and large stores on high streets. Supermarkets account for a massive 75% of the market and 80% of independent retailers say that multiples are the single biggest threat to their livelihoods. I certainly do not advocate getting rid of supermarkets and propping up failing independent retailers for the sake of it: both have their place in a healthy and modern economic mix; they are not mutually exclusive.

Although this is by no means atypical of the operating experience of all independent retail sectors, I shall give just one example of how the scales are tipped against newsagents. The National Federation of Retail Newsagents, and newsagents in my constituency, have told me that one of their biggest problems is the lack of control that they have in the newspaper supply chain versus supermarkets’ buying power. We need to protect our independent high streets, which are far more vulnerable than the multiple retailer end of the sector. Once they are gone, they are gone for good, as are the friendly face of our local independent retailer and the heart of our community.

I recently went to the ceremony for the independent achievers awards, which celebrated best practice in the sector. The energy in the room was electric with the buzz of the best independent, innovative retailers regaling one another with stories of how they had adapted to support their local communities and build up successful businesses. That is the sense of pride and enthusiasm that we need to regain.

Our independent retailers work long hours, seven days a week, all year round, only to combat increasing costs, aggressive competition from multiple retailers, decreasing profits, increasing bureaucracy and decreasing access to credit. We need to reinvigorate the small business sector with a package of measures. Scrapping the tobacco display ban would be a good start.