Independent Retailers

Debate between Geoffrey Cox and Mark Prisk

Wednesday 24th November 2010 Westminster Hall

[The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)]

May I begin by congratulating my hon. and learned Friend the Member for Torridge and West Devon (Mr Cox), not only on securing the debate but on his characteristically eloquent and powerful advocacy of the arguments that he had marshalled? He ranged across some of the crucial touch points that allow our town centres, villages and high streets to prosper but that, in some cases, prevent them from trading at all. I want to touch on as many of those points as I can.

It has been an excellent debate and there have been a number of common themes. I will use the nine minutes or so remaining to tackle some of the wide range of issues, but I will canter through them, if I may use the white knight metaphor without too much danger, leaving it there for Members to mull over if they have strong stomachs. I will not get into some of the finer points or the broader issues around regulation. We have important issues such as business rates, planning, the role of high streets, town centre management and the commission that my hon. and learned Friend mentioned.

First, as someone who started his own business at the bottom of the previous recession, I share my hon. and learned Friend’s interest in and passion for enabling our independent retailers to start and grow. Times are difficult for many retailers, as well as other small businesses. The point that hon. Members in all parts of the Chamber have made is that small businesses, and small shops in particular, are not just vital parts of the local economy, but focal points for the community. We need to bear that in mind.

It is also important to bear in mind that at the moment, in some places, independent retailers are often feeling squeezed out by some of the larger chains, which can threaten to reduce consumer choice and competition. In the time that I have, without stretching the metaphor too far, I will seek to saddle up and tackle some of the practical issues, which our constituents are keen to learn about.

The Government inherited some plans that would not be good for small businesses, such as planned increases in small company corporation tax and in employer’s national insurance. We have made it clear that we will reverse both increases. For example, the impact of the planned national insurance rise, which we have now shown how we will reverse, would in the estimation of the Federation of Small Businesses have cost up to 57,000 jobs—often in the local shops that our communities value. We are, therefore, reversing the approach on employer’s national insurance, for the most part. On small company corporation tax, from next April we will be cutting—not increasing—the level of the rate on profits by 1%, which should be crucial for the viability and, indeed, profitability of many of the smaller retailers.

A number of people raised some powerful issues about charity shops. The question concerns when people enjoy special treatment but trade in areas that they had not previously traded in. I want to raise those issues with my ministerial colleagues.

The hon. Member for Hove (Mike Weatherley) mentioned tobacco displays, but the choice is difficult. We all want to ensure that underage smoking is tackled, but we do not want to penalise the smaller business unduly. We are having a strong discussion in Government on that subject, and the Secretary of State for Health will be making an announcement shortly.

The issue of business rates was raised by a number of hon. Members. When running a business, business rates sit on the overheads—they are fixed costs, so in good and bad times they affect people equally. That is why I can confirm in one case, and newly announce in two other cases, changes that address many of the questions asked in the debate about small business rates and the relief.

I confirm that we are doubling the level of small business rate relief in England for one year, with effect from this October, reducing the fixed cost for small businesses and helping them to continue to trade while the economy returns to growth. As suggested by hon. Members, that means that eligible businesses occupying properties with a rateable value of up to £6,000 will pay no rates, with tapering relief up to a rateable value of £12,000.

In practice, what does that mean? It means that more than half a million businesses in England will benefit, with 345,000 businesses paying no rates at all. In value terms, the saving amounts to £390 million. In particular, my hon. and learned Friend the Member for Torridge and West Devon will wish to know that we think about 65,000 businesses in the south-west will benefit. My right hon. Friend the Secretary of State for Communities and Local Government has announced that we intend to proceed with legislation to ensure that small business rate relief will be automatic. We made that commitment before the election, and we are honouring it. It will be set in legislation shortly.

Today, we announced our plans to change the rules so that councils can set further business rates locally, to respond to specific needs or to help high streets that are struggling and where a little local application of further discounts could help. It is a good local programme, funded locally, which will provide vital flexibility in our areas. I hope that right hon. and hon. Members will take those points further forward.

Planning was raised by several hon. Members. Independent retailers in the high street have been anxious about some of the changes made under the previous Government. This Government strongly support a localist approach to planning for the high street, which is why we have a clear commitment to the “town centres first” planning policy. In practice, it gives local authorities the ability to consider the vitality, viability and diversity of shopping districts when considering controversial planning applications.

Ministers are also making it clear that any specific changes to national planning policy will be brought forward through the national planning framework. There is, therefore, clarity and an element of consistency. We are committed to returning power to local communities, to enable them to shape the development of their areas, which is why we will present to Parliament a simple and consolidated national planning framework covering all forms of development. The announcement will be made soon, in particular on how we propose to progress the framework and on the implications for specific areas of planning policy. However, to be very clear, the principle of “town centres first” is a vital part of that framework.

[Mr Cox]

Will the Minister give way?

[Mr Prisk]

I will canter on, if I may, because I feel honour bound to mention a couple of questions asked by other Members.

On procurement, the answer for the hon. Member for Solihull (Lorely Burt) is 16%. Measures for transparency and removing red tape will help. If she looks at the UK Trade & Investment website, rather than at the Department for Business, Innovation and Skills one, she will find the export advice that she seeks.

I turn briefly to two other things, one being rural broadband, about which my hon. and learned Friend the Member for Torridge and West Devon is keen to have answers. We are determined to ensure that we do not just have a slight improvement—2 megabits—but that we have super-fast broadband right across the country. Our commitment is to deliver that by 2015, backed by a £530 million package. We are piloting it, in particular, in rural areas—we understand their difficulties—such as the highlands and islands of Scotland, Herefordshire, Cumbria and North Yorkshire. The commitment is clear, and we want to ensure that we deliver on it.

Lastly, I turn to the broader question. My hon. and learned Friend was, under the chairmanship of my hon. Friend the Member for Northampton South (Mr Binley), part of the commission referred to in the debate. A vital beginning to that process is the document—the tool—that I am holding, entitled “Healthy High Street?”. The process is about understanding the holistic issues that affect town centres—whether planning, parking or whatever. I happily and strongly commend the proposals, which have come from the retail industry jointly with the Government. The document begins a process to strengthen town centres.

Times are tough for retailers, which is why we are tackling their costs, dealing with planning and are open to helping them in the months and weeks to come.