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Retail Development Bill [HL]

My Lords, I beg to move that this Bill be now read a second time. Are we to wait to see our communities, our villages and our local neighbourhoods wither and die or can something be done about it? I do not think it is overstating the case to say that we are in danger of losing the heart and soul of this nation—a fact drawn attention to by reports produced in the past few years on Clone Town Britain and Ghost Town Britain. Parts of the United States very much deserve the title ““ghost town””. Where the US goes, do we follow? Noble Lords may like to know that there is a very interesting book on the US experience called Big-box Swindle: The True Cost of Mega-retailers and the Fight for America’s Independent Businesses by Stacy Mitchell. We can, through inertia, stand by and see the erosion of choice, diversity and, yes, competition. I refer of course to the decline in our small shops. In the other place on 8 February 2005, I introduced a similar Bill—the Small Shops (Protection) Bill. We are three years on and the issue is still to be tackled. In the mean time, many thousands of businesses have gone to the wall. That is why I am presenting this Bill today. Its title is the Retail Development Bill but it is really all about communities, neighbourhoods and what people need. I and others will increasingly argue that we need to keep our local shops and that they are the backbone of the local community. The Bill aims to protect the future of small independent retailers and to ensure that the local community has a real voice in the retail development of an area. Therefore, a key aspect of the Bill is the creation of retail development plans by the local authority, specific to each part of the country, taking into account local wishes and ensuring choice, diversity and convenience for local people and ensuring also that retail developments suit the character of an area. This should prevent the over-expansion of supermarkets where they are not needed or wanted and allow the local community to become involved in the future development of an area. When a supermarket has applied for planning permission, an impact assessment should be carried out to analyse the impact on the local community’s services. In this connection, there is a need to assess the effect on the economic aspect of the local community. It is said that £10 spent in small shops is worth £25 to the local economy, compared with just £14 for supermarkets. In addition, 59 per cent of turnover from local retailers is returned to the local economy, compared with just 5 per cent from the large retailers. The New Economics Foundation has strong views and evidence on this. Indeed, it is also not true to say that supermarkets create jobs; in fact, small shops create many more. Therefore, emphasis is placed in the Bill on assistance being granted to initiatives taken by local people where, especially in villages, the local shop is forced to close. Local residents who want to form a co-operative to keep the business going, or who want to do so by other means, should receive advice and help. Another aspect of the Bill is an overseeing regulator to ensure that these plans are formulated and carried forward, and the Bill also allows for such a regulator to investigate any restrictive land covenants or land banks. For many years now, there has been great concern over the business rates bill that small shops have to face, meaning that they pay a disproportionate amount. It is suggested that small shops can pay anything from 15 to 30 per cent or more of their turnover to meet the business rate cost, whereas it is said that supermarkets pay only 4 or 5 per cent. For the first time through this Bill, there will be the creation of three classes of shops. It will then be possible to examine this situation, and the Bill calls for a business rates review. Effectively, small shops will be class 1 and supermarkets class 3. The review will take into account how rates impact on the profitability of a business and its ability to support its owners and employees and whether the burden is disproportionate. Without anticipating a review, it seems fairly clear that at the moment it is disproportionate. There are many other concerns, such as frequently expressed views on the unfair pressure placed on suppliers and farmers by the big four. Much has come out recently on that, and much work has been done by Friends of the Earth, producer groups, trade associations and many others. So there is a great deal of support for the Bill. The Federation of Small Businesses, the FSB, says that it supports the Bill because of the strong message that it sends to the Government. The Forum of Private Business, the FPB, said in support of the Bill that, "““this is a fantastic opportunity for the Government to lessen the impact that business rates have on small shops””." We have an urgent situation which needs addressing. It is estimated that 2,000 local shops are going out of business every year, while the grocery market is being saturated by the big four supermarkets. They dominate 75 per cent of the market. A recent survey by the Association of Convenience Stores found that 69 per cent of people supported the idea of the local community becoming more involved with local planning decisions, a key ingredient of this Bill. In this day and age, with crucial concerns about the impact of activity on the environment, it is relevant to question the distance that food travels to reach the public. That has been talked about elsewhere and is very relevant to our concerns. Whether food needs to travel the distance that it does and the impact on the environment of that needs to be looked into. A similar recent statistic indicates that the average person now travels 893 miles per year to shop for their food. Those are all relevant aspects of shopping today. We have a great need for these issues to be addressed. In that connection, I shall refer to the fact that we have just had a preliminary report and recommendations from the Competition Commission, regrettably concentrating on competition between supermarkets—the big four—which is an issue, but they are still neglecting the small shops sector. A recent report produced by the FSB draws attention to the fact that France is the best example in Europe of getting the balance right between small shops and large retailers, with a balance of planning laws that allows fair competition and healthy communities. I would recommend those interested to study the detail and I hope that the Minister and the Government will want to study it also. I speak briefly to the Bill because the case is there. There is much evidence, published in papers and elsewhere, and I know that many colleagues will have things to say. It is undeniable that we need to address the issue of small shops and communities. I think all would agree that there is an issue of great concern here. I am sure that other noble Lords will add their experiences to what I have said. I thank the Minister for attending today and I hope that the Government will take the matter seriously. It is easy to sidestep, but if firm policies are not followed, inertia will rule and we will see a continuing decline in our local shops at great cost to our communities. I commend the Bill to the House. Moved, That the Bill be now read a second time.—(Lord Cotter.)