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Retail Development Bill [HL]

My Lords, the underlying aims of the noble Lord, Lord Cotter, in introducing this Bill as he explained it to the House just now and as supported by the noble Earl, Lord Glasgow, are admirable and I support them. Indeed, I have supported the preservation and encouragement of small businesses all my political life. However, I have been reading the Bill, and I am afraid that I must tell the noble Lord, Lord Cotter, that I do not think that the actual methods it proposes to help small businesses stand up to scrutiny. They leave a lot to be desired. To begin with, I would not like even one more semi-government body to nanny and bully us all. I do not like local authorities being given ever more orders from the Government and their agencies. The Bill provides for the new agency to bully and overrule local authorities. The Secretary of State can already do that, as I shall say in a moment. There are also far too many order-making powers in Bills these days about matters which are important to the working of legislation; this Bill is simply littered with them. Those drafting government Bills too often leave difficult matters to be dealt with in regulations and the noble Lord, Lord Cotter, has followed their bad example. There are at least 10 new order-making powers, one of which has 11 objectives, sprinkled throughout the Bill. The Bill tries first to define small, medium and large retail businesses. It does not actually define ““retail””, but I take it that that means businesses selling goods and services to the general public rather than others in their trade. That leaves antique shops in a grey area, because they do a lot of the latter. Nor is there any definition of small, medium and large retail premises, which are to be singled out for different treatment. Part of the definition is to be how many square metres of ““retail sales floor”” a shop has. Now, I know what the noble Lord means by ““retail sales floor””, but a legal definition is not so easy. Is it where the customers go? In that case, is the area behind the counter part of the retail shop? It is certainly part of the display area in many cases, with the cigarette shelves and that sort of thing, so presumably it is. What about the stock room behind it? That is presumably not part of the retail sales area, although it is, incidentally, included in the definition of small shops for Sunday trading. In a café, the obvious bit of the retail sales floor is the counter for takeaway sales, but it probably also includes the bit where people sit to eat the meals they have bought. If it can include somewhere where customers sit down, what about a solicitor? Is the room where he sees his clients part of a retail sales floor for this purpose? Presumably the reception area is as well. Service businesses often have no retail sales floor at all. A plumber does not have a retail sales floor, because he goes out and does the plumbing in people’s houses and other premises. All this is to be left to regulations. It will not be clear to anyone who looks at the Bill what is or is not included. The other half of the definition is to be based on annual turnover. Turnover is a valid method of comparing the respective sizes of two similar businesses, but not of dissimilar businesses. The relationship between turnover and profit varies wildly between different types of business and so does the number of employees, the size of premises and so on. Some businesses these days have a large part of their turnover in distant sales, via the web; that does not involve any sales floor at all. I recognise the problem of arriving at a general definition of a small business in order to give small businesses advantages over larger businesses. I have long been concerned about it, and I do not think that the noble Lord, any more than other people, has solved it. The new body that is to be created—the Office for Retail Planning—and the independent examiners who will back it up are additions to the overheads of the nation. We should be sure that they are of benefit. The Office for Retail Planning will sit somewhere between the Competition Commission and the Office of Fair Trading, both of which have the duty to ““improve the market””, in shorthand terms. The Office for Retail Planning has the duty to further the interests of consumers in relevant markets, but its first duty is to further the interests of citizens in relation to retail planning matters. I find it a bit difficult to understand exactly what is the difference between us as consumers and as citizens in this respect. Our relationship with shops is really as consumers rather than as citizens. The primary purpose of the new Office for Retail Planning is to take decisions away from local authorities and to hedge them about with extra guidelines. At the moment, the Secretary of State does that. He has the power to call in decisions and he gives pages and pages of planning guidance. There are books full of planning guidance that has to be to be followed by inspectors if something comes to appeal, and hence it has to be followed by local authorities. That guidance can be altered, and it probably needs to be altered because of the sort of decisions that we have just heard about where supermarkets are allowed even though local authorities do not want them. However, I do not think we need a new body and a different set of guidelines to add to the existing ones to stop local authorities deciding what they think is best for their towns. We should leave more decisions to local authorities, not take them away. As the noble Lord said, the Competition Commission has just reviewed groceries. Its proposal for a new ombudsman and extra powers relating to supermarkets’ relationships with their suppliers has merit and provides benefits not only to suppliers but also to small firms that compete with the supermarkets. The commission’s headline proposal in the planning field aims at the competition between the big supermarket chains, not at the competition between supermarkets and small, local shops or convenience stores. That is the aspect that worries me and the noble Lord, Lord Cotter, not so much the competition between the supermarkets. I want the Secretary of State’s planning guidance to give more protection to smaller shops than it does at present. That is the way forward as far as planning is concerned. I do not want a new body to complicate everything further and add to the nation’s overheads. The noble Lord, Lord Cotter, has taken up from the Competition Commission and others the question of landbanks. The Bill suggests a mechanism for the compulsory purchase of supermarket landbanks. I do not support that, but it is a slightly different matter. Another part of the Bill concerns rates. It hints at the idea of lower rates for small businesses but, as the noble Lord said, it does not provide a solution, only a review. At present, the mechanism for deciding business rates is the rateable value. If small businesses in a town are struggling, rents, and hence rateable values, should eventually go down. That is the mechanism at the moment. I am not sure it is working as well as it should, but that is no reason for inventing a new mechanism, although it may be a reason for improving the mechanism that we have. As far as local retail plans are concerned, I would encourage local authorities to have an eye on local retail development in their own plans, which many of them do. Overall, the noble Lord, Lord Cotter, is right to draw attention to the problems. I support the message that he wants to send to the Government, as he explained a moment or two ago, but I do not think that the Bill proposes the right solutions. I thought that Liberals were supposed to support Mr Gladstone’s principles of free trade and that sort of thing, but the noble Earl, Lord Glasgow, did not seem to support them outside Glasgow, where the public seem to be voting one way and consumers a different way from him. The noble Lord, Lord Cotter, has taken his cue not from Gladstone but from new Labour: ever more nannies and a case of, ““A word means what I want it to mean—see the statutory instrument””.