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Retail Development Bill [HL]

My Lords, I congratulate the noble Lord, Lord Cotter, on introducing the Bill this morning. It has certainly stimulated a valuable debate on a subject that clearly exercises many noble Lords. I have listened to a number of noble Lords this morning talking with great wisdom about the retail sector, and they all seem to have said the same thing in the end; that they do not go shopping with their wives. I warn noble Lords about this. There is a danger in setting those words out in Hansard. People do read them. I listened carefully to what the noble Lord, Lord Cotter, said, and I thought that he was overly gloomy in his analysis when he talked about the danger of us moving towards clone towns and ghost towns. I thought that was too dismal a general approach in introduction. Of course, I understand the principles behind the Bill, and the objective of attempting to revitalise our towns and city centres through retail is noble and one which, from listening to the contributions this morning, I think we all share. Of course, we need to do much more to revitalise our high street by encouraging more small retailers to open shops there and for those shops to be sustained. Clearly, the nervousness expressed by the noble Lord, Lord Cotter, has touched a raw nerve. Although the noble Lord was well supported on the Liberal Democrat Benches, the debate was fairly wide-ranging and well balanced. For me, the noble Lord, Lord Cope, was right; he said that he supported the Bill until he read it. When he did so, he could not find a great deal to support. That in the end is the way that I will approach the issue. The noble Lord, Lord McNally, in his thoughtful reflections on the Bill, expressed great support for it and, again, as he went though his story, he, too, was concerned that we get the balance right. While he welcomed the Bill as a valuable tool for discussion, I suspect that he could see some of its flaws. We had our ““Ooh la la”” moment, with the noble Lord, Lord Dykes, who told us about the wonders of French shopping and community life. Like him, I love France and its shops; but I live in a part of the world where booze cruising became a great thing for a short while, when friends of mine went over the water from Newhaven to Dieppe, hit the local hypermarket, cleaned it out and brought back all their drink and goodies. That of course did not do much for the small shops around Dieppe, but it probably did quite a lot for local trade in terms of bringing stuff back to their home town and having a good time with it—and perhaps selling it on sometimes. We need a broader and more corrective view. I am grateful to the noble Lord, Lord Dixon-Smith, for his contribution because he made the important observation that we live in the world as it is and we have to deal with the world as it is. He reminded us, too, that local authorities have an important role to play and I shall say more about that. Perhaps I should make one comment about the contribution of the noble Baroness, Lady O’Cathain. She owned up to being a Tesco director in a past life and warned us about the dangers of undermining local authorities. I well understand that, but it is strange that in Hove, which is now part of the city of Brighton and Hove, you cannot avoid going into a Tesco shop. Tesco has some six stores in an area with a population of some 100,000. Although I am sure that Tesco is a fine purveyor of foods, wines, spirits and other goods that we all enjoy, I must say that I have some concerns about the way that it dominates that town’s retail market. Let us come to the Bill. As the noble Earl, Lord Glasgow, said, we must give smaller shops a fair chance to survive. Is this Bill the right way to do it? In the end, I shall conclude that it is not. Our local high streets and town centres are crucial to creating sustainable communities and as a Government we recognise the importance that small shops can make to the vitality, viability and character of our high streets, to communities and, more critically, to the national economy. However, as I said, the Government do not consider that introducing additional legislation to promote small businesses, as is the intention of the Bill, is necessary or desirable. We have taken significant steps to strengthen the powers and incentives available to local authorities—which have a critical role—to promote their local areas. The main problem of the Bill is that in introducing a new central body such as the Office for Retail Planning, it will restrict and further undermine local decision-making processes and is contrary to the flavour, intent and general drift of our local government White Paper proposals to strengthen local leadership. The introduction of new-style retail development plans will not help further to streamline the planning system, which is contrary to the reforms that we set out in our White Paper, Planning for a Sustainable Future. As I see it, there is no reason why local authorities cannot already develop local retail plans. I urge local authorities to get on and do it, because the good local authorities—those with strong and effective leadership—are doing exactly that through their planning processes. Do not undermine that planning process by imposing on top of that a centralising Office for Retail Planning. That would take powers away from the locality and put them in the wrong place. It is for local people to determine issues and to take a lead in shaping the local commercial environment. Of course the planning process has a part to play in that. It needs good leadership and effective local governance. Small businesses already receive wide-ranging support from Business Link and financial sector small business advisers. We have also introduced small business relief for sole occupiers and the rural rate relief scheme enables local authorities to provide critical support for important institutions such as village shops. The level of small business relief given in 2006-07 was some £252 million. By the end of December 2006, some 392,000 hereditaments were reported by local authorities as claiming small business rate relief. That is a significant figure. We are helping those small businesses with rate relief in a profound way, and that relief is being claimed. It is worth drawing attention also to the success of the rural rate relief scheme; in 2006-07 we provided that relief to the tune of some £7.9 million. Small businesses in rural communities are beginning to benefit from that government scheme, and we are delighted that the relief is being taken up and used as it shows that people are much more aware of it. The Local Authority Business Growth Incentives scheme further incentivises the promotion of local business growth. We have enabled the creation of Business Improvement Districts, BIDs, which enable partnerships between local authorities and the local business communities to be set up and which provide a means to improve local high streets. I live in a city where one of those schemes has been adopted in the North Laine area; on the evidence in the past year or so, the extra improvement to the street scene and the extra security that has been provided through the buying in of street stewards, security staff and so on seem to be making a commendable difference to the feel of that area, which has very many small businesses in it. The rate of business reformation is very healthy in an area that is benefiting from the operation of BIDs. We are making other reforms. Under our review of subnational economic development and regeneration we are looking further to strengthen the local authority role in economic development by introducing a statutory economic assessment duty on which we will be consulting further. We are also consulting on a draft new planning policy statement on sustainable economic development, PPS4, which, when finalised, will ask local authorities to plan more proactively for the needs of businesses, large and small. It is also important to recognise that the Local Government Act 2000 gives local authorities in England and Wales a wide-ranging power to promote the economic, social and environmental well-being of their areas. Ultimately, however, the structure of local businesses has to be a commercial decision for the proprietors, and central or local government do not have a remit to influence their ownership. Our policy is to simplify publicly funded support for business, not complicate it further. We do not support a review of business rates as proposed in Part 1. We do not, therefore, believe that further legislation to support small retail premises, as envisaged in the Bill, should be introduced. We already have a well established planning system that provides a positive framework in which local authorities are required to plan for the needs of small and large businesses. Under the Planning and Compulsory Purchase Act 2004 and the related regulations, local authorities are required to prepare statutory development plans for their areas. That includes plans to guide retail and town centre development. Our policy in Planning Policy Statement 6: Planning for Town Centres asks local authorities to plan proactively for high streets and retail development by assessing the impact of development proposals and having proactive local policies that take account of the needs of all types of shops and town centre facilities. Our policy gives local authorities wide-ranging tools with which to promote the needs of business, and many local authorities are using them effectively. Those tools include the ability to control changes of use; to impose planning conditions on new proposals to restrict the size of shops and the goods sold in them; and, where justified, to seek financial contributions to help regenerate secondary shopping areas. The policy also requires local authorities to assess the impact of their planning policies and to test the impact of unplanned proposals on town centres and retail premises, especially larger proposals such as superstores on the edge of or outside town centres. The noble Earl, Lord Glasgow, referred to one horror story in the Glasgow area; we could all come up with an example. Those things are probably more in the past than in the future, because the success of our policy over the past 10 years—a policy that has been carried on across government—has led to a rebalancing in favour of city and town centres as opposed to out-of-town development. Such impact assessments, where required, need to be prepared by a developer and submitted with a planning application. We therefore see no need for separate legislation which requires retail development plans to take into account the impact of different types and classes of development, as proposed in Part 3. Perhaps here I should say a little more about our proposals to improve the effectiveness of PPS6, which we announced in the planning White Paper and on which we will shortly be consulting. It provides an opportunity further to strengthen the policy framework through three mechanisms. First, we propose a new impact test that allows local authorities more effectively to assess the impact of retail proposals outside town centres. Secondly, we will strengthen our policy which asks local authorities to plan proactively for their town centres—in other words, to get a grip on what is going on and to think very carefully about what they do, so that they meet the needs of whole communities in partnership with retailers and other stakeholders. Finally, that policy approach will produce new guidance to assist local authorities and developers in the implementation of the town centre policy. We also have a well established planning inspectorate whose experienced independent inspectors, who are appointed by the Secretary of State, routinely examine the soundness of emerging development plans and determine contentious planning applications in the context of our policies and the local circumstances. There is therefore no need for an Office for Retail Planning to oversee the preparation of local retail development plans, as set out in the Bill, or to intervene in planning applications for certain classes of retail development, as proposed. We do not see the need for the creation of an additional layer of regulation and bureaucracy in the form of an independent Office for Retail Planning to oversee the preparation of new retail development plans. It is also important to recognise that there are limitations on the scope of the planning system to consider issues such as competition, as proposed under Clause 5, which is the responsibility of the competition authorities. The planning system cannot, for example, routinely control the occupier of a building, so the proposals in the Bill would simply not be workable. However, as we said in the planning White Paper, we will look to ensure that our policy improvements to PPS6 will promote competition and consumer choice and that we do not unduly or disproportionately constrain the market. In addressing those issues, we have said that we will take into account the final conclusions of the Competition Commission grocery inquiry, to which several noble Lords, including the noble Lord, Lord Cope, referred. The Competition Commission has just published its provisional remedies, which we generally welcome, but we need to bear in mind that its proposals are not yet final. We will need to think very carefully about what the proposed introduction of a competition test into the planning system would mean for businesses, local authorities, consumers and communities before we finalise our consideration on those issues, but it is a welcome proposition and one which should stimulate further debate. In closing, although we recognise the need to support small retail premises, it is important to recognise that we already have a well established legislative and policy framework to enable the needs of the retail sector and small businesses to be addressed. We are also bringing forward further initiatives to help in planning for and offering support to retail development. Therefore, ultimately, we argue that the introduction of further legislation, as set out in the Bill, would not be in the interests of further devolving powers to a local level and incentivising local authorities to take the firm action we believe that they need to take, to reflect on local needs and to stimulate local business. It would put additional burdens on local authorities and would not help further to streamline what is sometimes an overly bureaucratic planning system. For those reasons, we cannot support the Bill. I think that I have covered most of the points that noble Lords have raised. I am conscious that there is the important and heady business of considering Lords reform to come. For those reasons, much as I have enjoyed and welcome this debate, it is probably only right that I leave it there and thank the noble Lord, Lord Cotter, for the precise and courteous way in which he introduced his thoughtful Bill.