HC Deb 24 June 1999 vol 333 cc1340-81
Mr. Deputy Speaker (Mr. Michael J. Martin)

I remind the House that Madam Speaker has selected the amendment in the name of the Prime Minister.

4.14 pm
Mr. Matthew Taylor (Truro and St. Austell)

I beg to move, That this House notes that the rapid expansion of out-of-town superstores under the Conservatives and the concentration of local market share has hit traditional town centres; notes that supermarket purchasing and pricing policies have hit farmers but not led to lower prices for consumers and are now under investigation by the Competition Commission as a result; further notes that a new wave of larger superstore developments and predatory pricing to gain market dominance, and a squeeze of local producers and traditional retailers, is threatened by Wal-Mart's acquisition of ASDA; therefore calls on the Government to reaffirm its commitment to preventing further out-of-town greenfield development, and to tackle urgently anti-competitive, anti-producer and anti-consumer practices by the major food retailers; and calls on the Prime Minister to put on record in the House the substantive contents of his meeting earlier this year with the Chief Executive of Wal-Mart and to clarify exactly what flexibility in planning regulation was offered in respect of any future superstore development. The motion relates to food and supermarkets, and especially to developments in the food retailing business in past decades and to the potential for great change given the takeover of Asda by the giant American corporation Wal-Mart—the world's largest company. Consumers have welcomed the supermarket revolution that has taken place over several decades, because it has offered convenience shopping and greater choice. In towns in my constituency, supermarkets have submitted planning applications, saying that they will create so many hundred jobs, and often claiming that they will cut prices.

As the 1980s rolled on and we came into the 1990s, the general public became increasingly aware of the problems that that revolution caused many communities. All parties in the House recognised that problem in the early 1990s, as planning guidance was changed. The problems were clear. That change was not free: it came on the backs of traditional food retailers and other retailers, particularly in town centres, which have had to close. It has comprehensively been shown that jobs have been lost and weaker town centres have been destroyed.

In January 1998, Boots sponsored a report for the national retail planning forum, which shows how great the impact on jobs can be. It said that the impact of out-of-centre food superstores on local retail employment was substantial job losses. That is contrary to the claims that the supermarkets have made. The report examined the 15 km catchment areas of 93 superstores that had opened between 1991 and 1995. It found that the supermarkets had created 10,500 full-time equivalent jobs, but that 25,000 jobs had been lost in local specialist food retailers, which is a net loss of 15,000, and another 10,000 jobs had been lost in non-food retailers. That is an average loss of 276 full-time jobs for every store.

In September 1998, the Department of the Environment, Transport and the Regions published its own research, which confirmed that town centre market share of food trade had been cut by 13 to 50 per cent., and that there was an overall cut in employment and an overall increase in car use. It also confirmed that—as we know from my own part of the world in Cornwall and from other rural areas with small market towns—the supermarkets, having pretty comprehensively covered the larger towns and cities, are now aggressively targeting new development in small towns that still have a reasonably successful parade of shops but feel under real threat. Perranporth in my constituency is one such small town. That report recommended that all edge or outside-centre applications over 1,000 sq m should have a combined retail economic and traffic evaluation.

There are, beyond any doubt, real problems of job losses. Supermarkets have an impact not only on traditional town centres, but on the environment. The town centre sites—the brown-field sites—that the Government say that they want to be developed are often not available. The sequential test leads supermarkets to push for development on the edge or even outside the town centre. Nothing in the sequential test says no to that. The larger the store for which they are seeking permission, the less likely it is that there will be a suitable in-town site.

Such development encourages traffic growth at a time when the Government are struggling to cut traffic and congestion. It leads to the dereliction of town centres in commercial terms with the loss of shops, and the loss of shops leads to the death of the town centre and to the increase in the dereliction of the community and, ultimately, in crime. From the environmental point of view, it leads to unnecessary food miles.

The supermarkets claim that there are price benefits, but they dominate the local market, which gives them real power over suppliers and customers. Farmers and other suppliers have reeled from the blows to agriculture. No one in this country can be unaware of the problems that farming has faced in the past few years, but what makes many farmers and, indeed, ordinary customers angry is the fact that the prices of supermarket goods have not fallen. We are also seeing some extraordinary anti-competitive practices, which are now subject to investigation by competition authorities.

Farmers who supply, for instance, brussels sprouts to major retailers have told me that they are required to buy their bags from a particular manufacturer, and that those bags are more expensive than the ones that they formerly obtained from their own sources. Why does the supermarket chain involved insist that those farmers buy expensive bags, when they could obtain bags more cheaply? The answer must be the link between the manufacturer of the bags and the supermarket. There have been negotiations which, supposedly, concerned an entirely different matter; but it has been alleged to me that the supermarkets get a kickback from the suppliers of the bags, while the farmers bear the cost.

We are also seeing sole agreements. Very little is given to farmers in the case of such agreements. Only rarely is there a guarantee of price, or even of purchase; but the price is squeezed, year by year by year. If the farmer finally goes out of business, that is not a problem: the business is simply transferred elsewhere. From the point of view of the rural community, money is being squeezed out. Similarly, because profits go elsewhere, supermarkets take money that might otherwise have stayed in the community. Local shops supplying meat and vegetables tend to buy within the local community, but supermarkets contract across the country, which means that food travels for long distances.

As for the producers, we often hear about promotions and cut-price sales; but the cut-price sales are often loss leaders, and the price of other goods in the supermarket often compares unfavourably with that of goods in local shops. Certain targeted items are sold very cheaply. The farmers who supply those items say that they are asked to bear the cost of promotion, so the supermarkets do not suffer in that respect either.

Customers, who are supposedly the big gainers, often find that they are nothing of the kind. Local and regional market dominance often means that prices are nowhere near as low as one might expect. We see loss leaders, but mostly high margins. We see returns for British supermarket chains that are several times higher than those of supermarket chains in France, and well above the average in Europe and America. As the town centre is lost, the 20 or 25 per cent. of the community who have no access to cars find that they can no longer get to the shops so easily.

I do not say any of this on the basis that the parties disagree. Certainly, they do not disagree publicly.

Mr. Eric Martlew (Carlisle)

Is it now Liberal policy to oppose supermarkets? The hon. Gentleman has said nothing in their favour.

Mr. Taylor

I was about to say something about the policy developed by the last Government and the present Government, which we have supported. I refer to the process of constraining the development of supermarkets, especially out-of-town supermarkets. We want changes in the rating system to help small shops, which pay high rates compared with the rates paid by supermarkets. The Government have done nothing about that.

I do not want to give the false impression that there is a huge division between the parties. There are key questions about where we are to go from here and what is happening in Government, and I shall deal with those shortly.

The policy that has been observed since 1993 relating to the sequential test—town centre, edge of centre, outer centre—is an important development, which was updated in 1996. There were two elements in that. The first was the sequential test. I do not think that anyone would disagree with the suggestion that it is important to look for the town-centre site first. They might have in the past, but I think that we are all agreed now. However, there is a second element. Once the sequential test has been exhausted, a supermarket chain may say that the only place where it can go is out of town. That will lead to an argument that boils down to this: should we allow more competition among supermarkets, thus allowing the development of new supermarkets that can compete with existing ones? Is that more important than preserving town centres, existing communities and environment? The test does not provide an answer to that question. It says that there should be a decision based on need, but we have yet to find out exactly where the Government stand.

A report published last year by the Environment and Science Research Council states: Since the mid-1990s, when the revised planning guidelines were introduced, the major food retailers increased floor space by nearly 2.5 million square feet a year, much the same as in earlier years. The theory is great, but, in practice, not much has changed, partly because of existing permissions. That is why we are now reaching a stage at which the test will be much stronger. As the existing permissions are used up, new sites will be sought. Asda has clearly said that it wants to do that in the south. Permissions will also be sought for the expansion of existing sites.

Ms Sally Keeble (Northampton, North)

Is the hon. Gentleman opposed to supermarkets per se, or is he just opposed to out-of-town retail centres? There is a difference. A well-placed supermarket can provide an anchor for a town centre.

Mr. Taylor

I am opposed to bad sites, generally out of town, and also to the growth of larger hypermarkets which, increasingly, sell not only food but other goods. They will knock out competition, and, indeed, have been designed to do so.

The last year of the Conservative Government and the first year of the Labour Government saw similar levels of supermarket development, but I think that we face a real issue now.

Mr. David Drew (Stroud)

The hon. Gentleman has made an important point about existing planning permissions. I cannot specify the exact period, but it was always known that a considerable number of years of extant supermarket permissions would have to be gone through before the policy could change. Surely that is the crux of the problem.

Mr. Taylor

The hon. Gentleman is entirely right. He may recall, as he was present for some of our debates on protecting green fields, that we argued that, while the Government were going through a process of review of planning guidance and planning law, they should put a hold on the development of some of those very large sites.

The hon. Gentleman is not right in suggesting that only extant permissions are involved. In north-west Coventry, for instance, inspectors have overturned local opposition to allow development of sites that they themselves have described as not ideal, and local authorities have given permission for major increases in the size of retailing facilities.

Mr. Tony McNulty (Harrow, East)

Will the hon. Gentleman give way?

Mr. Taylor

Not yet. I have already given way several times.

Last autumn, at the annual convention of "Action for Market Towns", the Minister made some helpful and positive comments. He was right to draw attention to the problem to which I have drawn attention today. He said: Many superstores now offer services like banking and pharmacies, and can effectively take over the traditional role of the town centre. They also create fewer not more jobs in the local area. Earlier this year, a report by the Select Committee on the Environment, Transport and Regional Affairs said that the Government should forbid future out-of-town or edge-of-town shopping centres or other developments which generate large amounts of private car travel". That is not the existing policy; it is quite a large change in policy. So far, the Government say that they want a period of stability, rather than to change the policy.

My first worry is that the existing policy is not as strong as it has been presented to be. Neither the sequential test nor the test of need answer that point. The real issue is: will these developments be allowed, or are we going to take the line suggested by the Select Committee and say no to such developments in normal circumstances?

Mr. James Gray (North Wiltshire)

Why have so many of the planning permissions that have been granted for huge out-of-town shopping centres been granted by Liberal Democrat-controlled councils? East Hampshire and Harrogate have done so, and my own North Wiltshire district council gave permission for a Sainsbury and a Safeway outside Chippenham, which have wrecked Chippenham high street.

Mr. Phil Willis (Harrogate and Knaresborough)

There is not one in Harrogate.

Mr. Taylor

Yes; so the hon. Member for North Wiltshire (Mr. Gray) may be wrong about that. Moreover, he knows as well as I do that councillors, of whichever party, are obliged to follow the Government's planning guidance, and are at risk financially if they do not. They cannot refuse permission simply because the local community is against granting it, but may do so only on planning grounds. If planning guidance does not enable them to refuse permission, they cannot refuse it.

Rather more extraordinarily, the former Secretary of State—

The Minister for the Regions, Regeneration and Planning (Mr. Richard Caborn)

What waffle.

Mr. Taylor

How does the Minister explain the fact that councillors in my own area are facing surcharges precisely because they allegedly did not follow Government guidance? Councillors are clearly obliged to follow guidance and can be surcharged if they do not.

Several hon. Members


Mr. Caborn

Will the hon. Gentleman give way?

Mr. Taylor

I shall give way to the Minister in a moment, but shall first answer the question of the hon. Member for North Wiltshire.

The former Secretary of State for the Environment, the right hon. Member for Suffolk, Coastal (Mr. Gummer), often argued against the previous Government's policy on supermarket development. I spoke to him today on the issue, and he supported the Liberal Democrats' position on it. Yet, when he was Secretary of State, he overturned the recommendation—not only of the local community, but of the inspector—that an out-of-town supermarket should not be built just up the road from my constituency.

Although we could all throw brickbats on the issue, we have made some progress on it, to put it most mildly. Now, the issue is how we shall address current issues. I should like to mention specific issues facing the Government, on which their action does not match their briefings.

Mr. McNulty

The hon. Gentleman said that the Government should block extant planning permissions. From what he has said, clearly, he is a planning expert. Will he therefore tell us how they are to block those extant permissions?

Mr. Taylor

The policy position that we articulated in previous debates is that the Government should place a moratorium on granting further development permissions. If I said anything unclear in making that point, I hope that that will have clarified it. We have debated the issue at length in the House.

Mr. McNulty

Will the hon. Gentleman give way?

Mr. Taylor

The hon. Gentleman has to let me make some progress.

The Government's position has much support. However, I should like to know whether the debate within Government in contrast to the Government's stated position—that current planning guidance will provide protection—will protect traditional town centres, as the Minister has said that it will.

Mr. A. J. Beith (Berwick-upon-Tweed)

When Labour Members think that there are no possibilities of Government intervention, they should remember that the Secretary of State overturned an existing planning permission in my constituency that is now the subject of a court case between the council and the Secretary of State.

Mr. Taylor

I should like to deal with a couple of points before addressing the main issue in our motion. The first is that the Government have vacillated in their position on out-of-town supermarkets, between the need to restrain developments and the need to encourage competition between them.

In May 1996, for example, when Chris Davies—the former Member for Littleborough and Saddleworth, who is now a Member of the European Parliament—initiated a debate on the subject, that day's newspaper headlines proclaimed that the Government were to implement out-of-centre parking charges. Within hours, in an official statement, the possibility of such charges was rebutted, and it was said that they were no longer on the agenda.

The issue was raised again in debates on the transport White Paper, when the Government said that there would be parking charges on out-of-town supermarkets. We then heard the Deputy Prime Minister's fury in attacking the teeny-boppers at No. 10 Downing street for ruling out such charges after a meeting between supermarkets and No. 10 Downing street.

Similarly, Ministers at the Department of the Environment, Transport and the Regions—I give the Minister for the Regions, Regeneration and Planning credit for this—undoubtedly believe, and have argued very strongly, that major new out-of-town supermarkets should not be developed, and that the issue is not competition but protection of the countryside. Nevertheless, there have been regular briefings from the Treasury and the Department of Trade and Industry, saying that they believe that competition is the higher priority, and that planning requirements should be softened.

Mr. Willis

I should be grateful if my hon. Friend—and the Minister, who represents a Sheffield constituency—will address one crucial issue: differential support in rating valuations for supermarkets and town-centre shopping. Differential rating valuations between, particularly, small town centres and out-of-town shopping centres is making competition terribly unfair. Until we restore the balance between the two, we shall never solve the specific problem about which we are so concerned.

Mr. Taylor

My hon. Friend is absolutely right, and Liberal Democrats have made that argument many times in the House.

Mr. Gray

Will the hon. Gentleman give way on that point?

Mr. Taylor


Now, we come to the key issue facing the Government: the purchase of Asda by Wal-Mart, the American retailer. The purchase should, in itself, ring alarms. Wal-Mart is an enormous company, with global sales totalling one tenth the United Kingdom's gross domestic product. It is also the world's largest private employer, and well connected—Hillary Clinton is a former board member.

One of Wal-Mart's tactics is to squeeze its suppliers but, as I said, British farmers are already suffering from such squeezing. Its basic tactic is to compete aggressively with other supermarkets. It moves in and opens more centres—contrary to the Government's policy and the views held on both sides of the House—which is exactly what Asda would like to do in southern England.

Wal-Mart would like to have much larger centres, selling a much larger range of goods—posing a correspondingly larger threat to traditional town centres, and entirely contrary to the Government's articulated position. It is therefore little wonder that there is great concern about Wal-Mart's potential impact on traditional town centres and traditional suppliers.

All those concerns are exacerbated by the fact that the process seems to have been started at a meeting, on 25 February, between the Prime Minister and Bobby Martin, Wal-Mart's chief executive. We might not be concerned about that meeting if we were given some clear answers about what happened at it, but we are not receiving clear answers. Off the record, newspapers have been briefed that there was no discussion of the planning issue. On the record, however, in parliamentary answers, we are told, "Nothing at all will be said about the meeting."

The most extraordinary feature of the Government's amendment to our motion is that they fail to address the key issue of Wal-Mart, which is mentioned in our motion. Was the planning issue raised? If not, why does the Prime Minister not say so in a parliamentary answer? As we all know, the difference between an official briefing to the newspapers by some unknown official and the Prime Minister replying on the record is that the Prime Minister can be held to account for his answer if it proves inaccurate.

If the newspapers were not briefed by the Prime Minister's office—I assume that they were not—they must have been briefed by Wal-Mart.

Mr. Martlew

Will the hon. Gentleman give way?

Mr. Taylor

I shall be happy to give way in a moment, but I want to make progress on this point.

The Mail on Sunday stated on 20 June: The PM had used the meeting to further his aim to bring down prices in British supermarkets by giving the Americans the go-ahead to enter Britain. In his desire to do this, he is said to have offered to relax planning curbs which could let Wal-Mart build huge US-style hypermarkets on greenfield sites in Britain. Mr. Blair was not alone at the meeting. At his side was his own Mr. Fix-It, personal economics adviser Geoff Norris … Mr. Norris was in a bitter row a year ago when he vetoed plans by Deputy Prime Minister John Prescott to curb car use to improve the environment. Mr. Prescott hit out at 'teenyboppers' at No. 10 … and said his remarks were aimed at Mr. Norris. The official line was that it was a courtesy visit. Since when has a Prime Minister received courtesy visits from the bosses of one of the world's biggest companies when it does not even operate in Britain? Are we seriously being asked to believe that there was no discussion about the potential for Wal-Mart to enter this country or the consequences of that?

Clearly, The Sunday Telegraph was also briefed on the subject. It said: Earlier this year, Wal-Mart executives[Interruption.] Perhaps Labour Members can tell me who the briefings were from. They were either from Wal-Mart or Asda, or from the Prime Minister's office. Either way, somebody within the industry believes that Wal-Mart was given the green light for those developments.

The article said that Wal-Mart executives shared a glass of sherry with Tony Blair at Number 10 Downing Street. They wanted to know whether their company would be welcome in Britain and were warmly received.[Interruption.] Labour Members may not like it, but that is what we were told. Perhaps they should ask the Prime Minister's office—[Interruption.]

Mr. Deputy Speaker

Order. We must have silence in the Chamber except from the hon. Member who is speaking.

Mr. Taylor

The article returned to the key issue: To achieve real competition, Wal-Mart needs a substantial relaxation in the planning laws to allow it to build its vast stores in favoured locations. The odds on that look long since the environmental lobby is growing ever stronger, but observers still believe that Wal-Mart will get what it wants. Why else would Wal-Mart be moving into Britain? Its strategy is to achieve profits and growth by building new larger stores to take on and beat the existing ones. Yet Asda, which has very little presence in the south, is in no position to do that unless it can acquire new sites and in a way that the Government claim to be against. There is no logic to the takeover if that cannot be achieved, because Asda has made it clear that it intends to squeeze down the margins as a way of gaining competitive advantage.

Mr. Martlew

Will the hon. Gentleman give way on that point?

Mr. Taylor

In a moment.

The Guardian, a paper with a very different political view, said in an article on 16 June: The Treasury and the Department of Trade and Industry have been keen to open up retail competition. A report last year for the Treasury by consultants McKinsey concluded that planning rules should be relaxed to allow more supermarkets. The McKinsey report was commissioned by the Treasury and is now part of the competition inquiry into supermarkets that is now taking place. Is it any indication of the direction in which the Government are going?

The article includes a direct quote from an unnamed source at the DTI, which incidentally comes just after a reference to one of the Ministers. It states: The DTI source said: 'We want competition. Where there are barriers to competition, we need a good explanation. A particular concern is that national benefits such as lower food prices are properly taken into account, as well as local disbenefits from new developments.' As a result of today's debate, Asda has issued a press release stating that it intends to adjust its policies within the current planning requirements. However, Allan Leighton, chief executive of Asda, said this week: If we were in the south, prices would be lower. You have got to believe there should be a softening in planning to allow the leading players to develop leading formats. There in no question about what Asda wants or what Wal-Mart must want. The real question is: Why was it after a meeting with the Prime Minister that Wal-Mart felt able to come in? If we get clarification from the Government on that, today's debate will have served a genuine and useful purpose.

Mr. Martlew

I am grateful to the hon. Gentleman for giving way. I realise that it is his job to probe the issue and I am sure that the Minister will answer his question. He has mentioned Wal-Mart bringing down prices. Is it Liberal Democrat policy to oppose Wal-Mart's takeover of Asda?

Mr. Taylor

On prices, the hon. Gentleman may not be aware that one reason why the Office of Fair Trading inquiry took place was that my hon. Friend the Member for South-East Cornwall (Mr. Breed) prepared a report on overpricing in the industry. Those issues, the anti-competitive practices and the bad treatment of suppliers can be addressed without Wal-Mart coming to Britain. If Wal-Mart is coming here on the basis of new development, we are opposed to it. The issue is not whether or not Wal-Mart is involved, but whether there will be new development. However, we must ask why Wal-Mart is coming here given that we know its policy. Why did it buy Asda, which supports the same policy of much bigger retailing units—indeed, it already has plans for 10 hypermarkets—and wishes to move into the south even though the sites are not available? Asda must be looking for new sites—indeed, it has already made that clear. Asda, unlike the other major food retailers, is specifically targeting similar operations to Wal-Mart and plans to move into non-food retailing, which has a greater impact on town centres. All the newspaper reports say the same thing. The information must be coming from somewhere.

Mr. Gray

Will the hon. Gentleman give way?

Mr. Taylor

In a moment.

It is obvious where the information is from, as the newspapers make that clear. The Mail on Sunday said: An Industry Department source said: 'We must do everything we can to encourage competition. The vital importance of achieving lower food prices must be taken into account alongside environmental arguments involving proposed new developments.' Wal-Mart has made no public comment about wanting to build bigger stores in Britain. However, Asda has. It is pretty obvious that The Guardian has it exactly right when it says that there is a struggle with those who believe that the primary issue is lower prices, which can be achieved only by the development of more and bigger supermarkets in tighter competition. That is a perfectly legitimate view, but it is not the view of DETR Ministers or the majority of right hon. and hon. Members. There are other ways to tackle the issue without raping the countryside and our town centres.

Mr. Gray

In an intervention, the hon. Member for Harrogate and Knaresborough (Mr. Willis) said that there was no out-of-town supermarket in Harrogate. I am sorry that he is no longer in his place. He has made his intervention, issued his press release and shoved off some place else. Liberal Democrat-controlled Harrogate council gave planning permission to Morrisons and Sainsbury to build supermarkets on green-field sites.

Mr. Beith


Mr. Gray

Just outside Harrogate. Does the hon. Gentleman believe that Liberal Democrat-controlled Harrogate will give permission for Wal-Mart—

Mr. Deputy Speaker

Order. The hon. Gentleman's intervention is too long.

Mr. Taylor

My colleagues tell me that the hon. Gentleman is inaccurate, but I am not in a position to answer for my hon. Friend the Member for Harrogate and Knaresborough (Mr. Willis). The hon. Gentleman can pursue him on another occasion.

I do not know whether those on the Conservative Front Bench support our concerns. I know that the right hon. Member for Suffolk, Coastal, a former Secretary of State for the Environment, strongly supports them and went on the television to say so. We shall find out soon whether there is division among the Conservatives.

I want to quote one last time from the newspapers. The Sunday Telegraph said: Given Wal-Mart's relentless attention to detail there is no doubt that it has already drawn up a blueprint for Asda, one that it is reluctant to share with outsiders. Wal-Mart has refused to comment. The report continued: It is almost certain to be based on the vision of transforming Asda into Britain's dominant retail business within the next few years, through a mixture of aggressive store openings and prices low enough to put rivals out of business. We know that Asda is pursuing that strategy and that Wal-Mart's acquisition makes commercial sense only if it is allowed to do that. We need to know whether the Government are going to stand up to that strategy.

The Government must clarify their policy. On 17 June, the Department of the Environment, Transport and the Regions issued a response to the report in The Guardian. It said: This is wrong. The Government has no intention of changing the policy on retail development which is directed to promoting the viability of our town and city centres. That is reassuring, but the press release goes on to refer only to the sequential approach, and so does not clarify whether it will allow large, out-of-town retail development. The approach says only that the first choice is for in-town development, but, if there are no in-town or edge-of-town sites, the need should be examined. All the evidence is that the debate in the Government about whether the need for greater competition should allow out-of-town developments in the circumstances that I have described or whether they should hold the line is still lively and, at best, undecided.

The McKinsey report recommended a change to give competition priority over the environment. We know that Asda is pursuing those developments. We know that Wal-Mart's acquisition makes sense only on that basis. If the Government want to reassure us, they should stop refusing to say anything on the record about what happened at that meeting. They need to be clearer about what happens after the sequential approach is exhausted and what they believe about need, competition and the development of new and much larger superstores around our towns, cities and smaller country towns. That is the issue. I hope that the House will agree with us, but nothing in the takeover and the Government's response so far holds out any reassurance.

4.52 pm
The Minister for the Regions, Regeneration and Planning (Mr. Richard Caborn)

I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof: welcomes the Government's planning policy on town centres and retail development, which promotes the development of food retailing in existing centres; endorses its attempts to maintain vital, viable competitive town, district and neighbourhood centres, which provide a broad range of retail services accessible to the whole population regardless of whether they have access to a car; welcomes the benefits which supermarkets have brought to consumers; notes the concerns over the level of supermarket profits and approves the investigation of grocery retailing being carried out by the Competition Commission; welcomes the recently agreed re-shaping of the CAP and the establishment of the second pillar of the CAP—an integrated rural development policy; and welcomes the Government's commitment to rural communities, its efforts to increase collaborative marketing among farmers and encourage diversification, and its support for regional, speciality and traditional food producers. We do not often congratulate an Opposition party on tabling a motion opposing the Government, but I welcome the debate because it gives us an opportunity to set out our position on out-of-town shopping and supermarkets. It is good of the Liberal Democrats to use half their Supply day to give me that opportunity. The hon. Member for Truro and St. Austell (Mr. Taylor) gave us one of the best examples that I have heard of a speech based on joined-up press releases and press cuttings. There was not a great deal of new substance to it. I shall try to clarify what has happened over the past 10 days and at some of the recent meetings.

I must make my apologies to the House, because unfortunately—or fortunately—I have a speaking engagement elsewhere and I shall not be here for the vote, if there is one. I shall deal with the Government's planning policy for supermarkets and my hon. Friend the Minister of State, Ministry of Agriculture, Fisheries and Food will deal with the food issues that the hon. Member for Truro and St. Austell has raised.

I welcome the opportunity to make the Government's position clear. Soon after we came to office, we published our response to the report of the Environment Committee on shopping centres. We made it clear that we were firmly committed to the objectives of the planning policy guidance note on town centres and retail development—PPG6.

Everyone knows that PPG6 seeks to sustain and enhance the vitality and viability of existing city, town and district centres to make them the focus for retail investment, so as to provide everyone with easy access to a wide range of facilities and services by a choice of means of transport. I remind hon. Members that nearly a third of households still do not have a car. Such investment is essential to the regeneration and enhancement of the attractiveness of our towns and cities.

What does that mean? We want local planning authorities to establish the need—a point raised by the hon. Member for Truro and St. Austell—for new retail facilities in their plans, and we want them to apply the sequential approach to identifying sites where this can be accommodated. That should be in existing centres. Developers who propose schemes that do not conform to that will have to demonstrate clearly that there is a need for the scheme.

I refer the hon. Member for Truro and St. Austell to a written answer on 11 February, when I cleared up the whole question of need—a point on which the hon. Gentleman dwelt and on which, I think, he accused the Government of being inconsistent. What does "need" mean? In that written answer, I said that, first, would-be developers must demonstrate that need does not mean simply an assertion by the developer that there is a market demand. It means that the local planning authority must consider the wider needs of the community as well as the market demand for a plan before it accepts the development plan. If the local authority is satisfied that a need exists, it must also be satisfied that the sequential test has been applied in selecting the site. Even then—[Interruption.] The hon. Member for Truro and St. Austell said that he wants answers to his questions, so I hope he will do me the courtesy of listening while I give him those answers.

Even then, the local authority must also consider whether there will be an adverse impact on the existing centre before it allows the proposal to go forward. That was a clear definition of the word "need".

Mr. Matthew Taylor

The Minister's comments are helpful. As I said, I believe that the Minister and his team at the Department share my concerns on this. However, can the Minister clarify whether, if it is believed that there will be an adverse impact either on the community or the town centre, that in itself could always be taken as grounds by councillors for refusing permission?

Mr. Caborn

We actually have devolved government and the planning authority is the local authority. Because of certain cases before the courts, we have tried to clarify the word "need". It will be for the local planning authority to make the decisions. If people believe that local authorities have acted outside their rights and responsibilities, there are many mechanisms by which they can be challenged. But we cannot and will not be as prescriptive as to say that everything can be determined from the centre. On the contrary, we believe that devolving government to local authorities is important.

It is difficult in a narrow debate such as this to talk about the wider impact of the planning regime. I think that the hon. Gentleman will accept that, since we came to power, we have looked at modernising land use and transport planning. We have now instituted for the first time at the regional level an examination in public, in an attempt to change planning regimes from being reactive to proactive. The first hearing in public took place in the eastern region. I believe that it has been successful. SERPLAN, the south-east regional planning conference, is going through that process now, and all the regions will go through it this year and the early part of next.

So the context is one of the right to make decisions strategically at the regional level, translating that into the local or unitary development plan, and the planning authority, in turn, translating that. That gives local authorities every opportunity to plan in the most positive way for their communities.

Mr. Taylor

There is nothing in that with which we would disagree. However, the Minister knows that what Ministers say in this House helps to influence what happens, particularly in inspectors' inquiries when they try to interpret the Government's intentions. In the past, councillors have often looked to refuse permission for out-of-town or edge-of-town retail superstores on the basis that they would harm the existing community. However, councillors have not been successful because, while that condition may be taken into account, it is not sufficient in itself.

Is the Minister saying that the policy now is that, if there will be a detrimental impact on an existing town centre, that should be taken as sufficient in itself by an inspector, should it go to appeal, to uphold the refusal by the local council?

Mr. Caborn

I will repeat what I said on 11 February, and I advise the hon. Gentleman to read my response of that date. Following the court case, we believed that the word "need" needed to be clarified, and we did that. If the local authority is satisfied that the need exists, it must be satisfied also that the sequential test has been applied in selecting a site. Even then, it must consider whether there will be an adverse impact on existing centres by allowing the proposal.

All that we can do is to give that type of guidance. When we do that, it can be cited in courts and at the various planning inquiries. Coupling that with what we are trying to do to bring more certainty to the planning system through other actions will mean that local planning authorities will be able to carry through their plans for their communities.

As I was saying, developers will have to demonstrate that there is a need for their scheme; that they could not find a more central site; and that there would be no significant impact on existing centres. I want to reaffirm that that is still our policy and that we have no plans to change it. My right hon. Friend the Prime Minister has confirmed that.

Let me put the record straight about the rumours concerning my right hon. Friend the Prime Minister's meeting with Wal-Mart. My right hon. Friend has put it on record that he has given no assurances to Wal-Mart about relaxing planning policy. Indeed, planning issues were not discussed.

I am pleased to say that our policy has widespread support in this House, from the general public and within the industry. However, there are some exceptions. For example, Asda's chief executive is reported to have told the BBC's "The Money Programme" that the only way forward is to loosen planning restrictions.

It is interesting to note that the Asda chairman, the hon. Member for Tunbridge Wells (Mr. Norman), told the House as recently as 3 February 1999 that it is important to recognise that the supermarket industry has, for the most part, welcomed the tightening of the planning restrictions, which is good for the industry and for the community."—[Official Report, 3 February 1999; Vol. 324, c. 1030.] I wonder whether the hon. Gentleman maintains that view when he has been so publicly associated with the takeover proposal by Wal-Mart.

I picked up a copy of an Asda press release when I came to the House. It says: Following today's report in the Financial Times Asda wishes to clarify that following the proposed acquisition by Wal-Mart, it plans to continue to trade in the UK under the Asda banner. We will continue to back British farmers, favour small British suppliers and crusade for value for British consumers. It will remain Asda's policy to adapt its store development plans to meet the intention and spirit of today's planning regulations and to work closely with local communities to meet local environmental and transport needs. As far as Asda is concerned, rumours to the effect that there has been any understanding, formal or informal, with the Government on relaxation of planning requirements are complete nonsense. Asda is all over the shop, with its chief executive saying one thing and its chairman saying another. However, we welcome that statement.

We are determined to maintain a firm and consistent application of the policy. That is more important than scoring a few points about press releases, and would be expected of us by all the stakeholders. Indeed, in the past two years we have clarified and tightened up the policy in PPG6, closing some loopholes; we have called in a large number of applications to ensure the consistent application of the policy; we have refused a high proportion of appeal and call-in cases, allowing only those in or on the edge of town centres; and we have successfully defended our policy in the courts.

I would characterise our policy stance on supermarkets as tough but fair. We have tried to keep the policy up to date; to ensure that it is applied firmly and consistently, without fear or favour; and to ensure a level playing field for all players in the industry. All the letters that we have received support our policy. Nobody from whom the Department has received representations wants us to relax it. Everyone wants to be reassured that we will maintain and uphold the policy, and I give the assurance that we will.

Mr. Brian Cotter (Weston-super-Mare)

The Minister talked about a fair policy on supermarkets. What about business rates, which cost supermarkets only 5 per cent. of their turnover, whereas small shops pay anything from 12 to 15 per cent? That is not exactly fair.

Mr. Caborn

We are prepared to debate anything that the Opposition table in a motion, but I was not asked to respond on that subject today.

We inherited a situation in which the number of superstores had increased nearly tenfold since 1980. Very many of them were built outside existing centres, and there were still out-of-town stores coming off the production line when we came to power. The legacy of the previous Government was a deluge of out-of-town stores. They left a trail of disaster and absolutely let the market rip. A combination of permissive planning policy and a property boom in the late 1980s meant that half the current out-of-town retail floor space was built in only five years, from 1986 to 1991. Another boom following the recession of the early 1990s brought another surge of out-of-town development. The situation was totally unmanageable.

Mr. Gray

Does the Minister agree that there was a significant change in policy at about the time when my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer), for whom I worked as a special adviser in the Department of the Environment, entered that Department? From then on, there was a significant shift in the number of permissions given for out-of-town centres. Does he agree that some tribute should be paid to the previous Government?

Mr. Caborn

I have acknowledged on many occasions that the previous Government introduced PPG6, and we welcome that, but that does not alter the fact that they were responsible for the massive expansion of out-of-town shopping in such a short period that has done so much damage to our town and city centres. We are only now beginning to reap the benefit of the change in policy to which the hon. Gentleman referred and, in the meantime, the boom has had a devastating effect on many of our local centres. It has been a very damaging and wasteful process, effectively playing Russian roulette with the future of our towns and communities. It is a process that we cannot afford to repeat. We will not do so, which is why this debate is very timely indeed.

We are determined to take a tough line. We realise that we must capture new retail investment for our town and city centres. We must ensure that supermarkets are developed in existing centres, to help to make them attractive and competitive. That is particularly true of smaller towns and district centres where we need to have stores of the right size.

Our independent research, conducted by Hillier Parker, on the impact of large stores on market towns and district centres showed that locating stores outside such centres can be very damaging. It showed that large food stores outside towns or district centres have in some cases cut the market share of the principal food retailers in such centres by up to 50 per cent.

As the hon. Member for Truro and St. Austell will be only too aware, the opening of superstores on the edge of town in many areas in the south-west has had a devastating effect on the town centres. Penzance, Helston and Falmouth illustrate that all too well. Small towns in East Anglia and small centres in our larger towns show similar results.

The research provides strong support for the tough line we are taking, and we need to capture that "inward investment" to revitalise our town centres. We cannot afford to allow new out-of-town schemes that undermine rather than reinforce the vitality and viability of existing centres.

If we are to regenerate our town, district and local centres, we will have to adopt a positive, plan-led approach. Our policy advice urges local planning authorities to adopt a much more proactive approach to the task. For example, they should say where new retail development is needed, and where it will be encouraged, and identify sites and, if need be, help to assemble those sites. We need to capture new investment for town centres. That means taking a positive approach to planning for new food stores, to help to bring about our wider aim of an urban renaissance, and using them to anchor the regeneration of district and local centres.

There are some encouraging signs that the message is getting through. Some companies have developed new formats, such as the Tesco Metro and Sainsbury's Local. The convenience store could be the format of the future for our local communities. Our retail policy is all part of our strategy for bringing about an urban renaissance.

Lord Rogers, who has headed the urban task force, will present his report and recommendations to the Government next week. We hope that his report will form the basis of the urban White Paper—and the rural White Paper—that we will publish later this year. Those White Papers will address the wider issues. The subject of our debate today will form part of that urban renaissance and should be seen in that context. If we are to make our towns and cities, and our local neighbourhoods, places where people choose to live, then we must make sure that we can offer them the quality of life that we all expect for ourselves.

Mr. Hilton Dawson (Lancaster and Wyre)

Does my right hon. Friend agree that, in pursuing the worthy objective of an urban renaissance, we should encourage distinctive urban centres, so that we do not end up with the uniformity of development that we have seen in the past? We should celebrate diversity and regional and local differences in our town centres.

Mr. Caborn

I could not agree more, and that is what we are trying to do. We are trying to change the whole concept of the planning regimes in this country and we want local authorities to be proactive, not reactive. Many initiatives are emerging in our city and town centres. I recently visited Manchester to open some flats that had been developed from an old broken-down warehouse. All those flats had been sold before the conversion had taken place. When designers and architects use their imagination, there is a market for the result. If professional people can be persuaded to stay in towns and cities, their disposable income starts to have an effect on the type of restaurants and shops in the area, and a virtuous circle develops.

We also want to develop the individual character of our towns and cities. We have some beautiful cities that can be said to be European, and there is no reason why we cannot develop some of those cities, as has been done in Barcelona. Shops and supermarkets are beginning to accept their responsibilities as part of the urban renaissance. That approach to planning and investment in the inner cities has brought out creative talent instead of letting the market rip, which produced the situation that we inherited. Even the Conservatives accepted that before they left office, and introduced PPG6, which we welcomed.

The new approach to regenerating smaller centres and building them up to meet a wide range of everyday needs is part of our approach to tackling social exclusion. We want to ensure that everyone has good access to shops, especially food shops, and that will often mean ensuring that appropriately sized supermarkets are opened in local centres.

Our objective is to promote competitive and vibrant town centres. We want retailers to compete on the same terms in the same market place: the town centre. The planning system provides a level playing field for all players, regardless of size or ownership. We are not trying to protect one firm against competition from another. Our policy is fair, clear and consistent with our overarching aim of revitalising our towns and cities. We intend to keep it that way.

5.15 pm
Mr. Nick Gibb (Bognor Regis and Littlehampton)

This is an important debate. A number of concerns have arisen in recent years about the food retailing industry. The growth of large supermarkets in out-of-town locations has been a fact of life for 20 or 25 years, and has taken place in Europe and the United States as well as in the United Kingdom.

The reasons for that growth are many, but unclear. They include social changes: people lead increasingly busy and demanding lives, and want to do their shopping in one trip once a week, at stores with easy parking. Other factors include increased pedestrianisation in many town centres, and the success of supermarkets in improving quality, choice and variety and in bringing down prices.

The motion tabled by the Liberal Democrats mentions the rapid expansion of out-of-town superstores under the Conservatives". Like the Minister's speech, that is a facile and juvenile approach to a complex issue. It does no credit to the Liberal Democrats, or to the Minister. However, although it was one-sided and simplistic, the Minister's speech was slightly less polemical than the motion and will contradict many speeches made by Liberal Democrats in constituencies around the country.

The growth of out-of-town supermarkets has had a damaging effect on smaller retailers and town centres, as I know only too well from what has happened in Bognor Regis and Littlehampton. Moreover, despite the gains in efficiency and economies of scale that supermarkets achieve, the prices that they charge are considerably higher than in similar enterprises in the United States. An effective campaign has been run by The Sunday Times to expose such price differentials.

There may be many reasons for those differentials, as no doubt the Competition Commission will report. Transport costs are higher in this country, especially after the Government's huge hike in diesel prices. [Interruption.] In total, the Government have increased the escalator from 5 to 6 per cent., and there has been more than one increase in any given year. The result is that diesel prices are 21 per cent. higher than when the Government came to power. The escalator is higher and faster than it used to be. It should be ended, because it is making the problems worse.

Mr. Martlew

If the cost of DERV has gone up so much, why have supermarket prices risen by only 1.5 per cent. since the Government came into power?

Mr. Gibb

One cannot have one's cake and eat it too. Either there is a problem, or there is not. In this case, there is a problem. One of the key contributors to it is the high price of diesel, as we shall see when the commission reports.

The second problem is the price of land. We live in a crowded island where planning guidance is very strict, for worthwhile reasons. The result of the two problems that I have set out—high prices for diesel and for land—is that the prices charged by the supermarkets are also high. A more important factor still is the absence of fierce competition between the large, multiple retailers.

The third element that needs to be highlighted is that the British farmers who supply supermarkets do not receive a fair price for their produce. That is especially apparent in the fact that falling livestock prices have not been passed on to the consumer. The price of pork provides a stark example. There has been a catastrophic fall in pig prices over the past couple of years.

Dr. Howard Stoate (Dartford)

The hon. Gentleman makes a valid point about farm prices. A farmer in my constituency tells me that the price of his cabbages has not gone up for seven years. He receives 15p a cabbage now, and he got 15p a cabbage then. Supermarkets put their prices up year after year, so why is the poor old farmer receiving exactly the same price he was paid all that time ago?

Mr. Gibb

The hon. Gentleman makes a fair point, although I am keen to get away from the consensus that appears to be developing.

Lack of competition among supermarkets affects consumers, but it affects suppliers too. There is concern that the supermarkets have almost monopsonistic purchasing power over their suppliers, and that that position is being abused. Supermarkets set high environmental, hygiene and quality standards for farmers and suppliers, and strict employee welfare conditions are required; yet, if the price or quality is better overseas, they are happy to switch to suppliers who do not enforce those conditions.

The environment is my fourth concern. It is suggested that out-of-town developments eat up the fast-diminishing stock of our countryside and that more such shopping means more car journeys.

All four of those concerns are real. The multiples supplied 86 per cent. of the United Kingdom grocery market in 1998, and are expected to account for 32.5 per cent. of all UK retail sales by 2004. However, the issues are also complex—no simple answers exist. Competing and contradictory interest groups represent concerns on either side of the argument.

It is all very well for Liberal Democrats Members to represent one set of interests in the House while Liberal Democrats locally represent different interest groups with contradictory policies, but the official Opposition, like the Government, require a joined-up policy. Commentators on these matters—the Liberal Democrats in particular—suffer from a lack of intellectual honesty or consistency that verges on the hypocritical. On the one hand, they are concerned that prices charged by supermarkets are too high in comparison with those of Europe and the United States; on the other, any suggestion that a new entrant to the market might force prices down raises concern about damage to town centres and smaller retailers.

If the supermarkets charge prices that do not drive out smaller stores, they will make larger profits which the Labour Government will deem too great. If they cut their prices, they will be accused of being predators. We need a balanced approach to enable competition to flourish, to allow the economies of scale enjoyed by the supermarkets to be passed on to the consumer and to enable farmers to be paid a decent price for their produce. We also need policies that enable our town centres to maintain a critical mass of viable shops and that protect an ever-dwindling stock of unspoilt countryside.

There are two pairs of competing policy objectives. One pair—lower prices for consumers and better rewards for farmers—benefits from greater competition. The other pair—protection of our town centres and rural areas—may be harmed by competition. How can the different political parties handle that dilemma? Labour, with its deep-rooted misunderstanding of capitalism and the free market, is subjecting the supermarkets to a battering because of what the Government regard as unacceptable profits. A commission, taking evidence in public, will judge the supermarket industry's profits, effectively returning us to the prices and incomes policies of the 1970s and sending the industry a signal not to be too profitable, innovative or efficient.

Meanwhile, Labour also let it be known that deals can be done behind the scenes to assist particular companies. A sherry party will be held for Wal-Mart, or a meeting with Formula One. That must never become the way in which the British Government do, or are seen to do, business. The Minister says that no planning guarantees were given and that planning was not even discussed at that meeting, but the mystery still remains. If planning was not discussed, what was discussed? As the hon. Member for Truro and St. Austell (Mr. Taylor) says, such meetings are unusual. In order to set minds at rest, will the Minister set out precisely what was discussed at the meeting? Only if he does that can we be sure that the Prime Minister is not just hiding behind careful words.

Mr. Dawson

Will the hon. Gentleman please take this comment from me with the seriousness with which I make it? It is galling and hugely irritating to sit across from him and hear a lecture about trivial issues. My experience of the city of Lancaster is that the Conservative Government wreaked absolute havoc. That is a situation from which we are desperately struggling to recover. Perhaps the hon. Gentleman will address the serious issues rather than nonsense about sherry parties.

Mr. Gibb

The hon. Gentleman does me an injustice. I have said that this is not the simplistic debate that the Liberal spokesman tried to present it as. There are competing concerns. Consumers want low prices and choice in supermarkets. Delivering that often means damage to the environment from the construction of out-of-town shopping centres. The competition provided by the supermarkets damages small retailers in the town centres. It is a question of balance. There is not a simple answer.

Mr. Caborn

Will the hon. Gentleman explain to the House why out-of-town food shopping increased by 50 per cent. in five years but we still have high prices in the supermarkets? The policy of the free market was given a fair wind. The market was let rip. Planning was ripped up. We allowed the supermarkets to do exactly what they wanted, yet we still had higher prices than on the continent when the Conservatives left office.

Mr. Gibb

It is worrying when Ministers have such a simplistic understanding. The Minister is confusing the comparison between prices in large out-of-town supermarkets in Europe and America and in Britain with the comparison between prices in out-of-town supermarkets and prices in town centres. If supermarkets had not been allowed to develop, there would not have been the huge falls in prices that have occurred in the past 20 to 25 years. That is a fact. [HON. MEMBERS: "No."] Yes it is. Everyone knows that supermarkets have delivered lower prices and greater choice. That is their great attraction. That is why they make money and why they have displaced many of our independent smaller retailers in town centres. People do not go to out-of-town shopping centres to pay higher prices. The question is whether the falls in prices that the supermarkets have delivered are big enough. Have prices fallen sufficiently, compared to Europe and the United States? The Minister should understand that question.

Mr. Gray

Perhaps I can take my hon. Friend back to the famous sherry party at No. 10 Downing street. He will know that there are only two kinds of meeting in Government circles. One is an official meeting at which civil servants take minutes, and the other is a political meeting at which difficult political decisions are taken, no civil servants are present and there are no minutes. It might be interesting to know whether the meeting was political or non-political. If it was official, why can we not see a copy of the minutes?

Mr. Gibb

My hon. Friend makes a valid point. The problem is that we are prising from the Government the truth about the meeting on a piecemeal basis—a briefing to the press, a statement in a debate on a Liberal Opposition day. We need a categorical statement of precisely what happened. It would be better if it were delivered by the Prime Minister himself in this Chamber but, if we cannot have that, will the Minister say what precisely was discussed at the meeting and whether it was official and minutes were taken? If minutes were taken, can they be published?

Mr. Matthew Taylor

We will not disagree on the last point, but will the hon. Gentleman clarify whether he prefers maintenance of the town centres and the environment to developing competition? He said that it was a complex issue and that there was a balance to be struck. Asda, or at least someone in Asda, has argued that it could cut prices if it were allowed to develop superstores in competition with local monopolies in the south. Is it Conservative policy to protect the town centre and the environment and say no, or to say that competition to reduce prices is the priority so such developments should be allowed?

Mr. Gibb

Our policy is clearly set out in planning policy guidance 6. It is to help small business. That was our policy, and it remains our policy. The Liberal Democrats try to resolve the policy dilemma that I set out in their time-honoured fashion by saying one thing to one constituency and the opposite to another. They tell consumer groups that they want more competition to reduce prices, and the rural lobby that they want fewer supermarkets and less competition. They tell environmentalists that they oppose new supermarket developments, but to consumers in Yeovil the right hon. Member for Yeovil (Mr. Ashdown) will say nothing against a new supermarket development. That is Liberal policy in a nutshell.

Mr. McNulty

Can the hon. Gentleman say whether that will remain his policy? I ask only because he said of another policy: We believe that we are right in our view, but we may not be. We are not arrogant, and if we are proved to be categorically wrong, we shall change our policy. It is irrelevant whether one person in society believes that we are wrong. What matters is whether we are wrong."—[Official Report, Standing Committee B, 17 June 1999; c. 659.] Will the policy change? Do those remarks represent the thrust of his policy formulation?

Mr. Gibb

We are not an arrogant party. We have a firm view about the euro, if I may digress. Our position at the next general election is that we will not take Britain into the single currency. Our policy for the general election after that will be decided nearer the time. That is a sensible, pragmatic approach to policy.

Neither the Labour nor the Liberal approach is acceptable in dealing with these difficult issues. Our approach, as it was in government, is one of balance. We want more competition to bring down prices and increase choice, and so that supermarkets have to compete with one another in their relationships with suppliers and farmers. However, as Conservatives, we understand that we live on a small and crowded island and that ever-more building and development are not sustainable ad infinitum. That is why the previous Government introduced PPG6 to slow the growth of out-of-town shopping development and ease pressure on the environment and town centres. That should remain the policy of the British Government, with no added codicils of ex-statutory, intramural deals for favoured companies. That balance is the right approach. I hope that no one will take any notice of the Liberal Democrats, whose disingenuous approach lacks integrity and damages the body politic as much as it damages them.

5.33 pm
Mr. Eric Martlew (Carlisle)

I have been a critic of supermarkets for 10 years. On 9 December, I laid out my reasons in a poorly attended Adjournment debate. The hon. Member for Bognor Regis and Littlehampton (Mr. Gibb) confused me because he seemed to say that we should not refer the problem of price rigging in supermarkets to what is now called the Competition Commission because that would interfere with the free market. However, we have a cartel of the four biggest supermarkets and his Government were to blame for that situation. One of the heads of the cartel is a Conservative Member, so we can understand why the Conservatives do not want the supermarkets to be examined by the Competition Commission. If I am wrong, he can intervene.

The growth in the power of the supermarkets has come at the expense of everyone else. We have heard the argument about small shops, which is difficult. My constituency had the sense to ensure that its centre was in a good state of repair before the out-of-town supermarkets came on the scene, so we still have a thriving city centre. That did not happen in some cities.

The British public love the supermarket—let us not kid ourselves about that; that is why I asked the hon. Member for Truro and St. Austell (Mr. Taylor) whether the Liberals were in favour of supermarkets. One has only to go round supermarkets to see that people look on going to supermarkets as a day out. That is not my view, although I do go to supermarkets. Indeed, on Sunday, I shall be opening the celebrations for the 100th anniversary of Morrisons at my local store in Carlisle—unless of course the staff read this speech. The reality is that the British public like supermarkets and politicians have to accept that. The Government's planning policies are strong enough to preserve what is left of our city centres, although devastation has taken place, as my hon. Friend the Member for Lancaster and Wyre (Mr. Dawson) pointed out.

Some of the information that is sent to Members of Parliament worries me. In March, we all received a briefing from the British Retail Consortium; it was called "Supermarkets' Prices and Profits—Myth and Reality", but most of it was myth. We were asked to phone the consortium if we had any queries. I pointed out that some of the figures in the briefing on competition with continental supermarkets were not quite right, because there is no VAT on food in the United Kingdom, but there is in France, Germany or wherever. I asked for some figures. The reply was, "Yes, of course." I waited for three months until June and rang the consortium again to ask for the figures, but was told, "We are very sorry, we don't have the resources." The British Retail Consortium does not have the resources to provide my answer. I was told that I should get my civil servants to find the information.

I pay credit to The Sunday Times for its work on supermarkets, and for exposing the fact that we are paying too much for our food. The idea that, if supermarkets charged less, the farmers would be paid less is nonsense. Supermarkets push down payments to suppliers as far as they can to increase their profits. Supermarket profits are extremely high, so I have no fear that the supplier would be paid less.

Dr. Stoate

Not only do purchasers force down prices, but they have told farmers in my constituency that, if they do not like the prices that they are offered, the purchasers will buy produce from abroad. They do not care about the deprivation and difficulty caused by their forcing down of farm prices for my constituents.

Mr. Martlew

I can give another example. Ten years ago, 68 per cent. of the price of a pint of milk in the supermarket—now it would probably be a litre—went to the farmer. Today, it is only 56 per cent. and the price has probably dropped in real terms. Supermarkets are screwing the suppliers and taking advantage of a monopoly.

Mr. Andrew Love (Edmonton)

They are screwing the consumers.

Mr. Martlew

As my hon. Friend says, they are screwing the consumer as well. Considering how much the average family spends in supermarkets, if we can get supermarket pricing policy right, it would be the equivalent of a penny or tuppence off income tax. We should be doing that.

Mr. Gray

If the hon. Gentleman feels that way about milk marketing, why has his right hon. Friend the Secretary of State for Trade and Industry taken so long to release the Monopolies and Mergers Commission report on Milk Marque?

Mr. Martlew

I was one of those Members of Parliament who opposed the breaking up of the milk marketing boards under the Conservative Government. That Government are to blame for the current situation.

Wal-Mart concerns me. It may be necessary to bring in someone from abroad to break up the cartel, but I have worries about Wal-Mart. It has more than 2,000 stores in America; not one of them is unionised. In fact, some people have been sacked because they tried to form trade unions. I understand that Wal-Mart went to the courts in America to ask for exemption from the minimum wage. I am sure that, in his reply to the debate, my hon. Friend the Minister of State will tell us that, if the company were to try to do that in this country, the Government would not accept it.

Asda is part of the cartel, but it has a good record with its employees. I hope that, in the event of a takeover, Wal-Mart will maintain that good relationship, retain the terms and conditions of the work force and continue to co-operate with the GMB—I know that the union is prepared to work with Wal-Mart. We will not tolerate in this country the sorts of practices that Wal-Mart has followed in the United States.

There is a major problem with supermarkets that Parliament has not yet addressed. Many of our constituents use supermarkets and they are being exploited. We must break the cartel because, if we do not, it will continue to advance. It is not a question of allowing the supermarkets to have a particular market share; if we do not put the brakes on, we will find that, in four or five years, the growth in supermarkets will have continued, competition will be less and the suppliers and the public will be worse off.

5.41 pm
Mr. James Gray (North Wiltshire)

I am pleased to participate in this important debate. The Liberal Democrat tradition in Supply day debates is to choose the least significant subject imaginable in which no one else is even slightly interested. However, the issue of supermarkets, the food in supermarkets and the future of food retailing is centrally important to us all.

Regardless of what one may say about town centres, village shops and the detrimental effects of the supermarket revolution, the truth is that we all use supermarkets. I challenge hon. Members who are present in the Chamber to say that they do not visit supermarkets—or perhaps it is a wife, a husband or a servant in some cases. [Interruption.] There is not a single person in this nation who does not use supermarkets.

For example, 88,000 people in the town of Chippenham go through supermarket checkouts every month—and Chippenham has a population of 30,000. It has three supermarkets, yet 88,000 people visit Safeway alone. Sainsbury and Somerfield presumably have a similar number of customers. [Interruption.] I am glad that I have been able to give the rather dull faces on the Government Benches a little innocent amusement. In order to set the record straight, I make it absolutely clear that I shop at Safeway and Sainsbury in my constituency.

Mr. Drew

Not your servant.

Mr. Gray

That is precisely my point.

When it comes to environmental issues—the same argument applies to supermarkets as to the use and building of motorways, the cost of road building and traffic congestion—the more self-righteous among us, whom we often find come from the Liberal Democrat Benches, love to claim the moral high ground. They say, "We believe in village shops and we believe in preserving the high street. We decry what has happened with regard to supermarkets across the nation, we decry the motorways that allow people to get to the supermarkets and the construction of parking facilities. We are into bicycles, bobble hats and high streets." The truth is that the Liberal Democrats use supermarkets as much as the rest of us, and they use motorways to get there just like we do. Pretending that, somehow or other, they are cleaner than clean and that we are the bad guys for using those facilities demonstrates how two-faced the Liberal Democrats are.

The truth is that hon. Members on both sides of the House are absolutely determined to do what we can to support our rural areas and village shops—and they are thriving in every village in my constituency that has them. The communities are vibrant and living, and villages that have lost their small shops are poorer as a result. We are all determined to do what we can to support the high streets—or what is left of them. We are doing an enormous amount in Malmesbury in my constituency to ensure that the vibrant high street remains. It would be foolish to suggest that any Member of Parliament from any political party is not committed to that useful aim.

However, that does not mean—as several luddite speeches have suggested—that supermarket shopping is somehow a bad thing. It plainly is not, and the people who voted for us use supermarkets an enormous amount.

As we heard earlier, 86 per cent. of all food shopping is done in supermarkets. The average weekly shop in the United Kingdom is six supermarket bags weighing 84 lb. That represents a significant change in the way in which we run our lives, and to try to ignore it or to argue that it is a bad thing gives the wrong impression to those who will read our debate later.

Mr. Gibb

Does my hon. Friend think it odd that the leader of the Liberal party did not oppose the development of a supermarket in his constituency on a site that was of particular interest because it was mentioned in a Thomas Hardy book, yet his spokesman in the Chamber today is antagonistic to all supermarket development?

Mr. Gray

I am grateful to my hon. Friend. He points out a curious anomaly in the attitudes of Liberal Democrats across the nation. Earlier, I had occasion to mention the fact that it was Liberal Democrat district councils that allowed superstore developments. The Liberal Democrats are proud of how many district councils they control, and those are the very councils—for example, in my constituency—that allow out-of-town shopping centres, but at the same time give lip service to supporting the high street.

It is interesting to note that although in Newbury the Liberal Democrat district council turned down the application by Vodafone, the hon. Member for Newbury (Mr. Rendel) apparently supports it. The Liberal Democrats are all over the place.

Dr. Jenny Tonge (Richmond Park)

I should like to place it on record that not only do I not wear a bobble hat, but the Liberal Democrat-controlled council in my constituency has opposed two major supermarket developments recently because of worries about damage to Richmond town centre. One of those applications was won on appeal—the Government opposed the council's decision.

Mr. Gray

I apologise, of course, if I slurred the hon. Lady by suggesting that she might wear a bobble hat, a smock or open-toed sandals. I am happy to accept her assurance that she wears none of those things.

The hon. Lady was not in the Chamber earlier when we spoke about Harrogate. The hon. Member for Harrogate and Knaresborough (Mr. Willis), from her own Benches, denied that an out-of-town shopping centre had been built on a green-field site in Harrogate. Liberal Democrat-controlled Harrogate district council gave planning permission for a Sainsbury supermarket in Rippon and a Morrisons superstore on a green-field site in Harrogate.

In Chippenham, the Liberal Democrat-controlled district council gave planning permission for a Sainsbury and a Safeway. There was no question of going to appeal or of turning down the application and leaving it to the Secretary of State to allow it; the district council was delighted and welcomed the development. However, the Liberal Democrat spokesman in the Chamber bad-mouths supermarkets as though we all hate them. That is not the truth.

The opening remarks from the Liberal Democrats went no way at all to addressing the problems that our town centres face. My experience in my area is that Liberal Democrat policies are responsible for killing off town centres. For example, just outside my constituency in Bath, the Liberal Democrats have introduced sky-high parking charges, which have led directly to a 7 per cent. slump in trade in Bath. That is an example of Liberal Democrat concern for our town centres.

In Chippenham, a small market town with a few town-centre shops, we have free parking for an hour. I welcome that, as it brings people in from the countryside to shop in the high street. The Liberal Democrats apparently propose to introduce parking charges in Chippenham and suggest that we might have a park-and-ride scheme in a town of 30,000 people. It is all very self-righteous, politically correct Liberal Democratism, but it will kill the high street in Chippenham. I challenge them to say what they would do to support the high streets.

This is an important debate, but so far it has not been characterised by a real desire to address the problems facing us in planning, transport and the other issues associated with supermarkets. The debate has been characterised by attempts to achieve the moral high ground and in a luddite way to express dislike of supermarkets. The Minister for the Regions, Regeneration and Planning, who is sadly not in his place any more, made some outspoken remarks against supermarkets. I should be interested to know, when the Minister of State, Agriculture, Fisheries and Food winds up, whether he uses a supermarket, whether it is an out-of-town supermarket and how he gets there. I would lay pretty good money that he or his wife do use a supermarket. The important thing is not to make party political points, but to deal with the marked change in taste that has occurred across the nation over the past 20 years or so.

When I was a child growing up in Scotland, my mother went down the high street with her shopping bag. She went into two or three different retailers and bought a loaf here and a lump of meat there. My grandfather was a butcher in Coatbridge: he was a small retailer and people went to his shop to buy meat. They do not do so today. They go to the supermarket and buy their 80 lb of shopping in six bags.

We must address these issues, and central to them is the subject of transport. It is not just a question of where to put supermarkets. I suspect that the market is nearing saturation point because of the large number that were built when we were in power—saturation may not be the right word. Most towns are served by supermarkets. A bigger issue is transport. The average customer at Tesco picks up six bags weighing 80 lbs. The only way in which people can shop at a supermarket is by motor car. It is nonsense to suggest that they go by bicycle, as Liberal Democrats would, or by bus.

My constituents who shop in Safeway and Sainsbury all use the car—or have done so up to now. It is apparently the Government's policy to make it more and more difficult for my rural constituents to use their car to go to the supermarket. They have put up petrol prices, which have gone through the roof. More than anyone else, that affects the less well off, the low-wage earners in rural areas, old people and the disabled. The Government are now talking about congestion charging. That would be helpful for a fat cat or a two-Jag Prescott, who would not mind congestion charging because such people could afford the £5 a day to get into central London. However, it would matter to an old person in my constituency who has to get to the supermarket.

Incidentally, I do not know why we need congestion charging if new Labour VIPs are allowed to use bus lanes to get into the city in their Jaguars. That is what road charging and doing away with supermarkets is all about—getting other people off the road so that they can drive quickly through, as the Prime Minister did the other day in the bus lane on the M4. That is the truth about these people who pay lip service to environmental benefits. They want to continue their way of life and what they are doing, and do not want other people to get in the way while they do it.

We are told that the congestion charge may be £5 a day in London, and £1,000 a year for workplace parking in London. A fat cat in a Jaguar will be happy to pay £5 a day to get the plebs off the road and £1,000 a year for parking, but people on a low wage living in my constituency need their cars to get to the supermarket.

Most of the debate has ignored the realities of modern life in modern Britain, which requires people to use their motor cars to get to the supermarket. We have also failed to recognise the good bits about supermarkets. Almost everyone who has spoken has had a go at supermarkets. They suggest that they are bad and that they are pariahs. They say that they are awful, that they do not like them and that they like high streets. Of course we like high streets, but there is a huge amount that is good about supermarkets, such as the quality and choice of food. We demand strawberries on Christmas day and exotic fruits from the tropics not as a special treat, but as an everyday part of modern living. We buy pre-packed salads—we do not wash lettuce any more. We demand high-quality food in beautiful condition.

Mr. Love

I have listened carefully to the hon. Gentleman's speech in support of supermarkets. What attitude will he strike when the next application for the development of a supermarket in his constituency comes along and his constituents are opposed to it?

Mr. Gray

The hon. Gentleman brings me on to my next point, which addresses that question. In the past 20 or so years, the number of out-of-town supermarkets has significantly increased. I welcome that to a large degree, because they have brought in their wake a great many other benefits, such as new roads, new housing and new schools. However, we are now nearing the point at which we have the right number of supermarkets supplying the right number of people.

In the town of Malmesbury in my constituency, a site is available on which Tesco is trying to get permission to build a new supermarket. Malmesbury is five miles from Chippenham, which already has two gigantic superstores, and three miles from Tetbury. There is a huge Tesco store just outside Tetbury. The people of Malmesbury, where there is a vibrant high street, would be much better off without a new supermarket. [Laughter.] I do not know why Liberal Democrats find that funny. I am simply saying that my constituency has a worthwhile supply of supermarkets. My constituents use them, but we do not want any more, because of the environmental damage that would be caused and also because, if we allowed too much competition, at least one of the supermarkets involved would probably go out of business. We would then face the problem of what to do with the site.

So far, this has been a one-sided debate. The planning issue should be about balance. It should be about supplying what all our constituents want, while also preserving the countryside, preserving the high street and preserving the village store. The careful and subtle balance contained in planning policy guidance note 6, introduced by my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer) when I was a special adviser to him, is precisely what we want in planning terms.

We want to supply the British people with the shopping experience that they now want. Incidentally, I heard on the radio this morning that there is talk of shoppers' actually paying to go shopping. My instinct would be to pay not to have to go shopping, but apparently that is the shopping experience that people want. On the one hand, we must give people what they want and need; on the other hand, we must have a balanced planning policy that protects our environment, saves our high streets and preserves our village stores.

I welcome what my right hon. Friend the Member for Suffolk, Coastal did with PPG6. I also welcome the assurance that the Government have given today and in earlier debates that they will continue the carefully balanced policy introduced by my right hon. Friend in considering future supermarket developments.

5.57 pm
Mr. David Lepper (Brighton, Pavilion)

I welcome the Liberal Democrats' choice of subject. Let me say at the outset that I have absolutely no interest in knocking the Liberal Democrats. In my constituency, Labour came first in the European elections; the Liberal Democrats came fourth, just about managing to beat the United Kingdom Independence party. I am afraid that any of my colleagues who are expecting to hear criticism of the Liberal Democrats should wait to hear another speaker.

In the past, I have hesitated to speak in debates on planning issues. Until last month, my wife chaired the Brighton and Hove council planning committee, and I thought it wise for just one member of the family to speak on such issues. My wife has now taken another role locally, and I am freed from that constraint.

It is certainly time that the Competition Commission investigated the whole question of grocery retailing and supermarket prices. We need an investigation, and I think that we need international league tables as well. Such tables would show us how much goods bought in this country would cost us in similar stores around the world, and would demonstrate the extent to which British shoppers are or are not being ripped off.

Having said that, let me make it clear that I do not wish to criticise either Liberal Democrats or supermarkets. In an intervention, my hon. Friend the Member for Northampton, North (Ms Keeble) made an important point about the need to distinguish between supermarkets and superstores.

The motion, the Government amendment and, indeed, comments that we have heard from Conservative Members today have a common theme: the need to ensure that development policies are consistent, especially in regard to out-of-town development. I welcome the assurance that the Minister gave me in reply to a question—last November, I think—that he had no plans to revise PPG 6 on town centres and retail development, and I welcome the further assurance that we have been given this afternoon. I was therefore surprised at the story published recently by The Guardian about relaxation of the rules. Until I heard the speech by the hon. Member for Truro and St. Austell (Mr. Taylor), with its patchwork of press cuttings, I had—in my ignorance—no idea of the extent to which the story had permeated. None the less, the story in The Guardian surprised me, although it should not have done. From the reassurances that we have been given today, the story proves to have been yet another of The Guardian's own-goals in stirring up tales of U-turns by the Government.

I have the honour of being chairman of the all-party group on town centre management issues. The group has more than 200 members, comprised of Members of this place and of the other place, and of all political parties. In membership numbers, it is rivalled only by the parliamentary beer group—as we now have to call it, rather than beer club.

The support enjoyed by the all-party group on town centre management demonstrates the genuine concern felt by hon. Members on both sides of the House about the future of our town centres, not only as places in which to shop and work, but in which to live and enjoy our leisure time. Moreover, the concern is not only for major cities or conurbations—such as Brighton and Hove, part of which I represent, with a population of a quarter of a million people—but about our smaller market towns.

I therefore welcome the initiative taken by my hon. Friend the Member for The Wrekin (Mr. Bradley)—who is not in the Chamber—which led to a recent report by the urban and economic development group on revitalising four small towns in his Shropshire constituency. I am sure that there are other examples of hon. Members, on both sides of the House, taking similar initiatives.

As the Minister said, next week, Lord Rogers will unveil the urban task force's report on regenerating our town and city centres. I am sure that we all eagerly await the report, to see what ideas it has on reversing the drift to the suburbs, to the edges of towns, and on to green-field sites—which, unfortunately, characterises so much of what happened, in the 1980s, under the previous Government.

I do not know what Lord Rogers's report will say about those issues, but know that, earlier this year, his summary of responses to the urban task force's prospectus stated: a number of respondents agreed with the House of Commons Environment Select Committee proposals for sequential tests, where developers are required to demonstrate that they have exhaustively examined the possibilities of developing any available brownfield land before being allowed to go ahead with green field development. I hope that all of us will endorse that position, on which the Minister has given us reassurances.

Mr. McNulty

Does my hon. Friend agree that the attempt to rubbish the sequential test in PPG 6 by the hon. Member for Truro and St. Austell (Mr. Taylor) owed more to his ignorance about planning than any lack of integrity in the test?

Mr. Lepper

I thank my hon. Friend for his intervention, but I have already described my own humility in planning debates, although my wife was able to advise me on the issues. We should perhaps avoid lurching into addressing issues—[Interruption.] I do not criticise my hon. Friend—when we do not fully understand all of them.

I should like to deal with the issue of the difference between superstores and supermarkets. We have to acknowledge the important role that food retailers, with supermarkets, are able to play as partners in regenerating our town centres. They have played an important role in many of the important town management schemes, not only by helping to enhance the appeal of centres—in which they are already located, and to which they decide to locate—and creating jobs, but by ensuring that they very often act as a lever for other funding sources to help to regenerate those town centres. Sainsbury, for example, claims that its active involvement in, and support for, town management schemes has helped local authorities across the country to lever in more than £300 million of additional funding from central Government, Europe and private investors.

I have no particular remit for Sainsbury. In fact I actively opposed its plans for a 38,000 sq ft supermarket on a brown-field site as it was a completely inappropriate development. I am glad to say that the inspectors upheld the decision of the local council to oppose that application. While acknowledging that the proprietors of supermarkets can play an important role as private partners in regenerating our town centres, we must be aware of some of the concerns that have been raised this afternoon.

There is a genuine fear that the entry of Wal-Mart into Britain might well be followed by yet another huge retailer. Will K-Mart be next? Will we have the same experience that I have not seen at first hand, but have heard about from visitors from the United States where some small towns have Wal-Mart at one end of what was once the main street, K-Mart at the other and absolutely no retail development in between? The assurances from my right hon. Friend the Minister that the Government do not want the same situation to develop here lead us to be optimistic.

Finally, I welcome the proposals in the Government's modernising planning documents to which the Minister referred and the pilot schemes in Bexley and elsewhere for one-stop shops providing assistance to developers submitting applications. I also welcome the proposals for mediation in the planning process to avoid the confrontation which often results from planning applications. I particularly welcome the underlying theme of the Government's modernising planning agenda for local development-led plans initiating the planning process in certain areas, rather than planning being a reactive process, as has often been the case in the past. Although there will be changes in the planning process—and not before time—we can all be assured that the Government are determined to stand by PPG6 and the safeguards that it provides.

6.8 pm

Mr. Norman Baker (Lewes)

I am pleased to follow my near neighbour the hon. Member for Brighton, Pavilion (Mr. Lepper) who spoke largely in support of the Liberal Democrat motion. I very much hope that he will join us in the Lobby this evening. I note that the Minister for the Regions, Regeneration and Planning is abstaining tonight, so the Government obviously have some sympathy with our motion.

Let me pick up on one point. There was considerable approval among Labour Members for what the Minister said and he gave us some welcome assurances. I want to be clear in my mind that his speech reflects the view of the entire Government. My hon. Friend the Member for Truro and St. Austell (Mr. Taylor) said that there were two ways of looking at the issue. The part of the Government that seeks to protect the environment puts that foremost, whereas another part of the Government says that lower prices, competition and letting the market rip may be a good thing. That view is epitomised by the DTI. The Government need to make it clear which line they are taking.

That is the case not just on this issue. On genetically modified foods, the Minister of State, Ministry of Agriculture, Fisheries and Food and the Minister for the Environment are cautious, while the Minister for the Cabinet Office and the Prime Minister are carefree and keen to push GM technology as fast as possible. The Deputy Prime Minister introduces bus lanes and the Prime Minister drives down them in his car. There are differences in the Government. We need clarification that the Minister for the Regions, Regeneration and Planning was speaking on behalf not just of his Ministry, but of the whole Government, including the Department of Trade and Industry and the Prime Minister. Perhaps the Minister of State, Ministry of Agriculture, Fisheries and Food will give us that assurance.

The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Jeff Rooker)

If it enables the hon. Gentleman to get on to the important part of his speech, I am happy to assure him that every Minister who speaks at the Dispatch Box speaks on behalf of the Government, unless they say that they are speaking for themselves.

Mr. Baker

I am grateful for that clarification. The important aspect of the debate is to tie the Government down, so I am glad to have heard that.

The hon. Member for North Wiltshire (Mr. Gray) said that people love their supermarkets and want to shop at them. People also want their corner shop to remain open. Finding the balance is important. The hon. Gentleman rather spoilt his case about supermarkets being wonderful by then saying that Chippenham high street had to be protected and he did not want a supermarket in his constituency. Never mind. We can gloss over that inconsistency.

Supermarkets bring benefits to the consumer, including lower prices—in some respects—ease of shopping and one-stop shopping. We know about those benefits, but there are disbenefits as well. The Government must ensure balance and should regulate when appropriate. Supermarkets have reduced the competition, particularly for groceries. The Conservatives mentioned a figure of 86 per cent. Village shops have closed around the country as a consequence of competition from supermarkets. That has happened in my constituency in villages such as Kingston. The effect of the concentration of ownership is like a cartel.

The Conservatives are also inconsistent in opposing any investigation into supermarkets and then complaining that farmers are not getting a fair deal as a consequence of the prices that supermarkets pay for their produce. That is why we support an investigation into supermarkets. I commend the good work done by my hon. Friend the Member for South-East Cornwall (Mr. Breed) on that.

Supermarkets can be ruthless. A Sainsbury store opened in Newhaven three or four years ago. It is a very popular and well-frequented addition to the area that people welcome. When it opened, there was a petrol station, which was already struggling, within sight. The petrol station opened 24 hours a day to try to make a living. The supermarket then opened its petrol station 24 hours a day and put up a big hoarding opposite to attract customers. The independent petrol station went out of business and, lo and behold, the supermarket reverted to its normal hours for petrol sales. Supermarkets are ruthless. They are interested not in serving the public, but in boosting their profits. Governments should always remember the down sides of supermarkets as well as their benefits when they are regulating.

Supermarkets are extending their range of wares, not just in food, which was always their central reason for existing, but in other areas of retail. Supermarkets in my constituency now have chemists and sell clothes, toys and videos. All that attacks independent retailers elsewhere in the high street to the detriment of the whole high street.

Lewes has a successful and vibrant town centre. Many people come into the town to work and there is a big work force at county hall, the police headquarters and the health authority. People go to the town centre to do their shopping at lunch time. Yet even in such a successful town centre, there is nowhere outside the supermarket that sells half a pound of butter. If the supermarkets expand to sell clothes, toys and products that chemists sell, I wonder how long the independent retailers will exist.

I hope that the Government will follow through their planning policy and see what they can do to protect smaller shops. The point made earlier by my hon. Friend the Member for Weston-super-Mare (Mr. Cotter) about business rates is important, and I am sorry that the Minister for the Regions, Regeneration and Planning rather skated over that. The Government's amendment refers to the viability of town centres, so it was a legitimate point to raise. The Government should obtain the right balance by tipping it slightly in favour of smaller and independent shops, perhaps more than has been the case so far.

I was opposed for many reasons to the extension of Sunday trading. One consequence of that has been that the one day a week when small independent shops were able to make some money without competition from supermarkets has now been eroded. Many of them took more money on Sunday than the rest of the week put together and have now lost that opportunity. I regret that.

I should like the Government to consider car park charging for out-of-town shopping. That was referred to earlier by my hon. Friend the Member for Truro and St. Austell and is something that I support. The DETR was considering that as part of its transport White Paper until No. 10 stopped it in its tracks. Many people, quite erroneously, decide to shop where parking is free. They object to paying 20p to park in a town centre but they will drive 25 miles to an out-of-town supermarket where parking is free. [Interruption.] I can give the hon. Member for Harrow, East (Mr. McNulty) examples of that from my constituency. My constituents write to me and say that they will shop in Uckfield, for example, which is 10 miles away, rather than pay 20p to shop in Lewes. Therefore, people do make such decisions, however illogical they may be.

It is time that we reflected the environmental costs of out-of-town shopping with car park charging, and I should like the Government to consider that carefully. It is not Liberal Democrat policy, but I would go further by making it difficult for supermarkets and other out-of-town stores to refund that parking ticket other than by lower prices, so that people are aware that they are making an environmental contribution by buying that ticket.

I do not want to be all negative about supermarkets because, as the hon. Member for North Wiltshire and others have said, they have benefits and we need a balanced debate. One function of supermarkets is as a last resort to help the consumer when the Government of the day have failed the consumer, and to articulate public opinion in the way that the Government sometimes do not do. It was supermarkets which led the campaign, following pressure from their customers, for dolphin-friendly tuna some years ago. The Government did not intend to do anything about that in a free market, but the supermarkets traced that back and tuna in supermarkets is now almost exclusively dolphin friendly.

The supermarkets are now doing the same thing with regard to GM foods. In the words of the Minister, GM foods are not necessary, as he told the Environmental Audit Committee. Those words were echoed by the Minister for the Environment. The public at large are not interested in GM foods. They do not want to buy them. But the Government largely stand on the sidelines—not in the driving seat, to use the Minister's words—and rely on the supermarkets to deal with the problem. Therefore, supermarkets are having to respond to their customers. They have to trace back the ingredients because the World Trade Organisation, the Government and the EU have failed to require the segregation of supplies of, for example, soya. The supermarkets are having to take it upon themselves to fill the gap left by the Government.

I hope that, as a consequence of the debate, the Government will stick to their planning policies and make it clear that there is no further room for out-of-town shopping, which will be to the detriment of the environment if it goes ahead; will make sure that they introduce measures to help smaller stores and high streets, and will resist any measures from the Conservatives or anybody else to let the market rip in the way that we saw during the 18 to 20 years of Conservative Government.

6.19 pm
Mr. Hilton Dawson (Lancaster and Wyre)

I am delighted to take part in this debate because I like shopping and I like food. I go to a very large supermarket at least once a week, and it is highly convenient for loading up the car with tins of beans and getting the shopping in as quickly as possible. There is a certain quality and range of food, and shops are alongside the supermarket. Visiting the chemist, optician or travel agent, or getting money out of the cash machine, is easy.

The problem is that it is all so boring. The supermarket is in a large shed and, although there is an enormous variety of food and other wares, it is all pre-packed, dressed up and bland. I can have strawberries at Christmas if I want—which I do not—and food from all around the world, including green beans from Kenya. Frankly, who wants all that? In contrast, when I go to the glorious city of Lancaster and walk its historic and beautiful streets, I can go into the shops and have a unique experience. In the marvellous market town of Garstang, I can buy local cheese, local sausage and local fish, and it is a world removed from my local supermarket. In the marvellous town of Poulton-le-Fylde, I can buy local produce from long-standing traders who know their customers and the niches in which they operate. It is a wholly different experience from bashing round the supermarket with a loaded trolley.

Supermarkets have their place, and that will continue. However, we must reverse the devastation that supermarkets have induced in some of our glorious market towns.

There is no easy way out of the problem, but we must find one. I reject absolutely some of the dreadful complacency of Conservative Members. This is an urgent issue of concern about the quality of life in our country, our local economies and, particularly, the rural economy. The previous Government's desperate attention to letting the market rip failed to reflect the importance of local producers, and let them down. When local producers abroad work co-operatively to develop local marketing strategies, they are able to gain power and influence in the market place that can redress the balance with supermarkets. We need to achieve balance. We must market excellent local produce well and attract people into market towns to buy the unique products that are there. We must help producers to work together to compete more effectively.

The Government's tightening of planning restrictions has had a tangible effect in my constituency. In Poulton-le-Fylde, we have been able to see off two separate applications for supermarkets that would have devastated an important town centre, and we have our fingers crossed for the future.

Fiscal issues are also important. I agree that we should impose a parking levy on supermarkets. If we want to cut down on commuter parking by charging large employers for their car parks, we should put the same pressure on out-of-town supermarkets. We should also consider changes in business rates.

We must try to work in partnership with the supermarkets. They should give much more commitment to town-centre development and recognise their responsibilities. I reject the idea of some Conservative Members that we should all get in our cars, get on the motorway and get round the supermarket as quickly as possible. There may sometimes be a place for doing that, but we need to attract people into town centres and we cannot do that by letting the motor car rip in historic cities, because that would devastate our city centres and dramatically reduce the quality of people's experience there.

I have heard nothing today about internet or local delivery services, which are starting to develop. We must attract people into city centres via public transport. At the height of the rush hour in Lancaster—which is especially bad on a Friday afternoon, with very congested streets—I took a train, accompanied by only six people, on a 10-minute journey that would have taken three quarters of an hour by car. We need greatly to improve the prospects for public transport.

Many hon. Members will, like me, be involved in initiatives with business, the farming community and local newspapers. In my constituency, we have developed the Wyre brunch and celebrated marvellous roast beef, glorious pies and wonderful fish and cheese. We did not have any beans. We need to move way beyond local initiatives and niche marketing to get more on a par with our friends and competitors in Europe.

Producers in Europe play a much bigger part in the marketplace, and European city centres are vibrant and celebratory places where people live. We need a different emphasis to the way that we shop in, and experience, our city centres. We also need to change the way that we use our supermarkets. They are an important part of life, but they cannot form the whole of shopping. I hope that the investigation by the Competition Commission will encourage the break-up of the dominant position of supermarkets, give more people a chance to compete and ensure that town centres take their grand place in the future urban renaissance.

6.30 pm
Mr. Stephen Day (Cheadle)

I shall make some brief remarks about out-of-town shopping and its effects on my constituency. Some of the comments that I have heard this afternoon—I shall not identify individuals—have been silly party political points. The problem has been around for a while, although I recognise that the Conservative Government, in their early years, were responsible for planning permissions for many out-of-town shopping facilities, including two shopping developments just outside the Cheadle constituency. There is one at Handforth Dean, with Marks and Spencer and Tesco, and one at Cheadle Royal, with the John Lewis Partnership and—I forget the other store.

Mr. Andrew F. Bennett (Denton and Reddish)


Mr. Day

The hon. Gentleman has obviously shopped there, which raises another problem that the shopping centres have caused and which I shall address in a moment.

It is silly to start casting blame. I do not disagree with this Government's policy or their recognition of the problems that out-of-town shopping brings, and I am pleased to hear Ministers making such points. However, we should recognise that that policy change was brought about by my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer), although it unfortunately came too late for my constituency and many other parts of the country. When he was Secretary of State for the Environment, my right hon. Friend visited the main centre in Cheadle to meet local traders. He made a genuine effort to bring publicity to the area to try to help the traders, and we should address practical issues such as that.

The out-of-town centres have had a devastating impact on shopping facilities in the villages of Cheadle, Cheadle Hulme and Bramhall. They have affected the trade and brought massive traffic movements into the area. Six months ago, I spoke at a ladies luncheon club in Liverpool and I was amazed when the lady in charge of the event, who sat next to me at lunch, told me that she knew my constituency well. I asked her whether she had friends there, and she said, "No, I come to shop at Marks and Spencer." She came all the way from Merseyside, and she said that many of her friends did, too. I told her that that explained why my local roads are jammed.

It was projected at the time of the public inquiry that the Cheadle Royal site alone would produce 20,000 extra car movements a day by 2000, but we passed that figure some 18 months ago, according to the most recent survey. It is an horrendous experience for the people living in the villages. A lot of traffic passes through village centres that have already been hit by the competition from the big superstores, and that makes those little village centres even more unattractive to shoppers, because they get stuck in traffic jams.

Mistakes were made in planning—I battled against the developments from the word go—but we must face the reality. It is all very well to say what the Conservative Government did or did not do, but we now have a Labour Government. People in my constituency look to the Government to solve their problems, and I ask the Government to do so.

The previous Government's road scheme retained a bypass system to cope with the traffic movements that I have described. One of the first actions of this Government was to cancel it. My constituency is an even worse mess as a direct consequence.

Mr. Bennett

Proposing more road works will not solve the problem. When I was first elected to represent Stockport, one of the worst problems was the so-called Cheadle crawl. A motorway was constructed to solve that problem, but the crawl has returned. More roads simply increase traffic and make problems worse. What should have happened is that the John Lewis group should have put its shop in the centre of Stockport.

Mr. Day

I do not disagree with the hon. Gentleman on that, but a third of the bypass scheme has been built. It attracts more traffic, much of which goes to the airport.

To solve the problems suffered by people and shops in villages as a result of the arrival of out-of-town shopping developments, the roads need to be finished. The Minister for the Regions, Regeneration and Planning said earlier that he wanted to help small village centres. I hope that his colleagues in the Department of the Environment, Transport and the Regions will hear this message: if they want to help the people of Bramhall, Woodford, Cheadle Hulme, Healds Green and all the other places similarly affected, they must give us our bypass back.

6.37 pm
Mr. Colin Breed (South-East Cornwall)

Although the Conservative spokesman, the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb), made it clear earlier that he wanted to get away from consensus, a thread of consensus is evident in the contributions from hon. Members of all parties. That shows that how we got to the present situation is less important than where we go from here. The problem has been brought into sharp focus by the Wal-Mart bid, which has made us realise that certain matters must be tackled to ensure that the issue that we have been debating is more controlled in the future than it has been in the past.

The history of the problem goes back about 30 years. It is only fairly recently that we have woken up to the creeping dominance—the stealth dominance—of the out-of-town supermarkets. The public interest has largely been pushed aside, but it is the only justification for Governments getting involved in the question of competition.

Companies have a duty to their shareholders to make profits. It is not for the Government to undertake to protect businesses, small or otherwise, but neither should they allow businesses to run riot against the perceived public interest.

The public interest was served by the benefits associated with the growth of supermarkets, which is why they became so successful. They provided a variety of products and were cheap, clean, efficient and convenient. They enabled people to switch their shopping habits, and they were pleased to do so.

However, that is now regarded as a slightly false perception. Supermarket prices are not as low as they should be, and high street prices are often comparable. As for choice, the number of shops has fallen after the many closures that have occurred in the high street. In fact, choice in shops is not as large as it is perceived to be. We tend to find only a brand leader and an own-brand product. Most second liners have disappeared off the shelves because manufacturers unable to compete go out of business or become a supermarket's own-brand supplier.

Supermarkets are convenient for many people, but they are becoming less convenient for more people as village stores disappear and as corner shops vanish from housing estates and the suburbs. People without access to a vehicle find it increasingly difficult to get to them.

Relationships with suppliers are changing, threatening the survival of small manufacturers who used to provide materials for all sorts of hardware shops but cannot fulfil a contract for, say, 200,000 buckets. Farmers face problems too. Only this week, one in Cornwall wrote to me, astounded that, having received only £20 per tonne for his potatoes, he found them in his local supermarket, washed and in a plastic bag, on sale for the equivalent of £484 a tonne. We have all heard about calves on sale for 29p.

I was pleased by the Minister's strident support for PPG6, but I hope that it can be strengthened, because the larger supermarkets are exploiting some weaknesses. We should move away from so-called planning gain, when supermarket development is allowed if new roads or leisure facilities come with it. The guidance is muddled, and it should be much clearer on planning gain, which must not bring a short-term gain in return for a long-term loss.

We have heard of the damage to our high streets and our villages. In the past 10 years, 50,000 businesses have ceased to be. The loss of the village shop—once a social centre and not just the place where people bought their groceries—strikes at the very heart of a small community. Supermarkets have also dominated buying, tending to be able to purchase all the top-grade fruit and vegetables and leaving smaller operations unable to buy the best quality produce. The ability to buy goods produced locally has virtually disappeared. Small operators that used to supply local shops are denied that opportunity by the disappearance of small shops, but they cannot put together the large quantities of produce required to win supermarket contracts.

Mr. Drew

I agree with what the hon. Gentleman has said about planning gain. Does he agree that the sequential test can be most valuable in that area, allowing us to measure the true costs and benefits of opening a supermarket on a green-field site against the loss to a town centre and smaller shops?

Mr. Breed

I agree entirely with the hon. Gentleman. In the past, not all relevant matters have been taken into account, and some subjective points have not been properly valued.

I do not believe that most people appreciate how big Wal-Mart is. The company serves 90 million customers a week in 3,600 stores, employing nearly 1 million people. With an annual turnover of £90 billion, Wal-Mart is truly a giant. It is already in Germany, and it has approached several British firms, including the furniture retailer MFI. Wal-Mart provides both an opportunity and a threat. It could kick some real competition into our supermarkets, but it would be threatening if it acted as it does elsewhere. If our planning regulations are not strong enough to meet the threat, they should be made stronger.

As several hon. Members have suggested, this is a complex issue. It is a prime example of a matter on which the Government should demonstrate joined-up government thinking.

The issue of food and supermarkets cuts across many areas of policy, including competition, environment, transport and social policy. All those policies need to be truly joined up. The Government must ensure that there is no rift between those who support an outright competition policy to reduce prices to their minimum—without any regard for the environmental and social consequences—and those who want environmental issues to drive our businesses.

The definition of the public interest has to be widened and better understood. The public interest is not served only by the lowest possible price of a tin of baked beans. Predatory pricing legislation also needs to be re-examined. We need to understand that, in trying to create the balance that everyone wants, policies need to be considered in conjunction with one another.

Planning policy is certainly important. Perhaps we could take a leaf out of other people's notebooks. The European cities often ensure that the floor space of large supermarket developments has some relevance to the size of the closest town. We should think about extensions to supermarkets. We may well think that Asda, or Wal-Mart, as it may well become, will go into a lot of new sites, but what about extensions to existing stores? Will we say that, because there is already a supermarket in a certain place, a precedent has been created so the company can build whatever size extension it likes? I hope that we shall ensure that extensions of, say, more than 10 per cent. of the existing floor space are subject to all the same impact studies as a brand new store. Existing stores should not be used as Trojan horses to defeat planning policy guidance.

We have talked about rate relief for small stores and parking charges. We need to support our smaller suppliers and small-scale agriculture and horticulture. I know that the Minister will say that the Government are already doing that, but we need to do more to provide opportunities for local traders. They should not be threatened with closure by trading standards officers, for example, because they have not quite got something right on a label. Perhaps supermarkets ought to be encouraged to use some of their car parks to allow people with local produce to sell on a Saturday morning. That would not dent their profits very much, and it might give people the opportunity to buy local produce.

Public transport must be made available to all stores. Any new store must demonstrate that public transport to it is available, either because the company will subsidise it or because existing services will be enhanced. Local councils must be given greater powers to restrict hours of trading, especially 24-hour trading. As my hon. Friend the Member for Truro and St. Austell (Mr. Taylor) said, Sunday trading has had a major impact on small shops on high streets in small towns.

It was once said many years ago that Britain was a nation of shopkeepers. We have rather sleepwalked into the current situation. There is a real threat that, if we do not get hold of it now, or in the not-too-distant future, and if the likes of Wal-Mart come in and have their way, we could soon have just one shopkeeper to the whole nation.

6.48 pm
The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Jeff Rooker)

I will do my best to respond to the points raised by hon. Members. It has been an interesting debate. The supermarkets feel very unloved at the moment. They probably feel less loved, having listened to some of the speeches in the Chamber, than they did before.

The hon. Member for North Wiltshire (Mr. Gray) said that everyone in the Chamber probably shopped in supermarkets. I plead guilty, if that is the issue. I do not use any of the loyalty cards. I did not have them before the election and after the election I made it clear that I did not want to be involved.

Mr. Baker

Just the pledge card.

Mr. Rooker

I carry the pledge card, but not loyalty cards. I am not in the business of giving publicity but I have used all the supermarkets at one time or another. The one I tend to use at present is not in the big four and is probably the nearest thing to a worker's co-operative in this country.

We have heard some interesting speeches. I shall long remember the matter of fact way in which the hon. Member for North Wiltshire explained his shopping arrangements. If he or his wife could not do the shopping, the servant would do it. Perhaps the servant does it when there are six bags weighing 84 lb.

This is not to criticise anyone's contribution, but it was worth coming to the debate to hear my hon. Friend the Member for Lancaster and Wyre (Mr. Dawson). At first, I wondered where he was going, but he took us on a heritage trail of the market towns in his constituency and the fine local produce sold there. The one thing that is hard to get in supermarkets is local produce, because of the nature of the food distribution network. Food is moved around the country in lorries that do not carry full weight because they are carrying gas-filled plastic containers to keep food from central distribution centres fresh. The chance of getting local produce is therefore much diminished. If people want local produce, it is better to do what my hon. Friend said and go down the heritage trail of local market towns.

I shall not repeat what my right hon. Friend the Minister for the Regions, Regeneration and Planning said earlier about planning. The position has been made abundantly clear. I understand from some of the interventions of Liberal Democrat Members that they appreciated the firmness with which the policy was set out. There are no changes. Some of the press reporting has been typically inaccurate.

The pattern of food retailing is consumer driven. Supermarkets have responded to demand. They are changing in some ways. They are trying to go back into the city centres that people accuse them of helping to destroy. Developments took place without the need for planning permission in some early enterprise zones. Those developments mean that families can go for a whole day out that does not encompass just the buying of food. My worry is that they buy food that needs to be kept chilled, load up the car, leave it out in the sunshine so that the temperature gets up nicely, and spend the rest of the day at the leisure facilities with children. They then take the food home, put it in the fridge, use it the next day and wonder why they got food poisoning. There is a problem with such expeditions.

The sourcing of produce and the grip of the supermarkets on the supply chain have been mentioned. In some ways, that grip can be used to our advantage. Information and traceability in respect of food safety for modern processed foods and ready prepared meals are crucial. Laboratories and traceability, and the technologists whom supermarkets employ, are all important. That is something that big organisations can provide.

The grip of the system encompasses, for example, supermarkets' contracts with suppliers. I shall not offer any clues as to the produce involved. The supermarket is happy with the price and finds out where the supplier obtains packaging, and then approaches the packaging supplier with a demand for a penny for every tray supplied to the supermarket. I was told of one case in which the number of trays used in a year was 300 million—at a penny a tray, that is £3 million for nothing. Alternatively, the first supplier would be told not to go to that packaging supplier. I hope that the Competition Commission will examine such practices because, in certain circumstances, they might be an abuse of market power. I do not say that that is always the case, but it seemed to be so in the example that I was given.

Contrary to the comments of the Conservative Front-Bench spokesman, the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb), the Government played no role in the referral to the Competition Commission. Anyone would think that the commission had only just been invented, but it used to be the Monopolies and Mergers Commission. The referral was from the Director General of Fair Trading. We await with interest the results of that study of the big four. The commission will examine such matters as barriers on entry to the market, including the availability of land, and the way that supermarkets exert their buying power over farmers and their other suppliers.

Mr. Bennett


Mr. Matthew Taylor


Mr. Rooker

I am trapped now. I give way to my hon. Friend the Member for Denton and Reddish (Mr. Bennett).

Mr. Bennett

Does my hon. Friend agree that, although that referral may be welcome, it was sad that it included a criticism of the planning system by someone who appears not to have a clue about it?

Mr. Rooker

The Government are not getting involved; it is a matter for the competition authorities. The commission was set up to do a job that it was asked to do by this House, under statute. It would not be helpful for me to make any comments other than those that I have made already. I am now duty bound to give way to the hon. Member for Truro and St. Austell (Mr. Tayor).

Mr. Taylor

I appreciate the Minister's giving way. Not everyone would be so fair.

The hon. Member for Denton and Reddish (Mr. Bennett) expressed a concern about the competition report. That is why we hope that Ministers will confirm that, whatever the report concludes, the Government are determined to protect land and town centres. I hope that the Minister will also take the opportunity to dissociate the Government from anything that appears to have been said to newspapers on this subject by officials in at least one Department—the Department of Trade and Industry. I am sure that they did not speak on behalf of the Government but, understandably, they fed the rumours that led to this debate.

Mr. Rooker

I am unable to say more than my right hon. Friend the Minister for the Regions, Regeneration and Planning said when he opened the debate. He spoke for the Government, collectively; he set the position out clearly. There will be no attempt by the Government to interfere with that inquiry.

In relation to food, last year, my right hon. Friend the Minister of Agriculture, Fisheries and Food set up a small group to consider the food chain initiative; it brought together farmers, manufacturers and retailers. We want food producers to exert more control over a larger part of the food supply chain. I realise of course that someone will say, "Look what happened when they did it with Milk Marque." We await, with interest, the results of the inquiry and the decision. That is a matter for my right hon. Friend the Secretary of State for Trade and Industry. However, MAFF has encouraged collaborative marketing. Compared with some of our European friends, partners and competitors, we do not have a history of such marketing, but it should be possible for farmers and food producers to talk to their neighbours without worrying about competition. It is in everyone's interest that there should be greater collaboration in marketing, food production and food supply.

Some producers worry about that, because they think that we want to force them into co-operative arrangements. That is not our intention. We want them to collaborate so that they can supply and control a larger part of the food chain. That will return added value to the producer. It is what happens in continental Europe and it is wholly to be applauded. Under such a system, there would be a greater chance of achieving wider distribution for some of this country's speciality foods, although there can never be a national supply of speciality, regional foods. However, that is why the initiatives that we have undertaken to try to get our local and regional brand names sanctified and codified in Europe are important to protect those names—

It being Seven o'clock, the debate stood adjourned.

Mr. Deputy Speaker (Sir Alan Haselhurst)

Order. We must now move on to motion No. 3.

Mr. Paul Tyler (North Cornwall)

On a point of order, Mr. Deputy Speaker. I was on my feet, about to put the Question—

Mr. Deputy Speaker

Order. I am afraid that the hon. Gentleman was clearly too late. I am absolutely certain that the time had lapsed before I heard any call that the Question be now put. Therefore, I am afraid that the matter must lapse.

Back to