§ [Relevant document: Second Report from the Environment, Transport and Regional Affairs Committee, Session 1999–2000 (HC 120).]
§ Motion made, and Question proposed, That the sitting be now adjourned.—[Mrs. McGuire.]9.30 am
§ Mrs. Gwyneth Dunwoody (Crewe and Nantwich)
Planning in a small island is not a bureaucratic idea or an idiosyncratic response to some people wanting to build wherever and whenever they can; it is an absolute necessity. Throughout the planning history of this country, there have been determined attempts to create civilised and cultured towns and cities, and a positive balance has been sought to ensure that our industry and commerce live alongside our residential areas in peace and harmony. One would have thought that that was a straightforward and useful idea.
During the 1950s and 1960s, we saw the evolution of sensible planning policies. When we moved on, it became clear that some commercial interests regarded aspects of planning as inimical to their economic development. That was a misleading approach, but some people regarded the decision to consider where development took place as a positive bar to them.
The Select Committee on the Environment, Transport and Regional Affairs was concerned when it heard some of the arguments about supermarkets. Supermarkets are ubiquitous; a person would have to be unusual to say that he had never benefited from or enjoyed their services. They are like rhododendrons, in that they may be attractive and interest people in large numbers but they destroy every other plant.
During the 1980s and 1990s, the positive rash of supermarkets that were built out of towns had an immediate and destructive effect. When we look around many of our smaller towns and villages and see so many charity shops and boarded-up properties, we realise that supermarkets can be not only competition, but destructive competition. They are like a series of private monopolies built on the outside of our cities. With their free car parking, they encourage people to come and buy not only one aspect of their shopping, but everything. As a result of the influx of American marketing techniques, the supermarket may increasingly seek to provide more than our weekly shop in terms of groceries, wines and beers, by providing textiles, household goods and other important items in our weekly budgets.
It became clear that if we were to rescue and improve the centres of our rural towns and cities, we would have to do something serious about the supermarket. That was an agreed policy, and we began to accept the fact that trade in the centre of a town was distorted if the area became over-supermarketed. That has happened to one town in my constituency, which has at least seven supermarkets on the edges of its small rural community.
46WH It was a welcome development when it was recognised that supermarkets could not be allowed to continue becoming larger and attracting an increasing amount of trade away from the centres of our towns and cities. I should have thought that that was a straightforward conclusion that was not difficult to support. Unfortunately, however, there seems to be a body of opinion among some economists and management consultants—such as McKinsey & Company, the Department of Trade and Industry and even, possibly, some Treasury officials—that more out-of-town supermarkets and more competition would bring down prices. That flies in the face of the fact that most supermarkets fight one another for only about 3 per cent. of the business and are prepared to commit murder to change their overall figures by an extremely tiny amount. I am afraid that consultants who say that there should be more non-food retailing have not thought through the implications.
The Committee decided that some anxieties were even more pressing. Last summer, the Director General of Fair Trading referred supermarkets to the Competition Commission, asking it to consider matters related to the planning regime. When the Committee began to inquire into the circumstances, it was worried to learn that that had been done without any evidence being taken from planning consultants or anyone involved, on the basis of the fact that some people thought that it might be a good idea to change the planning laws on science clusters.
If we are to make major changes in how we develop our towns and cities on the basis of some people's opinion, without having taken evidence, I can recommend to the Government a series of my own particular prejudices, not only in relation to the Department of the Environment, Transport and the Regions. I could give them a shopping list of the changes that I feel should be made, without any evidence to back it up. It is worrying that that decision was taken without any advice from planners.
We asked the Department about its attitude to that development. The Under-Secretary of State for the Environment, Transport and the Regions, my hon. Friend the Member for Greenwich and Woolwich (Mr. Raynsford), who gave evidence to us, should be comprehensively praised. Not only was he clear and decisive, but he made it plain that no major change in policy had taken place. That makes it even more difficult to understand why we face such circumstances. I trust that the Government will not change their policy.
§ Mr. James Gray (North Wiltshire)
Does the hon. Lady agree that the clarity of the evidence given by the Under-Secretary of State for the Environment, Transport and the Regions, the hon. Member for Greenwich and Woolwich, contrasts starkly with the complete muddle of evidence that we received from the Under-Secretary of State for Trade and Industry, the hon. Member for Leicester, West (Ms Hewitt), on the same subject?
§ Mrs. Dunwoody
I believe that the problem was that the Department of Trade and Industry got into a bind, which was slightly bizarre.
If the Treasury is dictating that changes be made to planning law on the basis not of planning evidence but of having been told by one of its consultants that in 47WH future some science industries might like to be treated differently from other industries, everyone is in trouble. I trust that that is not so, and that the Under-Secretary of State for the Environment, Transport and the Regions, my hon. Friend the Member for Stretford and Urmston (Ms Hughes), will make it clear that such decisions will be taken by the Department of the Environment, Transport and the Regions on the basis of the aspects that are most important to us.
The Competition Commission published a remedies statement, which states that the commission does not at present believe that major changes should be made to the planning regime. However, the commission seems to be considering recommending a system of selective planning permission, whereby, for instance, in cases in which Sainsbury is the major company, Sainsbury would not be able to obtain planning permission for new stores, but others could. That is the very antithesis of planning law, which has always been based precisely on such difficulties.
The Committee considered all those questions, said that it was extremely worried, and made several plain and unequivocal statements:We support the Minister for Planning's statement on competition. It is a well-established principle of planning control that planning decisions should not favour one company against another but should be even-handed between firms…We are appalled that before referring planning matters to the Competition Commission, the OFT took no evidence from planning experts and did not consult the DETR. In failing to take into account such expert evidence, it has behaved irresponsibly.If the commission suggests that it can distort the planning rules to profit one particular section, it is being shortsighted and irresponsible. We cannot understand how we have got into such a situation. The Government must say what is meant by the reference in planning policy guidance note 6 tosites in town centres which are suitable, viable and available within a reasonable time period.What is suitable for the size of store and format, and who decides those aspects?
We do not believe that there should be any more super supermarkets built outside towns. The decisions that have resulted in the growth of smaller supermarkets in city centres are already beginning to pay dividends. The large supermarkets that have followed that trend, including Sainsbury and Tesco, are responding to some very real worries. To confuse that issue or fudge the lines would not only put that process into reverse but make our aims unclear in the long run. In all but very exceptional circumstances, supermarkets should be in urban centres.
Supermarkets should also be better designed. Let us consider the quality of the buildings in our towns and cities. We all have to live with those erections, so let us not imagine that we can go on blithely irritating the eye and depressing the spirit with the most sad and unimaginative architecture.
The report is good; it is short, but says plainly that we do not know how or why we got into the situation in which we find ourselves. We believe the Minister for Housing and Planning when he says that he is clear in his mind about the Department's aims. However, if that is 48WH true, why was he not consulted? Why was the decision about the reference taken without anyone asking on what basis it was made? If the Office of Fair Trading now takes two or three steps back and says, "Oh well; we didn't really mean it, guv," I would not regard that as evidence of a responsible or balanced approach.
It would not be acceptable if the Competition Commission's findings were published in late July after the House has risen. It would fuel the view that the decision was taken in a hole-in-the-corner manner, for the worst reasons and on the basis of prejudice rather than evidence. The final results of that decision may be to hasten the demise of our smaller towns and cities. It does not provide a balance across a commercial field so that customers can get what they want when they want it. The development of a duopoly or even of three or four large supermarkets will not, in the long run, act in the customers' interest. The Committee has set out its worries in plain terms and I hope that the Minister can put our minds at rest.
§ Miss Anne McIntosh (Vale of York)
I am most grateful for the opportunity to contribute to the debate and am privileged to follow the hon. Member for Crewe and Nantwich (Mrs. Dunwoody).
I make my comments against the backdrop of the balance in my constituency between small market towns and 30 per cent. of a major city—the outskirts of York. The results of the inquiry that the Environment, Transport and Regional Affairs Committee conducted into the environmental, impact of supermarket competition, which are published in our second report, encapsulate the problem. I wholeheartedly agree with the hon. Lady about the part of the report that suggests that, although the planning regime serves the planning system well, we could tweak it and improve it. It was clear from the evidence that we received that planning policy guidance note 6 has the support of leading experts in planning and retailing, planning associations, local authorities and supermarkets.
Parking standards is probably the area of competition that impinges most on market town shops and corner shops on the outskirts of major cities. A major superstore on an out-of-town site is bound to have a clear advantage over those shops by offering greater car parking facilities that will attract people into the store. The Select Committee must ensure that planning policy guidance note 13 is observed and is as tightly construed as possible. It must not be interpreted in too lax a fashion.
Design is important. The high standard of evidence in the Select Committee report shows the importance of design and of not using the rhododendron scenario to attract people into the store. If we are now considering how to attract more supermarkets on to town sites, it is important to ensure that their designs blend in with the surroundings.
We did not have the opportunity to investigate in depth the impact of the unified business rate in market towns. It is significantly high and affects shops in small market towns and corner shops on the outskirts of major cities. A high unified business rate compounded by a high rent makes it difficult for those shops to compete effectively with out-of-town superstores.
49WH We are all conscious of the development of charity shops, which we welcome to a large extent. We appreciate their special contribution to the community and the role of the volunteers who man them, but we do not want sites to be left empty for long periods. When we took evidence in Thirsk for the urban White Paper, we found that one shop had been empty for two or three years—almost as long as I have been Member of Parliament for the area—as a result of the combination of a high unified business rate and a high rent. We should pursue such matters, perhaps in the next stage of the competition report if we are fortunate enough to be able to do so before the recess.
I was struck by the evidence that we received from Mark Wood Associates about the margins of food store operators. The company said:Moreover the extract also shows that…the four leading operators (Tesco, Sainsbury, Asda and Safeway) increased their combined market share from 59.4 per cent. in 1996 to 61.4 per cent. in 1997, a rise of 2 per cent. in just one year. Total sales from these four operators amounted to over £40 bn.The average sales per store is continuing to increase at a significant rate equating to around £2 m. per store for Tesco and over £3 m. for Asda.That increase puts the shops competing for business with supermarkets—especially out-of-town superstores, at least one of which I represent in my constituency—at an almost unfair competitive disadvantage because of the size of the superstores and factors such as parking facilities. I hope that we can pursue several of the issues that we highlighted in that valuable contribution. It must be ensured that PPG6 continues to be respected and built on, and that we forcefully consider the evidence from the Competition Commission against the backdrop of the planning regulations. To ensure that the competitive advantages enjoyed by out-of-town superstores are not repeated in future, we must integrate future supermarkets into market towns, having regard to the design of surrounding buildings.
I believe that the way forward is to meet a balance of interests, consumer needs and minimum competitive standards. I hope that we can put more supermarkets with better designs where required in town centres. That would allow sufficient competition in our market economy between supermarkets and, more important, between supermarkets and the market town and corner shops that I shall continue to hold dear.
§ Mr. Bill O'Brien (Normanton)
I welcome the opportunity to take part in the debate. I hope that the Competition Commission, in addition to studying the report of the Select Committee on Environment, Transport and Regional Affairs, will read the comments of hon. Members on the subject. The concerns voiced by the hon. Member for Vale of York (Miss McIntosh) about the effects of supermarkets on small urban areas, corner shops and small communities are shared by many of my constituents.
Out-of-town supermarkets have been the cause of many problems in town centres and the countryside. They increase car use, and the resulting congestion creates problems for people in the countryside, as some of the supermarkets are built in the green belt and on the edge of cities. I am, therefore, pleased that planning policy guidance note 6 restricts the development of supermarkets outside cities and urban areas.
50WH The Government's aim in the planning policy guidance is to concentrate retail development in existing urban areas. I hope that they will push that policy and ensure that applications for supermarkets to be built outside towns will be firmly rejected, so that there is no misunderstanding of what the Government mean in the planning guidance.
I am not anti-supermarket. I would welcome and support supermarkets where needed, in towns and urban areas. I want good, structured planning, which means developing our town centres. The growth of out-of-town shopping developments over the past 20 years has had a traumatic effect on town centres, villages and corner shops.
There are small urban communities, such as Ossett, Horbury and Normanton in my constituency, that have suffered because shopping centres have been located on the borders of Leeds and Sheffield. Access to those centres is easy by car, which has an effect on the smaller towns. Much of their retailing trade has disappeared as a result of closures caused by the large developments.
Car parking is also a factor. Local authorities are advised that they must capitalise on land use for car parking—hence charges. Such charges are an anomaly, given that supermarkets have free parking. I hope that planning policy guidance note 13 will address that, and that local authorities will take it into consideration when they consider the application of integrated transport policy.
PPG6 deals with out-of-town shopping and greater protection for town and city centres. I want the Minister to provide assurances that there will be an increased focus on planning aims within urban areas, and a restriction of developments outside. Applications are being made to extend large supermarkets outside town and city centres, especially by Asda. The Wal-Mart principle is being developed—the desire to extend an existing unit and develop the larger supermarket.
In relation to applications for out-of-town developments, we are witnessing the phenomenon of architects submitting, on behalf of a supermarket chain, proposals for a small, compact unit on the edge of the town, so as not to give offence, but then, when the request is granted, applying to develop the unit further. We are all aware that that is happening in our constituencies. I hope that the Minister, who is familiar with such scenarios, will accept that such applications should be rejected, regardless of their size, because of the impact on urban areas.
§ Dr. Alan Whitehead (Southampton, Test)
Has my hon. Friend come across the phenomenon whereby applications initially state a particular area for development, but a mezzanine floor is added later? The space above the site is thereby occupied, apparently in breach of planning conditions, but in circumstances which the planning regime is apparently unable to stop. Is that a further example of the phenomenon that my hon. Friend describes?
§ Mr. O'Brien
I am pleased that my colleague has drawn attention to that matter, as it has an impact on car parking provisions. When a planning application originally included car parking to meet a certain ground floor development, and extended developments follow 51WH in the form of mezzanine or additional floors, greater car parking problems are created. The Minister should address that issue and strengthen PPG6 to ensure that such piracy cannot happen. Measures to make our towns and cities more attractive must, therefore, be an important part of the strategy of the Department of the Environment, Transport and the Regions.
Furthermore, I should like to draw attention to the fact that, a great deal of money has been spent on introducing pedestrianisation and traffic-free areas in our towns and cities. That is part of the revitalisation of town and city centres. Losing retail outlets in those areas is a significant blow to such developments, which had the agreement of the communities concerned. The issue of supermarkets is not the be-all and end-all of retail shopping. If we want small, competitive retail units in urban areas, we should impress on local authorities the desirability of introducing covered markets, which would allow market traders to develop trade in various areas, so that competition and town centre development is generated through market procedures.
I am advised that, as a result of the closure of retail trades in the town of Ossett, no one can buy a pair of shoes. Ossett has a population of 20,000 or more and it is sad that people cannot buy shoes because of the demise of retail units in the area. We must persuade local authorities to reintroduce covered markets in small towns. I put it to the Minister that there is much to be learnt from the Select Committee report, as there is from the contributions of members of that Committee and others who have an interest in supermarket competition. I hope that they will influence the Competition Commission, which will present a report on the subject in the near future. Good planning is needed. We must reject bad planning. Will the Minister have regard in his response to the argument that small urban areas need regenerating?
We need more traffic-free centres. There must be a curb on planning applications to introduce traffic into pedestrian areas to facilitate supermarkets or other businesses. It is easy for supermarkets to offer planning gain to local authorities. We should put a stop on that, because some local planners can be influenced if they think that they can recruit a social or road development from an application for a supermarket to be developed.
I impress on the Minister and my colleagues that there is much to be said and done about out-of-town shopping. We must insist that PPG6 is applied firmly. Its aim is to strengthen the role of local planners to ensure that there is no further development on the edges of our towns and cities to the detriment of town and city centres.
§ 10.2 am
§ Mr. James Gray (North Wiltshire)
I was struck by the analogy used by the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) when she said that supermarkets were like rhododendrons. She is right. When rhododendrons are young and fresh, and flower in the spring, we are all attracted to them like bees to the honeypot. That applies equally to supermarkets. While they are young and fresh and necessary, we all use them. But those of us with a passing interest in gardening 52WH know that when rhododendrons have been around for a year or two, they become gross, overgrown and in need of major hacking back. We may be approaching that situation with regard to supermarkets, too.
We all use supermarkets. There are 20,000 adults in Chippenham, the main town in my constituency. It has three supermarkets, including Safeway, Sainsbury and Somerfield. I am told that 88,000 people pass through the tills at Safeway each month, so everyone in Chippenham uses Safeway four times a month, in addition to Somerfield and Sainsbury. Eighty-six per cent. of all food shopping in the United Kingdom is carried out at supermarkets. The average weekly shop is six supermarket bags, weighing 84 lb.
§ Mr. Gray
Yes, and nearly all by car. I accept the argument about the use of cars; none the less they are needed to carry six supermarket bags weighing 84 lb. As my hon. Friend the Member for Vale of York (Miss McIntosh) correctly pointed out, supermarkets turn over £44 billion a year in groceries—an enormous turnover.
Whatever else we may say about them, all of us in the nation use supermarkets to do our daily shopping. It is wrong to pretend that we do not. Our expectations, way of life and standard of living have increased greatly as a result. We presume that we can go to a supermarket on Christmas day and buy avocados, which were not even heard of in this country until 20 or 30 years ago. We can get fresh strawberries and vegetables all the year round—and not the sort of vegetables that I remember as a child. We used to have a bit of soggy cabbage in the winter and, if we were lucky, something slightly better in the spring. Now we can expect pre-packed, pre-washed, high quality, first class vegetables, eggs, meat and so on all the year round. The standard of beef that we buy in supermarkets is second to none. The quality, colour, size and texture of the fresh food that we get is first class. Our standards have increased enormously as a result of the supermarket revolution, and it is luddite to suggest anything else. We need them and rely on them.
In 1986 there were only 457 superstores in this country, but by 1997 that figure had increased to 1,102. I remember the debates that we had about that increase when I became a special adviser in the Department of the Environment in 1992, when my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer) came into the job. He considered whether we should allow that exponential increase in supermarket sites to continue. The decision was taken at that time, with the first draft of planning policy guidance note 6, that we should control the increase in supermarkets because it was not sustainable.
We all use supermarkets and like them, and the nation depends on them. None the less, in recent years, we have begun to move against them—the rhododendron is becoming overgrown. In that context, the Competition Commission has loomed on to the scene. Most people would agree that the damage done to village shops, town centres and our environment as a result of the use of cars, and of the lorries that take goods from depots to supermarkets, is a bad thing. Most would agree that we should save our green belts by restricting supermarket 53WH development, and that PPG6 is right, even when they continue to use supermarkets. That is not a controversial view.
The Under-Secretary of State for the Environment, Transport and the Regions, the hon. Member for Greenwich and Woolwich (Mr. Raynsford), said that there was no question that the planning policy would be changed. He said, "We are passionate supporters of PPG6. There will be no more supermarkets built out of town. That is certain, so do not worry about it, ladies and gentlemen. Everything is tickety-boo." As the hon. Member for Crewe and Nantwich said, he made a robust defence of the PPG6 measure initiated by my right hon. Friend the Member for Suffolk, Coastal.
The following week, the Minister for Small Business and E-Commerce, the hon. Member for Leicester, West (Ms Hewitt), gave evidence before the Committee. We asked her what the purpose was behind the referral of competition of supermarkets to the Competition Commission, to which she answered that she was not certain, but she was sure that it was a good thing. Like the hon. Member for Crewe and Nantwich, I hope that the commission reports before the House rises; otherwise, some serious questions must be asked about the machinery of government.
Let us imagine that the commission says, "We have a problem in Chippenham because Tesco has no site there. The town uses supermarkets to a huge degree and prices are slightly higher there than in London. We believe there may be a competition problem. If we can find a site for Tesco, the prices may be brought down again. The extra competition might depress the prices a little bit, so maybe that is a reason for relaxing the stringent planning controls around Chippenham to allow Tesco to have a site. Tesco is seeking sites in Chippenham, Malmesbury and Tetbury and trying to find a toe-hold throughout the Cotswolds; it is desperate to get in somewhere. Asda is seeking sites all the time. Perhaps we should relax planning controls to accommodate that perfectly sensible competition."
If that is the case, what are we to make of the assurance by the Department of the Environment, Transport and the Regions that PPG6 must remain sacrosanct? That is what the Department said, robustly and straightforwardly—that there will be no increase in the number of supermarkets in our countryside. If that is the case, what on earth is the purpose of the referral to the Competition Commission? What shall we do with the commission's report if, for example, it refers to Chippenham in the way that I described? However, if it says that there is plenty of supermarket competition and no reason to change planning, what would be the point of the referral?
When the Minister replies to this debate, which is useful and timeous in the light of the report, she must tell us precisely why the Department of Trade and Industry referred the matter to the Competition Commission, when the commission will reply and what consultations there were between planning Ministers in the Department of the Environment, Transport and the Regions and the DTI before that referral.
More important, the Minister must tell us why the referral was made. What will happen if the report says that there is a restriction on competition between supermarkets in England? What will happen if it calls 54WH for a relaxation of PPG6 in order to accommodate that concern? Does the hon. Lady think that PPG6 can be relaxed, or does she agree with the hon. Member for Greenwich and Woolwich that it cannot? Alternatively, if the Competition Commission says that it has wasted its time and that there is no supermarket competition problem, will she tell us why public money was wasted on an unnecessary inquiry?
Leaving aside the pros and cons of supermarkets, there is some confusion in the machinery of government. The Minister must at least try to shed a little light on what seems to be a murky subject.
§ Mr. Deputy Speaker (Mr. Frank Cook)
Before I call Front-Bench speakers at half-past 10, I should like to be able to fit in the three remaining speakers. Hon. Members should, therefore, be concise and alert in their contributions.
§ Dr. Whitehead (Southampton, Test)
It seems to be the form that we should preface our remarks with references to rhododendrons, and I shall not fail the Chamber in that. The analogy, which was made by my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody), is a good one inasmuch as there can be many different colours of rhododendrons and selective breeding increases the number of colours and types available to gardeners. None the less, they are still rhododendrons and still do what rhododendrons do. That seems to be the nub of the problem.
The owners of supermarkets say in public and to the Select Committee that there has never been a more intense period of competition, that the public are tremendously served for choice and that everything is great. There is a conundrum, however. Although there is greater competition between supermarkets, in wider and subtler ways there appears to be a diminution of competition at the same time. I am concerned about the approach of the McKinsey report, and to some extent that of the Office of Fair Trading, whereby the definition of competition is based on the narrow principle of price. My contention, which is reflected by the Select Committee report, is that supermarket competition is much more widespread and subtle.
The assumption of space has already been mentioned. Supermarkets are all generally dedicated to larger units wherever possible, although there has been some welcome variation with the rise of inner-city supermarkets as a result of planning policy guidance note 6. Common assumptions have been made about location and what is in the store. Recently, I read an interesting book called "Consuming Passions", which sets out the psychology of retailing. It mentions supermarket layout, anti-clockwise movement, different temperatures, products at certain heights and smells from the delicatessen and the bakery section. Those are always the same for every supermarket in order to homogenise the overall product but, within that, competition is available.
Secondly, a logistical assumption is made. Methods of supply are based on just-in-time management. The product must be in the store by the following afternoon. If the supply does not fit the requirement that the product be in the store the following afternoon, the 55WH product is excised. Therefore the product available for competition is one that can be delivered by truck to the supermarket by 4 o'clock in the afternoon, to be put on the shelf immediately. Bakeries increasingly conform to that pattern, whereby products are delivered just in time, using frozen ingredients; if a product cannot be baked within a limited time, it is not made available.
The relationship with suppliers has fundamentally changed. There has been an inversion of the traditional brand-to-shop idea. Now it is the shop that decides which brands will be stocked. Deals that are made with brands can require exclusivity clauses. Under a contract to supply a brand to a particular supermarket, the supermarket can prevent the supplier from providing brands to competitors or non-supermarkets. Consequently, a brand that should be available to anyone in competition has effectively been captured by the method of retailing and the consequent restrictions placed on that brand.
An interesting by-product of that process is the introduction of clones in the form of own brands. We do not need to think very deeply to realise the consequences. Brands are pioneered in the open market, to which a substantial number of brands are still supplied, but 40 per cent. of products sold in supermarkets are own brands and, overwhelmingly, not brands that the supermarket has pioneered. Supermarkets wait until a brand has become successful and then copy it to capture its market. We have witnessed, for example, the extreme coincidence of the rise of a particular corn chip called Doritos and its imitation by a corn chip called Amigos in particular supermarkets. Head & Shoulders dandruff shampoo has resulted in various clone dandruff shampoos appearing on supermarket shelves. If it goes any further, we do not need a great deal of insight to realise that if supermarket own brands are all that remain, there will be no innovation and choice among the brands that are developed and available.
The combination of own brands, the power of purchase and exclusive deals has, in addition to planning constraints and out-of-town developments which we discussed earlier, led to a reduction in independent grocery outlets, as the report, significantly, highlights. The number has decreased from 116,000 in 1961 to only 20,000 in 1997. We may have a great deal of choice among the four brand leaders, but do we as consumers have choice outside those brand leaders?
I conducted a personal investigation into supermarkets' increasing monopolisation of fresh food and vegetables, from the beginning of the supply chain up to the supermarkets. Supermarkets increasingly require their fresh fruit and vegetables to be supplied by a decreasing number of producers, to allow for economies of scale and just-in-time management. Consequently, those who produce fresh fruit and vegetables are becoming large, agro-industrial companies in their own right, effectively pushing out varietals and smaller farmers in the process.
Interestingly, the hon. Member for North Wiltshire (Mr. Gray) underlined that point. He mentioned that we now have fresh fruit and vegetables all the year round. However, that is at the price of one-third of the vegetables produced in this country simply being left to 56WH rot in the field because they do not conform to what the supermarket wants for its purposes. Particular varietals are difficult to place within those production purposes. The fir apple potato is now virtually extinct as a brand on suppliers' shelves.
In capturing producers, supermarkets now require producers of fresh fruit and vegetables to provide what are known in the business as over-riders. That is a nice term that means that the producer gives the supermarket money in order to be allowed to continue producing fruit and vegetables for it. If that continues, the margins of the company are reduced, as a result of which the innovation of that company in trying to produce a product for the supermarket is taken out of the process and it becomes a machine-like supplier to the supermarket.
I mention those points because they are additions to the planning process, which was highlighted in the report and referred to in the Chamber today. The extent to which supermarkets can effectively dictate the workings of the market seems to be a factor well beyond planning. Whether it serves the British public in the long term with regard to choice is a big question. I urge those who consider such matters, especially the Minister who is to respond to the debate, to assure us that the complexity of competition is active in the Government's mind and that the protection of the consumer will be featured in future debates.
§ Mr. Hilary Benn (Leeds, Central)
We are having this debate principally because supermarkets have been successful. The hon. Member for North Wiltshire (Mr. Gray) did us a service by reminding us of that fact. Like others, I welcome planning policy guidance note 6, as I do the report, because it fires a powerful warning shot across the bows of any person who is contemplating trying to row back from the decision taken by the previous Government, which I hope that the current Government will continue to support with equal vigour.
The hon. Member for North Wiltshire referred to the fact that the average weight of a load of family shopping is more than 80 lb. We must make it easier for people to continue to benefit from the service offered by supermarkets without necessarily having to use their car. I should like there to be more home delivery services in operation. Tesco leads the field in a modest way; 250,000 people have signed up to its service. I have used it twice and, speaking from experience, I would be keen to give up the pleasure of that weekly trudge up and down the aisles if my purchases were delivered to my home. Let us be imaginative. Why cannot we build into the planning system for new developments a requirement on the supermarket owner to provide a home-delivery service? Some people would welcome the chance not to drive their car to the supermarket, but to have their purchases delivered by van. That may release a few parking spaces.
One characteristic of inner-city areas is the absence of shops, especially in those areas that are in severe decline. The few shops that remain in such areas symbolise the problems that they face, given that they are steel-shuttered and, in a sense, as beleaguered as the communities that they try to serve. I represent a 57WH constituency with one of the lowest levels of car ownership in the country. The debate about people's freedom to use their cars for shopping does not arise for many of my constituents. If they cannot go by bus to shop, they are denied the range of choice that supermarkets provide, including the right to low prices.
Early this year, the Joseph Rowntree Foundation published an interesting study into the extra costs of being poor in Britain today. A representative bought 20 goods from a supermarket at a cost of £17.88. He then went to the local shop where the same basket of goods cost £29.11. Shopping is 50 per cent. more expensive for poor people who live in areas that do not give them access to a choice of goods at low prices than it is for others. The poorest fifth of households spend nearly a quarter of their income on food; the richest fifth of households spend 14 per cent.
The Leeds Co-op recently opened two stores in my constituency, one of which is a refurbishment in the Selby road. The other is on the Lincoln Green estate, which was the subject of Fergal Keane's "Forgotten Britain" documentary on BBC television about a month ago. The arrival of the store, which is in a former public house—in which there may be some symbolism—has given a lift to the area. It is a small, modest shop, which opens long hours. It has a range of produce, such as fresh fruit, which may not have been available in such quantity previously. It has given a boost to the area, and has played a part in the redevelopment and regeneration process of a run-down inner-city community. I never thought that I would regard the Co-op or any other supermarket as an instrument of inner-city regeneration in that sense. In this modest example, however, that is unquestionably the case. Other supermarkets should recognise that in addition to providing successfully for the market, about which other hon. Members have spoken, they have a responsibility to inner-city areas.
To the extent that PPG6 has encouraged more supermarkets to consider developing inner-city areas, it has been well worth while. To the extent that the report encourages supermarkets to do more of that—and the Government to ensure that they do more—it will also have been extremely useful.
§ Mr. Tom Brake (Carshalton and Wallington)
I am pleased to have the opportunity to speak in the debate. I join hon. Members in congratulating the hon. Member for Denton and Reddish (Mr. Bennett) on securing it. The subject of supermarkets is important, and Liberal Democrats used an Opposition day debate last year to discuss it.
The rapid expansion of out-of-town superstores and the concentration of market share has undoubtedly hit town centres. Supermarket purchasing and pricing policies have hit farmers but not led to lower prices for consumers. As the report highlights, a new wave of larger superstore developments, predatory pricing to gain market dominance and a squeeze on local producers and traditional retailers has had a heavy impact on town centres. Traditional food retailers and other retailers in town centres have closed, and many jobs have been lost.
The hon. Member for Crewe and Nantwich (Mrs. Dunwoody) likened supermarkets to rhododendrons, and I, too, shall use a gardening 58WH analogy. I am currently fighting a running battle in my garden with ground elder, which I think that I am losing. Supermarkets can be likened to ground elder, as they continue to spread and strangle anything in their path.
In January 1998, Boots sponsored a report for the national retail planning forum, which showed how great has been the impact of out-of-town food superstores on local retail employment. It studied 15 catchment areas of 93 superstores that opened between 1991 and 1995. Although 10,500 full-time equivalent jobs had been created, no fewer than 25,000 jobs were lost in local specialist food retailers—a net loss of 15,000. A further 10,000 jobs were lost in other non-food retailers. That is an average job loss of 276 employees for every supermarket that had opened. That report was backed up by a study produced by the Department of the Environment, Transport and the Regions.
Supermarkets have not just had an impact on town centres. They have had a wider impact on the environment, to which many hon. Members have referred. For instance, the Government rightly say that they want to develop brownfield sites in town centres. What happens, however, when such sites are not available? The sequential test, which has been praised in the report, leads supermarkets to push for development on the edge of or even outside town centres, but there is nothing in the test to say that that cannot be done. The larger the store, the more likely it is that it will not be able to find a town centre site. It will, therefore, claim that it must rely on an out-of-town site.
Since the last Select Committee report on the matter, three years have elapsed, during which the Government could have defined what constitutes a suitable site. I hope that the Minister can give us that definition.
I believe that everyone agrees with the policy that has been in place since 1996 and the need for the sequential test. However, I am afraid that, once options in town centres are exhausted, supermarkets move out of town. A report published in 1998 by the Environment and Science Research Council said:Since the mid-1990s…the major food retailers increased floor space by nearly 2.5 million square feet a year, much the same as in earlier years.It would be nice to think that the vast majority of that new floorspace had been developed in town centres, but I suspect that that was not the case.
Many members touched on the issue of traffic and congestion. The royal commission on environmental pollution producing its report last Friday, and the issue needs to be tackled quickly. The report called for a 60 per cent. cut in CO2 emissions, much of which will have to be achieved by reducing traffic and congestion. I, therefore welcome the new planning policy guidance note 13 and the fact that it will contain maximum, not minimum, parking standards. I hope that they will be tough; the Select Committee was worried that they would be too lax. The Minister will have the opportunity to reassure us that she has not gone soft on congestion.
In one respect, I am disappointed by the Government's response. They point out that, under the Transport Bill, it will be possible to levy a charge on workplace car parking at out-of-town stores. That is positive, but will not apply to customer parking. My hon. Friends the Members for Bath (Mr. Foster) and for 59WH Tweeddale, Ettrick and Lauderdale (Mr. Moore) tabled several amendments to the Bill suggesting the inclusion of out-of-town shopping complexes. If the Government are not prepared to entertain such proposals, perhaps the Minister could outline how they intend to level the playing field between out-of-town shopping centres without a charge and town centres, where charges often apply.
The development of out-of-town shopping centres leaves dereliction in town centres. There is a role for a greenfield development levy in trying to redress the balance and make the development of derelict sites in town centres more attractive. Value added tax has been mentioned as well, and it could help in levelling the playing field between out-of-town developments and the redevelopment of town-centre premises.
Even if those reforms were implemented, there would be a need for local authorities to make much more of compulsory purchase order powers to assemble sites, as the Select Committee report suggests. That would mean that, if the owners of a possible site in a town centre had different views about its future, the local authority would have the role of pulling all that together to make available a site that might not otherwise be available.
I am happy to endorse the report's views on design and PPG6. Supermarket design leaves much to be desired; there is an example in my constituency where the car park has been put on the high street and the store frontage has been set back. All that one can see when walking down the high street is the concrete of the underground car park. I hope that sometime we may consider not only the visual impact of building design, but the wider environmental impact. Much can be done about the environmental impact of supermarkets. The report's title is misleading, as the report concerns not only the impact of competition but the overall environmental impact of supermarkets.
The Committee report is rightly robust about competition, and I share its worry about the referral by the Office of Fair Trading to the Competition Commission. A relaxation of the planning rules would be disastrous, and I hope that DETR Ministers will hold their ground and insist on pursuing existing policy, if the Secretary of State for Industry has to consider adverse findings.
My time is up, I am told. I finish by saying that I welcome the report and its recommendations on Compulsory Purchase Orders, design, car parking and other aspects of supermarket development. However, I am disappointed by the Government's weak response, and hope that the Minister will enlighten us about their stance on the issue.
§ Mr. Damian Green (Ashford)
As the world's worst gardener, I will not extend the rhododendron analogy that has dominated the debate; given the greater expertise of other hon. Members, I would not add anything new. I commend the Committee on its report, which deals seriously with a range of serious and complex issues, as the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) showed when she opened the debate.
60WH I should like to comment on the Committee's discoveries and recommendations and the Government's response, and to question the Minister on some matters. I hope that she can reassure the chamber about the Government's actions so far and their intentions.
First, I congratulate and thank my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer), who introduced planning policy guidance note 6, which the Committee report commends. In fact, that is its most clear-cut commendation and it has often been mentioned in the debate. The Secretary of State whose policy is regarded as popular and right not only on the day on which it is introduced but four years later, should be a happy man. It is a rare accolade that he must want to savour. The special adviser in the Department at the time was my hon. Friend the Member for North Wiltshire (Mr. Gray). As his sage advice contributed to a policy that has received universal commendation this morning, he should share in the glory.
We all agree that supermarkets cause a range of problems. The existence of a nearby supermarket is likely to accelerate the closure of village shops, and out-of-town superstores make shopping in town centres more difficult. Because of their buying power, supermarkets can cause problems for farmers, who feel that they are dealing with a leviathan and do not have the countervailing power to extract a fair return for their products.
However, the hon. Member for Normanton (Mr. O'Brien) was right in saying that it is absurd to be anti-supermarket. We all use them and find them convenient, as do millions of our constituents. They have improved the quality of life in this country over the past 30 or 40 years, by providing a range of goods at prices that most people can afford. I was fascinated by the price comparison referred to by the hon. Member for Leeds, Central (Mr. Benn), which shows that, by driving prices down, supermarkets can provide a wide choice of goods, some of which would usually be regarded as luxury goods by the less well-off.
Like the hon. Gentleman, I would be delighted by a growth of home delivery through internet shopping, as it would be an enormous pleasure to give up that weekly routine. I have also discovered that it is a weekly routine that many of my constituents find convenient as a way of finding their Member of Parliament in the supermarket on a Saturday morning. It is a good way of getting things off their chest.
The report does not explain why supermarket competition is the problem, and I remain unconvinced. The quasi-monopoly characteristic of supermarkets is often the real problem. Many difficulties highlighted by the report relate to the areas in which supermarkets can effectively behave as a monopoly or, at best, as an oligopoly, instead of competing with one another. The Minister will have to deal with that central point.
I hope that the Competition Commission reports its findings when the House is sitting, given that the matter is important and controversial. It would be good to have an early and timely debate about it in one form or another. A balancing act must be clearly defined between consumer interests and wider environmental and social interests. At best, the Competition Commission will contribute to achieving that balance. It must be struck and I am sure that we shall continue to take a close interest in it.
61WH I commend two points in the report, the first of which relates to the need for small supermarkets in town centres. The report says that planners are sometimes relatively inflexible and consider that all supermarket development is bad. The Committee feels strongly that smaller supermarkets in a town centre can help to regenerate the community and keep the town centres alive—something that we would all welcome. The second point concerns design, which was mentioned by my hon. Friend the Member for Vale of York (Miss McIntosh). Paragraph 23 of the report quotes the urban taskforce on the problems of "monotony of design". Planners should pay attention not only to the general design, but to the desirability of using proper vernacular materials. One depressing aspect of many town centres is that, if we were led into them blindfold and then had the blindfold removed, we would have no idea where we were. Far too many towns look like one another. We have lost much of the regional and local vernacular feel in our town centres. We should try to get it back; it is one of the glories of this country.
Much mention has been made of Wal-Mart and its takeover of Asda. Will the Minister say whether there are on-going talks between senior management at Wal-Mart and the Government? At the time of the takeover, we all read the reports of meetings with the Prime Minister. Is Wal-Mart having an effect on future planning regulations? What will be the planning implications if the Competition Commission makes an adverse public interest finding on the issue of competition? We have heard how strong the Minister for Housing and Planning was on the issue, but it would be a different situation if the Competition Commission concluded that the public interest was being damaged. What would be the Government's response to that?
I was slightly disturbed to read paragraph 28 of the report, in which the Minister for Housing and Planning said that there had beensubstantial inconsistency between individual local authorities.That smacks of a desire for centralising micro-management that would not serve the planning process well. Can the Minister give us assurances about that today? Giving local authorities more power to take their own decisions is a good, rather than a bad, move.
The appeals system has not been mentioned this morning. It is widely held to be loaded in favour of the big battalions of the large shops as opposed to community groups that oppose big developments and it is regarded as one of the big problems with the system. It would be interesting to know whether the Government have any plans to change it.
Paragraph 12 of the Government response to the report is extraordinary. It refers to the compulsory purchase policy review advisory group, which will report to Ministers at the Department of the Environment, Transport and the Regions in the next two months. It says:A decision will then be made whether, and when, to publish it.I cannot believe that the report will be so sensitive that Ministers will not want to publish it. I assure the Minister that it is highly unlikely that the matter will form a central part of the Conservative party's manifesto at the next general election. If the advisory group makes such sensitive comments, it is all the more 62WH important to publish the report. I am sure that there are no reasons for not doing so, and I hope that the Minister will assure us that she will.
The final point to which I should like the Minister to respond relates to car parking. This is a good opportunity for her to clarify the Government's position on parking at superstores and, in particular, workplace charges, which have been mentioned. Has the Department done any work on the possible effect on pricing of the introduction of workplace charges at out-of-town superstores? Clearly, that may have an impact on the economics involved.
It seems to us that the long-term solution is decent and sensible guidance from the centre and greater devolution of power to local communities, because there may be a genuinely different balance to be struck in different communities between the advantages and disadvantages of supermarket development. We feel that Ministers should allow local authorities to take more of those decisions, as those decisions would then be more likely to reflect the needs of local communities. I hope that the Minister will reassure the Chamber about those points.
§ The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Ms Beverley Hughes)
This has been an important debate in both substance and timing. I congratulate my hon. Friend the Member for Denton and Reddish (Mr. Bennett) on securing the debate, and the members of the Environment, Transport and Regional Affairs Committee on their thorough report. I thank hon. Members for their unequivocal support for our policy of encouraging new retail development in town centres.
We very much value the Committee's continuing vigilance and interest in town centres and shopping. I know that the Committee, rightly, takes great pride in the important role that it played in convincing the previous Government to change their disastrous stance and the outcome of that stance on the issue. The revision of planning policy guidance note 6 was due largely to the Committee's inquiry into shopping centres.
I very much welcome the debate, the timing of which is important because it provides an opportunity to reaffirm the Government's position directly to the Chamber and to confirm the robust defence of Government policy for which the Committee commended my hon. Friend the Minister for Housing and Planning. I shall give hon. Members most of the assurances that they want and I shall try in the limited time available to deal comprehensively with all their arguments.
My hon. Friend the Member for Normanton (Mr. O'Brien) graphically outlined the impact of decisions taken during the 1980s and 1990s. In a debate last night my hon. Friend the Minister for Housing and Planning informed us that half of all post-war out-of-town developments were approved between 1985 and 1990, which illustrates what a step change in practice we witnessed during that period. That step change was not positive. It left a legacy for many of our small towns and city centres, as many hon. Members discussed today. One of the Government's central policies is to start to reverse those destructive trends and to renew, enhance 63WH and support the role of small town centres and inner cities in the rejuvenation of economic and social life for many of our people.
§ Mr. Gray
I am sorry to interrupt the hon. Lady; I know that we are short of time. She is trying to make what sounds to those of us in the know like a strong party political point that in the 1980s everything was bad and that this Government are changing that. Will she acknowledge that in 1993 my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer) changed the policy, which was coincidental to the Select Committee's report? To try to suggest that the new Labour Government are putting right the planning wrongs of the previous Government is incorrect and lowers the tone of what has been an interesting debate.
§ Ms Hughes
I do not believe that it lowers the tone. I acknowledge the change of policy and when it occurred, and I said as much. I am sorry that the hon. Gentleman has distracted us from the Select Committee's role at that time in drawing the Government's attention to the effects of their practices, if not policies, in town and city centres. In my constituency, the right hon. Member for Suffolk, Coastal approved the largest out-of-town retail store in Europe some time after the apparent policy change. The policy is not the only important aspect; the way in which it is implemented and the rigour with which local authorities and Ministers take decisions in the final analysis makes a difference.
The Committee's inquiry was prompted by Wal-Mart's takeover of Asda, which has been mentioned by one or two hon. Members, including the hon. Member for Ashford (Mr. Green). At the time, the Opposition tried to suggest that agreement had been reached with Wal-Mart for a relaxation in the planning regime. Despite reassurances at the time, that claim continued to be made. Nothing could be further from the truth, and the passage of time has vindicated our reassurances. I hope that that satisfies the hon. Member for Ashford.
All supermarkets now face a level playing field in planning terms. That is the outcome of the current policy position and the way in which we are trying to implement it. They all face the challenge of finding more central sites for new stores and of adapting their formats. My hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) raised an important point on the subject. Supermarkets need to adapt in terms of scale, design and car parking to try to fit their formats into existing centres. We are mindful of the possibility of applications in which a developer says that a community needs a store of such a size that it can be placed in only one location. We are not stupid; we can see that for what it is, and will not accept that argument as a reason for avoiding the sequential approach and the need to consider whether a small supermarket in a town centre could equally fit the need. We shall not accept the one-model approach of the large-format superstore. We expect supermarket operators to adapt their offers and possibilities to local circumstances. The Committee asked for clarification on the issue; we gave it in our response and I am happy to affirm it strongly today.
64WH The subject of extensions was raised by my hon. Friend the Member for Normanton. All extensions require applications for planning permission and so will be subject to the test of PPG6. We shall not allow large superstores to be created by increments, in the way that my hon. Friend feared and believed to be possible.
There has been a great deal of discussion this morning about the Competition Commission's inquiry, and of whether it might impose a relaxation of the Government's planning policy. Although I understand those concerns, planning is not a central focus of the inquiry. I must correct the hon. Member for North Wiltshire (Mr. Gray), in that the Department of Trade and Industry did not refer the matter; the Office of Fair Trading did. The commission's report will be given to my right hon. Friend the Secretary of State for Trade and Industry for consideration on 31 July. It will be published two months later—a time that is much more conducive to the sort of parliamentary debate for which hon. Members have called. The timing is not necessarily the problem that it has been thought to be.
§ Mrs. Dunwoody
My hon. Friend must forgive me, as I am not terribly bright. Is she saying that the report will be published, but that the Government's reply will be made in the recess? Although she may think that more convenient for Members of Parliament, I have a strange old-fashioned idea that we are more useful in this place than when dissipated throughout the country.
§ Ms Hughes
I think that that date is preferable to 31 July, if Parliament rises on 28 July. I share my hon. Friend's views and take note of them. I understand and welcome the fact that hon. Members want to discuss the report, and hope that they will press for such discussion.
Hon. Members have expressed concerns about the Competition Commission. Competing objectives are in the nature of planning and balancing different Government policies, but the protection and enhancement of our towns and city centres is a top priority for the Government. I can only endorse again the robust statement that my hon. Friend the Minister for Housing and Planning made to the Committee. The Government regard the policy for the siting of supermarkets as a crucial lever for the wider policy of revitalisation of small market towns and city centres, and we are determined not to relax it. I place that on the record as the view of Ministers, from the Secretary of State downwards, in the Department of the Environment, Transport and the Regions. We will continue to hold that position.
My hon. Friend the Member for Leeds, Central (Mr. Benn) raised another important point. Some people in inner cities are excluded from access to low-priced, good quality shopping with a wide choice. That is the area that we are considering, in so far as we may want to develop PPG6. We are following up the 65WH proposals about access to shopping made by one of the policy action teams, because we need new approaches to help local communities to develop retail strategies, and to give them choices.
§ Ms Hughes
I beg my hon. Friend's pardon, but I believe that he has just come in. I have three minutes to deal with the remaining points that have been raised.
We are firm on PPG6 and intend to consider the matter. The hon. Member for Vale of York (Miss McIntosh) and others have raised the issue of market towns and rural areas. I agree that, although the issue affects inner cities, it also affects the vitality of smaller towns, on which the siting of out-of-town supermarkets has sometimes had a disastrous effect. That affects those people who are least able to go out of town, because they are elderly or disabled or have no car or resources to do so.
Several hon. Members raised the question of supermarket design and the Committee called for an improvement in that respect. Although there are exceptions, we are all familiar with the shed-like structures sited in acres of tarmac that seem to be the hallmark of many of our supermarkets—certainly in out-of-town situations. When supermarkets are located in town centres, their design is often incompatible with the buildings around them.
We want good design to be an aim of all those involved in new development, and we have published new guidance called "By Design", which the Commission for Architecture and the Built Environment helped us to produce. It is not just an average guidance, but provides practical assistance for local authorities to help developers to improve the quality of the designs submitted in applications. The Government are pressing the issue of design, which is important, not only for supermarkets but for housing and public building, and affects the quality of the environment for local people.
Car parking is another important issue that has been raised. We have created a more level playing field for parking through planning policy guidance note 13, which imposes maximum standards as opposed to the minimum standards required previously. Workplace charging will assist in that matter, when local authorities want to introduce it.
In short, we are dedicated to retaining our robust approach to PPG6 because, as I said, it is so important for the achievement of wider Government objectives for regeneration.