Industrial Concentration and Retail Trade.

Part of the debate – in the House of Commons on 23rd July 1942.

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Photo of Mr Hugh Dalton Mr Hugh Dalton , Bishop Auckland

Yes, not only the total number but the proportion is very much less. I am anxious, however, not to dwell too much on that for the reasons I have just mentioned; it is only one of the elements in the picture.

Let me now give figures excluding Purchase Tax. In the year ending 31st May, 1942, excluding Purchase Tax, there was a drop of 12 per cent. in the value of sales, and that shows that there is, as we all know, a considerable decline in the total. But within this general picture there are large differences between different classes of retailer. That has been borne in upon me very forcibly during my discussions recently with various sections. Chemists, tobacconists and booksellers are all continuing to keep up a fairly high level of trade. On the other hand, the position of furniture, hardware and clothing is much less fortunate. These are all very difficult cases. Also I wish to give one or two very interesting figures to the Committee showing the very wide differences which exist between the state of retail trade in different areas of the country. Broadly speaking, in Scotland and in the North of England retailers since the war have done far better relatively to pre-war years than they have done in the South of England, particularly in London and the South-East. The figures here are quite remarkable. These again are Board of Trade figures which are comparable with those furnished to the hon. Lady and her colleagues on the Retail Trade Committee.

The figures for May, 1942, show a fall in the value of sales compared with a comparable pre-war month of more than 35 per cent. for London, West End and Central, That is a very heavy decline. I have not got separate figures for South-East England, but there sales will obviously have declined much more than in the South-West. All I have is an aggregate figure for the South of England showing an over-all decline of 2 per cent. On the other hand, there have been a number of rises in the value of sales as compared with pre-war: a 14 per cent. rise in the Midlands, 14 per cent. in South Wales, 17 per cent. in the North-West of England, 23 per cent. in the North-East, and 25 per cent. in Scotland. These, of course, are the distressed areas, getting rid for the time being of their distress, and benefiting from the full employment of their people, from the arrival of troops in the area, and so on. These figures suffice to show that depression in the retail trade is not at all smoothly spread and is not at all universal.

How far has there been an actual contraction in the retail trades up to date? Here our information is not at all complete, but the Retail Trade Committee have published some very interesting figures in the Appendix to their Report, which I judge hon. Members will have read. There are fairly complete figures for departmental stores, which have lost 25 per cent. of their space and over 30 per cent. of their staff, co-operative societies have lost about 5 per cent. of their space and 15 per cent. of their staff, multiple shops have lost 11 per cent. of their branches and 22 per cent. of their staff, and chain stores have lost 4 per cent. of their branches and 26 per cent of their staff. That gives a rough picture of how various sections have been effected. The Retail Trade Committee has also arranged for a very valuable survey, which has been most helpful to us, in seven medium-sized towns. If hon. Members who have the Report will turn to table 9, at the bottom of page 36, they will find some very interesting figures. Seven medium-sized towns are not a large sample, but I think they form a fair sample representing what has been going on all over the country. The moral of the figures is that relatively speaking small shops have lost ground very heavily. For instance, the Committee will be surprised—I was—to see that the very large shops have increased in number by 4 per cent., and large shops by 4 per cent., in this time of stress and diminished supplies. Medium shops have increased by 3 per cent., medium small shops have diminished by 5 per cent., small shops have diminished by 11 per cent., and very small shops have diminished by 19 per cent. That is a very extraordinary thing, and it leads to various thoughts, some of which I will give expression to later. That is probably typical of the position all over the country, although it is based on a survey of only seven towns.

That is the picture I wish to draw for the Committee—a sharp decline of the physical turnover, a much more moderate decline in the value of sales, and a big shift in the distribution of turnover between different products, different areas and different types of shops, together with a considerable fall in the number of shops and in the total number of workers employed. Faced with this situation, what must the object of the Government be? I think I can state it in general terms which will command a fairly wide measure of agreement. First of all, we must make sure that there are sufficient retail outlets for the public. We must not create endless shopping difficulties, particularly at a time when people are working much harder than ever before. It would be a very poor policy to close down or cause the closing down of a large number of shops, and then find that because people had to go further to do their shopping there was more absenteeism, more lost time and long queues among war workers. We must maintain sufficient outlets for the reasonable needs of the public when so many of them are working so very hard and have only a limited time in which to shop.

In the second place, I must help to meet the demands made by the Ministry of Labour on behalf of the Supply Departments and on behalf of the Service Departments for ever more mobile workers to go into munition factories and the Services. That demand will continue, and it is the duty of all of us to help to meet it. Now most of the men from the retail non-food trades have been taken. The labour problem is chiefly that of the younger women, and it has been suggested that most of the available mobile labour capable of being transferred to munitions which is now left is in the large shops, not in the small shops, and moreover that the premises of the large shops are more useful for other war purposes than the small shops can possibly be. In the third place, we must keep the cost of distribution per unit as low as we can. In the fourth place, we must avoid needless hardship, and we must bear in mind that the small trader, when a certain point is reached, is no longer able, as is the large trader, to restrict the scale of his activities but has to cease altogether. That should be borne in mind, particularly in view of the declaration made by the present Minister of Production, when as President of the Board of Trade he announced the appointment of the Retail Trade Committee. I shall here re-quote words often quoted before. He said that we must make sure that any measures which might be taken should secure a fair and equitable balance between the various trading interests concerned, both small and large. That is the policy of the Government, and that is the policy which I shall seek to apply. [An HON. MEMBER: "It is impossible."] Many things are impossible. I will repeat again that the idea is to secure a fair and equitable balance between the various trading interests concerned. That is the policy of the Government so far as it can be achieved.

I want to refer at this stage to the third Report of the Retail Trade Committee published just over a month ago, and I wish to express my thanks to the hon. Lady the Member for Frome (Mrs. Tate) and her colleagues. They have worked very hard and have produced an extremely interesting Report, which I assume has been read by most hon. Members here. Therefore I will not spend much time in recapitulating it. I will just briefly summarise the recommendations. The Committee recommend that as a wartime emergency measure a scheme of concentration should be initiated for the whole of the retail non-food trades. Their scheme is intended to facilitate voluntary withdrawal during the period of emergency. It is not a planned concentration imposed from outside; it rests upon the establishment of an insurance fund to assist those who voluntarily withdraw from the industry. The Commitee propose that there should be a levy which at first might be fixed at 1 per cent. on turnover, compulsory on all non-food traders, including confectioners, who have a turnover of more than £1,000 a year. Those below that might come in or stay out as they please. There are to be two forms of benefit, a standard benefit of 5 per cent. per annum on the turnover to be paid so long as obligations for rent or its equivalent continue, and also a special benefit payable at 5 per cent. per annum, limited to a period of six months, and limited to the first £5,000 of turnover, with a maximum of £125, and that would be paid without regard to whether there were contractual obligations on the withdrawing trader or not. The Committee also recommend, as a condition of continuing in business, that traders should be obliged to register, and that the right of re-entry should be given to withdrawing traders, and that that right should be retrospective in respect of those who have ceased to trade as a result of the war.

Immediately on receiving this Report I decided that before forming any firm conclusion on it I must learn the views of interested parties. I have had a number of consultations during the past fortnight with interested parties. They have just been concluded, and I will briefly summarise the views expressed to me by those consulted. There is no use in disguising the fact that the prevailing opinion among those I have consulted was definitely hostile to the proposals of the Committee. Having read the minority Report signed by Mr. Palmer, I was not surprised to find that the Co-operative Movement was opposed to them. I think that my hon. Friend the Member for East Ham South (Mr. Barnes) is to speak later on that. On the other hand the trade union representatives of the National Union of Distributive and Allied Workers and the Shop Assistants were on the whole favourable. The National Chamber of Trade was on the whole very critical of the Report. They said that the real problem was not how to facilitate withdrawal but how to keep the small trader in business, and they felt that the larger shops were getting a disproportionate share of the available supplies, and were being too generously treated in respect of the call-up of labour. They made a number of suggestions. The Drapers' Chamber of Trade were favourable but desired steps to be taken to secure a fairer distribution of goods to small traders.

Neither the Retail Distributors' Association, who speak for departmental stores, nor the Multiple Shops' Federation considered that the scheme afforded a saisfactory solution, and took the view that the benefits would go to landlords and mortgagees rather than the traders themselves. They made a number of other criticisms which I will not repeat. The Association of British Chambers of Commerce were very divided, but on the whole they were opposed to the scheme. The Southampton Chamber of Commerce have been kind enough to send me their views direct. They said that their Chamber viewed with the greatest concern the third Report of the Retail Trade Committee and heartily and completely rejected it on grounds which they set out.