Industrial Concentration and Retail Trade.

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

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Photo of Sir Hugh Linstead Sir Hugh Linstead , Wandsworth Putney

I have to ask for the indulgence which the House is usually ready to accord when a new Member addresses it for the first time. The business with which the Committee are concerned to-day is to see what can be done to help the independent businesses of this country, whether manufacturing businesses or retail businesses, because I think it is becoming clear that all the forces which were operating in peace-time to put the small business out of action are being greatly accelerated by war-time conditions. It is a tendency which is almost unobserved and is extremely difficult to stop at any time, but it appears to me that the publication of the Report of this Committee does afford a particularly useful opportunity to examine this tendency. Whatever opinions may be held about the recommendations of the Report I think it will generally be agreed that the second and third Reports together do provide an extremely valuable social document, and we are indebted to the Committee for that part of the work which they have done. When we come to their recommendations, it seems to me that we have to balance one set of considerations against another. On what one might call the good side of the account not the least item, I should say, is the fact that they give an indication to the small business man that someone is concerned about his future, because that will mean something to him. Secondly, they do propose definite means of ameliorating his position. But when we have put these two considerations into one side of the balance, there is a great deal to be put into the opposite side, and previous speakers have indicated some of the difficulties which have to be faced. First of all, I am afraid that it is burial and not survival that is interesting this Committee. It is a great pity that the contributions which they propose in their scheme are to come from only one half of the retail trading community. If there is to be a benefit, why should half the trading community be deprived of it, and if there is a burden why should what one must assume to be the prosperous half of the trading community not help to share it?

I suggest that the scheme does not put the burden on the proper shoulders. It is called an insurance scheme. If it is so, the premiums ought to be paid by the people who are to benefit from it, and that means in this case that the premiums should be paid by the landlords, to whom it is proposed that the payments out shall go. We must recognise that the scheme is really a levy to reduce the number of retail outlets, in the interests of the community as a whole. Surely the community as a whole should take on its shoulders that burden if it is to benefit. The smallest man of all, the under £1,000-a-year-turnover man, is given the opportunity of contracting out. It is very serious that the balance of the retail trade will certainly be altered if this scheme is put into operation. The small man will go out of business, and, at the end of a year or so, there will be proportionately a very much smaller number of small men. Finally, there is no certainty, in spite of the attempt the Committee have made to deal with the matter, that the small man can get back again immediately the war is over. He is given priority, but he may be at the tail of a very long line of people all clutching certificates of priority, which might not help at all. No one of these objections is fatal, but when you have six or seven of these objections altogether, it suggests to me that the scheme requires very careful examination by the trade, the Government and the House of Commons before it ought to be proceeded with.

It ought to be possible, as the hon. Member who has just spoken suggested, for arrangements to be made trade by trade, provided that there were at the back of them some statutory sanction. I do not think that hundreds of thousands of small traders will do very much if they are left to their own devices, because they are individuals. A good deal might be accomplished by arranging this matter trade by trade. I happen to know something of the retail drug trade. The President of the Board of Trade seemed to suggest that chemists wanted to be left out of this scheme for purely selfish reasons. I would remind the Committee that for two or three years there has been a committee advising the Ministry of Health and the Ministry of Labour and trying to keep chemists' shops open, in order to maintain an adequate pharmaceutical service, to the community. Our problem is slightly different from the problem of some other trades.

There are remedies outside the proposals of this Report. First, it would help enormously if the Board of Trade were to say clearly what the Government's policy is with regard to the number of retail outlets there should be. If they were to say: "We want, in a year's time, to have reduced the number of shops to 500,000," we might know where we were. There should be some plain direction to that end. If the Board of Trade, instead of prescribing maximum prices were to prescribe fixed prices, something might be accomplished. Maximum prices induce the big man to undercut, in order to attract people to his shop. The little man cannot afford to do so. The Board of Trade could ease things a good deal for the small man, particularly for the small manufacturer in the matter of quotas and of retaining his staff. I have had a good deal of correspondence on the subject of the concentration of industry with one particular firm of manufacturers in Nottingham who have a special sort of leather which is of no use for anything except for the things they make They have a staff which works at home, immobile, the Ministry of Labour would call it, and they have warehouses which have been inspected and rejected as useless. There is no reason why they should not use up the stocks they have; but they are now threatened with the imposition of such a quota that they will be forced out of business. We are told that hard cases make bad law, but generosity in administration could ease the burden of the small man very substantially.

Finally, there is a great deal that the trader can do for himself. One of the most important is to provide some association which would enable the retail trades to speak with a fairly united voice to Members in this House. All Members have probably found themselves receiving confused advice on this subject. Surely the retail traders should get together and give us combined advice. In about a year ahead we shall find that the retail trade situation has considerably deteriorated. I can see no solution under Government control, except by one of two courses. They are, either concentration of the retail industry in a vertical line—manufacturer, wholesaler and retailer—or some form of registration and licensing which will reduce, pro rata, the small man, the co-operative society and the chain store, as the necessities of the war require. It may be said that the small business is not efficient, but I would be bitterly opposed to that suggestion. I have had plenty of evidence in correspondence which has reached me that some of the most efficient businesses are suffering seriously. Efficiency is not enough. If it is a case of small store versus the automatic machine, I am on the side of the small store. It represents an element of individuality in the community, and in this House we should do everything we can to preserve it.