§ Order for Second Reading read.
§ 11.5 a.m.
§ Captain Harold Balfour
I beg to move, "That the Bill be now read a Second time."
I am aware of two things—first, that no private Member's effort could be directed at a more difficult subject, and that there are very few subjects which are less suitable for a private Member to attempt to deal with than this. Also, I think, it is the general desire of Members that the Debate should concentrate, as I hope will be the case, on the particular issue as to whether some legislation with the objective that this Bill has is desirable or not, and that the provisons of the Bill should be a secondary consideration compared with the principles which it raises. I realise that it is incomplete in many ways—there are of course gaps—and it is easy of criticism. Nevertheless, I think it is better to attempt to bring forward a subject such as the Bill covers rather than leave it untouched.
There is an Amendment for the rejection. I think the hon. Member for Huddersfield (Mr. Mabane) considers that I am a sort of political horticulturist who makes two errors come where only one should grow. I hope he too will deal more with the principles raised in the Bill than with the actual proposals. There is one Clause of it which, I hope, will have the support of all Members, whether they are opponents or supporters of the Bill, and that is the Clause that deals with the requirement of a census of retail distribution. It seems to me curious that in nearly all branches of our industrial life, manufacture and primary production, there are statistics available, but in the case of retail distribution there are none. The President of the Board of Trade has not given very hopeful replies to questions as to whether he would have such a retail distribution census, but this Debate will not have been in vain if the Parliamentary Secretary gives a more encouraging reply than his chief. The right hon. Gentleman has gone to what some people call, I believe, a better place, which is really the home of statistics. In America there is 1206 scarcely a phase of industrial life or a single human emotion that you cannot see portrayed on squared paper for the benefit of the population, and perhaps the visit of the President of the Board of Trade to the home of statistics may have some sympathetic result on the Parliamentary Secretary when' he comes to reply.
The other section of the Bill aims at checking, by a system of licensing, the uncontrolled growth of co-operative and multiple stores which are at present helping rapidly towards the extinction of the independent shopkeeper. I shall endeavour to show, first, that such a problem of extinction exists and, secondly, that it is a problem which Parliament should face. I am not endeavouring to infer any illegal action or any wrong against the interests that I have mentioned, but there comes a time in the development of nearly every new movement, whether it is railway, air transport, public utility services, such as electric light and gas, when the community has to ask itself whether the continued uncontrolled development of the movement is in the general interest of the community, or whether there should not be some form of restriction, guidance or control. In each of those interests I have mentioned there has been legislation passed by the House, and, I believe, if not to-day, the time will come when this new movement of multiple chain-store shops will have to come under the eye of Parliament and be controlled in some form or other. Other countries have already realised it and Italy, Belgium and France, to mention but a few, have all passed, or are in process of passing, some form of legislation to deal with the problem.
The position to-day is that the private trader still has the bulk of the distributive trade of the country. It is agreed by most interests, including the National Chamber of Trade to be about 70 per cent. of the trade which is still in the hands of these private interests. But in the last 15 years we have seen a widening breach in the independent distributive system made by the multiple chain stores and co-operative stores. I believe that in the national interest, in the interest of consumers and ratepayers, we cannot afford to allow this to go on uncontrolled and unguided. It is the small men who, by their initiative, spirit of enterprise and individuality, in this distributive trade, as 1207 in other walks of life, have built up the retail distributive system and, in doing so, have shown qualities which are our national characteristics, and which are unbuyable on the market. After all, if by legislation we endeavour to protect the lives of miners and to protect manufacturing interests and various other phases of industrial life, is it not equally logical that we should endeavour to give protection to these intangible qualities which are our most valuable national characteristics? Again, the bulk of these 2,000,000 workers engaged in the distributive trades—65 per cent.—are still employed by the independent shopkeepers, and we should pause before refusing some form of control of a movement which will put out of employment the large bulk of these workers with no corresponding advantage to the community by the extinction of the small shopkeeper.
It is the independent shopkeeper in many communities who takes the major burden of the civic life of the community. How many managers of multiple shops who owe a central allegiance to their organisation and owe nothing to their towns do you see taking part in civic and municipal life? It is the man whose interests are in the town who gives voluntary service to that town, and that is a quality of the independent shopkeepers which alone justifies some form of control and assistance. It is said that manufacturers sometimes prefer to deal with the big interests, because they get bulk orders, but on the other side of the picture there is the story of manufacturers who have given up their many small customers in favour of one large one and, when the time has come for the renewal of their contracts, have had them offered on cruel and uneconomic terms, and the last state of those manufacturers, after two or three years, is worse than their first in that they have lost all the small men in the hope of serving a single large one. The independent shopkeepers give a far wider range of sales service than do the large interests.
§ Mr. Mabane
Will the hon. and gallant Gentleman give some evidence about the statement he has just made of manufacturers being crushed out?
§ Captain Balfour
Firstly, I have had so many letters on that particular subject that I could give the hon. Member evidence nearly all the morning, if he so 1208 desired, and if the House would tolerate my doing so, and, secondly, it is common knowledge that large interests will seduce from the many small customers the manufacturer, who will be induced very often, on borrowed money from the bank, to increase his plant and facilities. He will have two or three good years, and then the large buyer will turn round and wring from him a contract at terms which virtually bankrupt him, or compel the handing over to large interests of all the manufacturer's facilities.
Another point is, that independent shopkeepers give full sales; with their sales they deliver and they repair goods. The one object of the multiple stores is to skim the cream of the sales market; to sell the easy, and avoid selling the difficult. You can buy a kipper in cellophane from a multiple stores, but they do not handle white fish, whereas the small man, out of his sense of duty, and having to give service and comprehensive sales, has to handle the unpopular as well as the popular. The progress of the big multiple stores is measured by monetary profits, and their efficiency by ascending returns, whereas the progress and efficiency of the small man is measured not only by these two factors, which must come under his concern, but also by the amount of good will which he can build up in the community; the amount of service he can give to his customers. The factor of service is not incidental to the success, but the main determination of the small man.
Perhaps some of those representing the big interests to-day in this House whom I see ranged opposite—the big guns—know what goes on in America under the system called "deal days." Perhaps some of the big stores will introduce "deal days" in London. That is a day in a city when the branches of the big stores will suddenly mark the price of bread a half-penny cheaper than anyone else and advertise the fact largely. The whole shop will be filled with customers for bread and who will come incidentally to buy other things. The next day the price of bread is put as high as before, and probably higher but they have succeeded, by their campaign of selling at an uneconomic price for a short period a particular article, in obtaining a degree of custom, which, I maintain, in the interests of the community it is not right 1209 for them to have. I have tried to bring out in a few moments both nationally and locally what is in the manufacturers' interests and also, from the interests of employment, reasons why the small men should be allowed survival in this country.
My next task is to endeavour to examine this menace and to show its size. We had a colleague in this House who is now no longer with us, Mr. Hoffman, a Member for Sheffield. He wrote a very interesting book called "Shops and the State," and he puts the total value of the retail trade in this country at £2,361,000,000 of which the big interests, it is generally admitted, have approximately 30 per cent. We have to look next at the number of shops there are in this country, and here, again, it is difficult to get accurate figures, but there is a general consensus of opinion that there are probably around 1,000,000 shops in this country. The National Chamber of Trade were good enough to furnish me with statistics of the number of shops in big cities. I have to give such information as I can, and I do not think that the House will dispute the broad conclusion that around 1,000,000 is the number. We know that Cadburys have a quarter of a million selling points, and that there are half a million tobacco licences issued in this country. This is evidence of the large number of small shops, which, added to this, come to approximately 1,000,000.
§ Captain Balfour
All tobacco licences. Of those 1,000,000 shops, there are approximately 40,000, or 4 per cent., owned by the Co-operative movement and the multiple chain stores. The National Chamber of Trade puts the proportion of the 1,000,000 shops owned by the big interests I have mentioned at 10 per cent. The figures I have endeavoured to collect put it rather nearer 4 per cent., but we come to this fact. Four per cent. of the shops which are in existence to-day are doing approximately 30 per cent. of the retail trade. The movement has been greatest during the last 15 years, and it is not unreasonable to say that, if 4 per cent. of the shops do 30 per cent. of the trade, with one of these graphs, any person can plot 8 per cent. of the existing number of shops would do 60 per cent. 1210 of the retail trade of the country. It is with great pleasure that I hear the noble Lord say "hear, hear," and no doubt he will be speaking for the big interests later.
§ Captain Balfour
Messrs. Boots are getting a very ample share of it, I presume, at the present time, but in Australia there are some doubts whether they are going to get their full share.
§ Captain Balfour
I would describe them as one of the big interests. There are multiple stores, multiple chain stores, big trading stores and the Co-operative stores. I do not desire to go into details, but I can give the hon. Gentleman, if he wishes, a categorical division as to the classes of shops in this country. When I say "big interests and multiple stores," I am including big trading stores, chain stores, multiple stores, and I include for the sake of argument, the Co-operative stores as well. If four per cent. of the shops do 30 per cent. of the trade, then 12 per cent. can do 90 per cent. In fact, the big interests, if they trebled their trade at the present time, would virtually kill the small men. I do not think that that assumption is unreasonable in that we see that the Co-operative Society in 50 years have raised their membership from some 540,000 to something over 7,000,000 —a very creditable performance from their point of view, but I question whether it is one in the national interest, and that is one of the matters which we have to debate to-day.
What will be the effect on the ratepayers if that is allowed to take place? I would ask the House to consider who is going to pay the rates when these small men are put out of existence by the trebling of the numbers of the large interests and the virtual extinction of the small men. Thanks again to our former colleague, Mr. Hoffman, I have—I grant that they are some years old because in this subject statistics are hard to get—some statistics of various towns. I will 1211 take the City of Glasgow as an example. Glasgow has a population of 1,147,000. It has one shop per 60 people, with 130 shops, large interests, paying £1,000 or more in rates. Had there been a very large increase over the amount of £1,000 rates paid by these shops, Mr. Hoffman for the sake of his argument would have made another column, covering £2,000 or over. Therefore, we may assume that although 132 shops are paying £1,000 or over, the average figure is not very much greater than £1,000. On the other hand, 16,723 shops pay £100 or under. Again, assuming that the £100 figure is the average for the 16,723 shops, in the same way that the £1,000 is the average for the 132 big shops, we find that the large interests pay £132,000 a year in rates, and the little shops £1,672,000. If that rate payment of £1,672,000 is to be extinguished by the tripling of the big interests, it will mean the payment of £400,000 in rates to Glasgow in place of the £1,672,000 paid by the small traders, and the difference will have to be made up by the residential ratepayers of the city.
One of the grounds of criticism of my proposals will be that I am endeavouring to protect and subsidise inefficiency, and that the efficient shop can survive at the present time. I am afraid that I cannot agree with that view. There is an academic school of theorists and super-planners who would always stand for maximum theoretical efficiency and leave out any human factor. The theory of 100 per cent. efficiency is not always the one thing to seek. Perhaps it would have been better for this country if we had not aimed at such rapid efficiency in some directions by the introduction, say, of some classes of machines before we had prepared the industrial life of the country to accept the new inventions which were being brought about. My proposal is not designed to fasten inefficiency on the backs of the consumers. It may be said that the multiple interests would welcome my proposal, because it would give them a monopoly. If it pleases them, I am content. What I am endeavouring to do is to prevent their future growth being uncontrolled. If their present position were stabilised on the lines that they must compete fairly in the open market with other retail forms of distribution, then let them keep their present position, 1212 as long as they can face the competition. My effort is an endeavour to see that there should be some check against the uncontrolled growth of this multiple trading, which is a comparatively new feature of our distributive life.
I ask the Government, firstly, to institute a retail census of distribution, and, secondly, in deciding upon their action in regard to the Measure I would ask hon. and right hon. Members not to think that they are deciding on the merits or demerits of my Bill, with all its faults, which I admit quite freelly, but that they are deciding whether a problem exists for the consideration of Parliament. If such a problem does exist, let it be dealt with. If this Measure does not become law—and I am not foolish enough to think that it will become law—and if such a problem as I have indicated exists, I would ask the Government to let us have an inquiry into retail distribution in this country, based primarily on the results of a census of retail distribution. If my Bill succeeds in drawing attention to the problem and in persuading the Government that there is a problem, I shall feel that my work on it has not been wasted. I speak not in the interests of any one body or any section of traders, because I own no shares or any other interests in any form of retail distribution. I have no direct financial interest in distribution, but I feel that the small man is being crushed under at the present time, and, as in other forms of national life which have been legislated for, the value of the small trader is such that he should receive that protection from the community which we grant to other interests.
§ 11.33 a.m.
§ Major Courtauld
I beg to second the Motion, and I do so in the hope that the Bill will get a Second Reading, in order that the subject may be discussed further in the Committee stage. When I came to the House this morning I had it in my mind that there would be no great opposition to the theory of the Bill, although, as my hon. and gallant Friend says, there are certain gaps and weaknesses in the Bill. I notice opposite me, however, what looks like a formidable battalion of opposition on the part of my hon. Friends who have been expressing some amusement on their features while my hon. and gallant Friend was speaking. I gather from the sounds they made that this Bill 1213 is not likely to have an uninterrupted passage towards its second stage. My hon. and gallant Friend has covered the ground exceedingly well in putting the theoretical case for some form of legislation, but there are one or two aspects of the matter on which I should like to say a few words.
I have in mind the effect on provincial, and more especially country, life if the process of the elimination of the small shopkeeper is allowed to continue. I have had a good deal of experience of the small country towns and villages of this country, and during that fairly lengthy period I have noticed the great changes that have taken place. I know that the old order changeth, and that we cannot stop progress or the course of economic events. I admit, too, that the introduction of the large chain store has served its purpose, and probably is serving a purpose, but I maintain that if it is carried out to its logical conclusion—and it will be carried to that conclusion unless some legislation can be passed protecting the smaller trader and the small retailer—'then the state of this country will be a great deal worse than it has been. Let us look at the question of local government. We hear a great deal about the merits of our democratic system of government, and we are always pointing to less fortunate foreign nations and saying how much wiser and cleverer we are in our form of Government.
Our form of democratic government is becoming more and more decentralised. This House hardly ever passes a Measure which does not impose some further duty upon local authorities. County councils and committees of all sorts are always having work put upon them, and that work is done, in the main, by the inhabitants of the various districts, who give their services voluntarily. My experience is that the great majority of the people who are doing that work, especially in small country towns, are the smaller tradesmen and retailers. They have, on the whole, a great civic feeling and an interest in their towns, where probably they were born and where their fathers and grandfathers have lived before them, and they are prepared to give a good deal of their time to local work. If these people are gradually eliminated I do not see where we are, going to find substitutes.
1214 Anybody who takes an interest in local affairs—I am referring chiefly to the rural districts, and not to the larger towns—will realise that the difficulty of finding people who are prepared to give up their time voluntarily is getting greater and greater. Already I have seen the disappearance of a good many shopkeepers in towns which I know intimately, and I am certain that their disappearance has made this problem more difficult. If for these smaller shops we get big multiple stores established, we are not going to get the same personnel. We shall have managers in these branches, very efficient men but as they may be transferred to another branch they will not have their roots in the soil, they will not have the same interest in the town or locality and, therefore, one cannot expect them to give the same services as their predecessors, the small shopkeepers.
§ Mr. A. V. Alexander
Would the hon. and gallant Member apply that to the workers at Messrs. Courtaulds works at Braintree, who are members of the local co-operative society?
§ Major Courtauld
I am afraid that I cannot give any details of the work of the particular firm mentioned by the right hon. Member, because I have never had any connection with that firm, and am supremely ignorant of its operations. I have never yet been inside any one of their factories in this country. I was born near the town of Braintree many years ago but, quite honestly, I can give no information about its co-operative society or the workers in the factory. However, it does not affect my main argument. If this process of allowing large centralised businesses, multiple shops, to supersede the smaller retailer throughout the country is allowed to go on, there will also have to be some change in the form and practice of local government. Whether that would be a good thing or not, I do not know.
There is another aspect of the matter which also affects local government. The small shopkeeper is much more likely to obtain his goods from local producers than these large stores, That will not be denied. The local greengrocer gets his stuff from the local market gardener and, therefore, in removing the small retailer you are going, definitely, to hit the local producer. There, again, a different system will have to be organised. The 1215 small market gardener will have to join up with larger firms in order to raise his produce, and once again the locality will suffer. As regards the manufacturer, I agree with my hon. and gallant Friend, although there are evidently some hon. Members who do not agree. I believe it is the case that many manufacturers accept extremely large orders from these big corporations which give then very little profit, if any. They are prepared to accept these orders because they keep their organisation going; they keep the machinery in work. But they depend for their profit on smaller orders from smaller firms. As long as that goes on, these big stores are able to get extremely cheap lines of goods, but if the smaller shops are eliminated, the manufacturer will no longer be in a position to execute the large orders, which do not give him any profit, and the inevitable result of that will be that he will have to charge a larger sum to the large stores who, of course, will not mind because any competition will have been largely removed.
The ultimate result, however, will be that the purchaser, the consumer, will have to pay more than he does now for his goods when he shops with Messrs. Woolworths or Marks & Spencer, or one of the other big firms. Therefore, the advantage which the consumer is undoubtedly getting out of the existence of these large stores and chain stores will very likely disappear if the smaller retailer is eliminated, and we shall have as a result a great change in our country and provincial life, a change which, I think, will be definitely for the worse, while the temporary advantage which the consumer may have got from the introduction of chain stores will also be lost to him. I have no doubt that many hon. Members will criticise the Bill but I hope there will be many who will support it. I think the principle is right. It is a matter which should be further discussed, and the arguments of my hon. and gallant Friend cannot be completed ignored. I trust the House will agree to give further consideration to this matter so that the Bill can be exhaustively discussed.
§ 11.41 a.m.
§ Mr. Mabane
I beg to move, to leave out the word "now," and at the end of the Question, to add the words "upon this day six months."
1216 The hon. and gallant Member for the Isle of Thanet (Captain Balfour), and the hon. and gallant Member for Chichester (Major Courtauld) have carefully avoided any direct reference to the Bill at all in their speeches and, indeed, have made no attempt to explain it. The hon. and gallant Member for the Isle of Thanet endeavoured to erect a kind of theoretical basis for the Bill without much evidence, and the hon. and gallant Member for Chichester made a powerful romantic appeal which will, no doubt, have some influence on those who may wish to support the Bill, but which ought not to convince the House that it should be given a Second Reading. Ever since I entered Parliament I have hoped that the House would give some serious attention to the great problem of distribution. I have observed that in times of difficulty and crisis hon. Members and Ministers have agreed that the real problem is not that of production but of distribution, but one and all have refused to allow the House to devote any time to this great problem.
While I have hoped that the House would give attention to the problem of distribution I am sorry it is receiving attention by being asked to consider this Bill, which I say quite definitely to the House makes progress an offence, efficiency a crime, and the provision of employment so hostile to the public interest that it is to be visited by a fine of £500 in the first instance, and £100 for every additional day in which this additional employment is provided.
Moreover, the Bill is discriminatory. If one had not read the Bill one would have gathered from the speech of the hon. and gallant Member for the Isle of Thanet that it contained proposals for regulating the business of distribution. The hon. and gallant Member for the Isle of Thanet is doing nothing of the sort. I think a good case can be made for a careful examination of the whole facts about the distributive industry and perhaps a certain degree of regulation. But the hon. and gallant Member is not proposing an examination of the whole distributing process and its reasonable regulation. He is merely endeavouring to impose certain prohibitions on certain parts of the distributive industry.
My second point is that the Bill is premature. Before we can attempt to regulate any industry we must know the 1217 facts about it. There is certainly Clause 12 in the Bill which proposes that a census of distribution shall be taken but a census of distribution should come before the Bill. The hon. and gallant Member for Thanet admitted by implication that he knows nothing about the distributive industry, and yet he proposes that certain action should be taken without any information being available.
Moreover, it appears to me that the Bill and the arguments of its promoters are based upon an ignorance of the industry which I can only describe as abysmal. Although the hon. and gallant Member for Thanet gave some figures, he appeared to have no comprehension whatever of the size and importance of this industry, or of the whole distributive process. Supposing that we were talking about an industry of minor importance in size, such as the aircraft industry, of which I understand the hon. Member knows something, and supposing hon. Members who knew nothing about that problem were to propose methods of regulation of this nature, I am sure the hon. and gallant Member would be the first to object violently. Yet, as I say, by comparison with the distributive industry, the aircraft industry is one of very, very minor importance from the point of view of size.
Let us consider some figures, of which the hon. and gallant Member has given some. Let us consider, first of all, the figures of employment: in 1923, the distributive processes employed 1,200,000 people, and to-day the figure has increased to no less than 2,000,000 employes. As to the figure of turnover, the hon. and gallant Member gave one estimate, but I would be more inclined to estimate the total retail turnover in this country as £2,000,000,000. Those are almost astronomical figures. To endeavour to deal with an industry of this character by a Bill such as this which has been brought forward is completely absurd. In America and in Canada a census of distribution has been taken, and an approach can be made with some real basis of face behind it. In this country no such approach is possible. However, the hon. and gallant Member did give one further figure. He said that, whereas at the present time approximately 70 per cent, of the total retail trade of the country is in the hands of what he called 1218 independent traders, there is an ever-widening breach, but he gave no sort of evidence of that ever-widening breach.
Let me now ask the House to consider what is the avowed purpose of this Bill. The avowed purpose, as declared at the outset of the Bill, is to protect the independent retailer. The hon. and gallant Member apparently assumes that all independent retailers are properly classed together and also that all of them desire, need and deserve protection. As an independent retailer, I regard that proposal as impertinent, misguided and vicious. For what does the Bill do? For all time it prohibits the independent retailer who is adventurous, who is efficient, able and desirous of getting on, from making any progress.
§ Mr. Mabane
Of course it does. If there is an independent retailer who has one, two, three or four shops and who looks forward to the day when he will be a competitor of the great multiple chain, the hon. and gallant Member for Thanet would say to him, "No, you may only get your six shops and may not have any more." Moreover, it is a gross error to class all independent retailers together. Some independent retailers are efficient and some are not. The efficient retailers do not need the protection of the hon. Member for Thanet, they do not ask for it and they do not desire it. Let me say further that to-day the efficient independent retailer can face the largest combine and beat it. Of that I have no doubt whatever, and I can offer any sort of evidence that is desired. When we turn to the inefficient retailer, however, I think the House will agree that he does not deserve protection. Where, then, is the basis for this Bill? The efficient independent retailer does not ask for protection and the inefficient retailer does not deserve it.
§ Captain Balfour
The hon. Member is making a great many statements, but he is not substantiating them by any evidence. He has said that the independent retailer who is efficient does not ask for any assistance. May I point out that the National Chamber of Trade has suggested, while not agreeing in principle with the full provisions of this Bill, that the Bill should be supported? Many other organisations consisting of efficient re- 1219 tailers have written to hon. Members and to myself, so much so that I wish the hon. Member had to deal with the postbag which I have.
§ Mr. Mabane
I am speaking from the point of view of one who has had practical experience of the job. I know what the efficient retailer can do and I have evidence of what he is doing up and down the country. Assuming, however, that you desire to protect the independent retailer, what sort of protection is given by this Bill? The protection is limited, it is discriminatory and I suggest it is entirely ineffective. I suggest to the hon. and gallant Member that if he supposes that his Bill will achieve the objects which he set out in his speech, he is entirely mistaken. By this Bill, the hon. and gallant Member would prohibit only what are called multiple stores. He would not prohibit departmental stores. An hon. Member behind me asked the hon. and gallant Member whether he would include the departmental stores, and the hon. and gallant Member gave a very evasive reply; but anyone who has read the Bill knows that it does not prohibit departmental stores. I would like to ask why Lord Trent is apparently considered by the hon. and gallant Member to be a menace, whereas Mr. Selfridge is a saint. Can he tell the House why he does not prohibit departmental stores? He does not reply. Obviously there is neither sense nor reason in the proposal. What is more, can he inform us why he does not prohibit those forms of trading which are far more dangerous than any he has suggested—cut-price trading, club trading, house-to-house selling and discount selling? Those are forms of trading that have a great deal to be said against them on the ground of public interest, but they are not as much as mentioned by the hon. and gallant Member in his Bill. Those are serious menaces, and I believe that if we were to make an examination of this industry and frame legislation on the basis of our examination, we might direct our attention to those forms of trading which have nothing to be said for them. The most extraordinary thing of all, and something to which the hon. and gallant Member made no reference, is that the Bill exempts the Metropolitan area from its provisions. Why is the independent retailer to be protected, as the phrase 1220 goes, in every part of the country except the Metropolitan area? Why is he to be crushed out in the Metropolitan area? Can the hon. and gallant Member give a single intelligent reason why the Metropolitan area should be excluded? I am willing to give way to him. Apparently he cannot.
§ Captain Balfour
The hon. Member tempts me to do something which you, Sir, would not allow, that is, to make another speech. I cannot give my reasons now, but no doubt they will be given in Committee upstairs during the later stages of this Bill, when it has had its Second Reading.
§ Mr. Mabane
That intervention will save my hon. and gallant Friend from answering my next question. How does he propose to protect the inefficient independent retailer from the efficient independent retailer? The greatest threat to the inefficient independent retailer is the efficient independent retailer, and as long as he continues to exist, so long will the inefficient independent retailer continue to be in danger.
Further, what would be the effect if this Bill were to become law? It would simply be to move the trend of retail trade from multiple trading to departmental-store trading. It is not possible to keep the efficient and able small man small by Act of Parliament. He will become big, and if the law says, "You shall not engage in multiple trading," a form of trading which, on the whole, is probably the most efficient of all forms, he will create departmental stores, and the departmental stores will be no less of a threat to the inefficient trader. There is indeed no evidence of the efficient independent retailer being crushed. The hon. and gallant Member made no attempt to produce any evidence that the independent retailer was being crushed, and I believe from my close experience of retail business that to-day there are far greater chances in the distributive industry for the small man to make a success than there are in any other phase of industry. To-day there are hundreds of small men starting as retailers in this country every year and making a success of it. These are the men who in a few years' time will become the big men.
The Bill, however, would have an even worse effect than any of those which I 1221 have mentioned. It would create a monopoly where none now exists. This Bill might have been promoted by Messrs. Woolworths or Marks and Spencer or by the Multiple Shops Federation. If it became law, you would say in effect to these great multiple chain organisations which now exist "We guarantee that you will be safeguarded for all time from competition. We are not going to allow anyone to infringe on your preserves." It would, indeed, make their position secure. It would place a blank wall in front of the many small men who are now eager and ambitious and looking forward to the day when their businesses will grow; who are, it may be, looking forward to the day when they themselves, having grown more efficient, will be able to absorb some of these larger chains that have become less efficient. Such opportunities exist and the history of retail trading to-day affords many instances of that sort of thing. So there is nothing to be said for the Bill on the ground of the protection of the private individual trader.
The hon. and gallant Member, however, suggests a further purpose for the Bill, one to which he did not refer in specific terms. He uses, in the Bill, a curious phrase. He says he desires the Bill "to protect the welfare of the public interest" against what he describes as "unfair and uneconomic competition." I was hoping that he would indicate precisely what he meant by "unfair and uneconomic competition". In view of the intervention which he has already made, perhaps if I ask him to explain precisely what he does mean by that term he will not reply. Nevertheless, I hope that some of his supporters will, at a later stage, inform the House precisely what it means. Does it mean that the hon. and gallant Member desires to protect the public from the danger of being able to buy their goods more cheaply? I gather from his nod of assent that that is so and I am glad to have that acknowledgement. But surely the object of all efficient distribution is to lower prices. I seem to recollect that the hon. and gallant Member at a previous stage in his career had something to say about profiteering. I seem to recollect that Bills have been introduced into this House and proposals made to prohibit retailers from selling at prices which were considered to be too high, and that the hon. and gallant 1222 Member has given his assent to such legislation.
§ Mr. Mabane
In September, 1931. But now the hon. and gallant Member turns round and says that he desires to protect the public from the danger of buying goods too cheaply. What is his complaint? Is it that the efficient retailers do not make enough profit? Is that his definition of "unfair and uneconomic competition"? Does he wish the House to believe that these large organisations, for some Machiavellian purpose of their own, sell goods at a loss? Is that the uneconomic competition? I gather that the hon. and gallant Member has an idea that these organisations sell goods at a loss. But look at the profits which they make. I have heard it suggested that their profits are too high. Look at the results. Those are the results of efficiency and the hon. and gallant Member cannot, at one and the same time, sustain the two arguments, first, that these organisations sell at a loss and second, that they make too much profit. Indeed the hon. and gallant Member may have been led away by romantic ideas which have been put into his head. He may feel that he is the hero of a hundred chambers of trade but I suggest that he has entirely forgotten the consumer. He has forgotten, too, that the consumer bulks numerically much larger in this country than any group of individuals.
The hon. and gallant Member mentioned the fact that in other countries legislation on these lines has been introduced. I do not pay much attention to the example of legislation in Italy or Germany, which are dictatorial countries, but I will give an example of the consequences of legislation of a similar character introduced in a country that is still democratic. In Switzerland, a very able man felt that the distribution of foodstuffs was being inefficiently conducted and he set out to create an organisation which had for its purpose the lowering of the prices of foodstuffs. That organisation was extremely successful and in the course of ten years it built up a turnover of something like £3,000,000. Those retailers who were unable to sell at as low prices as this organisation, made the usual complaints and the Swiss Legislature introduced a 1223 law which, in effect, prohibited the development of the organisation. The creator of the organisation naturally thought that this was against the public interest and decided that he would attempt to get into the Swiss Parliament. He offered himself at the elections a year last October, and in order to be quite certain he offered himself in seven different constituencies. In Switzerland they vote on the list system. What was the result? The consumers, indignant at the efforts of the Legislature to protect them from the danger of buying too cheaply, elected him by overwhelming majorities in all seven constituencies. Thus at once he found himself endowed with a party of seven in the Swiss Legislature. If the hon. and gallant Member for Thanet were to succeed in his attempt to protect the consumers in this country from buying goods cheaply, he would find himself swept out of this House and out of public life.
Let us consider the public interest from another angle, the angle of employment. I suggest that the large-scale development of retailing has opened new opportunities of employment for hundreds of thousands of young men and women. Nowadays these great organisations take great pains to train their young men and women efficiently, and even send them to various parts of the world to learn their jobs. What is more, young men and women coming in at the very bottom in this distributive process find no obstacle in their way to prevent them getting to the very top. In very few industries does that condition of affairs exist. To-day in the distributive trades a boy can begin as an errand boy and end as a managing director. The large-scale distributive organisations offer many examples of that sort of thing. I would say, too, that the wages paid in the distributive trade have been raised all round as a result of the operation of the large-scale organisations. Those of us who are familiar with the details know that the small inefficient retailer pays rates of wages and employs workpeople for hours which would not be tolerated by any of the large concerns. Where is the public interest there?
I ask hon. Members now to approach the question of the public interest from yet another angle, that of the manufacturers. The hon. and gallant Member 1224 raised the bogy of the manufacturers who were crushed out by the large-scale organisations. The hon. Member for South-West Bethnal Green (Sir P. Harris) dismissed my interjection by saying it was a matter of common knowledge, but I remember that in 1931, when the question of tariffs was being discussed, he made a great outcry about an impartial inquiry. He wanted facts, and we are entitled to demand facts. I claim that, far from the bogy being real, the truth is that the manufacturers of consumer goods have in recent years been taught their job by efficient retailers. The manufacture of consumer goods is a relatively recent development. Until a few years ago, I doubt whether in many directions our manufacturers of consumer goods were able to meet the manufacturers of the world in the world markets, but the efficient retailers, in direct touch with the public and able to feel the rapidly changing demands of the public, were able to interpret to those manufacturers what the public wanted. I believe that nothing has so enabled the manufacturers of consumer goods in this country to meet the competition of the world as the assistance which they have been given by the large-scale retailers.
What is behind this proposal of the hon. Members? Briefly, I will say that it is the result of a revolution in the distributive industry, a revolution the causes of which are first, the decline in domestic industry and, second, the development of the large-scale manufacture of consumer goods. A generation and more ago a shopkeeper was a very different sort of being from what he is to-day. He was primarily a craftsman. The tailor was a man who made clothes; the shoemaker was a man who made boots; even the grocer was a man who blended his own tea, ground his own coffee, and probably even sanded his own sugar. He was at any rate a man who knew and did his job, but with the development of large-scale manufacturing and the decline in domestic industry, the business of shop-keeping became the business of the collection of completely finished goods from the manufacturer and their distribution to the public. The first requirement was not a knowledge of merchandise, but a knowledge of the technique of selling merchandise and a knowledge of organisation.
1225 This process was going on before the War. During the War and the few boom years afterwards the process was interrupted. During that period I will say that shopkeeping was a soft option. It was not difficult for any retailer to make money in that period; but then when that period ended this revolution was accelerated, and since 1923 has been very rapid. But throughout these years, the efficient retailers had seen the way things were going and had begun to organise and to grow big. Mr. Marks, a man who not so very long ago was, I believe, the proprietor of a single shop in Leeds, selling articles for a penny, organised. Mr. Price, of "Fifty-shilling Tailors," a man who had only three or four shops not so very long ago, saw the way things were going, organised, and created an organisation that employs thousands and thousands of people and that would be of great assistance to the Government in a time of emergency. So one could go through the names of these men, whose histories in industry are a romance. While this process was going on, the inefficient retailer was sitting quietly and comfortably down, taking, in my view, a reward which he did not deserve. In those comfortable days it was possible for the little shop doing a turnover of about £2,000 or £3,000 a year, to bring a reward to its proprietor of £400 or £500 a year. I believe that reward not to have been deserved, and it is not surprising that as the efficiency of the industry developed, as the margin of profits was forced down, those who were really not doing the job began to find that things were very difficult and now we have this Bill.
Let it not be suggested that the independent retailer cannot become efficient and successful. He can. It is said that the great power of the large-scale organisation is the power of bulk buying. The independent retailer can use that power too. He can form combinations of small retailers; he can use the great wholesale warehouses, which perform for him precisely the functions of the large buying organisations. Further, I believe indeed that the independent shopkeeper has something to offer the public which the large-scale organisation cannot. I believe that he offers that additional service, that more direct personal interest, and in so far as he is efficient in the organisation of his merchandising, he has 1226 nothing whatever to fear from the large-scale organisation.
But I do not want to fall into the error of the Mover and Seconder of the Bill, and neglect the provisions of the Bill. I will now turn to the Bill itself and ask the House to consider what I think may fairly be termed the farrago of nonsense contained within its covers. First of all, the Bill sets out to establish a large new bureaucratic organisation. The hon. and gallant Member sets up a new bureaucratic organisation of great size and cost. In Clause r he creates II retail distribution areas, for which he appoints 33 retail trade commissioners, whose salary he carefully does not determine in the Bill. Those 33 retail trade commissioners may employ officers and servants, and no doubt, when the House considers the job that they have to do, it will come to the conclusion that the number of those officers and servants will be very large indeed. Their job will be to consider applications from those who may desire to open multiple shops, and to determine whether or not they shall open them. They must hold public sittings. Two commissioners in any particular area may hear the application, and if there is a disagreement between them, they must begin all over again, and a third commissioner must be brought in.
Then, in Clause 4, it is determined that anyone who opens a multiple shop—(with the peculiar exception of the Metropolitan area)—without a licence shall be fined, as I say, £500 for opening the shop and £100 for every day on which it remains open. We come next to Clause 5, the operative Clause, a most complicated rigmarole which contains this extraordinary provision, that in the event of any multiple shop now open desiring to remain open, it must give an undertaking that it will not employ more than 10 per cent. more labour in any one year than in the previous year. It is to be fined if it finds employment. Provisions are made for multiple shops that desire to open anew, and of all the extraordinary provisions in this Bill I think the following is the most extraordinary: —The retail trade commissioners, having before them an application from a firm to open a multiple shop, may, if they determine to grant a licence, also make a condition as to the nature 1227 of the trade or business which may be carried on in the shop. That is to say, that supposing a firm like MacFisheries were to make an application to the commissioners to conduct a fish business—and I would remind the hon. and gallant Member that MacFisheries do sell wet fish—the commissioners may say, "Yes, you may open a shop, but you shall not sell fish in it; we will allow you to indulge in a little quiet gents' tailoring."
Moreover, objections to any application may be made by a local authority or by any shopkeeper, and the objections may be made on the ground that stocks of the goods proposed to be sold are available at reasonable prices and that the interests of the public will not be served. I ask the House- to consider what would be the job of the retail trade commissioners in endeavouring to determine, on objections being made, whether stocks of the goods proposed to be sold existed at reasonable prices within the proposed area. I would refer M detail to one more Clause, namely, Clause 9—if possible, a little more extraordinary than the last provision. It provides that, even if a multiple shop licence be granted, it shall be granted for two years only. What, I ask, would be the effect of that provision on leases? What would be the effect on rents? The hon. and gallant Member made great play about rates, but I would remind him that rates are dependent on rents, and if nobody desiring to open a multiple shop were able to give a guarantee beyond two years, that would be the effect? He would not get a lease. He could not possibly buy freeholds. Does not the hon. and gallant Member agree that rents would fall in a catastrophic way, and that if rents fell rates would fall also?
Then I come to Clause II, which constitutes an appeal tribunal, the members of which, it says, shall not retainany financial interest in any undertaking which provides facilities for the wholesale or retail distribution of goods.How the hon. Members who have put their names to the Bill can have agreed to that, I do not know. I went this morning through the list of securities on the Stock Exchange, and I think I am right in saying that if this provision were passed no one would be entitled to be on this tribunal if he had any government securities, 'or any railway- stock, for the 1228 railways provide facilities for the wholesale and retail distribution of goods to say nothing of the vast storage of industrial securities this excluded. The House will see the absurdity of the proposal. Then there is Clause 12, which is the only proposal of the Bill to which I can agree. It proposes that the facts shall be found, that a Census of distribution shall be taken. But who opposes the taking of a census distribution? The small traders. Who desires a census to be taken? Who desires the facts to be found? The multiple shops. The departmental stores desire it. They are the ones who say, "We are prepared to lay the facts before you." It is from the small and inefficient shopkeepers that the opposition to this fact-finding proposal comes. The National Chamber of Trade, as the hon. and gallant Member for Thanet knows, has described this Clause as irrelevant and unnecessary to the Bill. If we are to take the evidence and find the facts, those who are now condemned declare "We will put the evidence before you and disclose the facts," while those whom the Bill is to assist say, "No, we will withhold the facts; we do not desire them to be made known."
I trust that the House will not for one moment think of giving this Bill a Second Reading. It is introduced in the absence of any sort of evidence; it is framed without intimate knowledge of the distributive process; it is discriminatory in its effect. If we look for its purpose it is difficult to find one. It may be that the hon. and gallant Member, in the colloquial phrase, wants "to have a crack at the Co-ops." Beyond that I can find no sense or reason in the Bill, and I ask the House to reject it with an overwhelming majority.
§ 12.18 p.m.
§ Mr. Orr-Ewing
I beg to second the Amendment.
Like the hon. Member for Huddersfield (Mr. Mabane), who has moved the rejection of the Bill, I was interested in the shyness and the coyness with which my hon. and gallant Friend the Member for Thanet (Captain Balfour) introduced this Measure, and I must confess that I have to apologise to him for most embarrassingly drawing attention to the Bill itself. After all, we are considering the Bill itself, the principles involved, and grave issues which are far graver issues than any found in the Bill. Those grave issues 1229 cannot blind us to the fact, however much we may be in sympathy with some of the points raised in the Bill itself, that it is the Bill and nothing but the Bill on which we have to arrive at a decision to-day. I wish to make it clear that in supporting the Amendment for the rejection of the Bill I speak as one who, so far as I know, has no interest, direct or indirect—if it is indirect it is so distant as to be intangible —in any of the large multiple firms or in any big business which is connected with the distribution of goods through the retailing of them in its own shops. It is true that it is impossible for any one of us in this House to say that we are not interested at some stage in the distribution of goods in this country, but I would speak here as one who, in his small way, is doing as much as he possibly can to support the small retailer, for I recognise that the small retailer now if ever, if he puts his house in order, has a very great opening in the future.
Let me turn to the question of a census of distribution. On that point, like the hon. Member for Huddersfield, I find myself in agreement with those who are responsible for the Bill. On all the evidence that I can find the opposition to such a census comes, though perhaps in a secondary sense from the Board of Trade, in the primary sense almost entirely from the smaller retailer. It comes from the historic tradition which they have of being over-individual in their own trade. The horror with which many small retailers have expressed their views on any idea of looking closely into their businesses in order that such a census could be carried out, really has led me to believe that there must be a great deal to hide, and whatever our views on the Bill itself I hope that the discussion of it will bring to the attention of the Government the necessity for taking steps as early as possible to look into the question of the distributive trade in connection with a census.
In examining any Bill such as this it is interesting to see the businesses or forms of business which are excluded from it. I was particularly excited in turning to the Second Schedule where I see that the exempted businesses and exempted forms of multiple trading which would not be affected by the appallingly dictatorial provisions of the Bill are very curiously mixed. For instance I will select only a few—the cinema, any train, omnibus, 1230 aeroplane or passenger vessel, and houses selling intoxicating liquors. Transactions carried out within such places will be exempted from the provisions of the Bill. Can the hon. and gallant Member who moved the Second Reading have examined closely the history of all these organisations? If he had done so, would he not have realised that the very efficient groups which now exist in connection with the cinema, trains, omnibuses, aeroplanes and houses selling intoxicating liquor, started at one time as small individual concerns, owning but one unit perhaps, and that they developed into the present enormous and extremely efficient means of serving the public?
That brings me to my main point. Serving the public surely must be the chief duty of any of those who are engaged in the distribution of goods. If it is found in any direction, at any point in that line of distribution, from the producer to the consumer, that combination is better from the point of view of the producer and from the point of view of the consumer, surely it is not beyond the bounds of possibility that the producer and the consumer will recognise the fact and will wish to be combined closely together so as to get a larger return and enable the consumer to purchase goods at a cheaper rate and at greater convenience to himself.
It is perhaps a little sinister that even the hon. and gallant Member has not been able to bring his gallantry to such a point as to attack that roaring lion among the businesses which form the cornerstone of our catering industry. This Bill cannot have been framed in the interests of either the retailer or the consumer. It would in its effect grant a monopoly to those multiple shops and groups which already exist. It has been argued by the hon. and gallant Member that if the extension of the multiple shop system is carried out at the same rate as that which exists now, the elimination of the retailer is bound to take place in a short time. If it be true that the multiple shops and other groups are such vicious and wicked concerns, would it not be better to throw them into free competition so that dog might eat dog? If we are to consider this Bill and the questions raised by its production before the House and come to a fair judgment we must have a clear picture of the subject. If the question really is one of private 1231 individual trading against group trading, have we not to examine to some extent what each type of retailer and distributor can do and what he should do, and arrive at our decision—which, to my mind, should be the rejection of the Bill, because I think that I can show that, even at the present time, there is a field open to each class of distributor.
Let us examine the group distributor, including the chain store, the fixed price distributor, and the multiple shop mentioned specifically in the Bill. The hon. Member touched on the question of the danger to manufacturers of being so absorbed by the placing of large orders by the multiple shops and being so absorbed within the webbing of that system, that, should the multiple shop at any time cease to take the output of the manufacturer, he would be dropped like a hot brick and left to disintegrate on a cruel world. Is that really the case? Would it not be fairer if we recognised that many manufacturers have developed out of very small and, perhaps, rather old-fashioned concerns into extremely live and modern concerns of considerable size specialising in mass production of cheap goods which were not manufactured readily, certainly not economically, in this country before the multiple shops and other groups started to place orders for such goods?
Let us assume that after a time the multiple shop ceased to purchase the output of a particular factory, which had been brought into existence by the placing by the group of a considerable amount of orders. That is the method by which some of these concerns obtained their goods at a low rate; a contract is made for the complete output of a manufacturer. What will be the effect on the community should such a break between distributor and manufacturer take place? Would it be any detriment to the community or the manufacturer? The arrangement would have set up a factory where no factory existed before. The manufacturer had served the public, and done it with some profit to himself, and if a firm ceased to take his whole output their still existed a factory ready and willing to supply the public with goods which could not have been supplied from the same source before the multiple firm brought the factory into being. In that respect, far from multiple firms being a 1232 danger to the community in the setting up of factories or in assisting to set them up, they have filled a public need. Without their existence there would have been a gap in the supply of the growing and varied demands of the people.
A question lightly touched on by my hon. Friend the Member for Huddersfield was that of new products. Is it possible for a small retailer to incur the expense, risk or uncertainty of sending representatives not only to other parts of this country and to Europe, but to other parts of the world to search out new products which may appeal to the public of this country and to study methods of production in order that the goods which are in popular demand may be even more cheaply produced in this country than ever before? It is obvious that the small retailer cannot perform that function and cannot carry out that investigation. I have seen no great effort made on the part of individual retailers to organise themselves into any group of investigation so that they could be able by their joint efforts to send out such a representative. It may be that that is the duty of the manufacturers, the warehousemen and the wholesalers, but is it not better that these efforts should be made by the retailer himself, because it is the retailer who has to test the feeling of the public for any article which he has to retail? He cannot dictate, he cannot force his goods upon the public.
Anybody who studies the work of the more efficient groups of multiple shops will know that very careful experimental tests are made in different parts of the country as to the will of the people to buy types of new goods. The multiple store also has methods of bringing to the notice of the public products that would otherwise be unnoticed or be retailed in such small quantities as to make their very production in doubt. A curious case was brought to my notice some months ago to show how the multiple shop has assisted even the agricultural producer. One firm of fixed price stores took practically the entire output of a manufactured dairy product which otherwise could not possibly have found an outlet to the market except through a very large number of small retailers. Is it not cheaper from the point of view of the consumer that a large group should put this product before the public after one or perhaps two centralised negotiations 1233 than that this manufactured dairy product should be hawked round the country, at higher expense, by a representative of the manufacturing firm, because the consumer would be bound to bear the higher expenses of marketing this new product?
Then there is an aspect of the matter which indirectly affects another great national branch of industry. In conversation yesterday I was told something of which I had never heard before and which caused me some amazement. I refer to one of the fixed-price chain stores—the very lowest price. I was amazed to hear that the goods with which they serve their public are carried entirely over British railways, that with all their hundreds of stores they own but four motor lorries of their own, and that the tonnage of their goods carried by the railways amounts to over 180,000 tons a year. That means extremely careful organisation in buying and in the placing of orders with manufacturers, it means extremely careful liaison between the chain store and the railway and shipping companies, and is not that to the advantage of the customer in the long run? Surely that close liaison between the distributor and the conveyor saves the customer who buys over the counter considerable additional expense.
Here is another curious example of the value of large group distributors. During last year's fruit harvest in California, a part of the United States which is by no means too friendly to the chain store system, growers were left with a surplus of some 6,000,000 cans or tins of fruit, of which they could not readily dispose. In spite of the unpopularity of chain stores in that section of the United States they applied to chain stores to unload this surplus and they undertook that duty. The surplus was disposed of in that way, and everybody concerned was a great deal happier at the end of the transaction than at the beginning. Surely that was a useful function for any link in the chain between producer and distributor to be able to perform, to act as it were as a temporary buffer in a time of temporary over-production and to find a market over a wider area which it would have been quite impossible for those working only within a limited field to discover.
We have been told many times that the small individual trader is being crushed out by these great firms, that there is no longer any opening or chance for the in- 1234 dividual, that he is being dragooned or bullied into the chain store system, and that he ought to be left free to be able to expand for himself. Quite obviously those things could never have been envisaged in the mind of the hon. and gallant Member for Thanet and put into the draft of this Bill. We were told on the one hand of the great growth of employment within the retail trade, and also told that a great many people had been put out of work by the closing down of the small individual retailers. That seems slightly illogical. In view of the enormous increase in the last 12 years in the numbers employed in the retail trade, and it is exactly in that period that there has been a considerable increase in the number of multiple and group firms, it would appear that those firms are employing more people than the smaller retailers had been able to employ. That raises the question of bad wages. I stand in defence of no particular group, but we ought to strike a fair balance in this case. Is it or is it not true that many small family retailers can only remain in existence because members of the family are prepared to live on a mere pittance, a pittance which would not be acceptable to the younger members of that family were they working as wage earners in a firm outside their own control?
Let us turn to the other side of the picture. I have been attempting to show that the bigger groups of multiple stores play not only a useful but a vital part in the long journey from the producer M. the consumer, but I would not for a moment suggest that all retail trade of every class can best be performed by that group. I am convinced, and I think, all who have made a study of the problem are convinced, and I believe the right hon. Member for Hillsborough (Mr. Alexander) would also agree, that in many sections of the retail trade the large organisation is paralysed or helpless in the face of efficient individual retail work. Why is that? The large group distributor obviously finds his natural place in dealing with products which can be, or should be, mass produced, more or less of standard type—I do not mean limited in the number of the standards, but more or less of standard type—appealing to a large section of the community, if you like to the masses of the people, who have no particularly strong individual tastes in the matter of those products. 1235 But what is the position in the case of goods on which the individual taste of the consumer or purchaser is exercised? There we have exactly the reverse of the situation in which the mass distributor comes into his own. There we have the situation where the individual retailer, be he large or small, so long as he is efficient, studies the taste of his public and gives them that individual service which is impossible in the large organisation, is not only assured of a steady livelihood and the respect of the community which he serves, but also assured of a very fair profit indeed, and is assured of a future in which he can work side by side with even the largest organisations of retailers in this country. That is a matter almost of general knowledge and of fact among those who have analysed the retail trade.
The bringing of this Bill before the House serves at least the useful' purpose that it has drawn to the attention of the Government the necessity of finding out considerably more for themselves and for us than is already known about the distributive trades. I believe that the attention of the public may also be drawn to the question of how they can best be served. Part of the comparatively recent education of the public mind in the passing of goods over a counter has been brought about by the cheaper kind of stores, which display all kinds of goods to the gaze of the housewife, who is the chief purchaser. She can walk up to a tray and say: "That is what I want," in respect of things which would have been quite impossible of nomenclature to her. She can now pick them up. That system is a comparative novelty in this country, but has been carried on now for 15 years. There are consequently housewives who have been brought up from infancy under that system.
The question should be closely watched, not only by those who are engaged themselves in industry, but by those Departments of the Government which are specially interested in the retail trade of this country. Tendencies which are dangerous should be guarded against and those which are healthy should be assisted. Every one of us respects the hon. and gallant Member who brought this Bill forward and would do nothing which would cost him pain and affliction, 1236 or which might embarrass him in years to come, should he look down from his flying machine and see the poor children of his constituency unable to buy their little spades and buckets. We should not wish to do anything of that sort, but the cruellest thing that we could possibly perpetrate against the hon. and gallant Member would be to support him in his request that this House should give his Bill a Second Reading.
§ 12.48 p.m.
§ Mr. Doland
I rise with some diffidence to speak on this Bill, particularly after the devastating attack made by the hon. Member on the Front Bench below the Gangway on the hon. and gallant Member for Thanet (Captain Balfour), whose sense of humour I admire, because he smiled the whole time since he was attacked. I ask the indulgence of hon. Members. I have been in active business as a retail distributor for the past 36 years and I have some knowledge on the subject which may be of interest to the House. As a member of what was once called a nation of shopkeepers, I started in a small way with one shop in the very constituency which I now have the honour and privilege to represent. I started with a very hard-earned capital of £100. Since that time I have developed my business to such an extent that I come within the category defined in the provisions of the Bill as a multiple-shop trader. My business now consists of about 20 branches in London and the outer suburbs. I still control those shops, but, in order to give my sons an interest in them, I have formed a limited liability company, but with no outside capital.
During the past 36 years I have seen the growth of multiple shop trading almost from its inception, and I have also had many opportunities of watching the effect of that growth upon the fortunes of the individual shopkeeper. I have also watched with the same kind of deep and keen interest the growth of the co-operative system of distribution and trading, and the effect upon the small trader. If I may, I will read a little slogan that has been sent to me, I think by someone engaged in co-operative trading. It refers to the "Ten Year Plan", which it says is to be a direct challenge to private enterprise:It is the intention to prove to our opponents—1237 I take it that that refers to the individual shopkeeper—as we have never proved before that we are a real menace to their interests.It says underneath in red:That means you, Mr. Retailer.Then I find a quotation—
§ Mr. Doland
Published within the last day or two, about a big rise in sales.
It says:Steady progress is revealed in the latest report and balance sheet of the London Co-operative Society. In the year ended September 5 last, sales totalled £22,843,251, as compared with £11,816,874, for a 53-week period of 1935. Surplus for the year, including £41,211 brought forward, amounts to £1,297,043 which has been allocated as to £288,775 for share interest, £260,000 for depreciation and £321,939 in payment of an interim dividend for the half year ended March 31st. Membership now stands at 631,464, an increase of 56,543 for the year.Not only have I had the opportunity of watching the effect individually, but I have for many years been a member of retail traders' organisations, and thereby ascertained the views of members of those organisations. I must confess that, during that time, the concensus of opinion of a very great number of those with whom I have had contact in those traders' organisations is that the rapid growth of multiple shop and co-operative store trading has not only affected their turnover but, in many instances which I could quote, jeopardised their livelihood or actually destroyed it. It may be paradoxical of me, therefore, to speak in favour of the Second Reading of the Bill when I am one of the multiple shop traders who may possibly be penalised under it, but as a Member of the House my first duty is to represent those who sent me here and not to consider my own personal interests if—and I emphasise that most important little word—if the welfare of the retail trading community is to be served by the passage of such a Measure as that which is now before the House.
The statement I have just made should not be taken to imply that all the small traders are unanimous in their anxiety to see this Bill placed on the Statute Book as it stands. There is, I find, a divergence of opinion. For instance, I have had a conversation with the President of 1238 one of the biggest and most influential of the retail traders' organisations in this City, an organisation which federates all the traders' associations in London and the suburbs. That gentleman, who at one time was a Member of this House, told me that he would vote against the Second Reading of this Bill if he were still a Member of the House. He said he would vote against it because there are so many Clauses in the Bill which in his opinion would militate against the distributive industry of this country. I think it must be admitted that there is a great difference between a small multiple retail trading concern, such as that which I represent, and vast organisations such as Woolworths, the International Tea Stores, and MacFisheries, with their hundreds of branches and thousands of shareholders. I read with interest a leading article in a daily paper, which stated:The Bill is presented by Captain Harold Balfour, and has the support of prominent Conservative members. It will not go through. For it requires a financial resolution, and such a resolution is a prerogative of the Government, who will certainly not exercise it.It goes on to say, with regard to the phenomenal growth of one of the firms I have mentioned—Woolworths—The phenomenal growth of the Woolworth's organisation in this country must cause deep anxiety to all who recognise in the independent trader a valuable element in our economy. Forty new branches were opened in 1935, and another 40 in 2930. The total number of these stores is 677. And their profits are immense—£5,298,000 in 1935 and £5,832,000 in 1936. Such sums are, in effect, a subtraction from the earnings of countless private traders. And on what is this profit based? Not, certainly, on a highly paid salesmanship, for the average wage of the Woolworth salesgirls is less than thirty shillings a week. As for the Co-operative octopus, that powerful movement embodies a perilous spirit in our national life—an unholy alliance of politics and shopkeeping.
§ Mr. Doland
I am of the opinion that to restrict the number of branches of a multiple business to six shops, in order to bring them within the jurisdiction of this Bill, would not be tolerated by the retail trading community, and that is my first objection to the terms of the Bill. The Bill does not differentiate between a comparatively small number of shops owned and built by an individual, perhaps trading as a private limited liability com- 1239 pany, and those huge combinations to which I have just referred and which have hundreds of branches. I understand that in the City of Hull, to take that as an example of a typical city, there are many businesses, built up and owned by one family, having more than six branches. That there is a case for very grave consideration of the admitted dangers of the progressive growth of these concerns I am certain, and it has been admitted in this House to-day.
I have found in the course of my experience that one of the principal reasons why large multiple businesses tend to crush out the individual initiative is that these large multiple businesses unquestionably force up the rental values of retail shops. I particularly refer to the rental, because it naturally follows that increased rents are accompanied by higher rates. It is well known to Members of this House that, in order to get into the market of a locality, these people will pay, and do pay, high premiums and enhanced rents which the small trader is quite unable to bear. I think it can be admitted that the type of business in which I am engaged, bespoke tailoring, is more competitive than most so far as multiple shops are concerned. I have heard mentioned in the House to-day the name of Price's Fifty Shilling Tailors. There are two of these well known multiple businesses, one of them that of Montague Burton and the other that of Mr. Price, each with hundreds of branches and huge aggregations of capital. I have no doubt that in my own line of business many small practical men have been put out of business by these multiple shops. Whether this works, as it has been said to do, for greater efficiency or for the good of the community, I am not going to argue, but I do know that it has been fatal to many small traders in my line of business, and I think the same would apply to many other trades, particularly the grocery and allied trades.
My experience teaches me that personal service is a great factor in successful retail trading—one of the principal factors to-day. I think it can be said that that is even more the case to-day than ever it was, and I am convinced that in this direction the individual shopkeeper has a distinct advantage over the multiple shop. I am fearful, with the growth of bureaucracy that is becoming so alarming, of 1240 the effect of such a Measure as this on the small retail shopkeeping community, but at the same time I sincerely trust that the Government may be moved by the introduction of this private Member's Bill to initiate an inquiry into the conditions of the retail distributive industry, with the object of curtailing the octopus growth of these huge distributive concerns in order that the small shopkeeper now established may get an honest living, and in order, which is perhaps more to the point, that young men may have the same opportunity that I had when I was a young man of starting themselves in their early days. I find that it is becoming more and more difficult for these young men to be able to do so owing to the huge aggregation of capital of the bigger multiple concerns.
I have spoken on the matter only from the point of view of the trader, and not from the consumers' standpoint at all—I shall leave that to others—but I should like to mention the extraordinary development of the building of shop property not only in this great city but throughout the country. I would refer particularly to the neighbourhood in which I live, that is Streatham, in the borough of Wandsworth, which for all I know may be typical of many other districts. These facts are very interesting. In 1931 the number of shops in Streatham was 357, with a population of 68,435, or approximately one shop for every 191 persons. By 1935 there were 169 new shops erected and a further 58 in course of erection.
§ Mr. Doland
The hon. Member has reminded me that there is such a Measure as the Town Planning Act. I also understand that it is within the province of certain local authorities to exercise their prerogative to stop the building of these shops, but I am a little doubtful because it is not being done. By 1935 there were 169 new shops erected and a further 58 in course of erection, making in all 227 new shops in six years, or one per 114 persons. At this rate of progress an easy arithmetical calculation will determine the time when every consumer will have a shop to him or herself and, to use a colloquialism, they 1241 will take in each other's washing. But the tragedy of this overbuilding of shops is that already very many men in my neighbourhood have within 12 months opened and shut for good and lost every penny of their small capital.
To sum up, millions of persons engaged in the retail trade will welcome this discussion. There is no doubt that a case can be made out for a careful and impartial inquiry and survey by a Committee appointed by the Government to endeavour to discover a means of putting an end to unfair competition with the small trader by multiple businesses. There is so much, in my opinion, that is had in the Bill that the good will never be allowed to find its way on to the Statute Book, but, paradoxical as it may appear, in order that something may be done by the Government, I shall vote for the Second Reading.
§ 1.10 p.m.
§ Mr. Rhys Davies
I do not think I have listened to a more delightful Debate since I have been in the House. The small retail trader, the middle man, the manufacturer, the director of multiple firms are all found quarrelling in the House to-day and all their special interests have been represented in the speeches that we have heard. I might therefore quote the old proverb that, when thieves fall out, honest men come by their own. I need hardly say that the honest men to-day are my right hon. Friend the Member for Hillsborough (Mr. Alexander) and I. I hope that goes without saying. One thing can be said for the hon. and gallant Gentleman who proposed the Bill; he has undoubtedly done great service to the House by bringing this important subject forward for discussion. Unless I am mistaken, this is the first time the House of Commons has ever had an opportunity of discussing the ramifications of the retail distributive trades. We have had many Shops Bills dealing with closing hours, hours of labour of young persons in shops and the Sunday closing of shops, but we have never before dealt with retail distribution as such until this Bill was produced.
I sincerely trust that the House will not let this great subject drop when this Bill is rejected to-day, because I feel sure that it will be defeated. I cannot see how the Government can possibly support it and, in any case, I feel sure 1242 that I can speak for all Members on this side of the House that they will object to it passing into law. I could almost feel in this discussion, as far as it has gone, that the real purpose of the Bill is to safeguard the interests of the manufacturer of domestic commodities against the pressure of the multiple firms, to compel him to reduce his production charges in the factory.
I am very glad indeed that the Bill has been introduced in order that we may at long last get some information about the distributive trade. The number of people employed in the distributive trade, as far as I know, is the only indication that we can get of its size and, if that is an indication of the size of the industry, it is indeed a colossal venture. Not only are there 2,250,000 persons employed for wages, but I should say there must be approximately 1,000,000 persons in businesses on their own account who employ members of their own families as well. Consequently, the number of persons engaged in distribution, so we are told authoritatively, is greater than the total number employed in agriculture, in textiles, in coal mining, engineering and one or two other industries.—[Interruption.]—More than all the five combined.
§ The Parliamentary Secretary to the Board of Trade (Dr. Burgin)
The hon. Gentleman would not wish to say that if he had the figures in front of him. The facts are these. The distributive trades are the only block of trades where the number of insured persons exceeds 2,000,000. Taken as a block, the distributive trades employ more insured workers between the ages of 16 and 64 coming under National Health Insurance than any other trade. But if the hon. Gentleman takes his group of trades together he will find the balance on the other side. In coal mines there are 1,100,000; in building, just under 1,000,000 and in textiles over 1,000,000 in cotton and wool taken together.
§ Mr. Davies
The hon. Gentleman really did not follow exactly what I said. The number of persons who gain their livelihood from distribution is far larger, so we are told, in a statement made in a Government document, in which it says that the number of persons employed at a given date, or entering within a given period, was greater than that of any five industries put together. That 1243 statement was made, I believe, on the authority of the Ministry of Labour, but whether correct or not it does not affect my argument at all for the purposes of this Bill. If you analyse the provisions of the Bill, the Measure does not mean much more than a blow at the Co-operative movement; in fact, that is all it means. The hon. and gallant Gentleman knows, that if he curbs the multiple stores and prevents them from occupying more than six shops, all they need do under this Bill will be to divide up their capital and start new multiple firms under another title. That could not be made to apply to the Co-operative movement, unless they adopted the same tactics and established small Co-operative societies all over the land. In that case, even they would get round the difficutly.
This Bill is more like a twopenny pamphlet than a Parliamentary Measure. It is a thesis on retail distribution. I do not for one moment think that its provisions could ever become an Act of Parliament. The Bill, of course, would prevent the expansion of firms like Woolworths, the Home & Colonial Stores, Liptons, and, incidentally, Boots Cash Chemists I suppose, would be included within its provisions. I observe a change in the facial expression of the Noble Lord the Member for Aldershot (Viscount Wolmer) when I mention Messrs. Boots, but the point I want to make on that score is that, even if all these multiple firms were allowed to remain as they are now, and no expansion admitted, they have already covered nearly all the ground in the country, and it would be no hardship to some of them if they were told that they could not open another branch anywhere. They have nearly all the branches they want already, and consequently the Bill would be of no avail in that direction. The force of the attack would therefore fall upon the Cooperative movement, which is as yet in its infancy. Does the Noble Lord smile at that?
It has been argued this morning very frequently by some hon. Members, especially by the hon. Gentleman the Member for Balham (Mr. Doland), that many small shopkeepers have been forced into bankruptcy because of the power and strength of the Co-operative movement and the multiple stores. A number of them went into bankruptcy before 1244 either of these trading organisations came upon the scene at all, and some would still go into bankruptcy whatever happens to this Bill. It is interesting to note that some of these big stores themselves have gone into bankruptcy. Does he forget the case of Liptons, which was in rather a shocking financial condition for some time? It does not follow, therefore, that all these multiple firms are able to proceed, progress and spread themselves out as the hon. Gentleman has presumed.
Let me say something else to him. Without being partial either to the multiple or the departmental store, I am convinced that the multiple store and the small shopkeeper and the Cooperative Society have grown, progressed and extended side by side. There has been such a tremendous growth in retail trading in this country that all forms of business have grown at the same time. I am not sure that the small shopkeeper would care to handle some of the business done by the multiple stores, and I am sure that they would not do all that the Co-operative Society can do, which is the best form of trading of all. [HON. MEMBERS: "Oh!"] Why should I not say that? I am a Labour man. I am a member of the Co-operative Society not merely on principle, but because, on balance, I can purchase to better advantage at the co-operative store than elsewhere [interruption.] I was going to say something personal, but I think I had better not. I will say to the hon. Gentleman and to hon. Members who have decried the growth of the Co-operative movement, the multiple store and the departmental store, that they are entirely wrong in guessing the wages paid by Woolworths by stating the average wages paid. In calculating the wages paid by any firm whether a Co-operative Society, a private trader, departmental or multiple store, the striking of an average is not a fair way of doing it.
§ Mr. Davies
Hon. Gentlemen connected with the shop assistants will know better than I do, but I am sure that they will agree with me that in general there is a better chance of securing decent conditions of employment and good wages in a large than in a small firm. In the 1245 first place, it is very difficult to organise the individual shop assistant. You have more chances of organising them in a trade union when shop assistants are employed in scores and in hundreds. That is the general experience of those connected with trades unions. There is one serious flaw in the Bill itself, and I am astonished that the hon. Gentleman has not seen it. He objects to multiple firms and co-operative societies spreading themselves out, but he has no objection, in this Bill, to the establishment of a departmental store in every town in the country. What is likely to happen to the small shopkeeper unless he is careful is, that he will have a departmental store without a single branch at all covering the whole of the trades in every small town. I would not be a bit surprised if a small shopkeeper like himself became the owner of the departmental store in his own town. I can see two hon. Gentlemen, the Member for Huddersfield and the Member for Balham, who might easily become the departmental store owners in their own locality and wipe out the small shopkeepers and probably the multiple firms as well. They look very much like it this morning, anyhow.
The hon. and gallant Gentleman who moved the Second Reading of the Bill did not touch two of the biggest problems connected with retail trading. There is the mail order business. As a matter of fact the small shopkeeper has a legitimate complaint on account of rate paying; but his complaint against the mail order business which is growing by leaps and bounds is much stronger. This Bill does not meet that at all.
§ Mr. Davies
The hon. and gallant Member wants another Bill. Before he can deal with all the ramifications of the retail trade he will require 50 Bills. It is delightful to see Members of the Tory party quarrelling among themselves. Mostly Tory Members have spoken, and we see the small capitalists disagreeing with the big capitalists—Woolworths, Boots, Nestles Milk—
§ Mr. Davies
Yes, especially the medical profession. The voice of the British Medical Association at last. It is a power- 1246 ful voice, it speaks with authority and it can bring Ministers down. It wants its 9s. panel fee in respect of every insured person.
§ Sir F. Fremantle
May I say, that I am entirely independent of the British Medical Association, and have never had any connection with it?
§ Mr. Davies
Then I am more ashamed of the hon. and gallant Member than ever! I never thought that any hon. Friend of mine was a non-unionist. Let me deal with the problem of shopkeepers and rates. In this connection the small shopkeeper has a legitimate complaint. If I thought that this Bill could do anything to help the small shopkeeper I would not criticise it, but I am sure that it cannot. The problem of rates has nothing whatever to do with the competition between the multiple shop and the small shopkeeper. The hon. and gallant Member has been in this House long enough to know that his own Government have derated industrial undertakings and agricultural holdings and have thrown the whole of those rates upon shops and cottage and other property. Therefore, this is not a problem exclusively for the small shopkeeper. When hon. Members speak on behalf of the small shopkeepers and say that they are being crushed by the competition of multiple concerns, let me tell them that sometimes small shopkeepers crush out each other. The corn-petition between small shopkeepers in their own community is often very much more fierce than competition from the multiple firms.
There is one point in the Bill upon which, I think, we are all agreed, and perhaps the Parliamentary Secretary to the Board of Trade will tell us what is the Government's point of view on this issue, which is the most important thing in the Bill. I have been trying to get Governments for years to take a census of retail distribution, and if the introduction of this Bill can produce unanimity in the request for such a census it will have served a useful purpose. It passes my comprehension why there should not be a census of retail distribution. I read in Government documents and monthly volumes of enormous dimension issued by the Board of Trade, that nearly every ounce of food produced is weighed, every yard of goods produced in Lancashire and Yorkshire is measured, 1247 every ton of coal produced in Wales, Lancashire, Northumberland and elsewhere, is accounted for, and every bag of potatoes, every dozen of eggs are rerecorded; but the one thing of most importance which is not recorded is a detailed return of the distributive trades. If we are to measure the wealth or poverty of a nation I know of no better standard than the distributive trades, showing the amount per head consumed of the commodities sold over the counter. If we are to have that census of distribution I should like two or three questions inserted on the census paper, such as the age of every employé, the sex, the wages paid and the hours worked. What a picture we should get of the life of a section of the community which numbers 2,750,000.
§ Mr. Mabane
Would the hon. Member also be prepared to include a question as to the degree of security on reaching the age of 21 and when adult trade union rates have to be paid?
§ Mr. Davies
We would not shirk anything on that score. I suppose the hon. Member would also like to have the salaries of trade union officials included.
§ Mr. Davies
Yes. What do we care? Those particulars are in our balance sheets. Our trouble is that we cannot get to know what the proprietors get. They always know what we get. There is one thing in favour of a census of distribution, and it is particularly in favour of the Co-operative movement. The Cooperative movement, whatever criticism may be levelled against it, provides annually a complete census of production in its factories and workshops and its distribution over the counter. If we could get complete information about the private trade on the lines now supplied by the Co-operative societies it would be very helpful. I oppose the Bill on the several grounds that I have indicated, but I will add one or two more before I sit down.
§ Mr. Davies
If the hon. and gallant Member produces a Bill he must be prepared for criticisms. He ought to be more prepared for criticism from me than from some of his own friends. It is natural 1248 that I should criticise; his own friends belong to the same party as himself.
§ Mr. Orr-Ewing
Is the hon. Member claiming that breaches in affiliations are the monopoly of the party to which he belongs?
§ Mr. Davies
Breaches of affiliations are a common failing. They are not the prerogative of any party.
Let me now criticise some of the actual provisions of the Bill. In the Preamble reference is made to 10 per cent. increase in the number of hours worked. Unless I am mistaken the hon. and gallant Member will find that some of the provisions of the Bill would mean an extension of 10 per cent. in the hours worked by each shop assistant. Then, if commissioners were appointed and they were asked to grant licences to Co-operative societies to open branch shops, I am not at all sure that the private shopkeeper would not succeed where the Co-operative society failed. It is stated that some municipal corporations even now are making it easy for private enterprise to open shops on new estates, and making it as difficult as possible for Co-operative societies. If that be true, without any legal authority, how much more true would it be if commissioners were appointed.
It seems to me that every Member from the Principality of Wales will be against the Bill. Although I am an Englishman in politics, I am otherwise a Welshman, and I feel that every hon. Member from the Principality will object to the Bill because in the Schedule it throws North Wales into Lancashire and Cheshire. There is nothing more offensive to the Welsh people than a suggestion of that sort. Individual Welshmen may go into Lancashire but they do not like their country to be thrown into it.
§ Mr. Davies
No precedent will satisfy nationalism. The Bill does not in my view meet even the claim of the small shopkeeper; and it has one further fatal flaw. As soon as I saw the Bill I sent to an authoritative quarter to find out what the Hitler regime did in Germany, what attitude it adopted towards the retail distributive trades. I have the papers here and find that the hon. and gallant Member's Bill is almost word for word the decrees of Hitler and the attitude of 1249 the German National Socialist party towards the retail trade. On that score alone he will fail, I am sure, to convince the House that it should become law. Although I am an internationalist, I am sufficiently national to say that this nation, to which the hon. and gallant Member and I belong, is big and intelligent enough to fashion its own institutions without copying anything from Germany, Italy or Russia.
§ 1.40 p.m.
§ Viscount Wolmer
I am sure the House has enjoyed the entertaining and able speech of the hon. Member for Westhoughton (Mr. Rhys Davies). I shall have the added pleasure, denied to the hon. and gallant Member who introduced the Bill, of being in the same Lobby as the hon. Member when it comes to a Division. The hon. and gallant Member for the Isle of Thanet (Captain Balfour) has accused me of being connected with a multiple firm and of being a director of Boots. He spoke as if the organisation of these multiple firms had something anti-social or inherently wrong about it. I want to say that I am exceedingly proud of being connected with a firm of that nature. I deny and repudiate entirely that the work of the great multiple firms has been anti-social, and I want to try to remove some of the misapprehensions under which the hon. and gallant Member is clearly labouring.
Perhaps it is desirable that in this Debate someone who knows something about the working of these multiple shops should make a few remarks. I take the firm which I know. What is its history? It was founded by the late Lord Trent, who started life as Jesse Boot and in the year 1883, he had only one shop. It was very lucky for Mr. Jesse Boot that the hon. and gallant Member was not born 50 years earlier. It was not only lucky for Mr. Boot but also for England, because if this Bill had been an Act in those days the firm of Boots would have been confined to six shops. In those 50 years under the direction of Jesse Boot and his son the one branch has grown to 1,100; there are now 13,000 employés in those shops and 40,000 shareholders. The hon. and gallant Member spoke about money being drained away from provincial towns. These shareholders are scattered all over the country and spend their money with their fellow-townsmen just as 1250 much as any individual tradesman. The firm deals in over 10,000 different articles. I do not know what the hon. and gallant Member meant by talking of "skimming the cream "—perhaps it was face cream he was referring to!
§ Captain Balfour
I meant that they sell ironmongery but not kerosene or firebricks. They sell the easiest sold articles. You can buy dried kippers wrapped in cellophane, but they do not handle wet fish.
§ Viscount Wolmer
I do not think that is a very happy illustration of the hon. and gallant Member in view of the existence of MacFisheries. If they do not handle wet fish I do not know what they do handle. He speaks as if it was something of a reproach that a firm or series of firms should select and choose the goods they sell. Surely we are still a sufficiently free country for a man to decide what articles he prefers to trade in, and also for customers to decide at what shops they prefer to deal. The hon. and gallant Member poses as the champion of private enterprise, but it is only a limited kind of private enterprise he wishes to encourage. He thinks that a little private enterprise is very admirable, but that if you have too much of it it is something which is dangerous to the community. I suggest that the history of the particular firm I have mentioned is the history of every one of these big firms. Every one has been started by a man who commenced as an individual shop-keeper, and who by his efficiency, by giving the public what the public wanted, extended his organisation for the benefit of the community and of everybody concerned, and even for the benefit of their competitors. Again I take the case which I happen to know. There are actually more chemists per head of the population in business to-day than there were 30 years ago, and that is because an efficient business creates a new demand. There are millions of people to-day who go regularly to a chemist's shop in a way that was never thought of 20 or 30 years ago.
Everyone sympathises with the desire of the hon. and gallant Member that these small shopkeepers shall continue to fill a very valuable part in our social economy, but where I think he is making a profound mistake is in his fear 1251 that the small shopkeeper is ever going to be driven out. The big multiple shops may have obtained 30 per cent. of the retail trade of this country, but that does not in the least prove that they are going to obtain the 100 per cent. The calculation which the hon. and gallant Member gave us was that if 4 per cent. of the shops were doing 30 per cent. of the trade, then if they were 12 per cent. of the shops they would do practically all the trade. That calculation is perfectly absurd. There is a place for the multiple shop; it has a service to render to the community. There is also a place for the small shopkeeper who still does by far the greatest part of the retail trade, and there always will be functions and services which the small shopkeeper will be able to render to the community. I agree that it would be a serious thing for England if there was not an adequate supply of small shops, because it is from the ranks of the small shopkeepers that the great organisers of the big businesses of the future will be drawn. Therefore, I think my hon. and gallant Friend has entirely failed to diagnose the situation correctly. He has wrongly diagnosed the situation, and he attempts to meet it with an astonishing remedy.
However, before dealing with the details of the Bill, which I propose to do a little more fully than he did, I would like to say one thing with regard to the very able speech that was made by my hon. and gallant Friend the Member for Chichester (Major Courtauld). He spoke very eloquently of the great social value of the small tradesman in public affairs and in local politics, and I entirely agree with him; but he is making a very great mistake if he thinks that the managers of the multiple shops, the banks and so on, take no part in local affairs, in local organisations and in local politics. On the contrary, a great many of them take a very active, a very prominent and a very useful part in these things; and I think it is absurd to suggest that if a man is the owner of a private shop he is interested in local affairs and local politics, but that if he happens to be appointed manager of the local branch of a big firm, he ceases to have that interest. I admit that there is shifting of residence in both cases, but there is also continued residence in both cases. Frequently the managers of these branches spend a con- 1252 siderable time in one locality, or come back to it after an absence, just as private shopkeepers may change. There is not so much difference as my hon. and gallant Friend may think in that respect.
Even if my hon. and gallant Friends had correctly diagnosed the problem—which they have not—it would be impossible for them to put back the clock by a Measure of this sort, just as it would have been impossible to stop the railways driving the stage coaches off the road or to stop motor cars from competing with the railways. However, I do not think there is any fear of that happening in this case. My hon. and gallant Friend's astonishing remedy certainly would not bring about the results he desires. I am not surprised that he did not spend much time in explaining his Bill to the House. When first I read it, I rubbed my eyes at seeing that so good a Conservative could be responsible for such proposals. It has been suggested from the Benches opposite that he got his ideas from Herr Hitler, but it seems to me that they have come much more from Stalin than from anything in Germany. My hon. and gallant Friend starts off with 33 commissars.
§ Captain Balfour
Will the Rt. Hon. Gentleman say what is the essential difference between the machinery of this Bill and that of the Road Traffic Act?
§ Viscount Wolmer
The machinery may be similar, but the function is totally different. There is a great difference between arranging the traffic of the country and deciding whether a man may get his livelihood or not. My hon. and gallant Friend has then drafted the Bill in such a manner that I am advised that all the big banks would be brought within it. Not a single further branch of any one of the big banks could be opened in this country without the leave of one of the commissars. The insurance companies would also be affected, and so would the building societies and travel agencies. What is even more astonishing than the scope of the Bill is what is excluded from it. My hon. and gallant Friend would exclude all public houses. Why he thinks it is right that a brewer should own as many public houses as he likes, but that it is wrong that a multiple shop should have more than a certain number of branches, he has not explained.
1253 Even more surprising is that he would exclude everything within five miles of Hyde Park Corner. What Hyde Park Corner has to do with this question, I really cannot understand. He would exclude London, but he would include Liverpool, Manchester, Birmingham and every other great city. Again, he apparently thinks it perfectly right that Selfridge's, for instance, should sell every commodity under the sun, as long as it is under one roof, but if Woolworth's or Marks and Spencer try to sell the same commodities under 300 or 400 different roofs my hon. and gallant Friend holds up his hands in holy horror and says it is a social menace. Could anything more absurd ever have been printed among the Bills brought forward in this House? There is then the astonishing phrase:Unfair and uneconomic competition.My hon. and gallant Friend did not explain what constituted "unfair and uneconomic competition," and I suggest it would be impossible for him to do so. What is the proposal in the Bill? It is that before a multiple shop, let us say Woolworth's or any one of these big shops, may open a branch in a locality, they have to get a licence from the commissars and they have to satisfy the commissars that they are not going to indulge in "unfair and uneconomic competition" against the existing tradesmen.
There is, however, no proposal in this Bill to prevent anybody else from setting up a shop in that locality and indulging in "unfair and uneconomic competition." Could anything be at once more ridiculous or more unjust than that there should be special legislation against a particular type of firm and that they should have to give guarantees and proofs, before they are allowed to trade in the country, which are not required of other competitors? My hon. and gallant Friend said in his speech that just as it had been found necessary to control by legislation such services as electricity, and other services, and just as it had been necessary to help agriculture, so it was necessary to have a Measure of this sort. There is no analogy. My hon. and gallant Friend is not proposing to help the retail trade as one might propose to help agriculture. He is proposing to discriminate between various sections of the retail trade, each of which has its own place and its own functions.
§ Viscount Wolmer
My hon. and gallant Friend pleads guilty, and in that case he must not cite the agricultural legislation as a precedent, because all our agricultural legislation has been to help all agriculture and not to penalise one branch of the industry in favour of others. The only precedent he will find in agricultural legislation is again in Russia, where farming on a big scale has been made a crime and the kulak has been made public enemy No. 1. Once more I can see Stalin at the back of my hon. and gallant Friend. My hon. and gallant Friend made a comparison with the electricity legislation. But the electricity companies and public utility companies are given statutory monopolies by Parliament. Parliament has always insisted on its right to insert special conditions when it has granted a monopoly. The whole essence of the retail trade of this country is that nobody has a monopoly or anything like a monopoly. Of course the effect of my hon. and gallant Friend's proposal would be to confer a monopoly on all multiple shops in their present areas. I do not know if that is what he wants or how he would justify it. He is content to prevent their further growth. A two years' licence would of course be useless to anyone. Nobody is going to open a new business if he has security of tenure only for two years. No new shopping centres would be developed in the way in which shopping centres are developed at present, because none of the big firms would be allowed to go there and the property values would not be made.
The point to which my hon. and gallant Friend does not appear to have directed his attention is the interest of the public. The only reason why multiple firms have had any success is because they have been able to render a service to the public which the public has appreciated. As England is still a free country, people are allowed to shop where they like, and some of them, at any rate, desire to trade with these firms. My hon. and gallant Friend does not like to prohibit them from doing so, but he proposes to make it as difficult as possible. I suggest to him, with all respect, that he is barking up the wrong tree. I desire, with him, to preserve the small shopkeeper. I believe, with him, that the small shopkeeper has an essential part to play in our social economy and is 1255 doing a very valuable work. If the small shopkeeper suffers from any legislative grievance, such as unfair taxation or the like, then my hon. and gallant Friend can help him by trying to remove that grievance. Another way in which my hon. and gallant Friend can help the small shopkeeper is by supporting that excellent movement which has just been started, by which small shopkeepers can combine in order to buy collectively. In that way they may be able to make a number of economies. It is by those methods that the small shopkeeper can keep himself up-to-date. But to come to this House with proposals directed against firms who are meeting a public need, who have brought about an immense improvement in the conditions of shopping and in the conditions of employment among their workers, will not solve the problem.
I am glad that my hon. and gallant Friend has made this attack on the multiple shops. I am glad that he introduced this Bill because it has allowed the matter to be ventilated. I do claim for the great firm with which I am connected —and I think the same is true of others that have been mentioned—that they are pioneers as good employers. They have given conditions of wages and hours which are as good as or better than any in the country. They have instituted pension funds for their employés, they have shortened hours and improved the conditions of work and there is tremendous competition to get into their service. They have given shopping facilities which the public did not enjoy before; they have given an improved service and an improved article at a reduced price, which has benefited the public. They have created employment, they have shown the small shopkeepers the art of shop-keeping and they have improved the technique of the whole industry. There is room for them to live in England side by side with the smaller men. During the last great slump my own firm spent over £1,000,000 in improving shop fittings and buildings. An expenditure of that kind could never have been undertaken by any firm which had not their resources. If my hon. and gallant Friend proposes to limit retailing in this country to men with small capital resources, he is not going to help employment or to improve the industry; he is not going to benefit anyone, not even the shopkeepers 1256 of Margate and I do not believe that either the shopping public or the shopkeepers of Margate will thank my hon. and gallant Friend for the efforts which he has been making on their behalf.
§ 2.1 p.m.
§ Dr. Burgin
It may be convenient if I intervene at this stage to indicate the attitude of the Government on the subject which we are discussing. If I judge aright, it is hardly necessary for me to tender any advice to hon. Members on how they should vote on this Bill. The general feeling of the House seems already to be ranged against its provisions. But I think it will be agreed that we have had an interesting Debate and I certainly find no fault with the hon. and gallant Member for the Isle of Thanet (Captain Balfour) either for his choice of a subject or for the way in which he introduced the Measure. In one respect at least, he was a good advocate. It is a rule of advocacy that it is a great mistake to pitch your case too high only to find, when you call your evidence, that it does not come up to your opening speech. The hon. and gallant Gentleman avoided that danger by pitching his opening speech in a rather minor key so that the evidence was bound to be in excess of the claims which he made.
The problem of supply, of seeing that the products of manufacture reach the ultimate consumer, is one of the great tests by which the efficiency of a country is determined, and it would be idle to suggest that in the Debate, wide as it has been, we have done more than touch the fringe of the problem. The hon. and gallant Member who introduced the Bill asked that matters of principle only should be discussed and disclaimed any particular interest in the provisions of the Bill itself. Of course in a Parliamentary sense, he has to be responsible for the actual terms of the Bill as he has introduced it, but behind the Bill and behind his speech, lay the general question which he desired to bring to the notice of the House and of the country, namely, the problem with which distribution is necessarily connected. It is in that sense that I have understood his proposals to-day.
I agree with the Noble Lord the Member for Aldershot (Viscount Wolmer) that the people of the country, broadly 1257 speaking, obtain the shops they require and the shops they deserve. I think it is true that the large growth in departmental stores, some of which are multiple shops and some are not, the growth in the multiple shops themselves, and in the chain stores, has been caused by a public demand for some of these services and by the fact that these institutions have met that public demand. It is impossible to travel about the country without receiving a volume of evidence showing the services which these shops render to all and sundry over wide areas. That there may be points in connection with them that ought to be watched is another matter. That there may be limits, not yet reached, which if reached would produce new problems will not be gainsaid. But at the moment the attitude of the Government is that this Bill is not called for, that its terms would not alleviate the evil which its sponsors allege to exist and that the advice tendered to the House should be to oppose it.
The merits of the independent shopkeeper need not be stressed. The House will not overlook the fact that the independent shopkeeper is willing to give credit where many of these other institutions will not give credit, that he delivers goods where many of these institutions do not, although some, of course, do, and that he is able to render specially good service in the way of what we may call after-service. He notes the specialities, he collects the particular things his special customer wants, and there is a human element about the independent shopkeeper which will always play a very large and a very proper part.
We need not discuss whether the total estimates of retail trade and the number of shops outlined as being in this country that have been given in the Debate are accurate or not. The figure of the total retail trade that I have is just under the £2,000,000,000 mark—somewhere between £1,700,000,000 and £2,000,000,000 a year—but be the total more or less, the figure of £2,000,000,000 can be taken as a convenient one. The probable number of shops is under 1,000,000 rather than over, but that again is a matter which is not very material at this stage. The only reason why I intervene at all—because it must have been apparent to hon. Members that the Government opinion was not required on the merits of the Bill itself—is to deal 1258 with this question, which has been taken up in many quarters of the House, as to the advisability or otherwise, the wisdom or otherwise, the necessity or otherwise of having some sort of census of distribution, and I think perhaps a moment or two spent in considering the problem may be moments well spent.
I should not like it to be thought that there was any opposition on the part of the Government to ascertaining facts or to having information as to what occurs between the time when goods leave the factory and the time when goods reach the consumer. There is a gap in our knowledge of some portion of that chain, and if it is possible or practicable to fill in that gap, we should like to do it. But do not let the House imagine that the making of a census of distribution can be compared to taking a census of production, and do not let them believe that it is a simple or an easy matter, or an inexpensive task. Leaving out one important factor which is asked for by this Bill, and which has not yet been attempted in any census of distribution in any country before, leaving out the item of costs, it is estimated that the expense to the country would be half a million pounds sterling. I am not talking of the practicability, but merely of the cost. I want, therefore, before one can say that the Government are willing to embark upon a census of distribution, to be satisfied that the information, when obtained, would have sufficient practical value to justify an expenditure of anything like £500,000 for that indeed is a great undertaking.
§ Mr. Orr-Ewing
Will my hon. Friend give the House some sort of idea as to what type of census he referred to that would cost £500,000?
§ Dr. Burgin
The estimate of £500,000 is based on a census similar to one made in the United States of America, which is the most elaborate that has been made anywhere up to date, but which, even though it is the most elaborate that has yet been made in history, does not come up to the elaborate census which is now sought in Clause 12 of this Bill, because it does not include the element of costs. The question of a census of retail distribution has hitherto been regarded in the light of three considerations, that a comprehensive census would be a very costly undertaking, that the information 1259 likely to be derived would not be of sufficient practical value, and that at present there is no evidence of any widespread or general industrial or commercial demand for it.
Let me say at once that I should be very happy at any time to receive representations from industrial or commercial undertakings who desire to put forward arguments in favour of a census of distribution—very happy indeed—but on the information at present before me, I would ask the House to accept it from me that there is neither a unanimous nor even a widespread demand for it. There are some eloquent champions of it and there are organisations which have it as an item in their programme, but those eloquent champions and the organisations which have it in their programme do not agree on details, and the broad commercial and industrial community have not yet asked for it. Let us look at it for a moment. You would have to have a huge force of enumerators, who, so far as this very large number of independent small shops is concerned, would have to make something in the nature of a personal canvass. The cost, the delay, the utility have to be considered. Lots of these small shopkeepers, carrying on their business with vedy rudimentary ideas of bookkeeping, are not in the habit of analysing costs volume, quantity. They do not keep quantitative records; at the most they keep some sort of information upon which they can base an Income Tax return, but the idea that there is any sort of cost-accounting, any sort of differentiation between the different classes of goods that are sold in some of the millions of small independent shops would be an overstatement.
Now let me tell the House that in the United States of America, when they took a census of distribution in 1933, they found out that not more than 15 per cent. of their retail stores kept records showing how their total sales were distributed between particular kinds of goods. The United States of America has been described by one hon. Member as a country which loves statistics, but I think that if not more than 15 per cent. of the retail distributors in the United States kept these statistics, it would not be unfair to assume that no higher percentage of our own retail traders would keep them. In the United States census of distribution, 1260 made in 1935, they employed 12,000 local enumerators, and although the requirement for our country would necessarily be smaller, because of the geographical difference, a staff of many thousands would be needed if a canvass were to be either complete or expeditious, and a numerous headquarters staff would be wauted too. It is that type of census which I have used as the basis of cost of the £500,000, and in that census there is not included an item as to the costs at which goods had been purchased compared with the costs at which they had been sold.
If hon. Members will look at Subsection (3) of Clause 12 of this Bill, they will see that the hon. and gallant Member contemplates that forms shall be filled up giving particulars as to the nature of the shop, the control and ownership, and the volume, value, and nature of goods purchased for and sold at such shops; that is to say, the volume of each commodity, the value of each commodity, the nature of each commodity, the price at which it was bought, and the price at which it was sold. If you ask anybody to give in a form the price at which they bought something and the price at which they sold it, you inevitably ask them to disclose their profits, and I should not like to hazard the degree of opposition that there would be in this free country of ours to an inquisitorial demand as to the profits which traders were making on the sale of particular goods; and I think it would want a very strong case to be brought to the attention of this House before they would be likely to be in favour of a census at all.
I want the House to understand some of the difficulties that there are. Surely the most that we would be likely to obtain would be some sort of gross value, giving the entire turnover for the year, and in some of the larger establishments there might perhaps be some sort of breaking down of that total figure. To ascertain the number of shops in each trade, the shops selling particular commodities and so on—those would all be difficult matters to ascertain, and they would be asked for from those who are not in the habit of furnishing that kind of information. The request for it would necessarily involve something in the nature of a house-to-house canvass. I cannot believe that with the information in the possession of the Government at the present time there is a sufficiently 1261 unanimous or widespread demand to make the cost of that census of distribution money wisely spent, having regard to the very little practical value which would ensue from the results that would be secured. On the whole, therefore. I am obliged to advise the House to reject the Bill in its present form. With regard to the census of distribution, the Government are willing to receive representations from organisations of industry or commerce who think that useful results would be obtained from such a census; but the difficulties must not be overlooked, and any idea that a census could be taken now and completed by 1938 is quite out of the question.
§ 2.18 p.m.
§ Mr. Petherick
My hon. Friend the Parliamentary Secretary to the Board of Trade has devoted a great deal of his speech to a discussion of a census of distribution. That particular Clause seems to me to be one of the least attractive parts of the Bill. I think there is a great deal in what the Parliamentary Secretary said, particularly so far as the cost is concerned. I was very much impressed by the claim that he made that a census of this nature would cost something in the nature of £500,000. In a few moments I wish to say something about how treacherous such statistics may be, particularly in relation to America. This has been a very interesting Debate, and the House ought to be grateful to my hon. and gallant Friend the Member for Thanet (Captain Balfour) for having introduced the subject. I admit freely, as he has done, that the Bill is not all that may be desired, but at any rate it has given an opportunity for a discussion of what may conceivably be in course of time a very real danger in the distributive trades of this country.
There are certain hon. Members in this House and many people outside who are noticeably impressed in these latter days by greatness of any kind. I cannot help thinking that if my hon. Friend the Member for Weston-super-Mare (Mr. Orr-Ewing) were to visit the Zoo he would make a bee-line for the elephant, and stand in awe gazing at its greatness, instead of gazing at the lesser but more amusing animals. There is nothing necessarily of great value in size or greatness, but gradually we have been encouraged 1262 to believe that the great stores, the great organisations of the coal industry and of other forms of industry, are necessarily good and more efficient in themselves. But the figures we have got in this country go to prove that during the slump the smaller industries, those employing fewer than 500 men, held up very much better than the bigger firms.
It has been the object of the opposition to this Bill to try to prove that the promoter of the Bill was endeavouring to stop multiple shops altogether. That is not the object at all. The object of the Bill is to prevent the over-expansion of multiple shops at the expense of the smaller men. My hon. and gallant Friend who moved the Second Reading has had an enormous correspondence in regard to this matter, and there is very clear evidence of the fact that the smaller man in many districts of the country is being shut out. I have a letter here from a firm in Coventry. The writer took the trouble to examine the conditions in the centre of the City. He states:Approximately for a quarter of a mile down each of the four main streets in the business centre of the City I find that in 1880 there were 323 independent shopkeepers in that area, and since that date 292 of them have died out or closed down, making only 31 independent traders in that area at the date of my investigation.In other words, in 1880 there were l00 per cent. independents, but in 1881, when the first branch of a chain store organisation was opened, there were 99 per cent. independents, and by 1933 there were only 26 independents left, and this figure is still falling.So those of us who have an interest in this matter may claim that there is very considerable evidence that the smaller man is being shut out. The noble Lord the Member for Aldershot (Viscount Wolmer) said that there was no analogy between the agricultural policy of the Government and this Bill. I claim that there is a very considerable analogy if we take his own special case of the hops scheme. In that scheme, as I understand it, speaking from memory, the grower is not allowed to increase his acreage without a licence, and I think I am right in saying that he has in certain circumstances to pay a fine. The general principle of some form of control where it is absolutely necessary is firmly established in this country. I never like to extend the practice of that principle any further than is absolutely necessary, but 1263 we have the practice of the principle established in many different directions. We have for instance, the case of the public-house, which has been mentioned to-day. It is not possible to start a public-house without a licence obtained from the magistrates, and any extension of the licence has to be sanctioned by the magistrates. The same principle applies in a very high degree to road transport. 1264 No man is allowed to engage in road transport or extend a service without a licence.
§ Notice taken that 40 Members were not present; House counted; and, 40 Members not being present—
§ The House was adjourned at Twenty-five Minutes after Two o'Clock until Monday, 1st February.