§ 4.8 p.m.
§ LORD LLOYD rose to call attention to the position of the small trader in this country; and to move for Papers. The noble Lord said: My Lords, if my Motion refers specifically to the small trader, it is because I feel that in these days of mass organisation the interests of the small man in this country are tending increasingly to be overlooked but in that the majority of small traders are to be found in the field of distribution, and particularly in that of retail distribution, I realise that my Motion does, in fact, cover a very large subject. Indeed, it may be said to cover the sale of practically every article from a Rolls Royce car to a Rolls razor, and to deal with every kind of business, from a department store to a barrow boy.
§ With so large and complex a subject, I feel that any detailed approach is impossible for me in the time at my disposal 654 this afternoon. Nor, in any case, am I qualified to speak on the intricacies of the main industries and businesses involved. My approach is entirely that of the consumer, for I am myself a consumer, and, clearly, my main concern is for the retailer, partly because most of the small men happen to be in the retail side of the business, but also because the retailer is the man with whom I chiefly deal. Upon his courtesy and upon his efficiency depend most of my daisy needs, and a good deal of my comfort and convenience. Therefore, I was rather surprised some months ago to note that the Chancellor of the Exchequer, in reply to a question in another place, said that the independent trader represented no one but himself.
§ Obviously, the independent trader represents his own interests, but if he gives good service and a variety of choice to the consumer, surely he represents the consumer's interests as well. Indeed, if I may say so this remark of the Chancellor was just another example of the attitude of mind which is unfortunately too common in the ranks of the Party opposite. I refer to that apparent inability to understand that the man who is independent, who is not organised in some union or other, can still be a valuable member of the community. The Chancellor of the Exchequer stated that the independent trader represents no one. It would be more true to say that there is nobody in the Socialist Party who represents the independent trader.
§ It is this fact and this mental attitude which I believe are responsible for the Government's neglect of the interests of the private trader over the last three and half years. Since 1945, all enterprise in this country has been handicapped by excessive interference on the part of the Government. Nobody, however, has suffered more than the small man, partly because of his more limited capital resources, which make a quick turnover vital to him and the increased costs difficult to absorb; and even more, I think, because he is the ultimate link with the consumer. It is upon him, more than upon others further up the line of distribution, that the burden of Government control has fallen most heavily. He it is upon whom the snoopers snoop, and if they snoop successfully he may be con- 655 victed of an offence. If he is convicted, the penalties that face him are serious.
I should like to quote to your Lordships, if I may, the remarks of Mr. Justice Hallett at a recent Assize in Norfolk. He said to the prisoner:
Parliament has given power to the Minister to put out of business anyone to whom he takes a dislike. Unfortunately, you are one of those people. You have been put in a very difficult position. Because you have got a simile black mark, the Minister has now deprived you of making the livelihood you previously earned. It has nothing to do with me. The Court can exercise no control over the actions of Ministers.
That is the sort of penalties with which the trader is faced. Usually it is he, more than anybody else, who is most completely submerged beneath the sea of forms which nowadays seem to encumber the simplest transaction. The first problem that confronts him is the control of the retail and wholesale prices of nearly every commodity to-day. As the result of this, he is faced with a fixed margin of potential profit, from which his costs have to be found. And these, like everything else, are continually rising.
§ Wages have more than doubled since before the war. Rates also have gone up, and in this connection it is interesting to note that the 1929 Derating Act, which relieved industry of 75 per cent. of its rates, did not include the shopkeeper. The cost of repairs and maintenance, again, have increased enormously and there is the cost of the controls themselves. A reputable trade paper states that clothes rationing has accounted for 5½ per cent. of the work of the whole of the staff engaged in the retail clothing and textile trades. This represents the work of no fewer than 20,000 people. Again, owing to nationalisation, the small trader has had to pay more for his coal, gas, electricity and his freights, not to mention the heavy loss which these industries have incurred and which are reflected in the crippling and unpleasant tax demands which he, like all of us, from time to time receives, and which make it difficult for him to plough back any profits or build up reserves.
§ If it were a question merely of running costs rising steadily, as they have risen, I would not say that existing profit margins are necessarily unreasonable. It is true that some of them date back as 656 far as 1939, and are obviously outmoded. But even so, there are marry which would not be unreasonable if it were a question of running costs alone. But one of the greatest handicaps which the small man has to face to-day is the greatly increased capital expenditure and risk of capital loss. The cost of replacement of stock has risen at least three times what it was before the war and, of course, requires a great deal more finance. This difficulty is aggravated in its turn by purchase tax, whereby the small man becomes an unpaid tax collector for the Government. He pays tax when he buys goods, and he recovers the tax if and when he sells goods. In the interval he is forced to loan the Government, free of interest, the amount of the tax. It is estimated that at the present time some £60,000,000 is being carried by the retail trade in purchase tax.
§ What is the result of this? The small trader has two alternatives: either to reduce his stocks, and thus reduce his turnover and profits, or go to a bank and ask them to finance his purchase tax. Whichever he does, he is worse off. And if his goods do not sell quickly, or if in the meantime purchase tax is reduced, he is faced with a capital loss. This is a bad tax. It is had for the trader himself, and bad for the consumer, because it encourages the trader to carry smaller stocks and to concentrate on utility lines which do not carry purchase tax. It is also bad for the export trade because it discourages manufacturers of new types of goods, which by their very novelty are risky and which wholesalers and retailers are not prepared to handle. The effect of high prices, high taxation and purchase tax has enormously increased the capital resources which are necessary for the small trader if he is to carry on. No allowance is made by the Inland Revenue for these greatly increased costs. Where is the small trader to find the additional capital? There are only two ways: either to go once more to the bank and borrow, which is not a healthy state of affairs, or to find it out of his profits margin. If he finds it that way, there is little profit left to the trader.
§ I turn now from increased costs to increased competition. The small trader to-day has to face greatly increased competition. On these Benches we have no objection to free competition—that 657 particular phobia is reserved for the Government's nationalised industries. But we have a predilection for fair competition, and I think that is more than can be said for some of the competition which the small man has to face to-day. In the first place, there are the co-operative societies, which have been his competitors for many years and have enjoyed for many years certain advantages in taxation. Some people citicise the tax immunity of the "divi." I do not quarrel so much with this as with the fact that the profit from trading with non-members may be included in the gross profits from which the "divi." is declared. As a result, it is possible to pay a larger "divi.," and some of these profits escape the taxation which they should properly pay.
§ This is not the only advantage enjoyed by the co-operative societies. In general, of course, they enjoy the benefit of intimate relations with the Socialist Party, both personal and, I believe, financial. In particular, they happen to enjoy the special favour of the Minister of Food, if the Christmas allocation of poultry, rabbits and sugar is any guide. More important still, they appear, if The Times is correct, to enjoy, with the T.U.C., the special confidence of the Government, when it comes to the question of framing the future policy of the Government. I understand, again from The Times, that these discussions have been going on for some time and have not been entirely harmonious. This lack of harmony seems to be most regrettable; but even more regrettable is the fact that discussions of such importance on the future of distribution should have been held without the participation of the private trader.
§ I turn from the co-operative societies to municipal trading which, as your Lordships know, has been encouraged by the Government in their Local Government Act. Such competition has within it the seeds of injustice, because it can be subsidised out of the rates, not only without the citizens' poll, but also without the production of the balance sheet. As a result, the private trader may well be forced to subsidise his own competitior.
Finally, there is uncertainty about the future. Uncertainty and lack of stability are the greatest enemies of our economic recovery. Heaven knows, enough dislo-
cation has been caused by past nationalisation schemes of the Government, but if the evil were confined to the follies already committed, I think there would be more hope for the future. However, some of the more exuberant supporters of the Government, having tasted blood, so to speak, clamour for more, and their views may easily be found in any of those very reputable organs which purvey the views of that particular section of the Party, among them, of course, the New Statesman, from which I should like to quote a few words from an article written anonymously by a Labour M.P., in which he discusses the future programme of the Socialist Party. He says:
The second main theme of the 1950 programme must be the cost of living.… In the first place, the programme must contain proposals for cutting both the profit margins and the waste man-power in the distributive trades with a view to lowering prices.
The other passage I would like to quote, as one would expect, coming from The Tribune, is in a rather more robust tone, and is written by Mr. Nally, M.P. That says:
The nation to-day carries a massive burden in an inflated, expensive and often grossly inefficient distributive system, most marked in food. It is necessary to provide new and efficient machinery for handling the people's food and eliminating the horde of parasitic profit-makers who dip so deeply into the housewife's purse. The solution lies somewhere in the field of State co-operative partnership. The best argument for nationalisation is the success of industries already nationalised.
As I read that, I wondered how much loss an industry had to make before Mr. Nally would consider it a failure.
§ The noble Lord who is to reply will probably tell me that statements from such sources are of no importance and do not represent the views of His Majesty's Government, and I dare say he will be quite fair in doing that. But I am not so certain that he would convince the small trader, because the small trader has seen too many examples where the Government, like the Duke of Plaza Toro, have preferred to lead their regiment from behind. We have had too many examples of what is said by the back-bencher to-day being done by the Front Bench to-morrow. What is more, we know that the General Council of the T.U.C. has recommended rationalisation of distribution, and we know from The Times that discussions have been 659 going on for a very long time. Therefore, it is not entirely surprising that amongst the small men there should be certain anxiety and apprehension, and that the forthcoming census of distribution is apt to be regarded as little more than a Trojan horse—a gift horse which I believe they will look very firmly in the stomach.
§ What is the result? The difficulties to which I have referred are only a few of those which confront the small trader. I have deliberately ignored the normal trade risks which every trader has to accept, and have concentrated on what seem to me to be the additional and unnecessary burdens which the Government have inflicted upon them and which make the retail trade an uninviting proposition to those already engaged in it and also to those who might otherwise have set up on their own. Faced with a limited chance of profit, and an unlimited chance of loss, it would be scarcely surprising if the small man decided to get out while the going was good. If the Annual Abstract of Statistics is at all correct, this appears to be what he is doing, certainly in the retail food trade. Between 1944 and 1947 there were 3,000 fewer independent retailers and 1,000 more co-operative stores and multiples. That appears to be the trend.
§ To anybody who, like myself, believes in the small man and wishes to see him have a fair chance, this picture is a disturbing one. If we were to apply to the Government the legal maxim that a man must be held to intend the logical consequences of his actions, I think it would not be unreasonable to conclude that the Government wish to eliminate the small man and set up some alternative system. I am anxious to be fair. I am not entirely certain that we can apply such a maxim to such a Government of planners. We all know that many of the things which they have planned have not happened, and, conversely, that many things which have happened are precisely what they have not planned. I feel, in the circumstances, that we ought to give them the benefit of the doubt. At the same time, I feel that if we treat them with this generosity, we are entitled to get from them some indication of their attitude to the small 660 trader in particular, and to distribution in general.
§ I hope when the noble Lord comes to reply he will be able to tell me that in future the policy of the Government will be to assist the small man, and to make the existing system work rather than to attempt one more reorganisation of our economic system. I know it is argued that the existing system is wasteful in man-power and extravagant in operation, but I do not find this generalisation any more convincing than a great many other generalisations which I have heard. Of course, no system is perfect, and it may well be that there are individual cases of exploitation which merit investigation and appropriate action. But individual cases do not condemn a system. I suggest to the Government, with great respect, that if they are really anxious to save man-power and reduce prices, there are many more obvious fields in which they might try their hands.
§ For example, consider the vast bureaucracy which they have set up; consider the waste of industrial and commercial man-power in operating the innumerable controls, and consider the expense to the consumer of bulk purchase and the high losses incurred by, and the high prices demanded by, the nationalised industries. Are these extravagances to be left untouched for problematical economy in distribution? Nor is price the only factor; convenience and consumers' choice are matters of great importance. To achieve such service the wholesaler and retailer have to take risks. Surely they are entitled to some reward. Undoubtedly, if a number of retail shops were amalgamated into large units it might be cheaper; but many consumers would be further away from essential sources of supply. Again, if everybody were compelled to wear the same clothes, eat the same food and use the same utensils and furniture, it would be cheaper. But, in that case, I would suggest that the Government hand over to Mr. Harry Pollitt right away.
§ I hope that in replying the noble Lord will be able to repudiate the views of the Party extremists and to say that the Government intend to encourage the small man. I hope it will be possible to take immediate steps to remedy some of the evils to which I have drawn attention 661 this afternoon, and, in particular, the evil system of purchase tax—which I think should be abolished or, at least, the unjust method of its collection should be. I should like to see the introduction of some system of tax allowances which will take into account the small trader's capital expenses. Finally, I would like to see the abolition of clothes rationing, which, I understand, was recommended to the Minister as long ago as November last.
§ In conclusion, I wish to say this. If the Government do the things which I have suggested, I feel sure they will strengthen not only the economic but the moral and social structure of our country. There is much talk to-day of democracy and freedom. I believe that in many ways fewer people are really free. There is a tendency for the concentration of industry and commerce into ever larger unions. The Government have done their best to accelerate this tendency by creating new monopolies at the rate of rather more than one a year. It may be that these processes are the inevitable result of the industrial and technical advances of modern times. But, inevitable or not, I cannot believe that the social results are desirable, or that further concentration should be encouraged unless it is absolutely inevitable and necessary. More and more people are becoming dependent upon somebody else, not only for their living but also for their homes, their food, their clothes and their education.
§ This increasing dependence seems to me to weaken the qualities which spring from freedom alone—the qualities of independence, initiative, thrift, courage and responsibility. As a nation we have owed much to those qualities in the past, and I cannot believe that in the future we can hope to survive without them. These are the qualities which are perhaps particularly those of the small trader. I feel, therefore, that it is a matter of national importance that one field, at any rate, in our economic life should be left where the small trader can operate and where men of initiative and character can start up on their own. Napoleon called us "a nation of shopkeepers." Perhaps we were: but is not that precisely the reason why we eventually defeated Napoleon? Again, let us remember that it was the small 662 man who made possible the miracle of Dunkirk. I beg to move for Papers.
§ 4.32 p.m.
THE MARQUESS OF READING
My Lords, there will be general assent to the proposition that this has been a valuable and a timely Motion, and we on these Benches certainly desire to associate ourselves with it. We have always endeavoured to support the cause of the small man, and I hope we shall continue to do so until such time as the Marxian millennium has annihilated him. I hope that in replying to this Motion the Government may see fit to give us some general indication of their policy—if there be one—in regard to this important subject, for not only would your Lordships welcome a clarification of their views, but I am certain that many thousands of small traders would be glad at this stage to have their profound anxieties and apprehensions either relieved or confirmed.
There have in the past been many attempts by psychologists, sociologists, and even by politicians, to classify mankind. Perhaps one division which would receive a fairly general acceptance would be a division into masters and servants. I would not be misunderstood: I do not mean a slave State, in which all the commissars come first and the rest nowhere. But I mean that there are many men who, by temperament, prefer to be servants, often at high altitude—leading servants of the State, of great corporations or of vast institutions, but none the less servants—whereas there are others who constitutionally are prepared to remain in the foothills, providing always that they can be their own masters. It is from that latter class that the great bulk of the small traders of this country are, drawn. It is often said nowadays that they are uneconomic, and the epithet "uneconomic" on this side of the Iron Curtain is regarded as more or less the equivalent of "bourgeois" on the other side. Yet they form a most valuable section of the community, for they are people, who, as regards the great mass of them, possess qualities of enterprise, of tenacity and of independence.
Those may be middle-class virtues, but at the same time we know now, from the recent panegyrics of the Lord President of the Council, that the middle class possess almost as many virtues as they do votes. Yet 663 it was just this class of persons, the small shopkeeper, who suffered perhaps more acutely during the years of the war than any other section of the populace. The man was called up into the Forces, possibly, after a period of deferment; the woman, perhaps, making an effort to carry on the business for a time and then finding herself in a factory, and the business perhaps brought to a standstill, if not actually destroyed, by enemy action. When he came out there was no Reinstatement Act to put him back into the position that he had held in employment before the war. He had to start again, with no premises, no stock; and in the interval the value of the kind of site that he wanted for a shop had mounted to a height which made any such sum as he was likely to receive as gratuity totally unable to cope with the problem of establishing himself afresh.
The wonder is that so many of these small men did manage, in spite of all those handicaps, somehow to reassert themselves and to re-establish themselves in business on their return. Surely that is a potent indication that there is for these people, in the life of this country, a sure and definite niche. There are some amongst them, and perhaps more outside their ranks, who lean occasionally towards the perpetuation of the policy whereby methods of restriction shall be applied: that in a particular area there shall be only so many greengrocers, so many chemists, so many butchers or whatever it may be. I cannot but think that those who support that view are mistaken. It may be that shopping is rationed, but that seems to me no reason why shops should be rationed. It may be that you cannot buy what you want, but you might at least buy where you want. The spectacle of Whitehall allocating greengrocers to Blackpool may have merits as a colour scheme, but it seems to me to have little else to recommend it.
It is true, of course, that in the years before the war these small traders were peculiarly vulnerable in times of economic depression; but the small man was not the only person who foundered during those days. Of course, it is easier for the big concern to close down a few of its unprofitable branches, or to draw for a time upon its reserves. The small man 664 has no branches, and he is unlikely to have much in the way of reserves; and therefore in a time which it was then the fashion to call an economic blizzard he is prone to perish. The fact remains that people in this country, or many of them, like buying from small shops. Many of your Lordships know small areas, even in the heart of London, where something of the atmosphere of the village is still retained and where there are small, almost "village," general shops to which people go because they enjoy going there—an action which is, of course, very anti-social and unregenerate, but they continue to do so. There is a certain satisfaction in going into a shop where one is known to the shopkeeper and where one's wants are known and catered for. On the other hand, there is very little satisfaction to be obtained from dropping into Selfridge's, or Harrods, for a few minutes' heartening gossip during the morning round. Therefore, there remains constant this desire for the small shop. It may be bad planning, but it is pleasant shopping.
Reference to planning brings my attention to another aspect. I have tried to follow by plans, by maps and by models, many of these designs for the Gardens of Eden (perhaps, in order to avoid political recrimination, I ought to call them "Gardens of Silkin") which are about to spring up over the country. I cannot help wondering whether, in these designs, any real provision is made for the retention of the small shopkeeper as such. When I study these various things, I see that at recurrent—I sometimes think too infrequently recurrent—intervals, there are on these plans the rather intimidating words "Shopping centre." I sometimes wonder whether some of those who are busily designing these new places have in mind a shopping centre consisting only of plate glass and chromium steel, with an ant-heap of flats above. That is not what many people regard as a shopping centre; it is a place where the multiple shops and the general stores may well be able to accommodate themselves, but it is far outside the scope of the small man.
Is it too much to expect that in these new towns there will be areas, separate from the main and more grandiose centre, where people can still perform the operation known as "running round the corner to get something"? Too 665 many of these big shopping centres would appear from the evidence of the maps of these towns to be at an unreasonable distance from the homes of the smaller people who will have to live there. Moreover, one wonders whether it is the intention to confine shopping centres and other arrangements for shopkeeping to the lock-up shop, or whether there is to be provision for the man who wants to live over his shop, and who does not want to incur the transport costs of going to and from his business, perhaps once or twice a day. I think it is true to say that there is something very attractive about the atmosphere of a shop which, when you go into it, discloses a parlour beyond and the life of a family going on. It is preferable to merely going into a lock-up shop which has nothing behind it but a store, which may or may not contain anything, according to whether or not the ration supplies have arrived.
These points need looking at with care when new towns are being developed. The small man has much to contend with in these days. He has the present rating system, which may later require overhaul; he has difficulties in regard to arrangements in restraint of trade; he has the competition of the co-operative societies, and the competition of municipal trading. Let those in whose eyes size is the only merit reflect sometimes that the majority of these great stores that have come into being, here and elsewhere in the world, have in many, if not in most, cases sprung from one humble shop, started years ago by a man of vision and energy. And let them not be in too great a hurry to eliminate the small trader from the society of the future. If he is suffered to survive, the country as a whole, in ways not only tangible but intangible, will be the richer for his survival.
§ 4.47 p.m.
§ LORD WILLIAMS
My Lords, I welcome the opportunity of taking part in this debate, and I should like to make early reference, if I may, to the Annual Abstract of Statistics, which was quoted by the noble Lord, Lord Lloyd. Unfortunately, in the Abstract of Statistics they have departed from the classification which they laid down in 1940, inasmuch as they have excluded all retail shops that are not dealing in sugar; all shops with no sugar registrations are, so far as 666 the grocery and provision sides are concerned, excluded from the figures. In the year 1947 those shops numbered no less than 19,000. Tea shops were also excluded; by that I mean shops dealing by way of speciality in the sale of tea and coffee. Nearly 24,000 of these did not appear in the figures of the year 1947. Had the noble Lord quoted a figure for 1940 the comparison would have been much worse than it was, because in 1940 there were 166,900 independent retailers—that is, on the grocery and provision side—whereas in 1947 the figure had dropped to 120,400. The difference, in my opinion, is due to the fact that all those shops that had less than twenty-five sugar registrations ceased to be able to supply sugar, and they have been excluded from this particular figure.
In order to confirm my impression I should like to give your Lordships percentages of sugar registrations of the multiples, the co-operatives and the independent retailers. Taking the year 1940 as the basis, the multiples had 24 per cent. of the sugar registrations, the co-operatives 28 per cent. and the independent retailers 48 per cent. In 1947, out of sugar registrations totalling 46,891,000 the multiples held 21.4 per cent., the co-operatives 26.5 per cent. and the independent retailers 52.1 per cent. As compared with the year 1940, therefore, the independent retailers had improved their position to the extent of 4.1 per cent.
I am not going to enter into the general argument regarding the merits or demerits of the small trader. Suffice it to say that the small trader for the last hundred years has occupied an important position in the distributive economy of the country. My own opinion is that he will continue to play an important part in the distributive economy of the country, but I think it is essential, in his own interests, that the small trader should try to rationalise himself; because, unless we are to get efficiency from the small trader, he will cease to exist. We hear from time to time that, so far as nationalised industries are concerned, one of the essentials is that of efficiency. I do not quarrel with that. I think it is essential that there should be efficiency. But we cannot restrict efficiency merely to one form of industry. It has to apply to every branch of industry, whether it is nationalised, and whether it is distributive.
667 In that connection, I would like to draw the attention of your Lordships' House to an extract from the Grocer dated April 18, 1942. It deals with a speech that was given by Mr. C. P. Houghton, who at that time was the head of the Wholesale and Retail Section of the Ministry of Food. He was dealing with the question of sector distribution. This is what it said:Mr. Houghton said one of the most uneconomic forms of trading was the supply of small parcels of goods transported long distances from different sources. Out of a random sample of fifty-seven retail shops, they found that the average number of wholesalers per shop was 6.9 and the number of manufacturers supplying the average shop"—that is, of the 57 samples—was 33.6. Of a larger retail shop with 1,480 registrations the retailer had twenty-four wholesalers and ninety-nine manufacturers. Another retailer with 600 registrations had ten wholesalers and sixty manufacturers supplying him.Whether we like it or not, one has to accept the position that there is need for some form of rationalisation so far as those particular distributors are concerned.
One would have imagined from the speech of the noble Lord that nearly all the small traders were going out of existence because of the competition of the co-operatives and the multiples. In the case of grocery, provisions and general, the multiples in 1940 had 15,000 shops; in 1947 they had grown to 15,300 shops. In 1940, the co-operatives had 9,500 shops, and that number had grown by 1947 to 10,300. When we come to butchery establishments—again, small traders operate in that particular branch of foodstuffs—we find that the multiples had 10,448 shops and the co-operatives 5,420, while the independent retailers had 29,317. The trade of the multiples per shop was £95 per week, and of the co-operatives £85 per week, while the independent retailers, who are the small people, were able to do a trade of £64 per week.
When we turn to another branch of the trade into which small people enter more frequently than into any other branch—that is, the sale of sugar confectionery and chocolate—there is really an interesting story to tell. On the grocery side, where they sell sugar confectionery and chocolate, the multiples had 7,760 668 outlets, and the co-operatives 8,193, while the independent grocers had outlets numbering 108,981. In the case of sugar confectionery shops proper, including tobacconists and newsagents—and anybody who has a little capital and does not know very much about business generally wants to buy that particular type of business because he thinks it is easy to run—the multiples had 3,111 outlets, the co-operatives none, and the independents 91,406. If you take a combination of those selling points of confectionery and chocolate, you find that the multiples had 4.8 per cent. and the co-operatives 3.62 per cent., while the independents had 90.69 per cent. My noble friend will agree that, on that account at any rate, there is not very much competition with the co-operatives.
I was glad to hear the noble Lord say that he was not interested in the question of taxing the dividends of the co-operative societies, but there are some people who are very anxious to do that. I should like to present to your Lordships' House a point of view which is often ignored in a consideration of this subject. It is that, if there were taxation of the co-operative dividend, the co-operatives could avoid payment of that tax by reducing their prices after allowing for costs of distribution. In the year 1947, the co-operatives distributed £39,500,000 by way of dividend on purchases. That represented roughly 8.92 per cent. of turnover. The national retail trade (excluding alcoholic beverages) was £3,743,000,000, and if all the shops had a return on their trade similar to that of the co-operatives, there would have been a surplus of £294,000,000. It is a very simple question to ask, What would have been the effect on the small trader if co-operatives had cut their prices by 8.93 per cent.? If the small traders had had to follow, there would have been no surplus available for them to carry on their businesses, and therefore no return upon them.
May I, for a moment, deal with one other point raised by the noble Lord—the question of the allocation of poultry, rabbits and sugar over Christmas. Incidentally, the Minister of Food, in deciding upon a new allocation, did a vast amount of good, so far as some of the small traders were concerned. He did it for this reason: that poultry and rabbits had been allocated on the basis 669 of a datum performance. That datum performance related to supplies taken in 1939. The same thing had applied to points goods, such as canned fruits, canned salmon and canned meats. Any small trader who was operating in 1939 and had a small performance in the purchase of those commodities was not able to get any increased allocation, irrespective of the additional registrations which he might have. It is true to say that, as the sugar registrations of the independent retailer increased by 4.1 per cent. in 1947, we secured his additional supplies. When the Minister made the departure from datum he benefited to the same extent as the co-operatives. The only people who suffered were those independents or multiples who had lost sugar registrations.
In the case of rabbits, in spite of the fact that the co-operative movement has about 16 per cent. of the meat registrations of the country, it was allowed only 1½ per cent. of the supplies that came in. The departure made by the Minister gave to the co-operative movement roughly 11½ per cent. against the 1½ per cent., but still left them 4½ per cent. short, based on meat registrations. But that departure of the Minister had this very important effect. Those who were merchants and wholesalers were holding stocks in the hope that when it came to Christmas they would be able to dispose of them on the black market, but once supplies reached co-operative shops they had to give supplies to their own people at prices which were rather less than they had anticipated getting.
In conclusion, may I say that when you talk of small people and the desires of small traders you must not ignore the fact that the co-operatives represent roughly 10,000,000 small people who have subscribed a small amount of capital to enter into business on their own account, and that out of their mutual trade they return to themselves the difference between the costs of distribution and the selling values. Last year there was a distribution of roughly £40,000,000 which represented no less than £4 per membership of the co-operative movement, and that £4 added materially to the value of real wages. I have every sympathy with the small trader, but in putting forward his claims do not let us forget that justice should be meted out to those 10,000,000 people who trade for their mutual benefit.
§ 5.3 p.m.
§ LORD BALFOUR OF INCHRYE
My Lords, I am sure that every member of your Lordships House is grateful to my noble friend Lord Lloyd for having raised this vital subject. I believe I am correct in saying that this is the first occasion either in this House or in another place since the end of the war where the focus of Parliamentary searchlight has been put upon the small trader. It seems to me that we should fairly and reasonably ask ourselves certain questions as regards the small trader. The first is: Is he necessary? The second is: If he is necessary, can he survive? Thirdly, if he is to survive, are there steps which should be taken now in order to help him so to do? I propose, with your Lordships' permission, briefly to examine those three questions.
I submit that his value is very great, and in assessing his value it is worth remembering the pre-war trading figures. We have had many figures this afternoon dealing with the periods before, during and after the war, but the first set I would like to give you are those given for the division of total retail sales in 1939. For my information, always wishing to convince noble Lords opposite that the source of information is good in their eyes, I went to an authority on this subject—a Mr. Hoffmann of the Union of Shop, Distributive and Allied Workers. In 1939, approximately 9 per cent, of the retail trade was done by co-operative stores, 26 per cent, by multiple stores, while independent shops of various kinds, including street traders, did the remaining 65 per cent. With those figures I think we establish at any rate that before the war the small trader played a very large and important part in community life.
As regards his actual service to the community, my noble friend Lord Reading made a moving appeal for recognition of that service. I think it is widely recognised, and it has been well put by the noble Lord, Lord Strabolgi, who unfortunately is not in the House. From the Benches opposite he put the matter clearly during a debate on a Bill dealing with the reinstatement of retail shop premises when he said this:In theory, the big unit, the big chain store, should give better service, but in practice that is not the case. The decent little shopkeeper is usually the man who gives you by far the 671 best, for the simple reason that he depends on good will for his livelihood.My Lords, as my noble friend said, housewives are extremely anti-social as regards the theoretically planned State, where they have to do as they are told, because they insist on continuing with their preference for the "little man round the corner."
The noble Lord, Lord Williams, said that efficient economy of distribution was really, as it were, the test as to whether a system of small traders should or should not be encouraged to survive. He said, "If you on those Benches insist on efficiency and economy in nationalised industries, you must also insist upon it when you put forward your point of view for the survival of the small trader "I think that puts his observation fairly. I have heard so often from those Benches, in regard to losses in nationalised industries, and particularly aviation, the defence that they have such great social importance, and therefore we must not be so small-minded as to look at the pounds, shillings and pence, but must accept the grander conception of value in regard to those industries. I would only say that if the noble Lord, Lord Williams, advances that point of view from that side of the House, we also are entitled to advance it; and I submit that the cost of distribution is not the final and complete test of the value of the small trader. The independent trader preserves competition, because if he "goes to the wall" the retail trade remains to be divided up and fought for between the co-operative stores, the municipal enterprises and the multiple combines.
I believe also that it is good for the commercial vitality of the nation that there should be channels or an opportunity for small men who refuse to become planned cogs, following that perfect blue print of the totally planned England which allows no place for the small trader. One has but to read the literature of the theoretical planners to come to that conclusion. But the individualist insists on opening shops where he thinks there is a need, even though the planned blue print may say it is not necessary. We on this side of the House reject absolutely the point of view which has been put forward by Sir Joseph 672 Hallsworth at the Blackpool Conference of the Union of Shop, Distributive and Allied Workers. He said there:Anyone with sufficient money and impudence can 'crash into' the distributive trades.That seems to me a most reprehensible sentiment to put forward. Since when has a Britisher who is willing to risk his skill and his resources in pioneering his own way of commerce deserved the label "impudent"?
My Lords, I think there is a moral value of the small trader, because he forms a close social contact between the supplier and the consumer. The small trader is a member of his community; he spends his takings in the community. Often he is engaged in local government, and almost certainly he is engaged in the work of the local chamber of trade. He serves his community and he spends his profit locally, whereas the hard-working members of the staffs of multiple shops and co-operative stores are always answerable for policy and profits to some great organisation at the centre. There is a great danger that we may not pay sufficient attention to the question which we have to answer now: Can the small trader survive?
That survival must depend on the Government's attitude and intentions. We have had a reassuring speech from the noble Lord, Lord Williams, who has played such a distinguished part in the Co-operative Movement. He has said, in effect, "Good luck to the small trader if he can survive against the competition which I represent!" But not all speakers in the noble Lord's hierarchy speak with that kind voice. Take the words of Mr. Neil Beaton, who was at the time a leader of the Co-operative Movement, at a Scottish conference during the war. He seemed to me to express what is felt today by many who think the small trader is in danger. After referring to the fact that the co-operative societies hoped to open a shop in every town and village in the Highlands, he said:There is a fight. The small shopkeeper will have to go, whether he likes it or not.Now let us take Mr. Peddy, director of the Hull Co-operative Society. This is what he said:Large-scale monopolies are meaning to get the trade of the small shopkeepers as we are. There are thousands of shops more than are necesary.Next, I invite your Lordships to refer 673 to the most modern document, Problems of Distribution, which has been issued within the last few days by the Co-operative Society. Let us look at paragraphs 20 and 21, on page 23, where the real aim of the Co-operative Society is stated, for all who care to read, as follows:The Co-operative Movement as an organ of voluntary democracy expects that its rôle in a Socialist Britain will be more important than it has been in a capitalist Britain. It should be regarded as a desirable alternative to the rigidity of pattern which is so often a feature of state organisation.That does not look so good, perhaps, from the point of view of anyone interested in municipal trading. The next paragraph says:What the Co-operative Movement has already achieved indicates the use to which it might be put if it were more whole-heartedly supported by other wings of the democratic movement.Small traders can hardly feel reassured, therefore, by the pleasant words of encouragement and toleration spoken to-day by the noble Lord who represents the Co-operative Movement. It seems to be so clearly their wish to put small traders out of business in order to obtain a larger share of the distributive business of this country.
The present position is as the noble Marquess, Lord Reading, has described it. The war and the call-up have closed down thousands of businesses run by independent men, who now have to try to re-start their businesses on far smaller resources than are possessed by the great stores and the co-operatives. The co-operatives and the multiple stores can go to a town, and can afford to buy the best sites. They can afford to establish branches which can trade at a loss, if necessary for several years, in order to get the custom which small shops have enjoyed. In these great organisations the losses of one small local branch are offset by the profits made by many other established branches in other parts of the country. The "big boys"—the co-operatives and the multiple shops—can advertise centrally, and they can give credit facilities which the small man cannot give. Lip service has been paid to the small trader by various Ministers of the present Government—is the noble Lord, Lord Lucas, amused at lip service?
§ LORD BALFOUR OF INCHRYE
I will tell the noble Lord. Mr. Herbert Morrison has spoken of "the rights and freedoms of the lesser firms." Mr. Herbert Morrison is the noble Lord's own "boss," to whom he will have to report if he says anything wrong to-day. This is what Mr. Herbert Morrison has said.There is a great deal to be said for survival of the small firms, of the family undertaking.Mr. Morrison also said that he did not wish to see the individual crushed out. The noble Lord asked me what lip service is being paid. I have just told him. Now that is all to the good. But I ask: Does that view—the view expressed by Mr. Herbert Morrison—really hold sway in his Party generally, or do the Socialist "back-room boys," some of whose statements I have just quoted, really hold power and rule? Do these views on the desirability of individuality surviving in our commerce hold sway, or must traders qualify to some theoretical standard of size and turnover before being allowed to exist?
The political views expressed by Mr. Herbert Morrison sturdily defend individualism, but it is not always so. I look at the words of some others who have taken part in these controversies. In the Sunday Times during the war there was a forum—co-operative societies against the small trader. One who took part in that forum wrote this—I quote his words:There is no reason why a single branch concern with adequate turnover should not be as efficient as individual branches of multiples. Of an estimated total of 750,000 pre-war shops, 90 per cent. independent traders had an average turnover of just over £2,000 per annum. Is that considered a turnover adequate to efficiency?I think it will be agreed on all sides of the House that the writer of that was inferring that anyone who had not a turnover of £2,000 per year could not be efficient, and therefore could not comply with his standard of definition as to what should be allowed to exist. That was written by a gentleman named Mr. George W. Lucas, President of the Motor Agents' Association. It was a contribution to that interesting discussion in the Sunday Times. Mr. George Lucas was putting forward a sort of means test. If you had got £2,000 turnover a year, Mr. Lucas would allow you to continue in business. If you could not accomplish 675 a turnover of £2,000 a year, you could not be efficient, according to Mr. Lucas's standard.
I have quoted what he wrote. To-day, we are to have the privilege of hearing Lord Lucas of Chilworth speak on behalf of the Government. I shall be interested to hear whether Lord Lucas speaks with the voice of Mr. Herbert Morrison, and will express the sentiments of Mr. Herbert Morrison, or whether he will speak with the voice of Mr. George Lucas, President of the Motor Agents' Association. We shall await with great interest what the noble Lord is to say. There are black clouds gathering at the present time over the head of the small man.
The noble Lord, Lord Williams, spoke on the taxation of co-operative societies. I do not want to go into that matter to-day. I would dearly like to have the time and opportunity to debate that subject with him, because in my view and in the view of many others the co-operative societies to-day enjoy advantages of taxation which was never the intention of those who passed the Finance Act which laid down their present taxation position. In those days it was never contemplated that such a large amount of trading would be done at co-operative shops by those who were not members of a society—trading which nevertheless gives a benefit to those who are members when they receive their dividend. A further important concession was made to the co-operative societies in the Finance Act of 1947, which gave them a preferential rate of profit tax—5 per cent. instead of 12½ per cent. And I quote Mr. Glenvil Hall, Financial Secretary to the Treasury in the present Government, when he said that although this applied to all industrial and provident societies, it was the co-operative societies who would be the chief organisations to benefit. All along the line the co-operative societies have an advantage in their taxable position as compared with the private trader.
Now I understand that the T.U.C. at Margate called upon the Government to make an investigation into the distributive trade. My noble friend, Lord Lloyd, dealt with the straws in the wind, and the noble Lord, Lord Williams, tried to blow them away—the straws about Mr. Strachey's allocation of sugar and his allocation of Christmas turkeys. The 676 whole tendency in legislation is to go against the private trader and help the co-operative society. The private trader is penalised under the Town and Country Planning Act. The widow cannot turn her front parlour into a shop without incurring the risk of a development charge. The shopkeeper is in doubt whether he can legally advertise his wares on his own plot of land, because he becomes liable to development charge. Now the nationalised corporations are threatening to go into the retail trade. When the Electricity Act was passing through this House, we protested about certain powers for trading being given to the corporations. To-day the Electricity Area Boards in certain areas are circularising electrical consumers offering to sell lamps on credit, delivered to their doors, although I grant that they are selling them at the retail price. I consider that unfair trading. When it was done by a private electricity company, it was done at risk to the shareholders' money, and the directors were accountable to the shareholders for the result if they lost money. But to-day it is done virtually with public money. Provided the accounts are made to balance over a period of years, the Treasury is perfectly happy—and if the accounts do not balance, the losses have to be made up by the taxpayer.
There is a growth of municipal trading which is a menace to the small shopkeeper. I will cite only one instance, in West London, where a municipality is going into the retail wireless trade and is offering to deliver wireless sets on credit terms. I will give one more instance of this weight against the small trader. The noble Marquess, Lord Reading, talked about the need for preserving sites in new towns where small traders could have shops. There is a tendency for certain Socialist councils to give a preference to co-operative societies over private traders. I would instance Wolverhampton, where the Socialist council allotted the first six sites for shops on a new housing scheme to a co-operative society, and ex-Service men and other traders were informed that applications for the remaining sites would be considered at a later date.
I will conclude by saying that private traders ask for no special advantages; they ask only for a fair opportunity. If 677 the Government declarations, such as that made by Mr. Herbert Morrison, are not just so much "eye-wash" about a year before the election to reassure a section that refuses to be planned, the Government should now declare their recognition of the value to the community of the independent small trader, even the small trader with a turnover of up to £2,000 a year.
I would like to make some suggestions. First, I suggest that there should be short loans on easy terms for re-starting small businesses, with a preference given to ex-Service men; secondly, that new towns should include provision and plans for small shops on the lines pointed out by the noble Marquess, Lord Reading. Thirdly, I suggest that the Government should see that what I might call Left Wing local authorities do not squeeze out independent men in an unfair way, as I have just instanced. Fourthly, I suggest that the present system of rating, whereby a bank in a prominent position in a town may pay less rates on a lower assessment than a small shop, should be reformed, so as to help small businesses. Fifthly, there should be protection for small traders in any projected reductions of purchase tax in forthcoming Budgets. Sixthly, I suggest some reform of taxation. I do not want to go into the controversy about co-operative taxation, but there is a genuine feeling that at the present time the co-operative societies are enjoying an advantage which was never intended, If the Government are really in favour of the small trader, a long-term charter on the lines I have indicated, ensuring his preservation, should be granted. If, on the other hand, the Government do not believe in small traders as an essential and vital part of our community, let them say so, and the small trader will know where he stands.
§ 5.28 p.m.
§ LORD LUCAS OF CHILWORTH
My Lords, although the noble Lord, Lord Lloyd, couched his Motion in terms specific to the small trader, he has widened the discussion until it has covered the whole distributive chain and the space it occupies in the economic life of this country. I gather, in spite of the banter of the noble Lord, that that was his intention. I also gather that beneath that banter there was serious concern on his part, and that he expected from me a serious reply.
678 The noble Lord started by expressing regret that the Socialist Party did not represent the independent trader, and that there was an entire absence of representatives of the co-operative societies on his side of the House. How fortunate the noble Lord is that my noble friend Lord Williams is a director of the Co-operative Wholesale Society, and that I stand at this despatch box as one who before taking upon himself the respectable trade of politics served for years in industrial life as an independent trader—and one, I may tell the noble Lord, who does not take his instructions from some of the gentlemen he has mentioned who sit on the back benches in another place. I was rather taken aback that in his criticism of the large scale trading of co-operative societies, municipalities, and other forms of trading, he made only a fleeting reference to multiple concerns. I wonder whether that was out of consideration for his "lord and master" from whom he takes cinders, the Chairman of the Party of which the noble Lord is such an adornment. I hope the noble Lord will take that shaft from me in the same good humour in which I have taken those directed at myself.
Perhaps it would be as well if I attempted to give a serious reply to this debate—a debate which has contained more irrelevances than I have heard in your Lordships' House for a long time. I will try to place before your Lordships some of the considerations which I think have to form the background in any consideration of the future, and to bring into this peculiar set-up of producer and distributor the one factor which is usually left out of consideration—namely, the consumer. Although the data which has been available for a serious study of this matter is all too scarce, there have been many organisations of repute which have given some thought and consideration to the factors. In this country we have never had a census of distribution. Everyone deplores the fact that the proposed census has had to be postponed. When it is held, it will fill large gaps in our knowledge. However, there have been many surveys and, whatever they have brought forward, they have proved one thing—namely, that the cost of bringing the buyer and seller together is too high, and that the spread between the cost to the producer and the price to the consumer 679 is unjustifiably wide. If no other has emerged, that fact has, and it has been contained in every Report of any Committee or Commission that has studied this problem.
I would remind your Lordships of words contained in the Linlithgow Report, published in 1922. It there says:Distribution costs are a far heavier burden than society will permanently consent to bear,and also that it shouldbe possible to concentrate in the hands of one intermediary the successive functions now performed by several.Even the noble Lord, Lord Woolton, when he occupied the responsible position of Minister of Food, said that the distributive trades were one of the most extravagant and luxurious factors in our national life. And there is no denying this. Before the war, the gentleman referred to by the noble Lord, Lord Balfour of Inchrye, made a study of this question, and I had intended to quote some figures that emerged from that study, of which the noble Lord mentioned one in his speech.
One of the most authoritative investigations and surveys made of this problem before the war was by the National Institute of Economic and Social Research. What did that reveal? It revealed that there were 750,000 retail shops in this country serving goods over a counter—that is, 750,000 retail shops supplying something under 12,000,000 families. The turnover over those counters amounted to approximately £2,600,000,000 per annum. Ten per cent. of the 750,000 shops did 45 per cent. of the turnover, and a simple division sum will show that the total turnover per annum of all those shops was approximately £3,000. If you take the 45 per cent. which the 10 per cent. of the shops did, the average turnover of the remainder was £2,000 per annum. Those are figures which were produced by the National Institute of Economic and Social Research.
The statement to which the noble Lord, Lord Balfour of Inchrye, referred, said that those most competent to judge have stated that the lowest turnover per annum that a food shop could have to maintain a reasonable amount of stock turnover was £4,000 per annum. Those are the figures I quoted in 1944 or 1945, and I 680 quote them again. Your Lordships may draw from them what deductions you like, but there is one deduction which you must draw from them—namely, that one of the troubles of the small retail trader before the war was that he could not get a sufficient turnover to cover adequately the cost of his operations. It is not the Marxian millennium to which the noble Marquess, Lord Reading, referred, of which the small trader has to be afraid; he has to be afraid, if I may use the expression, of the multiplicity of his own kind.
What are the reasons for that growth? The old Adam Smith theory, which the noble Lord and I learned years ago—he more recently than I—was that if you put two grocers into one street where only one had existed before, the competition between those two would give lower prices to the consumer. That was true the day that Adam Smith uttered it, but completely untrue the day that the branded article arrived. The price fixing and price maintenance that has been built up in the retail trade as a consequence of the advent of the branded article has been one of the primary causes for its inefficiency. What happened to my two mythical grocers? They divided the turnover, and then had to have their margins increased. I was surprised that the noble Marquess, Lord Reading, in a contribution to this debate—as usual with the noble Marquess, of a very high standard—did not attack one of the biggest enemies—namely, restrictive practices, which were built up after the arrival of the branded article.
THE MARQUESS OF READING
The noble Lord will forgive me for interrupting. I did not go into it in detail, but I think when he looks back he will realise that I said one of the things the small man had to contend with was the state of law in regard to the restraint of trade.
§ LORD LUCAS OF CHILWORTH
I know that the noble Marquess has on many occasions referred to it. Those are some of the factors. There is another factor to which my noble friend, Lord Williams, referred—namely, the intermediaries who insert themselves between the small trader and the producer, intermediaries who erect their "toll gates" upon the path from producer to retailer serving in many cases little or no economic purpose whatsoever. Those are some 681 of the problems which are militating against the economic existence of the small retailer. I will return to the position of the small retailer later on.
May I now come to some of the specific points raised by the noble Lord? As to the position of the small trader under control, the Location of Retail Businesses Order was revoked in 1946, since when no licence has been required to open a nonfood retail establishment. In businesses of this class no licence for trade is required, except for milk retailers, butchers, and confectioners. I could argue to my own satisfaction, as well as the noble Lord argued the opposite to his, that the lot of the small retailer and shopkeeper is better under controls and rationing than it was before. He has enjoyed what the noble Lord will understand—the "closed shop." He has had his customers tied to him; he has not had to go out and find them, and only at periodical intervals has he had to stand competition in the flow and ebb of retail customers. The noble Lord mentioned retail margins, and said that they were too high in some cases and too low in others.
I do not think I ever said that. What I did say was that some of the retail margins were fixed as far back as 1939, and certainly needed to be examined. What I said further was that retail margins might be perfectly satisfactory if it were merely a question of running costs, but that another factor was the question of capital costs, and that was what made them inadequate.
§ LORD LUCAS OF CHILWORTH
I understood the noble Lord's point precisely, but margins are fixed over the whole range of goods as a percentage of the selling price. As the price rises, the profit rises.
The profit rises, but equally so does the cost of replacing the trader's stock. That is the whole point of my argument.
§ LORD LUCAS OF CHILWORTH
If the noble Lord will bear with me I will deal with all his points—not one will escape. Would the noble Lord tell me how he would like margins fixed? If he fixes a margin at what will remunerate the least efficient unit—and that is how margins are usually fixed—what about the efficient unit? If you fix it at the level which will give adequate coverage 682 to the efficient unit, then the small trader or the inefficient member of the distributing community will go out of business. That is one of the problems of fixing margins. The noble Lord is surely not going to argue that if a margin is fixed which will give a trader with a low turnover a reasonable profit, and he doubles that turnover and therefore doubles his gross profit, his overheads double at the same time?
When the noble Lord comes to the question of purchase tax he has my entire sympathy. That tax is something which bears heavily upon the retailer, and I will not deny it. But a solution to the difficulty has baffled the best brains of the Customs and Excise, the best brains of His Majesty's Treasury and, incidentally, the best brains of the retail associations. It is very easy to talk about rebating purchase tax. All noble Lords are cognisant with the mechanics of this taxation. It is easy to rebate on an easily identifiable article, bat unfortunately the easily identifiable articles are all high priced articles and are usually luxury goods. On the small article, which is lost without trace in the maze of distribution, it is an impossibility. If the noble Lord can succeed in evolving a scheme where all others have failed, I can assure him that it will receive very sympathetic consideration, because we are fully alive to every one of the points he has raised. These matters are easy of arrangement to the satisfaction of the retailer on a seller's market, when prices are rising; but on a buyer's market, when prices are falling, it is a different story entirely. I think my noble friend Lord Williams has adequately answered the noble Lord's points with regard to co-operative society economics. I do not suppose I could ever convince the noble Lord—although I hope to do so before I sit down—but I was not surprised that he did not make much of the hoary old story of the dividend of the co-operative societies being a trading profit and being deduct-able for taxation purposes. The co-operative societies are in no different position from that of the noble Lord. If at the end of the year the noble Lord likes to give all his customers a rebate on their purchases as an inducement to them to buy from him, for taxation purposes he is allowed to charge that against his profit and loss account in exactly the same way as the co-operative societies do. 683 They are in no different position from that of the ordinary trader. The purchase dividend which the member gets is not in effect a dividend; it is a reduction in the price of the goods he has purchased. The dividends on the shares of the co-operative societies are taxed in exactly the same way as all other dividends. The only difference is that they are not taxed at source, but they are returnable for taxation.
The only point that I think worthwhile discussing upon this matter is one which has not been discussed—I was almost going to say for years and years and years. It is the point of recent introduction which was raised by the noble Lord, Lord Balfour of Inchrye, about a co-operative society being taxed at only 10 per cent. to-day on distributed as well as undistributed profits. The reason is that the distributed profits of the co-operative societies are really looked upon as thrift investments. I need not go into the whole question, because the noble Lord knows the story as well as I do. If there is a difference of opinion as to whether it is right or not, I am afraid it will have to remain a difference of opinion. I do not think there is any quarrel between us as to what are the facts. Nor need I go into the other points which the noble Lord raised; I think I have covered the majority of the details.
I would now like to return to an aspect of the problem upon which I think I can make some useful comment, and that is what noble Lords have popularly called the battle between the large and the small trader. I deplore it very much, and I rather thought that the noble Lord only just steered clear of making it a political issue. It is not a political issue, however much noble Lords on the other side may endeavour to make it so because next year happens to be 1950. In any future rationalisation of distribution an effort must be made—and this is where I find myself 100 per cent. in agreement with both noble Lords who have spoken from the other side, and with the noble Marquess, Lord Reading—to create and maintain trading conditions which will give the enterprise and the initiative of the small trader a fair chance of a fair reward. Those conditions have never existed in the past. It is no good noble Lords trying to argue that this is a struggle between the multiple store and 684 the independent trader, or between the large and the small man. The public interest demands that the struggle should be between the efficient and the inefficient unit. There must always be a wide network of distribution if the policy of the dispersal of the population of this country is to be a success. In the last analysis it must be efficiency which wins survival—not whether the trader is a large or a small one. That is in the public interest, and in the consumer's interest; and in the world of the future there will be room for all in their proper sphere. It is efficient service to the consumer which will eventually determine whether or not one succeeds or another fails.
The noble Lord asked me what is the Government's policy? I do not know whether noble Lords expect to get some profound statement from me. The statement I shall make may not be profound but it is, I hope, eminently sensible. The Government's policy is not to return to the economics of laissez faire. On the other hand this Government have no plans for nationalizing the retail trades. They certainly have no intention of driving the small shopkeeper out of business. The aim of this Government is to loosen the grip of those restrictive practices which have gained such a firm hold on the distributive trades, and to maintain conditions in the future in which the more efficient units of distribution, whoever they may be, whether they be large or small, have the opportunity to increase their trade—and, what is even more important, are allowed to pass on to the public the benefits of their efficiency. The national interest demands this. That is the aim and object of His Majesty's Government.
Much has been said about Government controls. But noble Lords have never said what control they would take off. I know that this is a very popular subject; but noble Lords will realise that the overriding responsibility of the Government is the safeguarding of the position of the ordinary man.
§ LORD BALFOUR OF INCHRYE
The noble Lord said we had never made clear what controls we would take off. I should like to make this point, because it is important. We have always said that we would retain controls which ensure fair distribution where shortages exist, but that we would not continue 685 vexatious controls or controls for political purposes. We would take off the control which forbids anyone to have a powder puff made of a piece of material more than four inches square; and the one which forbids anyone to buy a skipping rope longer than 9 ft. 6 in. Those are examples of the stupid controls which, amongst others, we would remove.
§ LORD LUCAS OF CHILWORTH
The first part of the noble Lord's interjection describes exactly His Majesty's Government's policy.
§ LORD LUCAS OF CHILWORTH
The days when I knew anything about skipping ropes are long past; and I have never had any intimate knowledge of the construction of a powder puff.
§ LORD LUCAS OF CHILWORTH
I am not hopeful that the answer which I have given to the noble Lord who raised this matter will satisfy him; but I have tried to be objective and reasonable, and to treat the matter with the seriousness which it deserves.
§ 5.58 p.m.
My Lords, at this late hour it would not be either right or appropriate that I should enter into further argument with the noble Lord who has just sat down, on a subject on which we could probably argue until late in the night. I would like, however, to say how grateful I am to him for the speech he has made and for the way in which he has tried to meet my points. I am sorry to say that I do not think he has met many of them, and I do not feel that when, in a discussion about purchase tax, he asks me to provide a solution, we are getting much further. After all, that is the purpose for which he is on that Bench. However, let that pass. Nor do I feel that he has given me any very clear policy as to what His Majesty's Government intend to do in the future. However, he has given one assurance, which is that the Government do not intend to drive out the small trader, and with that assurance I feel that I must be content. I beg leave to withdraw my Motion.
§ Motion for Papers, by leave, withdrawn.