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“RSA Update”

UTILITY SAVINGS CORPORATION JOINS RSA
"The Rural Shops Alliance is pleased to announce that the Utility Savings Corporation Ltd has taken up RSA Membership. USC are independent utility brokers, who act on behalf of businesses, at no cost to themselves, to identify the cheapest and best energy sources for their particular circumstances.

Alan Taylor, Director of USC said “We look forward to working with the RSA to help rural shopkeepers keep their costs under control. Local retailers are spending an increasing percentage of their income on energy bills, and it has been proven that in many instances, they are paying more than they should be, in some cases up to 50% extra when they are out of contract! USC are therefore delighted to be able to offer them the opportunity to make cost savings which will go directly into increased profitability.”

Ken Parsons, RSA Chief Executive said: "This really is an excellent scheme for rural shopkeepers, and I hope that many will seize this opportunity to review their utility expenditure, at no cost, no commitment, and no risk to themselves."

COSTCUTTER BECOMES OUR LATEST PARTNER
The Rural Shops Alliance is pleased to announce that Costcutter Supermarkets Group Limited have taken up RSA Membership.

Colin Graves, Costcutter Supermarkets Chairman said: "We are delighted to support the Rural Shops Alliance. Many of our stores and customers are to be found in rural locations. Our membership reflects our retailers' aim of being at the heart of their communities."

Trevor West, RSA Chairman, said: "We are delighted to have Costcutter Supermarkets as a Partner. They are one of the UK's leading symbol groups, setting a high standard in community retailing. The Costcutter "Making a Difference Locally" initiative is a great example of this."

WHICH WOULD SCARE TESCO MORE – PEOPLE POWER OR A GROCERY OMBUDSMAN?

“People power can bring about a revolution in the way food is produced and sold” Hilary Benn, Environment Secretary, at the Oxford Farming Conference

The Rural Shops Alliance frequently makes the point that government is generally very bad at joined up thinking. However, even by their normal standards the recent pronouncement from the Environment Secretary, Hilary Benn, that Britain must grow more of its own food, ignored inconvenient but key decisions faced by other government departments.

For years the supermarkets have used their excessive market power to drive down farm gate prices for food. The recent Competition Commission report on the grocery industry took as a basic part of its brief that low prices for consumers were what mattered. Competition was about having more than one supermarket shed in a town, even if it meant only one cowshed per county. It did nothing to preserve a diverse and viable farm industry – not part of the brief. And the idea that competition might mean specialist butchers, greengrocers, farm shops, farmers markets and village shops, all able to sell local produce from smaller producers, did not even get beyond the silage pit in their thinking - not part of the brief.

Even their very weak recommendations, including the appointment of an ombudsman to help suppliers get a fair deal from their supermarket customers, have been effectively stalled for a couple of years. It would seem that in government thinking, keeping food price inflation artificially low has had a higher priority than providing a fair deal to farmers or small food retailers.

Ken Parsons, Chief Executive of the RSA, commented,
“Hilary Benn has said that “people power” can now “help bring about a revolution in the way food is produced and sold”. The fact of the matter is that the Environment Secretary can huff and puff till the cows go to slaughter, but unless the government gets serious about taking on the big supermarkets, with their 80% market share, nothing is going to happen.

The reality is that if we are going to produce significantly more food in the UK, we have to make it economic for growers of whatever size to expand output, and for a wider range of retailers to sell it. That means paying them a reasonable rate of return. The RSA welcomes Hilary Benn’s statement, but we now expect him to put his fine words into practice by preventing the supermarkets from abusing their market power. This will involve him working with his colleagues in government to appointment an ombudsman to rebalance the relationship between the big supermarkets and their suppliers. We note that Nick Herbert, the conservative shadow environment secretary, supports this approach, but this is not something to park until after the election – this is a decision for now – and we call on Mr Benn to put his fine words into action”.

THE SUSTAINABLE COMMUNITIES ACT – THE RSA SHOWS THE WAY
The RSA has been fully committed to making this revolutionary piece of legislation work for local shops. The Act provides a “bottom-up” approach to government, giving local people the chance to put forward ideas to local councils for submission to the Local Government Association (LGA), which is acting as gatekeeper to the scheme. The RSA was very active in promoting our ideas to help rural businesses and our submission is one of these that have passed the first hurdle and will be considered by the LGA.

We are delighted that the RSA’s proposal, to get central government funding for local authorities to set up local schemes to improve support for rural pubs and shops, has gone forward to the next stage for consideration. We really hope that the LGA and then central government will recognise the importance of this issue and see the value of our proposals, In addition to our own submission, there are also a number of other proposals on the list that could help smaller shops, including support for Post Office branches and ideas to reduce business rates. We very much hope that this new Act will actually work to help communities retain their local shops, pubs and post offices.
There is a long way to go, but at least we have overcome the first hurdle.

You can see all the proposals that have gone forward on the Local Government Association’s website: www.lga.gov.uk

GOVERNMENT THREAT TO RURAL PETROL STATIONS
In 1973 there were 33,000 petrol stations in the U.K., today there are only about 9,000 such outlets. This massive decline has seen the disappearance of most rural forecourts, driven out of the market by the very low profit margins on fuel sales and the very high costs of maintaining a safe and environmentally sound site. As a result, there are many rural parts of the country where the nearest petrol station is many miles away, whilst many even quite large market towns now depend on only one outlet.

Ken Parsons, Chief Executive, said, “The 2010 business rates revaluation is the latest threat to rural forecourts, with many of them facing a massive increase in their rates bill. Now that the problem has been brought to the attention of government ministers we expect them to respond – these new rateable values do not come into effect until April and they do have time to act. Rather than impose higher costs on independent forecourt operators, they should actually be encouraging them. The Scottish Parliament has provided grants and other help to maintain petrol stations in their rural areas. This approach could at least halt further closures in England and make sure that rural residents are able to buy fuel without travelling many miles to do so, at significant wasted cost to themselves and to the environment. However, at the moment it seems that we are set to accelerate the closure of petrol stations through the tax system, yet another example of government actions having unintended consequences on rural areas.”

This is a particular issue for the 6,000 or so independently run sites. The decision to base the revised rateable values on turnover is perverse. Sales can seem very high, with petrol at over £1 per litre, but the profit on that litre is usually only a couple of pence. When bought together, a bag of sweets can deliver as much profit as the tank of petrol. A forecourt business with a turnover of a million pounds a year can end up with just a few thousand pounds declared profit. Higher business rates could eat a significant hole in this limited return. Transition relief may help, but ultimately the bill will have to be paid.