The problems with planning, business rates, excise duty and card payments were spelt out in no uncertain terms as key concerns of the fuel retailing sector at the recent Regeneration Forum hosted by the Petrol Retailers’ Association, and organised in conjunction with the Department of Energy and Climate Change.
In a dogged and continuing effort to ensure the voice of the forecourt trader is heard in the right places, invitations had been sent to government ministers, MPs, senior government officials, leading industrialists, representatives from city institutions, police authorities, the Office of Fair Trading and the Valuation Office.
Michael Fallon MP, the Minister for Energy and Business, was the keynote speaker: "The fuel retail market is extremely important given the dependency of businesses and individuals on their vehicles to get around," he said, as he welcomed the opportunity to hear retailer views on the challenges they face and what they think the government can do to support them.
"The scale of the petrol retailing sector is very impressive in 2011 the market was estimated at £47bn. It is extremely efficient but enjoys very low margins. I’m aware the number of petrol stations in the UK has been declining for the past 40 years. I’m also very much aware that it is the smaller, independent petrol stations that have borne the brunt of those closures."
He talked about the recent Deloitte report on the forecourt sector which showed that despite the closures, the changes had not significantly impacted on the UK’s resilience to supply disruptions: "We’re not complacent about this, we continue to keep a very close eye on market developments. Athough the rate of closure has reduced in the past five years, I think it’s right we consider what government and industry can do to encourage further investment into this sector. Having a resilient downstream sector is extremely important and that was brought into very sharp focus with the recent developments at Grangemouth. We are determined to learn the further lessons from the potential closure of the Grangemouth refinery, for the resilience of the sector as a whole." He said the government would be factoring in those lessons in its review of UK refineries, due in the New Year.
The current government has a number of strategies for growth, explained Fallon, particularly for smaller businesses: He spoke of steadily reducing the regulatory burden, and trying to improve the enforcement of regulation; creating a more competitive, simpler and more stable tax system, and continuing to help SMEs reduce the cost of taking on staff, by giving every business a £2,000 tax cut with the new employment allowance that will apply from next April. He said the government would continue to reduce the main corporation tax rates, and to simplify the way businesses deal with their tax; it has also postponed the business rates revaluation that was due in 2015 in order to avoid very sharp changes in business rates of up to 28%.
Fallon spoke of giving local councils new powers to levy local business rate discounts, and said the government was also taking action to improve competition in the card market the European Commission in Brussels has published a proposed regulation that caps the level of interchange fees that can be applied to card payments.
Fallon said the government was committed to ensuring that the planning system does everything it can to support sustainable, economic growth: "We want planning to encourage and not to act as an impediment to sustainable growth," he stressed. On the subject of pump prices, he said he understood the impact that high pump prices have on the cost of living and on the cost of doing business: "In the last Budget we cancelled the fuel duty increase due in September, and we have now cancelled the September 2014 duty increase. Taken together that means fuel duty will have been frozen for four-and-a-half years the longest duty freeze for more than 20 years. He also spoke about high pump prices in rural areas and the government’s application to the Commission for an extension of the rural fuel rebate to selected towns on the mainland, seeking up to a 5ppl cut in fuel duty for petrol stations in those designated areas.
"Small firms and independent retailers are at the heart of local economies and supporting them will help our economy grow, so I do understand your concerns about the competitiveness and the resilience of the retail fuels market," concluded Fallon.
Questions came thick and fast from fuel retailers including Peter Brough from Manor Service Stations about the implementation of the duty deferment scheme (see News Extra on page 10); while Hugh Fraser of Fraser Retail and Steve Highland of Bluntisham Service Station, asked about business rates.
Steve rebuilt a rural service station in 2008: "My valuation went up from £20,000 to £120,000 a three-and-a- half-fold increase. How does the government think a rural business like mine is going to pay that sort of increase?" he asked the Minister.
Jet dealer Mike Garner posed a question about current planning laws: "Supermarkets are required to submit a retail impact assessment as part of the planning process to justify their existence. However, the forecourt element of that assessment is excluded, despite the fact supermarkets have decimated traditional forecourt business. Should the forecourt element be included in that assessment?" he asked. Brian Tew of Simon Smith Retail spoke of supermarkets making "wild claims" about the creation of employment when putting in their planning applications. "Shouldn’t the planning department be looking more closely at the impact on jobs of small businesses closing following the opening of supermarkets?" This led to a wider discussion during which PRA chairman Brian Madderson called for a national policy statement for petrol retailers, which would go hand in hand with the new national planning policy framework. Steve Rodell, director and head of retail at Christie & Co, spoke of the services provided predominantly by independent forecourts compared to supermarkets: "In the fullness of time, if we continue to allow the development of supermarkets which have very limited services for the community, we will end up with the situation where the services provided by independents, such as sites with HGV lanes, red diesel and so on will disappear." Other strong presentations came from Adam Wadlow of Barber Wadlow on the inequity of petrol filling station rateable values; Alan Powell of Alan Powell Associates on fuel duty deferment; Gordon Balmer on card payments; with an overview of the market presented by Tim Jones of TW Jones Downstream Consulting. Sarah Rhodes, head of energy resilience at DECC later joined the panel.
While answers by the Minister to many of the questions may have been unsatisfactory since they were beyond his remit Fallon did agree with the suggestion made by Fraser Duffin, the former property manager at MRH, of the formation of a cross-departmental working group: "Brian Madderson goes round in circles trying to get meetings with different departments," he stressed. "We need a working group where we can discuss our concerns and have all the decision makers in one room.
"After all, our future lies in their hands."