City of London (Various Powers) Bill [HL]

Baroness Wilcox Excerpts

Thursday 28th April 2011 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)]

My Lords, I have listened with interest to the debate this afternoon. Having learnt about noble Lords’ views on this Bill I am pleased, as my department’s representative in the House, to respond to this debate on the Government’s behalf. My noble friend Lord Brooke of Sutton Mandeville brought history alive and put flesh on the bones of his Bill, my noble friend Lord Lucas encouraged the use of little opportunities to start little businesses for the future, and my noble friend Lord Palmer of Childs Hill talked about clutter and ice creams and the City of London as a showcase of renown. Then the noble Lord, Lord Myners, leapt into the gap with his support, as did the noble Lord, Lord Young, in whose time this all started.

I am happy to respond to my noble friend Lord Lucas by committing to take forward the response to the consultation on street trading and pedlary. I generally support his call for more local product sales. We are committed to following on from the recommendations from the consultation on pedlary as soon as possible and are hoping to consult on specific measures by the end of this year.

As your Lordships know, this is a private Bill and therefore one that traditionally the Government neither support nor oppose unless for some reason it contains provisions that are contrary to public policy—in which case, I understand, it is the Government’s role to bring such matters to the attention of the House. The House will be aware that in January I reported favourably on the assessment carried out by the promoters of the Bill of its compatibility with the European Convention on Human Rights. My department has now had a further opportunity to consider the content of the Bill, and I take this opportunity to report to the House that certain elements of it give cause for concern as to their compatibility with the provisions of the European Union services directive, should the Bill progress.

Of prime interest to my responsibilities are the proposed amendments to allow the City to license temporarily a wider range of street traders than it currently does. This Bill has emerged against the background of the Government’s work to assess the need to change and modernise street trader and pedlar licensing and certification. Some of your Lordships will be aware that the Government have recently published their response to a detailed consultation that draws on the views of stakeholders involved in street trading and pedlary legislation in the United Kingdom. In addition to reflecting on the views of stakeholders who responded, it had also become necessary for my department to consider the impact of the European services directive on authorisation schemes such as the licensing of street traders and the certification of pedlars.

As retailers of goods are deemed to be service providers within the scope of the directive, limitations on their activities in the form of authorisation schemes must be justifiable within the terms of the directive. They must be justifiable in respect of both service providers that are already established in the UK and those from other member states that might wish to provide services on a temporary basis within the UK—maybe even making ice cream. The Government’s response sets out our analysis of the effects of the application of the services directive to retail services and these authorisation schemes. It concludes that we must make some changes to ensure compliance with the directive.

I shall take this opportunity to outline our main proposals. There are a number of changes that we consider necessary, and we intend to consult on draft regulations to implement them later in the year. The areas for consultation are: the amendment of parts of the existing street trading licensing regimes to bring them into line with the directive; repeal of the Pedlars Acts and the certification of pedlars as a deregulatory measure; and the removal of provisions in private or local Acts and in devolved regimes that make certain pedlars subject to street trading regimes, which is also a deregulatory measure.

To ensure the continued freedom of pedlars to trade, and to prevent reregulation by another route, we intend to amend the current general exemption from street trading regulation for certified pedlars by more clearly defining the exempted mode of trade. This should ensure that pedlars are generally free to trade and are not subject to the street trading regime. This should also aid local authority enforcement of illegal street trading by enabling local authorities to establish more quickly when traders are not trading as pedlars.

The full publication, which is available on the BIS website and in the House Library, sets out our proposals for change and our general analysis of the effects of the services directive in more detail than I can give today in the context of this debate. I hope that noble Lords will choose to take some time to look at the response document, and at the consultation document when that is published later.

My noble friend Lord Brooke mentioned the European services directive, and I address that now. I mentioned that the Bill gives rise to some concern about compatibility with the services directive, and I shall outline briefly what those elements are. All local authorities that seek to apply authorisation schemes on street traders will already be aware that they must do so in accordance with the provisions of the directive, as implemented in the UK by the Provision of Services Regulations 2009. Where there are provisions in existing regimes that might be applied in a way that is not compatible with the directive, it is for the local authority to ensure that they are not so applied.

In general, authorisation schemes and specific elements of them must be justifiable in their application to service providers already established in the UK, and in their application to those who wish to provide their services on a temporary basis in the UK. In respect of those established in the UK, authorisation schemes, and the specific elements of them, need to be shown to be non-discriminatory and necessary because of overriding reasons related to the public interest. It also needs to be shown that the objectives cannot be met by less restrictive means—that is, that they are proportionate.

In respect of authorisation schemes that apply to temporary providers from other member states—for example, those who might come to the UK to test the market here—the grounds on which such authorisation schemes can be justified are much more limited. Local authorities need to show that the application of such schemes can be justified based on one of only four available grounds: public policy, public security, public health or the protection of the environment. The application of such a scheme must also be non-discriminatory and proportionate. In this context, our view is that the most likely available justification to local authorities will be that of public safety, where such a case can be established. This fundamental difference in available justifications in respect of established and temporary service providers has led the Government to conclude, in our work on the national street trader regime, that it is probably necessary, at least in part, to have a regime that treats each one differently where necessary.

As to the current Bill, our concerns relate to the elements that might not be able to be applied in a way that is compatible with the directive. Clause 3 contains proposals whereby the City would be able to grant temporary licences to trade for up to a maximum of 21 days. Time limitations on authorisation are not banned by the directive, but they must be justifiable in respect of established service providers and temporary providers. It is not clear in the Bill that it is possible to justify such a limit in all cases. The promoters’ stated purpose for these licences—that the intention is to permit trading only in respect of short-term properly defined events—might aid them in framing a justification for these limitations or perhaps in better framing the restriction, but further consideration is necessary.

The second element of the Bill that I would draw to the attention of the House is that concerning the fees chargeable to temporary licence applicants in Clause 3. This provision allows the City to charge such fees as it may determine to cover the reasonable administrative costs or other costs incurred by the Corporation in connection with its functions. However, the directive limits the charges payable under an authorisation scheme, providing that they must be proportionate to the cost of administering such a scheme. They should not in any event exceed that cost. Although strictly speaking the Corporation is not therefore allowed to charge more in respect of an authorisation scheme than is permitted by the directive, noble Lords might consider, for reasons of legal clarity, whether this should be put beyond doubt in the Bill.

The final element of the Bill that I should mention is Clause 9, which relates to permitting the sale of ice cream, using an approved container, outside premises. One effect of this approval system, as currently presented in the Bill, is to permit only occupiers of premises within the City to sell ice cream on the street, albeit within 11 metres of those premises. This, in the view of my department, is likely to be considered indirectly discriminatory against temporary service providers who, by definition, have no established premises in the United Kingdom. The directive prohibits measures that are discriminatory, either directly or indirectly. We suggest that the promoters should rethink these provisions in relation to temporary service providers.

Noble Lords will have noted that the coalition Government want to see all retail businesses, including those operated by licensed street traders, thrive over the coming months as the United Kingdom economy grows. We applaud measures that are good for business and encourage entrepreneurship at all levels. Extending opportunities to licensed traders in the City of London is certainly aligned with the Government’s desire to encourage opportunities for growth. We do not believe that the issues mentioned above are by any means insurmountable.

I am pleased that there has been much of interest in this debate, and to have been able to make a contribution from the Government’s perspective. I know that noble Lords are far-sighted and might recognise that the contents of this Private Member’s Bill not only reflect issues of interest to the residents of and visitors to the City of London but lead us to reflect on the wider developments in street trading and pedlary policy, which will be part of my department’s work into the summer. I hope all stakeholders with an interest in these areas—noble Lords and interested Members of the other place who have been active in the consideration of other private street trading Bills—will choose to get involved in shaping that future landscape. We can all play our part in helping to achieve the large-scale regrowth of the economy, which in a localised way the promoters of the City of London Bill would apparently like to see achieved on a smaller scale within their authority.