STREET TRADING AND PEDLAR LAWS A joint consultation on modernising Street Trading and Pedlar Legislation, and on draft guidance on the current regime - Government Response MARCH 2011 Government Response: A joint consultation on modernising Street Trading and Pedlar Legislation, and on draft guidance on the current regime Contents Executive Summary.........................................................................................................................3 Introduction ......................................................................................................................................8 Developments in Interpreting the Application of the Services Directive (2006/123/EC) and Necessary Changes ........................................................................................................................9 Government response to questions...............................................................................................15 Next steps......................................................................................................................................42 Annex A Summary of Responses..................................................................................................43 Statistical analysis of responses....................................................................................................43 Summary of responses to the consultation questions ...................................................................44 Certification Process......................................................................................................................44 Revoking the Pedlars Act and licensing Pedlars under the Local Government (Miscellaneous Provisions) Act 1983 (LG(MP)A) and Civic Government (Scotland) Act 1982 ..............................70 Revoking the Pedlars Act and excluding pedlar activity from street trading regulation except in specific, defined circumstances. ....................................................................................................74 Enforcement ..................................................................................................................................77 Services Directive ........................................................................................................................100 Annex B List of Responders .......................................................................................................109 2 Government Response: A joint consultation on modernising Street Trading and Pedlar Legislation, and on draft guidance on the current regime Executive Summary 1. This document sets out the Government’s response to the joint consultation on modernising street trading and pedlar legislation, and on draft guidance on the current regime. It also details the consequences of our subsequent conclusion that the Services Directive1 applies in general to retail sale of goods, including pedlary and street trading. The consultation took place between 6 November 2009 and 12 February 2010. The consultation document can be found at: http://www.bis.gov.uk/Consultations/street- trading-and-pedlary-laws. 2. In the debates on the revival of private Bills being sought by some local authorities in the House of Commons on 5 July 2010 Edward Davey MP the Minister for Employment Relations, Consumer and Postal Affairs made clear the Government’s view of pedlary as a legitimate business activity which in general should be subject to the minimum of restrictions and that the rights of pedlars need to be protected. He also said that a new national framework appeared to be needed if the genuine concerns of local authorities were to be met and to save those with a perceived need to obtain more powers to tackle illegal street trading from having to spend considerable sums on bringing forward private legislation. The Minister also acknowledged that the Government must be mindful of the rules set down in the Services Directive in formulating any future proposals. 3. There are approximately 4000 pedlars in the UK who essentially trade on foot, moving around to customers, carrying their goods. Some use a small means of transporting and displaying their goods. Pedlars are usually sole traders, often selling small novelty items. Licensed street traders, on the other hand, are generally static traders operating in a specific location from a stall selling fruit, clothes, etc. Many licensed street traders operate in street markets, other who operate from vehicles generally do so with the consent of local authorities where the street trader regime has been adopted. 4. It seems clear from the Department’s earlier research, from debates on private bills in both Houses of Parliament and from the responses to the consultation that traders who operate more like street traders who should be licensed rather than pedlars are most likely to be the cause of concern to those local authorities who perceive they have a problem with traders in the street. On the whole it is these traders, who may be certified as pedlars but who do not trade in the way that pedlars should, for example by trading from substantially static positions using large trolleys or display devices, and yet are not licensed by local authorities to trade in the street, which give rise to some local authorities’ desire to see their powers of enforcement extended and pedlars’ activities restricted. Difficulties in establishing that a person certified as a pedlar is not in fact trading as a pedlar seem to be the main stumbling block to efficient enforcement of street trader licensing. 1 Directive 2006/123/EC – OJ L376/36 27.12.2006 3 Services Directive Developments 5. The consultation document set out a variety of possibilities which, while they remain relevant in good part, could not take into account the Government’s revised view on the coverage of the Services Directive. The Government now considers that retail sale of goods should generally be considered a service within the scope of the European Services Directive (this is explained further at paragraph 24 below). This change in interpretation has meant that we have had to consider how the application of the Directive to the retail sale of goods by certified pedlars and licensed street traders impacts on the options consulted on in 2009/10 in relation to the current legislative framework, and what changes are now necessary to ensure compliance with the Directive. 6. Our updated analysis of the provisions of the Services Directive against the authorisation scheme (certification) for pedlars in the Pedlars Acts and the authorisation scheme (licensing and consent) for street traders under the Local Government (Miscellaneous Provisions) Act 1982 and other similar street trader licensing regimes in the UK has resulted in the following general conclusions: i) The certification system for pedlars is untenable (we do not think such a system can be justified within the terms of the directive as it is too restrictive). Not only does the certification regime contain a residency requirement (banned under the directive) but we have no evidence to support the need to impose an authorisation regime based on a test of “good character” (which would be the most significant remaining criterion). We do not therefore think that continuing the certification regime can be justified as acceptable under the Directive. ii) Further, we do not believe pedlars should in general be regulated under other schemes. In other words, the European Services Directive and our preference both suggest we should deregulate pedlary and help pedlars be freer to trade across the UK. iii) Some elements of the street trader licensing regimes are also not, in our view, compatible with the Directive and will need changing. But we believe the principle of street trader licensing and consent is compatible with the Directive in relation to established traders (i.e. traders established in the UK) and temporary providers (i.e. traders established in another EEA state) where it can be justified for each in accordance with the Directive, but it is not in general compatible with the directive to apply such regimes to pedlars. Because the possible grounds in the Directive for justifying the existence of an authorisation regime are more limited for temporary traders than for established traders, we anticipate that two separate street trading licensing regimes may be required - one for temporary traders and one for all other traders. iv) Those of the existing street trader licensing and consent provisions which do not need to be changed to ensure compliance with the Directive must be applied in accordance with the Directive by local authorities. Local authorities throughout the UK are already obliged to act in accordance with the Provision of Services Regulations 2009, which implement the Directive. 4 v) While we believe that pedlary should be looked on favourably in most circumstances, and we have no evidence to suggest that it should not be, there may be a case for providing that local authorities may be able to limit the numbers of pedlars trading in a particular location at particular times, perhaps via a temporary local authorisation scheme, providing that adequate justification can be made out in accordance with the Directive. However, the permissible grounds for justification seem very limited to us. In our view, this means, at least for temporary service providers, probably only for reasons of genuine public safety and where a local authority is