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4 November 2009 - SD/Pedlars Act-BIS justification PDF Print E-mail

 

Government justification for retention of the Pedlars Act.

4 November 2009 by email:

Dear Mr McGerr

You asked for our view on why the Department has concluded that the certification of pedlars of services constitutes an authorisation scheme within the terms of the Services Directive and that that scheme and the requirements on pedlars of services does not comply with the directive.

There are a number of provisions where the Pedlars Act is potentially in conflict with the Services Directive.  These provisions are set out below:

Residency

Section 5(1) of the Pedlars Act 1871 provides that a person applying for a pedlar certificate must have lived in the area in which he is applying for a certificate for a month beforehand.  Such a requirement is prohibited by Article 14(1)(b) of the Services Directive, as it is a residency requirement which would affect pedlars from other Member States more significantly than nationals. We therefore consider that this provision is in conflict with the Services Directive as regards pedlars of services.

Authorisation scheme – established pedlars

It is possible that the requirement for a pedlar established in the UK to have a certificate is an authorisation scheme under Article 9 Services Directive. As set out below, we have considered each provision of Article 9 in turn to consider whether the tests set out can be met.

Article 9(1)(a) - assuming the residency requirement is removed, the requirement to have a certificate and the application process does not discriminate against particular providers in any way.

Article 9(1)(b) – the concept of “overriding reason in the public interest” is described in Article 4(8) as including consumer protection, public security and public safety. In this respect there are a number of reasons why consumer protection or public safety might be at risk if pedlars were not required to have a certificate.  These include, for example, the need for consumers to be able to obtain redress if something goes wrong with the provision of a service and that consumers allowing pedlars into their homes should do so on the basis that the police have checked they are of good character.

However, in relation to sales at the doorstep, other service providers are not required to have a pedlar certificate (e.g. telecommunications or utility suppliers).  In addition, the definition of a pedlar excludes those procuring orders for goods, for example, commercial travellers do not need a pedlar certificate. It may therefore be difficult to argue in such circumstances that a certificate is needed for public security or consumer protection, when there are other providers of services who do not require a certificate. It should be noted, however, that in general doorstep sales of goods and services are also regulated by the Doorstep Selling Directive, implemented in the UK by the “Cancellation of Consumer Contracts made at Home or away from business premises etc Regulations 2008”. This Directive (and Regulations) do not provide for any licensing of doorstep sellers, but do provide the consumer with rights to a cooling-off period and specified information when they purchase goods or services. In turn however, the Regulations do not apply to certain doorstep transactions e.g. those with a contract worth less than £35 so commercial travellers seeking orders for goods costing less than £35 are not regulated under either the Pedlars Act or the Doorstep Selling Regulations. In conclusion, we think that the requirement for an established pedlar to have a certificate may not meet the test of permissibility in Article 9(1)(b), although the arguments are finely balanced.

Article 9(1)(c) – seeks to ensure that the same result cannot be achieved by a less restrictive measure.  We think that the requirement to have a pedlar certificate is a proportionate measure justified by the need to ensure that those with a criminal record are not allowed to sell services on the street and that consumers are able to know who it is that is selling the service so they can seek redress if something goes wrong.

In addition, all authorisation schemes in scope of the Services Directive have to be made compatible with the Point of Single Contact requirement, so that all procedures and formalities can be completed online. This would mean the police would have to be able to process applications electronically. In practice this would require completely new systems to be set up which would not be feasible within the timescale for implementation.    

Temporary providers

Article 16 of the Services Directive provides for free access to service providers established in one Member State to the market in another.  Article 16(1)(b) restricts any requirements placed on service providers unless they are necessary for reasons of public policy, public security, public health or the protection of the environment.  Case law interprets this in a narrow sense in that there must be a genuine and serious threat to a fundamental interest of society. It would be for the Member State claiming the public interest objective to demonstrate the risk involved. The case law relating to the interpretation of “public policy” indicates that that term does not include consumer protection.  In addition, we have discussed above that there is a question over the strength of any argument we might put forward in relation to public security. We therefore consider that we need to amend the Pedlars Act in relation to providers of temporary services.

Notwithstanding the possible risk of not requiring a certificate for service providers alluded to above in relation to Article 9(1)(c) Ministers decided  that the Pedlars Act should be amended as the Government has proposed in order to implement the Services Directive.

I hope this helps explain the position.  I have taken the liberty of copying this to Mr Campbell-Lloyd  as it appears to answer some subsequent questions he has about the need to amend the Pedlars Act at this time.

Sincerely

Kevin Davis
Consumer and Competition Policy
BIS
020 2715 0329


From: Nick McGerr [mailto: This e-mail address is being protected from spambots. You need JavaScript enabled to view it ]
Sent: 04 November 2009 14:56
To: Davis Kevin (CCP)
Subject: Services Directive - Pedlars

Mr Davis

you assured me at 11.14 this morning that you will do your best to give me the opinion that leads to the inclusion in the Services Directive of Part 10, SUPPLEMENTARY AND MISCELLANEOUS, Street Trading, 45.-(1), the inclusion of paragraphs (a) the words “mender of chairs” are omitted, and (b) the words “or selling or offering for sale his skill in handicraft” are omitted,

and that you will give me an explanation about in what terms the Pedlars Act can be seen to be non-compliant with the Services Directive

this last in italics is both a précis and paraphrase in summation of our conversation.

I look forward to your response before the close of your office today as I have to relay this further before debate tomorrow.

Yours sincerely

N.J.McGerr,
pedlar
petitioner
and Agent

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