Market Failure?: Can the traditional market survive? - Communities and Local Government Committee Contents

Memorandum by the Local Government Association (MARKETS 30)

  The Local Government Association discussed the select committee inquiry into traditional retail markets with a cross section of local authorities across the country. Some councils have strong opinions on how markets operate and contribute to the local community, and others do not. This reflects the variance in local economic sectors that the LGA has pointed to in its recent publication From recession to Recovery: the local dimension.


  1.  The type, strength and picture of traditional retail markets in England vary considerably from area to area. Some areas have reported a decline in specialist markets in the last few years while others have seen a rise in the number of regular specialist markets operating within their areas.

2.  Generalising a picture that fits across the whole of England is not helpful in the context of this inquiry as local realities depend entirely on the location, environment and demographics of the functional economic area. There is significant variance within regions.

  3.  For example while Bournemouth have reported a decline in the level of traditional street market and specialist market activity in their area, Westminster City Council have reported a stabilising of their traditional street market trade over the last 10 years after a period of decline earlier. Westminster also reports an increase in demand and provision of specialist, leisure and farmers markets.


  4.  Again the economic, social and environmental impact of retail markets will vary significantly from region to region. Some councils, for example Chelmsford who have also submitted evidence to the committee, use street trading as a vehicle to promote community cohesion and social inclusion. Their town centre management team works at leveraging opportunities for community groups in street trading.

5.  Markets in other areas can and do make positive environmental contributions by providing produce with reduced packaging/ waste, providing easy access to local and organic produce and reducing the need for customer travel further a field.

  6.  In the current economic environment markets may grow in importance to local economies as source of local employment and business start-up opportunities.

  7.  Equally the economic downturn could see an upsurge in problem traders, consumer scams and counterfeit goods flooding in through markets. Local trading standards services are best placed to deal with this issue should it prove a problem.


  8.  Local government is best placed to operate markets in their community because they are able to integrate its management into the wider physical, economic and social development strategies of the local area.


  9.  The LGA has been lobbied by some of its membership to address the issue of illegal street trading and in some case the issue of pedlars certificates being wrongly used or providing an excuse for illegal street traders.

    — Street trading is subject to statutory controls, which allow local authorities to designate streets within their area that will be subject to such controls.

    — The 1871 and 1881 Pedlars Acts established rules for pedlars, who would traditionally go door-to-door selling their wares or skills. Today holders of pedlar's certificates (which are available for a small charge from a local police station) are exempt from controls and may trade wherever they choose.

    — Whether an individual is operating within the terms of a pedlar's certificate is a question of fact which can only be ascertained through protracted observation, either by CCTV or enforcement officers, which is extremely resource intensive.

    — It hard to stop pedlars selling faulty or unsafe products, while consumers have little chance of getting their money back for substandard goods. Their products are often poor in quality and even dangerous. Some councils have reported that they can operate in groups, and may in some cases be linked to local criminal gangs, obstructing passers by and using intimidating and threatening behaviour.

    — A LGA was conducted last year to assess the scale of the problem. Of those that responded, 90% of local authorities said pedlars were a problem. The vast majority of councils supported new national legislation.

    Manchester City Council Example

    In the summer of 2006 acute problems were experienced in Manchester City Centre with large groups of individuals trading, most claiming to benefit from a pedlar's certificate.

    Groups of up to 20 individuals were often found selling goods such as balloons, flags, whistles etc from large, wheeled stalls. Their presence not only caused obstructions to pedestrians and projected a negative image of the area, but also resulted in complaints from legitimate street traders in the area who are subject to strict control by the City Council via conditions on their licence.

    Enforcement exercises were undertaken involving licensing officers, trading standards, CCTV and GMP. Whilst this exercise had some limited, short term, success it was extremely labour intensive, and not sustainable in the long term.

    Manchester City Council introduced a Private Bill to Parliament to try to address this issue for their local area. One of the main powers sought by the Bill is to remove the "pedlar's exemption" on regulated streets, which would negate the need for officers to spend long periods on surveillance in order to obtain the necessary evidence to take the matter to Court. Other powers such as seizure and forfeiture of goods, as well as the power for officers to issue fixed penalty notices were also included in the bill which passed its second reading in October 2008.

  10.  Currently six councils have private bills before parliament promoting a similar change to legislation in their areas. These bills are Canterbury City Council Bill, Bournemouth Borough Council Bill, Manchester City Council Bill, Reading Borough Council Bill, Leeds City Council Bill and Nottingham City Council Bill.

  11.  Similar legislation has been successfully promoted in recent years in respect of London, Leicester, Liverpool, Newcastle upon Tyne, Medway, and Maidstone.

  12.  The LGA believes that the government should look into new national legislation to give councils in all areas the power to regulate pedlars and /or illegal street traders properly, rather than relying on councils promoting numerous local bills (as is occurring at the moment).

  13.  The Department for Business, Enterprise and Regulatory Reform conducted research into the issue of illegal street trading last year. We are awaiting the findings of their report and believe that the committee should take the BERR report into consideration during the course of the inquiry.

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