Examination of Witnesses (Questions 280
MONDAY 20 APRIL 2009
Q280 Anne Main: You blame central
government for that.
Mr Nicholson: The central government
issue is different. It is the pressure from the Treasury for local
authorities to manage their assets. You will hear a lot about
asset management, not all of which is bad, but in reviewing their
property portfolios, as local authorities are bound to do, they
have to within the current constraints view markets and market
property in much the same way as they view other property that
they own. Often they will look at the return from their markets
and think they could get a better return or perhaps they will
sell them off because they have pressure to sell off their assets.
Q281 Anne Main: That is street markets.
Mr Nicholson: Street markets are
slightly different. I am talking about where a local authority
owns an indoor marketBradford, for examplea market
which is a building with shops. A market in the centre of that
would be classically what an indoor market would look like. In
Bradford, as part of their asset management strategy, the local
authority decidedalthough they did not go through with
it in the endthat they would strip the shops out of the
market portfolio and sell those with all the other properties
which Bradford owned as a local authority under a tendering process
for a private sector property company to manage all their properties
on their behalf. You could argue that might have made sense but
it stripped out the surplus from the market. The income from the
shops was taken away from the market's budget. The market itself
was then put in danger of not being viable. Shops are an integral
part of a market. That is what I am saying about the Borough Market.
The composite nature of these markets is that you do not just
look at the street market separately from the street properties
in the same way that you do not look at the stalls at the centre
of an indoor market separately from the shops or the streets around
it. That is not a tendency which is pushed by local government
but the asset management side of things is something, I think
you will find generally, where a lot of local authorities have
found themselves facing these dilemmas as to how they manage their
property portfolio in those situation. The markets and the rents
they get, the values they have to put to them relative to the
local property market, often put the market at a disadvantage.
Mr Auguste: You have to understand
that our competitorsfor example, big supermarket chainshave
a unique decision possibility. They have a staff and they can
implement in every supermarket belonging to the company the same
policy and attitude. We do not want every market to be a clone
of another. To help you understand, central government can on
some aspects give to so many city councils, so many markets, at
least some very important help.
Q282 David Wright: You said that
there was a policy vacuum in Whitehall about markets. Do you think
the government could be doing more? What should it be doing? What
incentive is there for the government to do more in relation to
Mr Nicholson: Central government?
Q283 David Wright: Yes.
Mr Nicholson: We would concur
that what the market industry needs in central government, wherever
it is located, is a champion for markets which currently does
Q284 David Wright: Should that be
a minister or a civil servant?
Mr Nicholson: It should probably
be a minister and it should be BERR. Markets have an economic
purpose. They are businesses. You could argue that they have a
social purpose because historically they have existed in these
places for a very long time but essentially they are business
focused. If you are going to have a champion in government, which
is what we need and do not have at the moment, it has to be in
a department which has some relevance. Planning and regulatory
things obviously do have a relevance. DCLG has played a part in
PPS6 and promoting markets but essentially it is a business focus
that it needs and the champion could and should come from BERR.
Q285 David Wright: What happens in
the rest of Europe?
Mr Auguste: We have a champion
in France. There is a sort of minister for small businesses. He
is our contact within the government. There is a National Commission
and each year there are some meetings, some preparatory action
work, and we are having this in France.
Q286 David Wright: What practical
help does that minister provide?
Mr Auguste: Last year in France
there was unification work about business papers. The legislation
was too complex for little businesses with tax problems, social
problems, wages, authorisation to act as a commercial business
in the public domain etc. Each trader was in the middle of having
eight to 10 different documents. There was work to have different
ministries merging the documentation in one.
Q287 David Wright: So reduce bureaucracy?
Mr Auguste: This is an example.
The other problem was to help lobbying to Brussels. It is the
World Union job now also. We had anxiety about the new rules.
For example, there was to be a rule about stickers to be placed
on every food product. A trader preparing some fooda charcuterie
for example, a pa®téwould have been obliged
to give at zero point something per cent the components of his
pa®té on the market day. Tomorrow it is impossible
to get the same composition each day if you are not allowed to
Q288 David Wright: Would you say
that that capacity is not available in the UK?
Mr Nicholson: What helps clarify
this to me is to think: where do markets sit in the chain of produce?
Downstream from the market you have agriculture, if you are talking
about food in particular. We have the Ministry of Agriculture
that can deal with farming and all those kinds of things. Upstream
you have the retail world. There is competition law, planning
laws and all those kinds of things that apply. In the middle you
have markets. That is where the focus needs to apply. Very little
attention is paid to that key, pivotal role whether it is a wholesale
or a retail market. That is why there needs to be a champion for
that bit of the chain which is the market in the middle. We would
argue it should be BERR. The essence of a market is about competition
and commerce. It is much more logical that the energy from government
and the focus are applied in that part of the chain.
Q289 Sir Paul Beresford: You mentioned
London was different. We have found that London is different within
London as well. Particular mention was made of the London Local
Authorities Act. What should be changed?
Mr Nicholson: A lot was made of
the London Act as being restrictive on London markets in a way
that other markets are not restricted. That may or may not be
the case. I think it is much more that London markets are not
markets. Maybe there is legislation for markets outside London
which means they are recognised as markets in a way they are not
in London. In London it is just a licensing function. You have
a street. You have pitches. The local authority issues licences.
They are not actually markets. They are a selection of pitches
which are let out. I do not think even that situation in London
could or should stop the local authority who wants to promote
or manage their market. If you take North End Road Market in Hammersmith
for instance, it is a very big street market. There is nobody
in Hammersmith Council responsible for managing that market. There
is a person responsible for issuing the licences but no one on
a daily basis or a weekly basis looks at what is happening in
that market or manages that market.
Q290 Mr Hands: As the MP for the
area, it comes under the town centre manager for Fulham, which
is not quite the same thing as a council officer dedicated full
time to the market. It comes under the same person who is responsible
for the retail frontage and other things.
Mr Nicholson: That is a recent
innovation. That is a wholly good thing. The town centre management
function has suddenly now appeared on the radar and has taken
up the mantel and filled the vacuum which was left by the fact
that there were not market managers in the way that previously
there had been.
Q291 Mr Hands: I am slightly confused
about the legislation. We have heard about the London Corporation
Act. Others have told us about the London Local Authorities Act
1990 as amended. Do you happen to know which Act? Perhaps it is
both Acts. People have particularly told us that one of the problems
is that one Act or both Acts prevent any profit making by a local
authority in its management of the market. Is that particularly
the issue? My second question is about restrictive practices and
whether, in your experience, some markets have problems due to
restrictive practices preventing new entrants from coming into
the market. You could have a rule for example that there cannot
be a pitch within six pitches of an existing pitch that does the
same product range, which effectively prevents newcomers coming
into a market, which is sort of done in the name of protecting
the market, but it can often have the perverse effect of preventing
renewal of different people coming into the same market.
Mr Nicholson: Jean-Paul manages
East Street Market which is one of the big markets south of the
Elephant and Castle.
Mr Auguste: We are not yet managing
the market so we have no influence right now. We have quite the
same rule in France, it never prevented markets to be managed
as markets, it never forbid newcomers in the markets. The rule
in France is four metres which is close to the distance between
two stalls. The legislation should be the same as in other cities
and I agree with what George was saying about the London Act.
Q292 Chair: You think the legal framework
in London should be the same as in the rest of England?
Mr Nicholson: Yes. I am not sure
how much of an obstacle it is. It is undoubtedly not helpful because
it effectively turns local authorities into licensing authorities,
not marketing authorities. In relation to the issue of competition,
that is quite a difficult issue. The nature of markets is to encourage
competition. In building up the Borough Market from nothing to
what it is today, we have a lot of people who apply to come to
the market. By and large, there is no restriction except quality.
If you have four fish stalls and someone else applies to be a
fish stall holder in the market, you have to take some kind of
management decision as to whether you think the customer base
will support another fish stall within the market.
Q293 Mr Hands: That is contrary to
what the nature of a market is. You are essentially operating
in a non-market way.
Mr Nicholson: I do not think you
are. The same thing would apply in a shopping centre or in any
other kind of situation. These are businesses. It is not a completely
open ended, free market situation. You have to manage these situations.
Q294 Mr Hands: If you cannot have
markets in markets, it seems to me it makes it very difficult.
Surely somebody would have done their homework and thought, "I
can sell fish better than the person four pitches away"?
Mr Nicholson: It is not as simple
as that. Then you have to make a choice because there are only
so many pitches in any one market. On the face of it you would
say, "Okay, your quality is sufficient to come into the Borough
Market." We also have several hundred other applicants and
you are making a balance as to whether you want another fish stall
in that market or whether you want another stall selling meat,
vegetables or whatever.
Q295 Chair: I can see how this is
in your interest managing the market but is it in the interest
of the consumer? One of the things that individual members of
the public like about a market is that you have lots of stalls
very close together and you can wander around and get the best
Mr Auguste: This is a complex
process. You have to understand the population, the clients. You
have to adapt the merchandising of this stall. It is competing
against others. It has to offer what the population is waiting
for. You can make some mistakes but if you have the final clients
in mind you will be close to the solution. You have to understand
the merchandising needed on the site, as George was saying.
Mr Nicholson: I think there is
confusion as to what a market is. I do not know any retailer who
operates a totally free market situation anywhere, except maybe
somewhere in downtown Vietnam or somewhere. It does not exist
in the United States, Europe or in this country.
Q296 Mr Hands: There is no restriction
that prevents barber shops being very close to each other. Very
close to North End Road Market, there are about three barber shops.
They have all set up. One is a break away from another and they
compete. It is in the customer interest. Nobody has a problem
with that. No town centre manager comes along and says, "There
are too many barber shops here. We want to manage the process.
Instead of hairdressing, we are going to have an extra cheese
shop", do they? Why should that happen in your market?
Mr Nicholson: Because we are running
Mr Auguste: I would give an image
of some markets on the continent. The problem of a market is that
it has many exits and entrances. A supermarket has only one door.
You are obliged to go through that and you are obliged to go through
a route within the store. They can organise the merchandising
and the location of each product in the store. In a market you
have to disperse different stalls in order to provoke within the
clients' brain the need to go everywhere in the market. It is
a different way of managing. We have experience of markets, apart
from fishmongers, fruit and veg etc. Generally, they are working
less than the markets where you are dispersing the products and
obliging a promenade.
Q297 Dr Pugh: Is it the case that
a successful market requires, unless it is just a very specialised
market that sells one thing like in a fish market, a diversity
and you will not get that diversity unless you manage the situation
so that you get the diversity in that market?
Mr Auguste: Exactly. You need
Q298 Anne Main: You did mention PPS6
in passing. Do you think PPS6 should be improved, altered or amended
in any way, shape or form? Do you have any concerns?
Mr Nicholson: It is essential
in the new, merged PPS6 and PPS4 and whichever other ones that
are going to be merged with itwe will hear later this week
or whenever, when the new, merged PPS comes outthat at
the very least the paragraph in PPS6 should be carried through
to the new document. It is a very important paragraph and recognition
from government that DCLG, in issuing PPS6 in the first place,
had a paragraph for the first time which specifically addressed
in planning terms the importance of markets. It is important that
that is carried through into the new guidance which emerges later
this spring or summer.
Q299 Chair: This is your opportunity
to have your wish list. Is there something else that should be
added to PPS6? The Minister is sitting behind you so if you do
not say it now you have missed the opportunity.
Mr Nicholson: I think what is
in PPS6 is fine because it is a call to arms. It is asking local
authorities to recognise that street markets and indoor markets
have an important function within their towns, city centres and
villages throughout the country.
Mr Auguste: I agree with George.
Chair: Thanks very much.