Enterprise

Written evidence submitted by the Keep Sunday Special Campaign, Relationships Foundation (ENT 11)


Relationships Foundation has hosted the Keep Sunday Special campaign since 1994. The Campaign itself was launched in 1984 and remains a coalition of retailers, unions, faith and community groups and individual supporters. This evidence draws on our 20 years’ experience of this issue, as well as our work on family policy including the development of the ‘Family Test’.

This submission argues that the Public Bill Committee for the Enterprise Bill should reject any proposed new clauses that devolve Sunday trading to local authorities. The reasons are outlined below, and include substantial and procedural points.

SUMMARY:

I. Devolving Sunday Trading to Local Authorities

a. Competition between authorities

b. Economic case

c. Family life

d. Regulatory burden

e. Consumer demand

f. Supporting High Street


II. Procedure

a. A National Debate

b. Full Parliamentary Scrutiny

_____________________________________________________________________

I. DEVOLVING SUNDAY TRADING TO LOCAL AUTHORITIES

We do not believe that Sunday trading regulation should be devolved to local authorities for a number of reasons, as outlined:


a. Competition between local authorities

BIS reports on the retail sector and high streets have recognised the competitive pressure that one retail centre places on its neighbours. Local authorities will be under pressure to match opening times of competing retail centres even where there is no net economic benefit. Comment by the London School of Economics suggests that fear of losing trade to neighbouring länder was a factor in Germany: "Bremen (next to Lower Saxony) and Brandenburg (next to Berlin) were minded to minimise economic disadvantage that might be suffered from having much more restrictive laws than their neighbours." [1] Local decisions will therefore not necessarily reflect local preferences.

It is uncontroversial that London competes with Paris on global retail markets, and in the same way UK cities compete with each other. In a world of easy transport links, consumer choice and online information, it is inconceivable to suppose that local authorities will not be forced to compete with each other to attract inward investment, footfall and jobs. Consistent regulation across the country would avoid this ‘race to the bottom’ to deregulate, and ensure that Sunday trading can be decided on a democratically in Parliament, rather than forcing councils to bow to business pressure.

b. The economic case is flawed

The Government economic assessment draws from the 2006 Indepen report. The most recent assessment by Oxford Economics shows that there is no compelling case in theory or from international experience that there is any benefit in terms of GDP, prices or employment; and that in the UK a net reduction in retail employment of 3,270 jobs in England and Wales is likely should full nationwide deregulation of Sunday trading take place. [2] This suggests that the Government was wrong to suggest that giving local authorities powers to extend Sunday trading hours would help local job creation.

For many shops, particularly smaller businesses, the pressure to stay open on Sundays to compete will increase costs without boosting sales, since overall consumer spending is not likely to rise proportionally to the extra hours of opening. This explains why many private sector organisations, like the Federation of Small businesses and the Association of Convenience Stores, are opposed to the Government’s policy. [3]  

The annual benefit to households from full deregulation was estimated by Indepen as £64 per year. The consultation document describes this as being generated ‘from lower prices as a result of increased efficiency from shops being able to make more use of existing stores’. As Europe Economics indicated in their assessment at the time [4] and Oxford Economics show in their current assessment, this claim is theoretically questionable.

Local devolution is likely to increase confusion over opening hours rather than reduce it, meaning that in this area there is more likely to be an increased cost to households. The consultation’s highly flawed use of evidence is also evident in the citation of a London School of Economics study showing that ‘the amount people spent on non-durable retail products, such as food, rose by up to 12.5 per cent following deregulation.’ [5] This represents the potential impact of moving from the highest level of regulation to complete deregulation. The UK is already at the second most liberalised level on the CEP analytical framework which would, in their analysis, result in a 0.14% sales increase. This illustrates the weakness of the government proposals, characterised by the lack of evidence, flawed evidence or its misinterpretation.

c. Impact on family life

Despite the Prime Minister’s commitment that all policy shall be subject to a Family Test, no such test has been published by the Government on this policy. The guidance on the Family Test for Government Departments states: "The objective is to introduce a family perspective to policy making by asking policy makers to anticipate the potential impact of policy on families." [6] When the Prime Minister first announced his commitment to a family test on policy, he said with reference to all domestic policy that if it "stops families from being together, then we shouldn’t do it." [7]

Although the Government has not published a family test, The Social Market Foundation’s family test on the Government’s proposals for Sunday trading [8] summarises many of the key issues. Key findings from the NatCen analysis include:

Fathers who work on a Sunday miss out on time with children over the whole week. [9]

Sunday working has a detrimental association with fathers’ time with their children playing, reading and teaching. [10]

It is Sunday working that appears to encroach the most on couple and family time together. [11]

Sunday work, which is a traditional time that parents and children spend together, was shown to be related to 8 to 10 year olds spending less time on activities such as reading and hobbies [12]

Question 3 of the Family Test states:

What impacts will the policy have on all family members’ ability to play a full role in family life, including with respect to parenting and other caring responsibilities? [13]

The evidence from NatCen suggests that a measure that increases the requirement to work on Sundays will fail the Family Test. As the Social Market Foundation analysis shows, weekend working is already far more prevalent in the retail sector than in others:

"Retail has one of the highest rates of weekend working, with 80% of people working some weekends and over half working most weekends. That very high figure on the proportion of people in retail working weekends compares to only 23% of people in general who work most weekends. The rate of working most weekends in retail is, for example, seven times the rate in financial services and five times the rate in construction. Changes to Sunday trading laws are likely not only to entrench these disparities but to make them worse." [14]

The impact of Sunday working is felt more acutely in the retail sector, affecting shared time for couples, parents’ time with children and wider family members. Time lost with children is not made up on other days during the week. The proposals fail the Family Test because not all workers are protected, and even those who do have some statutory protection will be pressured into working extra hours on Sundays. Extending Sunday trading hours will affect workers involved in, for example, distribution and street services, who are not protected under the Sunday Trading Act 1994.

There is clear evidence from USDAW (submitted separately) that shopworkers are under pressure to work on Sundays to the detriment of family life and care responsibilities, and that deregulation would increase this pressure. This pressure may be through the impact on promotion prospects or through loss of earnings resulting from the need to opt out of Sunday working. This matches wider public perceptions, with 60% people believing that shop workers will be forced to work longer hours and that their family life will suffer. [15] The fact that employment protection is hard to enforce is a significant reason for regulating trading hours.

There are also wider social impacts that are not covered by the Family Test. There are many community activities which rely on the easy co-ordination of shared time-off, for example youth sports. There are also the health and productivity benefits that arise from social arrangements that promote and encourage rest.

d. Greater regulatory burden on retailers

The Government claims that the proposals ‘would contribute to the Government’s goal of reducing regulation over the next Parliament’. [16] Devolving regulation to Local Authorities does not reduce the amount of regulation or the burden on business. Indeed variable local regulation and consultation with each authority will increase costs compared to single national regulation with no off-setting economic benefit.

e. Consumers do not demand change

The current rules are supported by 2/3 of people, with only 12% believing that they do not provide sufficient opportunities to shop. [17] There is no clear public demand for change. The Government’s statement "the current system provides a reasonable balance between those wish to see more opportunity to shop in large stores on a Sunday and those who would like to see further restrictions" is in tune with public opinion. [18]

The findings from Populus are consistent with other poll findings. So, for example, Mark Burgess, Head of Retail at Ipsos MORI, commented on findings that a majority oppose further deregulation of Sunday trading:

"Many will find this result somewhat surprising with those against removing restrictions still in the majority. The 24 /7 society appears to have been with us for some time and we would have expected the British shopper to be more relaxed about the possibility of longer opening hours. And yet, for the majority, this is obviously not so. In fact, this is not just in respect to Christmas opening times. We have had a similar result when we asked shoppers if they would like Sunday hours to be extended on a permanent basis." [19]

ComRes have also found a significant majority (77%) in support of the current regulations. [20]

f. Supporting the High Street

The alleged economic benefit of deregulating Sunday trading is based on a diversion of trade from small to large shops. Given the widespread acceptance of the view that there will be no net increase in sales, the retail sector as a whole cannot benefit. Shifting sales from other days in the week to Sundays will not increase the profitability of high street stores.

The Government’s claim that the proposals will support the high street by enabling it to compete more effectively with online shopping has no clear evidence to support it. Many high street stores also have an online presence, and the preference for online shopping is driven more by the convenience of being able to shop from home than opening hours.

II. PROCEDURE

a. A National Debate

If the power is devolved and the Government is serious about the principle of localism, then the power should be to restrict as well as to extend trading hours should local areas so choose. We believe that the regulation of Sunday trading hours should be a national decision. Should the powers be devolved, we believe they should be devolved to all areas equitably in a way that allows local opinions and preferences to be clearly heard and considered alongside the lobbying power of large businesses.

b. Full Parliamentary Scrutiny

The Government has thus far been secretive about where and how its Sunday trading proposals will be introduced. The proposals were first voiced in the Chancellor’s 2015 budget. In October, the Prime Minister said that the proposals would be introduced in the Cities and Local Government Devolution Bill [21] , even though this was already after the Bill’s 2nd Reading in the Commons. There were no such proposals in the Bill. More recently the Secretary of State for Business, Innovation and Skills announced that they would be in the Enterprise Bill - but not until the committee stages, after it had already passed through the Lords and its first and second Commons readings. The effect of this is that the proposals have not received full Parliamentary scrutiny, despite the controversy surrounding the proposals and strong opinions on both sides. If introduced as a new clause to the Enterprise Bill, Parliament will not have a chance to debate this important legal change until the final reading.

This is not a mere technical point about Parliamentary process. It is a much greater concern that the Government is deliberately attempting to usher in the changes through the backdoor, while many MPs and constituents believe that they deserve a full debate in both Chambers. Regardless of one’s views on Sunday trading legislation, the undeniable controversy and opinion surrounding this particular policy merits a full Parliamentary debate. This means that if the Government is serious about its proposals, they ought to be introduced formally as part of a Bill, not tagged on at the last minute.




Written by John Ashcroft and David Lawrence, Relationships Foundation

February 2016


[1] http://blogs.lse.ac.uk/politicsandpolicy/what-the-uk-could-learn-from-germanys-sunday-trading-laws/

[2] Oxford Economics, Economic Impact of Changes to Sunday Trading, September 2015

[3] Oral answers to questions, Business Innovation and Skills, House of Commons, 15/9/15. http://www.publications.parliament.uk/pa/cm201516/cmhansrd/cm150915/debtext/150915-0001.htm#15091539000005

[4] Europe Economics (2006), "Europe Economics’ appraisal of a report ‘The economic costs and benefits of easing Sunday shopping restrictions on large stores in England and Wales’ by Indepen Consulting Limited for the DTI", page 5.

[5] Consultation document paragraph 4, citing Centre for Economic Performance Discussion Paper No 1336 ‘Evaluating the Impact of Sunday Trading Deregulation’, London School of Economics, March 2015

[6] The Family Test: Guidance for Government Departments, Department for Work and Pensions, October 2014

[7] https://www.gov.uk/government/speeches/pms-speech-on-the-fightback-after-the-riots

[8] http://www.acs.org.uk/wp-content/uploads/2015/09/Social-Market-Foundation.pdf

[9] "Working atypical hours: what happens to ‘family life’?" p. 47

[10] "Working atypical hours: what happens to ‘family life’?" p. 67

[11] "Working atypical hours: what happens to ‘family life’?" p. 81

[12] "Working atypical hours: what happens to ‘family life’?" p. 97

[13] The Family Test: Guidance for Government Departments, October 2014, Department for Work & Pensions

[14] http://www.acs.org.uk/wp-content/uploads/2015/09/Social-Market-Foundation.pdf

[15] Attitudes towards Sunday Trading, Populus, September 2015

[16] Consultation document para. 1.10

[17] Attitudes towards Sunday Trading, Populus, September 2015

[18] Letter to Keep Sunday Special on behalf of the Prime Minister, 20/4/15

[19] https://www.ipsos-mori.com/researchpublications/researcharchive/3106/Most-shoppers-agree-with-governments-decision-not-to-extend-shopping-hours-this-Sunday.aspx

[20] ComRes, March 2014

[21] Prime Minister’s Questions, 21 Oct 2015, 1st Question

 

Prepared 10th February 2016