§ Mr. BarnesTo ask the Secretary of State for Trade and Industry how many representations her Department has received since the Trading Schemes Act 1996 to amend the definition of single tier established in the Fair Trading Act 1973, so that more than a single master franchise of a trading scheme may be permitted in the UK; if proposals permitting a change to exempt certain multi-level schemes were considered in her Department when drawing up S.I., 1997, No. 1887; if she will place in the Library details of her considerations in opting to maintain the single tier exemption in 1997; and if she will make a statement. [26153]
§ Miss Melanie Johnson[holding answer 15 January 2002]: Current legislation on trading schemes does not prohibit more than one master franchise from operating in the UK. However, each master franchise would have to comply with the relevant provisions of the trading schemes legislation.
The legislation is intended to protect scheme participants or potential participants whose ability to take commercial risks is similar to that of consumers and not to restrict normal business format transactions. The 1997 regulations therefore exclude from controls single-tier schemes or schemes where participants are registered for VAT. Some exemption of certain multi-level schemes was considered but it was concluded that this carried the risk of creating loopholes in the controls.
A copy of the summary of responses to the consultation which preceded the 1997 regulations has been placed in the Libraries of the House.