HC Deb 12 November 2003 vol 413 c391W
Mr. Prisk

To ask the Deputy Prime Minister what discussions he has had with(a) representatives of local government, (b) the Federation of Small Businesses and (c) other groups representing business on the effect of Part 8 of the Local Government Act 2003 on competition between local government and small businesses. [137607]

Mr. Raynsford

The Government consulted widely on the provisions in the Local Government Act 2003 and has considered the concerns of small businesses particularly with regard to the charging and trading provisions. In addition, officials in the Office of the Deputy Prime Minister held discussions with the Small Business Service of the Department for Trade and Industry (DTI), the Office of Fair Trading and CBI.

While the powers to charge for discretionary services will be available to all best value authorities, the trading powers set out in the Act will be subject to the council's CPA categorisation and only available to authorities with a fair good or excellent record on delivery of public service. Trading is only exercisable through a company structure which means it will be subject to the same regulation as other commercial bodies (for example on taxation). This will ensure that authorities keep any trading activities separate from their ordinary functions as well as promoting a level playing field with the private sector.

The Office of the Deputy Prime Minister intends to ensure that authorities do not distort markets through the provision of inappropriate subsidies to trading companies or the arrangement of preferential terms and other forms of unfair competition. To cover these concerns, we propose to impose certain conditions to regulate how authorities should engage in their trading activities. We will issue Guidance to reinforce this, to which authorities are required to have regard. Guidance on the charging powers will be published shortly. Authorities are subject to best value audit and inspection and must abide by competition legislation.