HC Deb 25 March 2002 vol 382 c690W
Mr. Barnes

To ask the Secretary of State for Trade and Industry pursuant to her answer of 14 February 2002,Official Report, column 520W, on the single tier exemption, what representations were made to her Department for an additional exemption from the relevant provisions of the trading schemes legislation for trading schemes with more than a single master franchise in the UK during (a) the consultation in 1996 and (b) lobbying for the amending SI 1997 No. 1887; and if she will place in the Library the description of Government policy on multi-level trading provided to those requesting additional exemptions during the lobbying for SI No. 1887; and if she will make a statement. [39319]

Miss Melanie Johnson

[holding answer 11 March 2002]: At the time of the Trading Schemes Act 1996 and the introduction of supporting subordinate legislation in 1997, parts of the franchise industry proposed exclusion of schemes with more than one master franchiser in the UK.

In response to some of the representations made, the subordinate legislation was amended to reflect more accurately the policy of excluding from regulatory control master franchise operations in which only the UK master franchiser would benefit from the recruitment of others to the scheme. However, it was decided that schemes with more than one master franchiser could leave a loophole allowing illegitimate schemes to avoid regulatory controls.

Government policy for legislation in this area has always been: to provide a degree of protection to a party who is vulnerable in relation to another, in terms of their financial position and level of business acumen, but not to burden legitimate business, particularly the franchise sector, with unnecessary regulation.