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J2/S2/06/R14

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14th Report, 2006 (Session 2)

Contents

Remit and Membership

Report

Annex A : Responses to Finance Committee consultation on the Financial Memorandum

Annex B : Extracts from Minutes

Annex C : Oral Evidence and Associated Written Evidence

20th Meeting 2006 (Session 2) 5 September 2006

Written Evidence

Scottish Retail Consortium
USDAW
Debenhams Retail plc
Scottish Co-op
VisitScotland
Scottish Tourism Forum
Edinburgh Woollen Mill (Group) Ltd

Justice 2 Committee Official Report, Tuesday 5 September 2006

Scottish Retail Consortium – supplementary submission
USDAW – supplementary submission
VisitScotland – supplementary submission

21st Meeting 2006 (Session 2) 12 September 2006

Written Evidence

Humanist Society of Scotland
Deregulate

Justice 2 Committee Official Report, Tuesday 12 September 2006

Rev Graham Blount, Scottish Churches Parliamentary Office

22nd Meeting 2006 (Session 2) 19 September 2006

Justice 2 Committee Official Report, Tuesday 19 September 2006

Scottish Executive
Karen Whitefield MSP – supplementary submissions

Annex D : Other Written Evidence

ACPOS
Aldi Stores Limited
Argos Retail Group
BHS Ltd
CBI Scotland
CBI Scotland – supplementary submission
Federation of Small Businesses Scotland
Free Presbyterian Church of Scotland
Glasgow Chamber of Commerce
Glasgow City Council
Sarah Hendry
HMV Group
Kingfisher
John Lewis
David McArthur
David W. Norris
Scottish Chambers of Commerce
Scottish Grocers’ Federation
Scottish Low Pay Unit
Scottish Parliament Information Centre briefings

Remit and membership

Remit:

To consider and report on matters relating to the administration of civil and criminal justice, the reform of the civil and criminal law and such other matters as fall within the responsibility of the Minister for Justice, and the functions of the Lord Advocate other than as head of the systems of criminal prosecution and investigations of deaths in Scotland.

Membership:

Mr David Davidson (Convener)
Jackie Baillie
Bill Butler (Deputy Convener)
Colin Fox
Maureen Macmillan
Mr Stewart Maxwell
Jeremy Purvis

Committee Clerking Team:

Clerk to the Committee
Tracey Hawe
Alison Walker

Senior Assistant Clerk
Anne Peat

Assistant Clerk
Steven Tallach

Stage 1 Report on the Christmas Day and New Year’s Day Trading (Scotland) Bill

The Committee reports to the Parliament as follows—

introduction

1. The Christmas Day and New Year’s Day Trading (Scotland) Bill was introduced in the Parliament on 20 March 2006 by Karen Whitefield MSP.

2. On 19 April 2006 the Parliament designated the Justice 2 Committee as lead committee for the Bill. Under Rule 9.6 of the Parliament’s standing orders, it is for the lead committee to report to the Parliament on the general principles of the Bill.

EVIdence received by the committee

3. The Committee issued its call for written evidence on 15 June 2006 and received 27 written submissions. The Committee took oral evidence over 3 meetings as follows:

5 September 2006

Bruce Fraser, Scottish Divisional Officer, and Liz McHugh, Shop Steward, USDAW.

Fiona Moriarty, Director, Scottish Retail Consortium, and Kevin Hawkins, Director General, British Retail Consortium.

Peter Betts, Store Manager, Debenhams, and Graeme Ross, Deputy Chief Officer, Scottish Co-op.

Riddell Graham, Director of Strategy, Partnerships and Communications, VisitScotland, Alan Rankin, Chief Executive, Scottish Tourism Forum, Martin Clarke, Area Manager, Edinburgh Woollen Mill (Group) Ltd.

12 September 2006

Reverend Graham Blount, Scottish Churches Parliamentary Office, and Ivan Middelton, Humanist Society of Scotland.

Mandy Millar, Debenhams, Edinburgh, and Sheila Govilpillai, Debenhams, Leith.

David Ramsden, Chairman, Deregulate.

19 September 2006

Hugh Henry MSP, Deputy Minister for Justice, and Andrew Dickson, Access to Justice Division, Justice Department, Scottish Executive.

Karen Whitefield MSP, member in charge of the Bill, and Rodger Evans, Non-Executive Bills Unit.

4. All oral evidence and associated written evidence provided to the Justice 2 Committee is included at Annexes C and D.

BACKGROUND AND COnsultation

5. The purpose of the Bill is to prohibit shops exceeding 280 square metres (3,000 square feet) in floor area from trading on Christmas and New Year’s Day.

6. The Bill contains exemptions for restaurants, pubs and take-away eateries, registered pharmacies (for the purpose of dispensing prescriptions), shops within commercial airports, railway stations, ports and motorway service stations and filling stations (for the purpose of selling fuel and other goods) exceeding 280 square metres. The policy memorandum states that these exemptions are in place so that businesses can provide “an essential public service (pharmacies), satisfy a public demand for hospitality (restaurants, pubs, take-aways)” or facilitate a means of travel.1

7. A maximum penalty of £50,000 is prescribed for any breach of the prohibition on stores opening on Christmas and New Year’s Day. Under the provisions of the Bill, the occupier and any person responsible for controlling or managing the shop’s operations commit an offence if they allow a shop to trade in breach of section 1 of the Bill. Prosecution of any offence will be by summary criminal procedure. The Bill also seeks to ensure that all who control such shops opening can be found liable by applying the offence to bodies corporate, partnerships, trustees and unincorporated associations.

8. The Bill also provides a defence for anyone accused of an offence on the grounds that they or anyone working for them or representing them took all reasonable precautions and exercised all due diligence to avoid committing the offence.

issues

General

9. The written and oral evidence that the Committee has received indicates that a prohibition on large stores opening on Christmas Day is of less concern to a number of respondents than a prohibition on New Year’s Day opening. Though a number of submissions, such as those from John Lewis, Glasgow Chamber of Commerce, Kingfisher, and Deregulate oppose any legislation forcing shops to close on these days, the Scottish Retail Consortium (SRC), CBI, Debenhams, VisitScotland and the Scottish Tourism Forum, while opposing enforced New Year’s Day closure, take no view on the Bill’s provisions as regards Christmas Day. A number of retail businesses expressed their support for the Bill in its entirety when responding to the Committee consultation. These were: Aldi, Argos Retail Group, HMV and Scotmid. Karen Whitefield MSP told the Committee that the Bill is supported by “a number of large retailers, including Waterstones, Ottakars, HMV, Scotmid, Habitat and Argos”.2

10. The Scottish Executive has no formal view and is still weighing up the merits of the Bill and the arguments for and against it.3 It would be helpful if the Executive could come forward with its view on the Bill as soon as possible.

‘Special nature’ of Christmas Day and New Year’s Day

11. The policy memorandum states that the intention of the Bill is “to maintain the special nature of Christmas Day and New Year’s Day, traditionally these being the two holidays in the calendar when most people would expect to be able to spend time with families and friends rather than at work”.4 Karen Whitefield MSP said that “Christmas Day and New Year’s Day are midwinter festivals that bring a little magic and something special into our lives. I believe that that will be lost if there is widespread opening of our large stores, not just for shop workers but for everyone”.5

12. Much of the support for the Bill centres around the “special” nature of both Christmas and New Year’s Day in Scotland, and the benefits to both the individual retail workers and to the country of a whole two days when large retail stores are not open. For example, USDAW’s written evidence on the Bill states that “Christmas Day and New Year’s Day remain special days in Scotland, and should remain so. Opening by large stores would have a detrimental impact on the quality of national life as well as on the employees concerned”.6 USDAW, in oral evidence to the Committee added that: “We believe that [the Bill] is necessary because of the fundamental change to the Christmas and New Year’s Day celebrations that will come about if we do not have the Bill”.7

13. The Humanist Society of Scotland supported the principle of the Bill on the basis that “there should be two days in the year when other human values are placed ahead of the commercial interests of big business. We feel that the whole run-up to 25th December has become a consumerist extravaganza and that this is one of the less pleasant aspects of our modern society in which conspicuous consumption has become an end in itself”.8 In oral evidence, the Reverend Graham Blount from the Scottish Churches Parliamentary Office agreed that the Bill promotes “the idea of people taking shared time off to spend with their families and their communities on days that are widely recognised as being special”.9

14. Some written respondents expressed a fear that these days are becoming like any other. One individual suggests that “the proposal should be taken forward as a signal of a move away from both our modes of consumption and our working patterns”.10

15. However, the concept that Christmas and New Year’s Day were both “special days” was questioned by a retail worker from Debenhams who gave oral evidence to the Committee. Sheila Govilpillai, who is from Singapore and has no family in Scotland, told the Committee: “If I am at home at Christmas and New Year, it is a bit lonely. I enjoy the company at work and am comfortable about working during the Christmas and New Year periods”.11

16. The Federation of Small Businesses in Scotland told the Committee that Christmas Day and New Year’s Day have “equally special significance” in Scotland.12 However, it became apparent in evidence that New Year’s Day has been a traditional holiday in Scotland for longer than Christmas Day. The SRC told the Committee that as recently as the 1960s, Christmas Day was a working day throughout Scotland.13

17. The Committee acknowledges the evidence that Christmas Day and New Year’s Day are viewed as significant and notes in particular the comment from Graham Blount from the Scottish Churches Parliamentary Office that the Bill promotes “the idea of people taking shared time off to spend with their families and their communities on days that are widely recognised as being special”.14

Are large shops likely to open on Christmas Day and New Year’s Day?

18. The policy memorandum refers to a “trend of larger shops trading on these days”.15 However, the SRC told the Committee that there is no evidence that shops would want to open on Christmas Day. The British Retail Consortium (BRC) said that a number of stores have opened on New Year’s Day and have been “surprised by the level of demand, which has exceeded expectations in almost every case” but stressed that opening on New Year’s Day in Scotland will be “selective and will only happen where there is sufficient consumer demand”.16 However, USDAW told the Committee that although some retail businesses do not wish to open on Christmas or New Year’s Day, “if one or two stores open, others will do so, because of the pressure and a snowball effect”.17 USDAW admitted that there was no “hard evidence” to support the idea that larger stores would want to open on Christmas Day, but said that “many of the big retailers gave the same assurances about Sunday trading, and we know what happened to that”.18

19. The Committee acknowledges that there is currently greater pressure on large shops to open on New Year’s Day than on Christmas Day.

Retail workers

20. USDAW’s submission to the Committee emphasises the benefits of the Bill for shop workers, stating that Scottish workers believe the recent experimentation of a few retail companies with Christmas and New Year’s Day opening makes legislation “absolutely necessary”.19 USDAW told the Committee, “the vast majority of shop workers believe that, at some time in the future, they will be forced to work on these two days if legislation is not passed to stop large stores from opening”. USDAW believes that shop workers deserve to be able to spend time with their families on days which are traditionally “days off” and gave details of two cases where it claimed that staff had been pressurised into working on New Year’s Day. According to USDAW, one worker was “told quite bluntly, “If you don’t work [on New Year’s Day], you will be dismissed”” and another was told that “the hours for which she was contracted—which suited her family care—might not be available after the New Year if she did not comply with the request to work on New Year’s Day”.20 USDAW told the Committee that “with the larger stores, it is increasingly difficult to get enough staff to staff the stores and that means that they get into compulsion”.21 Rev Graham Blount of the Scottish Churches Parliamentary Office was also of the view that staff are often put under pressure to work unless there is legislation to protect their right to refuse to volunteer.22.

21. The policy memorandum states that the policy behind the Bill originates from the Protect Christmas Day and New Year’s Day in Scotland Campaign run by USDAW. According to the policy memorandum, USDAW’s view is that many of its members were already working longer hours over the Christmas period, “usually for no extra money”. USDAW wished to ensure that its members were protected from this further extension in working hours.23 Liz McHugh, an USDAW shop steward and retailer worker told the Committee that “the lead-up to Christmas Day and New Year’s Day is tremendous. It is not only a one-week or two-week lead-up; it is the whole month. No one in my company is allowed to take any holidays in December and, in the week before Christmas, supervisors and managers are not allowed a day off—they take the day off previous to the event—so, by Christmas Eve, we are on our knees and have worked ourselves right into the ground. The pressure to get the stuff on the shelf and out to the customers is tremendous. The last thing that we want to do is come into work the next day or the following day—we look forward to the time off”.24

22. However the SRC contends that there has been a high demand from employees to work on New Year’s Day. It points out that many stores employ “seasonal” workers (for example students) at “premium” pay who “want to maximise their income”, over Christmas and New Year. It also suggests that businesses in general do not force staff to work as to do so is not beneficial, given their reliance on a motivated, committed workforce.25 The BRC spoke in the context of the pressures on retail staff to maximise earnings at this time of year because “employees want to spend more money at Christmas”.26 The view that staff are not forced into working was echoed by David Ramsden from Deregulate, who stated that “it seems crazy to me that anybody would want to put on their sales floor a shop assistant who did not want to be at work, because the first person whom they would take it out on would be the customer”.27

23. Peter Betts, Store Manager of Debenhams in Glasgow told the Committee that all the staff who worked there on New Year’s Day did so on a voluntary basis and were paid “triple time” and that seasonal workers were employed if need be.28 Graeme Ross, Deputy Chief Officer of the Scottish Co-op, which opened a fifth of its stores on New Year’s Day 2006, and Martin Clarke from the Edinburgh Woollen Mill stated that there was no difficulty recruiting staff for that day.29 The SRC confirmed that if people worked on Christmas Day or New Year’s Day, “the chances are that they will get double time or triple time or time off in lieu”.30

24. Some witnesses made a comparison between trading on Christmas Day and New Year’s Day and Sunday trading. Karen Whitefield MSP told the Committee that when Sunday trading began, workers received enhanced payments but that “it would be difficult to find many retail workers who get enhanced payments for working on Sundays now”. She believed that the same could happen in relation to Christmas Day and New Year’s Day.31 USDAW also made an analogy with Sunday trading, “Sundays were seen as special days on which trading should not take place. However, those days became like normal trading days and lost their special status, retailers stopped complying with agreements on volunteering, premium payments and so on that sought to protect staff – all that went out the window”. USDAW contended that with Christmas Day and New Year’s Day trading “exactly the same thing will happen”.32

25. Mandy Millar, a retail worker for Debenhams, confirmed that there is no pressure on staff in her store to work on New Year’s Day.33 However, when Karen Whitefield MSP suggested that financial incentives to work on New Year’s Day could diminish as has happened with Sunday working, Mandy Millar confirmed that there would be less demand to work if there was no extra payment available.34 Kevin Hawkins of the BRC conceded that, in the case of trading on Sundays, premium payments made to staff by the supermarket Safeways had been “phased out” as staff were now contracted to work on a Sunday.35 David Ramsden from Deregulate confirmed that most major retailers now offer a contract for a five-out-of seven day week rather than offering overtime for working on a Sunday.36

26. Experience of Sunday working varied among retail workers who gave evidence to the Committee. Liz McHugh, retail worker and member of USDAW, told the Committee that her company pays time and a half for working on a Sunday but that the opportunity to opt out of working on a Sunday, as provided for by the Sunday Working (Scotland) Act 2003, is not viable for her because of the pressure it would put on colleagues to cover for her.37 However, Mandy Millar confirmed that Debenhams has a policy that staff can opt out of working on Sundays and that they get an extra payment for working on Sundays.38

Retail workers covered by the Bill

27. It has been pointed out, for example by the BRC, that the Bill does not guarantee employees working in large retail stores Christmas and New Year’s Day off, as the Bill simply prohibits shops from opening on those days and does not prevent stores carrying out “behind the scenes” duties.39 However Karen Whitefield MSP argued that there would only be “limited” behind the scenes activity if any, on Christmas Day and New Year’s Day, “although stores could do the things that you mention on Christmas Day or New Year’s Day, the financial cost would be so great that they would not do them”.40 Peter Betts of Debenhams confirmed that the company does not have workers in “behind the scenes” on Christmas Day.41

28. Several written submissions highlight the fact that the Bill will only ensure Christmas and New Year’s Day off for customer facing employees in large stores. Both CBI and the Scottish Tourism Forum ask why only workers in retail outlets should be covered by the Bill, whereas, for example, those who work in restaurants or “stock-take” are not.42 The SRC claimed that a “major inconsistency and flaw in the Bill is that it affords rights to retail workers that would not be afforded to workers in other sectors”.43 The SRC also believes that the Bill is discriminatory as “employees would lose out on opportunities to work at times when they would be earning premium overtime payments”.44

29. Using different methodologies, the Committee has been presented with alternative viewpoints as to the number of retail employees directly covered by the Bill:

  • Karen Whitefield MSP contended that it was her “belief and perception that the majority of Scotland’s shop workers work in larger retail outlets. If that is the case, then the Bill will protect the majority of Scotland’s shop workers”.45 In supplementary written evidence, Karen Whitefield MSP estimated that approximately 190,000 of shop workers worked in large stores affected by her Bill and that this constitutes 72% of shop workers in Scotland. She indicated that this was based on an estimate by USDAW that the average small store employs 3 people;46

  • The Scottish Executive estimated that a minimum of 31% of retail workers (80,000) would be covered by the Bill. This was based on a BRC estimate that 6% of retail outlets are above 3,000 square feet, implying that small stores have 20 employees or less;47

  • Information provided by Professor Leigh Sparks, Professor of Retail Studies at the Institute for Retail Studies, University of Stirling, indicates that data is not publicly available to make the calculation. However he does point to a small scale study of the Raploch area in Stirling, which indicated that small shops employed between 3 and 13 workers, with most shops employing between 5 and 10. However Professor Sparks acknowledges that this was a very specific study which may not have wider applicability across Scotland;48

  • David Ramsden of Deregulate suggested that only 15% of stores across the UK were classified as “large” and that the Bill therefore fails to protect shop workers;49

  • Figures from the 2003 Annual Business Inquiry indicate that 84% of Scottish retail stores employed 10 people or less, accounting for approximately 30% of all retail employees. 95% of stores employed fewer than 25 people, accounting for 48% of all retail employees. However these figures do not indicate the floorspace of the stores.There is no other publicly available data to link floorspace of shops and numbers of workers.Without making assumptions about how many people generally work in small or large stores, and how many would be included in the other exempt categories, it is not possible to draw any definitive conclusions as to how many retail workers would be covered by the Bill.50

30. The Committee acknowledges that there is no reliable data available in relation to the number of employees that will be “caught” by the Bill and notes that the information it has received is based on different criteria and different approaches.

Other issues of concern

31. Peter Betts from Debenhams told the Committee that opening on New Year’s Day is less of a concern for staff than other issues such as late-night working and abuse of shop workers by members of the public.51 Mandy Millar who works in Debenhams in Edinburgh agreed, “I see late-hours opening as more detrimental to my family life than working on New Year’s Day”.52 However Peter Betts also told the Committee that although he agreed that it was appropriate to open from a business perspective, on a personal note, having three young children, he was “sad that we are open on Sundays and New Year’s Day”.53

32. The Committee notes USDAW’s view that without the legislation workers will be forced to work on Christmas Day and New Year’s Day in the future. The Committee also acknowledges the evidence that some workers wish to work on these days. The Committee also notes the lack of robust data available relating to the number of employees that would be affected by the legislation.

Impact on tourism

33. Some evidence is focused on the particular impact that the Bill would have on tourism in Scotland. VisitScotland voiced some concern that the prohibitions of shop opening, particularly on New Year’s Day, would be detrimental to income from visitors to Scotland and also to “the perception of Scotland as an attractive tourist destination”.54 This view is shared by the Scottish Tourism Forum which believes that “the core product offering of a New Year city break will be vastly reduced should retailers be forced to close on New Year’s Day therefore making Scotland a less attractive must stay must return destination”.55

34. VisitScotland cites research that indicates that shopping is one of the main reasons why a third of Scotland’s visitors come to the country. As 83% of visitors shop whilst on holiday in Scotland “there are significant links between tourism and the retail sector”. To VisitScotland, it is “important that retailers retain the opportunity to respond to market forces and…meet the needs of tourists”.56 The potentially negative impact on tourism is also referred to by the SRC and Glasgow Chamber of Commerce.57

35. Riddell Graham of VisitScotland said in oral evidence that “the experience of a holiday in Scotland—at Hogmanay or at any other time of the year—is enhanced or diminished by people's experience at the hands of all sectors” and that “my concern about any restriction—which the media may grab on to—is that it might create the perception that Scotland is closed on New Year's Day. That is the last message that we want to put out to visitors. I know from experience that there are a huge number of people in Scotland at New Year and that they are looking for something to do, part of which involves retail”.58 Alan Rankin of the Scottish Tourism Forum added that “as a past operator of tourist attractions, I know that retail is a vital part of a range of activities to attract families to such attractions. It is clearly a key plank of the visitor attraction sector”.59

36. Emphasising the link between retail and tourism, Debenhams told the Committee “retail in Scotland is becoming more visitor focused”.60 Edinburgh Woollen Mill confirmed that 20 to 30 of its stores regularly trade on New Year’s Day, just over 20 of which are above 3,000 square feet. All of its stores trading on New Year’s Day are in tourist-driven locations.61

37. However, Karen Whitefield MSP contended that visitors would not be put off by the closure of large stores on New Year’s Day, arguing that it was more important for visitors to go to tourist attractions, and that visitors went to a country with a set budget and would not spend more money simply because shops were open for an extra day. She added that the loss of a single day will not make a difference as people will still shop on Hogmanay and the second of January.62 VisitScotland was unable to provide any evidence of any negative economic impact of trading restrictions on Easter Day in England.63 The Federation of Small Businesses in Scotland argued that “there is a wealth of small, specialist shops in Edinburgh which cater for tourists” and it was therefore unfair to suggest that because large shops are not allowed to open there would be nothing else for tourists to do.64

38. The Committee was not able to obtain figures to confirm the specific significance of shopping as an activity for tourists visiting Scotland for New Year. The Committee sought further information from VisitScotland on this matter but it does not hold this information for the specific time periods in question. Similarly, VisitScotland was unable confirm the average length of stay for tourists visiting Scotland for New Year.65 It has therefore been difficult for the Committee to assess the potential impact of this Bill on tourism in Scotland.

39. The Committee notes the diverse views on the potential impact of the Bill on tourism in Scotland. However, the Committee was unable to come to a view regarding the impact that the Bill would have on tourism due to the lack of robust evidence relating to the relative importance of shopping as a tourist activity and the average length of stay for visitors to Scotland at New Year.

Economic impact

40. Retail jobs account for approximately 11% of all Scottish jobs,66 whilst retail accounted for just under 6% of the Scottish value added in 2002.67 Much of the evidence received by the Committee concerns the impact that the Bill will have on the Scottish economy. The SRC estimates that “non-displaced” sales (i.e. sales that would not take place on other days) for New Year’s Day could be worth up to £88 million.68 Glasgow Chamber of Commerce argues that the ban on Christmas Day and New Year’s Day opening could potentially damage the retail economy of the city.69 VisitScotland and the Scottish Tourist Forum believe that if the Bill were enacted it would have a detrimental effect on Scotland’s economy as a whole.70

41. Deregulate argued that bars and restaurants, whose trade is closely connected to that generated by retailers, could also be damaged by the legislation. The Edinburgh Woollen Mill stated that its sales on New Year’s Day represent 15% of the turnover in New Year’s week, above the average takings for that week.71

42. However the extent of the economic impact has been contested by Karen Whitefield MSP who told the Committee that she did not believe that the proposal would have a “catastrophic effect” on the Scottish economy and that there was a high degree of displacement as regards spending on New Year’s Day.72 The policy memorandum states that “creating an extra day’s trading will not necessarily produce more revenue, rather it is more likely to result in the spread of existing consumer spending over the entire seasonal period”.73 USDAW concurs.74 Information provided by the Scottish Parliament Information Centre indicated that Scottish Executive economists assume that there is a high degree of displacement from additional retail activity when considering applications for financial support for businesses under the Regional Selective Assistance schemes.75 However, the SRC believes that a large proportion of takings at this time would be tourist spend rather than displaced spend.76 David Ramsden of Deregulate also disputed the displacement argument, stating that people may choose to spend their money in other places if they are unable to go shopping on New Year’s Day.77

43. The policy memorandum states that widespread opening of shops on Christmas and New Year’s Day “could have a significant knock-on effect for workers in other connected services” such as banking and call centre staff, street cleaners and traffic wardens.78 The financial memorandum suggests that the provision of emergency services would need to be increased if people are moving around more for the purpose of shopping on these two days.79 USDAW concurred.80 The Deputy Minister stated that he was “not sure that there would be a major impact”.81

44. The Committee acknowledges that the Bill could have some economic impact but does not believe that the impact will be significant. However, the Committee was unable to accurately quantify the economic impact of the Bill due to a lack of robust evidence available.

Size of stores

45. The Bill excludes retail stores of 280 square metres (or 3,000 square feet) and under from closure on Christmas and New Year’s Day. The policy memorandum states that this definition was included in the Sunday Trading Act 1994 (although this statute does not apply in Scotland), it having been considered that shops of less than this magnitude generally do not have to be staffed by employees. The policy memorandum confirms that this size has been applied as it is regarded as being the largest sized store that could be staffed by one person. It is also intended that people will be able to make emergency purchases as “the majority of convenience stores, corner shops, small grocers…will not be prevented from opening on Christmas or New Year’s Day”.82

46. The Federation of Small Businesses in Scotland and Scottish Grocers’ Federation (SGF) welcome this exemption. The SGF believes that the “Convenience Store Sector” plays “an important community role” on those days in allowing consumers to purchase “last minute” items.83 Similarly, the Scottish Co-op believes that stores smaller than 3,000 feet square are not creating a demand for large numbers of people to come out and do their shopping; rather they are offering a service to the community.84 USDAW also argued that small shops should be exempt partly because many of these stores are family-owned and staffed by family members.85

47. However some of the submissions, for example from CBI and the Scottish Tourism Forum, have questioned why shops of under 3,000 square feet should be exempted from the legislation.86 The SRC told the Committee, “we are asking for a level playing field with other sectors” and are concerned about a number of “inconsistencies” in the Bill, for example banning larger retailers from opening but allowing smaller retailers to open”.87 Similarly, Peter Betts, Store Manager of Debenhams, told the Committee that “we cannot see why it should be all right for a small shop of under 3,000 feet square to sell women’s clothing, but not all right for a big shop, where trading would be outlawed on a New Year’s Day”.88 The BRC also questioned why the Bill should “discriminate” against those who work in small shops, “if family life and the traditions of Christmas are sacrosanct for certain types of shop worker, why not for all?”89

48. The Deputy Minister for Justice suggested that “If we do not agree that there should be a complete ban on every store opening, we must accept that there will be a degree of inequity”.90 Karen Whitefield MSP argued that as the criteria has been used previously with regard to Sunday trading legislation it will be easily understood; that smaller stores would be less likely to open on Christmas and New Year’s Day; and that, if her Bill was enacted, would be under less pressure to do so, as they would not have to compete with larger stores.91

49. The SGF sought clarification as to whether the Bill sought to prevent supermarkets opening a limited floor area to sell a restricted line of convenience goods.92 Karen Whitefield MSP told the Committee that any retailer opening a limited floor area to comply with the size limit set out in the Bill would be “attempting to thwart the law and bend the rules that were considered and laid down by Parliament. No reasonable retailer would wish to do that”.93

50. The Committee acknowledges the rationale behind the choice of the 3,000 square feet limit and notes the comments by the Minister that “if we do not agree that there should be a complete ban on every store opening, we must accept that there will be a degree of inequity”.94

Freedom of choice

51. The issue of consumers’ and businesses’ freedom of choice was raised by many of those who gave evidence. Glasgow Chamber of Commerce, for example, states “we believe that businesses and their staff are capable of reaching their own decisions on whether or not they choose to trade on Christmas Day and/or New Year’s Day”.95

52. Some respondents, such as David McArthur, an individual, and the organisation Deregulate, oppose such a prohibition on the grounds that the government has no right to regulate shop opening hours. David Ramsden of Deregulate argued that the opening hours of stores are “a matter for the shopkeeper, the shop worker and the customer and not for government”.96

53. However, the Deputy Minister for Justice contended that this argument “assumes that the views of the employer and the employee have equal weight” and that this may not necessarily be the case, and therefore, it could be an appropriate area for government intervention. Karen Whitefield MSP told the Committee that some employees feel that they have no freedom of choice in relation to refusing to work when asked to do so by their employers.97

Voluntary code

54. The SRC in its written evidence detailed proposals for a voluntary code that SRC members had agreed to. According to the SRC the code would have ensured that stores did not make staff feel obliged to work on New Year’s Day if the stores opened on that day. The SRC stated that it had been happy to discuss the development of a voluntary code further with USDAW or any other interested party.98 This proposal was supported by Kingfisher, Deregulate, the Scottish Tourism Forum and the CBI in their submissions. However the BRC stated that the Office of Fair Trading declared that such a code would be contrary to competition law. The code, therefore, is no longer under consideration as an option.99

55. The Committee notes that, given the views of the Office of Fair Trading, the option of a voluntary code is no longer under consideration.

Days on which trading should be restricted

56. The written submission from an individual, Sarah Hendry, suggests the prohibition of trading on Boxing Day and the second of January in addition to Christmas and New Year’s Day. The Free Presbyterian Church of Scotland in its written submission, and supported by the submission from David W. Norris suggests that rather than a prohibition of trading on Christmas Day and New Year’s Day, there should be a prohibition on trading on Sundays.100

Religious and ethnic minority issues

57. Some organisations, such as Deregulate, raised the issue of whether the Bill discriminated against those with non-Christian religious beliefs by using “certain religious norms, but not others to regulate trade”.101 Glasgow Chamber of Commerce echoed this, noting that Glasgow is “a multi-cultural city with a number of businesses and business owners who do not celebrate Christmas”.102 Glasgow City Council suggests that “there may be an issue relating to ethnic minorities who operate retail premises which are not included in one of the exempt categories and who may want to open on these days”. Though the Scottish Low Pay Unit supports the Bill, it suggests that provision be made for “other important traditional festivals and celebrations”.103

58. The policy memorandum states that Christmas Day has “lost much of its religious significance for a number of people and is probably now more widely seen more as a family day”.104 USDAW concurred, “Christmas Day and New Year’s Day have now become holidays for the population in general irrespective of individuals’ faiths”.105

59. Karen Whitefield MSP stated that she consulted with all faith groups and none objected to her Bill proposal. She said that “we live in a multicultural and multifaith society, but, notwithstanding that, Christmas Day and New Year’s Day remain special days for most of us, for religious and family reasons”.106 Rev Graham Blount confirmed that the Scottish Interfaith Council took soundings among non-Christian faith communities which showed that they generally welcomed the recognition of 25 December as a special day.107

Proposed fine

60. The Bill proposes a maximum penalty of £50,000 for those convicted of an offence under its terms. The policy memorandum states that £50,000 “could be seen as a relatively small amount given the turnover of some large shops”.108 However, Deregulate considered that the penalty is “totally disproportionate to the alleged offence as against penalties prescribed for other breaches of regulatory rules of this type”.109

61. The SRC told the Committee that its members would “want to abide by the spirit and the letter of the law” and that “the fine is almost insignificant to our members because they would operate according to the law”.110 Peter Betts of Debenhams and Graeme Ross of the Scottish Co-op agreed that the level of penalty was not an issue, as their shops would abide by the law.111

62. The Deputy Minister for Justice said that he believed the £50,000 maximum penalty would be “largely a symbolic gesture” and that “the damage to a company’s reputation from action having to be taken against it would be much more damaging than whatever it would have to pay for a fine”.112 Karen Whitefield MSP agreed with this assessment.113

63. The Committee agrees with the Minister that the proposed fine is largely symbolic and that the damage to the reputation of a company that was prosecuted for trading on these days would have a greater impact than the fine itself.

Enforcement

64. As a breach of the provisions of the Bill will be a criminal offence, enforcement will be the responsibility of the police. The financial memorandum on the Bill states that, should a breach occur, detection should not be resource intensive, as in the few instances when large shops open “they will wish to advertise the fact rather than acting surreptitiously”.114 The Association of Chief Police Officers in Scotland agreed that the policing effort in enforcing the Bill “need not be significant”.115 In his evidence, the Deputy Minister was satisfied that enforcement of the Bill would not present any difficulties as “the stores affected would be easily identified”.116

Legislative competence and competition issues

65. CBI Scotland raised the issue of the legislative competence of the Bill. It argues that the principal motivation behind the Bill relates to work and employment rights, an area reserved to the Westminster Parliament. Karen Whitefield MSP confirmed that the Executive and the UK government have stated that the matter is within competence and that this view is supported by the Presiding Officer.117

66. David Ramsden of Deregulate highlighted a potential concern that the Bill might raise an issue in relation to competition law as it allows a range of merchandise to be sold in a small shop but not the same range of merchandise in a large shop.118 However the Deputy Minister was content that no questions in relation to anti-competitiveness arose.119 Karen Whitefield MSP confirmed that the DTI carried out a Regulatory Impact Assessment in 2003 (for England and Wales) and concluded that “the proposed regulation would not impact on the competitive process” and that “the legislation will not impact adversely on any particular firms more than others”.120

Alternative approaches

67. Some respondents suggested that a more effective alternative approach by which workers could be protected from being forced to work on Christmas Day and New Year’s Day would be to introduce an “opt-out” for staff similar to the opt-out for Sunday working established in England and Wales by the Sunday Trading Act 1994 and extended to Scotland by the Sunday Working (Scotland) Act 2003. Under the terms of these Acts all shop workers, having given notice to their employer, may refuse to work on Sundays if they so wish. Deregulate, for example, suggests such a measure.121 However, as was pointed out by the Deputy Minister for Justice, employment law is not within the legislative competence of the Scottish Parliament.122

68. It has also been suggested that, as there is considerably less concern from respondents as to shops being prohibited from opening on Christmas Day (see paragraph 9 above), the Bill could be amended to the effect that only Christmas Day opening would be prohibited. The Scottish Chambers of Commerce argued that a ban on trading on these days should not be considered together as “the circumstances of these two dates are entirely different and cannot be dealt with uniformly”.123 In response to a question on this point, the Deputy Minister implied that this would not be possible: “As we read it, the Bill does not afford us the opportunity to separate the two days, so there is little point in our speculating on a matter that is not before us”. However he added that “If there is a debate to be had about separating the two days, we will consider that”.124

69. Despite receiving evidence on treating the two days separately the Committee acknowledges that an attempt to remove one of the days could be viewed as a wrecking amendment.

Policy memorandum

Consultation

70. The policy memorandum includes a section on consultation which states that the member in charge of the Bill sent 170 copies of a consultation paper to various groups and individuals and received 91 responses with 89% expressing support.125

Equal opportunities

71. The policy memorandum also outlines the effects of the Bill on equal opportunities. It states that in gender terms the majority of retail workers are women, “given the pivotal role women play in family life in general and child care in particular then the Bill can be seen as a positive development for family-friendly policy and work-life balance”.126 Rev Graham Blount also highlighted that the impact of shops opening on Christmas and New Year’s Day would be “strongest on the lowest paid, and particularly on women”.127 Religious and ethnic minority issues are covered in a previous section of this report.

Financial memorandum

72. The Committee is required under Rule 9.6.3 to consider and report on the Bill’s financial memorandum. The financial memorandum states that there would be zero cost on the Scottish Administration if the prevailing festive season trading environment is preserved. It also states that the costs to the police on enforcing the legislation should be “absolutely minimal”.128 The Finance Committee agreed to adopt level 1 scrutiny of the Bill. This level of scrutiny is applied where there appears to be minimal additional costs as a result of the legislation. The Committee agreed to seek written evidence from CBI Scotland; the Federation of Small Businesses in Scotland; SRC; STUC; and the Association of Chief of Police Officers in Scotland and to forward any responses to the Justice 2 Committee.

73. The Finance Committee received responses from the SRC and the Federation of Small Businesses in Scotland. These responses are attached at annex A. Points raised by the SRC in its response have been outlined in other sections of this report, particularly in the section on the economic impact of the Bill. The Federation of Small Businesses in Scotland had no specific concerns in relation to the financial memorandum but pointed out the possibility that the costs for publicising the proposed legislation may not have been accurately defined.129

Recommendation

74. By majority, the Committee recommends that the general principles of the Bill be agreed to.130


Footnotes:

1 Policy memorandum, paragraph 51

2 Karen Whitefield MSP, Written evidence

3 Official Report, 19 September 2006, Col 2708

4 Policy memorandum, paragraph 4

5 Official Report, 19 September 2006, Col 2708

6 USDAW, Written evidence

7 Official Report, 5 September 2006, Col 2589

8 Humanist Society of Scotland, Written evidence

9 Official Report, 12 September 2006, Col 2646

10 Sarah Hendry, individual, Written evidence

11 Official Report, 12 September 2006, Col 2657

12 Federation of Small Businesses, Written evidence

13 Official Report, 5 September 2006, Col 2592

14 Official Report, 12 September 2006, Col 2646

15 Policy memorandum, paragraph 2

16 Official Report, 5 September 2006, Col 2596 and Cols 2603-4

17 Official Report, 5 September 2006, Col 2605

18 Official Report, 5 September 2006, Col 2596

19 USDAW, Written evidence

20 Official Report, 5 September 2006, Col 2594 & 2600

21 Official Report, 5 September 2006, Col 2591

22 Official Report, 12 September 2006, Col 2654

23 Policy memorandum, paragraph 35

24 Official Report, 5 September 2006, Col 2599

25 SRC, Written evidence

26 Official report, 5 September 2006, Col 2600

27 Official Report, 12 September 2006, Col 2676

28 Official Report, 5 September 2006, Cols 2616-2618

29 Official Report, 5 September 2006, Col 2618 and 2642

30 Official Report, 5 September 2006, Col 2594

31 Official Report, 19 September 2006, col 2726

32 Official Report, 5 September 2006, Col 2612

33 Official Report, 12 September 2006, Col 2659

34 Official Report, 12 September 2006, Col 2666

35 Official Report, 5 September 2006, Col 2595

36 Official Report, 12 September 2006, Col 2673

37 Official Report, 5 September 2006, Col 2595

38 Official Report, 12 September 2006, Col 2663

39 Official Report, 5 September 2006, Col 2590

40 Official Report, 19 September 2006, Col 2719

41 Official Report, 5 September 2006, Col 2616

42 CBI, Scottish Tourism Forum, Written evidence

43 Official Report, 5 September 2006, Col 2605

44 SRC, submission to the Finance Committee

45 Official Report, 19 September 2006, Col 2714

46 Karen Whitefield MSP, Supplementary written evidence

47 Scottish Executive, Supplementary written evidence

48 SPICe, supplementary paper for the Committee

49 Official Report, 12 November 2006, Cols 2697-8

50 Supplementary SPICe briefing, (Source: NOMIS website 2006)

51 Official Report, 5 September 2006, Col 2624

52 Official Report, 12 September 2006, Col 2659

53 Official Report, 5 September 2006, Col 2622

54 VisitScotland, Written evidence

55 Scottish Tourism Forum, Written evidence

56 VisitScotland, Written evidence

57 SRC, Glasgow Chamber of Commerce, Written evidence

58 Official Report, 5 September 2006, Col 2631-2

59 Official Report, 5 September 2006, Col 2632

60 Official Report, 5 September 2006, Col 2628

61 Official Report, 5 September 2006, Col 2629

62 Official Report, 19 September 2006, Cols 2714 & 2716

63 Official Report, 5 September 2006, Col 2634

64 FSBS, Written evidence

65 VisitScotland, Supplementary written evidence,

66 Future Skills Scotland, March 2006, Scottish Sector Profile 2005 Retail

67 Scottish Executive, July 2006, Scottish Index of Gross Domestic Product Tables 2006: Quarter 1

68 SRC, Written evidence

69 Glasgow Chamber of Commerce, Written evidence

70 Official Report, 5 September 2006, Col 2633

71 Deregulate, Written evidence, EWM, Official Report, 5 September 2006, Col 2629

72 Official Report, 19 September 2006, Col 2711

73 Policy memorandum, paragraph 76

74 Official Report, 5 September 2006, Col 2597

75 Supplementary SPICe briefing

76 Official Report, 5 September 2006, Col 2596

77 Official Report, 12 September 2006, Col 2672

78 Policy memorandum, paragraph 38

79 Financial memorandum, paragraph 42

80 Official Report, 5 September 2006, Col 2610-2611

81 Official Report, 19 September 2006, Col 2705

82 Policy memorandum, paragraphs 3 and 47-49

83 FSB, SGF, Written evidence

84 Official Report, 5 September, Col 2627

85 Official Report, 5 September 2006, Col 2606

86 Scottish Tourist Forum, Written evidence

87 Official Report, 5 September 2006, Cols 2605 & 2588

88 Official Report, 12 September 2006, Col 2616

89 Official Report, 5 September 2006, Col 2589

90 Official Report, 19 September 2006, Col 2703

91 Official Report, 19 September 2006, Col 2717-2718

92 SGF, Written evidence

93 Official Report, 19 September 2006, Col 2722

94 Official Report, 19 September 2006, Col 2703

95 Glasgow Chamber of Commerce, Written evidence

96 Official Report, 12 September 2006, Col 2669

97 Official Report, 19 September 2006, Col 2710

98 SRC, Written evidence

99 Official Report, 5 September 2006, Col 2593

100 Sarah Hendry, Free Presbyterian Church of Scotland, David W. Norris, Written evidence

101 Deregulate, Written evidence

102 Glasgow Chamber of Commerce, Written evidence

103 Glasgow City Council and Scottish Low Pay Unit, Written evidence

104 Policy memorandum, paragraph 85

105 Official Report, 5 September 2006, Col 2614

106 Official Report, 19 September 2006, Col 2726

107 Official Report, 12 September 2006, Col 2647

108 Policy memorandum, paragraph 43

109 Deregulate, Written evidence

110 Official Report, 5 September 2006, Col 2613

111 Official Report, 5 September 2006, Col 2627

112 Official Report, 19 September 2006, Col 2706

113 Official Report, 19 September 2006, Col 2722-2723

114 Explanatory notes, paragraph 27

115 ACPOS, Written evidence

116 Official Report, 19 September 2006, Col 2705

117 Karen Whitefield MSP, Supplementary written evidence

118 Official Report, 12 September 2006, Col 2679

119 Official Report, 19 September 2006, Col 2702

120 Karen Whitefield MSP, Supplementary written evidence

121 Written evidence and Official Report, 12 September 2006, Col 2675

122 Official Report, 19 September 2006, Col 2703

123 Scottish Chambers of Commerce, Written evidence

124 Official Report, 19 September 2006, Col 2694

125 Policy memorandum, paragraphs 65-68

126 Policy memorandum, paragraph 81

127 Official Report, 12 September 2006, Col 2650

128 Financial memorandum, paragraphs 19 and 26

129 FSBS, response to the Finance Committee

130 Stewart Maxwell MSP and Jeremy Purvis MSP dissented on the basis that there is a lack of any robust evidence to support the Bill and that it fails to meet the objectives as outlined by the Member in Charge, which is to "protect the majority of shop workers in Scotland" and to retain the special nature of Christmas and New Year's Day, as the Bill cannot guarantee the day off to any shop workers.

David Davidson MSP dissented on the basis that there was insufficient robust evidence to back the Bill which discriminates against some retailers on the basis of floorspace so removing their opportunity to respond to public demand, reduces availability to work for those that wish to and fails to guarantee time off for the majority of retail staff as claimed.

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