Gambling (Licensing and Advertising) Bill

Debate between Lord Clement-Jones and Viscount Astor

Tuesday 4th March 2014 Lords Chamber

[Viscount Astor (Con)]

My Lords, I should start by thanking my noble friend Lord Clement-Jones, and the noble Viscount, Lord Falkland, for moving this amendment in Committee. I also thank the noble Lord, Lord Collins of Highbury, for his support for the amendment. I should apologise for missing Committee but after joining the Prime Minister on his trip to China in December, I was called back to Beijing in January and so missed that stage.

My amendment produced an informed and generally supportive debate. The Minister concentrated his response by saying that now was not the right time to replace the levy and that a reform was needed to be considered across the whole system. I absolutely agree but my amendment does not seek to reform the levy. I agree that there should be a major reform that takes in all aspects of the issues that surround racing, whether it is on-course betting, off-course betting, offshore or onshore betting, betting exchanges, media rights or issues of state aid.

My amendment is simple. It allows the Secretary of State to bring in legislation to encompass offshore bookmakers who do not presently pay the levy. Racing is losing about £10 million a year that it is entitled to. That word “entitled” raises the question of why. There is a simple analogy. If the Government are going to regulate those based overseas on areas such as problem gambling and integrity on bets on UK sports, that shows that there is already that reach and the entitlement. My amendment does not force the Government to do anything but if they want to support racing they could use it. It does not cost any money and, in fact, it would provide an addition to the Treasury coffers. The reason it is important for racing is that we know that there is no time to legislate this Session. Therefore, the earliest time will probably be half way through the next Session of Parliament, by which time racing will have lost out on nearly £100 million of income.

I read carefully the Minister’s response in Grand Committee. He said that my amendment was too narrow in its scope. That may be so, so I look forward to the Government widening and improving it. The Minister said that the levy is regarded as state aid by the EU. I think we all agree with that. However, my amendment does not change anything. It just allows the levy to be collected as it used to be from all bookmakers. It is not necessarily a substantive change to the existing system as some have claimed. If permission is required from the European Parliament, the Government can ask for clarity before they proceed. After all, that is what the French did and it worked. If accepted, the amendment would allow the Government to continue their discussions with the European Commission.

My amendment supports the racing industry. Following the very useful discussions I have had with the Minister of Sport, Helen Grant, I understand that my noble friend might be able to reconsider his earlier response. I look forward to his reply. My amendment would put bookmakers based in the UK on an equal footing with those based abroad. It would allow the Government, if they wish, to remove the unfair competition that those based abroad currently enjoy and which benefits racing. I beg to move.

[Lord Clement-Jones]

My Lords, I rise briefly to support the principle of my noble friend’s amendment. It would be especially suitable for the Minister to take heed of it as it is the Chinese year of the horse. My noble friend spent some time in Beijing, so clearly he was inspired by the horse to put forward the amendment.

The question is whether we are going to miss the boat. The opportunity has been taken to hang off the architecture of the Bill a number of amendments that do not necessarily relate to remote gambling. It is incumbent on the Minister, if he is going to avoid further and perhaps unwanted amendments, to reassure those of us who see a boat going by without the opportunity to make desirable amendments, because we know that there will not be another gambling Bill for another five years or so. This is one of the issues that we face. I hope that the Minister will be able to give us an assurance on the ability of the Government—or any Government—to institute a new, improved form of levy that safeguards the future of the industry, without it being incorporated in the Bill. Otherwise, it will make reserved powers very attractive as a mechanism for introducing a future form of levy. That is a dilemma.

This evening, the Minister very adroitly proceeded by way of voluntary agreements and assurances in a number of areas, or by actions that do not require primary legislation. I hope that this will be another such instance. However, it is a subject of considerable anxiety in the racing industry and I very much hope that the Minister will be able to satisfy all those who want to see some action going forward in this case.

Police Reform and Social Responsibility Bill

Debate between Lord Clement-Jones and Viscount Astor

Thursday 16th June 2011 Lords Chamber

[Lord Clement-Jones]

My Lords, that is deeply reassuring to us lawyers, but I am afraid it is not very reassuring to the owners of businesses because they will simply have to place themselves in the hands of my colleagues and myself in challenging these orders on the grounds that no reasonable council would have imposed them. That is a very tall order.

[Viscount Astor]

Far be it from me to try to deprive my noble friend of business, but does he agree that one of the problems is that almost no operators can afford judicial review unless they are part of a large chain?

[Lord Clement-Jones]

Absolutely. That is only going to add to the burdens on business. Although I accept that the Minister has gone as far as her brief will allow her, I seriously ask her to give further consideration to this. I was delighted to hear what the noble Lord, Lord Stevenson, had to say about his enthusiasm for live music, but the reason why he was talking about it was the potential impact on small venues and live music in areas where local councils have decided that they do not like what is happening in other places—not necessarily in the small clubs but in the large boozers, so to speak. That is sweeping up everybody into one single pot with one remedy. Although I have heard quite a lot today from the Minister that was reassuring about the ability to deliver flexibility, I do not think we have heard quite enough yet. The least convincing response was on TENs. If you have a TEN, and an EMRO is opposed, you can have a bit of a consultation on it, but actually the remedy is to move your event in time or space. That seems pretty onerous and jolly unfair if you are a local community group and you have to shift yourself in that way after an EMRO has been imposed.

I look forward to further dialogue with the Minister and very much hope that we will continue that, even before Report, on certain areas of these reforms of the Licensing Act. In the mean time, I beg leave to withdraw the amendment.

--- Later in debate ---

[Lord Clement-Jones]

My Lords, I should like to speak to Amendments 240XF, 240XH and 241ZZA, while supporting Amendments 241 and 241Y. These amendments seek to remove the lines of the Bill which give councils the power to charge licensees for more than just cost recovery in the licensing system. Businesses in the sector are concerned about the cost implications of the amendment in the other place on fees. In already difficult economic times, licensees will be facing significantly increased costs, which will be particularly difficult to bear for small businesses.

The wording of the Bill is extremely vague, stating that businesses will not only be liable for costs associated with local authorities discharging the licensing function but also the general costs of the licensing authority and other associated authorities, such as the planning department. These amendments seek to delete the provision that would allow licensing authorities to reclaim not only the cost of carrying out activities relating to licensing but also any other general costs. This wording would effectively give local authorities power to charge licensees for a whole host of alternative activities even if they are not related to the cost of administering the licensing regime.

The legislation does not explain what safeguards will be in place for businesses. There has to be a transparent process where local authorities would need to demonstrate why their chosen fee level is appropriate. Businesses would have to have an opportunity to feed into this process and to appeal the decision if the local authority was looking to set fees at a level that was disproportionate. There should also be a national cap on the level at which fees can be set to avoid local authorities applying disproportionate charges.

While the measure would have a significant impact for all premises, there is the concern that it could disproportionately affect smaller businesses. It could be the case in certain areas of particularly high licensing fees that independent businesses find themselves priced out of the local market and therefore unable to compete with larger chains. That would be to the detriment of the consumer who would find that their choice is limited. With reference to the off-trade, a significant number of licensed premises are grocery retailers, so this decrease in competition locally would impact on far more than just the ability to buy alcohol. Any increase must consider the effect on smaller businesses.

Amendment 240XH is designed to ascertain the Government’s intention on the introduction of a cap of the amount that local authorities can charge. Subsection (3) of the new clause to be inserted in the Licensing Act 2003 under Clause 122(2) provides,

“the fee is to be determined by the licensing authority to whom it is to be payable”.

Subsection (4) of the new clause allows the regulations to provide a constraint on the amount up to which local authorities can charge but this does not necessarily mean that such a limit must be set. Businesses have a real concern that some councils may charge excessive amounts based on their costs, which will be difficult and expensive to challenge. We know already that the level of enforcement activity varies around the country and such variation is not necessarily driven by need. Not all councils are driven by the Hampton principles of good enforcement and over-zealous enforcement can be expensive and unproductive. The wide range of fees collected by councils under the old public entertainment licence regime was one of the drivers of their being subsumed into the Licensing Act 2003. A repeat of the problems, discrepancies and costs to businesses should not be repeated. A national cap, such as that imposed in the Gambling Act 2005, is a not unreasonable request and should be specifically included in the Bill.

Amendment 241ZZA builds on previous amendments to ensure that safeguards are in place in the legislation to prevent businesses facing excessive and unfair licensing fees.

[Viscount Astor]

Amendment 241, to which my noble friend Lord Clement-Jones referred, is in my name and concerns fees. Subsection (7) of the new clause to be inserted in the Licensing Act under Clause 122(2) states:

“In determining the amount of the fee, the licensing authority must seek to secure that the income from fees of that kind will equate, as nearly as possible, to the aggregate”.

Paragraph (a) of subsection (7) states that,

“the licensing authority’s costs referable to the discharge of the function to which the fee relates”.

I do not see any problem with that clause, which seems enormously sensible and would collect most of the costs. However, paragraph (b) of subsection (7) refers to,

“a reasonable share of the licensing authority’s general costs”.

That seems to be a recipe for confusion because there will be endless arguments about, first, what is a reasonable share and, secondly, what are the licensing authority’s general costs. I thought that when local government—there are many noble Lords here who are more expert than I am on it—determined fees and collected them, those fees related to the actual things that it was doing. The idea that this can cover general costs, as my noble friend says, would enable a local authority to say that general costs in many other areas—whether for collecting refuse or whatever—could somehow relate to this and then collect the fees. So there is a concern.

I hope that my noble friend can give me some comfort that this will not allow local authorities, which, as we know, are always short of money, to use this to collect fees, which would mean a greater burden on the industry than there should be. [Interruption.]

Police Reform and Social Responsibility Bill

Debate between Lord Clement-Jones and Viscount Astor

Thursday 9th June 2011 Lords Chamber

[Lord Clement-Jones]

In moving Amendment 237B, I will also speak to whether Clause 106 should stand part and Amendment 239A. As Clauses 106 and 108 stand, the vicinity test for making representations will be removed and any person will be able to object, broadly, to a live music event if they are located in the licensing authority area. A person will no longer be required to be an interested party in order to object. However, there is no doubt that removing the vicinity test could entirely open up the licensing process to an excessive number of people making representations who have no ties to the local area—for example, national campaign groups running a postcard campaign. This could lead to a significant increase in the number of appeals and reviews, increasing the bureaucracy and cost to local authorities and businesses.

As currently drafted, the Bill, while removing the vicinity test, introduces a different constraint in that it restricts participation to those living and based in the local authority area concerned. This could mean that a resident living on the other side of the street could not make representations if they were in a different local authority area. The current state of the clauses in the Bill is far from satisfactory. These amendments therefore seek to define who can make a representation more robustly, restricting it to either someone living sufficiently close to the premises that will be affected by its activities or to an affected business. This will ensure that only those with a local interest are able to intervene. It will ensure, however, that anyone directly affected by licensed premises will be able to make representations, even if they do not live in the local authority area where the premises are situated. This will improve the position of local communities with legitimate concerns about licensed premises and ensure that they are able to have their say.

Clearly, this is a compromise suggestion. It is not clear that the Government have entirely demonstrated the mischief that must be cured by Clauses 106 and 108. This is, in a sense, the clause stand part discussion, Clause 106 being on premises licences and Clause 108 on club premises certificates. As was clear from the consultation process, this proposed removal received a majority negative response. Respondents of all kinds suggested that this proposal could lead to a rise in vexatious complaints and give disproportionate influence to non-local individuals. I believe that of all the consultation proposals, that one received the greatest negative response. The onus of proof is really on the Government to demonstrate that Clauses 106 and 108 should be there in the first place. Thereafter, I hope that they will accept the necessity to amend them. If they demonstrate that, they will demonstrate that they support the amendments that I have put forward.

[Viscount Astor]

My Lords, I have added my name to the amendment moved by the noble Lord, Lord Clement-Jones, because I am concerned about the drafting, particularly in Clause 106(3)(a), which allows anyone who is “involved in a business”. However, that might be totally unrelated to pubs, clubs, bars or anything like that. What is important is to allow people who live in the local area to have a view. It should not be restricted to local authorities because if you are dealing with the city of London, local authority division might be down the middle of a street. People can live 100 yards away but be in a different local authority. I commend what the Government are trying to do but I am concerned about the wording and how it will be interpreted.

I remind your Lordships that we are trying to keep pubs open in rural areas and, indeed, all around the country. We should not allow interest groups who have no interest and live nowhere near that particular pub to have an influence on whether it should get a licence. It is also important to remind your Lordships that, 20 years ago, 70 per cent of the drinks sold in this country were sold in pubs, bars and clubs with 30 per cent being sold in retails outlets. The reverse is now the case: only 30 per cent is sold inside a pub, club or bar and 70 per cent is sold in supermarkets and other outlets. If we are concerned about excessive drinking, we should make sure that we do not blame those who have only 30 per cent of the market. We must look much more closely at those who provide 70 per cent of the alcohol in this country.

--- Later in debate ---

[Viscount Astor]

My Lords, this is an important amendment. The industry is concerned that the changes in the Bill could affect someone’s ability to operate a business because it would allow a review to look at the business in a totally different way from what has been done before, and produce a severe financial impairment.

One should start off by saying that it is not easy to get a licence. It is extremely difficult. You have to persuade the local police and get them on your side. You have to persuade the local authority, all the local interest groups, your competitors and almost everybody else who has a view. It is a not an easy process. It is a high-hat hurdle. It is a major barrier. It is quite right that it should be. As part of that you have to show why various things are necessary. That process is understood by the industry, local authorities and all those who look on it from the outside.

The Government seek to change the evidence test for the attachment of licence conditions by using “appropriate” rather than “necessary”. There is no evidence that local authorities are in favour of this change or that there is any barrier to imposing tough trading conditions. The problem is that the word “appropriate” would allow decisions to be taken on the grounds of subjective judgment as opposed to the actual facts of a case. “Appropriate” is not clearly defined in law. I am sure that my noble friend the Minister will say that “necessary” is not defined in law either. However, it has been defined by various judgments in the courts so that everybody understands what it means whereas “appropriate” has not.

I should remind your Lordships that in these circumstances the only right of appeal is in effect judicial review, which is an incredibly long and expensive process. Will my noble friend explain what evidence there is for promoting this change? What benefits do the Government think will be gained from it? Those have not been properly demonstrated. The Minister in another place suggested that there was pressure for the change, but during that debate and since then the Government have produced absolutely no evidence that there is any pressure to make this change.

The worry about the change is that you might have a responsible operator who has invested large sums of money in a pub or bar, or whatever it happens to be, and is doing exactly what he should do under the law, but somebody reviews his premises under a totally different set of decisions based on an arbitrary view rather than on anything that is evidence-based or is required for the benefit of the local community, and the operator might either have to review how he operates his premises or lose his licence and suffer a substantial loss not only of earnings but of all the capital that he has invested in the business. This is a very important issue—perhaps the most important issue in this whole area of licensing so far as I can see. I hope that my noble friend will give it his usual careful consideration when replying. I beg to move.

[Lord Clement-Jones]

My Lords, I support Amendment 240 moved by the noble Viscount, Lord Astor. I wish to speak to Amendments 240A, 240B and 240P. Amendments 240, 240A and 240B would retain the “necessary” test for the determination of applications for a review of a premises licence. Review proceedings are quasi-judicial, designed to deal with infringements of the licensing regime and have a wide range of penalties available to be deployed against the premises in question, from the imposition of new conditions restricting the operation of the premises to suspension or even withdrawal of a licence. Therefore, it is surely right that a higher evidence threshold should be retained in these specific circumstances.

Amendment 240P, which is grouped with the other amendments that I am discussing, reintroduces the need in Clause 120 for licensing authorities to consider that an early morning alcohol restriction order is necessary for the promotion of the licensing objectives, rather than appropriate. The noble Viscount, Lord Astor, has set out extremely well the need for these amendments and the significance of the change from “necessary” to “appropriate”. The Bill reduces the evidence test for the attachment of licence conditions so that these are “appropriate” rather than “necessary”. We seek to remove that provision from the Bill, either through opposing that the clause stand part or through amendments.

There is no evidence to suggest that local authorities find the evidential burden too restrictive and plenty of evidence from across the country that suggests that it is not a barrier to imposing tough trading conditions, as the noble Viscount mentioned. The substitution of “necessary” for “appropriate” would allow decisions to be taken on the grounds of political expediency, say, or subjective judgment. The fact that “appropriate” is not clearly defined in law, unlike “necessary”, increases the likelihood of legal challenge and appeal. In contrast, operators will still need to satisfy the higher evidence threshold. It is notable that the concerns of operators are shared by the Local Government Association and enforcement authorities, which are worried that it may undermine the robustness of decision-taking.

It is crucial to retain the necessary tests for conditions. Licensing authorities are already able to impose conditions that they and other responsible bodies need to promote the licensing objectives without difficulty. The vast majority do not find the evidential burden for this too restrictive. For those that have experienced difficulties, with a lack of representation being made by responsible authorities about problem premises, the Bill makes local authorities responsible authorities, which means that they will be able to tackle problem premises in their own right, not rely just on evidence supplied by the other responsible authorities.

It should be recognised that licence conditions impose additional cost and restrictions on businesses, so they must be necessary—that is, essential—in order to justify the additional burden on the premises concerned. The breach of a licence condition is a serious offence and carries a fine of £20,000. Such a penalty is too great in respect of conditions that are simply deemed “appropriate”. A change from “necessary” to “appropriate” will introduce subjectivity into the licensing process and could lead to a disproportionately strong voice for minority interest groups that find themselves able to dominate the licensing process. There are many different types of conditions that could be considered appropriate for most, if not all, licensed premises, but would certainly not be necessary for the vast majority of them, which are well managed, responsible businesses. One can think of examples such as plastic glasses, CCTV, doormen, and duplication of existing legislative requirements—all of which could be imposed as perhaps being appropriate but not necessary in those circumstances.

In Committee in the House of Commons, the Government justified the lowering of the evidence test from “necessary” to “appropriate” on the ground that some local authorities feared that a particular condition or step they sought to take would not be regarded as necessary, and that support for the measure was based on “anecdotal evidence”. Surely, this is insufficient evidence on which to base a change of this nature that will fundamentally alter the basis of the Licensing Act. Indeed, the Local Government Association has also expressed its misgivings about the change, I understand.

Why should we reduce the evidence base for conditions so that the need for them becomes a more subjective matter of opinion? This will lead only to conditions being challenged more than is currently the case, resulting in an increased burden on licensing committees, the courts and licensed premises. The licensed trade claims that the current “necessary” test has worked well and has ensured that conditions attached to licences are fair and address specific concerns, as opposed to being unfair and disproportionate. Where is the evidence otherwise?