Strategic Licensing Regulations: London

Jim McMahon Excerpts

Wednesday 4th November 2026 Commons Chamber

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Jim McMahon)]

I am grateful to my hon. Friend the Member for Cities of London and Westminster (Rachel Blake) for securing this important debate and for the significant effort that she has put into representing her constituents on this matter over a long period of time; I know how much it matters to her and to them. Hopefully I will address the points that she has made in the course of her speech, but I know that this will not be our final conversation on the issue, nor should it be.

This is about how we balance competing interests. We must recognise that London is a global city and acts as a draw, but it is also where people live and are part of a community. I know that my hon. Friend is trying to strike that balance. The new strategic licensing arrangements came into force yesterday. They give the mayor a strategic role in licensing across the capital, with a duty to publish a London-wide policy and a power to call in certain applications of potential strategic importance. Before I address their impact, it is important to explain the problem that the reforms are intended to solve.

London’s hospitality, cultural and night-time economy is central to the capital’s success and its appeal as a global city, but licensing decisions can have implications that extend beyond a single premises or borough, affecting London’s wider economy, cultural offer and international reputation. Individual boroughs are rightly focused on their local circumstances, and these reforms are intended to complement that local expertise with a strategic role for the mayor where an application may be significant to London as a whole. The aim is not to set local and London-wide interests against each other, but for them to complement each other. The aim is to support a licensing system that is capable of balancing those interests fairly while continuing to protect residents and uphold the licensing objectives.

Let me start with residents and the concerns that my hon. Friend has rightly raised on their behalf. I want to be clear that the protections at the heart of the licensing system remain unchanged. The four statutory licensing objectives—the prevention of crime and disorder; public safety; the prevention of public nuisance; and the protection of children from harm—continue to apply. Those protections apply equally where the mayor intervenes. Any application that is called in will still be determined in accordance with the Licensing Act 2003 and with regard to the importance of promoting those objectives, while residents and other interested parties will retain their existing ability to make representations on individual applications. Residents have also had the opportunity to respond to the mayor’s consultation on his new strategic licensing policy, which will set out the wider framework for his strategic licensing role.

Alongside those opportunities for residents to make their voice heard, the new arrangements include specific transparency requirements around the mayor’s new strategic role. Advertising requirements will ensure that residents are informed when an application is identified as being potentially strategically important, and, if the mayor intervenes, of the decisions taken. There are clear lines of accountability. Mayoral directions remain subject to the existing rights of appeal, and where a direction is appealed, the mayor is legally responsible for defending it. Overall, residents will retain the protections at the heart of the licensing system, and transparency and clear accountability are built into the mayor’s new strategic role.

Let me turn to London’s licensing authorities. I recognise the concerns about what the mayor’s new role could mean for local decision making, as well as the additional responsibilities that it will place on licensing teams. I should reiterate that local licensing authorities will remain the default decision makers. They will continue to receive applications, consider representations, hold hearings where necessary and determine applications in the first instance. The mayor’s new role does not replace those core functions; it provides an additional strategic role for applications that meet the relevant criteria, with call-in decisions remaining discretionary.

[Deirdre Costigan]

The Minister makes a point about supporting local authorities in London. Will he commit to ensuring that local authorities are included in the two-year review of this measure? Will he look at the potential new burdens funding that might be required for local authorities?

[Jim McMahon]

I will come on to the new burdens funding shortly. I will mention in a short while the built-in review periods and the approach to those that she asks about.

The new arrangements will require some additional information sharing with the Greater London Authority. Those requirements are largely based on information that authorities already collect or have access to through the normal licensing process. Even so, we recognise that meeting those requirements may come with additional costs. The Government will therefore conduct a full new burdens assessment to ensure that local licensing authorities are appropriately reimbursed for new costs resulting from these powers.

We recognise that the new system will place demands on the GLA. It has been preparing for its new responsibilities, in addition to recruiting additional resources to support the operation of the new regime. Our aim is simple: to keep boroughs at the heart of decision making on licensing while ensuring that both they and the GLA are equipped to ensure that the new system works effectively.

[Rachel Blake]

Will the Minister comment on the part of the process where the Greater London Authority makes the decision to call in applications? As I discussed in my opening remarks, we know that there is quite a broad pool of eligible premises. I believe that my residents have a concern about how the decision to call in will be made and the transparency around that decision. They are concerned that some types of premises or premises operating in particular areas might seek to get that call-in, so we really seek transparency on that issue.

[Jim McMahon]

I will talk through that process shortly, and also cover what the criteria for potentially strategically important venues mean. I need to reiterate, though, that although keeping boroughs at the heart of licensing decisions is important to us, so too is ensuring that the system supports London’s wider growth.

That brings me to businesses and the central purpose behind the reforms: better supporting London’s hospitality and night-time economy. A thriving hospitality sector is fundamental to London’s success as a global city. We want a licensing system that gives responsible operators greater confidence to invest, adapt and grow. Giving businesses that confidence means ensuring that the new process does not create unnecessary delay or uncertainty, which is why the regulations establish clear statutory deadlines and procedures.

To address a point made by my hon. Friend the Member for Cities of London and Westminster, the call-in power is designed to support a more enabling approach to licensing, rather than giving the mayor a means to block or further restrict applications. An application granted as applied for cannot be called in. Where the mayor intervenes, any conditions he imposes cannot, in his opinion, be more restrictive than those imposed by the licensing authority, and he can only direct that an application be rejected where the authority has itself rejected it. We believe that those protections and safeguards strike the right balance. They are intended to ensure that the new strategic role supports growth without creating unnecessary delay or uncertainty for businesses, while maintaining important protections for residents and the local community.

I now turn to the point about sites that are potentially strategically important to Greater London. As has been said in the debate, we have built in a requirement for the mayor’s call-in power to be reviewed after two years, and then at least every five years thereafter. I am happy to take away the particular point about the role of local authorities in that review process and confirm in writing the position.

To summarise one of the bigger concerns, because the scope of premises can feel quite wide, there is a concern that the proposal creates a completely double-run system—a process on top of the local licensing authority. In supporting this proposal and the new licensing regime, it is not our expectation as a Government that all the premises that are in scope will be called in by the mayor for a strategic decision. Our expectation is that most of them will go on as normal, and for them to be called in by the mayor, they would have to meet at least one of the criteria set out in law.

We believe that these reforms get the balance right between protecting local residents and communities and recognising that in many ways, London’s night-time economy is unique. Many people come to London not only to work and shop, but to experience the night-time economy—our theatres, bars, restaurants and nightclubs.

[Joe Powell]

I thank the Minister for his important clarification of the Government’s intention. Does he also accept that there is a big difference in rateable values between inner and outer London? One of the concerns of inner-London MPs such as myself and my hon. Friend the Member for Cities of London and Westminster (Rachel Blake) is that, almost by definition, we will end up with more venues in the potential call-in zone compared with outer London. That clarification for inner London is therefore particularly important.

[Jim McMahon]

We will need to see how that works in practice, because I think it could work both ways. I recognise that rateable values might be lower in outer London than in inner London, but that reflects the economic benefit that premises in inner London bring—that is why the business rates bill ends up being higher. It would be reasonable for the mayor to say that, for that reason, such premises clearly have a more important role to play than those of the same nature in an outer-London borough that might look the same on the outside. Those premises can play quite different roles economically in their contribution to the wider night-time economy, so that can probably work both ways.

Although I recognise all the concerns that have been raised, I believe that these reforms strike the right balance. They recognise London as a global city and the wider considerations that that brings, but balance that with the need to ensure that our local licensing authorities are empowered and their status is respected. I think we have set out how we will do that. Indeed, the extraordinary concentration of restaurants, music venues, theatres and nightlife in these areas is part of what makes them such attractive places, not just to visit but to live. That is why we should not treat the interests of residents and those of the hospitality sector as inherently opposed. These reforms are intended to balance them fairly, supporting responsible businesses and London’s wider growth while preserving the important role of boroughs and their accountability to local communities.

[Rachel Blake]

The Minister should be aware that some of the organisations where residents come together to represent their communities celebrate the nightlife in their neighbourhoods. Some have come together to support the re-establishment of particular celebrated nightlife venues, such as G-A-Y in Soho. I wanted to make it a matter of public record that many residents are clear about their passion for a lively nightlife, while balancing that with the residential character of an area.

[Jim McMahon]

My hon. Friend reinforces how it is not about putting residents in one basket and visitors from outside the city in another. Everybody benefits from a place that is thriving and active, where people feel welcome and that there is something for everyone. That is the balance we are trying to strike. I know from speaking to all the local MPs in the area who have made representations that that is very much the balance they are trying to strike, too. I commit to continuing our communication. I am keen to understand how the new arrangements work in practice and to hear from local experiences, and I know that Members will continue to make the case.

The regulations require the Secretary of State to review how these new arrangements are working in practice and to publish a report within two years of commencement. Further reviews, as I said earlier, will then be published at least every five years thereafter. It is not the case that these arrangements will be introduced and then simply left in place. Their impact will be kept under review, allowing us to assess how the system is working in practice for London businesses, licensing authorities and residents alike. That is the balance we are trying to strike. I once again thank my hon. Friend the Member for Cities of London and Westminster for securing this important debate and for her continued work supporting local residents.

Question put and agreed to.