Police Reform and Social Responsibility Bill

Lord Clement-Jones Excerpts

Thursday 16th June 2011 Lords Chamber

Moved by

[Lord Clement-Jones]

240PA: Clause 120, page 79, line 15, leave out “and club premises certificates”

[Lord Clement-Jones]

I shall speak to all the amendments in this group, other than Amendments 240V and 240X, and also touch briefly on clause stand part. I nevertheless support Amendments 240V and 240X, which seem extremely sensible.

All my amendments in the group are designed to mitigate Clause 120, which radically alters the impact of Sections 172A through to 172E of the Licensing Act introduced by the Crime and Security Act last year, in that they can now be imposed from midnight to 6 am instead of from 3 am to 6 am, and on the say-so of the licensing authority, not the full council as before.

First, I take Amendments 240PA and 240PB, which are designed to remove private members’ clubs from the scope of the clause. The proposed amendments to the Licensing Act 2003 in the Bill—the late-night levy and the early morning alcohol restriction orders—are designed to tackle issues relating to licensed premises, largely on the high street, that sell alcohol for consumption on the premises to members of the public. In contrast, private members’ clubs are not selling to members of the public but are membership-based. They also, by and large, are not positioned on the high street or close to centres of the night-time economy, because their original remit, which has not changed, was to serve and be at the centre of the community in which they were located. They not only provide a valuable service to their members but have responsibility for the conduct of their members in the community. They have a self-regulatory process, which enables censure by the committee of individual members' conduct.

On the basis that there is self-regulation and the recognition that private members’ clubs do not contribute to the issues which have prompted the proposed provisions of the levy and restriction orders, the clubs should be exempt from the measures. Not only are they particularly onerous in the extra revenue that will be required to pay for the levy, which we will deal with later, the loss of facilities after midnight under the early morning restriction order provisions will further curtail the revenue stream which is critical for their survival. The membership of clubs is reducing and revenues are decreasing. DCMS statistics show that, as well as all the pubs that have closed, the net reduction in clubs operating with a club premises certificate has reduced by 300 per year from 2008 to 2010.

Younger members of the community in which the private members’ club thrived now have a much wider choice of venues, which are on the high street, and have other interests which do not include the traditional club environment. Nevertheless, those clubs and their facilities continue to be important, and we should protect them against changes which will have a significantly detrimental effect on their survival.

Moving on to Amendments 240Q to 240W, Amendment 240Q makes a modest proposal of a 1 am start time for EMROs, rather than midnight. Midnight is far too early in the circumstances and out of step with today's customer expectations. Frankly, putting the beginning of the EMRO at midnight could be a business-killer for many businesses. Amendment 240R removes the restriction on temporary event notices which an EMRO would impose.

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[Baroness Browning]

My Lords, local authorities will be allowed to have their own exemptions, but that will be part of the consultation that is taking place.

[Lord Clement-Jones]

My Lords, I thank the Minister for that very thoughtful and useful response, which helpfully went through the different amendments and added quite a lot to our interpretation of what is before us. I am very grateful to my noble friend Lord Astor for his support on the amendments and on the clause stand part debate. I am also grateful to my noble friend Lady Hamwee for her support at least for the New Year's Eve exemption, and to the noble Lord, Lord Stevenson, for his support on the stand part debate.

We have quite a lot of common ground, which revolves around flexibility. What worries me somewhat is that the flexibility is all one way. I will come to the issue of the consultation process, which will be extremely important. I do not think that there are any puritans in the House. Certainly, I would not regard the right reverend Prelate as a puritan in this regard. Perhaps the noble Lord, Lord Brooke, might just qualify on this ground. I do not see where the clamour is coming from—

[Lord Brooke of Sutton Mandeville]

As there are two Lord Brookes, will the noble Lord make clear about whom he is speaking?

[Lord Clement-Jones]

My Lords, we have had a useful debate about exemptions and I would certainly exempt my noble friend Lord Brooke of Sutton Mandeville from that description.

I regard this as a very important debate because of the potential impact if these provisions are not applied flexibly. I took quite a lot of comfort from the fact that this provides a range of tools, timings and geography that will be very beneficial. I certainly would not accuse the Minister of being a nanny. However, there is something of a difference in philosophy. The powers of the local authority will be pretty wide. She said that she was not favourably disposed to an amendment—

[Baroness Browning]

I apologise for interrupting my noble friend and hope that he will forgive me: I wish to put something on the record. I was asked by my noble friend Lady Hamwee about whether EMRO exemptions would be decided locally and I am afraid that I gave her the wrong answer. It is levies that the local licensing authority will have an opportunity to issue locally: EMROs will be a centrally decided package. I apologise for that.

[Lord Clement-Jones]

My Lords, I worry that there will be no review mechanism for these EMROs unless the local authority decides that there should be. Of course, local businesses will be able to make representations both at the point that the Minister described when the EMRO is being considered, and no doubt during the course of the EMRO in terms of demonstrating that the original problem has gone away or been dealt with or whatever. However, what worries me is that there will be no mechanism that the business can rely on, at the point where the EMRO falls due for review and when the time is up, to ensure that a full and proper debate can take place.

The most important issue here is how that consultation is going to take place. I was very interested in the way in which the Minister described the process; for instance, the consultation on exemptions. I do not know whether it will be statutory guidance or whether an order will come before this House or, indeed, who would be consulted in that process. It would be extremely valuable to get from the Minister an indication, even at this point, about which cohort of people would be consulted because there are strong views about this. The real, deep worry that people have is about the potentially blanket nature of these EMROs.

[Baroness Browning]

It would be a full public consultation. The review mechanism is judicial review.

[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.

Amendment 240PA withdrawn.

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[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.]

--- Later in debate ---

[Lord De Mauley]

My Lords, I start by thanking all noble Lords for their thoughtful and constructive comments in connection with these clauses and amendments.

Clauses 121 and 122 address problems in the system of fees under the Licensing Act 2003. Local government has been calling for action on both these points ever since the Act was introduced. Clause 121 introduces the suspension of licences or club premises certificates for failure to pay the annual fee. Currently, an authority must pursue unpaid annual fees through the courts, and there is no other sanction for non-payment. The sanction of suspension will provide a considerable added incentive to licence holders to pay the fee on time. Clause 122 introduces locally set licensing fees. The purpose is to ensure that licensing fees properly recover the cost to licensing authorities of discharging their functions under the Act. Although this clause was introduced on Report in another place, it was not a decision taken in haste. We needed time to ensure that the clause achieved full cost recovery for licensing authorities in a way that is fair to fee payers, licensing authorities and council tax payers.

There are a number of amendments in this group, and I hope noble Lords will bear with me as I attempt to give each amendment the response it deserves. Amendments 240Z and 240XC would remove the requirement on local licensing authorities to provide a receipt. Amendment 240XA aims to reduce the burden of the requirement by requiring that the receipt must be provided only if it is requested. I recognise that these amendments aim to reduce what may look like excessive bureaucracy. At the outset, it is worth emphasising that the clause requires the provision of a receipt only in a case in which a licence or certificate has been suspended and is then reinstated when the fee is paid. We do not expect this to be a frequent occurrence, as we expect licence payers to be assiduous in avoiding suspension. It is not unreasonable for the licence holder to expect clarity as to whether the licence has been reinstated because carrying out licensable activities without a licence is a serious offence. The maximum penalty on summary conviction is six months’ imprisonment, a fine of up to £20,000, or both. Amendment 240XA is a compromise solution whereby licensing authorities will be required to provide a receipt only on request. Having considered it, I believe that this amendment would actually increase the bureaucratic process in terms of the correspondence relating to whether or not a receipt is required, with, I suggest, only marginal benefit.

Amendments 240XB and 240XD would greatly extend the grace period that applies in cases of dispute or administrative error. The period of 21 days is not set in stone as a matter of principle. However, three weeks seems to us a reasonable length of time in which to resolve a dispute or administrative error. It would allow evidence to be provided that the fee has already been paid or that the supposed due date was not the anniversary of the licence. I cannot yet see a case for extending this period by five more weeks, and I would be concerned that it would considerably weaken the sanction of suspension.

Amendments 240XE and 240XG remove references in Clause 121 to the Secretary of State’s powers to prescribe fees. I understand absolutely that the intention is to emphasise the Bill’s contribution to the localism agenda. However, the references which the amendments seek to remove are cross-references to the existing powers to set fees centrally. They are a necessary part of the mechanism by which Clause 122 introduces a power for the Secretary of State to provide that fees are set locally. So the result of the amendments would actually be that the clause no longer provides for locally set fees.

Amendments 240XF and 241 would remove the reference to the licensing authority’s general costs from the description of what fees must cover. I emphasise that there is no intention that locally set licensing fees will fund the general costs of local government in the everyday sense of the phrase, which means that they could raise money from fee payers for something unrelated, such as to help build a new swimming pool or, as my noble friend Lord Astor suggested, to collect refuse. That would mean that licensing fees had become a form of discretionary local taxation. This is certainly not permitted by Clause 122 through the insertion of Section 197B of the Licensing Act, specifically subsection (3), which defines general costs and limits them to costs referable to the discharge of functions under the 2003 Act.

Amendment 241ZA also seeks to reduce the costs that can be recovered by licensing authorities through locally set fees. In this case, it seeks to remove the costs incurred by the licensing authority under the Act, but in a capacity other than that of a licensing authority. The costs referred to are those of the responsible authorities that are part of the licensing authority. These costs were intended to be taken into account by the current centrally set fees. Not to permit these costs to be covered by locally set fees would be to impose a new burden on local government and would therefore be contrary to established government practice and the intention of the clause. Our intention in introducing locally set licensing fees is that they should cover the cost to licensing authorities of discharging their functions under the 2003 Act. The current fees, set centrally, were also intended to cover the general costs as they are defined in this clause, and the defined costs of a licensing authority acting as a responsible authority. To remove these costs would mean that fees did not achieve what they are supposed to do.

Amendments 240XH and 241ZZA seek to ensure that the power to set fees locally is constrained and subject to guidance. I can assure your Lordships that we do indeed intend to make locally set fees subject to constraints. Specifically, we intend to make each fee subject to a nationally set cap, and we will consult on the level of that cap. However, to impose a requirement for the imposition of unspecified constraints would be both excessive and, I suggest, ineffective. A future Secretary of State may, for example, have a legitimate reason to utilise the power to make different provision in respect of different authorities, or not to impose additional constraints on a particular authority. However, it must be remembered that such an authority would still be subject to the limitation that income from fees equates as nearly as possible to costs.

Amendment 241ZZA introduces a duty on the Secretary of State, when providing for locally set fees, to issue detailed guidance. Again, I can assure your Lordships that it is our intention, after consultation, to issue guidance covering all these points. However, I suggest that it is excessive to require all these specifically in the clause. Section 182 of the 2003 Act already requires the Secretary of State to issue guidance to licensing authorities on the discharge of their functions under the Act. It also enables her to make such revisions to the guidance as she considers appropriate. The addition of a new duty, that of setting fees, would therefore justify such a revision, and it is our intention to do so.

Amendment 241ZB seeks to ensure that the costs of social services and trading standards, in their roles as responsible authorities, can be taken into account within locally set fees even when they are located in an upper tier authority. Currently, the clause has the effect that these costs are recoverable only in a single tier authority, such as a unitary authority. I thank noble Lords for drawing attention to this. I know that many noble Lords will be concerned about the addition of any further costs that will be recovered by fees.

It should be noted that the amendment specifies that the costs that should be recovered are those of these two public bodies, but only in their roles as responsible authorities: for example, in considering applications and, in rare cases, applying for a review. This is expected to be a very marginal cost in the context of overall fee income. It does not incorporate the wider costs of these public bodies in dealing with licensed premises. We intend that locally set fees should cover costs that are not covered by the current centrally set fee levels. For example, the costs of the environmental health authority in respect of its wider statutory duties connected to licensed premises are not covered; only the marginal costs that arise from the 2003 Act are. Having said all that, I see sense in the intention of Amendment 241ZB and, if I may, I shall reflect on it further.

Amendment 241Y seeks to remove the provision in the Bill for regulations to be made providing that club premises certificate holders can make a free minor variation before a late-night levy is introduced in their area. It is consequential on a number of amendments that have the combined effect of removing members’ clubs from the application of the late-night levy. I hope that we will be able to discuss it later, alongside those amendments. For the reasons that I have given, I therefore ask that noble Lords do not press their amendments today.

[Lord Clement-Jones]

My Lords, briefly, before my noble friend replies on her amendment, I welcome the Minister’s useful clarification of the definition of general costs. I shall certainly reflect on that before the next stage. The technical references were extremely helpful. The Minister was also very helpful in talking about the guidance on how fees are calculated and will be dealt with by local authorities.

I welcome the support of the noble Lord, Lord Brooke, for my amendment. It was like the first swallow of summer or something of that sort. On my Amendment 241ZZA, the Minister said that guidance will be published, which is helpful. However, as far as one can see there is no appeal mechanism in the proposed new section that is already incorporated in the Bill. Is it possible for guidance to deal with how that sort of thing should be dealt with as well?