Select Committee on Deregulation Fourth Report



ORDER 2001


68. On 26 March 2001 the Government laid before Parliament the proposal for the Deregulation (Restaurant Licensing Hours) Order 2001 in the form of a draft of the Order and an Explanatory Memorandum by the Home Office.[45] The proposal contains two provisions relating to the sale of alcohol in restaurants after normal licensing hours.

69. The proposed Deregulation Order would amend the Licensing Act 1964 (as amended) ("the 1964 Act") to remove from restaurants licensed to sell alcohol

  (i)  the requirement, under Part IV of the 1964 Act, to be in possession of a supper hours certificate in order to sell alcohol with meals during the hour after the end of normal permitted hours; and

  (ii)  the requirement that live entertainment needs to be provided as a prerequisite of obtaining an extended hours order, which would authorise the sale of alcohol during a further hour.

70. Under the existing legislation restaurant licensing hours are the same as those for other on-licensed premises including public houses: that is between 11 am and 11 pm on Mondays to Saturdays and from 12 pm to 10.30 pm on Sundays. Restaurants providing a bar are therefore subject to the requirement of a full on-licence.

71. A slightly different regime exists for restaurants whose primary purpose is to provide alcohol only with meals, and not alcohol alone. These restaurants must obtain a restaurant licence or a licence under Part IV of the 1964 Act[46]. Restaurants wishing to serve alcohol outside the regular licensing hours may apply for a supper hours certificate. A supper hours certificate permits the sale of alcohol with a meal for an extra hour: that is until midnight on a weekday and until 11.30 pm on Sundays. Licensing authorities have little discretion to refuse the grant of a supper hours certificate. In essence the licensing justices must be satisfied that the application relates to a bona fide restaurant and that there are no other grounds for a refusal of the licence. Where the restaurant is already in possession of a Part IV licence then the licensing justices have no discretion to refuse a licence as the question of the bona fides of the restaurant will already have been settled at the stage of the application for the Part IV licence. The first part of the proposal is the amendment of the 1964 Act to remove the condition that restaurants with a Part IV licence must be in possession of a supper hours certificate.

72. The second part of the proposal concerns extended hours orders. Under section 70 of the 1964 Act, a restaurant wishing to serve alcohol for an additional hour may apply for authorisation by means of an extended hours order. An extended hours order permits alcohol to be sold as an ancillary to the provision of live musical or other entertainment as well as substantial refreshment up to 1am on a weekday. As a result of the Deregulation (Sunday Licensing) Order 2000[47], extended hours orders, which were previously restricted to Mondays to Saturdays, may now also be granted for Sunday evenings, up to 12.30 am on Monday mornings. The second part of the proposal aims to remove the requirement that the supply of alcohol should be ancillary to the provision of live musical or other entertainment. The requirement for substantial refreshment is not affected.

73. The House has instructed us to examine the proposal against nine criteria and then, in the light of that examination, to report whether the Government should proceed, whether amendments should be made, or whether the order-making power should not be used.[48]

We now report on the proposal against the criteria in Standing Order No. 141(5)(A) as follows:

Do the proposals appear to make an inappropriate use of delegated legislation?

74. Like the proposed Bingo and other Gaming Order, on which we report in Part III of this Report[49], this is the latest in a series of piecemeal changes to the licensing laws which have proceeded from the Home Office either in the form of statutory instruments or as proposals for Deregulation Orders[50] since the new procedure became available in 1994. The first part of the proposal—to dispense with the need for separate supper hours certificates— is innocuous in its own right, and may be regarded as a good example of the use of the deregulation procedure to remove an unnecessary bureaucratic procedure of little or no value as a means of controlling the sale of alcohol. The second part of the proposal—to relax the requirements for a restaurant wishing to continue to serve alcohol with meals for a further hour each night—represents a more substantial liberalisation of the restaurant licensing regime, and removes a far more significant burden from restaurateurs, but on its own merits it might also be regarded as a legitimate candidate for the deregulation process, so long as necessary protection was preserved and the consultation exercise had been satisfactory (matters to which we return below[51]).

75. Taken together, however, the two parts of the proposal would have the effect of permitting all licensed restaurants (other than those with a full on-license) to continue to serve alcohol with meals for one hour each evening beyond the normal permitted hour, and of making it very much easier for all such restaurants, if they wish, to continue to trade in such a way for a further hour: in reality, the proposal as a whole is likely to result in the widespread development of late-night restaurant trading. Whether or not this is regarded as desirable (and it is not as yet part of our remit to make that judgement) there can be no argument that it would result in significant change, with significant potential effects on residential neighbourhoods where restaurants are located, as well as significant potential benefits to restaurant operators. Yet the real extent and likely effect of the proposed changes is nowhere spelt out clearly and in terms in the Explanatory Document.

76. This two-part proposal is therefore in itself a localised example of the cumulative effect which may be produced by small changes pursued through the deregulation route, to which we have previously referred[52], and it is small wonder that many of those affected—and not merely those opposed to the principle of the draft Order—have questioned the wisdom and propriety of going further along this road, when a complete review of the licensing laws is in prospect. To quote one of these groups—the Association of Magisterial Officers—

"The Association believe that the restriction in licensing hours (for good or bad) is a fundamental part of the Licensing Act 1964. ... The Association is not necessarily opposed to increasing licensing hours but feels that it is inappropriate to continually introduce secondary legislation, which has the effect of undermining one of the principal aims of primary legislation. It avoids a full and open debate on the control of licensing hours generally and misses the opportunity of introducing different controls to avoid nuisance to members of the local community by noise and general rowdy behaviour."[our italics][53]

77. As in the case of the Bingo proposal considered above, we conclude, with some reservations, that the two parts of the present proposal do pass the test of "appropriateness" when considered on their own, and on those grounds may therefore be regarded as appropriate to proceed as delegated legislation. In the case of the second part of the proposal (relating to extended hours orders) there are, however, other considerations which we believe may prevent the draft Order proceeding in this form[54]. Moreover, the announcement by the Home Office of plans to proceed at last with the complete overhaul of the licensing legislation[55] may make our concerns (and those of many consultees) redundant, since it is perhaps not too much to expect the Home Office themselves now to reconsider the desirability of proceeding with either part of the proposal in this form.

Do the proposals remove or reduce a burden or the authorisation or requirement of a burden?

Supper Hours Certificates

78. The proposed Deregulation Order clearly removes a burden. A restaurant wishing to serve alcohol with meals can only operate under a restaurant licence or a Part IV licence. In order to obtain the latter licence, the restaurant is required to satisfy licensing justices that, not only does the application relate to a bona fide restaurant but that the restaurant is suitable for a licence. A Part IV licenced restaurant wishing to extend its operating hours under a supper hours certificate (ie by one hour beyond the normal closing time) is under an identical obligation to prove the bona fides of the restaurant. In practice the approval for such an application is a mere formality as there are no other grounds for the refusal of the application.

79. The Department estimates that the cost of applying for a supper hours certificate is £20 per application, therefore there would be some financial implications for restaurants wishing to take advantage of this provision. The Department states that assuming 5000 new applications per annum, approximately £0.2 m would be saved annually by this proposal. Courts would also benefit and would save time from not having to consider such licence applications.

Extended Hours Orders

80. The proposal relating to the extended hours order would also remove a burden on restaurants. Licensed restaurants would no longer be saddled with a duty to provide live entertainment in order to operate in their normal manner (ie serving alcohol as an accompaniment to meals) for a further additional hour (ie a second hour after normal closing time).

81. The Home Office argues that, on the assumption that 750 establishments would provide entertainment without commercial justification, this section of the proposal would result in savings of over £1m per annum. In addition, the Department maintains that there would be a wider choice for restaurant customers who would no longer have to choose during the last hour of trading between restaurants continuing to serve alcohol but with live entertainment thrown in, and those with neither. The Department also controversially contends that local residents would benefit from a reduction in noise from the absence of live entertainment. The only group who may suffer a disadvantage from the proposal would be entertainers themselves who would face a reduction in work opportunities. There would however be no reduction in the cost of applications as licence applications for extended hours orders, where the provision of alcohol is ancillary to substantial refreshments, would continue to be necessary.

82. We conclude that the proposal meets this criterion.

Do the proposals continue any necessary protection?

Supper Hours Certificates

83. The Department asserts, and we agree, that there would be no depletion of any existing protection if the need for a separate certificate for the hour after the end of normal licensing were to be dispensed with. This is based on the premise that the grant of a supper hours certificate is, as the Department states, a mere rubber stamping exercise once the restaurant is in receipt of a Part IV licence or is a licenced restaurant. No protection is removed for residents or other persons, including employees who are sufficiently protected under the terms of the Working Time Regulations 1998 and existing employment law principles.

Extended Hours Orders

84. The Department reasons that the only amendment to the 1964 Act is to the requirement for alcohol to be ancillary to live entertainment. Existing rules that licensed restaurants with a Part IV licence must possess an extended hours order and that licensed restaurants without a Part IV licence must have a supper hours certificate, guarantees necessary protection. According to the Department licensing authorities would be able to revoke extended hours orders if the premises cause noise disturbance, annoyance or other problems to residents. They will also still be required to consider whether the grant of an approval to serving alcohol outside normal licensing hours is justified. The Department also points to the special safeguards which were introduced by the Deregulation (Sunday Licensing) Order 2001 for Sundays[56].

85. In contrast to the position of the Department, several of the consultees and respondents expressed strong views on the necessary protection. To summarise the position of the majority of residents and residents' associations: the expense of providing live entertainment deters some restaurants from seeking extended hours certificates; the removal of this requirement would correspondingly encourage such establishments to operate much later and thereby increase noise and other pollution. For example the Central Westminster Police/Community Consultative Group states: "the current requirement to provide music is a financial cost (it is expensive to adapt premises and provide for entertainment and there are costs in doing so at that hour of the night) which a restaurant needs to take into account as against the potential income generated." Similarly the City of Westminster argues: "that the requirement that live entertainment has to be provided acts as a deterrent to restaurant owners wanting to extend their hours. The concern is that if the requirement was removed the floodgates would be opened and very many restaurants would seek extended hours orders. ... The grant of a large number of additional orders could lead to problems of noise and disturbance in the street, fouling of the streets by patrons, parking problems and litter problems particularly if the restaurant also ran a takeaway service."

86. The Committee sought further written evidence from the Department regarding the grounds for their belief that the need for live entertainment did not act as a disincentive to later opening hours. The Department response was : "1am is not very late at night in comparison to nightclubs, which can serve alcohol until 3am in the West End of London and 2am elsewhere. Moreover, many discotheques now open later than 2 or 3am under the terms of their public entertainment licences, issued by local authorities, but do not sell alcohol after the end of the period limited by their special hours certificates, issued by magistrates. .... the proposal relates not to restaurants' trading hours, but to their ability to sell alcohol with meals. They do not need an extended hours order to open for business, as the Committee's question implies."[57]

87. The Department continued: "the question takes no account of the checks already available against disturbance to residents. The licensing justices are not required to grant any application for an extended hours order. They have a broad discretion, and can use it where the circumstances of the case so justify, to refuse an application or to ask the restaurant to improve its noise controls. And of course restaurants are subject to noise nuisance law in the same way as any other premises. For example, under the Environmental Protection Act 1990. This enables local authorities to take enforcement action under that law if problems arise."

88. We do not find the Department's arguments persuasive. The basic premise of the Department's reasoning is that restaurants and nightclubs are the same and should be subject to the same licensing hours regime. Whilst we recognise the equity of treating like establishments alike, we are not convinced that restaurants and nightclubs or discotheques are like establishments. Nightclubs are confined to particular areas (usually central locations with limited residential capacity), their numbers are limited in those areas and they can differ significantly in size, often catering to crowds of hundreds. Conversely restaurants are smaller, more diffuse and can be found in both residential and commercial areas. The cumulative impact of noise that restaurants can therefore have on a wholly residential area is likely to be great if not greater than the effect of nightclubs in a commercial area or an area of limited or no residential capacity. The Department also demonstrates an apparent failure to appreciate that the proposal impacts directly on the operating hours of restaurants and the ability to sell alcohol, both of which impinge on and influence noise and other pollution. The Department also ignores the argument that the necessity of providing live entertainment may dissuade some restaurants from opening later.

89. We of course recognise that there is some strength in the Department's argument that there are checks available against disturbance to residents which will not be affected by the proposal, including the discretion of licensing justices to refuse to grant applications for extended hours orders and the laws against noise, although it is worth observing that there are few immediate sanctions available in law against restaurant operators for the noise or disturbance of customers or their vehicles after they have left the restaurant premises as such.

90. However, in relation to particular areas of inner London authorities with an exceptionally high concentration of clubs, pubs and restaurants, we remain to be persuaded that existing licensing rules are sufficient[58]. In their response to our further questions the Home Office acknowledge that "the proposal relating to extended hours orders will probably be taken up more by city restaurants than those elsewhere, and to that extent the views of inner London authorities have merit and have received particular weight"[59]; but there is scant evidence that this latter claim is true. The Department may say that "Ministers fully recognise that London is unusual", but they nonetheless appear to go out of their way to dismiss the special problems of the London authorities and their residents as, in effect, the price which has to be paid for "intensive tourism". Although licensing regulations cannot be said to be focussed on the problems identified by residents and residents' associations, the present rules do nevertheless have the effect of acting as indirect, albeit limited, protection against noise and other pollution, and until those problems are addressed in the round, they may be regarded as at least better than nothing. This gives added strength to the views of those who believe that this proposal is a good illustration of a measure which would be better addressed within the context of a broader licencing regulation review, for inner London as well as for the rest of the country.

91. Whilst we find the arguments relating to the supper hours certificate to be persuasive (ie that no significant protection will be lost as a result), we do not find the arguments concerning the extended hours order to be equally so. We believe that only the proposal relating to the supper hours certificate can definitely be said not remove any necessary protection; about the second part of the proposal a considerable doubt must remain.

Have the proposals been the subject of, and do they take appropriate account of, adequate consultation?

92. A consultation paper setting out the Government's proposal was issued in October 1999 and responses were sought by 28 February 2000. A total of 102 organisations and individuals were consulted. A further 76 bodies and 43 individuals who although not directly consulted nevertheless responded resulting in a total number of 156 respondents.

93. According to the Department's summary of the responses, all sixteen trade respondents and two police organisations were in favour of the proposals. Three court organisations also supported the proposal whereas one had no preference. Five local authorities and thirty six residents opposed the draft measures; another five local authorities were in favour. Six residents' associations were in favour and fifty three were against the proposal. Six Members of Parliament expressed support for the proposal. Two firms of solicitors were in favour; and of the remaining other consultees, fourteen supported the proposals, four opposed them and three were indifferent. In total fifty four respondents were in favour of the proposal, ninety eight were against and four displayed no preference[60].

94. The Home Office analysis of these results is, however, somewhat economical: indeed, they appear to base their decision to proceed largely "in the light of support for the proposal from the Association of Chief Police Officers and the Magistrates' Association"[61], a somewhat curious conclusion in view of the final sentence of the letter from the former, which states clearly that "It would seem sensible that this subject and subsequent final decision should be discussed in relation to the whole liquor licensing debate". And although the Magistrates' Association expresses support, the Department fail to note that the Association of Magisterial Officers is also among those bodies who are described as supporters of the proposal but are in fact opposed to the making of the proposed deregulation Order, although "not necessarily opposed to increasing licensing hours."

95. In its Explanatory Memorandum, the Department says that it has "carefully considered the concerns expressed by those opposed" but is nonetheless "satisfied that there is a good case for proceeding with its proposal" (making no distinction between its two separate elements). In particular it plays down the fact that the majority of responses were opposed to the Order by implying that the wrong groups were targeted (by the Department itself) and that the numerical result "does not necessarily reflect the strong support for the proposals from the restaurant trade".[62] We sought clarification from the Department on these rather surprising claims and expressed our concern that the Department doubted the adequacy of their own consultation exercise and had therefore decided to give disproportionate weight to some groups over others. The Department response was that "the Explanatory Document counts each response from a residents' association separately, the response from the Association, representing the views of around 3,000 businesses, is counted as no more than one."[63] We are not compelled by this argument. If the Department counts one response from a trade association as 1,000 responses, then to be consistent, a response from a resident's association should be counted as 1 x ÷, where ÷ is the number of members of that association.

Supper Hours Certificates

96. Of the 156 respondents, 54 organisations and individuals supported the proposals in principle at least, whereas 98 rejected them. The Government notes that the majority of those opposing the measures were residents and residents' associations who had been involved in and expressed concerns about previous deregulation licensing proposals, with the inescapable implication that their views should therefore carry less weight on these grounds.

97. Comments made in relation to the proposals included the following: the Association of Police Officers generally supported the change but drew attention to the possibility of abuse where bar areas are not clearly separated from restaurant areas. The Government noted that the proposals do not make it easier for licensees to break the law. Where they do so they face the risk of the loss of their licence.

98. According to the Department, "Some local authorities"[64] drew attention to the inefficiency of amending licensing orders again, whilst a general review on licensing legislation was being undertaken. The Department responded that where a deregulation order meets the criteria of the Deregulation and Contracting Out Act 1994, the measure should be proceeded with. This, they claim, is especially so where there are no definite decisions on the review into the reform of licensing law.

99. One residents' association opposed the removal of the supper hours certificate on the grounds that licencing authorities would not be able to reject an application on the basis of the lack of the applicant's fitness or the structural suitability of the site. The Department contended that these are not statutory grounds for the rejection of an application for a supper hours certificate. If the applicant was unfit or the premises unsuitable, a licence for a Part IV licence would not have been granted. Similarly a police/consultative group opposed the order on the grounds of noise. The Department's reply was that noise nuisance is not a grounds for refusing the grant of a supper hours certificate.

Extended Hours Orders

100. In addition to the general comments noted above, two specific criticisms were levelled at this proposal. The Union representing actors and musicians opposed the proposals on the grounds that its members would be deprived of employment opportunities. They also argued that the Government should await the outcome of the review into the licensing regime. The Department maintained that the provision of live entertainment should arise from customer demands and not from artificial constraints.

101. Residents, residents' associations and some local authorities objected to the proposal as it relates to extended hours orders on the grounds of noise pollution and nuisance caused by those leaving restaurant premises. The Department responded that there is no reason for customers to be likely to misbehave if they dine without entertainment. The Department also reiterated the conditions governing the grant of extended hours orders, in particular, the additional safeguards introduced by the Deregulation (Sunday Licensing) Order 2001, namely the need for regulatory authorities to take into account the impact on residents and local authority objections. Finally, the Department argued that the fact that more restaurants would apply for extended hours orders because they would no longer need to provide entertainment was not a sound basis for rejecting an illogical provision.

102. We were concerned both at the tone of the Explanatory Memorandum and the apparently dismissive attitude of the Home Office towards the views of residents and residents' associations as compared to trade bodies, and at the response to our request for clarification.

103. We are on balance satisfied that the range of organisations consulted, and of those that responded without being consulted, was sufficient to provide a reasonably balanced response to the questions raised by the consultation, if that was the intention. We remain to be convinced, however, that the Department took appropriate account of the representations received.

Do the proposals impose a charge on the public revenues or contain provisions requiring payments to be made to the Exchequer or any government department or to any local or public authority in consideration of any licence or consent or of any services to be rendered, or prescribe the amount of any such charge or payment?

Do the proposals purport to have retrospective effect?

Do the proposals give rise to doubts whether it is ultra vires?

104. We have no concerns to raise under these headings.

Do the proposals require elucidation or appear to be defectively drafted?

105. The lengthy sections of the Licensing Act 1964 appended to the Explanatory Document (in the form of a Keeling Schedule) provide ample evidence of the complexity of the licensing laws in their current state. Although implementation of the two parts of the present proposal might be thought to offer some simplification, it is hardly likely to simplify life for restaurateurs to be presented with this change in the knowledge that the whole licensing regime is likely now to be overhauled. Although we have no grounds for opposing the proposal on the technical grounds of defective drafting, we regard this as a further argument against implementation at this stage.

Do the proposals appear to be incompatible with any obligation arising from membership of the European Union?

106. We have no concerns to raise under this heading.


107. The proposed Order would apply to England and Wales only.

Report under Standing Order No.141

108. We do not believe that the proposal, as it relates to extended hours orders, should be proceeded with. We have not been presented with sufficiently convincing evidence that necessary protection will be maintained if this proposal is allowed to proceed. Although largely unintended, there are strong arguments to support the view that the current regime has indirect protective effects: the requirement for live entertainment dissuades certain restaurants from seeking extended hours orders, such restaurants are accordingly likely to close earlier than they otherwise might, and nuisance from noise and disturbance in the vicinity of such restaurants is therefore likely come to an end at an earlier time.

109. Similarly it is clear that particular London boroughs face an unusual situation of a high density of restaurants, clubs and pubs. We are not convinced that the special problems which they face have been adequately recognised or addressed during the consultation on the extended hours proposal. We believe that this part of the Order will be more appropriately dealt with in the context of a general licensing review.

110. Accordingly we conclude that if a draft Order is to be laid at all it should relate only to the supper hours certificate, unless the Home Office can subsequently persuade us that (a) no necessary protection would be erased by the removal of the requirement for live entertainment; and (b) the views of particular London areas have been adequately addressed.

111. In the light of the Home Office announcement of the intention to introduce primary legislation to encompass a complete review of the licensing laws—which, in view of their complexity, we hope will mean a complete re-writing of the 1964 Act—it is perhaps now in any case likely that the proposal will not be further proceeded with, and no draft Order laid in consequence.

45   Copies of the proposed Order and Explanatory Memorandum are available to Members from the Vote Office and to members of the public from the Home Office. Back

46  These licences are commonly referred to as a Part IV Licence.  Back

47  This was considered by the Committee in its First Report, Proposal for the Deregulation (Sunday Dancing and Licensing) Order 2000, HC 334 of Session 1999-2000 and the First and Second Reports, Proposal for the Deregulation (Sunday Licensing) Order 2000, HC 37 of Session 2000-01. The Deregulation Order came into force on 19 March 2001.  Back

48  Standing Order No. 141 (the text of which is set out at the front of this volume). Back

49   See paras 43-67 above. Back

50   Those considered by the Committee since 1994 have included proposals for the Deregulation (Sunday Dancing) Order 1995, the Deregulation (Special Hours Certificates) Order 1996, the Deregulation (Long Pull) Order 1996. The Deregulation (Employment in Bars) Order 1996, the Deregulation (Casinos) Order 1997, the Deregulation (Occasional Permissions) Order 1997, the Deregulation (Licence Transfers) Order 1997, the Deregulation (Methylated Spirits Sale by Retail) (Scotland) Order 1998, the Deregulation (New Year Licensing) Order 1999, the Deregulation (Millennium Licensing) Order 1999, and the Deregulation (Sunday Dancing & Licensing) Order 2000. Back

51   Paras 84-103.  Back

52   Paras 6-8 above. Back

53   Further objections on these grounds are discussed below (paras 92-103). Back

54   See paras 103, 108-110 below. Back

55   Proposals for the "comprehensive modernisation of the alcohol and entertainment licensing laws" were finally announced by the Home Office on 2 May 2001 (HC Debs, col. 682-3W)  Back

56  The Deregulation (Sunday Licensing) Order allows persons living or working in the neighbourhood, as well as the police and the relevant local authority, to apply to the licensing justices or the magistrates' court for the exclusion of Sunday from a special hours certificate on the grounds of avoiding or reducing (a) any disturbance or annoyance to persons living or working in the neighbourhood, or customers or clients of any business in the neighbourhood; or (b) the occurrence in he vicinity of the premises of disorderly conduct by persons frequently the premises or part of the premises. Licensing justices and magistrates court are also required, where a special hours certificate is granted, in spite of a local authority's objections based on the residential character of the area in which the premises are situated, to give reasons for the decision. Moreover a Guidance Note on Extended Liquor Licensing Hours on Sundays accompanies the Order and furnishes licensing authorities with guidance on the special nature of Sundays when considering both special hours certificates and extended hours orders for Sundays. Back

57  Appendix 4. Back

58   The views of several residents and residents' associations eloquently demonstrate the effects of the current licensing regime in relation to the control of noise and other pollution. Back

59   Appendix 4.  Back

60   Explanatory Document, para 18. Back

61   Explanatory Document, para 20. Back

62   Explanatory Document, para 19. Back

63   Appendix 4. Back

64   This should actually include the Association of Chief Police Officers and the Association of Magisterial Officers (referred to above), the Society of Entertainment Licensing Practitioners, the Central Westminster Police/Community Consultative Group and the Association of London Government (representing local authorities across London); as well as the main inner London authorities themselves (other than the City of London).  Back

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