Select Committee on Deregulation Fourth Report

Appendix 4

Exchange of letters between the Acting Clerk of the Deregulation Committee and the Home Office.

Letter from the Acting Clerk of the Deregulation Committee to the Home Office (dated 9 April 2001)

Proposal for the Deregulation (Restaurant Licensing Hours) Order 2001-04-06

The Deregulation Committee of the House of Commons began its consideration of the above proposal shortly after the proposal was laid. Following more detailed scrutiny of the papers submitted, including the responses to your consultation exercise, I am now instructed to raise a small number of issues with you.

1.  Result of the Consultation exercise: As you will know, the Committee is specifically required by its Standing Order to consider in the case of each proposed Order whether the proposals "have been the subject of, and take appropriate account of, adequate consultation". The Committee regards this as one of its most important functions.

The Committee has noted the account of the consultation exercise set out in paragraphs 18-27 of the Explanatory Document. In particular, the Committee note that although almost two-thirds of respondents expressed opposition to the proposals this is said by the Home Office (in paragraph 19) to be "due in part to how the consultation document was targeted". It goes on to say that the response "does not necessarily reflect the strong support for the proposals from the restaurant trade". You will appreciate that neither of these statements can inspire much confidence in the Committee either that the consultation has been adequate or that appropriate account has been taken of its results.

1.  If the Home Office is itself concerned about the targeting of the consultation exercise in respect of this draft Order, which organisations or individuals does it think should have been included in the consultation exercise?

2.  Have any of those organisations missed from the original consultation now been consulted? If so, what were the results of the consultation? If not, why not?

3.  Do the comments in paragraph 19 of the Explanatory Document suggest that the Home Office regards the views of the restaurant trade as of greater significance than the views of others concerned?

2.  Views of inner London boroughs: Even if a small number of other local authorities have expressed support for the proposals, is it not a fact that particular weight deserves to be given to the views of the inner London authorities, with an exceptionally high concentration of restaurants, clubs and pubs (and hence with particular local problems in balancing commercial interests against the interests of residents), who expressed opposition?

4.  To what extent do you take account of the particular needs of inner London and similarly congested urban areas when assessing proposals of this kind?

3.  Extended Hours Orders (provision of live entertainment): Paragraph 23 of the Explanatory Document refers to opposition to the proposal on the grounds that "the live entertainment requirement constitutes a deterrent to restaurants, and that without it more would probably apply for extended hours orders". The Government's response is that "this is not a good reason for retaining a requirement which lacks logic".

5.  Why is the existing provision thought to lack logic?

6.  Is it not the case that the ability of restaurants to apply for very late night opening without the expense of live entertainment could lead to a significant extension of late night opening and further late-night disturbance to residents? What research, if any, has the Home Office conducted into the likely effect of this measure on noise and disturbance levels in residential areas?

4.  Regulatory Impact Assessment: The Regulatory Impact Assessment refers in passing to the fact that "There would also be benefits for local residents through reduction in noise from entertainment which restaurants dropped." It does not however refer to the possible impact of increased noise outside restaurants at a later hour of the night as a result of more restaurants remaining open to late hours.

  1. How, and by whom, was the Regulatory Impact Assessment carried out? What independent advice, if any, was provided in carrying out the assessment? Or was the assessment simply a paper exercise conducted within the Home Office to satisfy the requirements of the deregulation procedure?

I would be grateful for reply to this letter (by e-mail or fax if necessary) not later than Tuesday 24 April.

I am copying this to the Clerk of the Delegated Powers and Deregulation Committee in the House of Lords, and to the Regulatory Impact Unit.

Letter from the Home Office to the Acting Clerk of the Deregulation Committee (dated 23 April 2001)

Proposal for the Deregulation (Restaurant Licensing Hours) Order 2001

Thank you for your letter of 9 April, setting out a number of questions on the proposed Deregulation (Restaurant Licensing Hours) Order. The answers are as follows.

Question 1:   The comment about targeting in the Explanatory Document which the Committee has questioned was intended simply to reflect the fact that, whereas the consultation document had been sent to many individual residents' associations which had previously expressed an interest in proposed changes to licensing law, it was not practicable to send it in the same way to all the individual restaurants which might benefit from the proposed Order. The Home Office relied on the Restaurant Association to make the proposal known to its members. While 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. We do not believe that we failed to include any relevant consultees in the consultation exercise.

Question 2:  This question presupposes that organisations were incorrectly excluded. In our view, this is not the case. I hope the answer to Question 1 clarifies this point.

Question 3:   No such implication was intended, and we are sorry if the Explanatory Document gave this impression to the Committee. In deciding to proceed with the deregulation proposal, Ministers gave full consideration to the views of all those who responded to the consultation document, recognising the need to strike necessary balances between the interests of local economies, local consumers and those of local residents.

Question 4:  While paragraph 2 of your letter is certainly correct, it is worth noting that the deregulation proposal applies only to restaurants and not to nightclubs, discotheques or pubs. In addition, we believe that the issue is a more complex one than simply balancing commercial interests against the interests of residents. The equation is more complex because a thriving local economy is beneficial to all local taxpayers and residents. In London, in particular, hospitality, leisure and tourism are vital components of the local economy, and restaurants are an important element of these parts of industry. An estimated 27 million tourists annually bring considerable wealth and employment to the capital. We also need to consider the needs of many visitors to London. Striking the balance between the desire of local residents for a quiet life and the need to encourage business and provide facilities to visitors is always a difficult equation.

The part of the proposal relieving bona fide restaurants of the obligation to obtain a supper hours certificate applies to restaurants everywhere and will not be of particular value to those in inner city areas. The part of 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. Indeed, Home Office officials met and discussed the proposal with a representative of the Royal Borough of Kensington and Chelsea (RBKC) immediately following publication of the consultation document. This was because we were aware that, although RBKC is the smallest London Borough, it is the most densely populated in London, and has in the past expressed anxiety about the deregulation of licensing law.

Ministers therefore fully recognise that London is unusual. But equally restaurants are more important to the local economy of London than almost any other part of the country, save for areas of intensive tourism. For example, the Royal Borough of Kensington and Chelsea (RBKC) is largely dependent on three key areas of its local economy: museums, major retail activity and entertainment and restaurants. The attached report, published and celebrated in March 2001 on the RBKC website, provides this wider picture, and confirms the importance of the hospitality and leisure sector to Kensington and Chelsea. Tourism is enormously important to London economically, and restaurants, as the attached report makes clear, are one of the reasons for the raising of RBKC's international profile. Finally, restaurants tend to be small businesses, which means that RBKC and its residents are not exposed to any one major employer. The report reflects this as a very positive factor for RBKC's future.

We would therefore stress very strongly that to suggest that a proliferation of restaurants in central London is somehow to be regarded as damaging for local residents or something undesirable would be an unreasonably narrow view.

It is Government policy to encourage the development of residential accommodation in all town and city centres. But central residential accommodation also gives rise to the need for leisure and hospitality facilities for local consumers, of which restaurants are a part, and which bring investment and employment opportunities to such areas that benefit local residents. The attached report indicates that there are areas of stressed socio-economic conditions in the RBKC. Nationally, unemployment stood at 5.5 per cent in November 2000, but was more than 10 per cent in two of RBKC's wards. The Government does however wholly agree that the benefits which restaurants bring to local economies have to be balanced with the nuisance factors which can arise for some residents later in the evening. The Government believes that the protections in existing law in respect of licensed premises provide the necessary balance in the context of restaurants.

The Government also believes that the vast majority of the problems of street noise late at night in central London (in areas such as Westminster, Camden and RBKC) are primarily associated with customers leaving public houses, nightclubs and discotheques after closing time; and are less associated with customers leaving restaurants. Key factors are age and levels of alcohol consumption. The Government are addressing these issues through the Criminal Justice and Police Bill which is currently before the House of Lords.

In considering our response to this question, the Committee will also wish to note points made in response to Question 6.

Question 5:  It is illogical that the ability of restaurants to serve alcohol with meals after the time covered by supper hours certificates depends on the simultaneous provision of live entertainment. If the provision of entertainment were thought to be necessary to enable the sale of alcohol after normal permitted hours, following the provisions in the present law enabling nightclubs to sell alcohol until 2am on weekdays (3am in London) then there might be an argument, in the interests of consistency, for requiring restaurants to provide entertainment, but no reason to insist that the entertainment was live: nightclubs are not subject to such a requirement. On the same premise, the entertainment requirement should apply to restaurants during the supper hour also, which it does not. So the premise does not stand up even within the context of the present licensing framework, which the Government sees as itself in need of reform.

Question 6:  The Home Office agrees that the lifting of a regulatory requirement imposing costs on business could lead to some modest expansion of business for restaurants only. But it questions the description of the proposal as allowing "very" late night opening. In the first place, extended hours orders for weekdays cover the period from midnight to 1am: earlier on Sundays. 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. In the second place, 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.

The question also 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.

The public consultation on the proposal presently under consideration constitutes the only specific research which the Home Office has conducted of the kind described in the question. However, the White Paper "Time for Reform: the Modernisation of our of Licensing Laws" (Cm 4696) published on 10 April 2000, included a proposal to introduce flexible opening hours for all licensed premises, including restaurants, to minimise public order and disturbance resulting from fixed closing times, subject to consideration of the impact on local residents. On 29 November 2000, in response to a request from the Right Honourable Member for Maidstone and the Weald, the Home Secretary gave instructions for the responses to the White Paper from 558 bodies to be placed in the Library of the House. A further 656 responses were received from Members of Parliament, on behalf of their constituents, and from private individuals. These were not placed in the Library as no advance notice was given that their views would be published. Of those replies which commented specifically on licensing hours, 56 per cent were in favour of the proposal and 44 per cent were against it.

Question 7:  Regulatory Impact Assessments are prepared in accordance with the published guidance of the Cabinet Office ("Good Policy Making: A Guide to Regulatory Impact Assessment"). The primary purpose of a Regulatory Impact Assessment is to assess the impact, in terms of costs, benefits and risks of any proposed regulation or deregulation which could affect businesses, charities or the voluntary sector. The RIA was prepared accordingly within the Home Office, taking the advice of the Cabinet Office Regulatory Impact Unit, and was initially published in draft as part of the consultation document. It was then presented to the Committee of each House, after taking account of all the responses to the consultation document, some of which referred to the draft which was published. A wide range of independent advice was therefore available.

I hope these comments and replies will be helpful to the Committee as they continue their scrutiny of the proposal.

I am copying this to the Clerk of the Delegated Powers and Deregulation Committee in the House of Lords, and to the Cabinet Office Regulatory Impact Unit.

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