Select Committee on Deregulation and Regulatory ReformMinutes of Evidence

Examination of Witnesses (Questions 1-19)




  1. Good morning, Minister. May I welcome you to our Committee. If, for the sake of the record, you could introduce your team, and then I know you want to make a few brief opening comments before we go to questions.
  (Dr Howells) Thank you very much, Chairman. On my left is Lucan Herberg from DCMS, and Andrew Cunningham, also from DCMS, formerly a Home Office official until this responsibility came over to DCMS after the General Election. I would like to say, first of all, I am very grateful to the Committee for this opportunity to explore with you ways of ensuring that the Special Occasions Order can be put in place in time for this New Year's Eve. As I hope very much my official's letter to your Clerk explained, I am still very confident we can find a way to deliver the Order in time. With your permission, Chairman, I would like to open by making a few key points of particular importance to me and to our Department. I very much want the Order to be made for New Year's Eve, and I believe it can be made lawfully within the time remaining. I am confident that most of our constituents (mine and yours) want to be free to choose how and where they enjoy New Year's Eve. I believe that the existing law denies them real freedom of choice on such occasions, as well as stopping an important industry from meeting its customers' demands. Relieving a burden on the industry and increasing consumer choice does not have to be achieved at the expense of local people living near pubs and clubs—far from it. The draft Order contains specific safeguards which achieve a very sensible balance. It offers local residents and local authorities the possibility of influencing the licensing hours of specific venues in a way that is not normally available to them on normal New Years' Eves. In other words, this draft Order is good for everyone; and that is why well over 80 per cent of those responding to the consultation are in favour of it. When reading our explanatory statement I hope very much the Committee noted the positive support offered for our proposal from the vast majority of police forces, magistrates, local authorities and industry representatives—including those representing small businesses—in response to the consultation. I know there have been difficulties in interpreting the legal issues with regard to the so-called two-year rule. I believe that a solution acceptable to the committees of each House is available. Following discussions between your and my legal advisers, we have been to Treasury Counsel and his advice does seem to offer a way through the legal maze. We have the advice with us today, and I hope very much we can pass it on to your legal advisers so you may consider it as a Committee. In addition (and this is a very serious addition) recent events, first the blight of foot and mouth and then the terrible events of 11 September, have had a very serious impact (if not the most serious impact ever) on the well being of the hospitality, leisure and tourism industries. I am very keen to offer them a boost. They are enormously important industries, as the Committee knows. £64 billion a year turnover in this country, and at least 1.3 million people in employment in those industries. The Order can still reduce the legal costs of the industry of applying for special orders of exemption for New Year's Eve. We originally estimated this saving at around £9 million. We have explained in our memorandum how we arrived at that. I certainly do not disagree with the Committee's view that the timing of the Order is central to realising that tall saving, but large savings could still be made. Obviously, if licensees start seeking special orders of exemption anyway, because they are worried that an Order will not be made in time, then some of those savings will be lost. I am confident that an Order can be made in good time, and with the effect we intended. I should say, Chairman, that the industry is telling me they have interpreted the Committee's press notice in July as saying that an Order cannot be made in time. As a result, they may apply for individual special orders of exemption anyway. I think that is probably a misunderstanding. My own reading of the press notice is not like that, and I think there is still plenty of time for us, together, to reassure the industry that an Order can be made and, I would like to say, that it is very likely to be made. I would be very interested to hear the Committee's views on this. I think the sooner we can give that reassurance, Chairman, the bigger the savings of wasted fees would be for the industry. If we do not make the Order nobody wins. The usual exaggerated differences between licensing hours in adjoining licensing districts will arise. This causes real problems, where people start moving significant distances to seek out licensing districts with more generous hours. There will be more late night drinking out on the streets as pubs close as a result. It is also vital that we conduct the trial of extended licensing hours, which is wanted by the police and magistrates. If the outcome of our review is positive, we can press on with permanent change for each subsequent New Year's Eve. Permanent change could be a very long way off if we cannot find a way forward with you today. Finally, I am sorry if the Department in the past has got off on the wrong foot with a new Committee. You yourselves have commented on the timing of this Order. Licensing Orders geared to special one-off events inevitably bring with them tight deadlines. The Special Occasions Order had to be laid before the Committee, before you were ready, because of those time constraints. Our colleagues in the Cabinet Office attempted to smooth the way in the special circumstances, but clearly you were not terribly impressed by that. I hope we can put that behind us and try and work together, in the interests of the general public to make this Order in time, and give everyone a chance to experience a thoroughly good New Year's Eve. Thank you very much, Chairman.

  2. Thank you. Can I just make it absolutely clear, as far as the press notices are concerned, it was quite deliberately worded that the Government had to persuade us that the necessary protection can be maintained. You will recognise that one of the duties of this Committee, as when we judge any Order, is the question of necessary protection. Later on in this morning's session there will be a number of questions on the issue of necessary protection. To start with, I want to tie together the three important items of timing before my other colleagues on the Committee come in. Why was the proposal brought forward so late? Could it not have been brought forward before? Does your Department fully understand the timetable we have to work to, as laid down by the Act? Even if we took a decision right at the start, the timetable still has to go forward; we cannot accelerate it or cut out procedures. Indeed, as you will appreciate, recognising your wish, we have called this evidence session effectively on the second day back—the first full working day of the parliamentary session after the Summer Recess—and our timetable is a problem to us. Recognising that there were difficulties last year and that this Committee (and I personally as Chair of the Committee) did point out to the Home Office and did ask one or two questions over a year ago, because I did indicate there were problems on timing, we did try to give warnings. It is not a question of this Committee being difficult, but we can only work within the procedures and the timetables laid down by the Act and the amended Act we are now working under.
  (Dr Howells) Chairman, we appreciate very much the early Committee session. The DCMS understands very well the constraints and the difficulties you face as result of that very tight timetable. If I can offer some sort of explanation of the lateness or the delay in the whole business. I think we have to go back to, I guess, 26 October 2000, when it was then an issue for the Home Office—when any possibility of relaxing hours for New Year 2000 ended and there was a necessity to consult with other Departments regarding the year 2001, and the Golden Jubilee of course. The timing of the General Election was also particularly crucial, as was the decision to have a longer Summer Recess this year than last. As most of the timing factors arose while we were not responsible for the draft Order, clearly some of the questions you have just asked me can only be answered by Home Office officials and former Home Office ministers; but I will try to answer some of the ones you have put forward.

Brian White

  3. It is the same civil servants.
  (Dr Howells) We will come to that. You can talk with them in a moment! I want to say this: we think, however, that if the Order is made by 11 December—which I think the Committee agrees is feasible, or if the Committee agrees is feasible—we consider that applicants will then have sufficient time to make applications, and the courts will have more than enough time to consider the small number of applications involved. We estimate an absolute maximum (a worst case scenario) of 700 Orders nationally, which is less than two per court area. Between 17-28 December there are nearly 3,000 court days (that is 370 x 8) on which 700 applications could be considered. We certainly think there is time to do it. The stage one scrutiny by committee ends on 14 November, and we can lay the stage two Order on 15 November. Stage 2 scrutiny of 15 sitting days ends on 5 December, and we could save time if it happens more quickly than that. We can arrange votes in the Lords and Commons to approve the Order on 6 December, and the Order comes into force the day after its approval in both Houses, which is 7 December. This will allow the courts 11 sitting dates between 12-28 December to consider restriction order applications. It is possible but, I absolutely agree with you, it is very, very tight.

  Chairman: We basically understand the timetable.

Brian Cotter

  4. I am very glad to hear the Minister say how important this is, considering the many problems the industry has had with regard to foot and mouth. I do not know to whom I should direct this comment but, in view of the importance for the hospitality industry, one wonders if we, as a Committee, could not perhaps have sat during this very long recess, which we all have enjoyed. It is a very important matter as far as the hospitality industry is concerned, so it is welcome that there is great concern about this. I am sure as a Committee we would like to see this go forward, but there is also concern that this trial does go through satisfactorily. The very tight timetable that is left there could leave it open to be suggested that the trial was not very satisfactory and, therefore, not very helpful for future occasions.
  (Dr Howells) We have certainly not received any indication from ACPO or any of the police representatives, nor indeed from most of the local authorities, that they are particularly concerned about that. They think if the Order does come through there is time to monitor it properly and we certainly want to do that. We want to accommodate ACPO and others in the way in which we monitor the events of New Year's Eve properly and throughly, so we can then go forward to making this a permanent arrangement.

  Chairman: If I could say on the question of timing—even if we had met during the Recess of course the timetable on the sitting days would not have been affected, other than the three special days when Parliament was called. Our timetable would not materially have been affected. I know that Mr Cunningham's reply to the enquiries is dated 27 September and is a very detailed response, and I know we did raise a number of detailed points. I think, Minister, you and I, and indeed the Committee, want to go forward in a positive way. Regarding the main point I am making on the timetable, I am sure your Department will be coming back to us with other issues. All I want to be absolutely certain of is that you do understand the timetable and what it means to the way we work. I do not want to waste any more time because we are tied down to an hour.

Mr Brown

  5. To what extent do you believe that going ahead with the proposal would provide an adequate test of the arrangements, given the lateness at which this Order would come into force? In particular, with regard to the figures you will draw from the number of restriction orders that will be applied for (which you believe to be essential information) do you believe that those figures will be useful in drawing up future proposals? Do you see that as being an honest and reflective perception of what is really required out there?
  (Dr Howells) I think it is a very important question because last time this was attempted was for the Millennium New Year. I know the police were looking very carefully at trying to learn lessons from the Millennium experience. The Home Office, which then had responsibility for this, assumed that there would be very large numbers of applications to restrict extensions; in fact there were very few applications—very few when one thinks of the potential numbers that could have come forward. We have made an assumption that there will be many, many applications for restriction orders. However, instinct tells me that there are probably going to be no more than there were for the Millennium Eve. Maybe there will be some more—it is very difficult to say. I guess that as MPs we are as sharp as anybody else in trying to detect what our constituents and other people think about the possibility of extensions being granted for New Year's Eve; because, of course, we are the first people to get the complaints when they happen. I can think in my own constituency of probably two cases where there are sensitive areas which contain licensed premises; but I have certainly not heard of anybody coming back to me since my appointment, for example, (and this has had a good deal of publicity), to say, "Now you make sure there are no extensions on New Year's Eve for such and such premises". As to the way in which the authorities will monitor it, we have been working very closely with them to make sure we have good data on all of this and that it is properly monitored. I think the Home Office in the past have laid down pretty good and pretty useful guidelines for monitoring this kind of activity, and I have every confidence that the information which will come out will be of great use to them. I quite agree with you that it is very, very close in terms of the timetable. We are confident there is time to arrange these things, and apparently the authorities are too.

Dr Naysmith

  6. One of the things that is rather puzzling about this application is that the proposal contains provision to make an appeal against the restriction by the magistrates to the Crown Court. The timescale is so compressed that that is really just an impossible hope. In the letter that went back and forth between our Clerk and your Department, your Department admits that the timescale is so short it is unrealistic. It raises the question: why are you including this proposal in what we are considering today? I know you have said you will withdraw it, but it suggests that the timescale was not properly thought through to start with.
  (Dr Howells) It certainly was a very tight timescale and I am not going to pretend it was not. I would like to ask Andrew Cunningham to deal with the technical side of that question.
  (Mr Cunningham) Essentially we initially thought that there was value in an appeal, even if it could not affect whether a set of premises opened on New Year's Eve, because issues do arise—restriction orders do exist other than for New Years' Eves; they exist as part of the Act generally and, therefore, issues of principle could come up that people might want to take to the courts to appeal and deal with because it has a wider effect than just New Year's Eve and the position taken by magistrates on a particular issue. There have been cases in the past where issues about policies on dealing with bulk applications have actually had to be resolved in the higher courts. On looking at points raised by the Committee, what we agreed was we accepted the argument that was put to us: that there was not sufficient value in the appeal to include it as part of the package and, therefore, we came to the conclusion we should withdraw it. We always knew that the appeal was going to be of very little value to individual licensees, for example—or, indeed, anybody else we might have offered that appeal to if we had broadened it out. It originally was only for licensees. The timescale generally was always going to be extremely difficult.

  7. Are you suggesting this is only for this coming New Year's Eve? It might have been broadened out but it is not going to be?
  (Mr Cunningham) Yes.

  8. Are you suggesting there might still be value in having it in to decide matters of principle? Is that why it is in there?
  (Mr Cunningham) We have discussed this again with our legal advisers; we looked at points made by your Clerk backed by your legal advisers; and we have come to the conclusion there is not sufficient value in it to be worth including.
  (Dr Howells) To reassure the Committee—when we have talked to industry about this they have basically said, "Give us this relaxation. We can live with the fact we don't have an appeals procedure". Effectively, the magistrates' ruling is final at the moment.

  9. Going back to one of the earlier questions, this is obviously going to be of importance if it is going to be a test case for further changes. A sufficiently robust appeal procedure would be necessary to test the whole procedure, would it not?
  (Mr Cunningham) Certainly in terms of the way we planned to look at the impact of the Order, the key areas we considered would be the position taken by the three groups (the local authorities, the police and the magistrates); the key issue for us in reflecting on the impact of the Order during a New Year's Eve would be what actually happened in licensed premises, on the streets, in and around the general event and, therefore, the impact on the community. I do not think our review would turn precisely on issues of law as to the precise nature of the decisions taken. In reflecting on whether restriction orders have worked as an effective measure, we will be looking at the view taken by the people who apply, who are either going to be successful or not in applying for restrictions, and whether they feel they got a reasonable hearing and they got a reasonable chance to influence what actually happened. A key part, finally, would be a subsequent consultation. We will do a review with the main organisations and the main groups, but when we do a further consultation on a permanent change on future New Years' Eves, we would then be getting views back from the public and a lot more local residents' organisations saying how they feel it worked. We would then reflect on that before presenting draft Orders.

Paul Goodman

  10. In the letter of 27 September in paragraph 20 there appears the following sentence: "Although it may not have been the Committee's intention [Minister, you referred to this earlier], we understand that many in the trade and the trade press took the letter to be a clear indication that a regulatory reform order could not be made in time for New Year's Eve 2001". We were just wondering whether the Government was attempting in any way to blame the Committee for the loss of the £9 million saving, which you estimated would accrue from the introduction of the Order? I ask this particularly in light of the further point in paragraph 20: "It appears likely that a high percentage of premises will apply for special orders of exemption as soon as possible as a precautionary measure", a point that the Committee took note of in July.
  (Dr Howells) God forbid that we would ever blame this Committee for anything! I think I tried to explain in my opening statement that there was some ambiguity there which was seized upon (and I do not want to refer to them) by some of the people in this room today, not necessarily members of the Committee, who watch this stuff very, very carefully. I think they were very worried about it; there is no question about that. An extension of hours, such as we are proposing, means a good deal of investment, for example, in making sure that the staff are in place for a New Year's Eve. As I have indicated, it is a very big employer as an industry and so on. When it seemed as if we were going to have difficulties with this for whatever reason—whether it was late timing, the way they had been handled previously or the attitude of the Committee—whatever the reasons were, were judged to be the most important ones and most significant ones. I assume that a lot of licensees would have said, "Look, let's not take any risks. Let's go for those extensions now", and the applications went in. In a sense, what that does for us is, it reduces that £9 million savings total that we wanted the industry to have. That is a shame, but I suspect it has probably already happened. It is very difficult to say how many of them have done it. We are certainly trying to find out. I think Mr Goodman is right—it will be a significant number and the savings will not be as high as they were when we initially assessed them.

  11. You do not want to make any estimate of what that number might be?
  (Dr Howells) No, I do not know. I have no idea. I have tried to do a straw poll in my own constituency—some applications have been made and others have not.

  12. Is it right in principle for the Government to rely on assumptions about decisions which Parliament has yet to make when advising the trade on arrangements for opening hours?
  (Dr Howells) No, it is not right. That has been the weakness of this decision, as the Chairman explained to us in his introduction—there is no question about it. We would like regulation to be much easier to understand and much more predictable. It has been one of the problems; and, of course, was one of the reasons this Committee was set up in the first place, to try to cut through that ambiguity and uncertainly and give industry a much better idea of what Government requires of it. That is why I am very much in favour of deregulation and better regulation.

Brian White

  13. Most of the discussions about this have not been about the principle, which most people would accept, but about the practicalities, and the Minister has already talked about some. Given it is about the practicalities on the ground, how many of the people actually putting this policy together in your office have had practical experience in a local authority actually on the ground in dealing with this, or in a magistrates' court or police force?
  (Mr Cunningham) None. We work with the police; we take advice from ACPO; I take advice from the Magistrates' Association Licensing Committee. I work with the LGA on a very regular basis, because we are working with them continually on licensing. I take their advice and then that is included in the advice I provide to the Minister.

  14. The Minister said earlier on you were expecting about 700 restriction orders as a maximum, of that sort of order?
  (Mr Cunningham) Yes.

  15. The assumption is that that will be spread evenly throughout the country. God forbid that I should be a defender of Kensington and Chelsea, but if you look at the Millennium year there was actually a skewing to some authorities. Have you done any analysis of that?
  (Mr Cunningham) There is no question that there will be larger numbers in city areas. London, in particular, will be highly congested. There are licensing statistics available at the Home Office which show the density of licensed premises across the country. The highest density is actually in Wales, Cornwall, the South-West, then followed by London. Obviously cities take the greatest burden, but I would also say the licensing committees and benches in cities are substantially larger. When we said it would be about 4,000 sitting days for 700 applications, that is not taking account of individual courts. I have no reason to suppose, in talking to the Magistrates' Committee, that they did not feel they could cope with what we are talking about now—dealing with applications within the period concerned. I think, if anything, the issue is more a question of preparation of the case, rather than whether the courts could deal with it. In that respect, I think the reports produced in November by the two committees become particularly crucial; because if it looks more possible that an Order will be made and approved by Parliament, then we could certainly give greater publicity to the need for people to start thinking about whether they want restriction orders so they would be ready to make their applications. The police would do that anyway because they go through a natural process in preparing for New Year's Eve, but not necessarily authorities.

  16. If this Order goes through on 4 December and you have got less than three weeks until Christmas until 20th to actually put these restriction orders in, in a number of courts and in some places much more than others, is it not the situation that you will be putting a lot of burden on people who are already busy doing other things so, as the Justices' Clerk said, it would be better to delay this legislation than include a power of restriction which would in effect be meaningless?
  (Mr Cunningham) I am sorry, I want to make sure I understand that?

  17. There have been suggestions that this should be delayed by the Justices' Clerks' Society. My question to you is: given the practicalities, you are talking effectively of three weeks; have you considered that delaying it would actually allow you to resolve some of the problems? As some are already going through existing procedures for this year, we could get this right for subsequent years.
  (Mr Cunningham) We have considered whether we should delay and whether we should not have any relaxation during New Year 2001. I hope that the memorandum we have produced and points the Minister made today explained why we wish to continue, despite recognising some of the difficulties involved. We consider that it is important we attempt to put this Order in place because of the benefits not only to industry but actually to ordinary people who want to take advantage of the environment which will be created by putting that Order in place. There is no doubt that if delayed and we went to next year then we would have our trial next year, that we could attempt to time it so that we could allow a much longer intro so that people could apply for restriction orders at a more leisurely pace. We think the benefits of doing it this year outweigh the gains we would make in doing it.

  18. You are saying this is much better than what we have got?
  (Mr Cunningham) Yes.

Andy King

  19. Minister, I am very concerned that we seemed to be concentrating on just a small aspect of the relevant sectors. We have talked a lot about the industry, we have talked about the magistrates' court almost like, "Yes, this is a process. We can do the bureaucratic bit on time". It does not sound to me as if any real consideration has been given to the many communities up and down the country who are going to be affected by this. I think this Committee has got it right by saying that people want some certainty; they do not want botched, rushed jobs; they want to have confidence that what is being done is being done absolutely properly, and that the protection will be there for all parties—the publican and the staff. The staff are not going to be happy if they have already made arrangements to be away and then the next thing is they are being told by their boss is, "By the way, we've decided we're going to take advantage of this opportunity which is coming up in a couple of weeks' time". I think there are a lot of different individuals and groups who are going to be concerned about this. We want to see it done absolutely right and want to give some certainty to the communities affected, employees affected and landlords affected. We think it is good that we actually get it right long-term, not piecemeal and not a rushed job.
  (Dr Howells) Mr King, if I may, I do not think this is a rushed job. I think the timetable is tight but we have thought long and hard about this, as the entire industry has and as all of those involved in the consultation have for very many years. This is not something which suddenly appeared with a new government in June 2001, this is something on which we have consulted a great deal and that certainly the industry has aspired to for a very long time, and it does not stand alone. Remember, we have got the Criminal Justice and Police Act which this Government has also brought in in 2001 which gives the police very, very tough powers to close down rowdy pubs, for example, in a way which they were not able to do previously. I think the safeguards, as far as public order is concerned, are much stronger now than they have ever been and that they will be applied on New Year's Eve 2001 in the same way as they would be applied at any time of the year. Secondly, I am very sensitive to the needs of the employees in this industry. The best establishments treat their employees very, very well, and there are good career structures for them. This is an industry which has suffered in the past from a bad image as far as employment is concerned, and one of the things we have got to do, it seems to me, as a country is wake up to the fact that being a member of bar staff is a very honourable profession. This is the only country, really, in Europe which does not regard serving behind a bar or being a waiter or the manager of a restaurant as being a very honourable job; it is some quirk in our culture. I am very sensitive to the fact that people should not be treated in an off-hand way in terms of their employment. I think that we have to take the example of the best in this country and say "This is what we aspire to". I know this is what all responsible representatives of the industry itself and the trade want and this is what we have to work towards. Of course, if I may say, we have to come back to an earlier statement I made, which is that due to the catastrophic effects of foot-and-mouth disease and, especially in Central London, the events of 11 September we owe it to the industry, to all those employed in it and all of the workers and businesses that contribute to that industry, the breweries, those that supply food and services to these establishments, to ensure that they are not bound by what I see, anyway, as needless restrictions on opening hours for a very temporary moment—after all, for twelve hours during one period of New Year's Eve—in order that they might make the most of that period for their business. I have not come across any employees who have complained to us or anybody else (perhaps they would not) about the fact that they had already arranged a holiday and this is a terrible noose hanging over that holiday's head, but I have certainly been approached by many people who say "Listen, our jobs are in danger if we do not have a good New Year's Eve". This is always a balancing act, and I am weighing up in favour of that very large majority rather than a very small minority that it might be I have not detected yet.

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