Select Committee on Deregulation and Regulatory Reform First Report

Appendix 1

Letter from the Clerk of the Deregulation and Regulatory Reform Committee to the Department of Culture, Media and Sport (dated 19 July 2001)

Proposal for the Regulatory Reform (Special Occasions Licencing) Order 2001

The Deregulation and Regulatory Reform Committee considered the above proposal at its meeting last Tuesday. Following discussion at that meeting, the Committee would be grateful for further information on the proposal as follows:

1.  The Committee has noted that the Order is entitled "Special Occasions Licensing", but applies only to one New Year's Eve. Our assumption is that this is because the Department intends to put forward further proposals relating to licensing hours which will affect the content of this Order, but it was nowhere explained in the Explanatory Statement. Is the Committee's assumption correct; and why was no reference made to this point in the Explanatory Statement?

2.  Linked with the above point, the Committee is concerned about the possible effect of s.1(4) of the Regulatory Reform Act on the making of any future RROs relating to licensing. We have seen your response to the Lords Committee on this point, but we do not believe it fully meets the Committee's concerns.

The burden which this Order seeks to reduce is primarily that imposed by section 59 of the Licensing Act 1964, which prohibits sale or supply outside permitted hours, combined with sections 60 to 83, which specify what permitted hours are.

The proposed Order amends the 1964 Act by substituting a new section 83A, which extends the permitted hours, where the Order applies, in accordance with the Order. Article 3 states that articles 4 to 9 (ie. the provisions which extend permitted hours) apply only to the permitted hours on 31 December 2001.

Section 1(4) of the 2001 Act precludes the making of an Order reforming the law contained in a provision of an Act if that provision has been amended within the two years preceding the date of the Order. The current draft Order would amend section 83A (but effectively amend the law contained in Part III of the 1964 Act, which needs to be read as a whole).

Because the Order would apply only to the permitted hours on 31 December 2001 it would become spent thereafter. It is difficult to see how a spent provision can be said to impose a burden. The position would simply revert to that obtaining prior to the Order. So an Order in 2002 would again have to remove the burden imposed by the provisions of the Licensing Act mentioned above, and would thus fall foul of section 1(4)(b).

The Committee would be grateful for a response to this argument.

3.  The Deregulation Committee's Report on the Millennium (at that stage "New Year") Licensing proposal suggested (at para 21) that the proposal was of sufficient significance to have merited being sent to all Members of the House of Commons during the consultation exercise. Did the Department consider this point, and if so why did it decide not to consult all MPs?

4.  Your Explanatory Statement estimates that "up to" 134,000 premises will be affected. However, it seems likely not only that not all on-licensed premises will necessarily wish to remain open on New Year's Eve, but that a substantial number of those which do will have already submitted an application for a special order of exemption by the time that this Order comes into force. How many premises does the Department expect not to incur the burden of applying for a special order of exemption? And what effect does your answer to this question have on the estimates of the likely savings to be gained from the introduction of this order?

5.  The explanatory statement claims that the proposal would provide for "consistent permitted opening hours across England and Wales". However, the Committee has noted that the possibility of successful applications for restriction orders means that hours may in fact be no more consistent than they are now; furthermore, given that the Order cannot become law earlier than early December, inconsistency could increase because the two regimes of normal hours extended by special orders of exemption, on the one hand, and New Years Eve hours restricted by restriction orders, on the other, will have to run side by side. On what grounds, therefore, does the Department believe that the Order will "remove inconsistencies" compared with the situation on a normal New Year's Eve?

6.  The Committee is very seriously concerned about the late introduction of the Order. Our estimate is that the very earliest at which it could come into force is early to mid-December. What are the department's views on whether the likely date for the introduction of the order gives sufficient time for residents, local authorities or the police to apply for restriction orders; for all licensing authorities to consider such applications; and for licensees to appeal to the crown court against any such orders?

Once again, we have seen your response to the Lords Committee's inquiry on this point (or at least on the point of appeals), but we do not believe that it fully answers this Committee's concerns. Your argument that an appeals procedure which you acknowledge cannot work as intended should nevertheless be included in the Order is questionable. Is the appeals procedure required to maintain necessary protection for licensees? If not, why is it included? Is it realistic, as you suggest in the explanatory statement and in your reply to the Lords Committee, to expect that licensees and the courts will expend time and money on pursuing points of more or less academic interest?

The Committee is more concerned, however, about the timescale for applications for restriction orders in the first instance. It seems wholly unreasonable to expect the police, local authorities and local residents to seek restriction orders within such a compressed timescale; it is also regrettable that licencing authorities will be required to hear applications for such orders at such short notice, particularly at that time of year. It also seems wholly unreasonable to expect licensees to wait until December before making firm arrangements for New Year's Eve.

On a more positive note, a proposal which has been put forward as a possible solution to this problem is that an objection (raised by the police, local authorities or local residents) might be enabled automatically to negate the extended hours, thereby ensuring that local residents would not lose necessary protection as a result of their applications for restriction orders not being able to be made and heard in time. Does the department believe that this would be feasible, and if so, what safeguards would be needed to ensure fairness to all parties? If not, does the department have any other suggestions as to how the problems of timing, which is the Committee's main concern, might be overcome?

7.  The Committee would like to know how the department arrived at the figure of 700 clubs and pubs being subject to applications for restriction orders (from paras 39 and 40 of the explanatory statement). The explanation given there is somewhat imprecise.

8.  The department appears to have made in respect of this proposal precisely the same error in calculating the costs to the trade of the current arrangements, of failing to take into account the fact that bulk applications can be made, as it made during the consultation on the Millennium (then New Year's Eve) Licensing order in 1999 (see paras 20-21 of the explanatory statement accompanying that proposal). Furthermore, the cost per application was on that occasion revised to just 50, rather than this time's estimate of 70: quite a considerable rise in just two years. The Committee would like to know why the department failed again to take the fact of bulk applications into account; and why the revised cost of an average application is estimated at 20 more than it was two years ago.

9.  The Committee draws the department's attention to two points relating to the drafting of the proposed Order. Firstly, on the title page of the draft order the words "Laid before Parliament....2001" are superfluous. It is not the practice to use these words on an Order subject to affirmative procedure in draft. If it is the department's intention to continue with the proposal, it may wish to remove them before a draft Order is laid before the House. Secondly, at article 4 (2) the words " any year..." are inappropriate given that article 3 states that the draft order applies only to licensing hours on the 31st December 2001. Similarly, if it is the department's intention to continue with the proposal, it may wish to re-consider article 4 (2).

10.  As you will be aware, the Committee is very disappointed that the proposal has been brought forward at such a late stage, and that as a result it seems unlikely that the Committee will be able to recommend its adoption. I have been instructed to ask you how many officials have been involved in the preparation of this proposal since it was first conceived at the time of consultation on the 1999 proposal; and what has been the cost to the taxpayer in terms of those officials' time of bringing forward this proposal.

The Committee awaits the department's response with interest. In the meantime, however, particularly bearing in mind both the difficulty of ensuring that necessary protection is maintained given the short timescale envisaged, and the likelihood that the lateness of the introduction of the order will mean that the majority of licensees will already have applied for special orders of exemption in respect of New Year's Eve, the Committee would welcome the department's views on whether it remains appropriate to proceed with this proposal; or whether it might be better to withdraw it and to proceed with a proposal relating to New Year's Eve 2002 (perhaps in conjunction with a similar proposal in respect of the Queen's Golden Jubilee).

Whether or not a decision is taken to withdraw this proposal, the Committee does, as I suggested when we spoke earlier today, wish to hear oral evidence from a Minister and officials at an early date on the return of the House after the summer recess. The Committee wishes to take the opportunity to take evidence not only on this proposal, but also on the Government's intentions for the future use of the regulatory reform procedure in respect of measures concerning licensing and gaming reform. This follows the comments and recommendations in the final report of the Deregulation Committee in the last Parliament (see particularly paras 6-8, 46-51, and 74-77) regarding the use of the deregulation procedure.

I am copying this letter to the Regulatory Impact Unit, and to the Clerk to the Delegated Powers and Regulatory Reform Committee in the Lords.

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