Select Committee on Regulatory Reform First Report



PROPOSAL FOR THE REGULATORY REFORM

(SPECIAL OCCASIONS LICENSING) ORDER 2002

 

Report under Standing Order No. 141

  65. The Regulatory Reform Committee has examined the proposal for the Regulatory Reform (Special Occasions Licensing) Order 2002 in accordance with Standing Order No. 141. In order to provide some degree of certainty for those affected, we are making a report of our assessment of the proposal against the statutory and Standing Order criteria now. Based on that assessment, our intention is to recommend to the House that a draft order in the same terms as the proposal should be laid before the House. However, some 28 days of the period for Parliamentary consideration still remain, during which we may yet receive further representations. We will therefore make our formal recommendation to the House later in the 60 day period.

Introduction

  66. On 24 July 2002 the Government laid before Parliament the proposal for the Regulatory Reform (Special Occasions Licensing) Order 2002 in the form of a draft of the order and an explanatory memorandum from the Department for Culture, Media and Sport (the Department). The proposed regulatory reform order would extend permitted hours for on-licensed premises and registered clubs, from the end of normal permitted hours on New Year's Eve through to the beginning of normal permitted hours on New Year's Day, for all future years. It is intended to be the final step in relaxing licensing hours on New Year's Eve, and follows the passage of the Deregulation (Millennium Licensing) Order 1999,[24] the Regulatory Reform (Special Occasions Licensing) Order 2001[25] and the Regulatory Reform (Golden Jubilee Licensing) Order 2002,[26] which relaxed licensing hours on New Year's Eve 1999, New Year's Eve 2001 and HM the Queen's Golden Jubilee in June this year.

67. The House has instructed us to examine the proposal against the criteria specified in Standing Order 141(6) and then, in the light of that examination, to report whether the Government should proceed, whether amendments should be made, or whether the order should not be made.[27]

68. Our discussion of matters arising from our examination is set out below. Where a criterion specified in Standing Order 141(6) is not discussed in the report, this indicates that we have no concerns to raise about that criterion. We have no concerns about the substance of the proposal. However, we were obliged to take evidence from the Minister on the timing of the proposal. That evidence, and the issues arising from it, are discussed below.

Purpose of the proposal

  69. The proposal would amend the 2001 Special Occasions Order in order to extend licensing hours from the end of normal permitted hours on all future New Year's Eves to the beginning of normal permitted hours on all future New Year's Days (i.e. all night on New Year's Eve).

70. It would also allow public entertainment licences which are subject to time restrictions to be varied automatically in line with the extended permitted hours governing the sale and supply of alcohol. This reflects existing provisions in Schedule 12 to the London Government Act 1963 and Schedule 1 to the Local Authorities (Miscellaneous Provisions) Act 1982, which effectively vary public entertainment licences automatically to bring them into line with any "special orders of exemption" granted on a special occasion.[28]

71. The same system of restriction orders as applied on New Year's Eves 1999 and 2001 and for the Golden Jubilee would apply to the extension of licensing hours on all future New Year's Eves, with the additional provision that restriction orders would apply not only to licensing hours but also to any public entertainment licence in force on the same premises. Residents, local authorities or police authorities could therefore apply for restriction orders in respect of any individual premises where it is desirable to avoid or reduce disturbance, annoyance or disorderly conduct.

Extent of the proposal's application

  72. The proposal affects England and Wales only. It has no effect in Scotland or Northern Ireland, as those countries have their own liquor licensing legislative regimes.

Assessment of the proposal against Standing Order No. 141(6) criteria

Removal or reduction of burdens

  73. As with the previous orders, licensees of relevant premises would be relieved of the burden of applying for special orders of exemption in order to open later on New Year's Eve, and licensing justices (or, in the case of registered members' clubs, magistrates' courts) would be relieved of the burden of considering those applications. The proposed order would also provide that any public entertainment licence in force on relevant premises would automatically be extended in line with licensing hours, thereby relieving licensees of the burden of applying for variations to those licences and local authorities of the burden of considering those applications.

Public entertainment licences

  74. Public entertainment licences are required by all premises intending to provide entertainment. Under the existing system of "special orders of exemption", the grant of such an order normally extends any public entertainment licence in force on the premises in line with the extension of alcohol licensing hours granted. However, the Orders that relaxed licensing hours for 12 hours on New Year's Eve in both 1999 and 2001 did not extend existing public entertainment licences in line with the relaxation of the hours during which alcohol may be sold. This meant that local authorities had to process a number of applications for variation of existing public entertainment licences in a busy period when many applications for temporary public entertainment licences are made. Although there are no costs for the local authority, as they recover them by charging for variations of licence conditions, some local authorities reported that this was a cause of difficulty.[29] The proposed order would relieve the licensed trade of the burden of applying for such variations, and local authorities of the burden of considering them.

75. If they intend to provide entertainment, premises without a public entertainment licence would still have to apply for one for this night of the year. However, if such a licence were to be granted by the local authority, it would have to be granted for the whole period up to the start of permitted licensing hours on New Year's Day, "to achieve consistency and fairness."[30]

76. We are satisfied that the proposal would remove a burden.

Other benefits

  77. As with the previous proposals, the Department expects the proposed order to benefit not only courts and police, but also consumers and the industry by providing for more consistent permitted opening hours across the country. This is because discrepancies between additional hours granted by licensing authorities by means of special orders of exemption would be eliminated.

Consultation

  78. A consultation paper setting out the Government's proposals was issued by the Department on 24 April 2002. It was the subject of a Departmental press notice, and was published on the web sites of both the Department for Culture, Media and Sport and the Cabinet Office. It was sent directly to a range of organisations and individuals known or likely to have an interest in the deregulation of licensing hours, including the crown court, all police forces and authorities, all magistrates' courts and committees and all local authorities in England and Wales. Because of the issues raised in respect of Sundays,[31] it was also sent to a range of groups representing the interests of various religions.[32]

79. Over 90% of the responses to the consultation were favourable to the main thrust of the proposal. As with previous proposals, a small number of respondents objected to the proposal on grounds of noise and nuisance but, even amongst residents' associations, opinion overall was strongly in favour.

80. Prior to the issuing of the consultation paper, and as promised on introduction of the 2001 Special Occasions Order,[33] the Department also undertook a review of the arrangements on New Year's Eve 2001 (see below).

Review of New Year's Eve 2001

  81. The relaxation of licensing hours which was effected by the 2001 Special Occasions Order was intended to serve as a further trial, following the relaxation of hours on New Year's Eve 1999, before the Government considered the complete relaxation of licensing hours for all future New Year's Eves. The Department therefore conducted a review of the impact of the extended licensing hours on New Year's Eve 2001.

82. The conclusion of the review was that the Order "had no significant detrimental impact on the period between New Year's Eve 2001 and New Year's Day 2002 in terms of crime, noise or anti-social behaviour when compared with any normal New Year's Eve in the recent past."[34] In fact, the review suggested that the overall effect of the order was beneficial. In many cases, businesses did not have to meet the costs of applying for special orders of exemption, and the courts did not have to process the applications. Restriction orders were extremely rare, as for New Year's Eve 1999. The indications were that very few pubs or clubs took full advantage of the 12 hours' relaxation. Most appear to have opened later than at previous New Years' Eves (other than in 1999) when the most common closing time imposed by magistrates was 12.30am, with the pub representative organisations indicating that between 1.00am and 3.00am were the most common closing times on 1 January 2002. Some licensed premises re-opened at some point between 6.00am and 7.00am offering, for example, champagne breakfasts on New Year's Day which would not otherwise have been permitted. In many cases, nightclubs and discotheques across the country did remain open later than pubs, taking fuller advantage of the relaxation.

83. Overall, 2001 appears to have been a relatively quiet New Year's Eve, and disturbance to local residents appears to have been minimal. Some police officers and local authorities commented that New Year's Eve 2001 was quieter than a normal weekend in their areas.

Consultation: conclusion

  84. No changes were made to the proposal in the light of consultation, although the Government did take account of the views expressed when choosing between various possible options set out in the consultation paper, particularly in respect of the issue concerning Sundays.

85. We consider that the proposal has been the subject of, and taken appropriate account of, adequate consultation.

Costs and benefits

  86. The explanatory statement estimates that the proposal would result in savings of just under 9.5 million per year for the hospitality and leisure industry. Due to the late tabling of the proposal, the savings which will accrue this year will be considerably less than that, since many licensees will already have applied for special orders of exemption in respect of New Year's Eve this year. Nevertheless, as the Department's subsequent letter notes, there will be benefits even to those licensees who have obtained special orders of exemption, because they will be able to take advantage of longer hours than would normally be the case under those special orders.[35] We are satisfied that the proposal has been the subject of, and taken appropriate account of, estimates of increases and reductions in costs and other benefits which would result from its implementation.

Necessary protection

  87. Necessary protection of local residents against excessive noise or disturbance from licensed premises is intended to be maintained by means of the same system of restriction orders as applied on New Year's Eves 1999 and 2001 and at the Golden Jubilee. Such orders may be applied for in respect of any relevant licensed premises by the police, local authorities or local residents. Where relevant, public entertainment licences will also be subject to any restriction order applying to the premises. Licensees will have a right of appeal against the grant of a restriction order.[36]

88. We have already concluded, during consideration of previous proposals, that restriction orders should in principle provide sufficient protection against excessive noise or disturbance from relevant on-licensed premises. This current order, however, raises two new issues which need to be considered against this criterion: namely, public entertainment licences, and the position of workers when New Year's Day falls on a Sunday. We discuss those two issues below.

89. Unfortunately, just as last year, the late tabling of this proposal also raised the question of timing, and whether, in respect of New Year's Eve 2002, it would be possible for the system of restriction orders to operate as intended. The issue of timing is also discussed below.

Public entertainment licences

  90. The first new issue which needs to be considered is that of public entertainment licences (PELs). Under the current law, any "special order of exemption" extending alcohol licensing hours also extends any PEL in force on the same premises. Although PELs are granted by local authorities, special orders of exemption are granted by licensing justices or magistrates. In normal circumstances, therefore, local authorities have no formal role in determining extensions to PELs on New Year's Eve.

91. The deregulation and regulatory reform orders applying to previous New Year's Eves did not affect PELs. Premises with such licences were therefore obliged to apply to local authorities for extensions to their licences if they wished them to be extended in line with the extension of alcohol licensing hours provided for by the Orders.

92. This proposed regulatory reform order would provide for an automatic extension of PELs for the same period as for alcohol licensing hours, i.e. all night. However, local authorities, in common with the police and local residents, would be able to apply for restriction orders in respect of licensing hours which would also have the effect of restricting PEL hours.

93. Whilst, as noted above, some local authorities reported that dealing with applications for variations to public entertainment licences to take account of the extensions to licensing hours made by previous Orders is a source of difficulty, others expressed a desire to retain control over such licences. The Department responds by arguing that local authorities will have more influence over existing PELs than they would normally have on New Year's Eve (i.e. as in paragraph 90 above), because local authorities would be able to apply for restriction orders. Under existing law the issue would be decided by licensing justices or magistrates on applications for special orders of exemption.[37]

94. Local authorities would have less control over such licences than compared with the arrangements following the passage of the previous deregulation and regulatory reform orders (i.e. as in paragraph 91 above). They would have to apply for a restriction order if they wished to restrict the hours during which a public entertainment licence applied, rather than being able to vary the terms of the licence as they saw fit. Nevertheless, 78% of those local authorities responding to the consultation were in favour of this aspect of the proposal, probably reflecting the fact that they would be relieved of the burden of considering applications for variations to licences.[38]

Objections from the Royal Borough of Kensington and Chelsea

  95. We received a letter from the Royal Borough of Kensington and Chelsea, reiterating its opposition (expressed directly to the Department in response to the original consultation) both to the relaxation of licensing hours as a whole, and in particular to the automatic extension of PELs. The Royal Borough believes, for a number of reasons, that its residents would be better protected under the existing licensing system.

96. We recognise that, as a central London authority with a high concentration of licensed premises, the Royal Borough of Kensington and Chelsea has a particular interest in licensing issues. However, we consider that local residents in the Royal Borough will still have adequate protection, through the system of restriction orders, against excessive noise or disturbance. We further note that the Council itself will be able to help to ensure that protection, because it will also have the power to apply for restriction orders.

97. Furthermore, as noted earlier, 78% of local authorities responding to the consultation were in favour of the proposal, suggesting that in the opinion of the majority of local authorities (including some other authorities representing inner city areas), the benefits of the proposal outweigh the disadvantages. Whilst acknowledging the Royal Borough of Kensington and Chelsea's concerns, we consider that, when the benefits to the licensed trade are also taken into account, those concerns are not sufficient to give grounds for preventing the proposal from going ahead.

98. We are satisfied that the proposal that public entertainment licences be extended automatically in line with the extension of permitted licensing hours would not remove any necessary protection.

Sundays

  99. Neither New Year's Eve 1999 nor New Year's Eve 2001 (the subjects of the previous relaxations) fell on a Saturday. Whenever New Year's Eve falls on a Saturday, the Government's proposal would mean that, for the first time, pubs and clubs could open during the time on the following Sunday morning when Christian services are normally held. In other words, opening would be permitted throughout the whole of Sunday until 10.30pm on these occasions. Because alcohol licensing law has traditionally treated Sundays exceptionally, the Government asked consultees to consider four different options for addressing this potential problem. It indicated, however, that its preferred option was to make no special provision relating to Sundays.

100. The Department reported that three key points emerged from the consultation:

81% of those who expressed a view considered that it would be discriminatory to treat Christian workers better than workers belonging to other religions

87% of those who expressed a view considered that employees in the licensed trade should not be required to work during the hours between 6.00am and 12.00 noon on New Year's Day when it falls on a Sunday

90% of those who expressed a view (including 100% of the responses from industry representatives) considered that all employees should be free to elect not to work during any part of the period of the permitted hours that would be extended by the Order.[39]

101. The Government concluded that all three of these objectives would be met if workers are not required by law to work any period of the extended hours. The Government did not consider that it was necessary to add a specific provision to the Order to achieve this end; indeed, to add one would duplicate aspects of existing law. Existing protections under the Working Time Regulations, and under the normal laws of contract, make it unlawful for one party to a contract of employment to vary its terms and conditions without the other's consent. This means that nobody whose current contract of employment, whether in its explicit terms or as a matter of custom or practice, does not provide for them to work on a Sunday or any other day for extended hours and/or at any unsocial times, can have different terms imposed on them. The industry would therefore be required to negotiate with workers to agree any new terms for working at these times (as they do now in the context of special orders of exemption), and no worker could be required to work during the extended period if he or she chose not to do so for either religious or any other personal reason. Furthermore, if the bringing into force of the draft Order necessitated new permanent changes to contracts of employment in respect of all future New Year's Eves, such permanent changes to contracts and the related hours of working would again be negotiable.

102. The Government therefore considers that the existing protections provide necessary protection against abuse as sought by the consultees. Against this background, it argues, an unnecessary burden on business through the introduction of new and specific regulations for this purpose cannot be justified.

103. The Government's analysis does not of itself, in our view, fully meet the concern regarding the maintenance of protection for Christian workers. It could be argued that the likely result of the introduction of the order will be that the majority of contracts of employment will be re-negotiated, and the new contracts will in practice affect the rights of future as well as existing employees in the industry. As a result there will be progressive pressure on Christians, who would ultimately find themselves unable to take up employment in the industry unless willing to accept New Year Sunday morning working, as, arguably, has happened in respect of Sunday trading in the retail sector.

104. Nevertheless this will be a rare problem, since Sunday New Year's Days will occur only every seven years or so. We also consider that it would be inappropriate, in this context, to promote a protection for members of one particular religion which would not similarly benefit those of other religions. We are satisfied, therefore, that the proposed order would not remove any necessary protection for workers in respect of working on a Sunday.

Rights and freedoms; proportionality; fair balance; desirability

  105. As with the previous orders, the system of restriction orders provided for by the proposal would impose a new burden on the licensed trade. We are therefore required to be satisfied that:

the burden imposed would be proportionate to the benefit which is expected to result from its creation[40]

the proposal would not prevent any person from continuing to exercise any right or freedom which he might reasonably expect to continue to exercise[41]

the provisions of the order, taken as a whole, strike a fair balance between the public interest and the interests of the persons affected by the burden being created[42] and

the extent to which the order removes or reduces one or more burdens, or has other beneficial effects for persons affected by the burdens imposed by the existing law, makes it desirable for the order to be made.[43]

106. In respect of these criteria, this proposal does not appear to raise any issues which have not already been considered in the context of the previous proposals. We are satisfied that all these criteria are met.

Timing of the proposal

  107. We now turn to the question of the problems resulting from the timing of the laying of the proposal.

108. The Regulatory Reform Act provides for a 60-day period for Parliamentary consideration of a regulatory reform proposal. That period is subject to extension for any time during which Parliament is dissolved or prorogued, or either House is adjourned for more than four days. As the period is statutory, the Committee itself has no power to reduce its length. No draft order giving effect to a regulatory reform proposal may be laid before Parliament until after the end of that 60-day period.[44]

109. This proposal was not laid before Parliament until Wednesday 24th July—the day before the House rose for the summer adjournment. Given the length of the summer recess, and prorogation, no draft order may therefore be laid until Tuesday 17th December. The House of Commons will rise for Christmas on Thursday 19th December.[45]

110. Two problems arise from the failure to lay the proposal in good time:

if the order consequent on this proposal is to come into force in time for New Year's Eve this year, the practical problems of ensuring Parliamentary approval for the draft order have to be considered

if an order were to come into force, then the ability of the system of restriction orders to work effectively this year also has to be considered.

111. The first question is that of how any draft order consequent on this proposal could pass through the necessary Parliamentary stages in the three available days. The proposal has to be considered by the Parliamentary Committees in both Houses, and then has to be approved by both Houses. Depending on our conclusions about the draft order, the motion to approve the draft order could be taken on the floor of the House of Commons without debate. However, that is not the case in the House of Lords, where time will have to be found for a short debate.

112. The second question is that of whether there would be sufficient time for the system of restriction orders to operate effectively in respect of New Year's Eve this year. Given the Parliamentary timetable outlined above, the earliest date on which the order could come into force would be Friday 20th December. Five days' notice would have to be given to the courts before an application for a restriction order could be heard.[46] There would therefore be only three days on which an application could be made—Friday 20th, Monday 23rd and Tuesday 24th December—and only two days on which any such applications could be heard—Friday 27th and Monday 30th December.

113. We asked the Department to comment on the issues of timing involved. We also indicated that, if the Government proposed to proceed with the proposal with the intention of bringing it into force this year, we would expect the Minister to come before us to explain how he proposed to do so.[47] The Department indicated in response that it did indeed wish to proceed with the proposal with a view to bringing an order into force this year. Consequently, in addition to the written response from the Department, we also heard oral evidence from the Minister concerned, Dr Kim Howells, MP, at a hearing on Wednesday 6th November.

 


24   SI 1999/2137. Back

25   SI 2001/3937. Henceforth "the 2001 Special Occasions Order." Back

26   SI 2002/1062. Back

27   Standing Order No. 141(2). Back

28   For a full explanation of the changes to the public entertainment licensing system, see paras 74-75 below. Back

29   Explanatory statement, para 11. Back

30   Explanatory statement, para 12. Back

31   See paras 99-104 below. Back

32   A full list of consultees may be found at Annex B of the explanatory document. Back

33   See para 13 of the explanatory document accompanying the proposal for the Regulatory Reform (Special Occasions Licensing) Order 2001, laid before Parliament 28 June 2001, available from the Department for Culture, Media and Sport or at http://www.cabinet-office.gov.uk/regulation/act/orders_made/2001/special_occasions_licensing.htm. Back

34   Explanatory statement, para 5. Back

35   Appendix B. Back

36   But that right of appeal will be ineffective in respect of New Year's Eve 2002 because of the timing of the proposal. See Appendix B. Back

37   See, for example, explanatory statement, page 25 (response to North Shropshire District Council), page 32 (response to Brentwood Borough Council). Back

38   Explanatory statement, para 40. Back

39   Explanatory statement, para 42. Back

40   Regulatory Reform Act 2001, section 1(1)(b). Back

41   ibid, s3(1)(b). Back

42   ibid, s3(2)(a). Back

43   ibid, s3(2)(b). Back

44   Regulatory Reform Act 2001, s8. Back

45   HC Deb, 31 October 2002, col 1001. Back

46   Article 6(1) of the 2001 Special Occasions Order. Back

47   See Appendix A. Back

 
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