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Second Standing Committee on Delegated Legislation
The Committee consisted of the following Members:
Chairman:
†Mr. Bill O’Brien
†Bryant, Chris (Rhondda) (Lab)
†Caborn, Mr. Richard (Minister for Sport and Tourism)
†Clappison, Mr. James (Hertsmere) (Con)
†Clifton-Brown, Mr. Geoffrey (Cotswold) (Con)
†Flook, Mr. Adrian (Taunton) (Con)
†Foster, Mr. Don (Bath) (LD)
†Jones, Mr. Kevan (North Durham) (Lab)
†Mahmood, Mr. Khalid (Birmingham, Perry Barr) (Lab)
†Marsden, Mr. Gordon (Blackpool, South) (Lab)
†Moss, Mr. Malcolm (North-East Cambridgeshire) (Con)
†Russell, Bob (Colchester) (LD)
†Salter, Mr. Martin (Reading, West) (Lab)
†Simon, Mr. Siôn (Birmingham, Erdington) (Lab)
†Stuart, Ms Gisela (Birmingham, Edgbaston) (Lab)
†Tami, Mark (Alyn and Deeside) (Lab)
†Watson, Mr. Tom (West Bromwich, East) (Lab)
Alan Sandall, Committee Clerk
† attended the Committee
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Wednesday 23 February 2005
[Mr. Bill O’Brien in the Chair]
The Licensing Act 2003 (Fees)
Regulations 2005
2.30 pm
Mr. Don Foster (Bath) (LD): I beg to move,
That the Committee has considered the Licensing Act 2003 (Fees) Regulations 2005 (S.I. 2005, No. 79).
I am delighted to serve on this Committee under your chairmanship, Mr. O’Brien. Those who have served on Committees with me will know that I make a habit whenever possible of speaking as briefly as possible—[Interruption.] It is clear that many members of this Committee have had a good lunch. However, this is an important matter and there are many issues to be debated, so I apologise to you and to hon. Members if I detain the Committee rather longer than I might normally.
The Committee is well aware that the transitional period for the full implementation of the Licensing Act 2003 is already well under way. Many applications have been made, many cheques are in the post and many disputes have already begun on the basis of the order, yet only today are we debating it.
We are also well aware that, in an attempt to rush the regulations through, the Government had to break the 21-day protocol on giving advance notice of a statutory instrument. I do not accuse them of not consulting—it is clear that there has been a great deal of consultation on the issue—but it is remarkable to note that until just a few days before the announcement of the statutory instrument and the details of the fee structure, the Minister was telling us that the Government would go with the fee structure that had been announced many months earlier. However, the fee structure in the statutory instrument is significantly different from the one that the Government were telling us right up to the last minute that they would use.
That change at short notice and the delays and other changes have been symptomatic of this legislation. I remind the Minister that on the Floor of the House on 5 January last year, he was asked to give a categorical assessment of when the full panoply of the Licensing Act’s powers would be implemented, and he replied,
“by the spring of 2005.”—[Official Report, House of Commons, 5 January 2004; Vol. 416, c. 6.]
That was after further delays had already taken place.
The Minister for Sport and Tourism (Mr. Richard Caborn): On 5 January of which year?
Mr. Foster: Obviously, the Minister also had a good lunch. The record will show that I clearly said, “January 2004”.
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In fact, when the draft guidance was published on 23 March 2004, the Government stated:
“It is expected that the new licensing system will be fully implemented in mid 2005.”
As we now know, it will not be fully implemented until November 2005 at the earliest. There has been much delay and discussion, and it is exactly the same for the fee structure, which we are debating today. Huge changes have been made. The Government accuse others of boom and bust, but one could argue that the Government have taken a similar approach on this issue.
Mr. Malcolm Moss (North-East Cambridgeshire) (Con): The hon. Gentleman talked about late changes. Does he agree that it is not just discourteous to the Committee and to the House but a scandal that two fundamental changes were made at the eleventh hour, yet we were not consulted at all? Between the end of December and the printing of the regulations in January, fundamental changes were made without consultation.
Mr. Foster: The hon. Gentleman is absolutely right. I planned to refer to that later, but let me deal with it now. I said earlier that there had been detailed consultation—I am prepared to accept that there was. The amazing thing is that, having had that consultation, the Government then made major changes in several areas. Those changes had significant impacts on parts of the industry—as we have heard in representations from the British Beer and Pub Association, for example—about which there was no consultation. That is symptomatic, as the hon. Member for North-East Cambridgeshire (Mr. Moss) is well aware, of some of the changes that were made in respect of another Bill that we have recently debated: the Gambling Bill. There is real concern on this matter.
The hon. Gentleman and I both spoke recently in a debate on the Floor of the House, suggesting a delay in the implementation of the Licensing Act. I believe—I suspect that the same applies to the hon. Gentleman and his party—that that would be the right way forward because a number of issues need to be sorted out. One of those issues concerns the proposed licensing fees.
Mr. Martin Salter (Reading, West) (Lab): Will the hon. Gentleman give way?
Mr. Foster: I will in a moment. It is worth reflecting that we are discussing a piece of legislation that the former Home Secretary described, in an article in The Daily Telegraph on 17 January, as nothing short of a leap in the dark.
Mr. Salter: I get on well with the hon. Gentleman and I do not wish to be churlish, but I suggest to the Committee that he might have another motive for wishing to delay the implementation of the order. Paragraph 2 refers to the age at which people can enter licensed establishments and, as we well know, the Liberal Democrats are in favour of people going into
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licensed premises at the age of 16. Perhaps there should be a delay so that the hon. Gentleman’s party can sort its policies out. It is irresponsible.
Mr. Foster: I like the hon. Gentleman’s addition at the end; I was waiting for some such comment. I understand his concern on this issue, and let me put it firmly on record, so that there is no doubt, that my party genuinely believes that in due course the time should come when people of the age of 16—
Mr. Caborn: In due course?
Mr. Foster: In due course, the time should come when people aged 16 should be given full social and political rights. In relation to the current situation regarding buying alcohol at the age of 16, the hon. Member for Reading, West (Mr. Salter) will be well aware that in countries as diverse as Italy, Spain, France and Germany—
The Chairman: Order. I must intervene because we are not discussing the reduction of the age of access. The hon. Gentleman replied, but he is now extending his point further and I ask him to stick to the order.
Mr. Foster: I am most grateful to you, Mr. O’Brien. I was merely going to say that we believe that in the current climate of binge drinking in this country it would not be appropriate to move in that direction—
Hon. Members: A retraction!
The Chairman: Order.
Mr. Foster: I recall vividly that on Monday, on the Floor of the House of Commons, when asked whether something was Government policy, the Minister replied so that the whole House could hear that it was not a policy but an aspiration. He made the clear distinction, and we share the making of that distinction. The matter is an aspiration for the future, not the present, and it is not in our manifesto.
Mr. Salter: Bravo.
Mr. Foster: I am grateful to the hon. Gentleman for his praise for my response.
Chris Bryant (Rhondda) (Lab): He thought you were about to sit down.
Mr. Foster: I am nowhere near to doing that. If there are many more interventions, I shall take even longer.
I believe that it is important to debate the order because the financial implications are huge. Those implications will affect local authorities, whose budgets are continually being squeezed, particularly in regard to non-statutory requirements. Short-changing local authorities, as I believe the order does, will have a major impact on other aspects of local authority activity. We are in danger of penalising through this order a number of activities that every Committee member would support. We are in danger of undermining the work of amateur sports clubs, the
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whole bedrock of live music in the UK, and a range of good social activities such as pub-sponsored sports teams, quiz nights, games nights and even, I hear from Islington, philosophy nights. We are also in danger of undermining circuses.
I genuinely believe that there is good reason to be concerned by the statutory instrument that we are debating. It is not just about binge drinking. We are in danger of damaging other areas and setting fees that will penalise local authorities financially in the early years, if not the later years, and damage their ability to deliver a number of crucial services. During this brief debate, I hope that we can consider whether the Government have got the balance right.
Chris Bryant (Rhondda) (Lab): The hon. Gentleman has just said that local authority budgets will be squeezed if we progress with these fee levels. Is he therefore suggesting that they should be higher?
Mr. Foster: The hon. Gentleman makes a fair point by asking that question. Let me respond to him by asking him to recall what I said. I said that in the transitional period local authorities will lose out. I shall give him evidence of that in a minute. I did not say that in the longer term local authorities would lose out; I said that in the current transitional period they will lose out. The argument for that is very clear, because their start-up costs are simply not being met. The hon. Gentleman is right: at a later stage, on balance, the fee structure will bring in revenue sufficient to meet the local authority’s needs—[Interruption.]
The Chairman: Order.
Mr. Foster: However, in so doing, the fee structure will have a damaging effect on some of those organisations and activities to which I have just referred—whether they are amateur sports clubs or the social activities taking place in pubs and so on. So, my answer to the hon. Gentleman is very clear: the figures are inappropriate for the transitional period; for the later period, they are probably accurate.
Mr. James Clappison (Hertsmere) (Con): On a point of order, Mr. O’Brien.
The Chairman: Order. It is not permissible for Members to consult civil servants at this stage.
Mr. Salter: Is that correct?
The Chairman: Yes, that is right.
Mr. Salter: I apologise.
Mr. Foster: Thank you, Mr. O’Brien. You are doing phenomenally well. It is clearly going to be a difficult Committee for whatever reason. I leave you to judge why.
I hope that I am being clear with the hon. Member for Rhondda, because I do not want there to be any misunderstanding of my position. I shall repeat it. In my view, and based on the evidence obtained by the
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Local Government Association, the sum of money that will come in during the transitional phase will be—[Interruption.] Let me just finish. It will be inadequate to meet local authority needs. In the longer term, it will meet their needs, but it will be done in such a way as to penalise a range of activities to which I have just referred.
Chris Bryant: The hon. Gentleman wants to have it both ways, as usual. He is trying to say that in the transitional period there is not enough money coming in, and in the long term too much money is being taken out of licensed premises and other organisations that he would like to see have an easier time of it. If that is the case, what does he suggest we do during the transitional period? Should we increase the figure to pay for what the local authorities want? Is he suggesting an additional tax? Where else will that money come from?
Mr. Foster: The answer is simple. The Government have imposed additional pressures and burdens on local authorities. When they do that, it is normally the case—[Interruption.] If the hon. Member for Rhondda (Chris Bryant) wants an answer, I shall give him one. It is up to him if he wishes to listen to someone else, but he asked me a question and I am giving him an answer. It is normal, customary and within legislation that when the Government impose additional pressures on local authorities, the Government normally meet those additional pressures through the local government financial settlement. That is how it should be done in these circumstances.
The hon. Gentleman accused me of saying that the structure will be okay at a later stage and the total amount will be fine, but that it will place burdens on all sorts of organisations. He is right; I am saying that. In those circumstances, the fee structure is incorrect, because it burdens some organisations with a penalty and does not burden other organisations that should be penalised.
Mr. Caborn: Will the hon. Gentleman give way?
Mr. Foster: I will in a moment. I want to be honest with the hon. Member for Rhondda. Let me give him an answer to the question that is, I imagine, in his mind: who would I say should be penalised more than is currently the case? Does the hon. Gentleman not find it strange that, in his constituency and mine, the vast majority of police activity on Thursday, Friday and Saturday nights occurs between midnight and 2 o’clock? That is the clear evidence from police throughout the country. Is it not clear that that is, in part, a result of activities that take place in nightclubs and not in pubs? Admittedly, club-goers might have been drinking in pubs beforehand. Does the hon. Gentleman not find it strange that the multiplier effect in the statutory instrument does not apply to nightclubs?
Mr. Caborn: If what the hon. Gentleman said were correct, there would be a problem, but it was not correct. There have been two consultations, with local
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government and with the trade, and between the two consultations there was a significant increase, from about 45 per cent. in favour of the fees to about 55 per cent. More importantly, the Local Government Association welcomed it when we announced the final fee figures, because we said that we would also set up a monitoring committee with various constituents with a vested interest to consider the continuing development of those fees.
Remember that we are bringing six regulatory regimes into one. A number of those regimes were already under the control of local authorities. Liquor licensing was under the control of the magistrates, and the fee involved was woefully outdated at £10 per establishment. It therefore had to be reviewed. I do not think that anybody would defend subsidising booze in this day and age, but that is what has been happening.
However, we found that, on the one hand—
The Chairman: Order. I remind the Minister that this is an intervention, so he should be brief.
Mr. Caborn: I will quickly answer the hon. Gentleman’s question. The liquor licensing fee was low and some of the other fees were high. We have said that we will keep the situation under review and that, if things go wrong, we will move to rectify them immediately through a statutory instrument. We do not believe that we have got it wrong and nor does the Local Government Association, so what the hon. Gentleman said is wrong.
Mr. Foster: I thank the Minister for his comments, but I suspect that the Local Government Association, which will, no doubt, study his words with close interest, will be staggered. I am sure that the Minister and his office have received the detailed briefing on the debate that all Members of the Committee have received. If the Minister is telling the Committee that that briefing suggests that the LGA is satisfied, happy and totally content with the decision, his reading of it is extremely different from mine.
For example, that document makes it absolutely clear that the LGA believes that local government will be £41 million light in funding in the transitional year and a further £41 million light in the first year of operation. I do not believe that the LGA has said that it is happy about being £82 million light in the first two years of the Act’s operation. If the Minister has evidence to suggest that that is what the LGA thinks, I would be interested to hear it, but that is not what it said in its brief. If the Minister believes that the LGA is satisfied about the escalator that is being applied to pubs and not to clubs, I would be interested to hear him say so. That is not what the Local Government Association said to me. Perhaps the Minister can explain—
Mr. Geoffrey Clifton-Brown (Cotswold) (Con): On a point of order, Mr. O’Brien. We must have a bit of discipline in the Committee. You ruled that it is not in
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order for Back Benchers to communicate with civil servants. I just spotted the hon. Member for Reading, West handing a document to the Minister’s Parliamentary Private Secretary, who then handed it to a civil servant. He is looking to the civil servant to check the document. Is that in order?
The Chairman: I do not know what the document is, so it is difficult for me to judge. However, I gave a ruling on the issue. Members of the Committee must not consult or contact civil servants.
Mr. Salter: Further to that point of order, Mr. O’Brien. I want to make it absolutely clear to the Committee that the document that I passed to the PPS has no bearing on the debate whatever.
Mr. Foster: I was saying that the Minister argued that the Local Government Association is totally happy. I am arguing that the briefing we received suggests that that is simply not the case. The LGA is not happy with the £82 million additional burden, which will not be funded but placed on the first two years of operation. Equally, the LGA is not happy with the arrangements for the escalator, which, as I was saying to the hon. Member for Rhondda a minute ago, excludes nightclubs because of the legal definition that includes a reference to premises that are primarily for the sale of alcohol.
If the hon. Gentleman or the Minister think that I have got this wrong and that we should not be doing something about nightclubs, they might like to reflect on the wording of the press release published by the Bar Entertainment and Dance Association, whose website displays the following words:
“BEDA, the nightclub lobby group, has played a blinder. Not only has it got the hefty PEL monkey off its back, it also seems to have escaped from being asked to cough up for town centre trouble. As long as its members can say their clubs are not ‘primarily for drinking’ (because they sell food and people dance) they are immunised against fines.”
What a bizarre state of affairs it is when all those people are saying that they conned the Government and the Government think that everybody is happy with that con.
Mr. Siôn Simon (Birmingham, Erdington) (Lab): Will the hon. Gentleman give way?
Mr. Foster: I will give way to the hon. Gentleman, for whom I have a great deal of respect. I look forward to his contribution.
Mr. Simon: I am very grateful to the hon. Gentleman, and I can assure him that my respect for him is at least equal to the respect that he so kindly evinces to me.
I just wanted to ask whether the hon. Gentleman could fill us in on the meaning of some of those bizarre and esoteric expressions—vulgar language which is, I am sure, confusing to those of us on this side of the Committee.
Mr. Foster: Fine—I am delighted to do so. The hon. Gentleman will be aware that the Government, stung
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by criticism of their 24-hour drinking rule, decided at short notice and without, as the hon. Member for North-East Cambridgeshire said, any consultation with the industry, to introduce an escalator. That is a system in which the fees charged are significantly higher for pubs that cause growing concern about their impact on binge drinking. The point is that the escalator fails to take into account clubs, because of the definition which states that the escalator applies only to those premises that are primarily—
Mr. Simon rose—
Mr. Foster: Perhaps the hon. Gentleman, for whom I have enormous respect, will let me finish and give him an answer. The point is that nightclubs are excluded because the Government have said that the escalator will apply only to premises that are primarily for the sale of alcohol. I have some Easter eggs and if the hon. Gentleman is a good boy, I might give him one in a minute.
Mr. Simon: I understood all that, or at least I understood what the hon. Gentleman believes the case to be. It was all the “monkeys”, “blinders” and “belters” that I was having difficulty following.
Mr. Foster: The only point that the hon. Gentleman needs to know is that the organisation—or trade union—that represents nightclubs believes that because of how it has behaved, it has “played a blinder” and succeeded in conning the Government to get out of having to pay the additional money.
Mr. Caborn: Can I just put the record straight? The “£41 million light”, as the hon. Gentleman put it, was mentioned by the LGA in response to the consultation and before the final regulations came out. We responded to its concerns, and it subsequently welcomed the final figures that we gave.
Mr. Foster: I would just ask the Minister whether he has in front of him a copy of the LGA briefing provided for today’s debate.
Mr. Caborn: No, we have taken a broad view in listening to concerns, and my speech has not been written by the LGA.
Chris Bryant: Unlike the hon. Gentleman’s.
Mr. Foster: I have already referred to the British Beer and Pub Association and the association representing nightclubs, so I can assure the hon. Member for Rhondda that my speech is not just based on that briefing.
In a gentle and humble way, I ask the Minister to ask his officials afterwards to provide him with a copy of the LGA brief for this debate, which I think that he would find extremely informative about the LGA’s views on the fees. He will note that the LGA has identified nine areas of detailed concern, and about seven areas in which it proposes changes to make the system fairer.
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I have taken note not merely of the concerns of the LGA or any of the other bodies that I have referred to, but of those of the Central Council of Physical Recreation, which referred to its concerns about amateur sports clubs. On Monday, the Minister assured the House from the Floor that there was no cause for concern about amateur sports clubs and small sporting organisations. It is worth reflecting that the press release put out by CCPR described its view as one of being “outraged” by the proposals in the fee structure. Mr. Howard Wells, the chairman of CCPR, said:
“The fees announced today are 50 per cent. or more higher than those proposed only two months ago. This shows a typical knee-jerk reaction to the concerns about problem drinking. But the effect is doubly likely to drive sports clubs out of business.”
Heaton tennis and squash club in Bradford, which is open to schools in the community, offers free membership to under-11s and is a registered community amateur sports club. It currently pays £15 over five years to obtain its bar licence. It will pay not the £90 to which the Minister referred, but £610 in year one of the new regime and £295 each year thereafter to renew its licence.
Chris Bryant: Will the hon. Gentleman give way?
Mr. Foster: Of course I will, because I know that the hon. Gentleman takes a particular interest in such matters.
Chris Bryant: I hold the hon. Gentleman in almost as much esteem as my hon. Friend the Member for Birmingham, Erdington does. However, he said in a rather grand statement earlier, which he may want to revise, that I would know perfectly well that the situation in my constituency when it came to clubs would be precisely the same as in his. It is actually very different. There are few nightclubs in Rhondda, or in many valleys constituencies, and the vast majority of people do their drinking in sports clubs such as those that he has mentioned. Indeed, I am patron of the Ferndale rugby football club, a fine establishment that will be delighted when the legislation goes through. The system that it has operated under until now of staying open until 1 o’clock or 2 o’clock, not exactly legally, will now be made legal and it will earn rather more money. I think that that is fairly publicly known, and I am sure that the club applies for a licence every time that I am there.
The important point is that such clubs accept that they have a responsibility when they are earning considerable amounts of money every year. They are sustaining an important club, but they accept that they have a responsibility to make sure that the system is policed properly by the local authority, and they should pay the appropriate fee.
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