Second Standing Committee on Delegated Legislation |
|
Mr. Caborn: I will come to that. By way of explanation, let me say that we are bringing six licensing regimes together in one regime. A number of bodies have been responsible for licensing. Local authorities have been responsible for one part of it and
I draw the hon. Gentleman’s attention to the entertainment licences in some authorities. I suggest that he visits one or two of the theatres that have been charged thousands of pounds. We have said that the new regime, whereby we bring six licensing authorities into one, will be cost-reflective. Those who have used licensing, rightly or wrongly, as part of an income stream for the local authority will have to bear that in mind. We have put in all the safeguards. Those who have been charging amounts for entertainment licences that are well above the cost of carrying out the relevant activity may well find themselves in somewhat of a deficit. We have said in the Act that we will bring the six authorities into one. The regime will be cost-reflective. There will be no burden in the operation of this licensing regime. I am talking about the financial liability on the local authority. To that end, we have had two revisions. We have brought in PricewaterhouseCoopers. We have given assurances that we will continue to keep matters under constant review throughout implementation. Twelve months after that, we will return with the National Audit Office to do a thorough review. We will stand by our word that any burdens that we put on local authorities will be fully costed and those charges will be recovered. Mr. Foster rose— Mr. Jones rose— Mr. Caborn: I give way to the hon. Member for Bath. Mr. Foster: I am grateful, though I look forward to the intervention of the hon. Member for North Durham (Mr. Jones). I support much of what the Minister has said about what happened in the past and I support the bringing of the six regimes into one. He has made it clear that in a year’s time there will be a thorough review of what has happened. Will he make a commitment here and now that if, as a result of that NAO investigation, the report contains clear evidence that local authorities lost out during the transitional period, they will be reimbursed for that loss? Only by making such a commitment will the Minister honour the pledge that he has just made to the Committee. Mr. Caborn: I would go further. We have instituted an ongoing review from 7 February to ensure that if things are really out of line and local authorities are in difficulties, we will respond. My right hon. Friend the Secretary of State made that perfectly clear to the LGA and to others. Mr. Foster: Will the Government reimburse? Column Number: 22 Mr. Caborn: No, I did not say “reimburse”; we said that we would—[Interruption.] We do not have to wait for that review; there is an ongoing review. We do not believe that the system will be found to be out of sync, because there have been two thorough reviews, we have had PWC in and we have taken all the evidence that we believe is necessary to take a sound decision. However, just to provide extra reassurance, we have said that we will monitor the system from day one and, if things are found to be out of sync, we will take action straight away. Mr. Jones: I remember that we spent many an hour in the Standing Committee talking about Soho. Some hon. Members have in-depth knowledge in that regard. I think that the Minister was aware of some of the antics that were going on in Westminster city council. Some people have suggested that the Conservative-controlled authority was profiteering under the old system. Does he therefore agree that it should not be the Government’s responsibility to reimburse that council for making money out of licences—money that it was obviously diverting to other services? Mr. Caborn: My hon. Friend makes the point very well. There are huge differences in some of the charges for an entertainment licence—the liquor licence was under the magistrates’ control—even in London boroughs. Whether the authorities are right or wrong to view that as a revenue stream is for the electorate to decide. We stand by our word as a Government that any burdens that we place on authorities will be costed. Mr. Foster: Will the Minister give way? Mr. Caborn: May I continue? I want to discuss the calculation of the fees. The Government accept that our task in calculating appropriate levels for the various fees was not easy. The system is entirely new, and our projections have been based on a range of assumptions that were fully explained in the consultation document published in November. We did not claim that we must be right about all forecasts, and we were obliged to make alterations as we proceeded. That is why, when we published the fee regulations and the order, we announced that fee income and expenditure would be closely monitored from the outset, as I said, and that there would be a full and independent review that would examine the period of transition and the first full year of operation. We will then examine the review’s outcomes and the fees will be adjusted if they are too high or too low. It has also been suggested that the consultation on fees was too short and that the changes made in consequence of that consultation were too near to the first appointed day for businesses and others to adjust. There are several points that I should make. First, we initially published estimates of the fee levels in April 2000, which is now five years ago. We estimated that they would be between £100 and £500 on application, with annual fees of between £50 and £150. We said that the personal licence would cost about £30. A full public consultation followed. The same estimates were debated during the parliamentary stages of the Bill
No one can reasonably suggest that we have arrived at the level of fees hastily, or can honestly claim to be surprised by them. Of course we have introduced some new elements as a result of the consultation: a general uplift across the board, because evidence was produced that the levels on which we consulted would leave a significant number of licensing authorities in deficit; a multiplier that increased the fees for larger premises that predominantly and exclusively sell alcohol for consumption on the premises, because many believe that they will attract disproportionately high enforcement costs; and a relatively small additional fee for premises that vary their licences for the supply of alcohol for consumption on the premises, because cases in which extended hours are sought, for example, will attract more representations and generate more hearings. We would have been rightly criticised if we had ignored the evidence emerging from the consultation, but we believe that we have taken it fully into consideration. When examining the evidence, we set ourselves three tasks: to ensure so far as possible that costs did not fall on any taxpayer, and that the costs falling on the licensing authorities were fully recovered— Mr. Foster: The Minister cannot have his cake and eat it. He has said—five times I believe—that there will be no burden on the taxpayer and that the fees will be set at such a level that they will fully recover local authorities’ costs. I am grateful for his confirmation that the Government will constantly review the matter. They do not even have to await the outcome of a review, but will, if necessary, increase or reduce the fees that are charged to take account of what they learn. The Local Government Association believes that the 376 licensing authorities will make a collective loss of some £22 million in the first year, and another £22 million in the second year. It recognises that 86 per cent. of those licensing authorities have had to pay more up front than they would normally have had to pay. It recognises that each authority has had to spend an average of £25,000 on the production of a licensing policy alone. Will the Minister give a clear assurance that, in light of evidence that fee levels are not high enough, the Government will not only change the fees so that they cover the cost in future, but take action to reimburse local authorities for the money that they lost up to the point at which the fees changed, as demonstrated by the surveys? Mr. Caborn: I reiterate what I said earlier. We have responded to the LGA’s concerns, and it is satisfied with that. We will constantly review the matter, and if the fees are drastically out of line, we will act before the 12-month review. Consultation has taken place over five years; the LGA has made submissions to that and was party to the PricewaterhouseCoopers report. What we have done and will do after the 12-month
The LGA could not, in the real world, ask for any more than we have done. We are reducing the number of transactions from 1.7 million to 250,000. We are reducing the system costs by £10 billion. Our proposals are welcomed by the LGA as a move to streamlining local government so that local authorities can intervene in their economies. What we have done in every conceivable way in consultation is to reassure the LGA that we will live up to what we have said as a Government. We could not go any further than that. Mr. Moss: I am most grateful to the Minister for his explanation, but the LGA is not happy or satisfied, as we heard through the passage of the Licensing Act 2003. In its briefing, it states:
There will be a period of 20 months or more in which a deficit is ratcheted up. The Minister has not answered the question asked by the hon. Member for Bath: who will make up that deficit? So far, the answer has been, “We may revise the fees, but we won’t make up the deficit, because that is for the future.” There will be a deficit, but who will meet it? It will be the council tax payer. It will be yet another burden on taxpayers. Mr. Caborn: The LGA accepts that many local authorities will make a surplus from fees because of applications from licensees for licences. According to the PWC report, many authorities are efficient, ensure that their licensing system is streamlined, and say that the fees are more than adequate. We must be careful not to be driven by a couple of local authorities, particularly in London, that have probably used entertainment licensing to gain a revenue stream. That is entirely up to them, but we should not factor that into what should be a cost-reflective system. I stand by what we have done, and I do not believe that anyone could have been fairer with the LGA. One should not take the LGA’s figures as absolute gospel and set in tablets of stone, as the Opposition do. The LGA’s first claim was that there would be a £41 million deficit. We reviewed that twice and we met the LGA in part, because it thought that its case was sound. We do not believe that what it is putting forward now stands up to argument. Over the next 12 months and the subsequent National Audit Office report we will see who was right. I jestingly asked the LGA whether all those local authorities with a surplus would pay it back to the Exchequer. I do not think that they will, and nor would we expect them to do so. The second of the three tasks that I was talking about was to ensure that the fees properly reflect the fact that certain licensing authorities have higher overhead costs than others, with regard to the costs of labour and accommodation, for example. The final task was to ensure that the fees were fair and proportionate for licensees and certificate holders operating in different ways and on different scales. Column Number: 25 Mr. Moss: Will the Minister give way? Mr. Caborn: No, I will not because I have got about 10 minutes left. Well, okay. Mr. Moss: The Minister spoke about the fees being fair. For a publican renewing their licence up to November of this year, the licence renewal start date will be April. Therefore, they will pay from November through to next April and then get another annual fee, but they will also pay for their previous licence in the current year up to November. Mr. Don Foster: Double funding. Mr. Moss: That is double funding. Will the Minister clarify that? Mr. Caborn: The renewal is in February next year, but we are talking about the transitional period for which the local authority will have collected the licence fee for the operation of this year’s licence, as well as collecting whenever they deem to change their licence, and they will collect the fee there, too. So the local authority will have extra income, depending where it is in that year. I shall take the hon. Gentleman’s question away, ensure that that is so, and put the answer in writing in the Library, because this is a little bit technical and I want to make sure that it is right. In setting about the first task, we were aware that some of the existing licence fees were failing to recover the expenditure of the courts and local authorities and that we were imposing an unjustified burden on taxpayers. There is no reason why taxpayers should subsidise the consumption of alcohol by others. As I have said, I am confident that we have satisfied the majority of licensing authorities and we recognise that we will be unable to satisfy a handful of authorities whose estimates of deficit or surplus were out of kilter when set against the forecast of the vast majority of authorities. I have given reasons for that. The LGA welcomed the changes that we made following the consultation and our commitment to a full and independent review once the system has been running fully for 12 months. Again, we will honour that. The fees are set in bands based on the rateable values of the premises that are affected. Non-domestic rateable value benefits licensing authorities and applicants and takes into account, among other things, the location of a business, its physical size and its turnover, so it should be reasonably reflective of the economic viability. That means that larger, more successful businesses will have to pay higher fees than, for example, a non-profit making club or a small business. Mr. Moss: A problem has been raised with me about golf clubs, although not the old issue that we dealt with
Mr. Caborn: I will respond to the hon. Gentleman in writing. I am not clear about whether the club and the course can be split. Rateable value provides that where overheads are highest for certain local authorities, they will receive proportionately more income per premise than those authorities with lower overheads. The highest overheads tend, as we all know, to be in areas with higher rateable values, such as London and the south-east. Mr. Foster: And Bath! Mr. Caborn: And Bath. On the arrangements and working practices that will ensue from these provisions, most sports clubs and political clubs—Labour, Conservative and Liberal—ex-services, working men’s, community and social clubs, will fall broadly into bands A and B as described in the regulations, with the vast majority in band A. Most commonly, the fees on applications for a new club premises certificate will therefore be £100 and on each subsequent anniversary of the certificate being granted it would be required to pay an annual charge of £70. We are talking about £100 for registration and £70 for renewal. The Committee should note that the smaller clubs in band A would be paying 19 times less than a large town-centre pub in band E that is primarily or exclusively engaged in selling alcohol for consumption on the premises. I want to make that clear; I do not think that people will be going down the road to booze in some of those. We believe that that is a fair reflection of the differences between such premises and the costs that each is likely to generate in terms of licensing authority activity. In order to supply alcohol, most clubs already have to obtain more than their certificate for £16. They have to pay out regular fees for occasional permissions and special orders of exemption, and they usually pay their local lawyer to go to court to get them. The red tape and costs involved with such applications are eliminated by the Act. The cost of 10 or 12 licences a year for special occasions such as fund-raising dances, extensions at Christmas and weddings would be way beyond the fees that we are debating in the mid to long-term. It is important to understand that a club must have at least 25 members to qualify to apply for a club premises certificate. Accordingly, in even the smallest club during the first 12 months, each member would need—[Interruption.] I hope that the hon. Member
It should be understood that a club must have at least 25 members to qualify to apply for a club premises certificate. Accordingly, in even the smallest club, during the first 12 months, each member would need to contribute only £4 a year, or less than 8p a week. In subsequent years, those figures would fall to under £3 annually, or around 5p a week, and that is with an absolute minimum membership of 25. As I said the other day, even if clubs elected not to charge members those amounts, the money could be recovered by adding an extremely small amount to the price of drinks. Many sports clubs with bars have considerably more than 25 members and the cost per head will therefore be even lower. Although I completely understand why sports clubs may want to minimise their costs, it really is nonsense to suggest, as did the Central Council of Physical Recreation, that we are putting the whole of our sporting infrastructure in jeopardy by charging £70 a year. I fully reject that. I suggest to those making allegations about putting £70 on boozing in clubs—something that the Opposition are asking us to subsidise, although we will not—that more than just 2,000 of the 40,000-plus clubs could become community amateur sports clubs and get mandatory rate relief. The 2,000 clubs that have already done so are getting £5 million a year, year on year, for genuine investment in grass-roots sport. I would say to those who believe we are bringing the whole of sport into crisis that we want to add another £35 million, but the inability of those very organisations to communicate with the clubs that they purport to represent means that they are denying clubs £35 million worth of investment, year on year—yet they can scream about 8p a member per year. We should get this into proportion. Quite honestly, to say that club members will go to booze down the road is absolutely fanciful. Mr. Clifton-Brown: May I bring the Minister back to a different subject, which he said that he would cover before he finished: the position of country shows and cross-country events? Under schedule 5, part 2, the fees for the very biggest events with many thousands of visitors would run into many thousands of pounds. That seems to place an onerous burden on those events. Mr. Caborn: My next line to the hon. Gentleman was to be on “Large scale events”; that is what it says in my brief. There has been a great deal of misunderstanding about the fees for large-scale events, as well as for sports clubs. I will inform the hon. Gentleman of the reality, rather than the arguments perpetuated by the hon. Member for Bath (Mr. Foster). Column Number: 28 In most cases, fees for large agricultural shows—I accept that there has been real concern about this—and markets will not be payable because most of the activities are not licensable under the Licensing Act 2003. The beer tent would need a licence but would be unlikely to hold more than 5,000 people, and so would not pay the extra fees. Just as with commercial events, large community and not-for-profit events give rise to serious public safety issues and some public nuisance issues. Fees for these major events have to reflect the costs to the licensing authority that would otherwise fall on the taxpayer. We listened carefully to what organisers have said to us during consultation, although the emerging evidence on actual costs has been a little on the thin side. Taking all comments into account, we accept that the fees at the bottom end of the scale should be lower, but those for the biggest events such as major pop concerts and festivals would have to be higher. As with all fees, we intend to monitor their impact carefully and to gather more detailed evidence as to costs. On— Mr. Moss: Badminton and Burleigh. Mr. Caborn: Yes, Badminton and Burleigh. Only the beer tent would be licensed, not the event itself. There has been a misunderstanding about that. Although I may be wrong, I thought that we had sent a full response to that effect to the governing body and organisers of the event. If that has not been done, I will make sure that it is. In conclusion, I hope that that reassures the Committee about the fees. I also hope that I have brought a dose of reality and not strayed into the many areas that the hon. Member for Bath did, and that I have said what the Act and the fees are for. I hope that the Committee will vote against the hon. Gentleman, and I commend the regulations. Mr. Foster: As we have a second, the Minister was asked a question by the hon. Member for North-East Cambridgeshire to which he said that he would respond later, about whether there is potential for an overlap of the fee regime. The Minister will obviously send a response to that question to all members of the Committee, but could he state clearly on the record that it is not the Government’s intention that anybody should ever pay for more than one licence under the scheme at any one time and that there will be no overlap? Mr. Caborn: As I said, I will write to the hon. Gentleman to clarify the position on that. The Chairman: Order. May I draw the Committee’s attention to what we are about? I want to make it clear that although the motion was moved by an Opposition Member, we are here to consider the regulations. We are voting on the question that the Committee has considered the motion.
The Committee divided: Ayes 9, Noes 6. [Division No. 1] AYES Bryant, ChrisCaborn, Mr. Richard Jones, Mr. Kevan Mahmood, Mr. Khalid Marsden, Mr. Gordon Simon, Mr. Siôn Stuart, Ms Gisela Tami, Mark Watson, Mr. Tom
NOES Column Number: 30 Clappison, Mr. James Clifton-Brown, Mr. Geoffrey Flook, Mr. Adrian Foster, Mr. Don Moss, Mr. Malcolm Russell, Bob Question accordingly agreed to. Resolved,
The Committee rose at two minutes to Four o’clock. |
| |
| ©Parliamentary copyright 2005 | Prepared 25 February 2005 |