9. Written evidence from the Department
for Social Development
REVIEW OF
LIQUOR LICENSING
The Minister for Social Development, David Hanson
MP, launched the consultation paper "Liquor Licensing—The
Way Forward" on 1 November 2005. It set out proposals
for reforming and modernising the law on the sale and supply of
alcohol in licensed premises and registered clubs in Northern
Ireland. The consultation period ended on 31 January 2006. Responses
are being considered and the Minister will make a statement in
early summer 2006.
The last review of the law governing liquor
licensing and registered clubs took place ten years ago. Since
then the social and economic climate in Northern Ireland has changed
and improved immensely. The peace dividend has altered the shape
of the tourism and hospitality sectors and of town and city centres.
More growth lies ahead. Liquor licensing law must keep pace with
these developments and with modern expectations and new challenges.
PROPOSALS
The main proposals in the consultation paper
are as follows:
— Six new objectives, to underpin licensing
policy, legislation and regulation: Promotion of public health;
Promotion of public safety; Prevention of crime and disorder;
Prevention of public nuisance; Protection of children from harm;
Fair treatment of all stakeholders.
— Moving responsibility for granting
and renewing licences from courts to district councils, leading
to a more accountable, transparent system.
— Removing the current twelve categories
of licence in favour of a dual system of personal and premises
licences, which will require personal licence holders to have
accredited qualifications and clean backgrounds.
— New, more effective enforcement measures,
including immediate temporary closure powers for the police, a
penalty points system for licensees who break the law and new
council liquor licensing officers.
— A proof-of-age scheme and more flexibility
to allow under-18s on certified licensed premises when accompanied
by responsible adults.
— A modest extension of current opening
hours, creating scope for opening up to 2.00am Monday to Saturday
and midnight on Sunday.
— Abolishing the provision which requires
an existing licence for a pub or off-licence to be "surrendered"
to a court before a new one may be granted.
— Revoking the financial controls and
accounts formats for registered clubs, prescribed in the Registration
of Clubs (Accounts) Regulations (Northern Ireland) 1997, in favour
of best practice guidance.
AIMS
The proposals aim to:
— Give people greater choice about
when and where they may drink.
— Encourage investment, variety and
high standards of service in the hospitality, tourism and entertainment
sectors.
— Remove bureaucratic burdens on service
providers, for example, pubs, registered clubs, hotels, restaurants
and off-licenses.
— Promote a safe, welcoming environment
in town and city centres where the evening and night-time economy
can flourish.
— Give police the powers they need
to crack down on irresponsible drinkers and rogue traders.
— Make the licensing system more transparent
and accountable, giving communities more information and a louder
voice in decision-making.
TIMESCALE
The proposals will come into effect in two stages.
Proposals relating to opening hours, enforcement, children and
registered clubs' accounts will come into effect as soon as new
legislation can be enacted, which should happen in 2007. The Review
of Public Administration is due for completion by 2009 which will
be the provisional target date for making legislation to transfer
responsibility for licensing from courts to district councils
and do away with children's certificates, existing categories
of licence and surrender.
ALCOHOL AND
ORGANISED CRIME
The PSNI continues to support the Minister's
balanced package of proposals. They were members of the Liquor
Review Team, and supported the Minister at the launch in November
2005.
ORGANISED CRIME
TASK FORCE
(OCTF)
During the pre-consultation phase of the licensing
review the OCTF queried the proposal to relax the registered clubs'
accounts regulations. They suggested that the clubs' accounting
requirements should be retained and extended to all licensees,
to take account of concerns about premises being used as a front
for organised crime. The Interdepartmental Group on Organised
Crime explored the issues further with the Department for Social
Development, Northern Ireland Office, Office of the First Minister
and Deputy First Minister and PSNI. Clarification of the overall
PSNI position was sought on behalf of the Group. The Chief Constable's
Office advised that PSNI corporately supported the proposal to
relax registered clubs' current accounting requirements and confirmed
that these do not need to be extended to licensed premises. "Liquor
Licensing—The Way Forward" reflected the PSNI corporate
position.
KEY ISSUES
Key points in response to the concerns that
have been expressed about the proposals are as follows:
— The package of measures proposed
will strengthen the PSNI ability to monitor activity and enforce
the law on the supply and sale of alcohol.
— Giving district councils responsibility
for granting liquor licences and club certificates will create
a more accountable system where pubs, off-licences, registered
clubs and other licensees will have to explain in detail how their
businesses will support the six licensing objectives.
— There will be other safeguards. Before
reaching a decision, district councils will have to seek the views
of responsible authorities and interested parties such as the
PSNI, local residents and local businesses. All applications for
a licence will be open to objection and a licence may be reviewed,
revoked or suspended at any time if there is cause for concern.
— Replacing the current twelve categories
of licence with a dual system of personal and premises licences
will simplify processes. Personal licence holders will have to
have accredited qualifications and demonstrate clean backgrounds.
This will help guard against infiltration by criminal elements
— Regarding concerns about registered
clubs illegally selling genuine or counterfeit alcohol, or money
laundering, a private members' club must serve a "dry year"
ie it cannot supply alcohol, between applying to a court for a
certificate of registration and the court hearing on the application.
This process aims to ensure a club is capable of obeying the rules
governing registered clubs before its registration is granted
and it is allowed to supply alcohol to members and their guests.
Review of Charities Legislation
1. There are three distinct charity law
regimes in the UK, each with its own legislation. At present only
England and Wales has a Charity Commission and a full Register
of Charities. Scotland has recently established its regulator
(Office of the Scottish Charity Regulator, OSCR) and will be launching
its register shortly. The Republic of Ireland has just published
its Heads of Bill to establish a charity regulator. Tax relief
for charities is an excepted matter, dealt with by HM Revenue
& Customs on a UK-wide basis.
2. In Northern Ireland, the Department for
Social Development (DSD) has the following powers in connection
with charities under the Charities Act (NI) 1964
— Section 2 of the Charities Act (NI)
1964—Where it appears that legal proceedings should be considered
in relation to a charity DSD may send a certificate to that effect,
with explanatory particulars, to the Attorney-General. The Attorney
general may institute such legal proceedings as he considers proper.
— Section 3 of the Charities Act (NI)
1964—Where DSD has reasonable grounds to believe that any
charity property may have been concealed, misapplied or withheld
it may, with the consent of the Attorney-General, by order require
copies or originals of any books, records, deeds or papers relating
to the charity.
— Section 29 of the Charities Act (NI)
1964—Where there is alleged to be a breach of a charitable
trust or the advice of the Court is required in connection with
a charity DSD (having given notice of its intention to the Attorney-General)
(or the trustees or any interested party) may apply to the Court
for such relief as may be necessary.
3. Use of DSD's Statutory Powers
— DSD has no power to go on a "fishing
expedition" in the hopes of finding evidence of wrongdoing
where no prima facie evidence appears.
— Before acting, DSD must have sufficient
evidence to satisfy the Attorney-General that its proposed actions
are reasonable in the circumstances.
— DSD has no power to act against organisations
which are not charities.
4. Collections
— Public collections (whether conducted
on the street or house-to-house) are primarily a matter for the
Police Service of Northern Ireland (PSNI). DSD has a limited role
in connection with authorising very large scale house-to-house
collections for a few major charities, but nearly all collections
are authorised by PSNI, and PSNI have general responsibility for
ensuring that collections are conducted properly.
— It is an offence to conduct a public
collection (even a perfectly genuine and honest one) without obtaining
the appropriate authorisation from PSNI, and it is an offence
to collect money for one purpose under the false pretence that
it is for another purpose.
5. It is proposed to introduce new charities
legislation in Northern Ireland bringing it broadly into line
with England and Wales, with a Charity Commission for Northern
Ireland (CCNI) and a Northern Ireland Register of Charities (NIROC)
to improve controls over charities.
— This will provide a strong visible
regulatory framework for all charities, and ensure consistency
with the other devolved regions and Ireland which have a charities
regulator or are about to establish one.
— Information on what charities do
with the money they raise will be made available to the public,
increasing public confidence.
— The opportunity for abuse by criminal
elements will be restricted through greater scrutiny and controls.
— Structures will be put in place providing
for greater exchange of information between other regulators across
UK and Ireland and with the PSNI and HM Revenue & Customs
regarding charities.
6. In March 2004 the Department established
a Northern Ireland Charities Advisory Panel to consider options
for change to charity legislation. The Panel recommended that
a system similar to that in England and Wales should be adopted,
but all charities in Northern Ireland should be registered (as
opposed to about 60% in England and Wales). Key features would
be:
— A new definition of charities for
Northern Ireland, based on that proposed for England and Wales,
with the addition of the promotion of peace, and the promotion
of good community relations. All charities should demonstrate
public benefit.
— There should be a Northern Ireland
Register of Charities and all Northern Ireland charities should
be registered.
— There should be a Northern Ireland
Charity Commission.
— All Northern Ireland registered charities
should be regulated to seek to ensure that they are well-run and
deserving of public support.
— Charities should be required to produce
accounts in specified forms, supply them to the Commission and
make them available to the public on request.
— The present systems for licensing
street and house-to-house collections should be replaced with
a new system covering all public charitable collections.
7. DSD carried out a public consultation
exercise on the proposals from 11 February to 3 June 2005. 106
responses were received from a wide range of bodies and individuals,
with the majority being broadly favourable. There was a degree
of differing opinion about a few specific issues which led to
relatively minor changes in the proposals, mostly intended to
avoid duplication of regulatory requirements on national charities
and organisations which have multiple regulators (eg housing associations).
8. In terms of the need for a Charity Commission
for Northern Ireland and a Northern Ireland Register of Charities,
checks by HM Revenue & Customs on organisations seeking charitable
tax exemption status are based on tax, not charity law requirements.
Organisations claiming to be Northern Ireland charities can operate
elsewhere in the UK, Europe and throughout the world, and enforcement
agencies in those jurisdictions have no reference point for information
on purposes, annual reports and accounts. Concerns about the regulation
of charities have been expressed in International Monitoring Committee
and Organised Crime Taskforce Reports, and there is evidence of
charities being established in Northern Ireland precisely to avoid
the regulatory framework that exists elsewhere.
9. The Scale of the Problem
— PSNI does not keep information that
would allow the number of cases of fraud involving charities to
be quantified, nor the value of money diverted to criminal purposes.
Enquiries, however, indicate that there are several such cases
each year.
— HM Revenue & Customs has encountered
a small number of Northern Ireland charities that appear to have
been set up as vehicles for sophisticated tax avoidance. Sums
involved can be substantial.
— Some sham charities established in
Northern Ireland were used to avoid Stamp Duty before new legislation
was enacted, with an estimated tax loss of approximately £2
million.
— One Northern Ireland charity appears
to have been set up to receive large gifts of shares thereby attracting
tax relief at 40% for the donor. Tax at risk in this case is estimated
at £14 million.
10. Paramilitary Involvement
— Certain organisations associated
publicly with current and former paramilitary groups have charitable
purposes that would be recognised under current Northern Ireland
legislative provisions and all of them deliver against these purposes,
to a greater or lesser degree.
— Anecdotal evidence, however, suggests
that some of the resources are used to fund expenditure not wholly
compliant with charitable purposes and the proceeds of informal
collections do not, in fact, reach the named recipient.
— PSNI investigations have highlighted
cases where bank accounts in the names of charitable organisations
associated with current and former paramilitary groups have been
used to encash monies collected from extortion and other criminal
activities. In these cases, persons with strong paramilitary connections
undertook the criminal activities.
11. New Northern Ireland charities legislation
is being drafted. The anticipated timetable is:
| — Anticipated completion of drafting
| April 2006. |
| — Public Consultation on proposal for draft Order
| May 2006 to August 2006. |
| — Order laid before Parliament |
October 2006. |
| — Order made at Privy Council |
December 2006. |
| — Subordinate legislation containing detailed provisions
| March 2007. |
21 April 2006
| |
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