6 Small operators
56. The FSB brought up the problems faced by small
operators[71] when the
new regime was introduced:
"the Licensing Act (2003) is fundamentally
flawed with regards to small businesses. The problems are principally
associated with fees, bureaucracy, and disparity in the actions
of the implementing local authorities. A lack of adequate consultation
may also have contributed to the difficulties with the new regime".[72]
57. The Government memorandum, which breaks down
the sectors requiring licenses, lists among them village and community
halls, boats, circuses and theatres and wider arts. Some of these
operators will not have required a licence before and are unlikely
to derive much of their income from licensed activities. The FSB
gives examples:
"The new fees system has resulted in some
SMEs selling alcohol at a loss. One member used to make £89
profit a year from selling alcohol at her guest house. Under the
new system, she sells alcohol at a loss because her customers
expect the service of a small bar. Another member runs a florist
shop. Under the new system, he has to double the amount of champagne
he sells to make a profit."[73]
58. We asked the Minister for Media and Tourism specifically
about village halls, and he told us "We responded to those
concerns by commissioning ACRE [Action for Communities in Rural
England] to do some research on the actual effect on village halls
and we will look at that research".[74]
It was made clear that the DCMS was waiting for the outcome of
this exercise before making decisions regarding community facilities
and licensing fees. We are concerned that the new licensing
system will discourage community facilities from carrying out
the range of activities they have previously engaged in, and this
goes against the ODPM's drive for sustainable communities. We
expect the DCMS to take this fully into consideration when assessing
the results of research into the effect on village halls and similar
organisations.
59. The FSB suggests that there are businesses which
would choose to cease their licensable activity rather than pay
the fees involved in the new licence scheme:
"Already two members are closing down their
businesses because of the cost of implementing the new regime.
These members are the ones that we are aware of, but there may
be many other small businesses in the same position. This is the
undesired effect of the new regime and one which has affected
a considerable amount of businesses and will continue to do so
if the status quo remains".[75]
We are concerned that businesses will close because
of the new fees regime. Closure is not the only issue. In oral
evidence, Stephen Alambritis of the FSB told us "A number
of [small operators] have said they will not extend their economic
activity and they will stay as they are because they can make
some savings".[76]
This is also undesirable - especially given that the example Mr
Alambritis gives is of the small shop which competes with a large
supermarket. We do not wish to see communities damaged by the
licensing system.
60. Small operators faced distinctive problems with
the new system. The application forms proved hard for many to
understand. We have discussed many of the discrete issues surrounding
the application process, but it was small operators who were most
likely to fall foul of the requirements of the new Act. The cost
of application was also likely to be proportionately higher for
those small operators who had to draw up floor plans or publicise
their application in expensive local papers. We discuss this further
in paragraphs 66-69 below.
61. We do not believe that the DCMS recognised the
specific difficulties of small operators who found themselves
applying for licences. We consider that the impact on small
operators should be a prime focus of the reviews of the Act and
its workings. The DCMS should look urgently for a solution
to the problem of small operators which are stagnating or ceasing
activities as a result of the new fees structure.
71 We use the term small operators in this Report as
we recognise that small businesses are not the only organisations
affected by the new licensing regime. Back
72
Ev 20 Back
73
Ev 22 Back
74
Q 80 Back
75
Ev 23 Back
76
Q 4 Back
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