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Baroness Blackstone: My Lords, we have had useful debates on the central setting of fees at all stages of the Bill. At each one I have emphasised that fees will be set at a level that will allow all licensing authorities to recover the costs of administration, enforcement and inspection, as the noble Lord, Lord Brooke, has conceded. There will be no potential for under-funding or for a deficit to be picked up by council tax payers. The amendments seek to allow licensing authorities to set fee levels, but the drafting is flawed in achieving that aim. The amendments fail to give licensing authorities the power to set fees.

That aside, I understand the concerns of local authorities about this matter. They are perfectly understandable. It is right that any guardian of public funds should seek to protect its resources. That is why, to ensure that fees are set at levels to meet fully the costs of the new system, they will be decided following extensive consultation with local authorities. Relevant factors will be taken into account, such as those areas with significantly higher overheads and the size of premises, because the costs associated with licensing relating to a large night-club could differ from those of a small pub or bar.

The intention behind that policy is to ensure that the level of fees across the country is proportionate and consistent with the enforcement aim of public protection. As one may expect, currently we have a wide range of enforcement effort which is reflected in the wide variation of fees charged. The Government believe that it is possible to cut out the extremes and to promote the right level of enforcement. In some cases that may result in a licensing authority reviewing the effort that it puts into enforcement, inspection and administration and the efficiency with which it carries out those tasks. That revision may just as easily be upwards as downwards.

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The fact is that fees for public entertainment licensing—we should not forget that that is the only licensing fee that local authorities set themselves—vary significantly across the country, as does the way in which fees are calculated.

As I made clear on Report, there are precedents for the central setting of fees. The 155,000 holders of alcohol licences pay fees to the licensing justices that are set centrally by the Lord Chancellor's Department. The noble Lord, Lord Brooke, asked about the savings from removing that responsibility from the licensing justices. Currently the cost of licensing justices is fully recovered from the licensing fee. Therefore, it follows that there are no savings to transfer when licensing justices cease those activities.

The fees for cinema licences are set centrally by statutory instrument. The businesses paying local authority set fees for public entertainment, theatre and late night refreshment are very much the minority under the existing regimes, of which I am sure the noble Lord, Lord Brooke, is fully aware.

I must stress that while fees will be structured to ensure that licensing authorities recover their costs, it is imperative that the large variation in the fees and the way in which they are calculated are not replicated under the new system. Those inconsistencies lead to uncertainty and to confusion for businesses as well as for others who apply for public entertainment licences under the current regime. There is no rationale for them either.

Given my repeated assurances that fees will be set at a level that will allow all licensing authorities to recover the costs of administration, of inspection and of enforcement in the new regime and that they will be set in full consultation with the industry, with local authorities and with other interested parties, I hope that the noble Lord will feel able to withdraw his amendment.

Lord Brooke of Sutton Mandeville: My Lords, I am most grateful to the noble Baroness. The words that I hear her utter are clearly intended to reassure me. I have a warm glow within me that perhaps means she is reassuring me. But the question that I postulated as to how centrally prescribed fees will prevent any local authority from making a profit or a loss, but meet its costs exactly, is quite difficult to envisage under the terms of what the Minister has so far been able to vouchsafe to us during the proceedings in your Lordships' House. At least we have had a good run on the subject of fees. I am certain that another place will return to the issue because at the moment I do not understand how the Government will work the magic that they constantly describe whenever they respond to amendments on this subject. As that excitement is for another place, and not for tonight, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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5.30 p.m.

Lord Brooke of Sutton Mandeville moved Amendment No. 6:

    Page 33, line 13, leave out subsection (4) and insert—

"(4) If the annual fee is not paid by the prescribed time, the relevant premises licence will lapse on that date.
(5) If a licence lapses under the provisions of subsection (4), the former holder of that licence may for a period of three months, commencing on the date the licence lapsed, seek re-instatement of the licence.
(6) The applicant for re-instatement shall pay to the relevant licensing authority the annual fee together with such reasonable re-instatement fee fixed in advance by that licensing authority.
(7) The premises licence shall be deemed to have been re-instated as soon as the requisite fees have been received by the licensing authority."

The noble Lord said: My Lords, I can speak more briefly on this amendment. In moving this amendment I shall speak also to Amendment No. 8 in Clause 90 as it seeks to achieve the same objective in the context of clubs as the first amendment seeks to achieve in the context of premises' licences.

I am grateful to the noble Baroness, Lady Blackstone, for her letter of today's date. It explained the Government's attitude to the amendments moved by the noble Baroness, Lady Thornton, on this subject on Report, on which I spoke. Clause 55(4) states:

    "Any fee which is owed to a licensing authority under subsection (2) may be recovered as a debt due to the authority".

Local authorities—I am conscious that this is a continuing matter of concern to the Local Government Association at large and is not simply a local central London problem—are extremely concerned at the huge cost and time implications of this aspect of the proposed legislation.

Currently, the law states that if one does not pay the public entertainment licensing fee before the expiry date of the licence, which is usually one year, then one's entertainment licence lapses until the operator pays the fee. The Government's proposal is that the local authority will in effect be able only to "chase up" the fee, which will now be for all licensable activities not just entertainment licences. That will cause significant problems, which is why new subsections (4), (5) and (6) have been tabled.

Under the new legislation—I am conscious that I am going over the same ground as on Report—the majority of premises licenses will run continually unless surrendered or revoked. I must repeat: what possible incentives are there for operators to pay their ongoing annual fee? Local authorities will be unable to take any redress or punitive action.

The proposal that local authorities will have the time and resources to chase up the fee is of concern to local authorities across England and Wales. The potential impact of reduced cash flow, which is needed to keep the licensing service running, should not be underestimated. Local authority budgets cannot sustain year-on-year under-achievement of income because licensees have no incentive to pay. The result will be an under-funded, inefficient service which is of no benefit to anyone, particularly those responsible licensees who do pay up on time.

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In her letter the Minister sought to explain why I am wrong. She said that most of those involved are businesses and that there is provision for normal commercial logic and discipline to be followed. The noble Baroness, Lady Thornton, in correspondence after Report indicated the acute problems which local authorities already have with street traders. I realise that it was the noble Baroness, Lady Thornton, who wrote to the Minister and not me, but in her reply to me there is no reference to the street trader problem. It is the street trader problem that prompts the Local Government Association to be so concerned about this aspect of the Bill. I beg to move.

Baroness Blackstone: My Lords, these amendments were brought forward both in Committee and on Report. The only difference is that instead of my noble friend Lady Thornton championing this issue, the noble Lord, Lord Brooke, has taken up the baton and is running for home on the back straight.

The amendments seek to make the penalty for late or non-payment of the annual fee the lapse of the premises licence or club premises certificate. The Government believe that that is disproportionate. It raises the prospect of entirely innocent people being put out of work because of what might be an administrative oversight by their boss. Debt recovery is part of a local authority's everyday business. We should also not forget that the licensing fee will be set at a level, as I said when dealing with the previous group of amendments, that will allow the licensing authority to recover its costs, including any that might be associated with debt recovery. However, we have no evidence to suggest that non-payment of annual fees is likely to be widespread in the future.

My noble friend Lady Thornton said on Report that there would be no incentive for licensees to pay the annual fee. I am afraid that that argument simply does not wash. Local authorities make charges of many different kinds on both individuals and organisations. I am not aware of any local council cancelling the rubbish collection service for individual council tax defaulters or refusing to educate their children. The unpaid council tax may still be recovered by the authority's debt recovery operation.

Finally, I should clarify a further point raised on Report; namely, that under the current regime a public entertainment licence lapses if the fee is not paid. That is not the case. Public entertainment licences lapse, as the noble Lord, Lord Brooke, made absolutely clear, after one year whether or not the fee is paid. The notion that the licence lapses if the fee is not paid is, I am afraid, misconceived.

I therefore ask the noble Lord to withdraw his amendment unless we want to damage the livelihoods of people through no fault of their own.

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