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Lord Roberts of Llandudno: My Lords, the word "Wales" brings me to my feet. With responsibility for education being devolved to the National Assembly for Wales, on these occasions we need to have a separate Bill for Wales. Of course, we have our own opportunities in Wales—the opportunities of language and sometimes of remoteness—that need to be dealt with in a specific way.

I shall not delay the House for long but, speaking of small communities, I think of one village in the Conwy valley—Penmachno. At the end of the war, it had 39 shops and seven places of worship. Every shop has now gone, as have six of the seven places of worship. The one thing that remains is the school. So we must ensure that we can resource the existing schools, either at Assembly level or any other level, because they fulfil a community responsibility.

Finally, I turn to the idea of holding a ballot of parents. Let us imagine that there is a small school with eight children and four sets of parents. In a way, those parents would be able to hold the whole community to
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ransom on this issue. Let us remember that those eight children will not be there in four or five years' time. With such a turnover of children and parents, we cannot leave this matter to a vote by the parents. Of course, their views should be considered, but there is the wider community to take into account, and we must get to grips with this matter somehow. In Wales we have community councils, which might be able to express the views of communities in a more effective way, and there are parish councils in England. We certainly understand the sentiment behind the amendment but, as my noble friend Lady Sharp has already said, it is not in a form that we would be able to support.

Lord Shutt of Greetland: My Lords, I am sorry to interject on this matter. I have a great deal of sympathy for the amendment, yet there is something about it which cannot be right.

The important point in this issue is what I might call the "last public place". In the ward that I used to represent, three libraries in three villages will be threatened in the budget this spring by the council at Calderdale. It is worrying if everything—the post office, the library, the church and the school—goes from a rural place. It is very important that some public place should remain because that can give a village an identity and a sense of community. Whatever the last public place is—if that is the way that things are going in rural areas—it is important that it has a multiple purpose and, if it is the school, that it can be used for other things. If that place is the library, it should be used for after-school clubs and so on. What I have been speaking about—the last public place—is very difficult to legislate for but it is a very important matter.

Baroness Andrews: My Lords, we have had a short but excellent debate. Noble Lords have spoken eloquently and very succinctly, and I shall certainly try to be succinct. In particular, I want to pick up on the motif introduced by the noble Lord, Lord Shutt, concerning the last public place. I also want to speak about the interests of the children being paramount. The Government absolutely agree with that sentiment. We now have great scope for developing rural schools so that they become the heart of the community to a greater rather than a lesser extent. That is a huge opportunity for us and I hope to be able to explain how supportive the Government are of that idea.

However, although we completely agree with the sentiment behind the amendment, we believe that it would be damaging in several ways. Perhaps I may start by picking up what the noble Baroness, Lady Sharp, said with regard to her reservations about the amendment. Essentially, responsibility lies with the local authority to ensure that the whole community and the best interests of the child in the community are served. But the amendment would cut across that. Local authorities have a pragmatic responsibility to ensure that education is of a high quality and properly resourced and that it is suitable for all children and provided for all pupils. Indeed the noble Lord, Lord Roberts, pointed out that the interests of parents, although powerful, are transient.
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Without wishing to diminish the great feeling that parents continue to have for the role of local schools, we ought to bear that in mind.

But the interests of parents are a key consideration, and we have clear and widespread protocols for informing and consulting them about all proposals. Noble Lords know from their own experience what one has to go through in order to make sure that parents are informed.

As I said, bearing in mind the importance of the local school in a rural community in England, we have given statutory guidance to decision-makers that makes it clear that there should be a presumption against closure. This has been very successful. I want to put on the record that the rate of closure of rural schools has been reduced from an average of 30 a year to five a year.

This amendment has swept up Wales. The noble Lord, Lord Roberts, made some very powerful arguments about the difference in Wales and about small communities such as Penmachno, which is a typical North Walian community with seven chapels and 39 houses. There is no similar presumption against the closure of rural schools in Wales. But let me allay fears: one of the reasons that there is no presumption is because of the density of rural education in Wales and the issues that cluster around that. Almost 14 per cent of primary schools in Wales have fewer than 50 pupils on the roll.

When the local authority is making its decision, it has to look at best interests. Evidence suggests that we have got the balance right in Wales. If there are objections to a closure, the issue is decided by the Assembly Minister, rather than the school organisation committee as in England. One third of rural school closures in Wales have been unopposed, and therefore decided by the local authority itself. As the right reverend Prelate said, all is not lost when closures are made because we have many examples of parents changing their minds when they know what the alternatives are in terms of the critical size of the school, the extracurricular activities that can be offered and the richness of the environment.

In some ways, we see the 50 per cent ballot as not being an additional safeguard because, in a school of only 80 parents, we would expect every parent to be consulted and to insist upon having their voice heard. We feel that a 50 per cent ballot could even have unintended perverse consequences because, having made their voices felt, parents might then not take part in the ballot, thinking that they had already made the decision. In Wales, we have had only 22 closures since 1999, 16 approved by the Assembly Minister and six by the local authority.

I shall pick up the point about journey times. The guidance in Wales is that local authorities should have regard for the welfare of children and if journeys exceed 45 minutes, we would be considerably worried. But of the 16 closures, it seems that the greatest travel time to school is 30 minutes. These things are being reconciled in practical ways.

Having brought Wales into the frame, we have to be very careful because this impacts on the principles of devolution and that is something that I know the noble
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Baroness would want to bear in mind. Having gone through the arguments, at a fair pace, I hope that I have convinced the noble Baroness that the Government are fully onside, that we have the safeguards and the presumptions in place and that we recognise the pragmatic needs of the local authority and the need for full accountability to parents. I am sure that that is what all noble Lords want.

Baroness Morris of Bolton: My Lords, I am grateful to the Minister for her thoughtful reply and for the contributions of other noble Lords in an excellent short debate. I have raised this issue in an honest attempt to highlight and draw attention to the plight of many rural schools. We feel that we have to go slightly further than the presumption against closure. We have no illusions: this is a complex issue involving many factors and outside forces. For that reason, it perhaps cannot be addressed in a single amendment and, possibly, not in this amendment. We need to reflect on this further. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Filkin: My Lords, I beg to move that further consideration on Report be now adjourned. In moving the Motion I suggest that the Report stage begin again not before 2.45 p.m.

Moved accordingly, and, on Question, Motion agreed to.

Licensing Act 2003 (Fees) Regulations 2005

Lord Clement-Jones rose to move, That an humble Address be presented to Her Majesty praying that the regulations, laid before the House on 20 January, be annulled (S.I. 2005/79) [7th Report from the Merits Committee].

The noble Lord said: My Lords, the background to this Motion is that the Government proposed a set of fees and accompanying regulations in November, only a few months before they were due to come into effect, having had nearly 18 months to do their calculations from the passing of the Licensing Act in July 2003. The Government's response to the consultations was made on 21 January this year, and it was to introduce a large increase in the fees set out in the consultation paper and a collection of regulations that had never appeared or been trailed in the consultation. So we had the delayed appearance of the fee structure and a massive increase in the suggested fees and now, to cap it all, we now have the amending regulations that introduce a number of amendments to cure errors made in the original regulations, which breaches the customary 21-day rule.

These regulations are crucially important because the financial implications of these regulations are huge for businesses and for local authority budgets. Licensed premises include or sponsor many social and culturally important activities in this country: amateur
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sports and recreation clubs; the bedrock of live music in the UK; pub-sponsored sports teams; quiz nights; games nights; and even circuses. The question is whether the Government have got the balance right between local authorities' costs and the regulatory burden on the licensable activities, particularly for transitional costs.

Secondly, there is the question of whether the focus of the fees is right. Do they work on an equitable basis? For instance, for alcohol-related crime and disorder, are they properly based on a polluter pays principle? Why do pubs get charged the inner city fee multiplier, but not nightclubs? Are these charges fair for sports and recreation clubs? Will live music suffer as a result of the fees and of the Act itself, as the Government's own survey suggests?

On the first question—the balance between local authorities' costs and the regulatory burden on licensable activities—the Local Government Association points out that enforcement of the Act will suffer if the new licensing service is underfunded. Rogue operators will be left unchecked, a great burden will be placed on the police, and communities will be put under even greater pressure from anti-social behaviour.

On 2 February, when we last debated these matters, the noble Lord, Lord McIntosh, said:

The original fee structure, set out in the original consultation document, would, according to the LGA, have led to a deficit to local authorities of £41.5 million in the transition period and £41.3 million in year one of the new system. The fees set out in Schedules 1 to 6 of these regulations represent a genuine improvement from that point of view.

But there are still issues relating to transitional costs. The LGA now estimates a total deficit in the region of £20 million to £30 million for premises licences, both in the transition period and in year one. It also believes that personal licences need to cost 100 per cent more to cover costs. Westminster City Council, which, I admit, is in the thick of it, says that it will have a deficit of £3.4 million in year one of the operation of these regulations.

In addition, there are the start-up costs. A survey carried out by the LGA shows that 86 per cent of authorities have had to make extra budget provisions for start-up costs. That money will clearly be diverted from other services. The regulatory impact assessment is quite clear: the objective of the regulations and the order is, as far as possible, to set the fees at a level that would achieve full recovery of the administrative inspection and enforcement costs falling on licensing authorities associated with their licensing functions. That may well not be the case. The Statutory Instruments Committee agreed there was doubt about that aspect. I look forward to hearing what the Minister has to say on the subject. So far he has not
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given the impression that he believes there is any doubt about the issue, or any need to re-examine it, but clearly, in the transitional period and the start-up phase, there is a need to do so.

Secondly, do the fees work on an equitable basis? One might think that the Government's introduction of a multiplier on fees for particular premises under these regulations would be welcome. In the words of the DCMS press release of 21 January, the fees are meant to,

The press release went on to say that its consultation had found that,

The multiplier, however, only applies, by virtue of subsection (4)(2)(i), to,

So are nightclubs off the hook? Why should they be? Anecdotal evidence suggests that brawls outside nightclubs are common.

In the Commons debate yesterday, my honourable friend Mr Don Foster referred to the boast of one entertainment lobby group on its website that it had "played a blinder" by fooling the Government. The Bar, Entertainment and Dance Association website displays the following words, taken from the Morning Advertiser of 27 January:

Will nightclubs pay the multiplier? The Minister in the Commons did not answer that question, and I put it to the Minister today. In the view of these Benches, the multiplier model is flawed and should be rethought.

Regarding sports clubs, we need much greater flexibility at local level for voluntary and amateur organisations to be exempted from charges. The Secretary of State at the time, in March 2003, said the new fee structure would be,

Mr Caborn, the Minister for Sport, subsequently angered the sporting world by claiming, in a press briefing about the fees, that,

Indeed, the noble Lord, Lord McIntosh, said, when we debated these fees last,

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In fact he displayed no sympathy at all, but simply said:

Resounding words. However, the costs to be incurred by the clubs are in no way proportionate to the risks associated with enforcing and inspecting voluntary sector clubs and recreation clubs. Under the proposals, the costs of enforcing the act and inspecting licensed premises are to be shared proportionately between all licensed liquor outlets, regardless of their estimated risk. It is clear that the costs associated with enforcing the act in local sports clubs will be quite trifling compared with those associated with large bars, pubs and nightclubs. In effect, local sport and recreation clubs will be subsidising the enforcement costs of the Act in larger commercial drinking venues.

The rateable value basis of the new fees takes no account of the not-for-profit nature of most sporting organisations, and makes no allowances for the charitable purposes of some of them. In almost all sports clubs, the area used for liquor purposes is a small proportion of the area on which the rateable value is assessed. If a voluntary sports club tries to increase its playing facilities—for example, several football pitches, a cricket ground or a number of tennis courts—and hence its services to the community, those efforts will necessarily disadvantage that club financially.

For the purposes of the proposed fees, clubs will be treated as businesses, which fails to recognise the not-for-profit nature of the vast majority of those organisations. The Community Amateur Sports Club scheme recognised in law that sports clubs are not businesses, and thus should not be treated as such. The inclusion in the Local Government Act 2003 of the clause to grant mandatory rate relief to sport and recreation clubs that are registered as CASCs also recognised that fact. The principles for stipulating the proposed fees contradict previous established practice.

As well as these detrimental effects on clubs, it is likely that there will be further damaging effects on national governing bodies and some clubs or events because of the effects of the proposals on the financial viability of events, which are often used to raise income for the governing body or club and support its delivery programme. The bodies that have expressed their concern include those representing hockey, cricket, riding and bowls.

The fees announced in January added insult to injury. They were already far higher than those being paid by sports and social clubs. On 2 February, the noble Lord, Lord McIntosh, said that most sports clubs would be in bands A or B. He went on to say that,

However, those fees are a massive increase from those currently being paid. Even if it were the case that most of these clubs will indeed fall within those two bands, where is the noble Lord's evidence for that?
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The 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 about £15 over five years to obtain its bar licence. It will pay £610 in year one of the new regime, and £295 each year after that to renew its licence. Magpies Hockey Club in Suffolk pays around £5 a year to obtain a liquor licence. Under the new measures, it can expect to pay £370 in the first year of the new regime, and £180 every year after that. In many cases, where these clubs have high rateable values, the cost of the licence will exceed the profit from the bar.

I have to say, because the Minister made a great play of this last night before the Commons committee, that the issue of CASC is entirely separate. We support that scheme, and believe that clubs have properly applied for qualification under it.

It is quite within the powers of the department to devise a licensing fee scheme that, while operating on a full cost–recovery basis, would recognise essential differences between commercial drinking venues and not-for-profit sport and recreation clubs, and could accommodate that difference in fee scales. Such a scheme would also recognise the contribution that sports clubs make to the community, and their role in nurturing and developing sporting talent.

Live music is another case in point that needs greater exemptions. The DCMS commissioned a recent survey into live music in Britain, which reported in August 2004, and demonstrated that the more licensees knew about what the Licensing Act was proposing, the less likely they were to put on live music in the future, and would be deterred from doing so. We should allow live music to flourish by reducing the requirements for overly bureaucratic licences for small venues, while strengthening local authorities' powers over noise disturbance and safety to prevent public nuisance.

I hope I have given enough reasons for the Minister to delay the implementation of the Act, and, indeed, to scrap these regulations. The Secretary of State certainly has the power to do so. To add to all that, it is likely that there will be a huge strain on licensing committees. Up to 65 per cent of premises may wish to extend their licences, according to a leaked DCMS memo. As local authorities only have 28 days to process objections to extensions, when appeals take place they will go to magistrates' courts and clog them up. So, I really need to ask the Minister whether he has considered all these points. I very much hope that he will give a more favourable reply than he gave on 2 February. I beg to move.

Moved, That an humble Address be presented to Her Majesty praying that the regulations, laid before the House on 20 January, be annulled (S.I. 2005/79). [7th report from the Merits Committee].—(Lord Clement-Jones.)

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