Skip to main content

Licensing Act 2003 (Fees) Regulations 2005

Volume 669: debated on Thursday 24 February 2005

The text on this page has been created from Hansard archive content, it may contain typographical errors.

1.45 p.m.

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 front 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 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:
"We have undertaken extensive negotiations with local authorities and anyone else who wished to express their views to us before reaching this conclusion. The conclusion is that virtually all local authorities will cover their costs but not make a profit out of the licence fees. That is what we undertook to do at the outset". —[Official Report, 2/5/05; col. 229.]
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 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,
"deliver tougher protections … against alcohol related crime and disorder and public nuisance".
The press release went on to say that its consultation had found that,
"the control of premises selling alcohol would in general give rise to higher costs than other premises, particularly during transition, and particularly where these were situated in town and city centres'.
The multiplier, however, only applies, by virtue of subsection (4)(2)(i), to,
"the use of the premises exclusively or primarily for the carrying on … of the supply of alcohol for consumption on the premises".
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:
"BEDA, the nightclub lobby group, has played a blinder. Not only has it got the hefty PEL monkey off its back, it also seems to have escaped from having been asked to cough up for town centre trouble.
"As long as its members can say that their clubs are not 'primarily for drinking' (because they sell food and people dance), they are immunised against fines".
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,
"welcomed by sports clubs, large and small".—[Official Report, 24/3/03; col. 53.]
Mr Caborn, the Minister for Sport, subsequently angered the sporting world by claiming, in a press briefing about the fees, that,
"the new licensing measures would be advantageous to everyone in our communities".
Indeed, the noble Lord, Lord McIntosh, said, when we debated these fees last,
"We do not believe that the fees will significantly affect the activities of the clubs involved".—[Official Report, 2/2/05; col. 228.]
In fact he displayed no sympathy at all, but simply said:
"The Central Council for Physical Recreation would be well-advised to devote more of its attention to ensuring take-up of mandatory relief, and therefore benefiting local sports clubs, rather than campaigning against licensing charges on which there has been full consultation".—[Official Report, 2/2/05; col. 229.]
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,
"in band A, the lowest band, we are proposing an application fee of £100 and a £70 annual charge. In Band B, the application fee will be £190 and the annual charge £180".—[Official Report, 2/2/05; col. 229.]
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?

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 costrecovery 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 Committed].— —(Lord Clement-Jones.)

My Lords, these regulations provide for the determination of the fees to accompany the making of applications and the giving of notices under the Licensing Act 2003 and the payment of those fees. Further, they make provision for the payment of annual fees in respect of premises licences and club premises certificates granted under the Act.

The problem, as the noble Lord, Lord Clement-Jones, has highlighted so eloquently, is that the Merits of Statutory Instruments Committee has drawn them to the attention of the House, as it feels they,
"may imperfectly achieve their policy objectives".
The regulations seem to satisfy no one. The Local Government Association argues that the fees are not high enough to cover the cost of implementation; that the penalty fee is not significant enough; and that there are problems with the interpretation of the regulations. Indeed, as an example, Westminster City Council, which was looking forward to having the power Tessa Jowell outlined in a press release,
"to run licensing regimes in their own areas … [and] to be in the driving seat",
now feels that this "driving seat" does not have a steering wheel, let alone a brake or an accelerator. The higher fee levels still inhibit the ability of local authorities to deliver an effective local licensing regime with a significant deficit expected of £20 million to £30 million in the first year.

Local governments feel particularly let down by the DCMS's failure adequately to consider, draft and consult on these regulations. It criticises the draft regulations for making no reference to the notion of an additional fee for variation or an additional multiplier fee, which explains why those on the other side of the coin are just as upset.

These increases in fees do not bode well for sports clubs in particular. I ask the Minister why the promise made in Committee on the Bill in the other place to reduce fees for such clubs has not been delivered. The noble Lord, Lord Clement-Jones, spoke powerfully and most effectively on this and we strongly support him.

The British Beer and Pub Association is up in arms about the large hike on the original proposals, which themselves are a significant increase on the current fee arrangements; about the new introduction of a multiplier for large premises; and about the timing of the annual fee—the due date for which falls long before the annual anniversary of the licence. Indeed, the BBPA feels that the fees in these regulations,
"represent a triple whammy of regulatory costs which many small businesses will struggle to bear".
On top of the new fees, the Government are also asking the industry to pay an estimated £200 million in advertising costs as part of the transitional costs when applying for variations to existing licences. I understand that that was unbudgeted and uncosted in the original Act and contradicts the advice of the Government's own advisory group, which agreed that newspaper advertising for this object was both ineffective and an unnecessary cost burden. We really feel that the Government need to explain their choice of fee increases, and I hope that the Minister can go some way to satisfying in particular the criticisms of the Merits of Statutory Instruments Committee.

The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport
(Lord McIntosh of Haringey)

My Lords, none of this comes as a surprise to me. I have had the advantage of reading the briefing from the British Beer and Pub Association, the Local Government Association and the Central Council for Physical Recreation. My only surprise is how noble Lords opposite can stand up and quote both views at the same time. The Local Government Association wants higher fees and the British Beer and Pub Association wants lower fees. Yet, somehow, the noble Lords, Lord Clement-Jones and Lord Luke, manage to straddle that contradiction and argue in one part of their speeches for higher fees and in another part for lower fees. When they have sorted that out with themselves and with their own consciences, perhaps we may have a more rational debate than we have had today.

I shall do my best in the time available to answer the points that have arisen, but there are some fundamental points that I must make first.

The transitional period required to implement the Licensing Act 2003 began on 7 February this year. Fees are already being paid. The flow will steadily increase. Licensing authorities and industry have already invested a great deal in terms of effort and resources in preparing for the transition; and licensing authorities cannot begin to recover their existing expenditure until fees are paid. It would, therefore, be extremely disruptive if the House were to support the Motion and to deny local authorities the ability to finance the new regime for which they are now responsible.

The second point that I must make is to emphasise what fees may not do. Fees are not an alternative source of revenue. They cannot function as taxation. Fees can only recover the costs of the services provided in carrying out the legislative function approved by Parliament. Fees therefore have nothing to do with what any individual, business or club can afford to pay. They have nothing whatever to do with what anyone should pay, based on moral ground.

Fees are not a substitute for the taxation needed to police the streets and control the behaviour of individuals once they are beyond the control of licensed premises and licensees. The policing of criminal and anti-social behaviour on our streets late at night must be properly funded and we are not ignoring those issues.

The House will have noted the contents of our consultation document published on 21 January, Drinking Responsibly, which includes proposals concerning alcohol disorder zones and charges which might be imposed on businesses in such areas. The Alcohol Harm Reduction Strategy, published last year, also includes proposals under which the alcohol industry might make voluntary contributions to the costs of policing alcohol-related problems in our communities.

The new legislation is entirely about the control of premises where licensable activities take place to ensure the promotion of the four licensing objectives: the prevention of crime and disorder; public safety; the prevention of public nuisance; and the protection of children from harm.

So the focus of this debate on fees must be on the recovery of the full costs associated with the administration, inspection and enforcement required to deliver the new legislation in operational terms in respect of those premises.

It has been suggested that the consultation on fees was too short and that the changes were made too near to the first appointed day for businesses and others to adjust. We initially published estimates of the fee levels in April 2000, when we estimated that fee levels would be between £100 and £500 on application, with annual fees of between £50 and £150. We said that personal licences would cost about £30. A full public consultation followed. The same estimates were debated during the parliamentary stages of the Bill between 2002 and 2003. Again we consulted between November and December last year. That represents almost four years of consideration and debate.

No one can reasonably suggest that we have arrived at these levels of fees hastily and no one can honestly claim to be surprised by them.

Of course we have introduced new elements as a result of the consultation. That is what consultation is for. First, 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; secondly, a multiplier that increases the fees for large premises that are predominantly and exclusively about selling alcohol for consumption on the premises, because many consider they will attract disproportionately high enforcement costs; and, thirdly, a relatively small additional fee for those varying their licences in respect of the supply of alcohol for consumption on the premises—for example, where extended hours are sought, because these cases will attract more representations and generate more hearings. We would have been rightly criticised if we had ignored the evidence emerging from the consultation.

It has been argued that it was an error to apply the multiplier only to pubs and not to nightclubs because customers coming out of nightclubs cause just as much trouble on the streets. The noble Lord, Lord Clement-Jones, made that argument. He said that they should be charged the same fee as high-volume vertical drinking establishments. But that misunderstands the function of licence fees. The policing of the behaviour of customers after they leave premises is a matter for general taxation, which is a quite separate debate.

Fees can legitimately cover only the costs of carrying out licensing functions and enforcing licensing offences on the premises themselves, not outside. The difference between nightclubs and pubs goes directly to that issue. Nightclubs all have capacity limits to prevent overcrowding. Some people, including myself, think that pubs should have the same limits, but not all of them do. Nightclubs all have security teams to prevent disorder and criminal activity on the premises. The consumption of alcohol in nightclubs must also be ancillary to the provision of dancing and substantial refreshment—that is, food—otherwise, they lose their late licence. Those are all conditions and embedded restrictions that they carry over when they convert licences to new ones under the 2003 Act. Large public houses are not subject to all those arrangements, and the evidence from the police and others is that costs relating to the enforcement of licensing law on those premises are likely to be higher than those relating to nightclubs. My answer to the noble Lord, Lord Clement-Jones, is categorical: no, we do not propose to make nightclubs pay the multiplier that applies to pubs.

Before leaving that issue, the noble Lord, Lord Luke, made the argument of the British Beer and Pub Association that it should not be subject to advertising. He did not make clear what the advertising was for. Advertising in this case is to tell people in the surrounding area what applications are extant, in order that, should they wish to, they have the opportunity to object. That was the subject of great debate when the Licensing Bill was going through, and everybody in the House, from all sides, was clear that it was essential that people should have a proper opportunity to object. The advertising is for that purpose, and it is, I think, entirely proper that it should be paid for out of licence-fee income.

At the end of the consultation, we set ourselves three tasks: first, to ensure as far as possible that the costs did not fall on any taxpayer, and that the costs falling on the licensing authorities were fully recovered; secondly, to ensure that the fees properly reflected the fact that certain licensing authorities have overhead costs higher than others— for example, costs of labour and accommodation; and, finally, to ensure that fees were fair and proportionate in respect of licence and certificate holders operating in different ways and on different scales. In setting about the first task, we were aware that some existing licensing fees were failing to recover the expenditure of the courts and local authorities now and were imposing an unjustified burden on taxpayers. There is no reason why taxpayers should subsidise, in particular, the consumption of alcohol by others.

I am confident that the changes we made have satisfied the vast majority of licensing authorities. During the consultation, the Local Government Association claimed that our proposals would leave them £41 million in deficit nationally. We looked at those figures; some authorities had made an excellent case, and we engaged consultants to assist us in examining it. However, we could not accept all of their case. Inevitably, we would be unable to satisfy a handful of authorities whose estimates, in terms of deficit or surplus, were completely out of kilter when set against the forecasts of the vast majority of authorities. The example of Westminster, cited by the noble Lord, Lord Clement-Jones, is one of those. Westminster of course has a particular concentration of premises; it has 2 per cent of the licensed premises in the country. Yet, it claimed 10 per cent of the total deficit claimed by the LGA as a whole. There is something wrong there.

After the consultation, the LGA welcomed the changes that we made. The fee levels increase the level of income that they can expect by £22 million during the nine months of the transitional period and by £21 million in each subsequent year. Yet we do not claim that our forecasting is perfect. The noble Lord asked us to re-examine the figures. 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 and that there would be a full and independent review that would examine the period of transition and the first full year of operation. The LGA has welcomed our commitment to a full and independent review, once the system has been running fully for 12 months. We will look at the review's outcomes, and the fees will be adjusted if they are too high or too low.

The issue of sports clubs was cited by both noble Lords. Most sports clubs—including political, ex-services, working men's, community and social clubs—will fall into bands A and B, as described in the regulations. The noble Lord, Lord Clement-Jones, queried that, but 79 per cent of all such premises will be in band A and B. That means that, most commonly, the fee on application for a new club premises certificate will be £100 and on each subsequent anniversary of the certificate being granted it would he required to pay £70. Those smaller clubs in band A would pay 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. We think that is a fair reflection of the differences and of the costs that each is likely to generate in licensing authority activity.

It is important to remember that a club must have at least 25 members to qualify for a club premises certificate. Even in the smallest club, during the first twelve months, each member would need to contribute only £4—less than eight pence a week. That £4 is the price of two pints of beer over a whole year. In subsequent years, those figures fall to under £3 annually—around five pence a week. Even if clubs elected not to charge members those amounts, the money could be recovered by an extremely small amount added to the price of drinks. Most sports clubs with bars have considerably more than 25 members, and the cost per head is even lower. I completely understand why sports clubs want to minimise their costs, but it is nonsense to suggest that any club would be threatened by the fees.

I have examined the campaign by the Central Council for Physical Recreation against the fees. The noble Lord, Lord Clement-Jones, quoted the two examples that it gave us. Let us look at them. The Heaton Tennis and Squash Club in Bradford has three indoor and six outdoor tennis courts, a 1,300 square foot gymnasium, a fully licensed lounge bar, a sports shop, a dining restaurant area, its own in-house caterers, and it puts on functions for up to 450 people. The annual fee for that club will be £295, which is less than the subscription for one member of the club. Can that conceivably be unreasonable? The other example, a hockey club, has 180 adult members apart from its 200 junior members. Since 1988, that club has invested close to £900,000 on its facilities. The licence fee would not be £370 in the first year, as the noble Lord suggested. It would be £190 for the initial licence, and then £180 per year. Surely that is not a small club in jeopardy from licence fees.

I completely reject the idea that the fees in any way diminish the extraordinarily valuable effort that the Government are making to support sport. Between 2002 and 2008. the Government are investing £1.5 billion in school sport, £60 million over three years in community sport through the Community Club Development Programme, and a further £45 million over three years through the Football Foundation. Government investment in the Football Foundation also leverages in an extra £45 million from the Premier League and the Football Association. We have put sports clubs at the forefront of our investment plans with the Community Amateur Sports Club scheme, which includes mandatory rate relief at 80 per cent for registered clubs, worth up to £10 million a year. In those circumstances, subsidising the consumption of alcohol in sports clubs is not the best way to support sports.

Another classic example is in the Daily Express this morning. It says that singalongs will he banned if more than two join in. I am sorry that noble Lords missed that one, but it is a real joy. It says that a group of pensioners has been banned from holding its weekly sing-song after a killjoy council said that it needed an entertainment licence. It goes on to say that they will have to pay huge amounts. It is true that under existing licensing rules, they would. Under the Licensing Act, when it is implemented, because we are encouraging live music, there will be nothing to pay.

I am sorry. I understand the passion with which the arguments have been advanced. but I have answered all of them. There is no case to answer.

My Lords, it is refreshing to see a Minister develop a head of steam on an issue such as this. I appreciate the trouble that he has taken to respond passionately to the points that I made in the debate. My conscience is entirely clear, because I genuinely feel—

My Lords, the Minister does not need to apologise. It would have been immensely helpful to have seen the Daily Express this morning, so that I could have developed my own even greater head of steam.

The Minister is quite right: the system is in place and I do not intend to press my prayer to a vote. I was encouraged by many things that the Minister said precisely because he bothered to respond to my points. The whole issue is about whether there has been careful examination of the costs of local authorities, whether the transitional costs and the year one costs will go to the independent review, and whether Ministers have really taken the trouble to do their homework on some local clubs. I appreciate the homework that has been done. The Minister and I could trade sports and social club examples all afternoon, but it is extremely helpful that that trouble has been taken.

The consultation outcome came as a considerable shock to many people. The Minister says, "Well, we had indicative figures early on and the process was very stately", but the 50 per cent hike for those sports and social clubs, in particular, came as something of a shock. The Minister asked whether I wanted nightclubs to be treated the same as high-volume vertical drinking establishments—I love that phrase, it conjures up all sorts of night-long activity, as one who has been round some of the Dublin establishments to look at their smoking bans. I was certainly not engaging in such a comparison. There may well need to be a differential, but I know that amendments were moved to the Licensing Act that would have enabled licensing fees to take that into account. I understand that this is not a tax, this is a fee and should represent the actual costs of licensing, but the Minister has really made a virtue out of necessity. Because of their social impact, nightclubs should pay higher licensing fees.

The Minister then said that nothing was perfect. Of course the estimates of costs are not necessarily perfect. Indeed, it seems that they may be £20 million or £30 million off. I very much look forward to the result of the independent review. The Minister said that 79 per cent of sports and social clubs, to which I referred, would be in bands A and B. That means that 20 per cent will not be. It will be important that, at the same time as the independent review of those transitional costs and year one costs, we specifically consider sports and social clubs.

My Lords, of course we will; that is why it will be an independent review. The examples that the noble Lord gave to which I referred are exactly those that will not be in bands A or B. My argument is that those cannot conceivably be described as struggling sports clubs.

My Lords, as I said, I could trade all afternoon with the Minister the number of sports clubs that have high rateable values because of their grants but yet do not fall into bands A or B. However, I am content to see what the review comes up with. Suffice it to say that a great many of those clubs that will be paying much higher fees-both initial and ongoing—are clubs that put their money back into sport in the local community. The Minister and I are lucky enough not to have to put ourselves up for election in a few months' time, but I anticipate that that will be an issue on the doorstep, whether or not he can tell me that Heaton squash club falls within the category that I claim.

The key issue for sports and social clubs is that the fees are completely disproportionate to the risk and the cost of licensing. If there was rowdy behaviour in those clubs, of course I could understand that, but to hike up the fees in this way is completely disproportionate. That has created the sense of injustice among those clubs. I am sure that discussion between the Government. sporting bodies, the CCPR and the Minister will continue, but that sense continues and there is a head of steam not just here but in local communities about the issue.

However, I am reassured in many ways by the care which the Minister has taken in replying, which was one purpose of the exercise. I very much look forward to the independent review, and in the mean time I beg leave to withdraw the Motion.

Motion, by leave, withdrawn.

My Lords, I beg to move that that House do now adjourn during pleasure until 2.45 p.m.

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

[The Sitting was suspended from 2.25 to 2.45 p.m]