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Legislative Reform (Licensing) (Interim Authority Notices etc) Order 2010

Volume 720: debated on Tuesday 13 July 2010

Considered in Grand Committee

Moved By

That the Grand Committee do report to the House that is has considered the Legislative Reform (Licensing) (Interim Authority Notices etc) Order 2010.

Relevant document: 8th Report, Session 2009-10, from the Regulatory Reform Committee.

My Lords, the order before us today was laid before Parliament on 10 March by the previous Government. It will extend five time periods under the Licensing Act 2003. First, it will extend the period during which specified persons may issue an interim authority notice, known as an IAN, following a lapse caused by the death, incapacity or insolvency of the licence holder from seven to 28 days. Secondly, it will extend the period during which a person may apply for reinstatement on transfer of the licence to that person following its lapse from seven to 28 days. Thirdly, it will extend the period during which an IAN has effect from two to three months. Fourthly, it will extend the period during which the police may object to a temporary event notice, known as a TEN, from 48 hours to two working days. Fifthly, it will extend the period during which the police may object to an IAN from 48 hours to two working days.

These relatively minor changes have been requested for some time by those affected by the legislation. In particular, the British Beer & Pub Association and various licensing lawyers have requested the extension of the seven-day deadlines. Also, the Association of Chief Police Officers has requested the change to the police objection period. It has told us that the current timescales are too short and that this amounts to an administrative burden. By allowing more time to conduct these procedures, we will help businesses going through difficult times and assist the police in the conduct of their duties. Therefore, we are seeking to complete the process of parliamentary scrutiny and to bring these changes into force as soon as possible.

The previous Government conducted a consultation on these measures alongside unrelated proposals to allow the police discretion to accept TENs received without the required notice of 10 working days and to remove the requirement that local licensing authorities consult on the publication of a new licensing policy statement every three years. The consultation ended on 9 February this year. There were 74 responses, covering a wide cross-section of those affected by the changes, including local authorities, the licensed trade and the police. Several of the responses were from national representative bodies responding on behalf of their memberships. These included the British Beer & Pub Association, Local Authorities Co-ordinators of Regulatory Services and the Association of Chief Police Officers. There was near unanimous support for the proposals, which were subsequently brought forward in this order. The other proposals, although generally supported in principle, received a more mixed response. The previous Government therefore decided not to proceed with them.

The House of Lords Select Committee on Delegated Powers and Regulatory Reform and the Commons Regulatory Reform Committee both unanimously approved the LRO. Their reports were published on 25 March. I am grateful to the committees for their work in scrutinising this order.

I shall deal first with the elements that are designed to make it easier to administer the affairs of licence holders after death, incapacity or insolvency. In brief, the order will allow them a longer period to transfer the licence. Under the Licensing Act 2003, anyone who wishes to sell alcohol or to supply it to a members’ club, to put on regulated entertainment or to provide late-night refreshment must obtain authorisation. This can be a temporary event notice, a club premises certificate or a premises licence.

Ordinarily, businesses that include licensable activities, such as pubs, supermarkets, off-licences and late-night takeaways, will do so under a premises licence. This licence is held in the name of an individual and lapses automatically if the holder of the licence dies, becomes mentally incapable or becomes insolvent—alternatively, in the case of a company, if the company becomes insolvent or is dissolved. This could, of course, have a damaging effect on the business and on those with an interest, such as the landlord or employees. Therefore, the Act makes provision for the revival of the licence after such a lapse. There are two mechanisms: reinstatement on transfer and an interim authority notice.

A reinstatement on transfer is, in practice, the most common method of reviving a lapsed licence. The licence is reinstated by transferring it permanently to another holder. The process is similar to the ordinary transfer of a licence that has not lapsed. In particular, if the chief officer of police is satisfied that the exceptional circumstances of the case are such that the transfer would undermine the prevention of crime, he has 14 days to issue a notice stating so.

Alternatively, someone with a prescribed interest in the premises, such as a freehold interest, or a person connected to the former holder of the licence, such as their personal representative or a person with power of attorney, can apply for an interim authority notice, or IAN. This is a less frequently used procedure in practice, because the authority that it provides is, as the name implies, only temporary. Currently, the maximum length of the interim authority is two months. The licence will lapse again unless it is transferred during this period. The order will extend the maximum duration of interim authority to three months. Respondents to the consultation said that this would be invaluable in some circumstances and did not identify any risks in this modest extension. When an IAN is issued, the chief officer of police has 48 hours to issue a notice relating to crime prevention. The order will extend this period for police objection to two working days. I shall return to this point later in the context of the TENs, for which a similar procedure exists.

On the extension of the deadline for the issue of an IAN or reinstatement on transfer, for both processes there is currently a deadline of seven days after the licence lapses in which steps can be taken to revive it. The most important element of the order before the Committee is the extension of that period to 28 days. The impact assessment published with the consultation set out estimates for the savings that this will make for businesses. It estimates that the extension to 28 days will have significant benefits for those managing the affairs of a business after bereavement or insolvency. In particular, to use estimates provided by local licensing authorities on the number of applications received after the deadline, it could mean annual savings of around £5.2 million to £9.7 million in lost turnover. Additionally, there would be a modest £0.4 million saving annually in the fees and administrative costs currently caused by the need to reapply for lapsed licences.

More important than these financial calculations, perhaps, are the compassionate grounds for extending the deadline. The British Beer & Pub Association said in its response to the consultation:

“There have been well documented cases of the distress caused where licensees have died and relatives have struggled to cope with the seven day period as currently exists. There is no justification or reason that we can see for such a short timescale regarding this process. The current requirements place an unnecessary burden on licensees at a sensitive time”.

Medway Council also supported the proposal and said:

“We have had situations where the licensee died and the family were unable to put in an interim within the 7 days due to bereavement and making funeral arrangements. The licence lapsed and this caused the family considerable distress as they had to close and reapply for a licence”.

The main motivation for this order is to make certain that such situations do not recur.

In comparison with other processes under the Act, such as a new application for a premises licence, the processes for interim authority and reinstatement on transfer are relatively light touch. In particular, it is only the police who can object on crime and disorder grounds and not, for example, environmental health departments on public nuisance grounds.

Sitting suspended for a Division in the House.

Nevertheless, the extension of the timescales described will leave sufficient safeguards in place to ensure that the public are protected. For example, all the conditions of the licence will continue to apply and the consequence of breach is the same as usual, including a potential six-month sentence on conviction. Any sales of alcohol still have to be supervised by a designated premises supervisor. This individual is required to possess a personal licence and to have undergone a criminal record check. The powers of search and entry, as well as the police and magistrates’ power of closure, continue to apply in respect of any licensed premises. Any interested parties, including residents and responsible authorities, such as the police, can apply to the licensing authority for a review of the licence.

The extension of the police objection period for temporary event notices and IANs enables the user to carry out licensable activities, including sales of alcohol and the provision of regulated entertainment on an occasional basis, without any other authorisation.

The TENs regime is light touch; in particular, only the police may object to a TEN on crime and disorder grounds. On the other hand, various limits apply to TENs to minimise the potential impacts; for example, no more than 499 people can attend the event at the same time and there can be no more than 12 events per year at the same place. Currently, the TEN must be copied to the police at least 10 working days before the event. The police have to have a maximum of 48 hours to issue an objection on crime and disorder grounds. An analogous 48-hour period applies to interim authority notices.

There is evidence to suggest that in some circumstances the current 48-hour objection period does not give the police the time intended and that that may sometimes limit or prevent the police from making a proper assessment of the risk of crime and disorder. An example is where a TEN is delivered to a police station that may be unmanned on a Friday night, so that the TEN is not received by the chief officer of police until the following week, by which time the objection period will have expired. Therefore, the order seeks to extend the 48-hour period to two working days for both TENs and IANs. That small change should make certain that the police always have sufficient time to consider notices properly.

There was almost unanimous approval from those who responded to this part of the consultation for the extension of the police objection period to at least two working days. The consultation document also asked for views on an extension to three working days in the case of TENs. The majority who expressed a preference opposed the further extension to three working days. Therefore, the order before the Committee proposes two working days. Although the police consider this change to be important, we do not consider that the extension would mean a significant net increase in police objections. That is because some police objections that may currently be made on a precautionary basis may not be made if the police have sufficient time to satisfy themselves about concerns. A very small number of respondents were opposed to any extension of the deadline for police objection for either TENs or IANs or both. The main argument was that the current 48-hour period causes no problems. That was contradicted by the overwhelming majority of responses, including all those from police representatives.

The order before the Grand Committee will assist business during difficult periods. It will also assist the police in making assessments of risks of crime and disorder. I commend the order to the Committee.

My Lords, I am sure that everyone in the Grand Committee is grateful to the Minister for her full and clear exposition of the order. As she said, this was originally published when Labour was in government and, although not only for that reason, we welcome the order. I have three fairly minor questions for the Minister and I would be grateful if she could let me know what she feels about them. First, we are looking for an assurance on the substantial cuts to police budgets and the coalition’s desire to see freezes to local authority budgets. Will that impact on the police’s ability to object to local authorities to administer interim authority notices? Secondly, in the case of temporary event notices we understand that the change from 48 hours to two working days is proposed because some police stations are not staffed at the weekends. The coalition is proposing substantial cuts to front-line policing. Can the coalition assure us that the police’s ability to object to TENs will not be compromised by cuts to front-line policing? Finally, do the Government have any plans to change the fees for temporary event notices? Those are the only three comments that I wish to make. Again, I thank the Minister for such a clear presentation of the order.

My Lords, having looked through the order and the rather daunting Explanatory Notes, I realised that basically this series of changes is designed to make it easier for everyone involved to operate. Extending the period from seven days to 28, as proposed, is a positive suggestion. The idea of going to working days rather than an arbitrary number of hours for police objections is another totally sensible suggestion, as are the other extensions of periods that are brought in. When the previous Government and the current Government have proven something, it would be foolhardy to go beyond that.

My Lords, the Minister mentioned that she does not envisage any substantial police objections. Was there any consultation with the Association of Chief Police Officers on this matter? Sometimes there may be individual points of view from different constabularies, but seldom do we get a total view. It would be helpful to know whether such consultation took place and, if so, the response.

My Lords, I am most grateful to noble Lords for their questions, which I hope to be able to clarify. I can assure the noble Lord, Lord Addington, that there will not be any further cuts in that respect. As to the comments made by the noble Lord, Lord Dholakia, we have had several consultations. The list is in the dossier. The objections were included in what I said earlier. I can send the noble Lord the details of the consultations. I thank him for that rather important point.

I thank the noble Lord, Lord Evans, for his three questions. First, I should clarify that the Delegated Powers Committee said that the order needed to be an affirmative instrument so that it would have to be approved and so that a positive case would have to be made for it. As an affirmative instrument, it must be approved, which is why we are doing this today. The committee stated:

“The Committee considers that the Order meets the tests in the 2006 Act, is not otherwise inappropriate for the LRO procedure, and recommends that it be upgraded to the affirmative procedure”.

The noble Lord also asked whether the Government intend to charge a fee for a temporary event notice. At the moment, the fee for a TEN is £21. The Government have no plans to change that. Regarding cuts, we estimate that the change to the TENs objection period would have an extremely small notional burden on the TEN users of £8,000 to £61,000 annually in England and Wales. We have no plans to cut the licensing fees. The fees are set to cover the cost of administering and enforcing the licensing programme. Those costs should not fall on the taxpayer. However, we will look to deregulate where possible and, where regulation is needed, to reduce the burden.

The third question concerned the revival of licences. I imagine that by “applications”, the noble Lord means reinstatement of transfers. The estimate is 494 to 658 additional revivals of licences per year.

I thank the Committee on behalf of the House for having scrutinised the order. I can give assurances that we treat this matter with all seriousness. I am sure that any future licensing legislation will be the subject of lively debate and that there will be further discussions on this subject. I am sure that noble Lords recognise the positive benefits of this measure and its importance. As Walter Bagehot said in 1867:

“The natural impulse of the English people is to resist authority”.

I trust that, in these circumstances, that will not be the case. I commend the order to the Committee and welcome the furthering of the recommendations.

Motion agreed.