Police Reform and Social Responsibility Bill

My Lords, I start by thanking all noble Lords for their thoughtful and constructive comments in connection with these clauses and amendments. Clauses 121 and 122 address problems in the system of fees under the Licensing Act 2003. Local government has been calling for action on both these points ever since the Act was introduced. Clause 121 introduces the suspension of licences or club premises certificates for failure to pay the annual fee. Currently, an authority must pursue unpaid annual fees through the courts, and there is no other sanction for non-payment. The sanction of suspension will provide a considerable added incentive to licence holders to pay the fee on time. Clause 122 introduces locally set licensing fees. The purpose is to ensure that licensing fees properly recover the cost to licensing authorities of discharging their functions under the Act. Although this clause was introduced on Report in another place, it was not a decision taken in haste. We needed time to ensure that the clause achieved full cost recovery for licensing authorities in a way that is fair to fee payers, licensing authorities and council tax payers. There are a number of amendments in this group, and I hope noble Lords will bear with me as I attempt to give each amendment the response it deserves. Amendments 240Z and 240XC would remove the requirement on local licensing authorities to provide a receipt. Amendment 240XA aims to reduce the burden of the requirement by requiring that the receipt must be provided only if it is requested. I recognise that these amendments aim to reduce what may look like excessive bureaucracy. At the outset, it is worth emphasising that the clause requires the provision of a receipt only in a case in which a licence or certificate has been suspended and is then reinstated when the fee is paid. We do not expect this to be a frequent occurrence, as we expect licence payers to be assiduous in avoiding suspension. It is not unreasonable for the licence holder to expect clarity as to whether the licence has been reinstated because carrying out licensable activities without a licence is a serious offence. The maximum penalty on summary conviction is six months’ imprisonment, a fine of up to £20,000, or both. Amendment 240XA is a compromise solution whereby licensing authorities will be required to provide a receipt only on request. Having considered it, I believe that this amendment would actually increase the bureaucratic process in terms of the correspondence relating to whether or not a receipt is required, with, I suggest, only marginal benefit. Amendments 240XB and 240XD would greatly extend the grace period that applies in cases of dispute or administrative error. The period of 21 days is not set in stone as a matter of principle. However, three weeks seems to us a reasonable length of time in which to resolve a dispute or administrative error. It would allow evidence to be provided that the fee has already been paid or that the supposed due date was not the anniversary of the licence. I cannot yet see a case for extending this period by five more weeks, and I would be concerned that it would considerably weaken the sanction of suspension. Amendments 240XE and 240XG remove references in Clause 121 to the Secretary of State’s powers to prescribe fees. I understand absolutely that the intention is to emphasise the Bill’s contribution to the localism agenda. However, the references which the amendments seek to remove are cross-references to the existing powers to set fees centrally. They are a necessary part of the mechanism by which Clause 122 introduces a power for the Secretary of State to provide that fees are set locally. So the result of the amendments would actually be that the clause no longer provides for locally set fees. Amendments 240XF and 241 would remove the reference to the licensing authority’s general costs from the description of what fees must cover. I emphasise that there is no intention that locally set licensing fees will fund the general costs of local government in the everyday sense of the phrase, which means that they could raise money from fee payers for something unrelated, such as to help build a new swimming pool or, as my noble friend Lord Astor suggested, to collect refuse. That would mean that licensing fees had become a form of discretionary local taxation. This is certainly not permitted by Clause 122 through the insertion of Section 197B of the Licensing Act, specifically subsection (3), which defines general costs and limits them to costs referable to the discharge of functions under the 2003 Act. Amendment 241ZA also seeks to reduce the costs that can be recovered by licensing authorities through locally set fees. In this case, it seeks to remove the costs incurred by the licensing authority under the Act, but in a capacity other than that of a licensing authority. The costs referred to are those of the responsible authorities that are part of the licensing authority. These costs were intended to be taken into account by the current centrally set fees. Not to permit these costs to be covered by locally set fees would be to impose a new burden on local government and would therefore be contrary to established government practice and the intention of the clause. Our intention in introducing locally set licensing fees is that they should cover the cost to licensing authorities of discharging their functions under the 2003 Act. The current fees, set centrally, were also intended to cover the general costs as they are defined in this clause, and the defined costs of a licensing authority acting as a responsible authority. To remove these costs would mean that fees did not achieve what they are supposed to do. Amendments 240XH and 241ZZA seek to ensure that the power to set fees locally is constrained and subject to guidance. I can assure your Lordships that we do indeed intend to make locally set fees subject to constraints. Specifically, we intend to make each fee subject to a nationally set cap, and we will consult on the level of that cap. However, to impose a requirement for the imposition of unspecified constraints would be both excessive and, I suggest, ineffective. A future Secretary of State may, for example, have a legitimate reason to utilise the power to make different provision in respect of different authorities, or not to impose additional constraints on a particular authority. However, it must be remembered that such an authority would still be subject to the limitation that income from fees equates as nearly as possible to costs. Amendment 241ZZA introduces a duty on the Secretary of State, when providing for locally set fees, to issue detailed guidance. Again, I can assure your Lordships that it is our intention, after consultation, to issue guidance covering all these points. However, I suggest that it is excessive to require all these specifically in the clause. Section 182 of the 2003 Act already requires the Secretary of State to issue guidance to licensing authorities on the discharge of their functions under the Act. It also enables her to make such revisions to the guidance as she considers appropriate. The addition of a new duty, that of setting fees, would therefore justify such a revision, and it is our intention to do so. Amendment 241ZB seeks to ensure that the costs of social services and trading standards, in their roles as responsible authorities, can be taken into account within locally set fees even when they are located in an upper tier authority. Currently, the clause has the effect that these costs are recoverable only in a single tier authority, such as a unitary authority. I thank noble Lords for drawing attention to this. I know that many noble Lords will be concerned about the addition of any further costs that will be recovered by fees. It should be noted that the amendment specifies that the costs that should be recovered are those of these two public bodies, but only in their roles as responsible authorities: for example, in considering applications and, in rare cases, applying for a review. This is expected to be a very marginal cost in the context of overall fee income. It does not incorporate the wider costs of these public bodies in dealing with licensed premises. We intend that locally set fees should cover costs that are not covered by the current centrally set fee levels. For example, the costs of the environmental health authority in respect of its wider statutory duties connected to licensed premises are not covered; only the marginal costs that arise from the 2003 Act are. Having said all that, I see sense in the intention of Amendment 241ZB and, if I may, I shall reflect on it further. Amendment 241Y seeks to remove the provision in the Bill for regulations to be made providing that club premises certificate holders can make a free minor variation before a late-night levy is introduced in their area. It is consequential on a number of amendments that have the combined effect of removing members’ clubs from the application of the late-night levy. I hope that we will be able to discuss it later, alongside those amendments. For the reasons that I have given, I therefore ask that noble Lords do not press their amendments today.