Clause 55 - Fees
Licensing Bill [Lords]
10:45 am
Mr Mark Field (Cities of London and Westminster, Conservative)
Yes, I am glad that the record has been put entirely straight on that point. It is just as well that Hansard's sound system is now working. We hope it is, anyway.
Much earlier in our deliberations, back in early April, the hon. Member for North Durham raised the costs of public entertainment licences in the city of Westminster and wondered whether all of the licence fee was put into enforcement. I have been able to conduct a certain amount of research into Westminster and the neighbouring borough of Kensington and Chelsea, the authority on which I sat as a local councillor for some eight years until 2002. I am acutely aware when discussing issues affecting central London that many Committee members are probably concerned that we should not forget that the country does not begin and end here in central London—although I would not necessarily support that contention.
My main concern with the Bill is that it is centralising in its authority. There is not the flexibility to take account of the fact that, without doubt, areas such as Soho and Covent Garden are sui generis in so far as two areas can be. The regime for central London should be considered differently from how the regime is considered elsewhere. Problems might arise from a set and centralised scheme for licensing and fees.
The hon. Member for North Durham (Mr. Jones) said that some of the fee income of Westminster city council is disproportionate to the costs of administration and enforcement. The implied conclusion was that Westminster was making a surplus income from the public entertainment licensing regime. Nothing could be further from the truth. I apologise in advance for boring the Committee with statistics that apply to a relatively small number of authorities—none the less, they make the point that we should not be overly prescriptive.
There are about 372 public entertainment licences in Westminster as a whole, two thirds of which are issued at a cost of £2,188 or less. About 31 per cent. of those PELs cost only £1,067 or less and only four venues in Westminster out of the 372 premises pay in excess of £20,000 for their PEL; we could all play a parlour game of guessing which they are, but I shall tell Committee members that they are the Royal Lancaster hotel, Westminster Central hall, the Hilton Metropole hotel and the Royal Albert hall. All those venues have extremely large capacities, and a frequency and variety of events that require robust enforcement. The notion that a set fee ceiling of about £2,000 or £3,000 would cover their costs flies in the face of fact. For instance, last year the Royal Albert hall paid the highest public entertainment licence fee of some £31,000, but for next year the licensing sub-committee of Westminster city council has reduced that to £18,000, having received various representations.
The Royal Albert hall has a capacity of 5,200, in excess of 1 million attendees to events annually and each year hosts 320 to 330 different events—almost one event per day on average. To ensure public safety, this world-renowned venue requires engineers from Westminster city council and licensing officers to visit at least weekly because of significant changes to scenery, stage and seating. Each visit usually requires a full day of officers' time, including at least four hours on site.
I have Westminster's statistics for the financial year just ended, on 5 April. It anticipates that public entertainment licences will provide a fee income of about £1,473,800 with expenditure of £1,794,300; in other words, there will be an operating loss of in excess of £300,000. The levels of fees are determined at present by a relatively straightforward formula that takes into account the capacity of the venue and the terminal hour.
The same sort of regime applies in the Royal Borough of Kensington and Chelsea, and similar statistics exist. The income fees of the tax year 2001–02 brought in £353,800, with expenditure of £376,000, so the deficit was in excess of £20,000. That local authority provided me with copious details to make it clear that the great costs incurred in officer time mean that although the fee regime might appear extremely generous compared with many other local authorities, it is not.
I hope that the Minister will give some thought to the amendment. Perhaps we will have to return on Report to whether we have the right mechanism for certain London authorities. That applies equally to Conservative authorities as to the stress areas of Camden, which also includes part of central London, and to a number of other London authorities that have real and distinct problems that are different from those envisaged under clause 55 in trying to introduce a fair and reasonable fee regime.
The Department for Culture, Media and Sport has said on numerous occasions that it will ensure that the centrally set application fee and an annual fee will cover all associated costs. That is a welcome assurance, but the Department must also recognise that there are
distinct problems in certain parts of the country. It is hard to envisage how the DCMS will come up with a ''one size fits all'' fee that does not involve local authorities making a loss or a profit.
Amendment No. 130 would still impose statutory regulations on fee setting so that there is certainty for business and to ensure that there is no suggestion of wild profits being made by a local authority, but it would also tightly control what may be charged for under the fee and how it should be calculated. Within those guidelines, local authorities will be able to set their own fee in consultation with licensees, residents and businesses. We hope that the outcome would be—to use a slightly vulgar phrase—a ''win, win, win'' scenario for licensees, residents and local authorities alike.
The rationale behind the amendment is straightforward and it was discussed in detail in another place. In Committee in the other place, Baroness Blackstone said that the Department was considering introducing a separate fee band for London and the south-east because of higher costs. That would be a step in the right direction, but that alone would not guarantee a fair licensing fee for local authorities and the licensees because there are several factors in determining licensing costs that can be determined only through self-determination—rather than by a regional-type scheme.
The two biggest factors are wage costs and travel expenses. Wage costs have an impact on every part of the application process, from policy development to inspections to enforcement and the actual process of applications. London weighting is an obvious example. There is a concern that if the Department calculated an average wage cost for the whole of England and Wales, London boroughs and metropolitan councils would lose money and rural councils with much lower wage costs would be able to make money.
On expenses, we accept that in more rural districts, where licensed premises are spread over a wide area, travel costs associated with inspection and enforcement will be far greater than they will be for inner city boroughs. Therefore, it is inappropriate for the Department to give a petrol allowance as part of the fee because many urban local authorities do not use such vehicles to get around.
There must be a sense of balance and there is a worry that a ''one size fits all'' approach would not produce the right result.