Mr Malcolm Moss (North East Cambridgeshire, Conservative)

I beg to move amendment No. 304, in

clause 64, page 37, line 13, leave out subsection (4).

Amendment No. 304 would take out subsection (4) and is a probing amendment. As it stands, subsection (4) would prevent any individual from deriving financial benefit from the supply of alcohol by or on behalf of club members or guests with the exceptions of

''any benefit accruing to the club as a whole, or any benefit which a person derives indirectly by reason of the supply giving rise or contributing to a general gain from the carrying on of the club.''

Exactly what or who is that designed to protect? In an earlier answer to my hon. Friend the Member for Fareham, the Minister said that there might be individuals out there who could profit by supplying a club. If a club committee deemed that it was getting a good deal in its own right that benefited its members, it is unreasonable and unnecessary that under this legislation the individual or individuals who might be supplying the club should not be able to do so. The onus is on the club and the club's committee to ensure that it runs a proper and efficient club for its members. As we know from annual general meetings, if committee members have not pulled their weight and done their work, those who will happily take on that mantle replace them. It should be entirely up to the club to decide whether any individual or group should benefit from supplying alcohol.

Many clubs have a bar steward who lives on and looks after the premises. They receive payment and may be said to profit from the sale of alcohol. In many cases, there may be a link between the profits of the club and the remuneration of that individual. Does that fall foul of clause 64(4)? Are such arrangements illegal, or will they be illegal under the Bill? Answers to those questions would be helpful.

Dr Kim Howells (Parliamentary Under-Secretary, Department for Culture, Media & Sport; Pontypridd, Labour)

Clause 64 sets out the additional conditions that a qualifying club must satisfy for the supply of alcohol. Additional condition 3, which is set out in subsection (4), is that

''no arrangements are, or are intended to be, made for any person directly or indirectly to derive any pecuniary benefit from the supply of alcohol by or on behalf of the club to members or guests, apart from—

(a) any benefit accruing to the club as a whole, or

(b) any benefit which a person derives indirectly by reason of the supply giving rise or contributing to a general gain from the carrying on of the club.''

Amendment No. 304 would undermine completely the basis for distinguishing between the use of licensed premises and qualifying club premises. A key reason for preserving the special position of the club movement is the way alcohol is supplied to members of clubs. The critical point is that they club together to purchase the stock. They do not purchase alcohol from the club—as members, they already own it—but it is supplied to them by or on behalf of the club. It is true that money changes hands, but that is to ensure equity among members in the distribution of the alcohol that has been purchased for club use. I shall give an example to make that clear. The procedures are designed to be fair to Joe, who drinks six pints a week, and Harry, who drinks 10. Obviously, they are both moderate drinkers. No profit is made by anyone involved in the supply.

Amendment No. 304 would allow a profit to be made and would render a qualifying club indistinguishable from a commercial entity applying for a licence in respect of any premises such as, for example, a pub or a nightclub. It would remove entirely the justification for special treatment under the Bill. It would allow anyone to set up as a proprietary club and to benefit from the lighter controls that apply to qualifying not-for-profit clubs, from which they benefit as a result of their special nature. The amendment would allow clubs to sell alcohol without a personal licence holder or designated premises supervisor. They would be in direct competition with pubs and other licensed premises, from which they would be more or less indistinguishable.

The condition that prevents an individual from making a profit from the supply of alcohol is a key safeguard for local residents, protects the industry from unfair competition and, critically, provides a basis for the preservation and continuation of the special status of not-for-profit qualifying clubs. On that basis, I hope that the hon. Gentleman will withdraw the amendment.

Mr Andrew Turner (Isle of Wight, Conservative)

I am concerned by the Minister's response to the comments of my hon. Friend the Member for North-East Cambridgeshire. If I give an illustration, perhaps the Minister will tell me whether I again have the wrong end of the stick.

A club has a steward and its members own the alcohol. The steward enjoys a bonus, depending on lettings of club premises, some of which may be for dominoes matches or private dinners. [Interruption.] I was not going to suggest such an activity. At some of those gatherings, alcohol may be served. Is that ruled out by subsection (4)?

Additionally, there may be an arrangement whereby even without any such lettings—where only members are concerned—the steward gains pecuniary advantage depending on the volume of alcohol sold. Most clubs recognise that one of the ways they can build up their facilities and improve the service that they offer to members is to make a profit from the sale of alcohol. Perhaps it was even the profit from the sale of alcohol that enabled the Conservative club to which

the Minister referred to furnish the use of snooker facilities for those who may not even have been Conservatives. It is reasonable to reward a steward for that sort of benefit, which derives from increasing the volume of sales, but that appears to be ruled out under subsection (4). Have I got that wrong?

Dr Kim Howells (Parliamentary Under-Secretary, Department for Culture, Media & Sport; Pontypridd, Labour)

I fear that the hon. Gentleman has got it wrong.

I meant to answer the questions of the hon. Member for North-East Cambridgeshire about bar stewards, who profit from their labour via their employment by the club and not from the supply of alcohol per se. The club may enter into some arrangement with the steward about bonuses, but that is not what is being dealt with. The Bill does not prevent a club from employing a bar steward and the contracts between clubs and bar stewards are many and various. There was a time—I am sure that this is no longer the case—when the great problem with bar stewards was making sure that they did not run off in January with the takings and the barmaid. We lost quite a few in south Wales at one time—not, as far as I can remember, from the Con. club in Hirwaun—I cannot remember whether it was the Constitutional club or the Conservative club and I do not want to get the title wrong.

Mr Andrew Turner (Isle of Wight, Conservative)

Does the Minister accept that Constitutional club is a term that is often used by Conservative clubs that may wish, for reasons best known to those in the locality, to conceal their exact political affiliation?

Dr Kim Howells (Parliamentary Under-Secretary, Department for Culture, Media & Sport; Pontypridd, Labour)

In the case of Hirwaun, it was a thin disguise.

Mr Mark Hoban (Fareham, Conservative)

I am sorry to prolong procedures. I want to return to one of the benefits of joining a club: getting some mutual benefit from membership. Someone might identify a person who could acquire on their behalf beer at a cheaper price—many people join clubs for cheaper beer as well for fellowship and comradeship—and the club committee might decide to split the saving between the person who found the source of cheaper alcohol and the club members. That would be precluded under the Bill.

On the comment made by my hon. Friend the Member for Isle of Wight (Mr. Turner) about relationships between the steward and the club and its members, the explanatory notes state:

''nobody should receive at the expense of the club a commission or percentage deriving from purchase of alcohol''.

A steward might increase alcohol sales and be rewarded on a commission basis for that increase. Based on the explanatory notes, it appears that that sort of arrangement, as opposed to a pure bonus arrangement, would be outlawed by subsection (4). My hon. Friend's amendment would resolve two or three of the problems associated with the way in which subsection (4) could operate in practice. It would simply eliminate the subsection. Furthermore, if it were demonstrated that a club was being conducted, and had been established in the first place in good faith, why would the additional condition be needed?

Clearly, the club would have demonstrated to the licensing authority that it was well run, for the benefit of members and not the committee or others.

Dr Kim Howells (Parliamentary Under-Secretary, Department for Culture, Media & Sport; Pontypridd, Labour)

I have nothing to add beyond the explanation that I gave and clearly I did not convince the hon. Gentleman.

I could add a little extra in response to the hon. Member for Isle of Wight, who talked about the letting out of club premises. If a club hired out its premises for licensable activities other than qualifying club activities—the hon. Gentleman listed some possible ones—a premises licence would be required, which is different from the qualifying club permission. Use of premises under the authority of the premises licence does not carry a condition relating to profit, so the situation would be different.

Mr Malcolm Moss (North East Cambridgeshire, Conservative)

I am still not convinced by the Minister's argument. He said that it was all right to pay stewards a bonus. He did not rule out whether that bonus was tied—as my hon. Friend the Member for Fareham implied—to the volume of alcohol supplied because technically it is not sold in a club but supplied across the counter. The more that is supplied, the more there is a margin of profit for the club that it could reinvest in its premises: its pool tables and so on. Most clubs need good alcohol sales to render their clubs successful and make them dynamic entities. It is their main source of income.

The Minister has not ruled out any correlation between a steward's bonus and the volume of alcohol sales that may go through that club in any given year. Re-reading subsection (3), the key words seem to be the last three at the end: ''by the club''. It refers to purchases of alcohol by the club, not in the club or by club members. There is a Chinese wall between the club on one side and whatever takes place within those walls, and what happens outside in the commercial sense that alcohol is purchased by the club in the first place. The clause says that no person may benefit and I do not understand that.

Dr Kim Howells (Parliamentary Under-Secretary, Department for Culture, Media & Sport; Pontypridd, Labour)

The matter centres on the business of the steward and his relationship with the club. If the individual involved is a member of a club, he or she could not profit from the supply of alcohol in the way that the hon. Gentleman suggests. The savings could be put back into the club as a whole, but that is different.

Mr Malcolm Moss (North East Cambridgeshire, Conservative)

Yes, that is different. I see that the Minister has some more information that may be the answer to the second question that I put to him, relating to the words ''by the club'', the Chinese wall, and the movement of the purchase of alcohol by the club from an individual. The clause seems to be saying that if the individual supplying the alcohol outside the club happens to be a member that cannot take place because the alcohol has been purchased by the club not within it.

Dr Kim Howells (Parliamentary Under-Secretary, Department for Culture, Media & Sport; Pontypridd, Labour)

The committee that runs the club will have a policy about the purchase of alcohol. The bar steward is an employee and he or she is not in a position to influence club policy on the supply of

alcohol. A member can seek election to the committee and if that person made some private profit out of such action that would constitute the difference to which I alluded. That is what the hon. Gentleman seems to misunderstand. The steward can be an employee and may be a member of the club. If he is a member of the club, that would cast a different light on the issue.

Mr Malcolm Moss (North East Cambridgeshire, Conservative)

I am grateful to the Minister for making another attempt to clarify the question. I am not convinced that even now I understand exactly what he is getting at, but that might be due to the time of day and my own difficulties. We may return to the matter at a later stage, but in the mean time, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr Malcolm Moss (North East Cambridgeshire, Conservative)

I beg to move amendment No. 206, in

clause 64, page 37, line 20, at end insert—

'(5) For the purposes of subsection (2) a committee shall be deemed to be elected by members of the club if it is a subcommittee appointed by and from the club's main committee without any co-opted members, provided that a person who is co-opted to fill a casual vacancy as a substitute in place of an elected member (or in place of any such substitute) for the remainder of the term of that elected member, and no longer, shall be deemed to be elected.'.{**w43**}

The amendment is lengthy. It would clear up an implication in the clause that it may be necessary directly to elect a committee to deal with the supply of alcohol for club premises. That is not consistent with usual practice whereby one primary committee is directly elected, often at an annual general meeting, and the powers are delegated to a group or sub-committee dealing with alcohol matters. It is not usually the case that more than one committee need be directly elected by the club or society's membership. Not only does that defy the Government's assertions that the Bill provides flexibility and accountability for the bodies concerned, it would also require much amending and changing of club constitutions throughout the country. It would be interesting to know whether the Minister has had representations from clubs on the implications of the relevant subsection of the clause.

Our amendment would uphold the provisions established under schedule 7 of the 1964 Act and would prevent additional complication for club members. It would also maintain the provision that members of any sub-committee are subject to the age restriction of 18 years of age.

Dr Kim Howells (Parliamentary Under-Secretary, Department for Culture, Media & Sport; Pontypridd, Labour)

The clause provides that additional conditions to those set out in clause 62 must be satisfied if the club is to supply alcohol to its members or their guests. The first condition in subsection (2) is that

''the purchase of alcohol for the club, and the supply of alcohol by the club, are managed by a committee whose members . . . are members of the club'',

are at least 18 years old and

''are elected by the members of the club.''

Amendment No. 206 would provide that under subsection (2) a committee would be deemed to be elected by club members if it were a sub-committee appointed by and from the club's main committee without any co-opted members. A person co-opted to

fill a casual vacancy as a substitute in place of an elected member, or in place of any such substitute, for the remainder of the term of the elected member and no longer would be deemed elected. The amendment would allow non-elected members to be part of the committee managing the purchase and supply of alcohol.

The amendment is unnecessary. Nothing in the Bill would prevent the committee responsible for managing the purchase and supply of alcohol from delegating its work to sub-committees or non-elected members, depending on anything in the rules of the club that might control such delegation and provided that the elected committee was still managing the purchase and supply of alcohol. The important principle that must be maintained is that the committee, which is elected by members, has ultimate responsibility for such issues.

If the amendment is an honest attempt to allow for sensible working practices in clubs, I can assure the Committee that it is not needed. If it is an attempt to allow the elected committee to offload its responsibilities on unelected members, it is unacceptable. Either way, I ask the hon. Gentleman to withdraw the amendment.

Mr Malcolm Moss (North East Cambridgeshire, Conservative)

Amendment No. 206 adds constructively to the Bill. It clearly sets out the options available to the club committee on dealing with the requirements in the clause. I see no reason why that should complicate the situation; in fact, it clarifies it and I am surprised that the Minister does not see fit to take it on board. It is meant to be constructive. It enables clubs to set up sub-committees and to co-opt people on to them in an appropriate way, so that there is always a body that is deemed to be responsible for the provision or supply of alcohol by the club.

We are not in any way affecting the requirements of subsection (2) that the committee's members,

''(a) are members of the club;

(b) have attained the age of 18 years; and

(c) are elected by the members of the club.''

I see no reason why the amendment should be rejected because it clarifies what could be achieved. Unless the Minister can give me some more assurances, I will press the amendment to a Division.

Question put, That the amendment be made:—

The Committee divided: Ayes 4, Noes 8.