Schedule 11
Legal Services Bill [Lords]
10:00 am
Bridget Prentice (Parliamentary Under-Secretary, Ministry of Justice; Lewisham East, Labour)
It is a very tempting thought that consumerists across the divide should get together. I do not know whether this is meant to be just a probing amendment, but I am rather surprised by it, because this matter was fully dealt with in the other place. I thought that the position was understood and that it had been accepted that the Bill—particularly schedule 11—gives the flexibility that the amendment is designed to achieve.
It is reasonable to expect a licensing authority to charge for the full cost of processing applications, whether or not the application is successful. As the hon. Member for North Southwark and Bermondsey said, some applications will generate a great deal more work than others, and that will depend on the nature of the body making the application. The megastore mentioned by the hon. Member for Huntingdon that wants to operate in various locations will clearly need more consideration than a single firm operating in one place.
The amendment also mentions the fee being payable whether or not the application succeeds. It is important that the fee is payable regardless of the success of the application, otherwise there may be a temptation on the authority to grant an application where it really ought not do so. Non-refundable application fees are pretty common in many walks of life and I see no reason why it should be any different here.
If the full costs were not charged in each case, one firm could end up subsidising another. That could create some problems. For example, it might make the authority unattractive to firms if their fees were disproportionately high, and in that event they might seek licences from another authority. There is nothing particularly wrong with that in principle—the reforms are in part about regulatory choice—but it might well have a knock-on effect on the authority itself if there were fewer applicants, each of whom would effectively be paying a discounted rate. The licensing authority could lose money as a result, and I am not sure that that is what we want.
The Bill already addresses the issues that the hon. Gentlemen have raised. It gives flexibility to the licensing authorities in how fees are set. The fee levels and their effects on legal services mark-up will obviously be monitored by the board. Fee levels form part of the licensing rules, which for example could set individual fees based on the amount of work that individual applications were estimated to need. All those would have to be acceptable to the board before it would put forward a regulator for designation as a licensing authority. If the board is concerned about the effects on smaller firms or on competition, it can require changes or decline to recommend designation.
Given that what he is seeking is already achieved by schedule 11 paragraph (1) and by a number of other safeguards and flexible provisions in the Bill, I ask the hon. Member for Huntingdon to withdraw the amendment.