Clause 47 - Interim authority notice following death etc. of licence holder

Licensing Bill [Lords] – in a Public Bill Committee at 8:55 am on 29th April 2003.

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Photo of Malcolm Moss Malcolm Moss Conservative, North East Cambridgeshire 8:55 am, 29th April 2003

I beg to move amendment No. 276, in

clause 47, page 27, line 19, leave out 'seven' and insert 'ten'.

Photo of Roger Gale Roger Gale Vice-Chair, Conservative Party

With this it will be convenient to discuss the following:

Amendment No. 277, in

clause 47, page 27, line 42, leave out 'seven' and insert 'ten'.

Amendment No. 278, in

clause 47, page 28, line 17, leave out 'seven' and insert 'ten'.

Amendment No. 279, in

clause 47, page 28, line 18, leave out 'seven' and insert 'ten'.

Amendment No. 280, in

clause 47, page 28, line 23, leave out 'two' and insert 'three'.

Amendment No. 281, in

clause 48, page 28, line 37, leave out 'seven' and insert 'ten'.

Amendment No. 282, in

clause 48, page 28, line 43, leave out '48' and insert '96'.

Amendment No. 283, in

clause 48, page 29, line 1, after 'it', insert 'within 14 days'.

Amendment No. 285, in

clause 50, page 30, line 6, leave out 'seven' and insert 'ten'.

There is only one group of amendments to the clause. It is entirely up to the judgment of members of the Committee, but I am prepared to allow a fairly wide-ranging debate to take place along the usual terms. If that happens, there will be no stand part debate. I leave that for hon. Members to determine for themselves.

Photo of Malcolm Moss Malcolm Moss Conservative, North East Cambridgeshire

Thank you, Mr. Gale. Welcome back to the Chair after what, I hope, was a pleasant Easter break. The amendments are probing amendments. They deal with various time scales to test the Government's thinking behind the length of the periods set out in the Bill. They relate to clause 47, which deals with the interim authority notice following the death et cetera of a licence holder as defined by ''death, incapacity''—I suppose that that is mental incapacity—

''or insolvency of the holder''

under subsection (1)(a).

Such events are fairly traumatic and, one way or another, would throw the business into panic. The Bill allows seven days after such an event for the notice to be submitted. We argue that that period is probably on the tight side, in light of the circumstances that gave

rise to such events. A10-day period would give an extra three days, with perhaps a weekend in between, to allow people to collect their thoughts and take stock of the situation, for example, when a person has died or been admitted to hospital. It would give people time to adjust to such matters and to make the necessary arrangements as well as thinking about the serving of an interim notice. We want to elicit from the Government their reasons for wanting a period of seven days after a fairly traumatic event has happened.

Amendment No. 282 would increase the time between the chief officer of police receiving a copy of the interim authority notice and notifying the relevant licensing authority that he or she was duly satisfied. It would change the time from 48 hours to 96. We want to test why 48 hours is deemed to be appropriate. At present, our police force says that it is overworked and under great pressure. As we know, our constabularies suffer problems of one sort or another and to state, under the Bill, that they should react within 48 hours of receiving a notice seems a little on the tight side.

Let us consider the Easter break, when there was a holiday period of four days: Good Friday, the weekend and Easter Monday. Obviously, police officers do not down tools for the whole Easter period, but there would probably be fewer of them on duty and to say that they had to respond within 48 hours in such a holiday period would put undue and unreasonable pressure on them. Have the Government taken such matters into account?

Amendment No. 283 would impose a time limit of 14 days for a hearing to take place by a local authority under clause 48(3)(a), which states that the authority must hold a hearing to consider the notice

''unless the authority, the relevant person and the chief officer of police agree that a hearing is unnecessary''.

Time scales are imposed on everyone else, such as the person who must submit the interim authority notice and the police, but nothing in the Bill requires the local authority to respond within a particular time. Perhaps the Minister will enlighten me otherwise. Everyone else seems to be held to a time limit and the local authority should be, too.

The situation could be fairly tricky. The business may be in a period of hiatus and there may be questions about how it should continue, who would take over, and so forth. It seems unreasonable that the Bill provides no time limit within which the local authority should respond and hear the police objection. Perhaps the Minister will consider whether, in the interests of a speedy transition, it is necessary to impose a time limit within which a local authority should hold a hearing.

If the police object to an interim notice, a cloud of suspicion may hang over the head of the individual who wishes to take over and it is important that that be removed quickly and reasonably, for the success of the business.

Photo of Kim Howells Kim Howells Parliamentary Under-Secretary, Department for Culture, Media & Sport

I thank the hon. Member for North-East Cambridgeshire (Mr. Moss) for the spirit in which he moved the amendment. He was correct to frame it as he did. Such incidents are often traumatic for the family of the persons concerned and for

employees of the establishments. The system set out in the Bill is designed to benefit principally those sections of the industry that lease property to tenants, although the range of circumstances in which such arrangements might apply goes wider than that.

If a premises licence has lapsed due to the events set out in clause 47—the death, incapacity or insolvency of the licence holder—it may be reinstated so that its authorisation may be transferred to another individual, organisation, or an interim authority obtained, provided that the application is made within seven days of the lapse of the licence. That is a major improvement on the current system, whereby a full hearing before the licensing justices would be required for an interim authority. The time limit is sensible and has been set to minimise the impact of the unfortunate events on those who work at the premises. When the licence lapses, those employed at the premises will effectively be out of a job until the licence is reinstated by the means provided for in the clause.

The seven-day limit was chosen to strike a balance between allowing sufficient time for a bereaved relative, for example, to make an application and the interests of those who earn a living at the premises. Nevertheless, I understand fully what the hon. Gentleman said about the possible state of mind of the relatives at such a time. It is essential that the period of time is kept to a minimum, because the authorisation would essentially have gone with the unfortunate events leading to the lapse of the licence and any steps to put life back into the authorisation should be taken without delay. If there is a longer delay before the premises could again do business, much hardship may be caused to employees who, through no fault of their own, could find themselves unable to earn an income. There is likely to be some uncertainty for employees, even with a period of seven days. There would, however, be less uncertainty under the clause as it stands than with the extended limit proposed in the amendment.

I am sure that hon. Members would not wish to impose such privations on employees, some of whom may be at the lower end of the income spectrum of the licensed trade.

Photo of Malcolm Moss Malcolm Moss Conservative, North East Cambridgeshire

For clarification, is the Minister saying that as soon as a licence holder dies, for example, the business at the premises involved cannot carry on until the interim notice is filed and accepted? Does the business effectively close down on the death of the licence holder?

Photo of Kim Howells Kim Howells Parliamentary Under-Secretary, Department for Culture, Media & Sport

Yes, essentially that is what happens. Once the event has occurred, the permission is gone. That is why we have to act with a little more haste than that which might be allowed by the amendments.

Amendment No. 280 would extend the interim authority period—that is, the period after which the licence again lapses—from two months to three months. I understand why the hon. Gentleman thinks that such an extension might benefit the industry. I remind him that clause 47 also provides

that if a relevant transfer application is made before the end of the interim authority period—that sometimes happens when people are very ill or if it is thought that something traumatic will occur—the transfer of the licence to the applicant will have immediate interim effect, pending the determination of that application. The provisions in the Bill that relate to the reinstatement of licences are designed to allow businesses to react to unfortunate circumstances and to keep businesses in being pending the taking of long-term commercial decisions.

Two months is plenty of time for such an application to be made and I do not think that there is any need to extend the interim authority period. Two months is, of course, considerably longer than the 28 days given under current legislation for interim authority notices to be granted.

Photo of Malcolm Moss Malcolm Moss Conservative, North East Cambridgeshire

Is the Minister telling us that he, or his Department, has received representations from the industry to say that the 28 days allowed under law is insufficient? Did industry ask for that period to be doubled, or did it ask for three months?

Photo of Kim Howells Kim Howells Parliamentary Under-Secretary, Department for Culture, Media & Sport

As I understand it—we have had extensive consultation with the industry on the matter—we have had no objections to the period of a month. Perhaps the hon. Gentleman has been speaking to other parts of the industry and those discussions are what lie behind his amendments. I accept that, but I can only give him that answer.

Amendment No. 283 would require that, if the chief officer of police told the licensing authority that he was satisfied that the interim authority notice should be cancelled, to prevent the crime prevention objective from being undermined, the licensing authority would be required to hold a hearing within 14 days. That is unless the authority, the relevant person, and the police agree that a hearing is unnecessary. I presume that the amendment was tabled because hon. Members are concerned that a hearing could be put off indefinitely—indeed, I think that that is the point that the hon. Gentleman was making—and that the police notice would therefore be ineffective. I agree entirely that that would be an unacceptable state of affairs and I assure hon. Members that the Secretary of State will use her powers under clause 180 to make regulations relating to the procedures for hearings, and that we will put a limit on the time that can be taken for hearings on interim authority notices following police objections.

With those undertakings, I hope that hon. Members are reassured and feel able to withdraw the amendment and that they will not press the other probing amendments grouped with it.

Photo of Mark Field Mark Field Conservative, Cities of London and Westminster

I have consulted with my esteemed colleague, my hon. Friend the Member for Isle of Wight (Mr. Turner), and wonder what would happen in an insolvency situation. Will the Minister say a few words about how the system would operate if a company were going bust, or if a person was involved in a receivership or went bankrupt? Clearly, in a corporate liquidation, an administrator might be appointed, and one of their most important duties

would be to maintain the business as a going concern. Although we appreciate that there is a distinction between a business and a licence that is in personal hands there are complications, particularly in relation to strict time limits. Has the Minister anything to say on how this would operate in practical terms?

Photo of Kim Howells Kim Howells Parliamentary Under-Secretary, Department for Culture, Media & Sport

There are strict regulations that deal with the insolvency of any commercial company. In this case, there are ramifications that may not exist for other companies: some of them are included in the principal objectives of the Bill and, because they involve alcohol and the possibility of a house being an unruly place or public disorder taking place as a direct consequence of the sale of alcohol, these procedures would come into play specifically in relation to licensed premises. This deals with licensed premises rather than generally with insolvency law.

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight

I was interested to hear the Minister's reply to my hon. Friend the Member for Cities of London and Westminster (Mr. Field) on that matter. We are talking once again at the extreme end of things if we talk only about premises on which alcohol is sold. These licences cover a whole range of events, including morris dancing in pub car parks—or, indeed, in school car parks, when no alcohol is for sale. I am concerned about whether the lapse of a licence on the insolvency of an individual licence holder would render it impossible, until the interim authority is given, for the activity to continue, even if it were at the lowest end of the scale: I think that that was the purpose of my hon. Friend's intervention.

There is another question, which relates to death. I appreciate that that cannot necessarily be planned. [Interruption.] It may be planned in the constituency of the hon. Member for North Durham (Mr. Jones), but it is not usually planned in mine. People make a range of arrangements in the event of death, or mental incapacity, including the use of the enduring powers of attorney that are mentioned in clause 27(1). Has the Minister explored alternative arrangements to this complex one of an interim authority having to be procured during which period the business cannot operate? In almost any other area of business one would expect the business to continue to operate. Is the business which is licensed in every case of such extreme danger to the public that it is necessary for it to cease to function?

The Minister pointed out that people actually lose their jobs on the death of a licensee. I would have thought that that was something that we would wish to protect them against altogether, rather than merely for as short a period as possible. I appreciate why the Minister is unhappy with the amendments to extend the period from seven to 10 days, but I would have thought that we could find a way to protect altogether the jobs of those who work for, for example, a publican, or of those who put on dances or events of a similar nature. Has the Minister explored alternatives? If so, what are the conclusions of those explorations—what are the alternatives and why has he rejected them?

Photo of Kim Howells Kim Howells Parliamentary Under-Secretary, Department for Culture, Media & Sport

As far as I am aware, I have not rejected anything at the moment. I intended to answer

a question that was raised by the hon. Member for North-East Cambridgeshire. It was a specific question and I did not know the answer at the time, but I know it now. The Interpretation Act 1978 will apply to the Bill and deals with calculations of time periods which would allow for public holidays. Regulations will also deal with time limits for the licensing authority's response. I was indeed a little perplexed about what would have happened if, on the Friday before the Easter weekend, a traumatic event had occurred.

The hon. Member for Isle of Wight asked me about insolvency. It is true that insolvency would lead to the lapse of a premises licence. There is no hierarchy of activity; activity is either licensable or not, and that is a problem. However, an administrator can apply for an interim authority notice. The hon. Gentleman has got to the nub of problem, as the speed of the process is important.

Photo of Malcolm Moss Malcolm Moss Conservative, North East Cambridgeshire 9:15 am, 29th April 2003

On the question about insolvency from my hon. Friend the Member for Isle of Wight, it is obviously in the interests of a business, or the person who wishes to take over a business, to get the interim notice through as quickly as possible to avoid delay. The pressure is therefore on the individual. Why, then, is there a limit of seven days? Why would the state or the Government want to set a time limit on the speed of operations? It is not in the interests of the state whether the business is up and running in one day or 10 days, so why, in reversing my earlier argument, has a limit of seven days been imposed at all?

Photo of Kim Howells Kim Howells Parliamentary Under-Secretary, Department for Culture, Media & Sport

I have tried to explain that we want to limit as far as possible the period of uncertainty in an industry that employs a large number of people in this country. The hon. Gentleman might think that seven days is an arbitrary figure, and that it could be 10 or 14 days. I have tried to argue—the hon. Member for Isle of Wight argued the same—that from the views that we have heard from the industry, seven days creates a sensible balance. Given the other guarantees that I have tried to make clear to hon. Members, that period is for the business in question to seek an interim authority and reassemble itself.

Photo of Malcolm Moss Malcolm Moss Conservative, North East Cambridgeshire

So, if that business fails within the seven-day period to submit an application for the interim notice, what happens? How does the business go about resurrecting itself after those seven days?

Photo of Kim Howells Kim Howells Parliamentary Under-Secretary, Department for Culture, Media & Sport

The business would have to apply for a new licence and follow procedures. The interim authority arrangement gives that business the opportunity of some continuity, and it does not involve a long application—at least, we assume that it would not. I want to answer the question about what would happen if there were a death, which was put by the hon. Member for Isle of Wight—I am intrigued by the possibility that deaths can be arranged in the Isle of Wight.

Photo of Kim Howells Kim Howells Parliamentary Under-Secretary, Department for Culture, Media & Sport

Or in North Durham.

The authority of the licence is personal to the holder, so if the holder dies, or becomes incapable through mental incapacity or insolvency, no authority

exists to carry on business activities. However, interim authorities have immediate effect, which is the point that I have been trying to make to the hon. Member for North-East Cambridgeshire. The fact that they have immediate effect is beneficial; it will be good for the business and the employers.

Photo of Andrew Turner Andrew Turner Conservative, Isle of Wight

Can the Minister tell me whether an interim authority can be applied for, or at least prepared for, in advance of death?

Photo of Kim Howells Kim Howells Parliamentary Under-Secretary, Department for Culture, Media & Sport

Not as far as I know. I think that the traumatic event must first take place. However, as with any other area of business, if things appear to be drifting, an astute manager or associates will make the types of preparation at which the hon. Gentleman is hinting.

Photo of Mark Hoban Mark Hoban Opposition Whip (Commons)

I want to ask about the process relating to insolvency. When a business goes into receivership, there is often a period during which the administrator tries to sell it. Would the administrator be required at any time to have a personal licence to continue the trade of the pub, night club or whatever, until the point at which he sells the business to another purchaser?

Photo of Kim Howells Kim Howells Parliamentary Under-Secretary, Department for Culture, Media & Sport

As I said, the administrator can apply for an interim authority notice, which gives him the right to continue the business. As the hon. Gentleman says, the licence essentially gives the administrator the opportunity to say, ''Look, here we have a going concern and it should continue.'' That sometimes happens. Recently, I was talking to members of the industry about such situations and they were most concerned that there should be the minimum of interruption to the business's operations. That is why we are sticking with seven days, rather than changing the figure to 10 or anything else. Seven is the right balance.

I should like to nuance something that I said to the hon. Member for Isle of Wight earlier: if there is mental incapacity, there is nothing to prevent the licence from being transferred, whether that had been arranged or not, even though the person has not died.

Photo of Malcolm Moss Malcolm Moss Conservative, North East Cambridgeshire

I am grateful to the Minister for his detailed explanations and I am generally satisfied by the arguments that he has put for the Government's case for the Bill. However, there is one exception, which relates to the local authority responding within a time scale by holding a hearing of objections that have been raised by the chief officer of police. The Minister sought to assure us that that would be dealt with by the Secretary of State under clause 180 and by regulations pertaining to the giving of hearings. However, clause 180 does not refer to a time scale, so we are left with a promise from the Minister that the situation will be dealt with at some unknown time.

Photo of Kim Howells Kim Howells Parliamentary Under-Secretary, Department for Culture, Media & Sport

The hon. Gentleman is right. I have always been sceptical about not tackling such issues in the Bill. However, I give him the reassurance that we need that flexibility in this case because if regulations that are introduced are seen not to work, we ought to be able to change them quickly so that they respond to

the needs of industry and employees and the licence holder if it is a small business.

Photo of Malcolm Moss Malcolm Moss Conservative, North East Cambridgeshire

Will the Minister give us a steer as to his thinking? Does he think that a time scale of 14 days is appropriate or acceptable? I understand that he wants to build in flexibility, but there should be some definitive time scale within which the hearing takes place. Will he share with us any thoughts that he has had up to now about the appropriate time scale?

Photo of Kim Howells Kim Howells Parliamentary Under-Secretary, Department for Culture, Media & Sport

As the hon. Gentleman knows, I am not good at sharing confidential information with the Committee, but I can tell him that he is in the right area. We have to think about the job that the local authority and the applicant will have in marshalling their cases.

Photo of Malcolm Moss Malcolm Moss Conservative, North East Cambridgeshire

Given that we will not reach clause 180 until our last or last but one sitting on 20 May, there is a lot of time between now and then for the Minister to hold any necessary meetings. At least when we reach that clause, he will then be able to give us the assurance that he has honed his thinking. We are not asking the Minister for trade secrets, we are simply asking him to put some flesh on the bones of the promise he made to the Committee. I am happy to withdraw the amendments, but when we get to clause 180 we will focus on the assurances that the Minister has given us. We hope that some serious thinking happens before then, so we know where we stand before the Bill leaves Committee.

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendments made: No. 46, in

clause 47, page 27, line 31, at end insert 'or'.

No. 47, in

clause 47, page 27, line 33, leave out 'or'.

No. 14, in

clause 47, page 27, line 34, leave out paragraph (d).—[Dr. Howells.]

Clause 47, as amended, ordered to stand part of the Bill.

Clause 48 ordered to stand part of the Bill.