Memorandum prepared by The Department for Culture,
Media and Sport (dated 27 September 2001)
1. This memorandum replies to the points raised
by the Clerk to the Select Committee on Deregulation and Regulatory
Reform in his letter of 19 July concerning the draft Regulatory
Reform (Special Occasions Licensing) Order 2001. It addresses
the points made by the Clerk on behalf of the Committee in the
order his letter took them.
I Title of the draft Order
2. The title of "Special
was chosen for the draft Order because it was intended that further
proposals concerning the Golden Jubilee and possibly, subject
to our review of New Year's
Eve 2001, subsequent New Years'
Eves should be given effect by amendments to the Special Occasions
Order, and not by amendment of the Licensing Act 1964 itself.
The Government did not comment on this in the Explanatory Statement
because the legal issues surrounding this matter do not arise
in the context of the draft Order currently before the Committee,
but would arise when the Government presented its proposal concerning
the Golden Jubilee licensing hours. As was explained in the Department's
letter to the Clerk to the House of Lords'
Delegated Powers and Regulatory Reform Committee, we understand
desire to resolve this issue now because of its potential impact
on the Government's
proposal to relax licensing hours during the Golden Jubilee. The
legal issues in question were raised by the Committee in point
II The "two
(Section 1(4) of the Regulatory Reform Act 2001)
3. The Government is grateful to the Committee
for setting out its concerns that the effect of section 1(4) of
the Regulatory Reform Act 2001 could preclude a future Regulatory
Reform Order from relaxing licensing laws at the Queen's
Golden Jubilee. We consider however that the Special Occasions
Order enables a future Regulatory Reform Order which amended licensing
hours on that occasion to be drafted in such a way that it would
not fall foul of the restriction in section 1(4). The essence
of our argument is that the Special Occasions Order transfers
the burden of restricted hours currently contained in Part III
of the 1964 Act into the Special Occasions Order itself: a future
Regulatory Reform Order would operate not by amendment of the
1964 Act, but by amendment of the 2001 Order. This is permitted
under section 1(2) and (4) of the Regulatory Reform Act.
4. We would concede that the approach described
i.e. drafting in such a way that a future order can operate by
amending the free-standing Regulatory Reform Order, rather than
by amending the 1964 Act B
is a device which is necessitated by the need to avoid falling
foul of the provisions of section 1(4). But we submit that this
Order is fully within the spirit, as well as the letter, of section
1(4). That provision was inserted in the 2001 Act at Lords'
Committee stage so as to discourage any temptation for primary
legislation to be over-hastily drafted in reliance on the fact
that mistakes could be put right later. But the mischief which
the provision is intended to prevent would not arise if Parliament
approved legislation establishing a procedure by which licensing
laws could be relaxed on special occasions, with the express intention
that Parliament could subsequently prescribe other such occasions.
The Golden Jubilee is manifestly a unique occasion and it seems
clear that a Regulatory Reform Order which makes provision for
relaxations of licensing law at New Year does not raise issues
over which relaxations, if any, are appropriate for the Golden
Jubilee. An amendment to the 1964 Act in relation to a particular
day does not affect its operation in relation to another day.
It therefore seems legitimate to make two such Regulatory Reform
Orders within two years of each other, and it is proper and acceptable
to proceed by amendment of a free-standing order.
5. In response to these concerns we would be
happy to redraft the Order before it is laid before Parliament,
if the Committee thinks it would be helpful, to make it clearer
that it is the Order rather than the Act which imposes a burden.
We envisage that the Order could be redrafted so that it relaxes
the permitted hours on all New Years, but so that it also imposes
a limitation by providing that the relaxation will not apply to
years after 2001.
6. The Committee argues that the Order will be
spent after 31 December 2001, and therefore will not impose a
burden thereafter. However, we submit that the Order will not
be spent but will continue to have force. After 1 January 2002
the new section 83A of the 1964 Act will remain on the statute
book. This section provides that where the Order applies, the
permitted hours are to be extended in accordance with the Order.
The Order, too, will still be live both because it will continue
to contain a restriction in article 3, which limits the application
of the Special Occasions licensing hours to 31st December
2001 only, and also in the sense that its provisions setting out
the Special Occasions licensing hours are capable of being applied
to future occasions. The position will effectively be similar
to what would pertain if the Order contained a (sub-delegated)
power allowing the Secretary of State to prescribe that the special
occasions relaxations applied on future dates. We have not adopted
that drafting approach, because it is not covered by previous
consultation and because we consider it appropriate that the designation
of future special occasions should be scrutinised by the Parliamentary
Committees of each House. There seems very little distinction
between an Order containing such a power and an Order without
such a power but which it is intended should be amended under
the existing power in the 2001 Act.
7. As a further indication that the Order will
continue to impose a burden after New Year's
Eve, we would point to the title of the Order, which indicates
that it is concerned with special occasions in general, not merely
8. Again, we would be happy to consider ways
of redrafting the Order to make it clearer that the Order will
continue to have life after 1 January 2002, if the Committee considers
that that would be helpful.
9. In response to an argument that a future Order
would effectively be amending the law contained in Part III of
the 1964 Act (which prohibits the sale or supply of alcohol outside
the permitted hours) rather than amending the restrictions in
the Order, we would observe that the wording of section 1(4) offers
a certain latitude. What is prohibited is the reform of the law
contained in "any
of an Act if "that
has been amended. Section 1(4) could have said
order under this section may be made for the purpose of reforming
the law contained in any provision of an Act if that law has been
10. This would have more clearly precluded two
successive amendments to any provisions relating to the permitted
hours. But instead, section 1(4) applies only if the same provision
has already been amended. We acknowledge that section 1(4) must
be read as relating to the substantive reform of burdens in legislation,
rather than being unduly limited to the textual amendment of particular
provisions. But we nevertheless maintain that even if the law
read as a whole relating to the prohibition on the sale or supply
of alcohol outside the permitted hours had already been amended,
section 1(4) would apply only to prevent a second successive amendment
to the same provision.
11. Moreover we submit that a "provision"
of an Act means a section or a Schedule, or any division or sub-division
thereof. (Although we have not found any express judicial authority
for this assertion, in the absence of any contrary authority we
submit that this is the usual meaning of that word and should
be applied in this context.) A Part or a Chapter of an Act, by
contrast, is a grouping of provisions. So we do not think that
the restriction in section 1(4) would prevent a future Regulatory
Reform Order being made merely because it reformed the law contained
in Part III of the 1964 Act. Only if a future Order amended the
same provision within that Part would section 1(4) bite.
III Consultation with Members of Parliament
12. Prior to publishing a consultation document,
consideration is always given as to who should be directly consulted.
Such consideration has always turned on the requirements of the
Deregulation and Contracting Out Act 1994 and more recently, the
Regulatory Reform Act 2001, the nature of the proposal made, any
groups or individuals on which it could be expected to have any
kind of impact, and those who have previously indicated an interest
in amendments to licensing law. We have particular regard to those
who may consider themselves to be adversely affected by any proposal.
In addition, we have built up knowledge from previous consultation
exercises, seminars, meetings, general correspondence and responses
to the White Paper on licensing reform of which groups are likely
to have anxieties about such proposals. We also issue press notices
about the consultation to generate awareness and publish the document
on the Departmental website to improve accessibility. Our aim
is always to be as inclusive as possible, rather than exclusive,
and to follow guidance, issued by the Cabinet Office from time
to time, on consultation exercises such as the Code of Practice
on Written Consultations and the specific material on Regulatory
Reform Order consultations, which Cabinet Office Ministers tabled
as advice for Departments during the Commons Committee stages
of the Bill and which will shortly be updated and published on
the Regulatory Impact Unit website.
13. The issue of specific consultation with Members
of Parliament was not raised during the extensive debates on the
Bill's consultation provisions and in relation to proposed RROs
of much larger consequence.
14. On this occasion, we were also aware that
in their Third Report of the 1998-1999 Parliamentary Session,
published on 15 June 1999, the House of Commons Deregulation Committee
had suggested that that proposal was of such significance to have
justified sending it to all Members of Parliament. However, the
proposal included in the consultation document published in November
1998 was, in our view, of much greater significance than that
proposed on this occasion. The proposal in 1998:
was the first to advocate a period of up to 36 hours continuous
opening between New Year's
Eve and New Year's
included the option of making a permanent change in the licensing
laws of England and Wales in respect of Millennium Eve and all
subsequent New Year's
15. Whereas the consultation document published
on 19 March this year was judged to be less significant because:
it proposed only a test of such arrangements on a single
Eve in 2001, with further proposals only to be brought forward
if the impact of the Order was beneficial;
no permanent change to licensing law would be given effect;
a further consultation would have to take place before any
permanent changes could be introduced; and
the Golden Jubilee proposal would have a similar temporary
effect on one night, and the relaxation of only two hours would
not be disimilar to the impact of special orders of exemptions
and special hours certificates on such nights normally.
16. It has not been our normal practice to consult
individually each Member of Parliament as part of every deregulation
or regulatory reform public consultation. In the past, we have
done so exceptionally only when a very significant and permanent
change to alcohol licensing law is being proposed. In considering
this matter, we were also aware that:
copies of consultation documents are always placed in the
Library of the House on publication which is announced by press
notice; and that
both the 1994 and 2001 Acts provide for the necessary Parliamentary
scrutiny to be conducted by Committees elected by each House for
that purpose. Each House then receives the recommendations and
advice of their Committee before Parliament considers any proposal
and votes on whether to approve the proposed Order.
17. If the Committee conclude that all individual
Members of Parliament should be directly consulted on all regulatory
reform proposals, the DCMS is prepared to give an undertaking
now that this will be done in respect of all its future proposals.
IV Premises affected
18. The figure of 134,000 premises comprises
all on-licensed premises (about 111,000) and all non-profit
making registered members'
clubs (about 23,000), which include for example, Labour, Liberal
and Conservative clubs, working men's
clubs, Royal British Legion, armed forces clubs and a range of
sports clubs. Under the terms of the Licensing Act 1964, these
clubs are also subject to permitted licensing hours. Our advice
from industry is that virtually all 134,000 premises would normally
seek a special order of exemption allowing them to sell or supply
alcohol later than usual on a New Year's
Eve when most hold some form of special celebration. The saving
million, which is explained in more detail in Annex C to the Explanatory
Statement, relates to this position.
19. Our advice from industry is that the vast
majority of licence holders and clubs would not have considered
applying for special orders of exemption until the Committees
of each House had issued their first reports on this proposal
in November. By law only 24 hours notice to the courts and the
police is required and applications are made to the magistrates'
courts (or in Greater London to the Commissioners of the Metropolitan
Police Area and the City). If the Committees'
reports were unfavourable, many could then have been expected
to apply for special orders of exemption rather than risk waiting
on the outcome of the full regulatory reform order process. If
the first stage reports indicated that the Committees of each
House were content with the Government's
proposal, most would have considered it unnecessary to apply.
20. However, we understand that the situation
altered with the issuing of the press notice by the House of Commons
Deregulation and Regulatory Reform Committee on 19 July; and as
a result of letters written on the same day on behalf of the House
Committee to representative organisations in the licensed trade.
The Government has not seen copies of these letters. But we understand
that the letters were based on the Committee's
serious concerns about timetabling. Although it may not have been
intention, we understand that many in the trade and the trade
press took the letter to be a clear indication that a regulatory
reform order could not be made in time for New Year's
Eve 2001. A report from the Morning Advertiser (one of the two
main licensed trade press organs) of 30 August quoting the letter
and the reaction of the various industry bodies is attached at
Annex A. While it is clear from the article and from our subsequent
discussions with representative organisations in the trade that
most on-licensed premises still want the regulatory reform order
to proceed, it appears likely that a high percentage of premises
will apply for special orders of exemption as soon as possible
as a precautionary measure. This would remove the saving of £9
million to the businesses involved, which might otherwise have
been generated by this proposal.
21. The Government does not believe the lack
of this financial saving to industry of itself negates the need
for the draft Order. The length of extension sought under special
orders of exemption would of course vary with, for example, nightclubs
often seeking much longer extensions than, for example, traditional
pubs or registered members'
clubs. However, the length of extension that has normally been
sought in previous years generally reflects an expectation of
what is likely to be granted by the courts. For example, last
year the Magistrates'
Licensing Committee issued general advice to local licensing committees
that extensions to 12.30am on New Year's
Eve were considered appropriate save in exceptional cases. As
a result of another letter of 19 July by the Clerk to the House
Committee to the Magistrates'
Association, the Association intends to issue similar advice in
respect of this year.
22. However, despite the Magistrates'
best efforts, extensions under special orders of exemption on
Eve granted by the courts across the country vary from licensing
district to licensing district. Last New Year's
Eve, a very small number allowed no extensions whatsoever; 12.30am
and 1.00am were relatively common; some allowed extensions to
2.00am, 3.00am and 4.00am; and a small number granted a 12 hour
relaxation. With regard to 12 hour relaxations, the response of
Devon and Cornwall Constabulary (see Annex B to the Explanatory
Statement) is particularly relevant. In those districts with a
more restrictive approach to special orders of exemption, some
businesses will experience a loss in trade which they could otherwise
expect to generate if permitted hours were relaxed for twelve
23. Accordingly, even if virtually all of the
premises affected now obtain special orders of exemption, the
trading hours of the vast majority will still be restricted in
a way that neither they nor their customers would like. The Government
believes that it would still be valuable
even if the financial savings described in the draft regulatory
impact assessment could not be realised
to relax licensing hours for 12 hours between 31 December 2001
and 1 January 2002 for several reasons:
discussions with representative organisations of the hospitality
and leisure industry indicate that the industry still believes
that removing this restrictive burden would better enable them
to meet their customers'
the draft Order would facilitate New Year's
Eve celebrations across England and Wales, enabling large numbers
of people to have a better time without an unnecessary restriction
on the hours at which they may attend on-licensed premises and
the draft Order would remove inconsistencies in licensing
hours between licensing districts, and fixed closing times in
any area, which in the Government's
view contribute to crime and disorder by encouraging binge drinking
close to earlier closing times and producing large numbers of
people on the streets simultaneously; and
as a pilot, it would provide the evidence the police and
the magistrates have requested before supporting any permanent
relaxation for future New Years'
Eves, help the Government in deciding whether to bring forward
such a proposal and better inform the Parliamentary Committees
if such a proposal is brought forward for their scrutiny.
24. The penultimate point above leads to the
fifth question concerning the removal of inconsistencies in licensing
V Consistent licensing hours
25. Except in London, where chief officers of
police are responsible, applications for special orders of exemption
are made to the magistrates'
courts but decisions in respect of holiday extensions are generally
made by members of the Licensing Committee sitting as a magistrates'
court. There are over 370 licensing districts (petty sessional
divisions) established under the Licensing Act 1964 for England
and Wales and the licensing justices for these districts normally
establish, for purely practical reasons, policies for the governance
of applications for special orders of exemption, and in particular,
for occasions such as Christmas Eve, New Year's
Eve and New Year's
Day. Although each application should be considered individually
by the justices, in practice, these policies are the main determinant
of the hours granted in any district where applications for special
orders of exemption are successful. The problem of consistency
arises where different policies (and therefore hours) apply in
adjoining petty sessional divisions. As explained above in response
to question 4, last New Year's
Eve, no special orders of exemption whatsoever were allowed in
a handful of licensing districts; extensions to 12.30am and 1.00am
were granted in many others; some districts permitted extensions
to 2.00am, 3.00am or 4.00am; and a small number granted a 12 hour
relaxation. The Magistrates'
Association attempts to encourage consistency, but as can be seen
from the variations described significant numbers of licensing
justices do not follow their advice. The effect is that there
may be a common closing time of 12.30am in a district adjoining
another with a common closing time of 3.00am. This can result
in significant movements of people across licensing district boundaries
in pursuit of venues still open and later drinking. This can cause
increased concerns about drink-driving, noise in the streets as
people move and public order problems. At various seminars around
the country attended by DCMS officials to discuss licensing hours
generally, police officers and local authorities have raised concerns
about the movement of people across district boundaries resulting
from inconsistent hours.
26. If the draft Order was to be given effect,
permitted hours in all licensing districts would be relaxed universally
and all on-licensed premises and registered members'
clubs could supply alcohol to their customers or members from
11.00am on 31 December 2001 until at least 11.00pm on 1 January
2002, unless the premises was subject to a restriction order.
The Committee has questioned whether the system of restriction
orders might undermine the desired consistency. We do not think
so. The number of restriction orders is expected to be relatively
small as explained in our response to question 7 below. However,
whatever the position with regard to restriction orders, premises
within each licensing district could in any event be expected
to close at a variety of times, some very much later than others.
The advantage of the situation created by the draft Order would
be that later celebration and later service of alcohol could be
expected to be available in some premises in virtually all licensing
districts and there would be no advantage in customers moving
significant distances to find open premises in other districts.
Problems of drink-driving, noise nuisance and public order should
therefore be reduced. Furthermore, the disadvantage of artificially
early fixed closing times on New Years'
Eves is that it can lead to binge drinking close to the end of
permitted hours, with all the customers of on-licensed premises
arriving on the street simultaneously. This causes peak density
and peak noise at one time within a licensing district, and queuing
for transport and late night food. Queuing in turn creates a volatile
situation generating public order problems. A wide variety of
later closing times within a single licensing district should
not produce the unseemly dash to consume drink before closing
time and reduce congestion on the streets at any particular point
in time. This should therefore reduce crime and public order problems.
27. The Committee also suggest that the mixed
regimes which would be in place if the draft Order is not given
effect before December, would actively produce inconsistency,
with special orders of exemption running alongside special occasions
licensing hours and restriction orders. It is correct that the
two regimes would run alongside each other, but we do not agree
that this will in practice lead to any inconsistency. The draft
Order adds special occasions licensing hours for premises from
the time that their permitted hours end. Accordingly, if premises
have been granted a special order of exemption until 1.00am, special
occasions licensing hours would be added until 11.00am on 1 January
2002. So premises with or without special orders exemption would
enjoy the right to the same hours. Any inconsistency could only
arise as a result of the fact that restriction orders may only
be applied to the period of special occasions licensing hours
and not to any hours authorised by a special order of exemption.
However, inconsistency should not arise for two reasons. Firstly,
it is conceded in this Memorandum that as a result of the Committee's
announcement in July most licensed premises and registered members'
clubs can now be expected to apply for and be granted special
orders of exemption. In each licensing district the hours to which
restriction orders can be applied will therefore be similar in
respect of all relevant premises. Secondly, as our estimate is
for a maximum of 700 restriction orders to be made (see Question
7 below), or on average less than two per licensing district,
we do not consider that the system of restriction orders could
in any case cause any significant inconsistency.
28. We therefore remain confident that the draft
Order would provide for greater consistency of permitted hours
across England and Wales.
VI The late introduction of the Order
29. It may be helpful to the Committee to explain
some background to the timing of the consultation document.
30. The Committee will be aware that until late
October 2000 Home Office Ministers were exchanging correspondence
with the House of Lords Delegated Powers and Deregulation Committee
about possible interpretations of the Deregulation and Contracting
Out Act 1994 which would permit a Order to be made within a shorter
period than would be usual for New Year's
Eve 2000. This culminated in a decision that such an approach
would be open to legal challenge and the statement made by Mike
in a Parliamentary Answer on 26 October 2000 which confirmed that
no Order could be sought in respect of New Year's
Eve 2000. It was not therefore until November that it was known:
whether or not relaxed licensing hours would apply at New
Eve 2000, and therefore serve as the pilot requested by the police
and the Magistrates'
whether or not it would be necessary to review the impact
of any Order made in respect of New Year's
Eve 2000, before finalising proposals in respect of New Year's
Eve 2001; and therefore
whether or not any proposal in respect of New Year's
Eve 2001 would involve a proposal for permanent or temporary change.
31. Accordingly, the process of drafting an appropriate
consultation document concerning New Year's
Eve 2001 and the Golden Jubilee could not commence before November.
The process of developing proposals and preparing a consultation
document is not straightforward. Policy decisions are not made
by Home Office Ministers in isolation. After Home Office Ministers
initially agree the terms of the policy and the consultation,
it is necessary for them to secure the collective agreement of
other interested Government Departments to the proposals and to
address any points of concern those Departments raise. Once the
terms of the consultation document are agreed, collective agreement
to the date of publication must also be sought and publishing
arranged accordingly. The Home Office sought to complete this
process as quickly as possible.
32. While there was some uncertainty as to when
the Regulatory Reform Bill would receive Royal Assent, we did
not think, given the additional burden of the restrictions order
procedure, that it would have been appropriate to have tabled
the proposal for scrutiny as a deregulation order. While that
may have saved some time, it may have also caused greater difficulties.
Nonetheless, to save time, we took advantage at the Bill's
2nd Reading in the Commons of the ability in section
5(4) to consult in advance of Royal Assent as a prospective Regulatory
33. We recognised that timing for such an Order
was critical, and that the number of days available for Parliamentary
scrutiny prior to the summer recess would be crucial, given the
possibility of a General Election during the period of the consultation.
34. In discussion with the Cabinet Office at
the start of the new Parliament, we took the view that timing
was so critical that the proposal would need to be tabled before
the two Committees were established. If we had not done so, there
would simply not have been enough time for the scrutiny and approval
stages to be completed before New Year's
Eve, especially given that it took longer than anticipated to
appoint the Commons Committee. We very much regret the inconvenience
that this caused to Members of both Committees, which the Cabinet
Office tried to minimise by discussing the case with the Committees'
officials in advance. The Government regards the circumstances
as unique and does not intend to cite the case as any kind of
precedent to support future proposals.
35. We agree with the Committee's
assessment that the likely earliest date that the draft Order
could be brought into effect is 11 December. We consider that
this would still allow the police, local authorities and local
residents to apply for restriction orders in respect of licensed
premises which might give rise to problems. The period of notice
to be given has been reduced to 5 days in the draft Special Occasions
Order from the 21 days cited in the Millennium Order. This change
is to the advantage of applicants for restriction orders and was
originally introduced at the request of the police to ease their
handling of such applications. The change slightly disadvantages
businesses operating licensed premises as less time is allowed
for the preparation of a defence against an application for a
36. We expect there to be no more that 700 applications
in all (see answer to question 7), which on average would be less
than two per licensing district, although we acknowledge that
some districts will attract more than others. We expect the majority
of these applications to be made by the police. Their licensing
officers are generally well aware of which premises in their divisions
pose problems on busy nights. There is also nothing to prevent
applicants preparing a case for a restriction order ahead of the
Order coming into force.
37. We acknowledge the points made by the Committee
about the value of the appeal procedures, and if the Committee
considers it appropriate, we are prepared to amend the draft Order
by removing the relevant provisions. We are satisfied that licensees
will still have the benefit of fair and independent decisions
by the courts on restriction order applications.
38. The Committee requested that we should consider
a proposal that "an
objection raised by the police, local authorities or local residents
might be enabled automatically to negate extended hours, thereby
ensuring that local residents would not lose necessary protection
as a result of their applications for restriction orders not being
able to be made and heard in time."
We have the following comments on this proposal.
39. In its reference to "objection"
we assume that the proposal is that any application for a restriction
order should be automatically granted. We do not think such a
process would be feasible. The draft Order provides that restriction
orders should only be available for good reasons, mainly the potential
for disorder or disturbance. This is important because the denial
of the right of individual licensees to engage in legitimate commercial
activity and members of registered clubs to make the use of their
own property, should only occur when it is clearly in the wider
public interest. Finally, we have serious concerns that such an
automatic procedure, without any proper scrutiny by the courts,
would be open to potentially malicious manipulation by unscrupulous
traders (who would often themselves be local residents) who wished
to gain an advantage by damaging a rival business. We do not therefore
consider that the proposal is feasible or desirable.
40. As we explained above, the Government's
position is that there would still be sufficient time for objectors
to seek restriction orders, and therefore necessary protection
would be maintained by that system. In that context, it is important
to note the existing licensing provisions on a normal New Year's
Eve. The vast majority of on-licensed premises and registered
clubs are granted special orders of exemption for a normal New
Eve at the discretion of magistrates allowing various extensions
of permitted hours up to 12 hours. Only 24 hours notice has to
be given of such an application. The arrangements and provisions
relating to the application for and grant of special order of
exemptions are set down in sections 74 and 75 of the 1964 Act.
The application does not have to be advertised, though the chief
officer of police must be notified. Only the chief officer of
police has a formal right to object and there is no requirement
on the justices to hold a public hearing. The Act provides no
entitlement to appeal, either by the applicant or a third party,
against the grant or refusal of a special order of exemption.
Parliament has therefore not given either local authorities or
local residents any locus in the existing procedures. We therefore
consider that even if only a very short period is allowed in which
to seek a restriction order, the draft Order provides them with
more influence than they have now in respect of such nights.
VII How many restriction orders?
41. Further information on why we have worked
on the basis of an estimate of a maximum of 700 restriction orders
is provided in the draft regulatory impact assessment at Annex
C to the Explanatory Statement. Any figure necessarily involves
a degree of reasoned speculation. In calculating this figure,
we took account of the only existing precedent which is Millennium
Eve (restriction orders forming no part of Devon and Cornwall's
own experiment last year). We will be tracking the number of restriction
orders applied for and granted under this pilot regulatory reform
order, as essential information for use in drawing up our proposal
for permanent reform of licensing hours at future New Years'
42. Our survey of the courts, which formed part
of the review of Millennium Eve which was included in the public
consultation document, and discussion with the Association of
Chief Police Officers, Magistrates'
Association, the Justices'
Society and the industry, indicated that only a very small number
of restriction orders were sought and made for Millennium Eve.
We estimate that there were no more than 12 in the whole of England
and Wales, which is 0.008 per cent of all on-licensed premises
and registered members'
clubs. However, the view of the police is that Millennium Eve
could have been atypical with a greater degree of tolerance than
might normally be expected during a normal New Year's
Eve. The most recent licensing statistics indicate that the licences
of about 400 on-licensed premises (or 0.4 per cent of the total
of 111,000) are revoked by magistrates each year, and this provides
a useful estimate of the number of what might be described as
premises in existence at any one time. We considered that the
figure of 400 needed to be increased for two reasons. Firstly,
the draft Order would also affect registered members'
clubs of which there are about 23,000, and secondly, restriction
orders might be sought and granted in respect of premises for
reasons which would not necessarily in ordinary circumstances
give rise to revocation of a licence. We therefore concluded that
a reasonable estimate would be 0.5 per cent of all on-licensed
premises and registered members'
clubs (or 0.5 per cent of 134,000). This gives a figure of 670,
which has been rounded for the purpose of this exercise to 700.
43. The draft regulatory impact assessment also
explains that the experience of the Millennium suggests that most
of these restriction orders would be sought by the police (our
estimate is 500), with local authorities accounting for 150, and
local residents no more than 50.
44. It may be helpful to the Committee to know
that we consider the figure of 700 to be a high estimate, but
that we thought it right to provide it so as not to risk exaggerating
the potential savings to industry which we wished to present conservatively.
The reason we think the figure may be high is that the Government
expects to bring into force Section 17 of the Criminal Justice
and Police Act 2001 by the beginning of December. This will provide
the police with new powers to close down instantly disorderly
and excessively noisy on-licensed premises at any time. Some senior
police officers may therefore decide that it is better to give
some premises the benefit of the doubt, by not seeking a restriction
order in advance, knowing that they can use the new powers on
the night if problems of disorder or disturbance do arise. In
addition, at a meeting of the Magistrates'
Association Licensing Sub-Committee held on 13 September, experienced
licensing justices expressed the view that they expected very
few applications for restriction orders if the Order is made.
The DCMS estimate of a maximum of 700 can therefore be regarded
as a very cautious and high estimate.
VIII Savings to the industry
45. The Committee are correct that the same error
was made in calculating the potential savings to industry as was
made in 1999. The reason is that new draft regulatory impact assessments
are developed afresh on the basis of the most recently available
information. The figure included in the consultation document
was based on our estimate of the unit cost to industry of an application
for a special order of exemption in England and Wales. Most special
orders of exemption are not granted for national occasions, but
individual special celebrations. For example, the vast majority
of special orders of exemption are issued by magistrates'
courts (and in London by the police) for wedding parties, Silver
and Golden Wedding anniversaries, 21st Birthday parties,
local charity balls and events, festivals, and other similar special
occasions. The unit cost has two main components: legal costs
and court/police fee. The overall unit cost is estimated to be
(without any element for the business'
own administration and licensee's
time which would be marginal at this holiday time of year as more
than one special order of exemption would be sought). In using
the unit cost figure of £210
we failed to note the information contained in the explanatory
statement of 1999 to which the Committee refer. Accordingly, the
figure given in the current consultation document was too high.
In response to the consultation document, the industry, some magistrates
and some court Chief Executives again advised us that the saving
would be reduced because of the effect of bulk applications in
some licensing districts. It was at that stage that the error
46. Although the law requires individual consideration
of an application, on national special occasions like Christmas
Eve and New Year's
Eve, for purely practical reasons some courts accept bulk applications,
applying policies by which similar hours are granted to all applicants
in the licensing district. Some courts do not approve of this
practice. We therefore re-drafted the regulatory impact assessment
with this information in mind to ensure that Parliament was clear
about the potential savings to the industry.
47. On presenting the Explanatory Statement to
Parliament we explained the amendment to the original estimates
and set out the details in the draft regulatory impact assessment
at Annex C of that statement.
48. The Committee would like to know why our
revised estimate is higher than that given by the Home Office
in 1999. In preparing the White Paper "Time
published in April 2000, the Home Office had collected a good
deal of new information from a larger sample of licensed premises
than previously available about the amount the industry paid in
legal costs in connection with certain types of licensing applications
to the courts. We therefore had more information available than
in 1999 when we came to revise the draft regulatory impact assessment.
On the basis of the information available, we concluded that notwithstanding
the bulk nature of some applications, the figure given in 1999
was in fact an underestimate of the cost to industry and registered
clubs of obtaining a special order of exemption for New Year's
Eve, because the legal costs would be slightly higher than originally
thought even for bulk applications. The savings would therefore
have been consequentially higher than predicted. The average figure
was considered to be a better estimate of the cost per business
across England and Wales, and this figure was used to estimate
the potential savings across 134,000 premises. However, we have
also estimated that more premises may be the subject of applications
for restriction orders than at the Millennium, and that the legal
costs of contesting such applications would reduce the potential
overall saving by around £0.4
million. Accordingly, we believe the hospitality and leisure industry
saved around £9.4
million as a result of the Millennium Order, but would save only
million on this occasion.
IX The draft Order
49. With regard to the two points raised in respect
of the terms of the draft Order, we are grateful to the Committee
for these comments. We will remove the superfluous words from
the title page. We also agree that the words "in
in article 3 can be omitted, since the Order is currently expressed
to have effect only in relation to 31st December 2001.
X The cost of preparing the proposal
50. The Committee raise two related questions:
How many officials have been involved in the preparation
of this proposal since it was first conceived at the time of the
consultation on the 1999 proposal?
What has been the cost to the taxpayer in terms of those
time of bringing forward this proposal?
51. The original consultation was conceived,
prepared and published in 1998. Between 1998 and 2001 fifteen
officials in seven posts have been involved at various times in
the Home Office, and more recently the DCMS. This figure does
not include staff in Ministers'
private offices in the Home Office and in other Government Departments
during internal Government consultations on the policy. It also
does not include Cabinet Office staff who monitor and provide
advice on regulatory reform policy, issues and legislation across
Government. At any particular time, the majority of the work is
mainly done by four administrative staff and one legal adviser.
52. We estimate that the cost to the taxpayer
in terms of officials'
time between 1998 and 2001 to be just over £47,000
up to and including the preparation of this Memorandum. Again,
this figure does not include private office and Cabinet Office
staff costs which would be marginal to their general work.
53. The work since 1998 has facilitated a major
national celebration to the benefit of taxpayers and has so far
generated an estimated saving to industry of about £9.4
million, but we regret that it has not been more productive since
54. We estimate that the current proposal, which
cannot be wholly distinguished from that concerning the Golden
Jubilee period, has so far cost £10,300
between 2000 and 2001 in terms of officials'
time. This is part of the overall figure of £47,000
GENERAL POINTS RAISED
55. The Committee also raised the general question
of whether the DCMS considers it appropriate to continue with
the proposal, their desire to take oral evidence on this proposal
and the wider points raised by the Committee's
final Report of the last Parliament.
Appropriateness of continuing with the proposal
56. As we hope is clear from our comments above,
the Government does still believe that the draft Order is lawful
under the terms of the Regulatory Reform Act 2001. It also believes
that it is possible to give effect to the draft Order in time
for New Year's
Eve 2001 and that sufficient time would be available to allow
restriction orders to be sought. The Government also considers
that despite the fact that considerable numbers of on-licensed
premises and registered members'
clubs can be expected to seek special orders of exemption between
now and December and thereby reduce or remove any potential savings,
the proposal continues to be worthwhile. It still has the potential
to remove a burden which prevents the industry from meeting their
desires on such nights, to facilitate the national celebration
of New Year's
Eve 2001 and to improve objectors'
rights. Indeed, the Government believes that Millennium Eve showed
the popularity of such measures and its beneficial impact.
57. It should be noted that if a trial of such
hours on a normal New Year's
Eve cannot be conducted on New Year's
Eve 2001, it would be necessary to treat New Year's
Eve 2002 as a trial before any final decision could be taken on
any permanent arrangement for subsequent New Years'
Eves. If it is the Committee's
view that the timetabling of this year's
Order is unacceptable, it would be impossible to conduct the review
of the impact of an Order in respect of New Year's
Eve 2002 and to complete the consultation, scrutiny and approval
stages of a further proposal in respect of subsequent New Years'
Eves in time for New Year's
Eve 2003. No permanent arrangement could therefore be put in place
before New Year's
58. The Committee may also wish to be aware that
we decided that designating those provisions that would need amendment
if the order were to have annual rather than once-off effect as
subordinate would not be an appropriate way forward. Doing so
would have provided the Committee, if it agreed, with the opportunity
of specifying whether the order should be made by affirmative
or negative resolution procedure. The Deregulation and Regulatory
Reform Committee, rather than the JCSI, would then be responsible
for considering the draft order when tabled. It would also mean
that the Government would not need to follow the full regulatory
reform order-making procedure given that the policy has been thoroughly
consulted upon and given both the unique circumstances of the
Millennium Eve deregulation order and of the pilot deregulation
this coming New Year's
Eve. In view of earlier views expressed by the Committees and
the sensitivity which they attached to the proposal, we decided
that it would be better, subject to the operation of the Order
on New Year's
Eve 2001, to proceed in relation to years after 2001 by way of
a fresh proposal for an RRO.
The Cumulative Impact of Licensing and Gambling
Regulatory Reform Orders
59. In the Committee's
Final Report of the last Parliament, concern was expressed in
paragraphs 6 to 8 that the cumulative effect of small changes
to liquor and gambling licensing law is to produce a substantial
shift of policy in these sectors which the Committee suggest should
be taken forward by Ministers as primary legislation. Elsewhere
in the Report, the Committee suggest that this cumulative effect
could be significant and manifestly controversial.
60. It may be helpful to the Committee for us
to make some general points now explaining the Government's
views. We do not think the charge described in the paragraph above
can be laid against the present Government in the context of either
its proposal concerning New Year's
Eve or that in respect of restaurant hours. Although a number
of deregulation measures were proposed by the previous Government
between 1994 and 1997 (including that resulting in the Deregulation
(Licence Transfers) Order 1998), the present Government has so
far brought forward only three proposals which could have resulted
in permanent changes to the alcohol licensing laws. These were:
The proposal to relax permitted hours for all on-licensed
premises at all subsequent New Years'
The proposal to allow special hours certificates to be granted
on Sundays but only up to 12.30am for about 5 per cent of on-licensed
The proposal to remove the requirement to hold a supper hour
certificate for restaurants holding Part IV licences that wish
to serve alcohol between 11.00pm and 12 midnight; and to abolish
the requirement for such restaurants to provide "live"
entertainment to obtain an extended hours order permitting them
to serve alcohol between 12 midnight and 1.00am.
61. Of these proposals for permanent change,
the first was withdrawn following receipt of the views of the
House of Lords'
Committee and replaced with a proposal to relax permitted hours
temporarily on a single New Year's
Eve (1999). The current proposals with regard to New Year's
Eve 2001 and the Golden Jubilee again represent temporary changes
on single nights and make no permanent change in the law. Accordingly,
since coming to the power in 1997, the present Government has
proposed and made only one permanent change to the alcohol licensing
laws using a deregulation order. This was the Sunday Licensing
Order which affected only 5 per cent of on-licensed premises on
one day each week. The proposal regarding restaurant hours is
therefore only the second proposal for a permanent change in the
alcohol licensing laws and would affect about one fifth of on-licensed
premises. We do not consider these two Orders cumulatively amount
to a potentially radical shift in alcohol licensing policy.
62. As Members of the Committee will know, the
Government set out its proposals for the modernisation and reform
of the alcohol, public entertainment, theatre, cinema and late
night refreshment licensing laws in a White Paper published on
10 April 2000. The proposals involved the complete re-structuring
of eleven statutes currently governing these licensing areas.
There is no doubt that the White Paper reforms are radical and
a substantial policy change affecting the lives of everyone living
in England and Wales. The Government received and considered 1214
responses to those proposals. On 2 May 2001, the Government announced
its intention to give effect to the vast majority of these proposals
by introducing primary legislation as soon as Parliamentary time
permits. Although a Bill could not be included in the Queen's
Speech on 20 June, it remains Government policy to introduce primary
legislation as soon as Parliamentary time permits. Such a Bill
is likely to be substantial - a minimum of 150 clauses. We do
not therefore think that it is correct to suggest that two minor
permanent changes and others that are temporary in nature represent
substantial shifts in policy when set against the Government's
published policy for the reform of the licensing laws. The permanent
changes to the existing laws proposed in respect of Sunday Licensing
and Restaurant Hours do not and could not give effect to the Government's
White Paper proposals.
63. Turning to gambling, we note the Committee's
comments and recommendations in its Final Report of the last Parliament.
The Committee will now be aware that the report of the independent
gambling review, chaired by Sir Alan Budd, was published on 17
July. The report makes 176 recommendations for reform, many of
which would, if implemented, require changes to the Betting, Gaming
and Lotteries Act 1963, the Gaming Act 1968, the Lotteries and
Amusements Act 1976, the National Lottery Act 1993, and other
primary and secondary legislation.
64. The Government has launched a period of public
consultation on the report that will last until 31October. The
Committee might wish to note that in undertaking this consultation
the Government has taken full account of its views, as set out
in the Final Report of the last Parliament, about the need to
consult more widely on gambling reform proposals. In particular
we have taken steps to ensure that a wider cross-section of religious
organisations and those concerned with the welfare of young and
other vulnerable persons are identified and formally consulted.
Once the consultation has concluded the Government will need to
decide which of the review body's
proposals it intends to accept, and how they are to be implemented
as a part of a coherent strategy for the reform of gambling law.
Without wishing to pre-empt those decisions, the Committee should
be aware that we will want to consider the extent to which the
regulatory reform process might play a part in the delivery of
65. The Government notes the Committee's
specific comments, in its Final Report of the last Parliament,
about the Deregulation (Bingo and Other Gaming) Order 2001 and
in particular the Committee's
concerns about Proposal 2: Mix of Gaming Machines. The
Government will wish to consider the Committee's
conclusion that this proposal should be deleted from the Order
in light of the responses to the current consultation on the gambling
review report (which includes a similar recommendation) and we
will revert to the Committee in due course.
66. The Government's
view is therefore that it remains open to the Government to consider
delivering the White Paper reforms, at least in part, and any
reforms of gambling law it decides are appropriate, not by means
of primary legislation but by means of regulatory reform orders.
The Government introduced the Regulatory Reform Bill in order
to allow policy changes to be introduced provided that they were
suitable and properly scrutinised. It should therefore be legally
feasible to deliver large parts of the Government's
licensing and gambling reform policies by this means. However,
the Government recognises that the use these procedures to deliver
certain major reforms is as much a question of appropriateness
as it is of vires. The Government therefore fully understands
the concerns which the Committee has expressed, and recognises
that it is important for Ministers to engage with the Committees
about the potential future use of regulatory reform orders. However,
we do not consider that the issue of appropriateness arises in
the context of the lesser and temporary amendments such as New
Eve 2001, the Golden Jubilee, and restaurant hours.
The Regulatory Reform Act 2001
67. In a separate Memorandum Cabinet Office Ministers
will be responding to the Committee on the broader issues raised
about regulatory reform.