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The Chairman: With this it will be convenient to discuss the following:
Amendment No. 320, in
schedule 5, page 122, line 25, at end insert—
'Determination that a club is established and conducted in good faith
9A Where under section 63(3) it is determined that a club is not established and conducted in good faith, an appeal may be made to local magistrates.'.
Mr. Hoban: To follow on from the Minister's comments about the importance of the matters in subsection (2) that a licensing authority may consider when ensuring that a club has been established and conducted in good faith, the licensing authority is required to issue a notice to a club if it does not meet the conditions set out in clause 63, but I cannot see in the Bill a right of appeal from the club to magistrates to enable it to dispute the licensing authority's findings as to the way in which the club has been established and conducted. I hope that there is provision in the Bill to enable licensing authorities to be challenged in a magistrates court so that any issues raised by a licensing authority about the way in which a club has been established and conducted can be properly aired.
Dr. Howells: I wonder whether I can reassure the hon. Gentleman by saying that at this stage I am not persuaded that an appeal to magistrates is necessary, and that the Joint Committee on Human Rights did not see fit to comment on that aspect. However, the hon. Gentleman raised an interesting point and I am prepared to look again at the matter and, if necessary, return with an appropriate amendment on Report.
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Mr. Hoban: I am grateful for the Minister's comments, and take note of what he said. It is important that clubs be given a right of appeal when appropriate. However, given the Minister's assurance, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Mr. Moss: When I was looking at the White Paper and the guidance on clause 63, I came across the following words in paragraph 101 on page 42 of the White Paper:
''The law relating to registered clubs once again exhibits unnecessary complexity, using many terms that are imprecise. For example, 'good faith' is an unclear way of setting standards of behaviour and propriety that should be required of clubs and their members. Another example is that members' guests may be supplied with alcohol on the premises in a variety of circumstances, but there is no clear statutory definition of the term 'guest'.''
Clause 63 deals with the establishment and conduct of a club in good faith, and I wonder whether the Minister seriously believes that the clause meets the laudable requirements set out in the White Paper, which states that such matters are difficult to define. One is left with the thought that the question may not have been addressed appropriately.
Chapter 10.8 of the guidance sets out the qualifying conditions of clauses 61 and 62 and goes on to say:
''Section 63 sets out additional qualifying conditions which apply solely to clubs intending to supply alcohol to members and guests. The full details in respect of these sections of the Act are reproduced in Annex [ ]''
The annex is still to be decided, so here we are, yet again, reaching a stage in the Bill where the accurate guidance that we ought to have in Committee to make sure that we are scrutinising this legislation at the most appropriate level is still not available. Perhaps the Minister could tell us why the guidance has taken so long and why, unless it has been supplied and we have not been sent a copy, the annexe to the guidance still states that the statutory qualifying conditions for clubs are to be agreed.
I should have thought that there had been sufficient time for those matters to have been sorted out between the various parties, and it would be helpful if the Minister were to tell us the stage that he has reached with the clubs in discussing the matters that relate specifically to clause 63.
3.15 pm
Dr. Howells: As we have just debated, whether a club is established and conducted in good faith is one of the general conditions that it must satisfy if it is to be a qualifying club in relation to any of the qualifying club activities. Clause 63 sets out the matters to be considered in determining that. Those matters include restrictions on a club's freedom to purchase alcohol, how money and property belonging to the club is used, giving members information about the club's finances, the accounts of the club and the nature of its premises. If a licensing authority determines that a club does not satisfy those conditions, it must notify the club accordingly to give the reasons for its decision.
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Clause 63 replicates current licensing law in laying down rules and conditions for qualifying clubs. It is designed to prevent abuse of the special system that the Bill provides in recognition of the special status and contribution of the club movement, which we have been debating.
The annexes will set out the qualifying conditions in the Bill, but they cannot be completed until it completes its parliamentary procedures, which is why we have to use shorthand in the interim.
Question put and agreed to.
Clause 63 ordered to stand part of the Bill.
Clause 64
The additional conditions for
the supply of alcohol
Mr. Moss: 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. Howells: 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
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(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. Turner: 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
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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?
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