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Legislative Reform (Licensing) (Interim Authority Notices etc) Order 2010

My Lords, the order before us today was laid before Parliament on 10 March by the previous Government. It will extend five time periods under the Licensing Act 2003. First, it will extend the period during which specified persons may issue an interim authority notice, known as an IAN, following a lapse caused by the death, incapacity or insolvency of the licence holder from seven to 28 days. Secondly, it will extend the period during which a person may apply for reinstatement on transfer of the licence to that person following its lapse from seven to 28 days. Thirdly, it will extend the period during which an IAN has effect from two to three months. Fourthly, it will extend the period during which the police may object to a temporary event notice, known as a TEN, from 48 hours to two working days. Fifthly, it will extend the period during which the police may object to an IAN from 48 hours to two working days. These relatively minor changes have been requested for some time by those affected by the legislation. In particular, the British Beer & Pub Association and various licensing lawyers have requested the extension of the seven-day deadlines. Also, the Association of Chief Police Officers has requested the change to the police objection period. It has told us that the current timescales are too short and that this amounts to an administrative burden. By allowing more time to conduct these procedures, we will help businesses going through difficult times and assist the police in the conduct of their duties. Therefore, we are seeking to complete the process of parliamentary scrutiny and to bring these changes into force as soon as possible. The previous Government conducted a consultation on these measures alongside unrelated proposals to allow the police discretion to accept TENs received without the required notice of 10 working days and to remove the requirement that local licensing authorities consult on the publication of a new licensing policy statement every three years. The consultation ended on 9 February this year. There were 74 responses, covering a wide cross-section of those affected by the changes, including local authorities, the licensed trade and the police. Several of the responses were from national representative bodies responding on behalf of their memberships. These included the British Beer & Pub Association, Local Authorities Co-ordinators of Regulatory Services and the Association of Chief Police Officers. There was near unanimous support for the proposals, which were subsequently brought forward in this order. The other proposals, although generally supported in principle, received a more mixed response. The previous Government therefore decided not to proceed with them. The House of Lords Select Committee on Delegated Powers and Regulatory Reform and the Commons Regulatory Reform Committee both unanimously approved the LRO. Their reports were published on 25 March. I am grateful to the committees for their work in scrutinising this order. I shall deal first with the elements that are designed to make it easier to administer the affairs of licence holders after death, incapacity or insolvency. In brief, the order will allow them a longer period to transfer the licence. Under the Licensing Act 2003, anyone who wishes to sell alcohol or to supply it to a members’ club, to put on regulated entertainment or to provide late-night refreshment must obtain authorisation. This can be a temporary event notice, a club premises certificate or a premises licence. Ordinarily, businesses that include licensable activities, such as pubs, supermarkets, off-licences and late-night takeaways, will do so under a premises licence. This licence is held in the name of an individual and lapses automatically if the holder of the licence dies, becomes mentally incapable or becomes insolvent—alternatively, in the case of a company, if the company becomes insolvent or is dissolved. This could, of course, have a damaging effect on the business and on those with an interest, such as the landlord or employees. Therefore, the Act makes provision for the revival of the licence after such a lapse. There are two mechanisms: reinstatement on transfer and an interim authority notice. A reinstatement on transfer is, in practice, the most common method of reviving a lapsed licence. The licence is reinstated by transferring it permanently to another holder. The process is similar to the ordinary transfer of a licence that has not lapsed. In particular, if the chief officer of police is satisfied that the exceptional circumstances of the case are such that the transfer would undermine the prevention of crime, he has 14 days to issue a notice stating so. Alternatively, someone with a prescribed interest in the premises, such as a freehold interest, or a person connected to the former holder of the licence, such as their personal representative or a person with power of attorney, can apply for an interim authority notice, or IAN. This is a less frequently used procedure in practice, because the authority that it provides is, as the name implies, only temporary. Currently, the maximum length of the interim authority is two months. The licence will lapse again unless it is transferred during this period. The order will extend the maximum duration of interim authority to three months. Respondents to the consultation said that this would be invaluable in some circumstances and did not identify any risks in this modest extension. When an IAN is issued, the chief officer of police has 48 hours to issue a notice relating to crime prevention. The order will extend this period for police objection to two working days. I shall return to this point later in the context of the TENs, for which a similar procedure exists. On the extension of the deadline for the issue of an IAN or reinstatement on transfer, for both processes there is currently a deadline of seven days after the licence lapses in which steps can be taken to revive it. The most important element of the order before the Committee is the extension of that period to 28 days. The impact assessment published with the consultation set out estimates for the savings that this will make for businesses. It estimates that the extension to 28 days will have significant benefits for those managing the affairs of a business after bereavement or insolvency. In particular, to use estimates provided by local licensing authorities on the number of applications received after the deadline, it could mean annual savings of around £5.2 million to £9.7 million in lost turnover. Additionally, there would be a modest £0.4 million saving annually in the fees and administrative costs currently caused by the need to reapply for lapsed licences. More important than these financial calculations, perhaps, are the compassionate grounds for extending the deadline. The British Beer & Pub Association said in its response to the consultation: ""There have been well documented cases of the distress caused where licensees have died and relatives have struggled to cope with the seven day period as currently exists. There is no justification or reason that we can see for such a short timescale regarding this process. The current requirements place an unnecessary burden on licensees at a sensitive time"." Medway Council also supported the proposal and said: ""We have had situations where the licensee died and the family were unable to put in an interim within the 7 days due to bereavement and making funeral arrangements. The licence lapsed and this caused the family considerable distress as they had to close and reapply for a licence"." The main motivation for this order is to make certain that such situations do not recur. In comparison with other processes under the Act, such as a new application for a premises licence, the processes for interim authority and reinstatement on transfer are relatively light touch. In particular, it is only the police who can object on crime and disorder grounds and not, for example, environmental health departments on public nuisance grounds. Sitting suspended for a Division in the House.