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The Late Night Levy will be introduced by the Police Reform and Social Responsibility Bill. Paddy Whur examines the progress of this controversial proposal.

When the new government came into power it outlined five Coalition Commitments relevant to licensing and alcohol. One of these commitments is that: “the government would permit local councils to charge more for late-night licences to pay for additional policing”. The government then held a public consultation exercise – Rebalancing the Licensing Act – a Consultation on empowering individuals, families and local communities to shape and determine Local Licensing.

Seven regional consultation events were held across England and Wales, with seven national consultation events being held in central London, to give all the opportunity to discuss the proposals in more detail. In response to the consultation, it was stated that it was not the Home Office's intention to penalise responsible businesses. They recognise the importance of the industry to the economy in that it contributes around £8.5bn to the Exchequer through excise duty, with over 180,000 premises licensed to sell alcohol.

In its response to the consultation, the Home Office outlined its intention to use the Police Reform and Social Responsibility Bill to introduce powers to allow licensing authorities to charge a late night levy to pay for policing the night-time economy. Where a licensing authority chooses to apply the levy, it will be charged annually, to all those in the on and off trade who have a licence to sell alcohol on any day of the week, during the time period which the licensing authority decides to apply. The maximum time period to which a levy could be applied is midnight and 6.00 a.m. (but licensing authorities will have the discretion to apply the levy to a shorter time period within those parameters).

The levy would be set as a national levy using the existing rateable value bands for the annual licence fee. Licensing authorities will have the discretion to offer exemptions or discounts in certain situations which will be set out in the Regulations. The burden on licensing authorities of collecting the levy would be minimised by using the same process as is used for collecting the annual licence fee, these charges being set out in secondary legislation. At this stage, it seems that the late night levy will not apply to temporary event notices, thus ensuring that licensed premises, that do not routinely trade beyond midnight, are able to open late for a limited number of events (e.g. New Year's Eve) without having to pay the late night levy.

It was with the above in mind that the Police Reform and Social Responsibility Bill was put forward for its first reading in the House of Commons on 30 November 2010. Clauses 124 to 138 relate to the late night levy. In summary the key clauses are as follows:

  • clause 124 contains provisions enabling licensing authorities to decide to introduce a levy
  • clause 125 contains definitions of premises to which, or the times at which, it would apply
  • clause 130 relates to the funds that are generated by the levy. At least 70% of these funds must be paid to the Police and Crime Commissioner, with the balance to be used by local authorities in tackling crime and disorder in the night time economy
  • explanatory notes to the Bill state that the Government's intention in introducing the provisions was to enable licensing authorities to require those who benefit from the late night economy to contribute to police costs and the costs of addressing the effect of alcohol-related crime and disorder in the night time economy
  • under clause 132, prior to introducing the levy in its area, a licensing authority must allow any person, with a potential liability to pay a levy, to apply to vary the relevant licence or certificate with the effect that the person ceases to be liable for the levy, without incurring the fee which ordinarily must accompany an application to vary
  • the licensing authority will have the power to suspend a premises licence or club premises certificate for non-payment of the levy
  • importantly, under clause 133, the regulations must require a licensing authority to consult the police, holders of relevant authorisations and other persons who may be proscribed by regulations before making the decision to introduce the levy in its area or to revoke it or vary certain matters
  • a levy would not be introduced so as to apply retrospectively to any premises affected by it.

The Late Night Levy as it currently stands

The Bill has progressed through the Committee Stage of the House of Commons and there has been further very recent clarification on certain aspects of the levy.

Whole Area

Diane Johnson, Labour MP, argued that there was a, "fundamental weakness in the Bill" and that the levy, with its application to the whole local authority area, would mean that the levy would, "be extended to many areas and premises where the late night economy is not a problem and additional policing - on which the late night levy focuses - is not required" [1]. She went on further, "to focus again on the localism issue, the Coalition Government is giving local authorities discretion over whether they have a late night levy, but they are not allowing them to use it in a targeted and focused way". She was even more scathing in respect of how the late night levy would fit together with an Early Morning Restriction Order (EMRO), concluding that, "the system sounds like a bit of a dog's breakfast" [2].

James Brokenshire, Parliamentary Under Secretary of State for Crime Prevention, responded with the view that applying the levy to the whole local authority area was thought, "the easiest, most efficient and effective way of dealing with the issue … because it is viewed as less bureaucratic” [3].

Other schemes may mean the levy is not needed

James Brokenshire went on to state that, should licensing authorities have concerns about particular pockets of alcohol-related crime and disorder, then there are, at their disposal, other initiatives (such as EMROs) which provide authorities with the relevant tools to target those areas. He sought also to make the point that a local community need not adopt the late night levy, and that best bar none schemes, community alcohol projects and business improvement districts could be a way of dealing with the late night economy without the need for a late night levy.

Exemptions and TENs

Other issues that were raised in relation to the late night levy included whether or not there would be exemptions in them for events like New Year's Eve. James Brokenshire stated that, "this was being kept under consideration" and that, "exemptions are intended and they will consult on what might be appropriate" [4]. He also stated that, in respect of premises that utilised extra hours on an occasional basis, i.e. New Year's Eve and Bank Holidays, those premises holders would be able to remove these extra hours – without charge – under clause 138 and reapply for extended hours using a Temporary Event Notice.
It was at this stage that it was clarified that temporary event notices could override the late night levy, but a temporary event notice could not override an EMRO [5].

Fees

In respect of clause 127 and the amount of the late night levy, Brokenshire stated that the government did not want to set charges in stone and the administrative burden on licensing authorities was to be kept to a minimum. As such the payment criteria would be nationally determined and calculated in the same way for all premises throughout the year. He went on to state that they would use the existing licensing structure to calculate the levy, again minimising administration costs.

From a document published by the Home Office in December on their website, the annual fee varies from £299 in Band A to the maximum of £4,400 in Band E x 3 (where the multiplier is applied).

Levy v EMRO

Further clarification was given in respect of the difference between a late night levy and EMROs; they are two important, but very different, provisions in the Bill. The late night levy will address some of the costs that the police and other services incur to ensure that the night-time economy is safe for businesses, and the EMRO allows licensing authorities to tackle specific pockets for alcohol-related crime.

It is hoped that licensing authorities will ensure that measures are not used in a punitive manner, and as such licensing authorities should think carefully about adopting a late night levy, and then adopting an EMRO afterwards that could reduce these hours [6]. It was also mentioned that there would be an accountability mechanism and that, before adopting the late night levy the authority would have to consult at least the premises holders and the police before doing this and indeed the licensing authority must first publish notices of its intention to impose an EMRO.

Brokenshire's comments were reinforced by Zoe Wilkinson, the Head of the Drug and Alcohol Unit at the Home Office, when she spoke at the National Pub Watch Conference in Liverpool on 8 February 2011 and again at a Night Time Economy seminar at our offices on 17 February 2011.

Wilkinson stated that there would indeed be a consultation in respect of the discounts or exemptions that licensing authorities could employ. She also alluded to the fact that there may also be types of premises, such as certain hotels and casinos, which do not benefit from the policing of the late night economy, which could also be exempt. Again these categories of exemptions and reductions would be optional for each licensing authority and they would have the discretion to decide what is appropriate for their own circumstances. These exemptions and reductions would be defined in categories in secondary legislation.

A summary of Late Night Levies as they currently stand:

  • purpose – to allow licensing authorities to charge more for late night licences to contribute towards policing and other costs associated with late night drinking (e.g. taxi marshals)
  • applies to all premises with licence to sell alcohol during hours designated by licensing authorities between midnight and 6.00 a.m. in the whole licensing authority area
  • charges set centrally by rateable value and collected with licence fee
  • licensing authorities to have discretion to grant discounts or exemptions to different categories of premises (to be prescribed centrally)
  • initial decision to apply levy taken by licensing authorities in consultation with police
  • targeted consultation with licence holders, police and affected premises (minimum) on details of levy, e.g. exemptions
  • licensing authorities will then write to all licence holders to give them opportunity to reduce their hours (by free minor variation) if they trade after midnight
  • licensing authorities deducts administration costs from total levy revenue; minimum of 70% to police, up to 30% for other licensing authorities costs
  • the late night levy will apply to the whole of a licensing authority’s area, but this may include a number of premises which perhaps should not pay the levy or be entitled to a reduced rate
  • licensing authorities will be able to offer exemptions or discounts to certain categories of business
  • to promote responsible business, licensing authorities may be able to exempt members of best practice schemes such as Business Improvement Districts
  • there may also be types of premises - such as certain hotels who have a late licence for mini-bars in guests’ rooms - who do not benefit from the policing of the late night economy
  • categories of exemptions and reductions will be optional, so that licensing authorities have the discretion to decide what is appropriate for their own circumstances
  • the Home Office will define these categories in secondary legislation after consulting with interested parties.

Paddy Whur is a partner and joint head of the Licensing Group at law firm Walker Morris. He can be contacted on 0113 283 2500 or by email at This email address is being protected from spambots. You need JavaScript enabled to view it..

[1] Page 577, Public Bill Committee 10 February 2011 Police Reform and Social Responsibility Bill

[2] Page 583, Public Bill Committee 10 February 2011 Police Reform and Social Responsibility Bill

[3] Page 580, Public Bill Committee 10 February 2011 Police Reform and Social Responsibility Bill

[4] Page 583, Public Bill Committee 10 February 2011 Police Reform and Social Responsibility Bill

[5] Page 586, Public Bill Committee 10 February 2011 Police Reform and Social Responsibility Bill

[6] Page 588, Public Bill Committee 10 February 2011 Police Reform and Social Responsibility Bill