MacAskill Calls for More Licensing Law Reforms

SOME THOUGHTS ON THE COLUMN WRITTEN BY KENNY MacASKILL FOR THE “AGENDA” SECTION IN THE HERALD, MONDAY 21 SEPTEMBER 2015, AND AN UNINTENDED DIP INTO LICENSING HISTORY

I read with interest an article by former Justice Minister Kenny MacAskill MSP and reportage contained within today’s Herald. The column is here. Coverage of the article is found here. Mr MacAskill writes in reaction to the news that 72% of all alcohol sold in Scotland is from the off sale sector. The main news story focuses on his calls to have licence fees linked to volume (as opposed to rateable value of the premises) but in fact he goes further than that and his piece is another call for further licensing law reform. As I have stated on these pages and elsewhere, the unrelenting pace of licensing law change and reform is incredible, and we seem to be on a never-ending licensing Mobius strip. The Scottish Government has just passed another Act which amends alcohol licensing significantly – the Air Weapons and Licensing (Scotland) Act 2015. His principal suggestion is about fees:

That licence fees be based on volume of alcohol sold, not rateable value

This will attract support from the pub trade and opprobrium from the supermarket and off sale sector. Mr MacAskill is clearly vexed by the recent confirmation of the significant amount of alcohol which comes from the off trade. He implies that alcohol sold in pubs is “safer” in that it is consumed in a regulated environment with checks and balances; whereas alcohol bought from off sales can be more harmful consumed at home alone. He argues that harmful under age consumption is not people trying to get served in bars but cheap alcohol from high street stores.

The proposition that licensing fees should be revisited is not new and it is surprising that the former Justice Minister did not make more of his case when he presided over a full review of licensing fees as Cabinet Secretary. Although the “72%” figure is the latest, it has been at 70% or thereabouts for a few years now. The Scottish Government review of licensing fees was published in February 2014 and my blog discussing this is here. The review was a damp squib: it did not deliver a new way of thinking about licensing fees and there has been no changes to any fees taken forward. It’s only current legacy is the creation of a new s.9B of the Licensing (Scotland) Act 2005, via s.56 of the Air Weapons and Licensing (Scotland) Act 2015, which has created a duty on licensing boards to produce annual financial statements confirming the amount of income received and the amount spent on administering the licensing system. Mr MacAskill wants any additional revenue raised under a volume scheme to be put towards dealing with the harm which arises from abuse of alcohol. The 2005 Act requires, however, that licensing fees are used to cover the administration of the system, and it also requires that this be “cost-neutral” – so licensing boards are not allowed to make a profit. So the Act would need to be changed significantly to deal with that.

I suspect that the on sales sector would welcome this as they feel that they are burdened with a double penalty of licensing fees based on rates inequity. On the other hand, the system currently is not about how much alcohol is sold but cost-recovery of administration. It should take the same time and internal cost for a licensing board to process an application for a 20 cover bistro as it does for a 1000 capacity hotel complex, or a mega-store. The time spent processing each application can be different, admittedly. The bistro may not attract any reports or objections. The mega-store may attract 200 public objections and adverse reports from the NHS and Police Scotland. There is obviously more work involved where there is more paperwork. So the fundamental basis for charging is not about costs associated with health harm, but administration.

If we move to harm based system predicated on volume then there is the issue of how to determine what the volume of alcohol sold is. That information is confidential, proprietary sales data owned by the business. I can imagine challenges to any fee system which requires alcohol retailers to publish their books in this way. It would mean retailers having to present their accounts, presumably on an annual basis, to licensing boards in order to evidence which category of fee they would have to pay, and one can see how companies would be averse to releasing such information. There is, however, precedent for this in licensing under the Gambling Act 2005. Gambling licence fees paid to the Gambling Commission are based on “gross gambling yield” and the Gambling Act empowers the Commission to be entitled to virtually complete disclosure on the financial aspects of a licensed gambling business. As it happens, the Gambling Commission has recently consulted on a review of fees. But that, of course, is predicated on the presence of provisions in the Gambling Act which allow for this, and secondly this is fees payable to the national UK regulator, not to the local licensing boards. Licensing board fees for gambling applications are set nationally and again that income is not to off-set harms but to deal with administration. In other words, Parliament has saw fit to require that a significant level of confidential financial detail should be presented to the national regulator, and does so in terms, but does not require a parity of disclosure or set licence fees payable to the local licensing board on those terms.

Another issue here is that of evidence. If the fees are to be based on harm, how do we evidence and analyse where the harm is? Do we take a broad brush view and simply target one section of the alcohol industry for higher fees? Do we focus on a local shop which is well-run and has no difficulties, or ask the rogue operator who sells to drunks and under age children to pay more? This is a very complicated and emotive proposition. To put this in context, note that the review process under the Licensing (Scotland) Act 2005 is not about fault and not about punishment. There is no ability to levy “fines” on an operator for selling alcohol to someone who is drunk (albeit there is the potential for a criminal fine, but that money does not go to the council).

Mr MacAskill’s suggestion is bound to be controversial and I will watch with interest to see where it goes. Moving away from fees, Mr MacAskill has some other suggestions to make:

  • Separate tills for alcohol: the Act already provides for designated display areas in off sales premises already but Mr MacAskill thinks we should go further by creating specialist and separate alcohol tills as he says the display areas are still subject to “sales manipulation”.
  • Banning young persons from manning a till: under the current law, under 18s cannot sell or serve alcohol; but that does not apply if the person is providing waiter service (ie a glass of wine with a meal), or to staff processing off sale purchases – as long as the sale is supervised by a responsible person. Mr MacAskill wants to remove the off sales exemption. This means 16 and 17 year olds would not be able to work a checkout or till. This would, in my view, create extreme practical difficulties unless separate tills were also introduced otherwise 16 and 17 year olds would simply not be put on the tills at all, to avoid chaos at the tills with staff playing musical chairs. In these circumstances, employers might chose to not hire 16 and 17 year olds at all. This would only work, therefore, if separate tills were to be introduced. If separate tills were to be introduced, that might require licence variations. Can a shop use an existing till? Can they move it from one till to another at their whim? Does it have to be a separate kiosk like the cigarette desk? Or are we looking at the Canadian model and having all the alcohol and tills in a separate room altogether?

Finally, he finishes with a rather odd statement: “Alcohol should be a product available, but sold separately both on and off sales”. The reference to on sales here puzzles me. I’m not sure if this is simply a drafting error. He has made a case for separation of alcohol in the off sale context which, whether you agree with it or not, is discernible.  I find it difficult to imagine he means that alcohol sales should also be separated in an on sales context. He is, contrarily, very supportive of pubs in this article and there is an overall theme that his view is one of targeting the off trade sector. So how would “separation” like this work in a bar or restaurant? One bar for drink and one for food? Only certain staff allowed to sell drink? That sort of proposition, if indeed it is one, goes too far in my view.

Mr MacAskill is now flexing some of his own muscular opinions as a back bencher and is perhaps less fettered in his opinions. There is other evidence of that with his recent exhortations concerning the Social Responsibility Levy (also a result of news that 72% of all alcohol is sold from off sales – but paradoxically this levy would have to be paid by pubs and nightclubs and other licence holders), but what he has to say would, I imagine, hold some weight in the administration given his experience as our licensing Minister for many years.

The real question then is, having just passed the 2015 Act, does Holyrood have any appetite for more licensing laws? Absolutely. Labour’s Alcohol (Licensing, Public Health and Criminal Justice) (Scotland) Bill is before the Parliament at the moment (on which I blogged here) and may well attract Government support for a number of reasons including that some of its proposals could be viewed as an alternative to minimum pricing if that does not go ahead, or just that they agree with some of the proposals. It is in early stages and could be subject to amendments including a new fee system, although it is perhaps easier to see the proposed rules over checkouts being adopted as amendments to Labour’s Bill, so watch for them being put forward by the Minister for Edinburgh Eastern.

Alcohol licensing law is subject to a whirlwind of opinions and reactionism because it is an emotive subject which most people have a view on. The Scottish Parliament has now had 5 attempts at getting it right and appears to have the appetite for more. But one must not take lightly these particular views, given Mr MacAskill’s experience in the sector, as they may find traction across the benches.

It is interesting to note that the Licensing (Scotland) Act 1976 survived over 30 years with only one real significant alteration by Primary Legislation, which was under the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990. The 1990 Act introduced changes to the permitted hours, children’s certificates were brought in, a tighter approach to regular extensions but a more relaxed procedure for Sunday opening. As I pause to dip my toes into licensing nostalgia, I note that the 1990 Act created issues with transfers of licences as it did not reflect the reality of conveyancing practice as it required a temporary transfer to be granted before a permanent transfer could be lodged. This was later reversed in the Licensing (Amendment) (Scotland) Act 1992. It is frustrating to think that 20 years later we are still dealing with similar issues on transfers.

As an aside, the one other reform I am aware of is the Licensing (Amendment) (Scotland) Act 1996 which introduced “entertainment” conditions as a result of public concerns over the rave culture of the early 1990s and in particular the deaths at Hangar 13 in Ayr.

Ruminating over old laws allows a little context.

  • The 1976 Act came into force in 1977 and was allowed to “bed in” for 13 years before it was changed under the 1990 Act
  • Over the 30 years life of the 1976 era, there were 4 Acts, including the 1976 Act itself.
  • The 2005 Act came into force in 2009 and was almost immediately reformed significantly with the Criminal Justice and Licensing (Scotland) Act 2010 and then the Alcohol etc. (Scotland) Act 2010.
  • Over the last 6 years, there have been 5 Acts including the 2005 Act itself, with another Bill on the horizon

The sheer volume of licensing law currently on the statute books is such that a Consolidatory Act is now essential. It cannot be equitable that all those involved in such an important area of life from traders, communities, health professionals, police, and even us licensing lawyers, have to wrap our heads around 5 Acts and 30 odd regulations. There is plenty of precedent for this but as I am in a nostalgic mood, so let us in particular look to the Licensing (Scotland) Act 1903 as an example.

In the Preface to the oldest Scottish licensing law book, “The Liquor Laws for Scotland”, by David Dewar (the Chief Constable and Procurator Fiscal for the Burgh of Dundee) the first edition of which was published in 1884, Mr Dewar says: “It is somewhat remarkable that so many Acts are at present in force containing important provisions affecting the trade in excisable liquors, extending from 1751 to the present year, and that no attempt has hitherto been made to consolidate these Statutes”. He makes the same plea in his second edition ten years later but was made to wait for the Licensing (Scotland) Act 1903.

I was pleased to learn that Mr Dewar retained his post until 1909 and therefore practiced licensing laws under the 1903 Act before his retirement. He must have enjoyed those twilight years of practice.

It was 152 years between the Tippling Act of 1751 and the 1903 Act. I do hope we don’t have to wait that long…

 

 

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About Stephen McGowan

Leading Scottish licensing solicitor at TLT. Chairman of BII Scotland.
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