LICENSING (CERTIFICATES IN SUSPENSE) (SCOTLAND) BILL (Hansard, 1 August 1966)

§ LORD ARCHIBALD
My Lords, I beg to move that this Bill be now read a second time. This is a small, simple, but I think useful Bill. It was introduced as a Private Member's Bill in another place and passed without opposition, and virtually without criticism. I hope your Lordships will be equally kind. Its sponsor in another place was a former Lord Provost of Glasgow, and as the Bill affects mainly Glasgow that is very appropriate. I was a member of the Glasgow licensing board some forty years ago, which makes it quite plain why I was asked to sponsor the Bill, but can hardly claim to be knowledgeable on current conditions.
The problems with which the Bill deals are twofold. During the last war some licensed premises were rendered unusable by war damage, and it was felt reasonable to place the licences in suspense until the licensee was able to restore his premises or find new premises. Later when, due mainly to slum clearance, many licensed premises were compulsorily acquired, it was felt reasonable to place the licensing certificates in suspense to give the holder an opportunity of finding new premises to which the licence might be transferred. I must say that the merits of this extension were much more doubtful than the original provision.
It should be said in passing that there were so many licensed premises in the slum areas of Glasgow that it is extremely unlikely, in Glasgow at any rate, that such a number can be reallocated, in addition to existing licences, over the city as a whole. But with the passage of time there has arisen the need for reconsideration of these two suspense provisions, which are embodied in the Licensing (Scotland) Act 1959. This Bill is based on a recommendation in the Second Report of Lord Guest's Committee on Scottish Licensing Law, presented to Parliament in June, 1963.
I come to the Bill itself. Clause 1(1) provides that no certificates shall be 1067 placed in suspense in future. This will cut out the creation of fresh certificates in suspense—that is, those that would arise from future compulsory acquisitions. I should give notice to your Lordships that we do not think that we have got this passage quite right. There are two different events relevant to the issue of a certificate in suspense—the compulsory acquisition and the discontinuance of the business—and these do not necessarily coincide in time. I propose to move an Amendment at Committee stage to clear up a little difficulty regarding premises that might be in the stage between these two events when the Bill comes into effect.
Clause 1(2) provides that certificates now in suspense shall be extinguished five years after the commencement of this Act. I think it will be generally agreed that, if after five years acceptable alternative premises have not been found, they are not ever likely to be found. As the Guest Committee Report says: In these circumstances we would suggest that a certificate in suspense may become little more than a dubious form of promissory note. Obviously, existing certificates in suspense should not drag on forever, and five years from the commencement of the Act seems to me a most generous provision.
There are other undesirable features of the present situation, such as trafficking in these suspended certificates. This arises from the fact that the procedure for "removal from suspense" is different from that for an application for a new licence. The purchaser of the licence in suspense may think that he is more likely to be successful in an application for removal of a certificate in suspense than in an application for a new licence. The reasons for this will become apparent when we come to Clause 2. All I need say now is that trafficking in licences has always been contrary to the spirit of the Scottish Licensing Law.
Clause 2 provides for a new procedure for an application for the removal of certificates in suspense during the five-year period. It does not wholly apply the procedure covering an application for a new licence, but it brings the procedures more into line. At present, the application for removal of a licence in suspense may be authorised at any specially convened meeting of the licensing court; it does not have to be advertised and local 1068 inhabitants and others interested have no opportunity to object. The effect of Clause 2 paragraph (a) is that a removal may be authorised only at the March or October half-yearly meetings of the court, and that applications must be made to the court fourteen days in advance. This enables the applications to be advertised in time for potential objectors to have an opportunity to object.
Clause 2 paragraph (b) applies some of the provisions of the 1959 Act governing the grant of a new licence to the procedure for a removal from suspense. Briefly. these are, as I have said, that the application must be advertised in the local newspapers, and that the same persons who have the right to object to a new licence shall have the right to object to a removal from suspense. The qualified objectors include any persons owning or occupying property in the neighbourhood of the premises; the procurator fiscal, and the chief constable. As your Lordships will see, the scope for objection is fairly wide, but the point is that under present procedure there is no provision for these objectors. Local inhabitants or the procurator fiscal or the chief constable may have just as strong objections to a removal licence coming into a certain area as they would have to a new licence coming into that area, and they should have—and under this Bill will have—the right to make their objections known to the licensing court. My Lords, in the interest of brevity, I may not have explained sufficiently the intentions and provisions of this Bill. If so, I apologise, but I commend the Bill to the House. I beg to move.

§ LORD HILTON OF UPTON
My Lords, I do not propose to detain your Lordships long since the Government's general welcome to this Bill has already been expressed in another place. However, I should like to congratulate my noble friend Lord Archibald on the able way in which he has presented his Bill. I should not like to take you into the complexities of the certificates in suspense system, which may have had some value in Scotland at the time of its introduction in 1942, to deal with the problem created when licensed premises were 1069 damaged by enemy action and were unable to operate; but its continuance since the war and its extension to compulsory acquisition in 1946 has been misconceived. I will not trouble your Lordships with the reason, but if you wish to find out for yourselves it can be seen in paragraphs 162 to 172 of the Second Report of the Committee on the Scottish Licensing Law, which sat under the able chairmanship of the noble and learned Lord, Lord Guest.
I should stress that the issue of a certificate in suspense to a certificate holder whose business has been discontinued as a result of war damage or compulsory acquisition does not give a right to re-establishment. The licensing court is under no obligation to grant the certificate holder a removal to new premises. The Guest Committee rightly described the certificate in suspense as "a dubious form of promisory note".
The difficulty created by the certificates in suspense system is largely confined to Glasgow where, as your Lordships will know, extensive redevelopment is in progress. This departs to a limited extent from the recommendations of the Guest Committee in that it does not provide for the immediate extinguishment of existing certificates in suspense on the payment of compensation. How, in any case, do you assess the value of a "dubious form of promissory note"? The alternative solution, that holders of existing certificates in suspense should have five years in which to realise whatever value the certificate has to them, seems to the Government to be a fair way of handling the matter.

LORD SALTOUN
My Lords, may I ask whether it is known how many licences in suspense there are, either in Glasgow or generally?

§ LORD DRUMALBYN
My Lords, may I also put a question to the noble Lord? What he has been saying will commend itself generally to your Lordships, but there is one further matter to which the Guest Report referred, in paragraph 171, which said this: When premises are acquired compulsorily, there is already a statutory right of compensation; and, provided that the compensation is assessed on the full market value of the business, including in appropriate cases an allowance for goodwill, we see no reason why licensed premises should be treated any differently in this matter from, say, shops". 1070 Is there an allowance for goodwill in the assessment of compensation for licensed premises, and, if not, will there be in the future?

§ LORD HILTON OF UPTON
My Lords, the answer to the first question, put by the noble Lord, Lord Saltoun, is between 50 and 60 licences. The answer to the question put by the noble Lord, Lord Drumalbyn, I am not at this moment in a position to give, but I will find it out and write to him.