HL Deb 14 February 1992 vol 535 cc978-82

2.27 p.m.

Lord Macaulay of Bragar

My Lords, I beg to move that this Bill be now read a second time. The Bill is supported across party lines and the importance of its provisions for the licensed trade and licensed hoards and the absence of any political content mean that I am glad to promote in this House a Bill which has been ably steered through another place by a Member of a different political persuasion.

Although there is no opposition to the Second Reading, it is right that I should put on record the reasons why the Bill has been presented and what are its purposes.

The Bill seeks to remove problems experienced by licence holders and prospective licence holders alike in the transfer of liquor licences under the procedures laid down by Section 25 of the Licensing (Scotland) Act 1976. The transfer system was amended by Section 51 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990 in the light of a consultative review which took place in 1986. In response to that review anxiety was expressed by certain business interests that the need for a transfer of a licence to take place at quarterly meetings of a licensing board had the effect in certain circumstances that trading on the licence had to stop until the licensing board had reached its decision on transfer of the licence.

In a genuine and reasonable attempt to resolve that problem, Section 51 of the Law Reform (Miscellaneous Provisions) (Scotland) Act introduced a two-stage procedure which permitted prospective licensees to apply for a temporary licence at any time and trade on that basis until the temporary transfer had been confirmed as permanent at the following quarterly board meeting.

That method, known as a two-stage transfer, entailing as it does a mandatory temporary transfer in all cases has been found to be unworkable by those involved in the licensing trade. Solicitors, clients and the licensing boards are encountering grave difficulties in interpreting the Act as amended.

In particular there is widespread anxiety about the effect of the two-stage transfer on the conveyancing and financing of licensed premises. Prospective purchasers of licensed premises were encountering problems in securing a loan from financiers when they held only a temporary licence since permanent transfer of the licence depended upon the subsequent decision of the licensing board, which could by no means be guaranteed.

The two-stage transfer has given rise to those practical problems. Since January 1991 representations have been received from the licensing boards, the licensing trade and the licensing practitioners about the practical difficulties experienced in the conveyancing of licensed premises and the financing of their sale or purchase.

It has been argued that prospective purchasers of licensed premises need to be assured before making a firm offer for the premises in question that the relevant licence would automatically continue to be valid under their ownership. Banks, breweries and other financiers have indicated some reluctance to lend to a purchaser who holds only a temporary transfer since it is possible that the licensing board might subsequently refuse permanent transfer. Though some clerks to licensing boards have adopted a flexible interpretation of these provisions which permitted their boards to hear applications for both temporary and permanent transfer on the same day, this approach has recently been held to be ultra vires by the Court of Session.

The Government accept that the two-stage transfer procedure is the source of genuine difficulties and therefore they support the Bill. The Bill reinstates the original one-step permanent transfer but retains temporary transfer as an option should anyone wish to take that approach.

Perhaps I may explain briefly the purposes of the various clauses. Clause 1(1) (a) deletes the word "temporarily" from Section 25(1) of the 1976 Act which was inserted by Section 51(2) (a) of the 1990 Act; the effect of this change is to reinstate the one-stage permanent transfer originally provided for by the 1976 Act.

Clause 1(1) (b) substitutes new subsections (1A) to (1C) for subsections (1A) to (1C) of Section 25 of the 1976 Act which were inserted by Section 51(3) of the 1990 Act. The effect of new subsections (1A) to (1C) is to retain as an available option the temporary transfer of a liquor licence at any time provided that the licensing board approves the temporary transfer as permanent at the next appropriate meeting.

New subsection (1A) permits a licensing board to transfer a liquor licence on a temporary basis. The licence so transferred is to have effect until the next meeting of the board or, where the temporary transfer is made within six weeks before the first day of the next meeting, the next following meeting of the board. The temporary transfer of a licence may be made under delegated arrangements (for example, by the clerk rather than the full licensing board) by virtue of Section 5(1) of the 1976 Act.

New subsection (1B) requires that, where an application has been made for the permanent transfer of a licence already temporarily transferred under new subsection (1A), the licensing board shall make a decision on the permanent transfer of the licence at the next appropriate meeting.

New subsection (1C) provides that where a licensing board refuses an application for the permanent transfer of a licence which has been temporarily transferred the licence transferred temporarily has effect until the conclusion of any appeal against the board's decision.

Subsection (1) (c) amends the definition of permanent transfer in Section 25(7) of the 1976 Act as inserted by Section 51(6) of the 1990 Act. The effect of this amendment is that permanent transfers are to be construed both as references to permanent transfers under the one-stage procedure reinstated by the Bill and to temporary transfers made permanent under new subsections.

Subsection (2) amends Section 19(1) of the 1976 Act which prohibits canvassing of the licensing board by an applicant for the grant, renewal or permanent transfer of a licence. The effect of subsection (2) is to extend the prohibition to applications for the temporary transfer of a licence under new subsection (1A) and to applications for confirmation of transfer under Section 25(4) of the 1976 Act, as inserted by Section 51(4) of the 1990 Act.

Subsection (3) repeals Section 51(2) (a) and (3) of the 1990 Act in consequence of the revised provisions introduced by subsection 1(a) and (b) of Clause 1. Clause 2(1) contains the Short Title of the Bill and describes its extent and subsection (2) provides that Section 1 of the legislation shall come into effect, on such day as the Secretary of State may appoint by order", and that the commencement order may contain any, incidental and transitional provisions and savings as appear to him to be necessary or expedient". I am sorry to bore your Lordships with such details. But I believe it is right that if people wish to know why the Bill has gone through your Lordships' House they should at least be able to read the details and understand the reasons for the Bill's introduction. There is wide agreement that the only effective solution to the difficulties that I have outlined lies in amending legislation. Accordingly, the Bill reintroduces the original one-step permanent transfer, but retains the option of a temporary transfer if circumstances demand it.

In conclusion—as I am sure your Lordships will be glad to hear—I should mention that the Bill enjoys the support of the Convention of Scottish Local Authorities, the licensed trade and especially the Law Society of Scotland, which have campaigned on its behalf. It is in the interests of all that the Bill should have a trouble-free and certain passage so that current constraints on the sale and purchase of licensed premises can be resolved during the life of this Parliament.

I should point out that the licensed trade is in severe trouble at present. Many hotels and pubs are for sale. Therefore, in order to get things moving, I think that the Bill will help to give the market—to use a terrible phrase—a kick-start. I am sure we all hope that that will happen. On that basis, I commend the Bill to your Lordships' House.

Moved, That the Bill be now read a second time.—(Lord Macaulay of Bragar.)

2.35 p.m.

The Earl of Strathmore and Kinghorne

My Lords, I am glad to have the opportunity to confirm to the House that the essential measure in the Bill enjoys the full support of the Government. I am most grateful to the noble Lord, Lord Macaulay of Bragar, for agreeing to sponsor the Bill in this House. His willingness to do so clearly indicates the cross-party support which the measure has attracted and the widespread desire which exists to remove unnecessary and troublesome constraints currently experienced by the licensed trade in Scotland as regards the sale or purchase of licensed premises.

As the noble Lord indicated, the measure enjoys the support of the Law Society of Scotland, the Scottish Licensed Trade Association and the Convention of Scottish Local Authorities and has received unanimous support in another place. In the Government's view, the Bill satisfactorily addresses the key concern which is the absence of a one-stage permanent transfer and is designed to ensure that that defect can be speedily resolved.

On Question, Bill read a second time, and committed to a Committee of the Whole House.

House adjourned at twenty-two minutes before three o'clock.