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Licence costs 'could close pubs' Concern at licensing cost rises
(about 4 hours later)
Smaller bars and rural pubs face closure under a new licensing scheme which could quadruple their fees, the licensed trade is to warn MSPs. Pub industry representatives have raised concern about a rise in licensing fees, claiming they would force the closure of smaller outlets.
The industry claims the proposals could result in "unjustified" costs. The move will see some premises facing a £2,000 bill for their licence.
The justice secretary is to tell the justice committee the rise will cover extra costs of enforcement, paid for by the industry instead of taxpayers. Justice Secretary Kenny MacAskill said the move would put communities before profit margins and fairly link the charges to the size of businesses.
The proposals would see some pubs facing a maximum fee of £2,000 for their licence application. Holyrood's justice committee agreed not to block the new measures, which will come into force in autumn 2009.
The system will require a new network of Licensing Standards Officers, who will police the licences and monitor the impact of pubs and offsales on communities in terms of anti-social behaviour. At present, all pubs pay an initial fee of £172 for a three-year licence, with further fees for renewals.
This statutory instrument... could impose an unjustified cost of £20m on the 20,000 licensed premises in Scotland over the next 18 months David DanielPunch Taverns Clearly the licensed trade want that subsidised something-for-nothing system to continue Kenny MacAskillJustice Secretary
The Scottish Government said it was appropriate that businesses which would profit from the licences should pay the costs of administration. Under the new regime, premises with a rateable value above £140,000 would pay the maximum charge of £2,000.
However, the trade estimates that the cost to the sector will rise from £5m a year to £20m. Strongly defending the measures at the committee, Mr MacAskill said they would dispense with the "outdated and dogmatic" mindset that selling alcohol was a right.
It said an unfair burden would fall on smaller and rural pubs, leading to closures. "It is not," he added. "It is a privilege."
David Daniel of Punch Taverns, which owns 500 premises in Scotland, is among those urging the committee to drop the plans. The licensed trade estimated that costs to the sector would rise from £5m a year to £20m.
"As a member of the Scottish Parliament I am asking you to reject this statutory instrument, which could impose an unjustified cost of £20m on the 20,000 licensed premises in Scotland over the next 18 months," he says in a submission. David Daniel of Punch Taverns, which owns 500 premises in Scotland, said the increases did not reflect the cost of administration of the licence system.
He said the increases did not reflect the cost of administration of the licence system. Paul Waterston of the Scottish Licensed Trade Association said pubs were already under pressure because of the smoking ban and the use of alcohol sales by supermarkets as loss-leaders.
Tory MSP Bill Aitken, convener of the committee, has tabled a move to block the increases. 'Subsidised' system
But Mr MacAskill will argue that the new fees will end years of the licensing system being subsidised by the taxpayer. "The last thing licence holders need is these fees coming in," he said.
Fee income at present covers only 63% of the licensing system's running costs and the rest is met from other council resources. Patrick Browne, of the Scottish Beer and Pub Association, added: "I think there will be marginal businesses that will no longer continue to trade after September 2009, and I think increased costs will be passed back to the customer."
The justice committee's convener, Tory MSP Bill Aitken, decided not to press a motion to block the increases, amid concern that the increases had been brought forward at the last minute.
Mr MacAskill also said the new fees would end the current taxpayer-subsidised licensing system, under which 63% of running costs were met from fees.
He added: "Clearly the licensed trade want that subsidised something-for-nothing system to continue. But the government does not and I would suggest the public do not want it either."
The system will require a new network of enforcement officers, who will police the licenses and monitor the impact of pubs and off sales on communities in terms of anti-social behaviour.