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SL/S3/10/R56

56th Report, 2010 (Session 3)

Alcohol etc. (Scotland) Bill as amended at Stage 2

Remit and membership

Remit:

1. The remit of the Subordinate Legislation Committee is to consider and report on-

(a) any-

(i) subordinate legislation laid before the Parliament;

(ii) Scottish Statutory Instrument not laid before the Parliament but classified as general according to its subject matter;

(iii) Pension or grants motion as described in Rule 8.11A.1;

and, in particular, to determine whether the attention of the Parliament should be drawn to any of the matters mentioned in Rule 10.3.1;

(b) proposed powers to make subordinate legislation in particular Bills or other proposed legislation;

(c) general questions relating to powers to make subordinate legislation; and

(d) whether any proposed delegated powers in particular Bills or other legislation should be expressed as a power to make subordinate legislation.

(Standing Orders of the Scottish Parliament, Rule 6.11)

Membership:

Bob Doris
Helen Eadie
Rhoda Grant
Alex Johnstone
Ian McKee (Deputy Convener)
Elaine Smith
Jamie Stone (Convener)

Committee Clerking Team:

Clerk to the Committee
Irene Fleming

Assistant Clerk
Jake Thomas

Support Manager
Lori Gray

The Committee reports to the Parliament as follows—

1. At its meeting on 2 November 2010, the Subordinate Legislation Committee considered the delegated powers provisions in the Alcohol etc. (Scotland) Bill as amended at Stage 2. The Committee submits this report to the Parliament under Rule 9.7.9 of Standing Orders.

2. The Scottish Government provided the Parliament with a supplementary memorandum on the delegated powers provisions in the Bill (“the supplementary DPM”)1. In addition, the Scottish Government has written to the Committee intimating the amendments it proposes to make at Stage 3.

Delegated Powers Provisions

Section 1 (paragraph 6A schedule 3 and paragraph 5A schedule 4 to the 2005 Act) (reinstatement with amendments) minimum price of alcohol

Power conferred on: the Scottish Ministers
Power exercisable by: order made by statutory instrument
Parliamentary procedure: affirmative resolution of the Scottish Parliament

3. As introduced, section 1 of the Bill provided for new standard conditions in premises and occasional licences prohibiting the sale of alcoholic products for less than the minimum price per unit (MPU). Section 1 originally provided a power for the Scottish Ministers to set the original minimum price and subsequently to vary it by affirmative order.

4. A Scottish Government amendment at Stage 2 to introduce the initial minimum price of 45p per unit on the face of the Bill was defeated and the lead committee agreed to remove section 1. The Scottish Government wrote to the Subordinate Legislation Committee advising that it will seek to reinstate section 1, including the initial minimum price per unit of 45p, at Stage 3 (see Annexe). It also proposes to introduce a new section before section 2 providing a time limit for the effect of the minimum price (sometimes called a “sunset clause”). Under this new section, the new licensing conditions will expire after six years unless an order is passed by the Parliament continuing their effect.

5. In its Stage 1 report, the Committee concluded that the use of affirmative procedure to set the initial MPU and any subsequent variation of it would not give the Parliament sufficient time to scrutinise the Scottish Government’s proposals and to hear evidence from experts as to whether the particular MPU proposed was compatible with EU law trade rules. Although it would be for the Parliament to determine the MPU, the Committee’s concern was that it was responsible for advising on what would be an appropriate procedure in order to allow time for the Parliament to scrutinise the evidence fully before making a decision.

6. In relation to the initial MPU, the Committee considered that it would have been more appropriate to include a minimum price for debate alongside the principle of minimum pricing at Stage 1. In relation to any revision of the MPU at a subsequent date, the Committee considered that super-affirmative procedure would be more appropriate and that any draft instrument issued for consultation should require to be published for at least 60 days before an order was brought forward for approval by the Parliament.

7. Although the Scottish Government proposes to set an MPU of 45p per unit, in relation to subsequent variations to the MPU, the Committee’s concerns have not been addressed. The reasons for the Committee’s recommendations are fully rehearsed in its Stage 1 report and it does not consider that there have been any significant changes in circumstance which would affect the Committee’s previous position on subsequent variations of the MPU. In particular, the Scottish Government’s proposal to limit the effect of minimum pricing to a period of six years (unless the “trial period” is then made permanent) does not address the concerns as to how evidence is to be obtained and provided to the Parliament so that it can consider for itself whether any proposed MPU is compatible with EU law. While the Committee was divided on the terms of the Stage 1 report as regards section 1, the Committee unanimously supported super-affirmative procedure for the variation of the minimum price.

8. The Committee therefore repeats the concerns which it expressed in its Stage 1 report, with regard to the need for the process of setting any MPU to allow the Parliament time to consider evidence and evaluate whether any proposal is considered to be compatible with EU law. It is recommended that any variation of the MPU is subject to super-affirmative procedure in which the consultation period should be not less than 60 days when the Parliament is in session.

New sections before section 2 (minimum price of alcohol – duration of amendments)

Power conferred on: the Scottish Ministers
Power exercisable by: order made by statutory instrument
Parliamentary procedure: affirmative resolution of the Scottish Parliament

9. The Scottish Government has brought forward an amendment (amendment 2) which proposes that the new mandatory conditions relating to minimum pricing should be subject to a six year trial period.

10. Under these provisions, after five years the Scottish Government must lay a report on the operation and effect of minimum pricing before the Scottish Parliament. After the five year anniversary, and before the end of the six year period, the Scottish Ministers can bring forward an affirmative order which, if passed, will have the effect of making minimum pricing permanent. In the event that no such order is passed and the minimum pricing provisions therefore expire, Ministers also have the power to make an order making any other provision which is necessary or expedient in consequence of those provisions expiring. This order is also subject to affirmative procedure – it may be used to amend primary legislation.

11. If the Parliament wishes to introduce minimum pricing on a limited trial basis then the process proposed by these amendments is sensible. It is a legitimate use of subordinate legislation to avoid further primary legislation on the matter. The Parliament remains in control of the outcome since an affirmative resolution will be required for minimum pricing to continue in effect. A report is also to be laid before the Parliament to assist the Parliament in making its decision.

12. The Committee considers that the powers expressed in the new section proposed by the Scottish Government’s amendment 2 are acceptable in principle and that it is appropriate that they are exercisable by affirmative procedure in conjunction with the provision of a report (as provided in amendment 3).

Section 7 – Occasional licences: modification of mandatory conditions

Power conferred on: the Scottish Ministers
Power exercisable by: regulations made by statutory instrument
Parliamentary procedure: affirmative resolution of the Scottish Parliament

13. Sections 27 and 60 of the Licensing (Scotland) Act 2005 (“the 2005 Act”) permit amendment to the standard conditions applicable to premises licences and occasional licences respectively. Regulations under section 27 are currently subject to affirmative procedure whereas regulations under section 60 are subject to negative procedure.

14. In its Stage 1 report the Committee recommended that there should be consistency of approach and that regulations under section 60 should be subject to affirmative procedure. Section 7(4) of the bill achieves this.

15. The Committee welcomes the fact that the Scottish Government has accepted the Committee’s recommendation in its Stage 1 report and amended the 2005 Act to provide that changes to the standard licensing conditions for occasional licences are subject to affirmative procedure.

Section 9 – Premises licences: variation of conditions

Power conferred on: the Scottish Ministers
Power exercisable by: regulations made by statutory instrument
Parliamentary procedure: affirmative resolution of the Scottish Parliament

16. In its Stage 1 report, the Committee agreed to reconsider this section after Stage 2. Section 9 introduces a new section 27A into the 2005 Act which confers power on the Scottish Ministers to prescribe the matters in respect of which licensing boards may vary the conditions of operation for all or a particular group of premises licences in their area. The Committee was concerned that the Scottish Government could not offer sufficient justification for the breadth of the power. It was clear that Ministers wished to be able to use it to impose conditions restricting the purchase of alcohol at off-sales premises to prevent sales to people aged under 21. In this context, the Committee was not convinced that an order-making power was required to achieve this policy objective.

17. At Stage 2, new section 8A was added which provides that a Licensing Board may not introduce a policy in its licensing policy statement prohibiting sales of alcohol for consumption off the premises to persons under 21.

18. New section 8A is concerned with restricting the scope of licensing policy statements and not the power to vary licences under new section 27A and so this non-government amendment does not address the Committee’s concern. The point under discussion was whether justification for the breadth of the power has been made and not whether or not there should be power to amend licensing conditions to prohibit off sales to persons under the age of 21. No further submissions have been made to the Committee in this respect. The matter was not subject to debate at Stage 2, beyond the discrete issue of sales to persons under 21, nor were any further arguments advanced in the Scottish Government’s response to the Committee’s Stage 1 report.

19. The Committee reports that it remains concerned that, in an effort to reach political consensus on a specific issue (sales to persons under 21), the Scottish Government has created a much more far-reaching power to give Licensing Boards discretion to vary licences in its area.

Section 9B – Occasional licences: limits on numbers and durations of licences

Power conferred on: the Scottish Ministers
Power exercisable by: regulations made by statutory instrument
Parliamentary procedure: negative resolution of the Scottish Parliament

20. Section 9B of the Bill amends section 56 of the 2005 Act to make clear that, if the granting of a further occasional licence application would result in the prescribed occasional licence limit being exceeded, the Licensing Board must refuse the application. Further provision is then made about what the occasional licence limit means. In relation to applications by voluntary organisations the limit is prescribed in section 56(6). In all other cases new provision is made for setting out the limit in regulations subject to negative procedure. Section 56(6C) sets out some of the ways in which regulations could set the limit.

21. The Supplementary Delegated Powers Memorandum explains that the current arrangements for the issue of occasional licences is open to abuse as a means of retailers avoiding the stricter requirements which apply to “full time” premises licences. Flexibility is still desired to allow for occasional licences, where justified for occasional hospitality and entertainment events, but also flexibility is required in order to respond to the potential abuse of the occasional licence system.

22. The Committee considers that the proposed power to set limits in relation to when occasional licences are permitted is a justifiable and proportionate means of addressing this issue.

23. The Committee is content that the power in section 56(6B)(b) of the 2005 Act inserted by section 9B(2) of the Bill is acceptable in principle and that it is subject to negative procedure.

Sections 10 and 11 – Licence holders: social responsibility levy

Power conferred on: the Scottish Ministers
Power exercisable by: order made by statutory instrument
Parliamentary procedure: affirmative resolution of the Scottish Parliament

24. Sections 10 and 11 give power to the Scottish Ministers to impose a charge on licence-holders through affirmative regulations. The purpose of the charge is to meet or contribute to expenditure incurred or to be incurred by any local authority which the authority and the health board consider necessary or desirable to remedy or mitigate any adverse impact on the licensing objectives or otherwise in furtherance of those objectives. The licensing objectives are set out in section 10(5) – these mirror those set out in the 2005 Act. They are the prevention of crime and disorder, securing public safety, preventing public nuisance, protecting and improving public health and protecting children from harm.

25. In its Stage 1 report, the Committee considered that the Scottish Government had not provided sufficient justification for the use of subordinate legislation to create the levy as opposed to providing full details of how the levy would operate in primary legislation. It drew this matter to the lead committee’s attention and agreed to reconsider the matter after Stage 2.

26. Minor changes were made to sections 10 and 11 at Stage 2. The local authority now requires to agree with the health board what would be necessary or desirable to remedy or mitigate adverse impact on the licensing objectives. Section 11 now provides that, before laying a draft instrument before the Parliament, the Scottish Ministers must consult the persons mentioned in section 11(3). The SDPM suggests that this amounts to “super-affirmative” procedure and that this is a response to the Committee’s Stage 1 report.

Further amendments to be made at Stage 3

27. The Scottish Government has intimated that it intends to make the following amendments to the social responsibility levy at Stage 3. Instead of local authorities having to agree with relevant health boards the expenditure for which the levy may be used, the local authority is required to consult the relevant health board and the chief constable.

28. In addition, the Scottish Government intends to permit regulations under section 10 to modify the 2005 Act and the Civic Government (Scotland) Act 1982 because it considers this necessary if, under section 10(4)(h), payment of the social responsibility levy may be made a condition of the licence.

29. Finally, the Scottish Government proposes to amend section 11(3) to require the Scottish Ministers to consult health boards and chief constables before laying a draft of the regulations imposing the social responsibility levy before the Parliament.

30. The Committee does not consider that there have been any changes of substance to the content of the order which the Committee previously objected to. The Committee noted in its Stage 1 report that, as a minimum, it would expect details such as who is to be responsible for administering the levy, the basis on which liability to pay it would be determined, the maximum charge permitted and the implications for non-payment of the charge to be approved by the Parliament in primary legislation. None of these details has been provided by Stage 2 amendment.

31. As a possible way forward, the Committee proposed super-affirmative procedure as a means for the Parliament to engage with the details of the proposed levy when known, but at a stage prior to the process for formal approval of the instrument through the affirmative procedure.

32. The Scottish Government indicated in the SDPM that it has introduced super-affirmative procedure as requested. The Committee does not agree that this is what section 11(3) provides. Rather, it places an obligation on the Scottish Ministers to consult persons representing the listed interests as they think appropriate. It does not provide for the instrument to be laid before the Scottish Parliament so that the Parliament has due notice of the proposal. The super-affirmative procedure would also usually involve a period of time being specified between the laying of the draft for consultation purposes and the laying of the draft instrument for approval so that consultation responses can be gathered and the Parliament can take evidence if it wishes. It could also require Ministers to have regard to comments made by the Parliament.

33. The Committee reports that its concerns with regard to the social responsibility levy expressed in its Stage 1 report have not been addressed. If, as the Scottish Government suggests in the Supplementary Delegated Powers Memorandum, it intends to make the exercise of the power subject to super-affirmative procedure then the draft regulations for consultation should be laid before the Parliament for a period of not less than 60 days when the Parliament is in session for scrutiny prior to a draft being laid for approval in order to give the Parliament the opportunity to consider the detail of the proposal.

ANNEXE – LETTER FROM ALCOHOL ETC. (SCOTLAND) BILL TEAM

This letter provides information on the amendments that the Government intends to bring forward at Stage 3 of the Alcohol etc. (Scotland) Bill which will introduce or amend powers to make subordinate legislation.

Minimum price of alcohol

The Scottish Government has already lodged an amendment imposing a licence condition in premises and occasional licences that alcohol not be sold below a minimum price. This amendment sets out that the minimum price per unit of alcohol is 45p or such other price as Minsiters may by order specify. Such an order would be subject to the affirmative resolution procedure.

Sections 10 and 11: licence holders: social responsibility levy

The Scottish Government is proposing to amend section 10(3) of the Bill which sets out the purpose for which the social responsibility levy may be imposed. The intention is to amend the duty of local authorities in section 10(3)(a)(ii) so that local authorities are not required to agree with relevant health boards the expenditure that the social responsibility levy may be used for but rather they are required to consult with the relevant health board and appropriate chief constable as to this expenditure. We consider this is a more appropriate way of involving health boards in the process of what the levy is spent on. This approach is consistent with the involvement of health boards in the licensing process provided for in section 9A.

Section 10(4)(h) provides that the regulations imposing the social responsibility levy may provide for the payment of the levy to be a condition of the licences held by relevant licence-holders. The Scottish Government is proposing to amend section 11(1) of the Bill to enable regulations under section 10(1) imposing a social responsibility levy to modify the Licensing (Scotland) Act 2005 and the Civic Government (Scotland) Act 1982. Such modifications will be necessary if the regulations under section 10(1) are to provide that payment of the levy is to be a condition of the licences held by relevant licence holders.

The Scottish Government is also proposing to amend section 11(3) to provide that the Scottish Ministers must also consult health boards and chief constables before laying a draft of the regulations imposing the social responsibility levy before the Parliament.


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