Trade dealt £43m blow in licence fee U-turn

by Ewan Turney

The Government has caved in to local authority pressure and increased licensing fees by 54%, raising an additional £43m from licensed premises in the first year of the new regime.

It has also promised local authorities an independent review in November 2006 of whether the fees are high enough. Large town-centre pubs have been hit hardest with a huge hike in both the licensing application and the annual fee ­ they will pay up to £3,000 in year one.

Other smaller pubs face slightly higher charges than originally proposed.

The one-off payment for a new licence has risen to between £100 and £635 ­ compared to the original promise of between £80 and £500 ­ based on rateable value. The annual fee has risen to between £70 and £350 ­ from the original figure of £40 to £225. Personal licence and a temporary event notice charges remain the same as proposed at £37 and £21 respectively.

A "multiplier" will be added to town-centre pubs falling in bands D or E if they are "exclusively or primarily in the business of selling alcohol". The largest town-centre pubs will now face a one-off transitional charge of £1,095 and a £1,050 annual fee. "This is only right," said Culture Secretary Tessa Jowell. "They can have the biggest capacities, the highest turnover and often make the greatest profit. They are a major beneficiary of our night-time economy. They should put more back into policing it."

Association of Licensed Multiple Retailers chief executive Nick Bish said the hike would hit some pubs very hard. He said: "The White Paper said there would be £1.9bn in savings in total. But we now have a band B pub rising from an annual fee of £10 to £180 ­ an 18-fold increase. But is the system going to be 18 times better?"

Despite the rise in fees, a survey conducted by the Local Government Association (LGA) and LACORS (Local Authorities Coordinators of Regulatory Services) predicted that councils were still facing a deficit of between £20m and £30m in the transition period and year one.

"It is nothing like the amount we needed," said Westminster cabinet member for licensing Audrey Lewis.

"We will still have a £3.1m deficit. For example, a large hotel in Park Lane was previously paying us £37,000 a year but will now be paying £350."