The late night levy will be a more simple and less bureaucratic way for police and local authorities to recoup money from late night venues than Alcohol Disorder Zones (ADZ).
That's according to Home Office minister James Brokenshire who defended the controversial late night levy before the Police and Social Responsibility Bill scrutiny committee yesterday.
Labour MP Diana Johnson said the "fundamental weakness" of the levy was that it applied to a whole licensing district and was not targeted enough.
She cited her own East Yorkshire constituency where Bridlington has a late night economy but where a "huge amount of small country village pubs which cause no problem at all" would get caught up in the levy if they opened late on New Year's Eve.
She slammed the idea as a "dog's breakfast" and said the levy may lead to a return of every premises chucking customers out on the streets at the same time.
"I am concerned we will end up with businesses closing early to avoid the levy and end up back at the situation the Licensing Act 2003 was trying to deal with."
Dr Julian Huppert welcomed the idea of the levy but added: "We may end up with a levy local authorities may not be able to implement because of the restrictions or that is open to appeal from premises who will say there is no risk in their area."
However, Brokenshire stressed: "The levy must apply to all premises who benefit from the late night economy."
He said the Government had learnt lessons from Alcohol Disorder Zones, which were never used. "We have learnt lessons from ADZs of taking a placed based approach that ended up so unwieldy," he said.
He said that setting a levy across the whole licensing district would be the most "easy and affective" approach and lead to a lesser administrative burden on local authorities.
"The levy must be attractive to local authorities by being simple to introduce," he said.
The minister claimed that the levy and Early Morning Restriction Orders (EMROs) provided a flexible toolkit for local authorities to use.
Brokenshire said that some councils would decide the levy was not suitable for their area and may opt for the use of EMROs or a Business Improvement District. "It is not for me to prescribe that local authorities should take that route," he said.
He said he would keep a possible exemption from the levy for New Year's Eve and other special days under consideration.