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News - 11 June 2005

New licensing regime penalises small businesses

The Federation of Small Businesses (FSB) has written to Licensing Minister, James Purnell, to complain that the new licensing regime penalises small pubs and businesses that do not make the bulk of their profit from alcohol.

Acording to Britain's biggest business organisation the new scheme is so indiscriminate that it could affect up to 400,000 small businesses, almost all of which will be hit by an increase in fees.

FSB members affected include off-licenses, wedding venues, agricultural shows, corner shops, chauffeurs and tea rooms in addition to pubs, bars, nightclubs, hotels, restaurants, guest houses, microbreweries, take aways and wine wholesalers.

FSB Policy Chairman John Walker said, "The new licensing scheme is such a blunt instrument that it fails to distinguish between a city centre fun pub and a bed and breakfast that makes less than £100 a year from alcohol sales."

"The government has underestimated the vast array of businesses that come under the new regime, and has made no attempt to recognise that for many of them alcohol is just a very small proportion of their total sales."

The FSB also hit out at the higher fees for small neighbourhood pubs. Mr Walker said, "This is a stealth tax that raises additional revenue for local authorities with most neighbourhood pubs and small businesses paying more. A business with a rateable value of under £5,000 is very different to one with a rateable value of £33,000 and yet under the new system they pay the same license fee."

He concluded, "We accept that the new licensing regime is in place and are urging our members to get their applications in on time to avoid being shut down. But that does not change the fact that the government's approach has been incredibly heavy-handed and has resulted in a system that is overly-bureaucratic and imposes disproportionate costs on small firms."

The FSB is calling for:

  • A fees system that operates on a genuine sliding scale, based on more distinct bands of rateable values,
  • A reduction in fees for wholesalers and businesses that do not make the bulk of their profit from alcohol,
  • An urgent review of the licensing regime by the independent fees review panel,
  • Measures to combat red tape and free advice from local authorities to ensure that businesses are not forced to take legal advice just to complete the form

Read related items on:
Retail, pubs, clubs and restaurants
Federation of Small Businesses

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