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Wed 10th Feb 2021 - Legal Briefing

The pandemic’s complicated relationship with legislation by Michelle Hazelwood

Legislation is a curious thing. It governs everything we do but remains mostly invisible. The public generally believes it is just the acts of parliament that control their behaviour when, in fact, it is often documents with less grand titles that have the greatest influence. As a result of the coronavirus pandemic, we have all become more aware of this kind of legislation and how it can affect our everyday activities. During the past year, we have seen how the government can impose power of huge significance without a great deal of scrutiny or approval. Of course, we all understand these are unprecedented times but the source of this power and the ease to extend it is not readily visible for the everyday person.

The latest update in the Health Protection Regulations 2021 stated the government could “make minor amendments to, and correct errors in” the previous regulation. A recent example of this was with the extension of a sunset clause in the covid directives. Originally, local authorities were to lose the powers to close hospitality outlets this month. However, in January, it was silently changed to the new arbitrary date of 17 July without material debate or input from either the public or MPs. As time has gone on, each coronavirus regulation has increased in length and every new revision has sought to remove elements of flexibility within the sector.

Within the licensing regime, hospitality has long experienced the authority of instructive documents flowing from Section 182 of the Licensing Act. A document known as “The Guidance” is issued by the secretary of state and, while it is unenforceable by way of prosecution, content in the document has a major influence on how the Licensing Act is implemented.

However, it is not just “The Guidance” that has had a significant impact on the licensing regime. We are seeing hospitality continue to be subject to the same additional burdens as before March 2020 despite a complete change of the climate. I call these factors the holy trinity of licensing. They are late-night levies, cumulative impact policies (CIPs) and business improvement districts (BIDs). All these enter the arena quietly through the back door but once present have a serious material impact.

CIPs arise out of an assessment undertaken by the licensing authority, which looks at the impact of licensable activities on the area. This could include levels of crime and police strain. The most powerful restriction for CIPs is the constraints on the approval of new licences, the extensions of hours or the enlargement of a pre-existing licensed space. This approach has been applauded by the police as an adequate strategy for controlling city and town centres and has been adopted in many areas on licensing policy reviews. However, it is also heavily criticised by operators for not allowing the market to fully function. There is no realistic mechanism for challenging a council’s adoption of a cumulative impact policy. This leaves business owners to fight hard to prove exceptional circumstances exist and that no adverse impact on the cumulative effects identified in the policy will arise if their application is granted.

However, the pandemic has put a spanner in the works and may have even inadvertently caused the temporary demise of CIPs. Policies must be based on an assessment that has to be revisited every three years. If the evidence does not support the continuation of the policy, it has to cease. During the past year, antisocial behaviour and violence in town and city centres has virtually disappeared because of the halt of late-night culture. Any problems that continue to exist cannot be related to the operation of the hospitality sector because it is currently inactive. We are seeing them lifted across the country in locations such as Bristol, Liverpool, Trafford and Hereford, with Oxford likely to follow. The CIP assessments have rolling deadlines so operators are still facing a postcode lottery in regards to whether their businesses can be approved or amended. No doubt there will be pressure for reinstatement once the evidence can be secured but with no solid data to hand, the pandemic has made some cumulative impact policies obsolete. If the CIP is rigorously upheld, high streets across the country will have even more empty spaces if new licences continue to be refused based on policy.

By contrast, late-night levies arise out of statutory regulation and I deem them as currently the most unjustified additional taxation. Regardless of the extensive periods of closure and implementation of curfews for hospitality, the tax remains until the statute is appealed by parliament. This is something it has not been quick to address and it has served as an additional unwarranted strain on the industry.

Finally, what I believe to be the most successful option is the collaborative approach brought forward by BIDs. These must be voted in by the participants and, therefore, the adjustments that are made are not arbitrarily imposed. They work as a mechanism to try to achieve redevelopments of town and city centres including assisting hospitality to responsibly thrive within these areas. As we start to see signs of hope and look forward to reopening, BIDs can serve as a way for the industry to have a say regarding its own sector and the regeneration of local areas. It is the one place where funds that are input by the industry can be directed to where the operators know it will have the best impact. This is a key way in which BIDs can help restart the hospitality economy in 2021 and assist the sectors return to its former glory.
Michelle Hazelwood is a partner at John Gaunt & Partners
John Gaunt & Partners is a Propel BeatTheVirus campaign member

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