New licensing regime penalises small businesses

The FSB will reveal today (Monday) that it 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.

According 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 then £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 by 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

Case studies

Amongst the FSB members affected are:

The Guest House - Anne Stephenson of the Braemar Hotel, a six bedroom guest house in Blackpool. Anne sells around £500 worth of cold cans of beer a year, making a profit of just £89. In the past she was happy to pay the £35 annual fee because it allowed her to offer a service that her customers wanted. But now she faces a yearly charge of £200 and will never be able to cover her costs.

The Wine wholesaler - Alan Watson of Wines Unlimited in London. Alan runs a small wine wholesale business from his spare bedroom, importing pallets of specialist wines and then selling them on by the case. In the past this was considered trading and he did not need a license. Under the new scheme he is treated the same as a city centre pub and faces a £450 fee.

The microbrewery - Don Burgess of the Freeminer brewery in Gloucestershire. Under the new regime Don is faced with the choice of paying around £1,000 in fees or being prohibited from selling beer to customers for weddings, parties or at Christmas.

The FSB is Britain's biggest business organisation with 185,000 members. It exists to protect and promote the interests of the self-employed, and all those who run their own business. More information is available at www.fsb.org.uk.

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