Michael McDowell (Dublin South East, Progressive Democrats)

I defy anyone to contradict that.

The so-called extinguishment requirement is the current rule whereby an applicant for a new licence for a public house or for an off-licence premises must present the court with evidence that an existing licensee has agreed to extinguish a current licence. I had intended to retain this provision, which many regard as restrictive and anti-competitive, as part of an overall package that included the creation of the new café bar licence. Without the café bar element, its retention will have to be reassessed. A question that now needs to be addressed is whether the decision to replace the café bar licence by a liberalised restaurant licensing system constitutes an obstacle to freedom of movement within the EU and infringes EC treaty rights to establishment and freedom to provide services. For example, if an EU national wishes in future to exercise his or her right of establishment to open a bar in this country, that person will now have no option but to seek to obtain, by whatever means, the agreement of an existing licensee to extinguish a current licence. There is no discrimination involved, as the rule applies to all, but the procedure lacks transparency and certainty.

For example, there is no register of licences available for extinguishment. There are, admittedly, auctioneers and agents who seek to put intending applicants in touch with licensees who may, depending on price, be willing to extinguish a licence, and licences for extinguishment are occasionally advertised in the newspapers. Availability also depends on demand, and as our population increases beyond 4 million and new urban centres are developed, there is a real probability that the price of extinguishment will increase. It has already increased from about €75,000 a few years ago to about €170,000 today.

The major driver behind this phenomenon is the increase in off-licence premises. Those who are concerned about the proliferation of off-licences should remember that the current boom in the value of licences for extinguishment is largely driven by the boom in demand for off-licence premises.

I am conscious that retention of the extinguishment rule without the alternative of a café bar would be construed by the European Commission as a means of discouraging non-nationals from exercising their rights of establishment and freedom to provide services in this country. Currently there are no EU laws relating to the operation of licensed premises and member states remain generally free to operate their own rules. The developing case law of the European Court of Justice suggests, however, that even in non-harmonised areas, member states must have regard to basic EC treaty freedoms. It could be claimed in defence of the extinguishment requirement, as has been argued recently by certain public health interests, that it is a necessary public health measure designed to limit the availability of alcohol. Unfortunately, alcohol consumption data suggest otherwise. It might be hard to convince the European Court of Justice of its public health merits given that a licence can be transferred from small uneconomic premises in a rural area to a superpub in some expanding urban centre. Its effectiveness is also doubtful in light of the 41% increase in alcohol consumption per capita which, according to the strategic task force on alcohol, took place between 1989 and 1999 with no increase in licence numbers. There is also an issue of population growth.

In any event the Court of Justice, while recognising the validity of health arguments, would be likely to question the proportionality of such a requirement and seek to explore whether less restrictive alternatives might not achieve the desired public health objectives. The matter is under consideration in my Department and the advice of the Office of the Attorney General has been sought. Any proposal to retain the extinguishment requirement might yet have to be notified to the European Commission under the so-called transparency directives. These directives are intended to give the Commission, and the other member states, an opportunity to consider member state proposals which might have an adverse impact on the exercise of EC treaty rights in the Internal Market.

In bringing forward proposals to reform the licensing laws, I am conscious of public concerns about alcohol-related harm in our society. For this reason, the proposed Bill contains safeguards that are intended to combat such harm. These include extending the jurisdiction of the courts to all retail licences and nightclub permits and giving specified notice parties and the public the right to object to the grant of a licence or permit, streamlining the system for renewing licences and clarifying the right of members of the public to object to such renewal on stated grounds, strengthening provisions designed to combat sales to under-age persons by requiring all off-licences to have written policies and control procedures, creating a new offence of being in possession of a forged Garda age card, as well as increasing the levels of penalties and sanctions, including a proposal that all temporary closure orders should involve closure for a minimum of two days.

The Bill does not propose any significant changes to existing opening hours. Certain changes recommended by the Commission on Liquor Licensing were introduced in the Intoxicating Liquor Act 2003, such as earlier closing on Thursday night, and no significant changes are proposed in this Bill. A number of relatively minor adjustments are included which relate mainly to the longer opening hours permitted under general exemption orders and exemptions for special events.

In all cases, reform is intended to clarify the law with a view to improving compliance and facilitating enforcement by the Garda. The new licensing arrangements set out in the Bill will allow the Garda to object to applications for retail licences, nightclub licences, special exemption orders and club registrations on grounds of undue risk of public nuisance or threat to public order or safety. In addition, the Garda will be able to apply to the District Court to have a nightclub permit revoked on the grounds set out above. Provision is made for offences relating to drunkenness and disorderly conduct on licensed premises and under age drinking. Certain provisions will be strengthened to combat under age consumption of intoxicating liquor, in which context a new offence of being in possession of a forged or altered age card is being proposed. In future, a member of the Garda will have the right to arrest a person who refuses to give his or her name and address, which right does not currently exist in all circumstances.

The Bill will provide for a consistent and coherent system of sanctions and replace the current patchwork of penalties which has evolved over time. Increased fines and penalties are proposed, including a minimum closure order of two days. Clarifying and streamlining the licensing code will help to improve compliance by licensees and enforcement by the Garda. The Garda already has extensive powers under the Public Order Acts of 1994 and 2003 to deal with the effects of intoxication and disorderly conduct in public places. The 2003 Act provides that the District Court can make an exclusion order as an additional penalty where a person is convicted of a public order offence under the 1994 Act. An exclusion order prohibits a person from entering or being in the vicinity of specified premises covered by the Act. The Act also allows the Garda to apply to the District Court for a closure order in relation to premises such as pubs, off-licences, nightclubs and food premises where there are disorder or noise problems.

I wish to discuss my fundamental approach in this area. I listened with interest to the contributions of the Deputies opposite which ranged in tone and content. It is interesting that a series of proposals from Government in the form of draft legislation in response to the report of a broadly-based commission has encountered in the House negativity and opportunistic posturing on the part of the proponents of tonight's motion.

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