A sex shop chain in Soho has won a major victory against license fees charged by Westminster City Council, in a landmark decision that the council believe could "open the flood gates for illegal pornography."
The council has been ordered to slash the license fees it currently charges sex shops after various outlets, led by Simply Pleasures Ltd, brought their case to the appeal court. Timothy Hemming, owner of Simply Pleasures, based on Brewery Street, and six other shop owners had argued that at most, only 10 per cent of the fees were justified.
Since 2005, Westminster City Council has charged sex shop owners in the West End of London £29,102 for their annual licence. In 2009, new European laws came into force in the United Kingdom, which prevented licensing authorities from charging fees going beyond the actual costs of the licensing process.
The council was challenging an earlier High Court ruling made in May last year that a European directive would not permit the licence fees paid by legitimate sex shop proprietors to include the cost of enforcement against unlicensed shops.
Licenses could now cost £1,100, opening the "floodgates" for illegal pornography, Councillor Nickie Aiken, Cabinet Member for Public Protection and Premises argued.
"This ruling, using EU law, will open the floodgates for illegal sex shops and we will no longer have the resources to deal with them. It will hit everything - including our policing of the grotty hotdog stands that we had forced out of the borough."
The ruling will also force the council to repay more than £1m in fees collected since 2010.
This dramatic drop in fees raised questions as to why the annual amount collected was set so steeply. A spokesperson for Westminster City Council said that fees collected were ploughed back into conducting investigations, which they said was "good news" for legally trading erotic shops as every time an illegal trader is removed off the street, "it is one less competitor".
Effectively these cuts will ensure that investigative work will now have to be paid for by tax payers, and some of the bigger operations may have to more "carefully considered", they added.
Cllr Aiken said that the Soho district presented a unique problem because of its reputation. Aiken said: "Soho's reputation and central location means Westminster has more sex shops than anywhere in the country. It is a unique problem, totally unlike any other area in the UK. And clamping down on the unlicensed shops costs a lot of officer time and money."
The Hemming v Westminster City Council case would also create a "free for all" in the sex industry, and the massive implications arising from it would place stress on licensing authorities across the country, putting a financial burden on the tax payer, she said.
"It will severely restrict our work against the businesses that throw up tables and chairs outside their premises blocking the paths of wheelchair users and parents pushing prams as well as causing a nuisance to residents in the area." There is no suggestion that Simply Pleasures and the other shop owners are operating illegally.
Hemming said: "I think I can speak on behalf of licensees to say that we are all very much delighted at the verdict."
"You never expect any outcomes in courts but we thought that our case was justified in being there.
"The whole point of taking the council to court was because we thought the fee was excessive - we just wanted Westminster to justify the fee or admit that £30,000 was an extravagant amount."