Licensing Bill could put an end to building pubs

The Government's new Licensing Bill could call a halt to the building of new pubs across Britain, leisure groups have warned.

The Government's new Licensing Bill could call a halt to the building of new pubs across Britain, leisure groups have warned.

Pub companies have voiced concern at a clause that would force them to reapply for a licence to trade once they have finished building a new site – at the risk of being turned down. This would differ from the existing system, which practically assures publicans of receiving a full licence as long as they build the new site to agreed specifications.

Stephen Haupt, the chief executive of Regent Inns, owner of the Walkabout and Jongleur chains, said: "We see it as an absolute nonsense. We will not risk putting that level of capex [capital expenditure] into new development knowing that it could ultimately get turned down."

The proposal, which is contained in the biggest shake-up of drinking laws since the First World War, could enter the statute books this summer but is being contested by some of the country's biggest pubs groups and trade bodies. Under the new plans, local councils – which will be responsible for issuing licences – will invite residents to object to the new pub after it has been built, jeopardising the likelihood of a licence being granted.

Trade groups are lobbying for the clause to be modified so that if a pub is built within a specified number of years it will receive its licence. A spokeswoman for the British Beer and Pub Association said: "We need to tie it down to a time frame."

A spokesman for Six Continents said: "This is an area we are looking at closely. We are working with the trade association to make sure you will be able to go ahead to develop in a decent way. You need certainty [before committing to new sites]."

The Department for Culture Media and Sport, which is piloting the new legislation, said it appreciated businesses need certainty when deciding to invest, but that the Bill balances their needs with those of local residents who, in the majority of cases, would get a second opportunity to object. A spokeswoman said: "If circumstances change significantly during the course of a development, it is only right that local residents have the opportunity to voice their concerns."

The House of Lords is due to report back on its preliminary investigation into the Bill at the end of this month.