Phase 2: No beer, no cheer for hospitality businesses by Stephen McGowan, TLT

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by Stephen J McGowan, partner and head of licensing (Scotland) at UK law firm TLT

The announcement yesterday that Scotland is moving to Phase 2 of its exit from the crisis was welcomed by many. A notable exception was a large number of hospitality businesses, who had been gearing up to re-open outdoor spaces and start to welcome customers back.

Those hopes were dashed when First Minister Nicola Sturgeon announced there would be no immediate reopening of beer gardens. Going further, she even appeared to suggest there was now developing evidence to suggest pubs were “hot spots” that required special attention.

Hot on the heels of this, the Scottish Government issued the long-awaited guidance to hospitality businesses on re-opening; and then, surprisingly, a document which as far as I know, no-one was aware of or expecting: an additional specialist guidance piece directed at licensing boards principally with regard to occasional licences, but with further implications.

I, like most, can hardly draw breath, but I know that the trade is desperate for clarity and guidance, and many have been asking me to offer my views – so here is my take on what happened yesterday.

Entering Phase 2 and the stepped approach

The First Minister made a series of announcements and in my view, there are a few key takeaways for the hospitality industry here. Firstly, she endorsed the proposed re-opening date of 15 July for hospitality and tourism businesses, which had been trialled a couple of weeks ago by Fergus Ewing MSP. I do emphasise the word “proposed” in relation to that date.

While she discussed certain relaxations on leisure and recreation, she made it clear that she expected people to observe a five-mile rule – so businesses hoping to attract people from other parts of Scotland or indeed beyond will still have to rely on local custom for a while yet.

There was some cheer, in that the construction industry can restart as of 22 June, which is good news for a number of hospitality developments that have been on ice for some time. Outdoor marriages could also be performed, she said, and one assumes that includes the traditional ceremonial way in which the lucky couple confirm their bond with a kiss!

Then came the blow for many pubs and hospitality businesses – there would be no opening of beer gardens or outdoor spaces, and this position will be reviewed again on 2 July. This has been hard to take for many, who had in good faith geared up to hope to trade from the weekend. That includes a steady cohort of local authority and police officials across Scotland, who had been doing their bit to help process occasional licences. The First Minister then justified this by inferring that there was science to suggest that pubs were “hot spots” and further analysis would be needed. I can’t claim that I have access to all knowledge on this subject, but this was news to me.

When questioned on this, the First Minister suggested that it was to do with the way people breathe, and that, if I understood her correctly, for example in an environment where people are singing and shouting there would be greater exchanges of particles. I can understand the principle, but I can’t ascribe to this as an accurate description of licensed outdoor spaces. There seems to be an unwarranted inference that these spaces are rowdy, with beer-swilling japery. That sort of behaviour does of course occur. But it is a very sweeping assessment and I cannot see how this characterisation would apply to many of my client’s businesses where I and others might enjoy an alfresco meal with families or friends. On top of that, I feel that the trade should be trusted just a little more as to regulation, supervision and risk assessment of these areas.

We shall await further information on this but for now, it seems to me that the earliest the outdoor spaces will open is 3 or 4 July. But even then it is so close to the wider date of 15 July you just can’t possibly say. What I will say is that, come 15 July, the desire for outdoor space does not go away. We will still have some form of social distancing rule in place and businesses will look to harness as much outdoor space as they can to maximise capacity and in turn the viability of the operation. The 2m rule will stay for now, but will be reviewed and a further decision made on 2 July.

The hospitality guidance

The release of this guidance last night was keenly anticipated and you have to appreciate that this was being watched not just from the trade, but by all the licensing boards, police and environmental health officers across the land who were hoping this would provide real assistance in helping them to help businesses.

To be blunt, it has failed in that regard. A large element of the guidance is general commentary and overview, and sources of other places to find other guidance. One extremely senior health and safety advisor, hugely experienced in hospitality and events, described the document to me as “wafer thin”. There are basic sections on how to assess risk and workforce planning, dealing with issues like PPE equipment.

A key and hugely anticipated section is on toilets. The guidance states: “The safe use of toilet facilities is still subject to further scientific advice on impacts and risks. Further advice will be issued on this subject in due course”. One licensing board member stated on Twitter “This just means more peeing on the streets”. On this particular issue, the trade despairs, and it is a real failure of the guidance that there is no clear statement on the use of internal toilets either for outdoor or indoor customers. Many of my clients have put forward extremely vigorous risk assessments as to how internal toilets might be used for outdoor areas: one way systems, one in one out systems, queuing systems, hygiene measures and so on.

There is a fairly decent eight-page “checklist” document at the back of the guidance, which is probably the best element, however for me, I would draw all businesses, all local authorities and all officers to the following key section of the guidance:

“It is for individual businesses in conjunction with trade bodies, sector organisations, trade unions and workforce representatives selected by employees to decide how best to successfully adopt and adapt guidance for their individual circumstances. Individual businesses and trade organisations will have responsibility for their self-produced guidelines, which should be regularly reviewed to reflect any changes made at government level.”

In other words, this says “Over to you”. It is now up to all of us involved in this wonderful hospitality trade of Scotland to pull together and help ourselves, roll our sleeves up and get on with preparing our own assessments. The guidance cannot be slavishly followed; for a start, it is not detailed enough to be the sole answer and the sole way through. But secondly, as the statement above confirms, this is merely guidance and it is not law. In order to get through this we must, must, work collaboratively at the local level to agree on risk assessments that ensure safety whilst allowing businesses to recover quickly.

Guidance on occasional licences

Lastly, but certainly not least, there was a little surprise package in the form of a formal issue of statutory guidance to licensing boards under the Licensing (Scotland) Act 2005. This was focused on occasional licence use.

As I inferred above, occasional licence applications have been the story of my life over the last few weeks as I, Caroline Loudon and our colleagues in the licensing team tried our best to get businesses into a position of being able to trade lawfully. The purpose of these was to give some businesses hope that they could trade an outdoor space not currently licensed – like a car park, or rear private land. Licensing board responses to these have, in the main, been excellent. Extremely pragmatic views to support businesses abound. This new guidance document seems to endorse those approaches.

A key statement is as follows: “Within the overall legal framework provided for in the 2005 Act and the associated secondary legislative regime, the Scottish Government considers flexibility and pragmatism in decision-making and sensitivity to the wider economic situation should be at the forefront of how a Board decides to operate (e.g. decisions as to whether to hold remote hearings) and the decisions made by the Board (e.g. occasional licence applications for use of space by a licensed premises previously put to another use such as a car park).”

The document is also a call to licensing boards to think creatively, saying: “The Scottish Government expects Licensing Boards to approach decision-making with a keen and focused sense on the needs of the on-sale business to seek to recover from the coronavirus outbreak”.

It does veer slightly in some places, such as a reference to road traffic in relation to the public safety objective, which as any private practice licensing lawyer will eagerly tell you is not a licensing consideration. But I would prefer not to be churlish as the document is, on the whole, a welcome statement to encourage licensing boards to be pragmatic and to recognise that their licensing policy statements, to which they will normally have regard, do not reflect the times in which we now live.

The final statement of the note is worth quoting: “Decisions have to be made within the legal framework contained in the 2005 Act, but all decisions should also be made with a clear focus on alleviating, where practical, the negative impact of the coronavirus outbreak on the licensed trade.” I have already taken some questions from businesses on the status of this guidance. The legal position is, of course, that this is merely guidance, it is not law.

In summary, looking back to the various announcements and releases yesterday, there is much to digest and ponder. One thing I do know for sure is that I, and others no doubt, will savour our first pint in the sun, and I cannot escape the image of Sir John Mills in that most famous of beer drinking scenes from the classic war movie, Ice Cold in Alex. Cheers to that.