National Applicability of Licences
The EU Services Directive 2006/123/EC (“the Directive”) was introduced principally to make it easier for service providers to sell their services anywhere in Europe, whether by establishing premises or operating temporarily across national borders. Most service sectors are covered, including, for example, accountants, builders, vets, travel agents, hairdressers and business consultants. There are also some important exceptions including, for example, financial and healthcare services. EU Member States were required to implement the Directive by 28 December 2009. In the UK the Directive was brought into force by the Provision of Services Regulations 2009 (S.I. 2009/2999) (‘the Regulations’). By agreement with the devolved administrations, the Regulations apply throughout the UK. BIS has been principally responsible for the implementation process in the UK and worked closely with other Government Departments, the devolved administrations, local authorities, regulators and others in tasks such as screening legislation for compliance with the Directive.
However, recently the European Commission has expressed its concern over a potential violation by the UK of the Directive in the area of national applicability of authorisations, or licences to provide services. Article 10(4) of the Directive specifies that a licence granted by a competent authority (including a local authority) should be effective nationwide unless there are good reasons otherwise.
Government Response to National Applicability of Licences (27/08/2013)
Having considered the responses the Government intends to introduce a form of mutual recognition for licenses granted in one part of the UK to be recognised in others but there will be important exceptions on the grounds of overriding public interest.
The Government recognised that it will not be practicable to extend the mutual recognition principle to smaller regions within the UK such as between District Councils in England. Consequently, the mutual recognition principle will be limited to the four principal parts of the UK, i.e. England and Wales to Scotland or Northern Ireland.
It further said that the changes will apply only to “personal” licences rather than licences that relate to specific premises and that it is for licensing authorities to determine which of the licences they issue fall into this category.
The Government recognised that authorities have the power to issue a wide variety of licences covering their geographical area and it would therefore have been impracticable for it to provide an exhaustive list of licences affected by the proposed changes. The pragmatic solution it proposed was to clearly indicate that only "Personal" or "Fit and proper person" licences will be affected by the proposals to introduce the mutual recognition principle.
On the issue of a national database for personal licences, the Government has said it does not propose to set up such a database because it would probably be expensive to implement, would require a nationally competent body to administer it and would very likely fall out of date through receiving incomplete or inaccurate information.
The Next Steps
The Government intends to amend The Provision of Services Regulations 2009 by introducing a mutual recognition principle under which all licences issued by competent authorities whose function relate to either the entire UK or to one or more of the four main parts of it will be valid throughout the UK.
The Government had hoped to publish the draft amendments with this response but it became very clear that amending the Regulations will be complicated and take some time. This is because there are numerous different licensing and regulatory bodies in different areas of the UK. Many of these are governed by statutes which limit the geographical competence of the authority to a particular part of the UK. It is therefore likely that, in addition to introducing the mutual recognition principle, there will be consequential amendments to primary legislation.