100,000 businesses risking closure over drink licences

With less than a week to go before the deadline for licence renewal applications under the new Licensing Act, local authorities say six out of every 10 licence-holders in England and Wales have not sent in the forms they need to keep selling alcohol. Government ministers, councils and industry trade bodies are concerned that many licensed premises may have to close.

More than 100,000 businesses have not submitted their applications, including 30,000 restaurants, 26,000 hotels and 6,500 shops, shows a survey today from the Federation of Small Businesses (FSB).

The low number of applications is leading to fears that councils will grind to a halt under the weight of a last-minute rush of forms in the final days before the 6 August deadline.

Under the Licensing Act, which permits round-the-clock drinking, premises selling alcohol must apply for a new licence even if they do not want to change their opening hours. If licence-holders have not submitted their application by 6 August, they lose the right to have their licence automatically renewed and will have to apply again. If they have nothing submitted by November, they will be trading illegally.

All premises selling alcohol have to spend as much as £1,300 for a new licence, compared to previous fees of £200.

John Walker, the policy chairman for the FSB, said the process has been a shambles that is about to descend in to chaos. "The failure of businesses to renew their licences is a time-bomb of the Government's making."