Sounds like the Southwark Council is overstepping its bounds. Is there an appeal process in the UK for these sort of disputes? In the US, a local action could be escalated by appeal to the state or federal level, which would result in an opinion which would be binding on future acts or merely instructive, depending on the particular court which sets forth the final ruling.

The whole PEL thing seems really weird to me. I am totally against anything which restricts buskers for stupid reasons and this is clearly one of those situations.

Jeff