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One could say that the Government do that to local government all the time and that the autonomy of the local authority has been eroded to the point where it often feels that it is the instrument of an increasing controlling and centralised Government. Perhaps that
is true, but when local authorities are at the sharp end and see actions taking place in their patch and on their watch that affect their electorates, I believe that they should have the ability to advise any primary authority that they really do not want to stand back and do nothing.
The amendments will remove the blanket power of primary authorities to prevent other local authorities from taking enforcement action in their own areas, while ensuring that enforcing authorities will be made aware of any view on the part of the primary authority that the proposed action is inappropriate.
Mr. Mark Prisk (Hertford and Stortford) (Con): I am sorry to interrupt the hon. Lady’s flow. I share many of her worries. Does she agree that there is a danger that the public—consumers—will be confused by the involvement of two democratically elected authorities, one of which can overrule the other? Should we not consider that danger, as well as the question of accountability?
Lorely Burt: The hon. Gentleman has made an excellent point. Local people expect their own enforcing authorities to be responsible for matters that affect them. As it stands, clause 28 allows one local authority, acting as a primary authority in relation to a particular business, to tell another local authority that it cannot take enforcement action against that business because it considers that the business is acting in accordance with advice given to it by the primary authority. If the council that wishes to prosecute disagrees either with the advice from the primary authority or with the view that the business has followed it properly, its only recourse is to ask the local better regulation office to reconsider the matter. If the LBRO supports the primary authority, that is the end of the matter.
Enforcement action may mean a prosecution, or the issuing of a notice requiring the business to make some improvement or halt some practice. The important point is that the business has a right of appeal against such notices to a court. Whether the action is a prosecution or a notice, the principle is the same. At present a court makes the final decision, but under the clause as it stands the court’s role is removed.
Mr. Peter Bone (Wellingborough) (Con): The hon. Lady is making a series of powerful points. I shall certainly support her amendments, and I hope to make some points myself on Third Reading.
Is the clause not a smokescreen? We are told that it will save money, but in fact the enforcing authorities will be judge and jury, and there will be no right of appeal.
Lorely Burt:
I agree. Let me give an example that I cited in Committee. Coventry council prosecuted Tesco for selling out-of-date food, and the supermarket was fined £133,000. The procedures agreed between the primary authority and Tesco were perfectly good, but they were not being implemented properly by a local store. However well run a primary authority may be, is it really best placed to say whether a business in a certain area is following exactly the advice that it has
been given, or is the local authority that inspected the store best placed to do that? Equally, does the LBRO—a small, unelected and untried quango—really know better than a local authority what poses a risk to people in the area?
The amendment would give the primary authority an opportunity to advise the prosecuting authority that it does not agree with the action that it is taking, and that advice would be disclosable if the matter came to court. A business that was prosecuted or appealed against an enforcement notice would be able to produce that advice in support of its case.
Local authorities do not take enforcement action against businesses without serious thought, and a local authority that has been advised that the primary authority believes that the action should not proceed will clearly consider the matter again very carefully before allowing it to proceed. The amendment retains the provisions that prevent the authority from acting without consulting the primary authority. However, I believe that if, after consideration, a council decides to take action, it should be for a court to determine whether that action is right, not an unaccountable quango—and not another local authority which will not have to answer to the voters of say, Wolverhampton if it fails to protect them.
Defending clause 28 in Committee, the Minister said:
“Neither LBRO nor the primary authority can give a once-and-for-all answer about the legality of a particular approach. Rightly, that decision must lie with the courts.” ——[ Official Report, Regulatory Enforcement and Sanctions Public Bill Committee, 19 June 2008; c. 124.]
I agree with that sentiment, but the clause as it stands will deny a court the chance to rule on the proposed action if the primary authority and the LBRO veto it.
Mr. Prisk: I commend the hon. Lady on her perseverance. I think I am right in saying that she tabled similar amendments in Committee, but just missed the deadline. We now have an important opportunity for us to consider the points that she has raised, several of which she expressed extremely well.
It should be borne in mind that the principles behind the amendment are supported by the Local Authorities Co-ordinators of Regulatory Services, the principal local government body responsible for raising the quality of local regulations. It is curious that, at this stage, LACORS has serious reservations about the operation of the Bill and, in particular, the clauses that the hon. Lady seeks to amend.
I share the hon. Lady’s concerns about the potential for this power of direction to undermine the authority of an enforcing council which itself—as she said—has a democratic mandate. How can we understand what that might mean in practice? Let me put it rather more simply. I have no doubt that if, for example, Solihull council were to direct Wolverhampton’s local authority, and the elected members of that authority felt that their ability to enforce as they saw fit was being undermined, they would understandably and rightly protest. Indeed, I suspect that they might protest to their Member of Parliament, who sits opposite me as I speak.
In view of that, can the Minister—not least as a member of the Government, but also, obviously, as the elected representative of a large proportion of the city of Wolverhampton—explain to us, and potentially to his constituents, why he feels that his local authority
should be so directed by Solihull council or, indeed, by any other local authority? It appears that he does not wish to respond now, but perhaps he will do so at the end of the debate. He is obviously keeping his powder dry until that stage. It is important for us to hear his response, because it will mean the same to all of us as Members of Parliament, who will often be the recipients of complaints and anxieties expressed by constituents.
To an extent our discussion in Committee about the potential for conflict and confusion between local authorities is reflected in the amendments, although they are different from the amendments that we discussed then. A power of direction does, of course, have benefits, notably in improving the consistency and quality of regulation. That is important to businesses of all sizes—small, medium or large. However, given the Government’s record of centralising rather than localising power, it is vital for the Minister to state clearly why he believes that the proposed power is appropriate—whether it is exercised in Wolverhampton or elsewhere—and why he considers that he can justify interference in what are, after all, the powers of a directly elected council.
As I implied in my earlier intervention, I am concerned about the confidence that consumers will have in the system. Clearly good trading standards will rely largely on consumers’ being confident, willing and able to complain, register and seek redress. There is potential for confusion, not least if someone who has complained to a local authority then finds that the action it proposed has been overridden by a different local authority from another part of the country. There is a danger that consumers may be confused and, if they subsequently make complaints or seek redress, they may lack confidence in what they are told because it could be overridden elsewhere. We need to explore through these amendments whether that potential for confusion could undermine public confidence. I hope that the Minister will be able to respond positively.
1.30 pm
Mr. Bone: My hon. Friend the Member for Hertford and Stortford (Mr. Prisk) has raised several points that the Minister may wish to dodge. I congratulate the hon. Member for Solihull (Lorely Burt) on the way in which she moved her amendments, which I certainly support. If the Government do not accept them and the hon. Lady presses them, I shall certainly vote for them.
The impact assessment for the Bill mentions the costs of this measure. It says that the total cost to local government would be £13.6 million, and the total benefits would be £14.2 million, leaving a net annual benefit of £0.6 million. Those figures are based on the Government’s assumptions, and we know how they always hopelessly underestimate the costs and overestimate the benefits. However, the impact assessment also says that there will be a one-off cost of £2 million, so the Bill will cost local authorities £1.4 million in the first year, even if we believe the Government’s figures. I see no additional funding to help local authorities pay for that.
Mr. Prisk:
My hon. Friend makes an important point. In Committee—my hon. Friend may not be aware of this as he did not have the opportunity of being a member—it was revealed that Hertfordshire county council had reckoned that the Bill could mean it needed a further 12 officers, which would potentially
treble its financial commitment. Does my hon. Friend share my worry that the Bill has greater hidden costs than the regulatory impact assessment suggests?
Mr. Bone: I was very disappointed not to be on the Committee, having spoken extensively on Second Reading. Obviously, so many colleagues wanted to be on the Committee that I was ruled out, but that is one reason why I hope to speak on Third Reading. We know that the Government’s figures are Mickey Mouse figures, whereas the council’s figures are probably correct. If they are multiplied by the number of local authorities, we see that the Bill will mean huge costs for very little benefit.
I agree with my hon. Friend and the hon. Lady about the confusion that the Bill may cause. I have tried to get my head round the details about prime authorities; what happens when more than one local authority is involved; the significance of whether a company is big or small; and when one local authority’s rules apply as opposed to another’s. I cannot think of anything more confusing, but the Bill is supposed to reduce regulation and improve clarity.
The Minister must surely acknowledge that the Bill will centralise power. The Government will be able to tell the strangely named LBRO what to do and it will then tell the regulators and the local authorities what to do, despite the wishes of elected councillors. When I was a councillor many years ago, the great advantage of local democracy was that we made local decisions for our local area. Decisions we made in Southend were different from those made in Birmingham. It is suggested that if the Government at the centre direct the regulation and remove the right of local authorities to carry out enforcement, that will somehow improve clarity for local businesses. The Minister will have to square the circle and explain that to people.
Councillors in my area have expressed great concern about the Bill. The Minister may, of course, accept the amendments, which would improve the situation.
Mr. Philip Hollobone (Kettering) (Con): My hon. Friend will know that in Northamptonshire local authorities are doing their best to slim down the regulatory burden on local residents and businesses. Indeed, his borough council and my borough council already co-operate with regard to legal enforcement. Well-run local authorities are already trying to slim down the regulatory burden and the last thing they want is another Government quango to tell them how to do that.
Mr. Bone: As hon. Members will know, my hon. Friend is a serving member of Kettering borough council, and he is right to say that his council and Wellingborough council—and Northamptonshire council—have worked hard to improve regulation and make it easier to understand. Indeed, my council is rated as excellent by the Government for its performance.
My area is already facing the problem of massive expansion and now these quangos are being forced on us. But when those quangos make a decision the Government overrule them, as they have done on the strategic gaps. This is another piece of the jigsaw that the Government are trying to impose on local government, with the spin that it will save money for businesses and make matters clearer. In fact, it will cost businesses
money. The Government admit that it will cost local authorities money, and it will impose centralised control in every way. It is an appalling measure and should be rejected.
The Minister for Employment Relations and Postal Affairs (Mr. Pat McFadden): It is important to remind ourselves of one of the central purposes of the Bill, which is to ensure consistency in regulatory enforcement. This goes back to the Hampton report of a few years ago, which identified a significant problem of inconsistency of enforcement around the country. That is where the idea of the primary authority/enforcement authority relationship comes from.
We are not starting from a perfect situation in which inconsistencies do not exist. For example, we heard the case of a manufacturer for a multi-site business which cleared a new product line with its primary authority, under the voluntary system that operates at present, before dispatching the product to the retailer. Despite that, a different local authority believed that the product violated regulations and threatened the store with prosecution. The manufacturer claims that the incident cost them £25,000 in wasted stock. That is what can happen when we do not have clear rules that ensure consistency.
Mr. Prisk: The Minister rightly points out the need for consistency for multi-site businesses, but the consumer argument—raised by several hon. Members today and in Committee—is that the fact that there are two systems, one in which primary authorities operate for multi-site businesses and another in which they do not, has the potential for confusion among consumers, and for those who own single-site smaller businesses. I understand the point about consistency for big business, and I welcome that, but we also need consistency for small businesses and, most importantly, for consumers. Why is that not properly reflected in the Bill?
Mr. McFadden: I am not sure how one would have a primary authority/enforcement authority relationship for a business that was not a multi-site business. That is a problem in logic. The primary authority/enforcement authority relationship applies to multi-site businesses—that is what it is for—so the two issues the hon. Gentleman raises are not directly comparable. Of course, it is not just for big businesses. We talked about a mythical black country car dealership, which might be a medium-sized business, operating across two or three local authority areas that might well benefit from the arrangements set out in the Bill.
Mr. Prisk: On that point, what would happen if McFadden motors—I seem to recall that that was the mythical business that we considered—was a single-site business rather than the huge multinational that the Minister clearly anticipated that it might have been in Committee? My point is about the consumers’ point of view. Understandably, we want to ensure that big business is regulated consistently. The worry is that in creating two systems, there will be potential for consumer confusion. How can the proprietor of McFadden motors ensure that his consumers get consistent advice?
Mr. McFadden: The LBRO will be responsible for giving advice to local authorities. We hope that they will have regard to that when enforcing regulations. Parts of the Bill offer benefits for a consumer who is carrying out a transaction with a business that operates only in the local authority area. Part 2, which we are discussing, is specifically about the primary authority and enforcement authority situation.
Let me turn properly to the amendments moved by the hon. Member for Solihull (Lorely Burt). I echo the comments of the hon. Member for Hertford and Stortford (Mr. Prisk) and commend the hon. Lady on her persistence in pursuing some of the points. However, I am afraid that I shall not be able to accept them on behalf of the Government today. Let me set out why.
The amendments would remove the powers that the Bill creates for the primary authority or the LBRO to give directions that an enforcement action should not go ahead and substitutes for them an advice-giving power. I understand that that is about protecting local authorities’ discretion to pursue enforcement actions should they choose to do so.
Let me say how we want the primary authority scheme to operate. I referred to the importance of consistency, and businesses have asked us to provide access to a scheme that will provide more dependable advice that they can rely on and that will provide a quicker resolution of disputes between authorities, which will give greater certainty and clarity not just for them but for their customers, too. That is why we are looking for the right balance between that and local authorities’ freedom to act.
The Government start from the principle that when a business and a local authority have gone to the trouble of establishing a primary authority for regulation there should be a presumption that the advice given by one professional in one part of the country should be respected by other professionals across the country unless, of course, there are good reasons. There are some safeguards. The amendment, however, would not provide that as it would remove the primary authority’s ability to intervene decisively in how a business was treated.
The hon. Member for Hertford and Stortford referred to the potential for confusion. I believe that the amendments would result in more confusion than the Bill as it stands because they would give far greater freedom for an enforcement authority to ignore the advice of a primary authority than under the relationship that we are trying to construct.
Mr. Bone: The Minister is trying to explain the incomprehensible. If a primary authority makes the wrong decision, which will then be enforced in other local authority areas, how will that benefit business?
Mr. McFadden:
If an enforcement authority believes that the advice given by the primary authority is wrong it can appeal to the LBRO as set out in the Bill and the LBRO could rule on the situation. The amendments, if we accepted them, would put the informal home authority relationships that exist in some cases on to a statutory footing. Under the current schemes, local authorities are informally encouraged to contact the local authority with which the business has a partnership before taking serious action. The difficulty is that under the existing schemes, the consistency that we seek is not delivered.
Businesses are finding inconsistent advice around the country. We are not convinced that simply putting that advisory relationship on to a statutory footing would be the best means of tackling that inconsistency.
Lorely Burt: I am listening very carefully to the points that the Minister is making. Does he agree that the Bill will make sufficient provision so that when the enforcing authority strongly opposes the overall agreement of the primary authority, some sort of partnership arrangements could consider what the enforcing authority has to say and, on occasion, an exemption could be given by the primary authority to the enforcing authority?
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