Regulatory Enforcement and Sanctions Bill [Lords]

[back to previous text]

Lorely Burt: After listening to the argument made by the hon. Member for Hertford and Stortford, it seems entirely appropriate that the laying of the report before Parliament should be timebound. I will be pleased to support the measure, and perhaps the Minister could see his way to incorporating it within the Bill.
Mr. McFadden: The amendments are, quite fairly, concerned with ensuring that there is no undue delay in laying the accounts before Parliament. As the hon. Member for Hertford and Stortford noted, the relevant section of the schedule says:
“The Secretary of State must lay before Parliament a copy of each certified statement and report received”.
The amendments add a time limit on the Minister’s duty to lay a copy of the LBRO accounts before Parliament and the Welsh Assembly. In principle, we recognise the importance of timing in the interests of proper public accountability. The hon. Gentleman said that scrutiny was improved with speed—perhaps that was not quite the word, but certainly without undue delay—and our intention is for copies to be placed in the House as soon as the accounts have been signed off by the auditor. However, in practice, such time limits laid down in statute are uncommon. Although the hon. Gentleman is right to say that there should be no undue delay, it is accuracy that is ultimately important. The Government hope that the hon. Gentleman will not press the amendment, as a statutory deadline might work against the overriding objective of accuracy.
The wording of the amendment might unintentionally create inflexibility. The requirement to air the accounts in this way might mean that they could only be made available on dates when the House is sitting. That might make a 30-day deadline difficult to meet, for example, if accounts were presented early in the recess. We could even inadvertently cause a delay as we may need to refuse them in order not to fall foul of the statutory requirement. I am sure that that is not the hon. Gentleman’s intention, but the way that it might fall could inadvertently slow the process down.
In previous debates I referred to a couple of precedents, and I hope that the Committee will bear with me if I do so again. For example, the Natural Environment and Rural Communities Act 2006, which set up Natural England, does not set time limits for the agency’s accounts to be laid before Parliament. The Education (Schools) Act 1992, which set up Ofsted, also specified no time period for laying the chief inspector’s report before Parliament. I sympathise with the intent behind the amendment. The hon. Member for Hertford and Stortford is absolutely right: there should not be undue delay in these matters and the Government do want to see accounts dealt with promptly.
Mr. Prisk: The Minister says that he accepts the principle behind the amendment. If the Government are willing to bring forward a different time period, or an adjustment in the words, I would be happy to withdraw the amendment. It may be that actually, the Minister does not want any time limit at all.
Mr. McFadden: I cannot promise the hon. Gentleman that I will bring forward a different time limit. While he is right to stress that the accounts should be laid before Parliament as soon as possible, the overriding objective must be accuracy and I would resist putting a number of days in the Bill. I hope that he will not press the amendment. If he does, I would ask my colleagues to resist him for that reason. However, I understand exactly his point about the desirability of avoiding undue delay. That is certainly the Government’s objective, but we also have the overriding objective of making sure that the accounts are right.
Mr. David Kidney (Stafford) (Lab): My hon. Friend will be asking us to vote no to a time limit. He has given a list of other Acts of Parliament that have a similar requirement with no time limit. Has a rule, a convention, a practice or a rule of thumb been developed under which there is a time that Departments aim for when they submit such documents to Parliament?
Mr. McFadden: My hon. Friend asks whether there is an informal rule outside 30 days. We certainly try to deal with matters each year before we go into recess. We do not do so by a number of days, but we try to avoid undue delay. The precedents that I quoted in respect of Ofsted and Natural England do not have such time limits. I completely agree with the sentiment of avoiding undue delay, but to put a number of days in the Bill might lead us, for the reasons that I have explained, to unintended consequences. I hope that accuracy would be accepted as the main objective, and if the accounts are accurate there should certainly be no undue delay in tabling them.
Judy Mallaber (Amber Valley) (Lab): In the event that the reports or accounts were published at the start of the summer recess. and thus would not be before Parliament for a period, would they still be published in some form so that people could see them or would that have to wait until Parliament sits again?
Mr. McFadden: My fear is that the effect of the amendment would be that if the accounts were coming to us shortly before the summer recess, we might say that we do not have the 30 days and that it would be better to receive them after the summer recess. That would cause an inadvertent and unintentional delay. I absolutely respect and agree that there should not be undue delay, but I am not quite sure that setting down a time limit of 30 days is the correct way to ensure that.
The Minister said that he recognised the merit of the fact that we need to have documentation in a timely way. I do not buy the argument that somehow inaccuracy will result. We are discussing the annual report that the LBRO is required to present to the Secretary of State. We are not talking about a time limit for the LBRO to get its accounts right, but the time from when the Secretary of State receives the documents and when he or she decides to place them in the Library of the House of Commons. The accuracy argument does not work. It might work if it was about 30 days for the preparation of the accounts. That is a perfectly legitimate argument, but it does not work in the context under discussion.
I recognise fully that 30 days is not a perfect answer, but I accept that quite understandably Ministers wish to have no trammels on their ability to act. However, we should not simply accept that. The hon. Gentleman is an honourable man. I am sure that it would be his wish and intention to present the documents in time, but we might not necessarily be dealing with him. We need to think of future Ministers and other circumstances, and need to ensure that the House can pursue its scrutiny effectively. Unless he can offer me something that would show recognition with a time limit perhaps on Report, it is not my intention to withdraw the amendments.
11.15 am
Mr. Kidney: The debate has raised an interesting point, and I am as surprised as the hon. Gentleman that major bodies, such as Ofsted and Natural England, send reports to the Secretary of State, who then apparently has no time limit at all in which to lay them before Parliament. That is a serious omission in Parliament’s administration. If we think of something such as a Select Committee report, Ministers are required by convention, rather than a rule, to reply within two months. That would perhaps get us over the Minister’s main objection about recesses. Does the hon. Gentleman think that if he presses the amendment to a vote in the Committee, whatever the result, maybe the Procedure Committee ought to be looking more generally at all such reports and a time scale for laying them before Parliament?
Mr. Prisk: The hon. Gentleman is absolutely right to say that the House, beyond this Committee—I will not stray too far away—needs to think about how we can tighten up the procedures so that there is a process. I cannot believe that Whitehall is opposed to a process, although I can understand the wish to reserve a certain flexibility, but the hon. Gentleman is absolutely right, and that is why I wish not to withdraw the amendment, but to press it to a Division to proceed with the matter.
Question put, That the amendment be made:—
The Committee divided: Ayes 6, Noes 8.
Division No. 1]
Baron, Mr. John
Burt, Lorely
Dorries, Mrs. Nadine
Lilley, rh Mr. Peter
Main, Anne
Prisk, Mr. Mark
Drew, Mr. David
Kidney, Mr. David
McCarthy-Fry, Sarah
McFadden, Mr. Pat
McGovern, Mr. Jim
McKechin, Ann
Mallaber, Judy
Seabeck, Alison
Question accordingly negatived.
Schedule 1 agreed to.
Clause 2 ordered to stand part of the Bill.

Schedule 2

Replacement of the LBRO company by LBRO
Mr. Prisk: I beg to move amendment No. 46, in schedule 2, page 43, line 30, leave out paragraph 3.
This is purely a probing amendment, so we seek not to delete, but to clarify. Paragraph 3 relates to matters of tax, including stamp duty land tax. Can the Minister tell us whether the effect of the paragraph is intended to be retrospective?
Mr. McFadden: As the hon. Member for Hertford and Stortford says, the provision is about the tax treatment of the LBRO as it becomes a statutory body. We are keen to make the transfer from the operation as a private company to a statutory body as smooth as possible. The creation of LBRO as a company last year has enabled a lot of good preparatory work to be done to make it ready for that transition. However, the Bill needs to provide for transfers to the statutory corporation when it comes into existence, and that involves the transfer of property, which would have tax consequences, whether through income or corporation tax, or stamp duty.
The transfer of assets and liabilities from the LBRO company to the LBRO could result in inappropriate tax consequences for the transferor or transferee, which would arise solely because of the transfer. For example, property transferred for no consideration could be treated as transferred at market value for capital gains purposes. Paragraph 3 addresses those consequences by providing tax neutrality. It ensures that a transfer will not give rise to a tax change or confer a tax advantage on either the transferor or the transferee. This is about ensuring that the transition between the private company and a statutory body can operate without unintended tax consequences. In terms of retrospection, I am not clear what the hon. Gentleman is driving at, given that we are talking about a transfer that is to take place if the Bill is approved by Parliament. The schedule deals with the tax implications of the transfer at the point that it takes place.
Mr. McFadden: My understanding is that there should not be an issue with the change in value of assets that the hon. Gentleman describes. I am happy to give him further detail about that, but the schedule deals with assets at the point of transfer. That is the key point. The schedule seeks to avoid unintentional or unwelcome tax consequences that could arise as the result of a move from a private company to a statutory body.
Mr. Prisk: It is a hideously complex prospect, but one that it is important to clarify. I am grateful to the Minister for offering to write to me and, I presume, the Committee members, to clarify the matter. I appreciate that it may be something that is beyond his immediate knowledge. On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 2 agreed to.
Clauses 3 and 4 ordered to stand part of the Bill.
Schedule 3 agreed to.

Clause 5

Objective relating to general functions
Mr. Prisk: I beg to move amendment No. 1, in clause 5, page 3, line 37, at end insert—
‘(d) in accordance with any Code issued from time to time under Section 22 of the Legislative and Regulatory Reform Act 2006 (c. 51).’.
Amendment No. 1 would insert a new paragraph (d) to clause 5. Its purpose is expressly to include Hampton principles in the LBRO’s objectives. The reason goes back to the origins of the Bill, namely, the Hampton review of regulatory enforcement. The principles include co-ordination, consistency of regulatory enforcement, a risk-based approach—targeting the rogues and not the individual who has made the odd error—and, most important, securing compliance with rules rather than just chasing prosecution. Those principles are supported by Opposition Members and by many businesses. Indeed, the amendment has the support of a number of businesses and their representatives, including the British Retail Consortium. Although I appreciate that subsection (2) lists some of those principles, it is neither explicit nor complete. The amendment would strengthen the clause, and I look forward to hearing the Minister’s reply as to why he thinks the reverse, or whether in fact he is only too delighted to accept the amendment.
Previous Contents Continue
House of Commons 
home page Parliament home page House of 
Lords home page search page enquiries ordering index

©Parliamentary copyright 2008
Prepared 18 June 2008