Regulatory Enforcement and Sanctions Bill [Lords]

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Clause 9

Advice to Ministers of the Crown
Question proposed, That the clause stand part of the Bill.
Mr. McFadden: I do not want to delay the Committee unnecessarily. We have been talking all morning about the job that LBRO is set up to do and whether it fills gaps in the current regulatory market. One such gap is regarding advice to Ministers, which is covered by clause 9. The Hampton review recognises that many of the difficulties that regulatory enforcement poses for business, arise not from any failing by the local authorities, but from the complexity of the system that they sit at the centre of.
We expect that LBRO will work to bring better co-ordination and intelligence to the way that Government Departments and the national regulators work together in setting the framework for local authority enforcement. LBRO will have an insight into how regulation is enforced by local authorities from the perspective both of those local authorities and the businesses subject to the regulation. It is important that the body has the power to advise Government on such matters, and perhaps to challenge the various players in the field in order to make the system more coherent and streamlined. Clause 9 provides such a power and makes provision for LBRO to
“give advice or make proposals to a Minister of the Crown”
regarding the way that local authorities exercise such functions, the effectiveness of the legislation, whether it would be appropriate for other regulatory functions to be exercised by local authorities and other matters relating to that. That is part of LBRO’s job, and its advice function will be an important one.
Judy Mallaber: This is potentially an extremely useful part of the Bill. Will my hon. Friend advise us on how open it would be for local authorities to use this measure to express their concerns about regulatory functions? For example, will they be able to talk about the way that other Government agencies, besides those with which they are directly involved, exercise their regulatory functions, or will they be able only to comment and pass advice via LBRO back to Ministers specifically in relation to their own regulatory functions? Potentially, it could be an extremely useful mechanism that provides a sounding board and guidance to Ministers across a broad range of issues in relation to a regulatory regime that impinges on a local authority’s constituents.
Mr. McFadden: My hon. Friend is absolutely right. The local authority voice is very important. As I have tried to explain, in LBRO we seek something that sits at the centre of the regulatory system, which involves central Government, local government, regulators and business. Sitting at the centre of the system, LBRO will have an important advice function. The local authorities that LBRO will deal with on a day to day basis will be able to raise any relevant issue—as in fact they already do in LBRO’s current form of a company, and I am sure that that role will continue. The advice function is important, which is why I wanted to draw it to the attention of the Committee.
Question put and agreed to.
Clause 9 ordered to stand part of the Bill.
Clause 10 ordered to stand part of the Bill.

Clause 11

Enforcement priorities
Question proposed, That the clause stand part of the Bill.
Mr. McFadden: This clause is also important because it deals with the priorities for regulation at a local level. Over the years, different priorities have been given to local authorities to enforce. Local authorities have said to us in the past, quite fairly, “We are being asked to do a lot of different things. A list of things that we are asked to do by all the different Departments would be long.” With that in mind, the Government recently asked Mr. Peter Rogers to conduct a review of the different local authority enforcement priorities, and to give some sense of priority to the priorities, if I may put it that way. He produced an extremely valuable list, and the clause will ensure that it is updated over time.
It states:
“LBRO must...publish...a list specifying matters to which a local authority...should give priority when allocating resources”
and that local authorities
“must have regard to the appropriate list”.
Of course, rightly, subsections (5) and (6) state:
“LBRO may not publish”
such a list
“without the consent of the Secretary of State”
or, when relevant,
“without the consent of the Welsh Ministers”.
I do think that this is an extremely—
Mr. Prisk: On a point of order, Mr. Chope. The Minister is referring to a list of lists. It sounds fascinating, but I am not privy to it, and I do not know whether other Members are, including the hon. Member for Solihull. We are not aware of what is on the list of lists, and it would helpful if it could be made available to the Committee.
The Chairman: That must be a matter for the Minister.
Mr. McFadden: Absolutely. This is a public document, so I am happy to furnish the hon. Gentleman and other members of the Committee with the fruits of Mr. Peter Rogers’s work.
The clause is important because it was a valuable piece of work. Local authorities will welcome some sense of what they are expected to concentrate on. The clause gives LBRO the job of ensuring that the list is kept up to date, but I am happy to furnish the hon. Gentleman with a copy of Mr. Rogers’s report.
Mr. Prisk: I am grateful to the Minister for agreeing to provide us with that report, not least because one of my questions was how prescriptive such a list would be. Clearly, the Minister is ahead of the legislation.
I agree that clause 11 is important, but will the Minister say where there could be dilemmas? In particular, if a local authority has chosen to focus on a particular problem in its area, why should the LBRO interfere, and how would it do so? That question would certainly be asked by some of our constituents.
Let us take, for example, Wolverhampton, given that it is familiar to the Minister. If the good burghers of Wolverhampton felt that sorting out bad licensees was their No. 1 priority, how would the requirement to “have regard to” a national list work? Who resolves whether or not Wolverhampton is completely ignoring the aforementioned list of lists because it is determined to resolve bad licensees? How does Wolverhampton allocate its resources to square the circle that the Minister described? On the one hand, it must be able to deal with the problems that it faces in its own area and, on the other, to “have regard to” what would clearly be national priorities. Who resolves such a conflict?
Mr. McFadden: The phrase “have regard to” is the key to the problem. The measure is not a power of direction like the one we discussed in our debate on clause 7. It says to local authorities, “The Government understand that you are often asked to do many different things by different Departments. We hope it will be helpful if we publish a list of all the things that we want you to have particular regard to, to give you some sense of priority.”
12.15 pm
The hon. Gentleman used the example of the fine city of Wolverhampton and circumstances when a Wolverhampton council would wish to prioritise licensing. As coincidence has it, licensing is one of the areas highlighted by Peter Rogers. The others were air quality, hygiene of food businesses, improving health in the workplace, fair trading, and animal and public health. I do not wish to rest the case just by saying that the example that he cited happened to be on the list. Let us say that Wolverhampton wished to do something that was not one of those six priorities.
We are not talking about the power of prohibition, but the list is a welcome guide to Wolverhampton city council and other local authorities saying, “Of all the different things that central Government ask us to do, what do they really think that we should be spending our time on in enforcement?” It does not prohibit a local authority from looking beyond the list and saying that the six areas are fine, but they have a problem with area No. 7. The list is not a prohibition. It is something that may change and evolve over time, which is why clause 11 is part of the Bill.
Mr. Prisk: I am grateful to the Minister. When focusing on the delightful city of Wolverhampton, it is such a pleasure to hear the gentle lilt of the Wolverhampton accent.
As for Wolverhampton’s priorities, one of the issues that we looked at under clause 7 was the power of direction. Can the hon. Gentleman confirm that that power does not relate to anything under clause 11?
Mr. McFadden: The hon. Gentleman will be aware that the local football team in Wolverhampton is called the Wanderers, so perhaps I am not the first wanderer to have arrived in the city.
Clause 7 does not apply to the Rogers list. It is not a power of direction. It does not apply in that way. I shall not go over the ground again. The Rogers list and that sort of exercise is valuable to local authorities, and the provision is about making sure that that value is maintained as time goes on.
Question put and agreed to.
Clause 11 agreed to.

Clause 12

Relationship with other regulators
Question proposed, That the clause stand part of the Bill.
Mr. Prisk: I want to pursue the relationship between the LBRO and other regulators. The clause does not deal with local authorities, but other regulators such as the Environment Agency, the Food Standards Agency, the Gambling Commission, the Health and Safety Executive and the Office of Fair Trading. We all know that those bodies all have other duties beyond the specific regulatory matters dealt with under the Bill. To put it briefly, what happens when the LBRO’s priority or guidance is perceived by those regulators as being contrary to their work or in danger of being in conflict with other duties? A classic example could be the Environment Agency, which clearly has other duties under law beyond the immediate regulatory issues that are before us.
Mr. McFadden: There are two main points to make about the clause. Subsection (1) states:
“LBRO and a regulator to which this section applies must enter into a memorandum of understanding with each other as to how they will work together”.
My second point is that the clause is permissive in the sense that other MOUs could be conducted with other organisations. The hon. Gentleman also asked what would happen if a conflict arose, the bone of his question. I stress that the organisations listed would retain their statutory independence. They will have to discuss matters maturely. I do not want the hon. Gentleman to feel that there will be some kind of takeover of these organisations by the LBRO. We are talking about memorandums of understanding, and the organisations concerned will retain their statutory independence under the clause.
Question put and agreed to.
Clause 12 ordered to stand part of the Bill.
Clauses 13 and 14 ordered to stand part of the Bill.

Clause 15

Guidance or directions by the Secretary of State
Mr. Prisk: I beg to move amendment No. 27, in clause 15, page 7, line 38, leave out subsection (6).
The Chairman: With this it will be convenient to discuss the following amendments: No. 28, in clause 15, page 8, line 1, leave out subsection (7).
No. 29, in clause 16, page 8, line 25, leave out subsection (6).
No. 30, in clause 16, page 8, line 28, leave out subsection (7).
Mr. Prisk: These are merely probing amendments, and I do not intend to press them further, but I do want to ensure that there is a degree of clarity.
On clause 7, with regard to guidance, we debated the precedent of a non-departmental body being able to use directional powers. Clause 15 prohibits the Secretary of State from directing the LBRO with regard to its clause 7 powers. I wanted briefly to explore with the Minister the thinking behind that exclusion.
Mr. McFadden: Part 1 specifies two distinct direction-giving powers. The first, which we have discussed, is LBRO’s right to give local authorities directions to comply with guidance under clause 7. The amendments deal with the second power, which relates to a Minister’s right to give directions to LBRO. It is intended as a reserve power. LBRO needs to be independent, but as the hon. Gentleman rightly said on an earlier point, Ministers remain accountable to Parliament for its work. If we found ourselves in a situation where LBRO was acting against the public interest, we would need to exercise such a power. It is unlikely that the power will be used, but it is perhaps prudent to have it in case it is needed.
The issue was included in response to a recommendation by the Delegated Powers and Regulatory Reform Committee. The Committee drew attention to the potential uses to which the two directional powers could be put in combination. It was concerned that Ministers could direct LBRO to direct multiple local authorities and that that would give the power a quasi-legislative character. It felt that the issue needed to be dealt with and recommended that parliamentary scrutiny be applied where LBRO used its directions for more than one local authority and where Ministers had instructed it to do so. Following amendments to implement those recommendations, both can be done only with parliamentary approval. Ministers are unlikely to use their direction-giving power in the sense that I have set out, but a safeguard should be in place.
I hope that clarifies that, in phrasing the clause in the way that we have, we are responding to concerns raised by the Delegated Powers and Regulatory Reform Committee.
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