Mr.
Prisk: That was a very helpful explanation, not least
because it is now on the record and will help people to understand the
distinction that the Minister has just made. It is interesting that the
Government felt it right to have accountability directly to Parliament
for directions in this instance but not in another instance. However,
the Minister’s comments were helpful, and I beg to ask leave to
withdraw the amendment.
Amendment,
by leave, withdrawn.
Clause 15
ordered to stand part of the Bill.
Clause
16 ordered to stand part of the
Bill.
Clause
17Review
of
LBRO Question
proposed, That the clause stand part of the
Bill.
Mr.
McFadden: It is often said when we establish new bodies
that we should include some kind of mechanism to review how they
operate, and that is what the clause does.
The
Government’s impact assessment process requires that all new
policies be reviewed to establish their actual costs and benefits and
the extent to which the aim behind them has been achieved. The clause
commits us to carrying out such a review after three years. It places
that commitment on a statutory footing and requires the Secretary of
State to review LBRO’s discharge of its functions three years
after part 1 of the Bill comes into force. The review should consider
whether LBRO is discharging its functions effectively and the extent to
which it has attained its policy
objective. Again,
the Secretary of State must consult Welsh Ministers and such other
persons as he considers appropriate when he conducts the review. The
clause is prudent, and it is correct to include it when establishing a
new body of this
type.
Mr.
Prisk: I am grateful to the Minister for those remarks. I
think that he will acknowledge that the clause represents a significant
concession that the Government made in the other place, both in
agreeing to our request for a review after three years and in ensuring
that that review is laid before both this House and the National
Assembly for Wales. I commend my noble Friends for their work in
improving the Bill significantly.
Lorely
Burt: I particularly welcome this clause. The three-year
review makes this quite close to being a sunset clause, for which my
party has been calling for a considerable time. We would like reviews
to be built into a great deal more Government Bills and
regulations. Question
put and agreed
to. Clause
17 ordered to stand part of the
Bill.
Clause
18Power
to dissolve
LBRO Question
proposed, That the clause stand part of the
Bill.
Mr.
McFadden: I do not want to detain the Committee, but I do
not think that the review makes clause 17 a sunset clause, as the hon.
Member for Solihull said. Perhaps clause 18 comes closer to being a
sunset clause, although it is not one in the normal understanding of
the
term. The
clause provides the power to dissolve LBRO. It will be an organisation
with ambitious objectives, but it is possible that a day will come when
its work has been achieved. As another matter of prudence in such
legislation, the clause makes provision for the dissolution of LBRO by
way of an order subject to the affirmative resolution procedure. That
order could also make provision for the transfer of property rights,
liabilities and so on to another
person. I
do not want to draw attention to the end of LBRO while we are debating
its establishment, but in legislation of this kind it seems prudent to
include a provision that allows for the power to wind it up at some
point in the future should the Government judge it
necessary.
Mr.
Prisk: I do welcome the provision being put in the Bill,
not because there is necessarily an ulterior motive but because it is
important that all eventualities are incorporated. Whether this is a
sunset clause, a late afternoon clause or a dusky clause, whatever
description one might want to give it, it provides an important power
and I welcome
it. Question
put and agreed
to. Clause
18 ordered to stand part of the
Bill. Clauses
19 to 21 ordered to stand part of the
Bill.
Clause
22Scope
of Part
2 12.30
pm Question
proposed, That the clause stand part of the
Bill.
Mr.
McFadden: It is probably prudent to pause for a moment at
this point to talk about part 2 of the Bill, to which clause 22 takes
us. So
far we have discussed the establishment of the LBRO. We have discussed
its powers in relation to advice and guidance to local authorities; we
have discussed the make-up of its board, payments to its members, and
so on. Part 2 takes us into slightly different territory: its
application to regulated persons that carry out an activity in two or
more local authorities. This speaks to the very heart of the Hampton
report. We began this
morning’s deliberations by talking about two issues identified
by the report as problems in the regulatory system as applied at a
local level. One of those problems was inconsistency and the other was
inflexibility. Inconsistency is at the heart of part 2 of the Bill.
Clause 22 limits access to the primary authority scheme to
persons—be they business, charity or other
organisation—that are regulated by more than one local
authority. The intention is to include multi-site retailers and
businesses that operate indirectly across local authorities, including,
for example, internet sales operations and manufacturers whose goods
are sold by another party in a number of local authorities. It will
also include some franchises, where the franchisor has extensive
control over the compliance standards of its
franchisees.
Mr.
Prisk: If an internet business is based offshore, but
trades across that, would I be right in assuming that it would not be
incorporated?
Mr.
McFadden: My instant response is that he would be right.
This can be directed only at businesses that operate in the UK. It is,
however, intended to cover businesses that operate in a number of
different local authority areas in the
UK.
Mr.
Prisk: The Minister said “the UK”. If we had
a business in Aberdeen, would the point I made be the same? My
understanding is that this is principally to do with England and Wales.
Will the Minister clarify
that?
Mr.
McFadden: That is not quite right. Part 2 of the Bill has
a different territorial scope from part 1, and the business in Aberdeen
would be covered by part 2 of the Bill, although it would depend to an
extent on whether the regulatory function was a reserved or a devolved
matter. We may debate this at greater length if the hon. Gentleman
wishes, but on the basic point of territorial extent, part 2 of the
Bill extends to Scotland and Northern Ireland in a way that part 1 does
not.
Mr.
Prisk: I do not necessarily need to delay the Committee by
deliberating on the matter, but if it were the Government’s wish
to clarify it at some point in due course, perhaps in writing, members
of the Committee and those seeking to understand this legislation might
find that helpful. There is a danger of a little lack of clarity, and
while I appreciate that a response may not be at the tip of the
Minister’s tongue, it would be
helpful.
Mr.
McFadden: I am happy to do as the hon. Gentleman asks, but
I will also point him to clause 24, which defines “relevant
function”, and under subsection (3)
states: “An
order under subsection (1)(b) may not specify a regulatory function so
far as exercisable in Scotland, if or to the extent that the function
relates to matters which are not reserved
matters.” There
is a similar provision for Northern Ireland. So there is clarity in the
Bill in terms of its territorial scope.
I would also
refer him to the—hopefully helpful—guide to the Bill
produced by the Department, where on page 7 the territorial scope is
very clearly set out. It says that part 1 applies only to England and
Wales, and this means that LBRO may issue guidance to which local
authorities in both England and Wales must have regard. Parts 2, 3 and
4 apply in England and Wales, and there are specific procedures for
matters in Wales in respect of which Welsh Ministers exercise functions
that we have touched on. Parts 2, 3 and 4 also apply in Scotland in
respect of matters that are reserved, and in Northern Ireland in
respect of matters that are not transferred. The Bill therefore has a
significantly different territorial scope in parts 2, 3 and 4, compared
with part 1. I hope that that clarifies the situation; it is set out in
both the guide and the
Bill. May
I return briefly to clause 2? As I was saying, the clause and part 2 in
general, set out the relationship that we wish to establish between
multi-site businesses and the local authorities that regulate them. We
shall come on, I am sure, to discuss primary authorities, enforcement
authorities, and LBRO’s role in ensuring that that relationship
works as smoothly as possible. This is a difficult area that was at the
heart of Hampton. We are trying to ensure consistency in enforcement in
a way that respects both local authority and, in a way, ensures that
businesses get the clarity that they desire from the regulatory system.
This is attempting to address the problem of inconsistency, which was a
very important point emphasised by Hampton in his
report.
Mr.
Prisk: I am grateful to the Minister for those remarks,
which I hope will clarify matters for those whom they will affect. The
Minister is right to say that part 2 of the Bill, of which clause 22 is
the first clause, seeks to aid businesses that trade in more than one
local authority area. The most obvious example of the national business
that we would think of is Tesco, which trades in hundreds of local
authority areas, and has to cope with a wide variety of different
approaches, not just the nature of the rules, but the way in which they
are implemented. Understandably, that creates significant difficulties
for such enterprises. It is that lack of consistency that the
Government are absolutely right to try to address.
I have one
fundamental difficulty with that, with which I hope that the Minister
can help, although I suspect that the Government have struggled with
it. That is that there is an unintended consequence of this, which
affects most UK businesses. As the Bill is currently drafted, it would
in effect create two regulatory environments: one for multi-site,
larger businesses—the Tescos of this world—and one for
the small, independent family businesses trading from a single
location. Multi-site businesses will be able to select a primary
authority, and in doing so, would hopefully have the intention of
ensuring that they enjoy a better regulatory environment.
One single
example—let us take Tesco—would be that its chief
executive would, quite naturally, want to move on from the current
local authority arrangements, and would identify what they regard as
the most efficient local authority. It might be Wandsworth, or it might
be, as its headquarters currently lie, in Hertfordshire. That is not
far from my own constituency. What would happen is that the Tesco chief
executive would say to the local authority chief executive, “Let
us have the
most efficient, streamlined, best possible arrangement that we can
have.” Quite understandably, the local authority would look at
that as an opportunity to set its standards, and would be very keen to
oblige. Meanwhile,
the small independent retailer in one site would be stuck with its own
authority. In good local authority areas, that would not necessarily
really matter. However, what about those people who are stuck in
Haringey, or—dare I say it?—the city of Liverpool, not
because they are unpleasant areas, because they are delightful and
charming areas, but because there is a concern there about the
efficiency of their
regulators? Locally,
it could mean that on the high street, a small independent retailer has
one regulator, but Tesco enjoys a streamlined super-duper, all singing,
all dancing, and efficient regime. In other words, there is one law for
the big chains, and another for small family businesses.
I am
characterising it in reasonably simple language, but it is important to
look at the potential unintended consequence. The Minister will, quite
rightly, have realised that the critical issue of the clause—as
I am sure you will have spotted, Mr. Chope—is
consistency. It would be quite right to say, “Mr.
Prisk, the lack of consistency that you are suggesting is utter drivel,
because if you are on one site only, perhaps consistency will have been
achieved.” However, it may be consistency of bad regulation that
that business has to suffer.
What I want
to explore with the Minister is: what consideration have Government
given to what this could mean, not least given the very great pressure
on small businesses on our high streets, and the competition that they
face from the larger supermarkets? How are small businesses meant to
benefit from this measure? What, in the Government’s view, are
the options available to them if they find themselves at a
disadvantage? There may not be a huge disadvantage, but in competitive
terms every incremental difference matters. In regulatory terms, if one
small family business were at the behest of the clipboard mentality,
while Tesco just up the street was enjoying a much lighter, better
regulatory environment, there would an injustice that I am sure the
Minister would wish to
address.
Mr.
McFadden: I should like to make a couple of points in
response to the hon. Gentleman’s questions. I am sure that I
detect no tone of partisanship in his citing Tesco, given the warm
relationship that he enjoys with his local
authority. The
current discussion takes us into an interesting area in respect of
whether we can criticise any legislation for not doing a job that it is
not intended to do. The principle of part 2 is to do with ensuring
consistency for multi-site businesses. Let us pursue the example of
Tesco, since we are on that subject. Tesco operates in most, if not
every, local authority area in the country. There is a particular need
for clear enforcement advice in respect of such a national, well-known
chain. The shop on the corner operating in one local authority area
only needs clear advice, but of a different kind, because it does not
face the same issues that arise with a chain of outlets, where
conflicting advice may be given between one local authority and
another. I am not sure that the hon. Gentleman is comparing exactly the
same situations.
The hon.
Gentleman suggests that there might be something in the Bill for big
business, but asks, what is in it for small business? I would not want
small businesses to think that there is nothing in the Bill that would
benefit small business. Under schedule 3, with its long list of
enactments under the different headings dealing with trading standards,
fire and safety, and so on, LBRO will be promoting better regulation
across all those fields, regardless of business size. If that helps to
lighten the burden of regulation, it will help businesses, large and
small. Many
businesses are in between the size of Tesco and the single,
family-owned corner shop. For example, a car dealership with outlets
across the four boroughs of the black country is not a national outfit,
like Tesco, but it might welcome the consistency of advice across three
or four quite closely linked local authorities. To local
government’s credit, there are existing examples of that. The
hon. Gentleman mentioned Liverpool. If memory serves me
correctly—I am sure that Committee members will correct me if it
does not—on the trading standards front there is quite a
successful partnership involving authorities in the Merseyside area,
where something like that is already happening. There are benefits to
small business and the national chains and to those in between with,
for example, half a dozen or so
outlets. We
have traded a few quotes today. The Federation of Small Businesses has
welcomed, if not pressed for, the creation of LBRO. I hope that this
measure benefits small businesses. However, part 2 of the Bill is not
designed to do a different job from the one that I set out; it is about
consistency for those business organisations or others who operate
across a number of local authorities and seek the right set of
relationships to ensure consistency. I am sure that we will soon
discuss primary authorities, enforcement authorities and how things are
to be
done. Question
put and agreed
to. Clause
22 ordered to stand part of the
Bill. Clauses
23 and 24 ordered to stand part of the
Bill.
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