Regulatory Enforcement and Sanctions Bill [Lords]

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Mr. McFadden: The hon. Member for Hertford and Stortford posed two questions in moving his amendment. One was why the Government had changed their position somewhat on the issue since the draft Bill was published and the other related to the relevant time, so I shall try to cover both points. He is right that there was something of a change in the position and that the amendment he proposed would take us back closer to where the process started in the original consultation. I will explain why the Government changed their view on that during the consultation. Subsection (2) is clear about what the grounds are. It states:
“If the primary authority determines within the relevant period that the proposed enforcement action is inconsistent with advice or guidance previously may within that period direct the enforcing authority not to take the enforcement action.”
The test, therefore, is inconsistency with advice or guidance previously given, and that test is narrower than the one we originally proposed and the one outlined in the hon. Gentleman’s amendment, which would be whether it was inappropriate.
When we consulted on that issue before the final version of the Bill was published, a number of stakeholders and local authorities told us that they were concerned about that because it would give the primary authority a role that was more akin to a free-ranging right of review, rather than asking it to answer what is a clearer and more narrowly defined question on whether the enforcing authority had acted in a manner consistent with the advice that was given. We took those representations on board and narrowed them down somewhat. In doing so, I believe that we have, to some extent, eased the burden on primary authorities with regard to what they are required to look at in those circumstances. Some primary authorities—even very experienced ones—have a number of headquarters in their areas. We are concerned that a wide test, such as the test of inappropriateness, would leave them having to play a much more interventionist role, rather than judging enforcement action on the basis of consistency of advice.
Judy Mallaber (Amber Valley) (Lab): I can see that my hon. Friend is saying that it gives a narrower power of discretion and judgment to the primary authority. However, there could still be circumstances in which the enforcing authority felt that it had a good, specific, local reason to take different action from that in the original guidance. Will my hon. Friend tell me what the situation will be? Will there be a right of appeal to the LBRO and whose view would ultimately prevail in that circumstance?
Mr. McFadden: That is where LBRO’s arbitration role comes in. My hon. Friend is right to say that. If the test was the original, wider appropriateness test, rather than the consistency test that we have now written into the Bill, there would probably be many more appeals to LBRO.
I hope that helps the hon. Member for Hertford and Stortford in relation to his amendment. I understand what he is driving at, as it is pretty close to the position where the Government began on this. However, we have listened to the representations about the burden that would be put on primary authorities. As I said, significant concerns were raised by people charged with enforcement. They said that giving primary authorities such a general right to block enforcement action would be wide-ranging—much more so than the consistency test—and that it would put a substantial burden of liability on the primary authority, which would find itself required to make a thorough investigation of every aspect of a particular enforcement action.
This morning, we discussed the concerns of the hon. Gentleman’s local authority about the burdens that will potentially be imposed on it by the Bill. My fear is that, compared with the consistency test, the amendment would increase those burdens. That is why we have made the change.
Before I turn to a further point made by the hon. Gentleman, I will mention a couple of the stakeholders who have commented on this. Representatives of the professions involved, such as the Trading Standards Institute and the Chartered Institute of Environmental Health, have welcomed the change we will make in this regard. The consistency test gives the primary authority more of an objective role, which is founded on judging the action against the advice that it has given. That is why we have narrowed the power in that respect.
On the point about the extension to the normal deadline of five working days, the hon. Gentleman is right that the normal deadline would be five working days. However, subsection (9)(b) states,
“such longer period beginning with that day as LBRO may direct.”
In the conversations that we have had with local authorities, including Hertfordshire council, five working days is thought to be sufficient in the vast majority of cases and is normally enough to give the enforcing authority time to judge the consistency test, about which we are talking in relation to the clause.
The ability to extend the deadline has been included to provide some flexibility in situations where, for one reason or another, it might not be possible for the primary authority to respond in five days. For example, a particular event in the primary authority area might mean that staff are diverted on a short-term basis and that the primary authority is unable to commit resources to considering such a referral. A case might be particularly complicated and occasionally might take longer than five days. The Local Authorities Coordinators of Regulatory Services—the local authority regulation body—has commented on the Bill and has recommended that we extend the term from 28 days as a matter of course. We do not want to do that because we agree with the hon. Gentleman: time is money and we do not want unnecessary extensions. Five days should be the norm in most cases. However, we do think that the provision for some flexibility makes sense. I hope that on that basis, the hon. Gentleman will not choose to press the amendment.
Mr. Prisk: The debate has been helpful. I understand that it was slightly ironic to propose what the Government were originally proposing and then to watch the Minister explain why they have changed their mind. It is very good to see—
Mr. McFadden: It is all part of the consultation.
Mr. Prisk: The listening Government. I am sure that that is all part of the process and we just hope that it is more successful than it has been elsewhere in Government business. It is entirely right that the Minister should reflect that consultation and that is welcome.
With regard to amendment No. 31, I confess that the moment the phrase “28 days” loomed I suddenly thought that we were in another place, discussing other matters. Thankfully, I do not feel so passionately about it that I feel the need to leave the room, but the debate is important.
It was particularly helpful that the Minister made it clear that the Government’s wish and the LBRO’s wish is that five days is the norm and that there has to be a jolly good reason for going beyond that. That is an assurance that I know small businesses will want. The idea that 28 days should be the norm is nonsense; it might be convenient for the local authorities, but in the end the paying customer is the small business. Small businesses are the ones who all of us in the public sector rely on to generate the wealth to pay for our incomes and we should not forget that. Although I understand that there will be exceptional cases, as long as that is the case and as long as we recognise that five days is the normality, it would seem that we have made a gain today. On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 28 ordered to stand part of the Bill.
Schedule 4 agreed to.

Clause 29

Enforcement action: exclusions
Question proposed, That the clause stand part of the Bill.
Mr. Prisk: I should like to raise some short questions, principally with regard to subsections (1) and (2). I am sure that the Minister will want to provide clarity to us. First, subsection (1) states:
“The Secretary of State shall by order with the consent of the Welsh Ministers prescribe circumstances in which section 28(1) to (4) shall not apply.”
It would be helpful if he described the circumstances in which consultation would not take place as it is not clear what that would extend to.
Secondly, subsection (2) states:
“Where a local authority other than the primary authority takes enforcement action against the regulated person in circumstances prescribed under subsection (1), the authority must inform the primary authority of the enforcement action it has taken as soon as it reasonably can.”
When informing a primary authority of enforcement action, given that people are waiting to know the sanction that may or may not be imposed on them, what would the Minister regard as unreasonable?
Thirdly, can the Minister tell us when it would be impractical to contact the primary authority? That is clearly a concern and it would be useful to know what exactly the Government have in mind.
Mr. McFadden: I hope I can shed some light on the hon. Gentleman’s questions. As he rightly said, clause 29 allows the Secretary of State to prescribe the circumstances in which the procedure requiring an enforcing authority to notify a primary authority of proposed enforcement action shall not apply. I shall provide some examples later, but I think that we can all probably think of examples where action needs to be taken then and there, where it may not be practical to do what is proposed, but I shall come on to that in a moment.
The primary authorities scheme is intended to provide consistency and certainty for businesses operating in a number of local authority areas, but it is also important that that should not be allowed to delay essential and routine action by local authorities where it is appropriate. Our extensive discussions with local authority enforcement officers and their representatives have demonstrated that although it is important that exemptions are made, the complexity and diversity of the underlying regulations dealt with in the Bill mean that secondary legislation is probably the most appropriate way of doing so.
4.30 pm
The order may include, therefore, exemptions where delay would inhibit effective evidence-gathering or investigation of a breach, or where it would be impractical to seek the view of a primary authority when exercising powers—for example, under the Noise Act 1996. If speakers were blaring at 4 am, I do not think that we would want to wait five days. The underlying regulations are deliberately local in nature, and that could be another reason, as for example with many aspects of the Licensing Act 2003, or where the enforcing authority already has to seek approval for its proposed enforcement action from another force—that would meet the purpose of the notification requirement.
We have committed to laying an order under clause 29 as soon as possible after the Bill has come into force. I am happy to repeat that commitment to the hon. Gentleman today. I would also like to take the opportunity to clarify that the primary authorities scheme will not become operational until the exemptions have been drawn up and come into force. That is the context and content of clause 29.
Question put and agreed to.
Clause 29 ordered to stand part of the Bill.

Clause 30

Inspection plans
Question proposed, That the clause stand part of the Bill.
Mr. Prisk: I thought that the Minister was about to rise gracefully to his feet and I hesitated, then he hesitated. I have only one brief question.
Mr. McFadden: I apologise to you and the Committee for being too slow off the blocks, Mr. Chope.
The clause makes provision for a primary authority to draw up an inspection plan containing recommendations as to how other local authorities should inspect a business for which it is the primary authority. That is important. It takes us back to the point made by the hon. Member for Solihull about risk-based inspection. The clause is intended to bring about greater consistency and co-ordination of regulatory enforcement for businesses that adopt the primary authorities scheme. That is one of the prizes in the regulatory regime—there can be an agreed inspection plan, which gives local authorities and businesses some clarity about what is inspected and what is appropriate in those circumstances.
Where another authority departed from the recommendations of the inspection plan, it would be required to notify the primary authority of that before carrying out the inspection, giving its reasons. That would help to support the sharing of strategic information between authorities. It would be important for the primary authority to learn why an enforcement authority might want to do that. It also might give the primary authority a better picture of how the business is operating throughout the country.
Subsection (3) lists examples of issues that can be addressed in an inspection plan, such as paragraph (a):
“the frequency at which, or circumstances in which, inspections should be carried out”
“what an inspection should consist of”.
The list is not exhaustive. The Government’s expectation is that inspection plans might address a number of other issues, including those areas where a business is dedicating resource to raise compliance itself, where that is an ongoing problem to which enforcement authorities should pay particular attention.
There are constraints on the content of an inspection plan. A primary authority must consult with the business before making such a plan and it must take into account any relevant recommendations relating to the frequency of inspection when drawing up an inspection plan. Again, that is an important part of the overall regulatory regime to encourage a more co-ordinated and strategic approach. I am sure that all of us in our constituencies regularly meet businesses that are asking for that kind of consistency. Any reasonable business expects, and does not mind, that it will occasionally be inspected. I recall visiting a business in my constituency a couple of weeks ago, when the owner said, “The trouble with inspections is that they are a bit like buses, you get none for a long time and then four turn up at once. We are not sure why, we have not been inspected for years”. An inspection plan, agreed between the primary authority and the enforcing authorities, would give businesses and the enforcing authorities clarity about what was expected.
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