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Division
No.
4]
Question
accordingly negatived.
Mr.
Prisk: I beg to move amendment No. 41, in
clause 40, page 19, line 4, at
end insert— ‘(5A) The final
notice must offer the person the opportunity to pay the prescribed sum
mentioned in subsection (2)(b) within a specified time
limit.’. The
amendment would insert between subsections (5) and (6) of clause 40 the
phrase:
“The
final notice must offer the person the opportunity to pay the
prescribed sum mentioned in subsection (2)(b) within a specified time
limit.”. What
is this about? It is very simple in a way. It is the classic dilemma
that one faces when confronted with a notice to pay something or an
accusation: should one make a representation and lose out as a result?
The amendment would correct that. A defendant should not be at a
disadvantage simply because they want to make a written representation
or an objection. Justice is not well served by placing a pressure on a
defendant to
accept a penalty regardless of their innocence in order to reduce the
potential fine. The amendment would ensure that if someone decided, as
they are entitled to, to make a written representation and if that
representation was overruled, that defendant would still receive a
discount for any other payment. There should be no financial inducement
one way or the other; they should be able to make those
representations. Mr.
McFadden: I understand the sentiment behind the amendment.
I do not want to put words into the hon. Gentleman’s mouth and I
am sure he will correct me if I am summarising this wrongly, but I
think that what he is trying to say is that people should not be
penalised for choosing to make representations. I understand that, but
I believe that the amendment is not necessary to ensure that that is
the case. Clause 40 allows the discharge payment to be set at a lower
level than the fixed monetary penalty to, for example, reflect
procedural savings from an early admission to liability by a business,
so we have that already. Once the penalty has been imposed, clause
52(1) deals with the situation that he is concerned about. The clause
states: “An
order under this Part...confers power on a regulator to require a
person to pay a fixed monetary
penalty.” That
may include provision “for early payment discounts” and
so on. The provision allows the regulator to offer an early payment
discount should a business decide to pay the penalty immediately. That
is once the penalty has been imposed. The discharge payment and early
payment discount could be set at the same level. We obviously need to
specify that in the Bill as there may be circumstances in which the
amounts could differ. The amount of the discharge payment and the fixed
monetary penalty and any subsequent early payment discount will be set
out in the order made under part 3. As I said before, such orders will
be subject to the affirmative resolution procedure, so Parliament will
have the ultimate say in deciding
that. 6
pm
Mr.
Prisk: May I take it that the Minister is saying that it
is the intention of the Government, when presenting such an order, to
ensure that no such penalty—from making a representation or
seeking an objection—will be unintentionally permitted through
any order? Do the Government intend to ensure that someone in the
circumstances that I have described in my amendment would not be
penalised?
Mr.
McFadden: I think that the situation is certainly covered.
I hesitate to say that it is covered in every instance. The discharge
payment and the early payment discount, as set out in clause 52(1),
could be set at the same level and that would be determined when the
order comes forward. I do not think that the hon. Gentleman’s
amendment is necessary, but I hesitate slightly in saying that that
would be the case in all circumstances.
Mr.
Prisk: That has been very helpful. The Minister has
married clause 52 together with clause 40. I was not clear that the two
welded together quite as neatly as he and his advisers were able to
adjudge. I am encouraged by the fact that it is clearly not the
Government’s
intention for someone to suffer such a penalty. I understand that one or
two areas may slip through. If it is going to be an order by positive
resolution to come before the House to ensure that such arrangements
are made in detail, that gives me due comfort. On that basis, I beg to
ask leave to withdraw the
amendment. Amendment,
by leave,
withdrawn. Clause
40 ordered to stand part of the
Bill.
Clause
41Fixed
monetary penalties: criminal proceedings and
conviction Question
proposed, That the clause stand part of the
Bill.
Mr.
McFadden: The clause ensures that where the regulator
serves a notice of intent on a person prior to imposing a fixed
monetary penalty, that person cannot be criminally prosecuted for the
same event to which the notice relates during the period within which
they can discharge their liability to the penalty. Similarly, a person
cannot be prosecuted for the same event if they discharge their
liability to the penalty or the regulator decides to go ahead and
impose it. That is down to familiar reasons of double jeopardy. Unpaid
monetary penalties will be forced through the civil courts. The Bill,
and clause 52 in particular, will ensure that regulators have access to
an efficient and streamlined procedure for recovering monetary
penalties. Question
put and agreed
to. Clause
41 ordered to stand part of the
Bill.
Clause
42Discretionary
requirements
Mr.
Prisk: I beg to move amendment No. 42, in
clause 42, page 19, line 35, after
‘determine’, insert
‘subject to a maximum amount to be
prescribed by order by a Minister of the
Crown’. Amendment
No. 42, ironically to clause 42, deals with discretionary requirements
and tries to put some form of cap, some maximum limit, on the amount of
fine. At the moment, the regulator can impose whatever fine it wishes.
There is no stated maximum in the Bill. Given that the regulator has
wide powers to investigate, effectively prosecute and be the jury, it
seems inappropriate to provide unlimited powers regarding the scale of
the fine. There needs to be some appropriateness, not least given the
principles that we are meant to be following in terms of Hampton and
Macrory. Therefore, the purpose of the amendment is, first, to send
that signal. There is a need for the regulators to have a clearly
defined limit, but the amendment would allow the Minister to set that
limit, and do so by order. There is some flexibility; we have not
sought to put a figure on that limit. I would be interested to hear the
Minister’s response to the points that underscore the
amendment.
Mr.
McFadden: The amendment intends to impose a cap on
variable monetary penalties. We have a cap on fixed monetary penalties,
but that goes back to the
point made by the hon. Member for Solihull about the punishment fitting
the crime. The cap for fixed monetary penalties relates to the nature
of the offences; having a cap for variable penalties would be analogous
to capping Crown court fines. A cap on variable penalties, while
debated a lot in the other place, is different from a cap on more
minor, summary offences. We continue to believe that a cap for the most
serious offences would not be appropriate. I would be interested to
know what level the hon. Gentleman thought might be appropriate. Even
in the current regime, without the new powers, sanctions and fines that
run into millions of pounds have been imposed. I am not sure where such
a cap would be set in any meaningful
way. The
issue is not just the level of the fine, but the kind of offence. The
hon. Member for Solihull is right that the level of penalty should be
related to the level of offence, rather than being a number that a
Minister may set down in an order. Regulators must be able to capture
any financial benefit gained from non-compliance. One of the weaknesses
of the current system is that sometimes fines imposed are small in
relation to the benefit that the offender has gained by committing the
offence. That was one of the recommendations in both Hampton and
Macrory. If a business knows that profit gained from committing the
offence will be removed, with the possibility of an additional penalty
on top, a potential incentive to try to break the law and get away with
it is removed. We fear that if a cap on the fine is set down, that
could deter compliance and militate against ensuring a level playing
field for compliant
businesses. In
making an order under part 3 of the Bill, the Minister may consider
whether a cap is necessary, but we do not think that there should be an
obligation on the Minister in every case, as I believe would be the
effect of the amendment. Setting a cap on the monetary penalties is not
simple, because it involves deep knowledge of the regulatory law, the
relevant market conditions and the amount of benefit that has accrued
to the offender through committing the offence, over what could be some
time. Professor Macrory ruled out a cap based on a business’s
turnover, as he thought that that would pose undue legal complexity.
The regulator will be required by clause 62 to publish guidance,
setting out the criteria that it is likely to take into account when
setting the level of variable monetary penalties, so there will be some
transparency in the process, but the amendment proposes a mechanism
that would effectively cap variable monetary penalties in every
case.
Judy
Mallaber: My hon. Friend referred to the Macrory report.
Does he agree that some of the fines that it quotes for health and
safety offences are absolutely shocking? Some businesses have benefited
10 times as much by non-compliance as they have ended up being fined.
Any cap on discretionary fines would not enable the necessary
discretion to charge a business a low fine where appropriate while
ensuring that an organisation doing something completely out of order
was not left in pocket as a result of
non-compliance.
Mr.
McFadden: That is one danger of capping in every case. I
am not saying that a cap would never be appropriate in any
circumstances, but the amendment
as I understand it would cap in every case. Making the punishment fit
the crime, or imposing a penalty appropriate to the gain accrued to a
business for its non-observation of the law, is an important and
relevant problem.
A list of
possible criteria for the variable monetary penalties is set out in
page 38 of the guide to the Bill. They include the seriousness of the
non-compliance, the business’s disciplinary record and whether
the business has taken any action to address the harm caused by
non-compliance, and they may differ from area to regulatory area. A
business will, of course, be able to raise objections to and make
representations about the level of penalty after the notice of intent
is issued and, again, will be able to appeal against the penalty if it
considers the amount unreasonable. If the tribunal agrees with the
appellant, it will have the power to withdraw or vary the
penalty
imposed. To
sum up, requiring a cap on variable monetary penalties in every case
might mean that regulators were tempted back down the road of criminal
prosecution. There is no limit on Crown court fines, and many of the
offences that we are discussing would be triable in Crown court. We do
not want to create an incentive between the two regimes for regulators
to favour criminal prosecution in the Crown court, which has no cap, to
a system with a cap in every case. I understand the point made by the
hon. Member for Hertford and Stortford, but I hope that he will decide
on that basis not to pursue his
amendment.
Mr.
Prisk: It has been a helpful debate. As the Minister
rightly said—I think that it is the most important point in the
Bill—guidance has already been established. He explored several
instances, which I did not notice in reading the explanatory notes,
that set out the options available when considering a cap, and not only
the options available to Ministers. The Government, rightly, do not
reject the principle of a cap but rather recognise the dangers of
limitation. I fully
understand. It
is also important, however, to bear in mind that the amendments are a
symptom of a wider concern. The nature of the system is such that
someone whose guilt must be proved against them does not have the
option of putting their case before an ordinary court of law, so one
wants to make sure that the Government are aware of the dangers in the
other parts of the system, hence the amendment and some of the previous
amendments. My
purpose in tabling the amendment was to establish exactly what the
Government’s view of the caps was. They clearly accept the need
for caps in certain cases, and I agree, but on balance, I think that
the Minister is probably correct to say that it would be a mistake to
write a statutory, narrow and strict requirement into the Bill. That is
a perfectly reasonable argument. It has been a useful debate, and on
that basis I beg to ask leave to withdraw the
amendment. Amendment,
by leave, withdrawn.
Question
proposed, That the clause stand part of the
Bill.
6.15
pm
Mr.
McFadden: The clause is important. We covered some of the
ground during debate on amendment No. 42, but clauses 40 and
49 are about fixed monetary penalties. This clause is about
discretionary requirements, and,
again, expands the suite of options available to regulators in trying to
ensure compliance with the law. Subsection (2) requires the regulator
to be satisfied beyond reasonable doubt that a person has committed the
relevant offence before imposing a discretionary requirement. The
discretionary requirements themselves are set out in subsection (3) and
include variable monetary penalties, which we have just discussed;
compliance notices, which are notices requiring a business to take
steps within a time period as may be specified to ensure that the
instance of non-compliance does not continue or recur; and restoration
notices, which are notices requiring a business to take steps as far as
possible to restore the position to what it would have been had the
non-compliance not taken place.
Many of us,
when we talk to local enforcement officers, will recognise this and see
the sense behind it. Most enforcement officers I have talked to do not
want to go around fining everybody and taking everybody to court and
issuing penalties right, left and centre. What they most want to do is
ensure compliance, and sometimes that just means restoring the position
to what it would have been had the non-compliance not taken
place. Discretionary
requirements are aimed at addressing offences where a greater degree of
flexibility may be required in order to sanction the offence
appropriately. This may be more suitable in more complex cases of
non-compliance, where there are a number of different effects and
consequences that need addressing. For example, if a business has
spilled toxic waste or chemicals on parkland, a regulator might want to
impose not just a fine, but a restoration notice to order the business
to restore the position to what it would have been had that offence not
occurred. The regulator may also want to impose a compliance notice to
make sure that a business takes steps to ensure that the offence does
not continue or reoccur. If the business has clearly gained a benefit
from failing to comply with regulations, the regulator may in addition
want to impose a variable monetary penalty. In the public interest,
this gives regulators a greater variety of options to ensure not just
that monetary penalties are imposed, but that action is taken to
rectify the initial breach of the
law. Subsection
(4) prohibits a regulator from imposing a discretionary requirement
upon a person on more than one occasion in relation to the same act or
omission, and subsection (6) goes back to our discussion about summary
only offences, which are capped, and the maximum fine available to the
magistrates court is usually
£5,000. Discretionary
requirements will allow regulators to deal with instances of
non-compliance in a more proportionate and targeted way, and the clause
is very
important in carrying forward the recommendations made by Professor
Macrory for more flexibility and proportionality in the
system. Question
put and agreed to.
Clause 42
ordered to stand part of the
Bill. Clause
43 ordered to stand part of the Bill.
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