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General Committee Debates
Regulatory Enforcement and Sanctions

Regulatory Enforcement and Sanctions Bill [Lords]

The Committee consisted of the following Members:

Chairmen: Mr. Christopher Chope, Mr. Eric Martlew
Baron, Mr. John (Billericay) (Con)
Burt, Lorely (Solihull) (LD)
Dorries, Mrs. Nadine (Mid-Bedfordshire) (Con)
Drew, Mr. David (Stroud) (Lab/Co-op)
Kidney, Mr. David (Stafford) (Lab)
Lilley, Mr. Peter (Hitchin and Harpenden) (Con)
McCarthy-Fry, Sarah (Portsmouth, North) (Lab/Co-op)
McFadden, Mr. Pat (Minister for Employment Relations and Postal Affairs)
McGovern, Mr. Jim (Dundee, West) (Lab)
McKechin, Ann (Glasgow, North) (Lab)
Main, Anne (St. Albans) (Con)
Mallaber, Judy (Amber Valley) (Lab)
Prisk, Mr. Mark (Hertford and Stortford) (Con)
Prosser, Gwyn (Dover) (Lab)
Seabeck, Alison (Plymouth, Devonport) (Lab)
Teather, Sarah (Brent, East) (LD)
Celia Blacklock, Chris Shaw, Committee Clerks
† attended the Committee

Public Bill Committee

Thursday 19 June 2008


[Mr. Christopher Chope in the Chair]

Regulatory Enforcement and Sanctions Bill [Lords]

Further written evidence to be reported to the House

RESB 02 National Consumer Council
9 am

Clause 46

Stop notices
Question proposed, That the clause stand part of the Bill.
The Minister for Employment Relations and Postal Affairs (Mr. Pat McFadden): We have made fairly brisk progress so far. Let us see what today holds for us.
When we adjourned the other day, we were in the midst of discussing part 3 and had completed our debates on clause 45. Part 3 offers a new range of options to regulators as alternatives to criminal prosecution in order to ensure compliance. One important option, set out in clause 46, is the stop notice.
The stop notice would apply to situations in which there was an ongoing dangerous activity—for example, the leak of hazardous material on to land or water or in a factory. In such situations, the regulator would have to do exactly what it says on the tin and say stop. A stop notice would prohibit a business from carrying on the activity specified in the notice, and the notice would remain in place until the person had taken the steps specified in it.
Subsections (4) to (6) give the grounds for issuing a stop notice. They state that the notice may be issued only if the activity
“is causing, or presents a significant risk of causing, serious harm to...human health...the environment...including the health of animals”—
or the “financial interests of consumers”. The regulator must also “reasonably” believe that the activity as carried on by the business
“involves or is likely to involve the commission of a relevant offence”.
The provisions are important because they also allow the regulator to impose a notice when an offence has already been committed and if an offence is likely to happen. The Government believe that in certain circumstances a regulator should be able to issue a stop notice to prevent an offence from occurring if there is a risk to the public or the environment. Indeed, it would seem odd to instruct regulators to sit back and wait if they believed that that could happen.
Subsection (7) ensures that the steps specified to be taken in the notice must be limited to compliance steps. Given the sometimes onerous nature of stop notices we feel that it would be inappropriate to allow regulators to include broader steps in the notice.
Mr. Mark Prisk (Hertford and Stortford) (Con): I do not profess to be an expert on non-criminal sanctions, but will the Minister clarify whether the cases identified in subsection (4) mirror those of the stop notices currently available in law? The subsection has three specific provisions, and I want to be sure that there is no significant variance from established cases.
Mr. McFadden: I am happy to confirm that.
I was approaching the end of my remarks. I now conclude. Stop notices will be an important part of the regulator’s toolbox and will provide important protection for the public. Alongside the fixed and variable monetary penalties that we have already discussed, they have an important function.
Mr. Prisk: I thought when the Minister began his speech that he was going to say it was a “Prisk” process, but it seems that we have made brisk progress. After that fourth-form attempt at humour, I shall move swiftly on.
Stop notices have considerable merit. The Minister rightly spoke of instances when immediate action is required and urgency is the essence. We have been assured that the cases are the same as under established stop notices. In principle, we have no problems with the use of the sanctions in those circumstances, although we will have questions about procedure when we discuss clause 47.
Lorely Burt (Solihull) (LD): Welcome back to the Chair, Mr. Chope, to what may be the last day of our considerations.
On behalf of the National Consumer Council, I want the Minister to explore the nature of stop notices. The council is concerned that the test that the regulators must prove before issuing a stop notice is too high and that
“a significant risk of causing...serious harm”
is perhaps too high a barrier. I understand the grave importance to any business of having a stop notice issued against it. However, if an activity could be described as having a harmful consequence but not necessarily falling into a serious category, I am worried about how much leeway an individual inspector might have before issuing the stop notice.
Mr. McFadden: In some ways, the hon. Lady has answered her own question. As she rightly pointed out, subsection (4)(b) states that there is a case when
“the regulator reasonably believes that the activity as carried on by that person is causing, or presents a significant risk of causing, serious harm”.
Stop notices will not be an everyday occurrence when a breach might have happened. I use the word subjectively—the breach could be minor, or it could be fixed with restorative action by the person or business concerned. There could be breaches of regulations that are not in themselves a danger to human health or the environment, so there could be another sanction in such circumstances. However, given the seriousness—I intend no pun—of stop notices, the use of the words “significant” and “serious” probably set the bar at the right level.
Question put and agreed to.
Clause 46 ordered to stand part of the Bill.

Clause 47

Stop notices: procedcure
Mr. Prisk: I beg to move amendment No. 43, in clause 47, page 23, line 32, leave out ‘14’ and insert ‘7’.
The Chairman: With this it will be convenient to discuss amendment No. 51, in clause 47, page 23, line 32, leave out ‘within’ and insert
‘as quickly as possible and no later than’.
Mr. Prisk: The amendment would change the current provision whereby a completion notice is issued within 14 days to within seven days of such an application. As we learnt in the debate on clause 46, stop notices are often used in urgent circumstances. The Minister referred to a possible chemical leak or something of that nature, and urgency is clearly at the heart of this form of sanction. Equally, it is often the case—in fact almost invariably—that compliance is evident. It is visible to the inspector and is usually fairly straightforward. In most circumstances, when one asks someone to stop doing something, it is reasonably straightforward to identify quickly that that has happened. Given that fact, 14 days seems a long period in which to issue a completion certificate. As I said, in most cases, it is fairly evident whether the activity has ceased.
When the situation is one of harm—the usual circumstances in which the stop notice is used—it is in the specific interests of the regulator to ensure that action is prompt as well. Therefore, there is a strong case for saying that 14 days is a very long period. That is why I think that seven days will be sufficient for the regulator to issue a completion certificate. Most cases involve attending a site, seeing that the activity or potential harm has been ceased, and thus being able to identify that directly.
I realise that there may be one or two incidents in which the regulator is not able to manage a particular series of incidents. However, those would be the exception. It is important that we send out the message that stop notices are for urgent issues and for ceasing specific activities. The regulator, therefore, should be able to issue the certificates in a similarly prompt manner. I hope the Minister will respond positively to an amendment that improves this part of the Bill.
Lorely Burt: Our amendment No. 51 is very much in the same spirit as the Conservative amendment No. 43. The difference is that our amendment acknowledges that there may be occasions when 14 days are necessary. Any arbitrary line that one draws will always have a problem one way or another. What is important about our amendment is that it emphasises the importance and urgency of making the decision as quickly as possible, and no later than 14 days. It keeps the 14-day deadline, but—like the Conservative amendment—it seeks to inject a note of urgency.
Closing a company for any period of time can be seriously harmful to its future. We wish to see those few words added to the clause so that no one can be under any illusion that it is very urgent—just as urgent as the issuing of the stop notice itself—to issue the other certificate as quickly as possible once there is compliance.
Mr. McFadden: I have a significant degree of sympathy with the points that have been made. The hon. Member for Hertford and Stortford said earlier in our proceedings that time is money, and he is right about that. Time is money for businesses and there should not be undue delay in responding to a request for a completion certificate to be issued. We are talking about a situation in which a person on whom a stop notice has been served may apply for a completion certificate and the regulator must decide whether to issue one within 14 days. The clause requires the regulator to issue a completion certificate once they are satisfied that the business has taken the steps specified in the stop notice. That allows the business to carry on its activity as before, with the problem having been rectified. I would expect that to happen as soon as is practical for the regulator. It is important that the Committee understands that 14 days is a maximum. The clause says “within 14 days”, so 14 days will not be the norm.
9.15 am
The procedure in clause 47(2)(e) allows a business to request a certificate from a regulator confirming its compliance. It is a safeguard intended to ensure the ongoing monitoring of the operation of the stop notice. The amendments suggest either a seven-day limit, or the insertion of extra words to ensure that 14 days is seen as a maximum. Although I understand the hon. Gentleman’s point—he is right to say that time is money—we believe that on some occasions it could cause difficulties. A seven-day limit might not always provide the regulator with sufficient time to assess fully whether a business has complied with the notice.
I will continue with the example that I used in relation to clause 46. A business might, for one reason or another, have been releasing some kind of toxic substance into the land. It could then have had a stop notice imposed on it for the leaking pipe that was emitting the waste, and the regulator might need to test whether the toxins had returned to an acceptable level, below which there was no danger to public health. In such a case, the regulator might have to wait for test results to be returned from a lab before it could confidently say that the business was complying. It might also have to contact a third party that might be involved, and ensure that that third party did not continue to suffer the harm that the original instance had caused to it.
I do not believe that such situations should be allowed to carry on for ever. There has to be a limit, which is why there is a limit in the Bill. A maximum limit of 14 days strikes the right balance between providing a safeguard for business, where time is money, and allowing regulators sufficient time to assess whether the business has complied.
Amendment No. 51 accepts the 14-day limit but seeks to add extra words. I have sympathy with that, but I do not feel that those extra words are needed to stress that 14 days is a maximum. The clause says “within 14 days”. Perhaps I can offer additional comfort to the hon. Member for Solihull, as I am happy to confirm that we will amend the guide to the Bill so that it states explicitly that 14 days is a maximum period, and that in practice we expect certificates to be issued as soon as possible within that.
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