Regulatory Enforcement and Sanctions Bill [Lords]


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Clause 62

Offences under subordinate legislation
Question proposed, That the clause stand part of the Bill.
Mr. McFadden: The clause extends the existing powers of the Minister to create criminal offences in secondary legislation under the powers to create alternative civil sanctions in this part of the Bill. It is important that clause 62 is read alongside the list of enactments in schedule 7. Subsection (4) limits the scope of the clause to the secondary legislation that can be made under the list of enactments in schedule 7. That means, for example, that a Minister creating, amending or consolidating criminal offences in secondary legislation made under one of those listed enactments may also provide for the offence to be sanctioned using the fixed monetary penalty.
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Taken with clauses 36 to 38, and schedules 5 and 6, the clause will ensure that all relevant offences, whether created in primary or secondary legislation, can be dealt with through a civil sanction. That is important because it helps to ensure consistency across a particular regulatory regime.
The clause allows Ministers to confer only those powers in part 3. All the substantive restrictions will apply when the extended powers are used—for example, in relation to devolution.
Before making an order, the Minister must be satisfied that a regulator will exercise the powers in a manner that is in line with the principles of good regulation—the Committee will probably not want me to list them again. That is provided for in clause 66, to which we will come shortly.
Clause 62(3) provides that any order made under an enactment in schedule 7 giving the regulator access to the new civil sanctions will be subject to the affirmative procedure. That matches the parliamentary procedure for orders made under clause 36.
The clause is intended to ensure that the option that we are creating to use civil sanctions is available across primary and secondary legislation and across the regulatory regime.
Question put and agreed to.
Clause 62 ordered to stand part of the Bill.
Schedule 7 agreed to.

Clause 63

Guidance as to use of civil sanctions
Question proposed, That the clause stand part of the Bill.
Mr. McFadden: The clause is about guidance, and again the provisions are important. We are significantly changing the range of options available to regulators and the use of civil sanctions, and it is important that there is proper guidance on that.
The clause says that where the power to impose a civil sanction is conferred on a regulator
“the provision conferring the power must secure the results in subsection (2).”
That means that the regulator must publish guidance about its use of the sanction, that the guidance must contain the relevant information and that the regulator must revise it where appropriate, consult such persons as the provision may specify and have regard to the guidance or revised guidance in exercising its function.
On what we might call the penalty guidance, subsections (3) to (5) set out the specific requirements that the guidance must meet in relation to fixed penalties, discretionary requirements and stop notices. For example, regulators will be required to include details of how the penalties will be imposed and of those matters likely to be taken into consideration in determining the level of a variable monetary penalty.
We have talked about the powers and the need for consultation in putting together an order to confer them, but guidance on how those powers are to operate in practice is an equally important part of the regime, and that is covered in clause 63.
Mr. Prisk: As the Minister said, clauses 63 and 64—I am looking principally at clause 63—refer to what should be in the guidance. I have two brief questions for the Minister. First, when would the guidance be published? It is always important for businesses to understand that. Secondly, how is it to be made accessible to affected persons? The provisions will affect a wide section of the business community, so it is important to understand how the Government intend to ensure that business is properly informed in a timely way.
Mr. McFadden: The answer to the hon. Gentleman’s question about when the guidance will be published is that we have codes on such things. Our intention would be to publish guidance 12 weeks before the proposals came into effect. That should give people adequate warning of what is involved.
More generally, the hon. Gentleman is right to say that guidance is important. Sometimes businesses pay outside consultants to help them to comply with regulation or a change introduced by the Government. Obviously, we recognise that that happens, but we do not want businesses to do it unless they have to, so we put significant effort into improving guidance.
Let me give an example. The Government have put significant effort into improving the “Employing people” pages of the Business Link website. They are a very good guide for businesses so that they do not have to spend what are sometimes significant sums asking people how they should comply with the law when that information could be made available for free and, we hope, in an accessible and user-friendly way by the Government. The hon. Gentleman is therefore right to stress the importance of guidance, and we do put effort into improving it. We envisage such guidance being available on a regulator’s website, so that a business in that field could check what was expected of it. That is right and fair, and that is what we hope that regulators would do under this provision.
Question put and agreed to.
Clause 63 ordered to stand part of the Bill.
Clause 64 ordered to stand part of the Bill.

Clause 65

Publication of enforcement action
Question proposed, That the clause stand part of the Bill.
Mr. David Kidney (Stafford) (Lab): It is a pleasure to serve under your firm but fair direction of our proceedings, Mr. Chope. I have some questions for my hon. Friend the Minister. The clause relates to the publication of information on enforcement action in respect of the new civil sanctions. What is the purpose behind the clause? It strikes me that it is one of two things. One possible explanation is that it constitutes a name-and-shame policy for people on whom civil sanctions are imposed. The second explanation is that it is about accountability: people who impose the new civil sanctions have to account for how many they have imposed and whether they are collecting moneys efficiently, so that there is information on which the public can judge them. To me, the second explanation is far more satisfactory.
The reason why I thought that the first explanation might apply is that this morning I woke up to the news that from today the Border and Immigration Agency will, under a naming-and-shaming policy, publish the names of employers who employ illegal immigrants. It therefore occurred to me that the Minister might say that that is his purpose in this case.
The important point about the second purpose—collecting the information and knowing whether the system is effective—is that under subsection (2) some information has to be published, but it is partial. The information that a civil sanction has been imposed should be collected, but not necessarily the information that the matter has come to a successful conclusion. Under subsection (2)(b), for some of the fixed monetary penalty cases, it will be reported that the penalties have been paid, but that will not necessarily happen for all of them. That is my reading of the provision. It is therefore possible that we would never know the true extent of the power and whether it was successful. I conclude that we might never know its effectiveness if we were thinking back to the time when magistrates courts were imposing many fines but apparently not collecting them successfully. The collection rate was appalling. That fact would be very important for public interest in whether the sanctions were any use. However, because of the way in which the clause is drawn, I do not think that we would have that information.
The provision also seems incomplete because of subsection (3), which states that if there is a successful appeal against a civil sanction, that information does not have to be collected and reported. If one is asking about the effectiveness of the overall system, one has to ask why that is, because it is a relevant fact that in many cases there would be a successful appeal against the civil sanction. We would want to know that fact, and it should be published, because it would lead to questions being asked about the alacrity with which civil sanctions were being imposed but overturned on appeal. It would be important to have that information; it should not be excluded.
Subsection (4) is the most worrying of all. It says that the information need not be collected and published
“where the relevant authority considers that it would be inappropriate to do so.”
That sounds as though a local authority, as a regulator, could decide not to collect information because it was inappropriate to do so or to collect some information about some cases but not others, which would lead to an undermining of the use of the statistical evidence. That seems to hole the entire clause below the waterline. I looked at the explanatory notes for guidance, but found that they muddied the waters even further instead of solving the problem.
Paragraph 170 reminds us that the reports may not need to list certain cases. “Certain cases” suggest that it is one or two and not the whole lot, but the clause is so broadly drawn that the regulator could decide that all the cases were inappropriate to be publicised. The clause says that cases need not be listed
“where the Minister thinks it inappropriate for such cases to be publicised, for example, for data protection reasons.”
If I am right and the purpose is to compile statistical information, data protection would not apply because we would not be disclosing information about individual cases.
Why do the explanatory notes mention the Minister? The Bill says that the “relevant authority” makes the decision. Either the Bill or the explanatory notes is wrong. The Minister needs to tell us the purpose of the clause—he was about to rise to do so before I interrupted him, so I apologise for that—and whether he is satisfied that the Bill has been drawn sufficiently carefully on this occasion.
Mr. McFadden: I am extremely grateful to my hon. Friend for asking me that series of questions, which will allow me to elucidate on the rationale behind the clause. Hopefully, I can give him some answers. He asked several questions, including whether the purpose of the clause was accountability or letting the public know who had contravened. It is a bit of both. It is right that regulators, who are being given a significant new sweep of powers under this part of the Bill, publish information about how they are exercising those powers. That is a good in itself. As to naming and shaming, there can also be a public interest in knowing whether an organisation has contravened and has reached the end of the process. We can go back to the example of a business releasing toxic waste into the environment. I do not know why the public should not know about a business that has been found guilty of such an offence, has received a civil sanction—it may have appealed but has not been successful—and has reached the end of the process.
Mr. Kidney: I guessed that my hon. Friend might say that it was a bit of both, but does he not think that that is confusing? If there were lots of civil sanctions being imposed and they were all being overturned on appeal, there would be a cause for public concern. If the Bill exempts publication of information about cases because they were successfully appealed, we would not know about that concern.
Mr. McFadden: My concern is with reputational fairness for the business. I do not think that saying that it is a bit of both is a bad thing. There is a perfectly fair dual purpose to publishing information. It will show those looking at the regulator how the regulator is using the new suite of powers, and it will serve the public interest to know about those who have contravened the regulations. That can be fair, provided it has reached the end of the process.
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The point that my hon. Friend is making is, in a sense, a generic one. It has been raised in other situations. My Department has sometimes been asked, “Shouldn’t those accused of something be named on some list, even if it isn’t proven?” I am not sure that that is fair. Subsection (3) is intended to deal with that situation.
My hon. Friend’s final question concerns subsection (4) and the phrase,
“where the relevant authority considers that it would be inappropriate to do so”.
I should make it clear that the relevant authority and the Minister are the same thing under that provision. The relevant authority will not be the regulator. Subsection (4) will allow the Minister to exempt certain cases from the publicity requirement, and is intended to capture cases that may have data protection implications or other grounds for exemption.
I must be careful how I put that. What other grounds might there be for exemption from the requirement to publish information about enforcement action? The regulated person or business may be in a particularly sensitive area. It may be that if information about the address of the premises came into the public domain, it could be a danger to those working there. I know that we can think of examples where that might be the case. There are some among the population who object fiercely to some business activities, research activities and so on, so it is prudent to give the Minister the power to say in those circumstances, “We don’t want that information released, because we could be putting someone at risk by publishing it.”
 
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