Clause
69Payment
of penalties into Consolidated Fund
etc Question
proposed, That the clause stand part of the
Bill.
1.15
pm
Mr.
McFadden: The clause is about the payment of penalties.
Again, we touch on previous debates; we have often mentioned the
analogy of parking, imperfect though it is. The accusation is sometimes
made that parking fines are used as a revenue-raising mechanism. The
clause makes it clear that money received through the issue of a fixed
or variable penalty, including late payments or interest charges, must
be paid into the relevant Consolidated Fund. Subsection (2) defines
those funds.
Professor
Macrory recommended that there should be no perverse financial
incentive for regulators to favour a particular sanction. In our
discussions about the various new powers available to regulators under
the Bill, I have said several times that we are trying to avoid
perverse incentives to use one route rather than another. The payment
of penalties into the Consolidated Fund is important. The clause
ensures that and acts as a safeguard against the kind of incentives
that we want to avoid.
Question
put and agreed
to. Clause
69 ordered to stand part of the
Bill.
Clause
70Disclosure
of
information Question
proposed, That the clause stand part of the
Bill.
Mr.
Prisk: I wonder whether I might test the Minister. I
allude to a debate initiated by the hon. Member for Stafford. How
confident is the Minister that the clause is secure from legal
challenge? I think not only of the Data Protection Act 1998 or the
Regulation of Investigatory Powers Act 2000 but of human rights
legislation. I know that Ministers always have to sign such things off,
and it would be helpful to know how confident he is about
that.
Would he also
tell us how confident the public can be that the disclosure of
information by the criminal justice system to the regulators enabled
under the clause will at all times be appropriate, confidential and
secure? We are all aware of recent mishaps with various forms of
data—I am sure that the Minister has his laptop firmly attached,
unlike a Cabinet Minister recently. The loss of 25 million benefit
records and the dreadful and unfortunate errors with other data concern
people, so it is important that the public can be confident that these
matters will be handled in an appropriate and confidential
way.
Mr.
McFadden: This is a gateway clause that allows the passing
of information from the criminal justice system to regulators. It is
necessary because those who work in the criminal justice system may
come across breaches that are properly dealt with by the kind of civil
penalties provided for under the Bill. The clause allows
them to pass information about those breaches or potential breaches to
the relevant regulator. Such gateway clauses are not unprecedented. For
example, the Enterprise Act 2002 has a similar provision.
When making an order under part 3, the Minister concerned will assess
the situation to ensure, as far as is possible in the circumstances,
that it is compliant with the European convention on human
rights.
If it helps
the Committee, I have some more facts about the clause. Information may
be disclosed only if the regulator has an enforcement function in
relation to a criminal offence, and for the purposes of the regulator
exercising one of the new powers. Subsection (2) provides that the
information that can be disclosed could include information collected
before this provision comes into force. Subsection (3) provides that
disclosure of information is
“not to be taken
to breach any restriction of
information”. However,
subsection (4) does not authorise the sharing of information in
contravention of the Data Protection Act 1998 or part 1 of the
Regulation of Investigatory Powers Act 2000. The hon. Gentleman is
right to say that one must be careful with any clause that mentions
information sharing and the public have legitimate concerns in that
area.
Equally, it
is also in the public’s interest for breaches of the law in the
regulatory field to be properly investigated. If we relate the clause
to the wider purpose of the Bill and part 3 in particular, that purpose
is to give regulators a new suite of powers in order to regulate more
effectively than they can at present with the one-club option of
criminal prosecution. It seems correct to allow for the passing of
information from the people concerned with one route, the criminal
justice system, to those who, by virtue of the Bill, will be
responsible for enforcing the new civil penalties. Information powers
should always be treated with care, but clause 70 gives the regulatory
system an advantage in ensuring that where there are breaches, the
information goes to those who are responsible for enforcing the law and
gives them the information necessary to do so.
Question
put and agreed
to. Clause
70 ordered to stand part of the
Bill. Clause
71 ordered to stand part of the
Bill.
Clause
72Duty
not to impose or maintain unnecessary burdens
Question
proposed, That the clause stand part of the
Bill.
Mr.
McFadden: The clause brings us to part 4 of the Bill. To
use a lay term, I would summarise part 4 by saying that it is related
to an aspect of the job description of regulators. This part of the
Bill was significantly improved as a result of discussion and amendment
in the other place and it gives us two important clauses, beginning
with clause 72. I am sure that we would all agree that part of the job
description of regulators—not the whole of it—should be,
as the clause states, that they exercise their functions in a manner
that does not impose unnecessary burdens or maintain burdens that the
regulator considers to have become unnecessary.
The point about the regulator making the judgment is one of the changes
that have been made as we have moved along the line in debating the
clause.
In overview,
the clause is about helping to ensure that regulators do not impose or
maintain unnecessary burdens. Subsection (2) provides that where the
duty has been imposed, unnecessary burdens need not be removed where it
would be impracticable or disproportionate to do so. The sense of
proportion is important because it is something that has been added. We
could find a situation where a burden had been identified by a
regulator as being unnecessary but the act of removing it would be
completely disproportionate to the burden that it was placing on the
regulated bodies. Subsection (2) allows that question of proportion to
be taken into account.
In following
this duty, the Government do not intend that regulators should divert
resources from their core functions in a way that compromises their
effectiveness. As I said, this is part of the job description of
regulators; it is not in any sense the whole job description. In
considering unnecessary burdens, we expect that regulators should be
able to target their resources more effectively, therefore enhancing
regulatory outcomes. Subsections (3) to (6) require a regulator to whom
the duty has been applied to publish a statement as soon as is
reasonably practicable, setting out what they propose to do in the
following 12 months. Statements must then be published annually, so the
clause asks regulators to keep a constant eye on the question of
unnecessary burdens. That is important because in the regulatory field
we often talk about the need for a culture change, and the provision
whereby the issue will be considered annually is intended to embed that
approach.
Mr.
Prisk: In the light of the duty and the knowledge that the
Government intend to establish regulatory budgets, how does the
Minister see the two policies interweaving? I can see a connection, but
it would be helpful to understand how that will work. There is a new
duty not to have unnecessary burdens, and he has just spoken about
wanting to encourage regulators to use their resources appropriately.
How does that fit into a regulatory budget
environment?
Mr.
McFadden: The hon. Gentleman is right to suggest that
regulatory budgets are much discussed and have significant potential in
this field. They will focus people’s minds not only on what is
coming in, but on what could be taken out. I think that that would help
in a regulatory budget environment, because there would be a duty on
regulators constantly to have an eye on the stock, as it were, as well
as the flow. I do not see a contradiction between the two elements; in
fact, I think that they go well
together. The
power is an important addition to the suite of provisions that are
designed to embed this agenda within the group of regulators operating
in this country. I stress that it is not new or unheard of; it is
similar to the duty in the Communications Act 2003 that requires Ofcom
to keep its functions under review, with a view to ensuring that
unnecessary burdens are not imposed or
maintained. The
clause also provides an avenue for implementing the recommendation by
the House of Lords Select Committee on Regulators in its recent report,
“UK Economic Regulators”, that
“economic
regulators be statutorily required to facilitate the competitiveness of
UK firms by...removing regulatory burdens from firms wherever
possible.” The
clause is in line with that
recommendation.
Mr.
Prisk: I welcome the Minister’s remarks. Indeed, I
welcome what is in effect a new duty to keep the regulatory function
under review and for regulators of the various hues that we have been
considering under this legislation not to impose an unnecessary
regulatory burden. It is fair to say that the clause has changed quite
remarkably from the original drafts that I saw in early forms of the
Bill that were considered in the other place. I commend the other place
for the work that it
did. I
also welcome the recognition of the need to remove such burdens, which
is noted in subsection (2). However, I note that the regulator, whoever
that may be in any circumstance, will still be left to decide, first,
what is or is not, in their view, burdensome, and secondly, whether its
removal would be impracticable or disproportionate. The requirement to
publish an explanatory statement is fine in itself, but I am
disappointed that notably lacking is a clear statement, a
requirement—I did not hear this in the Minister’s
remarks—for direct consultation and/or involvement of business
in determining whether a regulatory burden is
unnecessary. This
is a missed opportunity, if I may say so. I hope that the Minister will
correct that in replying to the debate. I suspect that to rely on
regulators regulating themselves is not likely to deliver the
significant change that we would all like in this area. Understandably,
given the general circumstances politically, Ministers are talking a
great deal about wanting to listen to business and to reduce the
regulatory burden—heaven knows, with the state of the economy,
that is long overdue—yet they have missed this opportunity to do
so. Often it is the regulated, not the regulator, who is best able to
judge what is an unnecessary or disproportionate burden. The Minister
will probably retort that, by using the Hampton principles, here
embedded in the Bill, the regulators will be able to make that
assessment. However, to fail to enable business to affect the decisions
is a serious
omission. 1.30
pm I
am particularly concerned for small businesses. Both sides of the House
agree that regulations have a disproportionate impact on the smallest
businesses. The Federation of Small Businesses tells us that the
average small business spends seven hours a week complying with
Government red tape and regulation. Given that there are 4.4 million
small businesses in the UK, that is an extraordinary waste of what
could be highly productive
time. Judy
Mallaber (Amber Valley) (Lab): Does the hon. Gentleman
agree that if we consult businesses, which is what I think he is
suggesting, we have to be careful that the business does not put
forward as unnecessary regulation something that is a regulation for a
good purpose? Something that may seem a burden on a business could have
a proper protective or administrative purpose. I have difficulty seeing
why we should just leave it to that business. We must also be careful
that we do not start to put too much burden of regulation on the
regulator, otherwise we will find ourselves with mirrors on
mirrors—potentially more administrative
burdens.
Mr.
Prisk: I understand the hon. Lady’s point. She is
right that it would not be appropriate for the regulated to decide what
regulations there should be. My concern is that the regulated, rather
than the regulator, should be able to be involved—indeed,
expressly—in looking at where the problems are. They should be
able to say, “We are having a real problem with this particular
regulation.” It should be expressly stated. That, I think, is
the omission.
The hon. Lady
is right that the decision must inevitably rest with the regulator. My
concern is about the omission of an explicit mechanism or trigger to
ensure that business understands that it has a part to play in an
important duty being put forward by the Government. Perhaps such a
provision will be set out in response to the debate, in the statements
that the Minister may be writing as we speak. Can he tell us what
consideration he and his officials have given to the inclusion in the
clause of a provision that the regulators should respond to business
concerns about regulation? What considerations have they made? Has the
Minister held any meetings with the business community, to discuss the
clause and how business might aid the process of rooting out
unnecessary
burdens? Members
of the Committee will be familiar—I know you are, Mr.
Chope—with the British Chambers of Commerce burdens barometer.
We could debate the strengths and weaknesses of any methodology of
judging, but the British Chambers of Commerce is well placed to do
so.
Judy
Mallaber: Does the hon. Gentleman accept that many people
think that the business barometer is absolute nonsense and makes no
sense whatever? That view was expressed to the Regulatory Reform
Committee, of which I am a member, by many organisations. The barometer
is not a tool that has a great deal of
respect.
Mr.
Prisk: I am sure that is the hon. Lady’s view, but
I suspect that it is not the view of the British Chambers of Commerce.
It is not my view. It is important that we have a clear, itemised list
of what the burden of regulation is. The barometer has shown that the
burden of regulation has increased by £65 billion over the past
11 years— £10 billion in the past 12
months—so there is clearly a problem. We can argue over one item
or another, but the principle is the
same. To
conclude, why does the clause not reflect the clear interest and
concerns of business? Why is there no guidance from the Minister to
show that business can participate, and is welcome to do so, in trying
to identify unnecessary burdens of regulation? I hope that his response
will lift the cloud of uncertainty and demonstrate that business has a
part to play. I look forward with eager anticipation to his
remarks.
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