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6 pm
Amendment 78 deals with early payment discounts and late payment penalties. It is similar to amendments tabled by the Opposition in the Public Bill Committee, and I am delighted to discuss these matters again, and to set out our thinking on them and explain why we must again resist the proposals. As the hon. Member for Cambridge has pointed out, the provisions for early payment discounts and late payment penalties replicate the equivalent provisions in the Regulatory Enforcement and Sanctions Act 2008, on which the civil sanctions regime is based.
I believe it is right to encourage prompt payment of sanctions, and to reflect the procedural savings to the regulator—in this case, the Electoral Commission. Of course, the commission’s role is not purely administrative, but there are those, including the hon. Member for Huntingdon, who have argued that the measures will turn the commission’s role into that of a traffic warden issuing fixed penalty notices. With respect to him, however, that is not the point. These sanctions provisions are only part of a range of potential sanctions, and the whole point is that there should be flexibility in how they are applied. We are seeking to provide such a flexible approach to sanctions in line with other regulators who have benefited from the provisions in the Regulatory Enforcement and Sanctions Act 2008, on which these provisions are modelled.
In providing for the possibility of early payment discounts and late payment penalties, the commission will have the option to offer the provisions if it deems that appropriate. I shall set that out in the final version of its guidance on enforcement. However, it may decide to offer the options in some instances and not in others. For example, it may decide that providing for an early payment discount is appropriate in some instances, and that a fixed monetary penalty might be appropriate for a relatively small breach and when speeding up the regulatory process is in the interests of the regulator and of the individual concerned. The commission may also decide that it is not appropriate to provide these discounts or penalties in some cases—for example, when the individual is a serial offender or when the offence is of a more serious nature. I hope that that addresses the concerns expressed by the hon. Member for Cambridge.
Mr. Djanogly: Will the Minister give the House one example of when an early payment discount would be likely to apply? These powers are not likely to be used frequently, and as he has said, in many people’s minds, such practices are more relevant to parking tickets than to electoral offences.
Mr. Wills: Just to correct the hon. Gentleman, let me say that that was not my analogy. I was quoting him, and I am not sure that I share his view. The point is that it will be for the commission to determine the circumstances, and we have to allow it flexibility as a regulator.
To return to the point made by the hon. Member for Cambridge, when we depart from the regulatory framework that the House agreed to in the Regulatory Enforcement
and Sanctions Act 2008, we must have a compelling reason for doing so, and I do not see any such reason here. I am sorry to pray in aid the hon. Member for Cambridge again, but as he said, we must be careful about suggesting to the people whom we all serve that we are somehow immune from the kind of sanctions and regulatory frameworks that apply to other people in public life. I hope that I have now said enough to convince the hon. Member for Huntingdon to ask leave to withdraw his amendment.
Amendments 64, 65, 66 and 67 are all consequential on amendment 63, and they would remove variable monetary penalties from the range of discretionary requirements proposed for the commission by the Bill. Again, I am going to ask the House to resist those amendments if they are pressed to a vote, because to accept them would be to remove an important part of the Commission’s range of civil sanctions and take away some of the flexibility that we believe to be desirable.
The sanction of variable monetary penalties is closely modelled on those contained in the Regulatory Enforcement and Sanctions Act 2008. The provisions are intended to allow the regulator to ensure that the financial penalty is appropriate to the offence. I come back to the fundamental point that, unless there is a compelling reason to do so, we should not depart from the principle that politicians should not be treated differently from those in the other regulated fields.
As well as that matter of principle, there is also a positive reason for including variable monetary penalties in the suite of powers that the Bill gives to the commission. They will provide greater flexibility, and enable the commission to adapt the penalty specifically to the facts of each case. The draft enforcement guidance issued by the commission indicates that it intends to use variable monetary penalties for the graver breaches of the Act, and to use fixed monetary penalties in cases of more minor, technical, breaches, where a penalty is still appropriate but where the breach is less grave or more routine.
Having said that, variable monetary penalties, while flexible, must still be imposed proportionately and, in summary cases, they may not exceed the level of a fine available to a criminal court dealing with the same sort of breach. Currently, that is £5,000 where a case would otherwise be tried in a magistrates court. In other words, the word “variable” does not mean “unlimited”. Factors that could be taken into account—I am not saying that they would be, but they could be—include the history of compliance of the individual or organisation concerned and also the gravity of the failure. The commission’s draft enforcement policy—to which I am sure that the commission would welcome contributions from all hon. Members—draws this distinction, stating that fixed monetary penalties are likely to be used for
“low level non-compliance such as the late delivery of statutory information”,
and that variable monetary penalties will be used for
“more serious breaches than fixed penalties where a fine can be set at a level to reflect the gravity of the offence and remove any financial benefit resulting from non-compliance”.
In this sense, variable monetary penalties are an important part of a graduated suite of powers and of the proportionate approach to regulation that all hon. Members want to see.
As the commission states in its latest briefing on the Bill, removing these sanctions
“would significantly reduce our ability to apply the appropriate sanction in a proportionate way”.
If there are still concerns about safeguards, I would draw the House’s attention to the fact that discretionary requirements may only be imposed by the commission when it is satisfied “beyond reasonable doubt” that an offence or breach has occurred. That is a high threshold. It is the criminal standard of proof, and it ensures that the commission must act responsibly in the use of these powers. The Bill proposes to ensure that regulations are properly enforced by an effective regulator, not to lower the required standard of evidence. The Bill also proposes an appeal mechanism against the imposition of a variable monetary penalty. Moreover, it also proposes to allow a person to make representations before the imposition of a variable monetary penalty. There is, therefore, a suite of safeguards. Amendments 64, 65, 66 and 67 are consequential, and I hope that the arguments I have already outlined against amendment 63 will also stand against those consequential amendments. I hope that I have said enough, therefore, to persuade the hon. Member for Huntingdon to withdraw his amendments.
I am sorry that, even before the hon. Gentleman had heard my reasons why amendments 74 and 82 were a bad idea, he said that he would press them to a vote. However, I hope that I can still persuade him to change his mind, although he said that they were very important to him. They provide that appeals against the imposition of fixed monetary penalties and non-compliance penalties should be heard by the High Court, rather than a county court as the Bill currently provides.
The Government believe that county courts are a more appropriate forum for appeal. The precedent for appeals in electoral law is to a county court, which will therefore have the appropriate expertise. Raising appeal to the High Court would inevitably place an unnecessary strain on the resources of the High Court, when the county court already provides an appropriate opportunity for appeal. It would also risk slowing down the appeals process, which could have a seriously negative impact on the person or organisation whose appeal was under consideration.
I do not subscribe to the logic that the hon. Member for Huntingdon put forward, at least in Committee, that the Electoral Commission might act with more restraint, should an appeal against the imposition of a civil penalty be to the High Court, rather than the county court. Under all circumstances, the Electoral Commission is under a duty to act reasonably and it is required, as I have just said, to meet the criminal standard of proof for the imposition of most of its new civil sanctions. Cases must be—and they will be, I am sure—judged on the facts of the case, not on the processes.
Mr. Djanogly: First, the Minister will appreciate that House procedures meant that I had to suggest that we would vote on the matter rather than wait until a later date. More particularly, does he not appreciate that the average county court judge is not very used to dealing with the legality of electoral matters? That is why they should go to the High Court.
Mr. Wills:
I stand corrected on the procedures for voting and I am happy to accept the hon. Gentleman’s point about that. As to the county court, appeals on
electoral law cases are currently heard there, and we believe that that is appropriate. More expertise exists in the county court than currently in the High Court and the point remains about the burden that the amendment would place on High Court resources. The hon. Gentleman’s proposal is unnecessary because we do not believe that, because the appeal would go to the High Court rather than a county court, the Electoral Commission would adapt its approach. It should not do so, and I do not think that it will do so. If we are to provide for an appeal to go to the High Court, I am afraid that we require a more convincing case for such a change, which would break with existing precedent and indeed with the precedent of the Regulatory Enforcement and Sanctions Act 2008.
David Howarth: I support the Minister’s general case on this issue, but is there not another important point in that amendment 74 is about appeals for fixed penalty notices? Wasting the High Court’s time on fixed penalty notices seems rather bizarre. There might, however, be a serious point—there might be, so I merely ask the Minister to reflect on it—when it comes to appeals about stop notices, which might have an effect on an election that is under way. That might be a different case, but amendment 74 seems to provide no case at all.
Mr. Wills: As always, I am happy to consider the argument; we can return to it at some future point. As I have said, I understand the instincts behind amendment 74 and I understand the importance that the hon. Member for Huntingdon attaches to it. I am sympathetic to the argument, but I just think that in this particular case, it would not be effective: it would be a break from precedents and it would not necessarily help in the way the hon. Gentleman imagines—possibly because of the delays and the attendant impact on those subject to appeals.
Mr. Djanogly: There is no precedent, because we are setting up a new system.
Mr. Wills: With all respect to the hon. Gentleman, there is a precedent in respect of electoral law and there is certainly a break from the precedent established by the Regulatory Enforcement and Sanctions Act 2008. Of course what is proposed is not identical, because as the hon. Gentleman says, we are dealing with new law, but in so far as there are precedents, the amendment would constitute a break from them. I hope that I have convinced the hon. Gentleman not to press amendment 74 to the vote and to withdraw it.
I am afraid that I am also going to have to resist amendment 77, which introduces a time period for appeals against discretionary requirements. As I said when we debated similar amendments in Committee, such a provision would reduce the clarity of the Bill for those regulated by the commission. The amendment would introduce a time period for appeals, but it is already in provisions devoted to appeals and representations procedures; that is the proper place for such a time period, where it sits most obviously with other provisions relating to appeals. I think that the amendment is an unhelpful step, which would not aid comprehension of the provisions, so I oppose it on that ground alone.
6.15 pm
In the course of his remarks, the hon. Member for Huntingdon asked whether there was an inconsistency between references to 28 days for appealing against fixed monetary penalties and those for variable monetary penalties. The precise point is that the maximum period for making representations for fixed monetary penalties is 28 days, which reflects the fact that the breach being punished is less likely to be serious. Representations against the decision to impose such a penalty will need less time. Variable monetary penalties are, as I have already said, likely to be higher and will be imposed in more complex cases, so it is right that longer time be given to object. That is why there is a minimum period of 28 days in that case. Both the time scales are based on the Regulatory Enforcement and Sanctions Act 2008, from which we should depart only if there is a compelling reason to do so. In this case, we do not think that there is.
The aim of amendment 75 is, I understand, to encourage the commission to demonstrate good practice to those it regulates by acting quickly. We do not believe that the amendment, particularly in the way it is structured, is desirable. As I explained to the hon. Member for Huntingdon when a very similar amendment was tabled in Committee, we do not want unnecessarily to limit the commission in its application of the new civil sanctions regime. We do not want to depart from the framework set up by the Regulatory Enforcement and Sanctions Act 2008. I have already said that many times already this afternoon and I suspect that I will need to say it many times again before we are through today.
Whatever the circumstances of the case, we expect the commission to act as promptly as it is able to do—a point that will be covered in the final guidance on enforcement. We believe that the commission is well aware of the need for working in a timely fashion. Indeed, in its draft guidance, the commission notes in words that I hope will reassure the hon. Member for Huntingdon:
“We recognise that it is important to conclude investigations as quickly as possible, in the public interest and in the interests of natural justice for those involved”,
“our first priority... to conduct a fair and thorough investigation”.
If I may paraphrase, it is precisely those concerns with natural justice and the public interest that lie behind the amendment, so I hope that the hon. Gentleman will be reassured. This is an important point. I understand that the amendment seeks to protect those subject to investigations, but it is precisely the references to natural justice and the public interest that should reassure the hon. Gentleman. In those circumstances, it is best not to put the commission under a legal obligation to act promptly; instead, of course, performance should be monitored and recorded in the annual report to ensure that decisions are taken expeditiously and on all the right evidence. I thus hope that the hon. Gentleman will withdraw the amendment.
Amendment 83 would provide that the Electoral Commission, in its reports on sanctions, is able to publish the names only of those on whom it has imposed a monetary penalty in excess of £5,000. Following the Government amendment on annual reporting of sanctions, the reports referred to will be included in the commission’s annual report.
Amendment 83 goes against the core principle of transparency. I believe that it is right for the receipt of a civil penalty to be public, which is an important part of the deterrent effect of the civil sanctions regime. The amendment would exclude a significant range of the potential sanctions available—and most likely the majority—from being reported publicly. For instance, for offences that are triable only in a magistrates court, fines are capped at £5,000, so should this amendment be agreed, the commission’s civil sanctions would not be reported.
Failing to report the imposition of such sanctions is also inconsistent with the requirements of article 6 of the European convention on human rights, by which the commission, as a public authority, will be bound. Article 6, as the hon. Member for Huntingdon will know, requires decisions to impose civil or criminal penalties to be made public. I should also say that the commission will be bound by data protection legislation in all circumstances.
Mr. Djanogly: Is the Minister asserting that any fine, no matter how small—very small fines could be imposed for short periods of late fining—should go into the annual report?
Mr. Wills: As I have already said, transparency is absolutely crucial and our approach mirrors the position with criminal prosecutions where a person has been convicted of an offence. That fact is normally known. I remind the hon. Gentleman that an imposition of a civil penalty in this case might, after all, be an alternative to criminal prosecution.
In all circumstances, the commission is required to be satisfied that the criminal standard of proof has been met before it can impose most of its new civil penalties. I understand the hon. Gentleman’s concerns, but it is also worth saying that the commission will not report on investigations that have not resulted in an imposition of a penalty or that are still continuing, although it has said that it will provide information in response to specific requests.
It is a fundamental common law principle, underpinning our legal system, that a person is presumed innocent until proven guilty. I do not think that anyone, including the commission, would want the publication of such a formal report to risk intruding upon that. Nothing in this proposal would require the commission to include such detail. I have no reason to think that it would be necessary to do so, although I should say that what the commission ultimately decides to include is a matter for the commission.
Mr. Djanogly: I put it to the Minister that if a company files its report and accounts late it will now be fined. So far as I know, however, such companies do not get listed in an annual report. Why should association officers be treated differently?
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