Draft Regulatory Enforcement and Sanctions Act 2008 (Amendment of Schedule 3) Order 2013
The Committee consisted of the following Members:
† Coffey, Dr Thérèse (Suffolk Coastal) (Con)
† Crabb, Stephen (Lord Commissioner of Her Majesty's Treasury)
† Fallon, Michael (Minister of State, Department for Business, Innovation and Skills)
† Freer, Mike (Finchley and Golders Green) (Con)
† Gilbert, Stephen (St Austell and Newquay) (LD)
† Harris, Rebecca (Castle Point) (Con)
† Horwood, Martin (Cheltenham) (LD)
† McCabe, Steve (Birmingham, Selly Oak) (Lab)
† Morris, Grahame M. (Easington) (Lab)
† Reed, Mr Steve (Croydon North) (Lab)
† Sharma, Mr Virendra (Ealing, Southall) (Lab)
† Shepherd, Sir Richard (Aldridge-Brownhills) (Con)
† Simpson, David (Upper Bann) (DUP)
† Skidmore, Chris (Kingswood) (Con)
Stringer, Graham (Blackley and Broughton) (Lab)
† Tredinnick, David (Bosworth) (Con)
† Turner, Karl (Kingston upon Hull East) (Lab)
† Wright, Mr Iain (Hartlepool) (Lab)
Anna Dickson, Committee Clerk
† attended the Committee
Fifth Delegated Legislation Committee
Wednesday 17 July 2013
[Mr Mike Weir in the Chair]
Draft Regulatory Enforcement and Sanctions Act 2008 (Amendment of Schedule 3) Order 2013
8.55 am
The Minister of State, Department for Business, Innovation and Skills (Michael Fallon): I beg to move,
That the Committee has considered the draft Regulatory Enforcement and Sanctions Act 2008 (Amendment of Schedule 3) Order 2013.
Mr Weir, may I begin by welcoming you to the Chair, on behalf of the Committee, on this sunny morning? We look forward to serving under your chairmanship.
Primary authority is a statutory scheme which helps businesses to comply with regulation efficiently by enabling them to form a partnership with a single local authority. This local authority, the “primary authority”, provides them with support and robust advice on regulatory compliance with specific regulations. To date, there are 785 businesses and 104 local authorities in primary authority partnerships, which are reducing duplication in the enforcement of regulations in over 64,000 premises, ensuring less wasted time for business. Businesses are working hard to succeed and grow, and the Government are doing all they can to end the burden of tick-box regulation. Extending primary authority is just one way we are achieving this.
Businesses tell us they want to be able to access the benefits of primary authority in more legislative areas, and the purpose of the order is to enable them to do just that. It will extend the scope of primary authority in three areas: first, part 1 of the Housing Act 2004, which contains the housing health and safety rating system; secondly, the Sunbeds (Regulation) Act 2010; and thirdly, the Single Use Carrier Bags Charge (Wales) Regulations 2010.
As I have said, primary authority partnerships save businesses time and money. By providing a trusted relationship, partnerships improve communication with regulators. By issuing tailored advice on which a business can rely, a primary authority gives a business confidence and saves it money. For example, BrightStar Fireworks says that advice from its primary authority has saved it £250,000 and helped it to secure £2.5million in sales. By providing a single point of contact, primary authority reduces duplication. Home Retail Group’s primary authority has handled 400 requests for information from other local authorities, saving valuable staff time. By co-ordinating inspection, primary authority helps to target activity where the risks really lie for a business. Sainsbury’s, for example, tells us that primary authority has so far saved it 180 days of staff time. These savings are why businesses consistently tell us that they value primary authority. In external evaluation, more than 90% of business respondents told us they would recommend primary authority to others.
We have listened to what businesses say they need, which is why we are strengthening primary authority. From October, the Enterprise and Regulatory Reform Act 2013 will enable many more businesses, such as those in trade associations and franchises, to join primary authority. However, we are not just extending eligibility for the scheme; we are also increasing the range of legislation it covers. In its recent evidence to the Business, Innovation and Skills Committee on the retail sector, the British Retail Consortium welcomed this extension, stating that
“we fully support progressively increasing the co-ordination of enforcement activity, especially through the Primary Authority scheme”.
The order will mean that businesses can benefit from primary authority for regulations covering housing standards and sunbed tanning, and Welsh regulations on single-use carrier bag charging.
In response to the consultation, businesses were clear that they wanted more consistency in the enforcement of these three sets of regulations. They have told us that primary authority for these areas will give them the confidence to invest in compliance and to raise standards. Local authorities have told us that efficiencies can be gained by making the scheme more widely available, as proposed.
Let me touch briefly on each of the three areas, the first of which concerns part 1 of the Housing Act 2004. Improving the standard of the private rental sector is extremely important. Landlord associations report that many landlords receive conflicting advice, which can put them off investing in improving their properties. Primary authority would enable landlords to access advice, setting out appropriate standards of locks and other security measures, and taking into account local factors for properties in areas with different crime ratings. That would give landlords the confidence to improve security for their tenants.
The Government have considered carefully the detailed consultation feedback we received in response to the proposed extension. Let me be clear: we recognise the reservations some local authorities have about adding part 1 of the Housing Act to the scope of primary authority. We have worked with housing authorities to ensure that the scheme will work well for the housing health and safety rating system and that there will be no unintended consequences, so we are confident that primary authority will support effective regulation in this area. As one local authority commented, it will give letting businesses
“more certainty to protect tenants and encourage a more proactive approach to housing standards in their stock”.
The second extension, to the sunbeds regulation, will mean that companies wishing to offer sunbed tanning to customers can access robust advice on how to check that such equipment is not used by those aged under 18. Businesses operating in Wales will also be able to get support from a primary authority in complying with the additional regulations in force there.
Finally, the extension to Welsh regulations on single-use carrier bag charging will mean that a business with customers in Wales will be able to gain advice on which sizes of bag it must charge for and which sizes are exempt. That will benefit not only Welsh businesses but those in England delivering to customers in Wales.
These extensions will not only save time and money for business. By increasing business engagement with regulatory compliance and reducing duplication, primary authority saves time for local authorities too, enabling them to focus their effort where it is most needed: on rogue traders. Protection for consumers is increased too: not just because local authority time is freed up to deal with the wilfully non-compliant, but because primary authority increases businesses’ confidence to develop their approach to compliance. Whether it is fitting appropriate locks to rental properties or ensuring there is a national procedure for age verification, primary authority helps businesses to drive up standards for consumers.
Primary authority improves the enforcement of regulation, is less burdensome for businesses and more efficient for local authorities, and leads to better protection for consumers, which is why we are committed to strengthening it. The order gives businesses the tools they want to enable them to comply with regulation efficiently. It is just one of the many ways in which the Government are reducing the burden of legislation on business, and I commend the order to the Committee.
9.3 am
Mr Iain Wright (Hartlepool) (Lab): Mr Weir, may I begin by joining the Minister in welcoming you to the Chair and wishing you and members of the Committee a good morning on this sunny day? I will not detain the Committee for too long—I want hon. Members to go and enjoy the sun—but I just want to make two or three specific points.
Like the Minister, I agree with the concept of the primary authority scheme. I agree that it is right that we ensure consistency of standards across the board and reduce unnecessary and burdensome regulation on businesses in order to help them grow. We had an interesting debate in the Enterprise and Regulatory Reform Bill Committee about the concept of the primary authority scheme, and I should be interest to hear in what other areas the Minister will introduce such legislation.
I do not propose to talk much—if at all—about Welsh carrier bags or sun-tanning premises, for which there is not much need on a day like this. Instead, I want to focus my remarks on the housing health and safety rating system. The Minister rather skirted over some of the issues. According to the consultation, 19 of the 22 local authority regulators that responded disagreed with the proposal. The main concern related to the rating system, which applies a risk-based approach that considers each property individually, taking into account such factors as the nature of the occupant and local crime statistics—a landlord in Hartlepool, for example, might be dealing with different risk factors from a landlord in Hull.
According to the consultation, the second biggest objection was that, as the majority of landlords have only one or two properties within the same local authority area, they would not be eligible to join the primary authority. As I said, 19 of the 22 local authority regulators that responded opposed the proposal. Why has the Minister disregarded that strong message? He said that
he plans to work with local authorities but frankly, I am very concerned that housing health and safety standards will be compromised as a result of this proposal. Can he reassure me in that regard?Drawing the logical conclusion from what the Minister said about primary authority schemes, I wonder whether he agrees with the idea of a national register of private landlords, which I considered when I was a Housing Minister in 2008 and 2009. It would provide consistent standards in the private rental sector and help to drive them up. On a similar theme, does he agree with the idea of national minimum standards for letting in the private rental sector? A register would ensure consistency, and better, easily understood standards would drive down landlords’ costs. Will the Minister work with his colleagues in the Department for Communities and Local Government to ensure that some form of national register of private landlords and national minimum standards are introduced?
9.6 am
Michael Fallon: I am grateful to the hon. Gentleman for his endorsing the first two of these extensions in scope—to sunbed tanning and to carrier bags in Wales. He asked about the consultation on the housing health and safety rating system. It is perfectly true that there was a mixed response to the proposal, but landlord associations also reported that they were not clear about their obligations under the rating system. It is important that we are more consistent and clearer about their obligations, which is presumably why the hon. Gentleman also suggests setting national standards. So, lack of consistency and clarity is an issue.
One local authority said in response to the consultation that, whatever its own view of the scheme,
“We do not feel that including the…Rating System in the scheme will compromise the discretion each local authority has to consider local factors in their assessment and enforcement decisions.”
So, primary authority does not entirely fetter local discretion. However, there is a big gain here for landlords. Some 500,000 premises could effectively benefit from these schemes. Giving letting businesses more certainty about their obligations makes it easier for them to comply with regulation, so they understand exactly what is expected of them, are clearer that those standards will be applied more consistently across the country, and are therefore more likely to invest in compliance. That will lead to greater protection for tenants—exactly the reason why the hon. Gentleman asks us, quite reasonably, to continue considering the case for a set of national standards.
I suspect that the national register the hon. Gentleman proposes would reintroduce some of the bureaucracy I am trying to remove, but I will certainly pass on that suggestion to the Minister for Housing, my hon. Friend the Member for Hertford and Stortford (Mr Prisk).
With that, Mr Weir, I hope the Committee is willing to endorse the order.