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Monday, 28 January 2008.
The Committee met at half-past three.
[The Deputy Chairman of Committees (LORD FAULKNER OF WORCESTER) in the Chair.]
Regulatory Enforcement and Sanctions Bill [HL]
(Third Day)
The Deputy Chairman of Committees (Lord Faulkner of Worcester): I remind the Committee that if there is a Division in the Chamber while we are sitting, the Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes.
Clause 24 [Primary authorities]:
Baroness Hamwee moved Amendment No. 68:
The noble Baroness said: I shall speak also to Amendment No. 69. I apologise to the Committee—I now realise that Amendment No. 70 is covered a few lines down in the Bill and so I shall not speak to it. That may give us an extra 90 seconds or so today.
When we adjourned the Committee last Wednesday, the Minister said that he thought we might have a good half-hour’s debate on this group of amendments and I found that slightly disconcerting. I do not have my 15 minutes’ worth.
Lord Bach: That was at half-past seven on Wednesday.
Baroness Hamwee: No criticism is intended. Nevertheless, this is not unimportant.
The amendment seeks to strike out Clause 24(1)(b) which would allow the local authority to be overridden. Under Clause 24(1) the LBRO may nominate a local authority as the primary authority if the authority and the regulated person have agreed it, or if the regulated person has requested it. In the position anticipated by Clause 24(1)(b), the local authority would be consulted under a provision further on in the clause, and it must be “suitable”. The issue there is one of resources. There is an imbalance and the amendment seeks an explanation of that from the Government.
We have spoken, both at Second Reading and at previous sittings in Committee, about the tensions between achieving good regulation—or, at any rate, better regulation—and democratic interests, the autonomy of local authorities, and so on. We think the Bill is weighted too much towards centralisation and that this provision is not necessary. I am not seeking to block the primary authority but to ensure that the authority in question consents. I wonder whether the primary authority relationship will work unless both parties wish to participate. I shall not go as far as the analogy of a forced marriage as distinct from an arranged marriage, but in an enforced marriage parties often tend not to be too happy.
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The second amendment relates to consultation and I hope that the suggested additional paragraphs speak for themselves. I have not taken anything like half of half an hour. I beg to move.
Lord Borrie: Where a business has a presence in more than one local authority, be it a supermarket of the kind which we have discussed previously, with retail outlets in many parts of the country, or a manufacturer which has factories or depots on different sites in different parts of the country, there is tremendous benefit to the business and to the public interest in enforcing regulations fairly and reasonably and in having the primary authority scheme. It may normally be that Clause 24(1)(a) is complied with and a business is able to find a local authority which will agree to be the primary authority, but it would be a pity if the benefits to the public and business of the primary authority scheme were lost if it so happened that the business could not find a local authority that was willing to make a partnership agreement under Clause 24(1)(a)—hence the value of paragraph (b). Only if businesses have access to a primary authority partnership can we ensure that the consistency and co-ordination for which the various provisions in this part of the Bill are designed are achieved. Safeguards exist. The noble Baroness, Lady Hamwee, will notice that Clause 24(3) states that consultation with the authority and the regulating person must take place. Bearing that in mind, I think that it would be undesirable to lose Clause 24(1)(b).
Lord Cope of Berkeley: The noble Baroness’s Amendment No. 69, on consultation, seems moderate, because it requires consultation with the local authority only where the regulated person principally carries out or administers their activities. However, many other local authorities, in whose areas also the regulated person carries out their business, will be affected. They are not defined in this part of the Bill, but if I call them “secondary authorities”, I think that Members of the Committee will know what I mean. There may be a large number of them. Their authority will to some extent be overruled. Not only will they not be consulted, but also it is not clear how they will hear about it until after the deal has been done. Many of their powers will be superseded and made more complicated. In some cases, we are talking about very large businesses. Some manufacturing companies in my part of the county have very large facilities there which employ thousands of people, but which are nevertheless not their principal manufacturing facilities—they have other facilities elsewhere. The local authority will suddenly find itself superseded, or being bossed about at any rate, in how it supervises many of the largest businesses in its area. It would be very difficult to require all of them to be consulted—that is why I have not put down an amendment to that effect—because supermarkets or clothes shops often have a very large number of branches all over the country. However, they are most affected by these clauses. That is why it is a very moderate amendment.
Viscount Eccles: If a multi-branch business has a primary authority, and one of its branches in another authority, the butchery department, puts the wrong
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Lord Bach: I am grateful to the noble Baroness, Lady Hamwee, for raising this important issue with her amendments, particularly Amendment No. 68. It takes us to one of the critical issues at the heart of the Bill. I shall do my best to present our reasons for a provision that has caused concern.
When the Government took the decision to put the home/lead authority schemes on to a statutory footing, we had two considerations in mind, much the same as those my noble friend Lord Borrie mentioned. First, it is unfair that only some multi-site businesses have access to the existing schemes; and secondly, just as importantly, it is unfair that certain local authorities choose not to host them, meaning that there are clear benefits for the citizens of the authorities that do—at no cost to themselves. We think all local authorities benefit where a particular local authority chooses to work with a business in this way. Hampton himself noted the inequity of the situation where certain local authorities shoulder a disproportionate element of what is essentially a national role. He noted, for example, that Hertfordshire hosts a large number of major schemes while others host none.
Businesses have every right to look to a local authority’s regulatory services for a professional service that reflects the importance of better regulation to their competitiveness and to our national prosperity. It is critical that all relevant businesses have access to the scheme. An LBRO’s power of nomination is a vital guarantee that that will be the case.
There may be cases where a partnership would just not be appropriate. Perhaps particular businesses have misused the scheme in the past, or doubt has been thrown on their good faith in starting a new one. An LBRO may therefore decline to nominate an authority for a particular business. However, in the interests of our competitiveness as a country and of fairness among local authorities, businesses should have a right to a partnership unless there are good reasons to the contrary. As a backstop, that can be delivered only through a process of compulsory nomination.
We have listened carefully to representations made about the potential resource implications of acting as a primary authority. Accordingly, the Bill makes it clear that the relevant local authority will have the right to recover any costs incurred by it when carrying out the primary authority role. As well as the costs involved there are important benefits, given the possibility for a strategic relationship with a major firm.
As my noble friend Lord Borrie made clear—and this is an assurance we think we can give—it is intended that in the vast majority of cases the primary authority scheme will be consensual. The LBRO will make nominations only after careful consideration. It will take into account the fact that if a local authority is firmly against taking on such a role, it is unlikely in practice to provide an effective service to the business. In doing so, however, the local
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Amendments Nos. 69 and 70 offer helpful perspectives on the procedural issues that will need to be taken into account. We believe, however, that the issues they raise can be dealt with administratively without the need for explicit statutory provision.
The noble Lord, Lord Cope, talked about the need to consult local authorities where the business operates. We would expect the LBRO to take sensible soundings before a nomination, but routine consultation with 400-plus local authorities would be too onerous a requirement.
The Bill formally requires the LBRO to consult any local authority that it is contemplating nominating for a primary authority partnership—one of the safeguards my noble friend mentioned. This is designed to protect the authority’s interests, in particular ensuring that the LBRO does not impose a role on an authority where it lacks the resources to carry it out effectively. It would be sensible in practice for the LBRO to consult other local authorities, which is the issue raised by the noble Baroness in Amendment No. 69, including those with an understanding of the business. However, we believe that there is no need for comparable statutory protection of their interests.
Amendment No. 70 raises the sensible point that the revocation of a partnership may also have resource implications for a local authority, so the Bill requires the LBRO to take particular account of the resources issues that the primary authority role might present for a local authority before nominating it, as set out in Clause 24(4). Where the LBRO revokes a particular partnership, this too may have resource implications for a local authority. As it may charge for the service, the revocation could involve the loss of a significant source of revenue. We do not believe that there is any need for comparable statutory protections here, however, as there is no question of the LBRO requiring the authority to adopt a role which may not fit the priorities of the local authority itself. But clearly, the LBRO will be under a duty not to revoke a partnership without good reason, and would lay itself open to legal challenge if it did so unreasonably.
In response to the question asked by the noble Viscount, Lord Eccles, I am advised that in principle there would be a requirement to consult, but that a range of exemptions might well capture the particular case he referred to. We shall examine those exemptions later today. It depends on a number of factors, and as I say, we shall come to the exemptions and to the need to have a primary authority in due course.
3.45 pm
Baroness Hamwee: I am grateful for that response. On Amendment No. 70, to which I have not spoken, the noble Lord says that it is not necessary to have statutory protection. I have decided that, given the way the clause is drafted, there already is statutory protection. Clause 24(5) provides that subsection (4) applies on a revocation as well as on a nomination. I thought that that was my error.
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Lord Bach: I am sorry to interrupt the noble Baroness, but I do so only to congratulate her on a point that neither I nor my officials had quite spotted.
Baroness Hamwee: You knew you had done it, but you just could not find it; I am often in that situation myself.
Two expressions used by noble Lords were interesting, the first of which was the “right to a partnership”. I have always regarded partnership as something consensual, organic and not something to which one has a right. The other expression was the phrase used by the noble Lord, Lord Borrie, at the start of his contribution, about forcing “fairly and reasonably”. I wrote the phrase down as it was said, but perhaps Hansard will show that I misheard the noble Lord since he appears to be denying it. But that is what this clause tries to say. In any event, I think that there will be an imbalance in which the burdens lie on local authorities that are called on to become primary authorities simply because of the geographical distribution of businesses. The noble Lord said that this could be dealt with administratively, but I am not sure whether that is so. To that end, I am grateful to the noble Lord, Lord Cope of Berkeley, for his very good point that it would be difficult to deal with either administratively or legislatively. The Minister asserts that there is no need for this to be in the Bill, but the need to address the matter has been demonstrated. However, I am not sure whether we have come up with the right way of dealing with it.
I am grateful to the Minister for his explanation. Since we have taken almost 20 minutes of the anticipated 30 minutes, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 69 to 71 not moved.]
Clause 25 [Advice and guidance]:
Lord Hodgson of Astley Abbotts moved Amendment No. 72:
The noble Lord said: We pop on to Clause 25, which relates to advice and guidance and the methodology that primary authorities will use in carrying out their role. I seek to ascertain from the Minister how these provisions will operate when they come into force. I understand why under Clause 25(1)(a) advice has to be given to the regulated persons, but in paragraph (b) “other local authorities” is a very wide phrase. I seek the Minister’s thoughts on how this will work in reality. For example, does he see the primary authority sending its advice and guidance to every local authority everywhere, willy-nilly, without regard, in order to cover the waterfront? Or does he see the primary authority selecting carefully the local authorities concerned for the advice and guidance to be more targeted?
I have referred several times in the Committee to my non-executive directorship of Masters Brewery. We might select Wolverhampton as our primary authority, but our 2,500 pubs all over the country
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Therefore, the amendment seeks to insert “when requested”—in other words, the local authority affected will ask the primary authority for guidance. This would mean that the paperwork would be sent only when required, avoiding the risk of another flood of paper that had to be checked by the issuing authority and the authority that received it. Can the Minister explain how he thinks this system will work and why we should not try to target the transmission of information to the relevant local authorities? I beg to move.
Lord Bach: It goes without saying that of course we would expect the primary authority to give advice to other local authorities when requested to do so. Our fear is that the amendment would limit too much the primary authority’s role or ability to be proactive in its role as adviser to other local authorities on the treatment of particular businesses.
For instance, where a business has acknowledged a problem in a particular area and is doing its best to put it right, the Bill allows the primary authority on its own initiative to bring this to the attention of other local authorities, or other relevant local authorities, and recommend, for example, a lighter-touch approach to enforcement in particular areas. The primary authority’s right to direct an authority not to proceed with an action could be founded on advice of this sort. The noble Lord’s amendment is too limiting. Limiting the primary authority’s advisory role with other local authorities to an “on request” basis may substantially reduce the potential benefits of the scheme for business.
Local authorities will have expertise in a wide range of enforcement issues associated with the business. The authority may bring any relevant matters, including advice to the business, to the attention of other local authorities. The register to be held by the LBRO, its database of primary authorities, will be sufficient as a means of bringing that to the attention of other local authorities.
The noble Lord asked a good question: will a primary authority as a matter of course give advice across the board to all other local authorities about all matters, even where it is not relevant to those authorities? The answer to that is, clearly not. It will have to make its choice as to which local authorities are relevant for those purposes. I am pretty convinced that that is what will happen. The danger of the noble Lord’s amendment—I recognise it as a probing amendment at heart—is that if it is just done on request, some advice that would be very useful to enforcing authorities will never get there.
Lord Hodgson of Astley Abbotts: I am grateful to the Minister for the consideration that he has given to the amendment. I hope that he is right that primary
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As for the Minister's second point about the “on request” nature of my amendment, I accept that, but you can bet your bottom dollar that the business in the subordinate local authority, faced with the fact that it is not getting the guidance from the primary authority through to it, will go to the relevant local authority and say, “Listen to me. There is this stuff from the primary authority. I want to hear about it”. I would prefer to see a more causative, interactive process, rather than what I fear will become a blanket flood of irrelevant and duplicative information flowing between primary authorities and local authorities across the country. I hope that before we reach the next stage, the Minister can give some further thought to the practical operation of that. In the mean time, I am grateful to the Minister for the thought that he has given to the amendment and I beg leave to withdraw it.
Amendment, by leave, withdrawn.
Baroness Hamwee moved Amendment No. 73:
“( ) providing general advice to other local authorities with regard to enforcement action in relation to relevant functions including liaising between local authorities and regulated persons.”The noble Baroness said: I shall speak also to Amendment No. 74 and, as under the previous amendment, to Clause 25. Both amendments are probing; the first would establish the exact scope of the proposed primary authority principle. The Bill is quite wide. Both the Trading Standards Institute and the Chartered Institute of Environmental Health have asked me to raise the amendments to establish whether the primary authority principle will cover all matters covered by the current voluntary principle.
I do not need to go through the background of how the home authority principle has worked, but it has been regarded as successful, allowing business to seek advice and guidance from one source. The home authority has also been able to act as a conduit for complaints from other local authorities about the business. That has the efficiency that results from cutting down the number of communications, as the Committee will well understand. The home authority can advise other authorities of action agreed with the business and confine the amount of toing and froing. The business is then able to concentrate on putting steps in place to deal with the position.
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