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The second amendment is intended to clarify the intention for the future as regards the relationship between the statutory and the voluntary principle. I know that there has been a great deal of consultation
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Baroness Wilcox: The amendments, proposed by the Trading Standards Institute, would ensure that the primary authority principle built on the current voluntary arrangements. At this stage, it may be fit for me to say that I am a vice-president of the Institute of Trading Standards Administration, as is the noble Lord, Lord Borrie. The noble Lord, Lord Jones, has not been present at these Committee sittings so far and I should like him to know that we have both declared that interest.
As I have complained before, there is so little written in the Bill that it is difficult to see exactly how the new Local Better Regulation Office will sit within the existing system. To my eyes, there is potential for some of the LBRO’s work to replicate the existing work of the home and lead authorities, but nowhere is it written that the LBRO will replace them. The amendments suggest that the statutory primary authority principle supersedes the current voluntary arrangements in order to rationalise business relationships into one consistent principle across the United Kingdom. Such an outcome would synchronise well with the ostensible aims of the Bill.
Through this amendment, therefore, I ask the Minister to clarify further how the Local Better Regulation Office will exist within the current regulatory system, as duplication of work can lead to confusion and inefficiency, not better regulation, which is what I understand the Government are looking for. As it stands, the Bill is confusing and bureaucratic. As the Minister must know, we on these Benches are committed to ironing out some of the confusion and removing some of the bureaucracy to create a result that will be workable in practice.
Lord Cope of Berkeley: Is it envisaged that some of the voluntary arrangements will continue indefinitely alongside the new arrangements and not just temporarily while the new arrangements are worked out? Obviously, it will take a little while for everything to be up and running in every possible business. Some businesses and local authorities may find it convenient to continue with the existing arrangements, which they know, rather than swapping to the new arrangements set out in the Bill. I presume that they would be able to do that and, indeed, they may wish to.
Lord Bach: We understand that some concern has been expressed that operating the primary authority scheme—which I am beginning to think the noble Baroness supports, although I am still waiting to hear that from her—alongside the voluntary home and lead authority schemes could result in a lack of clarity
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The provisions of Part 2, which we are debating at the moment, have deliberately been drafted to ensure that all the functions currently carried out by a home or lead authority can also be carried out by a primary authority. Therefore, although we understand the intention behind Amendment No. 73, we do not believe that it is necessary.
Under Clause 25, the primary authority already has the function of giving advice and guidance to other local authorities with the relevant function on how they should exercise those functions in relation to a regulated person. That captures all the advice that Amendment No. 74 would include within the scope of Clause 25.
It is not appropriate to make provision in the Bill for the abolition of current voluntary schemes. It has never been our intention that the primary authority scheme should simply replace the home and lead authority schemes, but that it should build on their successes while addressing their limitations.
The noble Lord, Lord Cope, asked a very good question in regard to the eventual intention of the two schemes. If the business and the local authority want the voluntary partnership to continue, it will do so. If it is too bureaucratic, we believe that they will not want to maintain it in its present state.
We are fairly confident—I choose my words fairly carefully—that the operation of the primary authority scheme alongside the home and lead authority schemes will not result in confusion. I assure the Committee that the LBRO will work closely with LACORS and the HSE to ensure clarity in the relationship between these schemes.
The home and lead authority schemes have been pretty successful, but they have not achieved everything that we wanted. We therefore think that putting the primary authority scheme on a statutory basis will help, but that is not to say that we want to discard all the good things that have happened under the home and lead authority schemes. I hope that, in light of what I have said, the noble Baroness, Lady Hamwee, will feel able to withdraw the amendment.
Baroness Hamwee: I am grateful for that answer. The Minister said that all functions currently carried out by the home authority can be carried out by the primary authority, which is not the same. I am temperamentally inclined to see how things grow rather than to impose provisions. Those who understand the practical implications more than me may want to pick up later on some of the things that the Minister said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
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Clause 26 [Enforcement action]:
Lord De Mauley moved Amendment No. 75:
Clause 26, page 11, line 16, leave out from “is” to “it” in line 17 and insert “in all circumstances inappropriate and that compliance could be secured by a different, more appropriate, enforcement action,”
The noble Lord said: As I understand it, the capacity of the primary authority to intervene to deter overenthusiastic enforcement action is limited to cases where that proposed enforcement action is inconsistent with advice or guidance previously given by the primary authority. The amendment probes whether it is possible to open up the options available to the primary authority and to introduce an element of flexibility, while still ensuring that the objective of securing compliance is met.
The Government gave a commitment in their manifesto for business that multi-site businesses would in future have to deal only with a single enforcement authority. That was one of the basic justifications for the proposed CTSA and the LBRO proposal that succeeded it. The Hampton review found that one of the biggest problems facing businesses was inconsistent advice and enforcement by difficult local authorities. National businesses operate on national plans, while local authorities operate on a local basis. The voluntary home and lead authority system was developed to mitigate that problem, but I understand that the Government felt that there were instances where local authorities ignored the advice of the home or lead authority for no valid reason, hence the decision to place the arrangement on a statutory basis, with the primary authority taking the lead role.
At its best, the home and lead authority system works well because it is flexible and based on a wide range of advice, both formal and informal. By strictly limiting the capacity of the primary authority under the proposed statutory system to cases where the proposed enforcement action is inconsistent with advice or guidance previously given by the primary authority, we feel that the Government are restricting its ability to act in order to lighten the touch of enforcement. This essentially requires the primary authority to provide formal advice, to ignore informal advice and contacts, to ignore other factors such as its knowledge of the company and its procedures, and the likelihood that in the future it would act on informal enforcement. I suggest that this will confuse the relationship and increase the administrative burden because businesses will be more likely to require all advice and guidance to be written down so that it can be relied upon, and in turn primary authorities will be less willing to provide informal advice without going through a formal process. The amendment would open up the options available to the primary authority and introduce flexibility, while still ensuring that the objective of securing compliance is met. This would return the character of the relationship to that which was originally promised and intended. I beg to move.
Lord Hodgson of Astley Abbotts: When the Minister replies, could he explain again how this is to operate because it seems to me that the primary authority is talking to itself: the enforcing authority is the primary authority. Is that not right? My noble
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Lord Bach: I shall come to the point raised by the noble Lord, Lord Hodgson, a little later. The noble Lord, Lord De Mauley, has it just right about the home and lead scheme, which as I said when we debated the previous amendment, had been a success. However, the failing with it was that sometimes what had been decided was ignored. That is why a statutory scheme is supported by the Government and, I hope, by all Members of the Committee.
We are sympathetic to the intentions behind the amendment. Indeed, as the noble Lord hinted towards the end of his remarks, the basis this provides for the primary authority’s decision-making role when reviewing enforcement actions by other authorities is very close to the formula we consulted on in the draft Bill. I think the word “promise” may be a little over the top, but it was certainly consulted on and considered. Perhaps I may talk through some of the issues raised by the amendment, which of course were raised during the consultation process, and the reasons for adopting the more focused formula in the present Bill.
Some Members of the Committee will have seen that in the original draft Bill, we proposed giving the primary authority a right to withhold consent from an enforcement action if it was not satisfied that the action was appropriate in all the circumstances—in line with the amendment. Very significant concerns were raised by representatives of the enforcement sector that giving primary authorities and the LBRO such a general right to block an enforcement action would present serious practical problems. More importantly, it would put a substantial burden of liability on the primary authority, which would frankly be required to make a thorough investigation of every aspect of a particular enforcement action before it would be prepared to block an action proposed by an enforcing authority. This would turn the primary authority into a statutory reviewer of every aspect of every enforcement action taken against a business with which it had a partnership.
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Representatives of a number of major local authorities, including some of those which are most likely to act as primary authorities to major businesses, told us that in practice they would not feel able to block proposed action on this basis. We therefore considered that there was a risk, perhaps a significant one, that the scheme upon which we had consulted, and which this amendment seeks to resurrect, would not be workable and would have the unintended consequence that local authorities that were primary authorities would simply be unwilling to withhold consent to proposed enforcement actions. It is worth pointing out that representatives of the professions involved, including those from the Trading Standards Institute and the Charted Institute of Environmental Health—who have every interest in
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The Bill more closely reflects what we think is the real expertise of the primary authority: the expertise and advice that it has given the business and the familiarity with the business’s management systems and the best way to secure compliance in working with its staff. The Bill also gives an objective role to the primary authority that is founded squarely on its advice-giving function. It does not give businesses a general right to appeal against enforcement actions on the ground that it is somehow inappropriate.
In practice, the scheme will give enforcing authorities a strong incentive to contact the primary authority about issues arising in its work at a very early stage of the enforcement process. Inevitably, in a small number of cases where disputes between, for example, the enforcing authority and the primary authority are taken to the LBRO, there will need to be a formal check on the advice that has been given. We will need to ensure that this does not mean that the provision of routine informal advice is undermined.
There is scope in Clause 25(1)(b) for the primary authority to be more proactive in particular areas of regulatory enforcement, given its role as adviser to other local authorities about the treatment of particular businesses. For example, where a business has acknowledged a problem in a particular area and is doing its best to put it right, the primary authority could bring that to the attention of other local authorities and recommend 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 that sort.
The noble Lord, Lord Hodgson, suggested that “primary authority” and “enforcing authority” in the Bill might be the same. In the Bill—I hope this is not too obvious—the “enforcing authority” means any local authority other than the primary authority that regulates the business in practice.
I am grateful to the noble Lord, Lord De Mauley, for raising this issue. I have spoken at some length about it because it is important, and I hope my answer has gone some way towards satisfying him.
Lord De Mauley: I am grateful to the Minister for his response. Having heard what he said, which does not entirely assuage my concerns, I shall consider this issue further. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Hamwee moved Amendment No. 76:
“( ) In this Part “enforcement action” does not include informal advice given to a regulated person notwithstanding that such advice may be followed by enforcement action as defined by subsection (5).”
The noble Baroness said: This is a probing amendment. I seek to understand what “enforcement action” is, and to make the point that much of what is
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I am sure that the Government do not intend to constrain inspectors from giving advice without first notifying the primary authority. Perhaps inevitably, formal—I shall use that less pejorative term, rather than “bureaucratic”—procedures attached to enforcement action are provided for, which would not be appropriate to the sort of advice and assistance given on a day-to-day basis by many authorities to many businesses up and down the country. I beg to move.
Lord De Mauley: We agree that it is insufficiently clear whether enforcement action includes informal advice and guidance that officers regularly provide to businesses. If it did, that could disadvantage small and medium-sized businesses; they particularly value this informal, sometimes oral, advice and guidance, and that usually leads them to compliance. Not allowing the enforcement authority to give an informal warning might create a system that was all stick and no carrot, and might well incur hostility between the regulators and the regulated. It would also increase bureaucracy—the very opposite of the Hampton principles and the declared deregulatory intentions of the Bill.
Lord Bach: Again, we are grateful for the opportunity that this probing amendment presents to give some assurances on the detailed operation of the scheme. During consultation on the Bill, the Committee will not be surprised to hear that we received an overwhelming message from businesses and local authorities that the primary authority scheme must not—I emphasise that—inhibit local authority regulatory services from providing routine advice to a business.
The example used throughout our consultation was that of one broken egg on the floor of a supermarket. Ordinarily a local authority enforcer would simply advise the supermarket that the egg should be cleaned up to avoid it being a slips and trips hazard. This would surely be the most appropriate response. To require the enforcer to contact the primary authority before giving this advice would not just be counterproductive, but absurd. It would create unnecessary delay and be in nobody’s best interests.
I assure the Committee that it has never been our intention that this type of informal advice should be captured by the definition of enforcement action in Clause 26(5). However, it is not easy to get the definitions right and defining these cases with sufficient precision was quite an intractable problem encountered in the consultation and, frankly, in drafting the Bill, because “informal” is a subjective concept, especially given the wide range of actions a local authority may take when enforcing regulations. This ranges from face-to-face advice at one end of the spectrum to prosecution at the other.
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While everyone agrees that oral advice should be allowed to go ahead without the need to contact the primary authority and that prosecution should be captured by the scheme at the other end, a huge number of potential enforcement actions fall inconveniently between these two extremes. I need hardly tell the Committee that the difficulty is to draw a line where informal enforcement action ends and formal enforcement action begins. Much depends on perception here; a letter that “advises” a business how to comply with a particular regulation, but states that any failure to comply will result in court action, may be perceived by the business to be formal enforcement action and will result in behaviour change and potentially cost, while the local authority may well regard the letter to be merely informal advice. If following the enforcing authority’s informal advice requires, for example, removing a product line, potentially at significant expense, while not following it will result in prosecution, it seems fair to us that this type of informal advice should be referred to the primary authority and that the informal advice should be captured by the definition of “enforcement action”.
Absolute clarity is needed regarding the exemptions from the definition of “enforcement action”. Having thought about this a considerable amount, we strongly believe that the best way to achieve this is through secondary legislation. Clause 27 makes provision for the Secretary of State, by order, to prescribe the circumstances in which an enforcing authority will not need to contact a primary authority before taking enforcement action.
The guide to the Bill, which was referred to a lot on Wednesday, gives examples of the type of exemptions that we intend to propose and makes it absolutely clear that routine advice will be excluded from the definition of “enforcement action”. To quote the guide, the main factor taken into account in drafting the order will be:
- “whether the enforcement action is purely informal (like advice and routine discussion between the authority and the business), which might make a check for consistency unnecessary”.
That is on pages 21 and 22. Making the exemptions in that way will allow for the detailed technical explanations that will be needed to address those areas where a different perception could create confusion regarding what should and what should not be considered informal advice.
I am sure that the Committee will join me in looking forward very much to debating the order when it arrives in this House; that should be a very pleasant couple of hours, at least. I want to make a point that I hope will seriously reassure the Committee. The first primary authority partnership will not be registered until all the relevant exemptions have been agreed by Parliament, and we will consult closely with local authorities, professional bodies, regulators and businesses when drawing those up.
I am again conscious that I have gone on at some length, but, again, an important point has been raised. I hope that that helps the noble Baroness to decide to withdraw her amendment.
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