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I then took my earlier schedule, Schedule 4A in Amendment No. 109A, and did a comparison with Schedule 6 and with all the other regulations that the Government thought they had and knew. One of the reasons that I did not move my amendments was that I did not think it was fair on the Government to ask them to do something and to ask questions which they could not answer. The suggestion was therefore made that I should ask yet another—the 27th—Question for Written Answer, to ask which Acts of Parliament and which regulations give powers of entry or certain other powers to which ministry or government department. It is quite a difficult Question to table, but I am most grateful to the noble Lord.
Take something like water or electricity; the electricity supply industry is not quite sure, other than “Of...” this or “Of...” that, who regulates it. When it takes powers of entry by accident, because the secretary has
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I would like to know how these regulations work. I feel sure that the relevant regulatory authority should be imposed between the regulation and the people who have those powers. I am most grateful to the noble Lords, Lord Berkeley and Lord Razzall, for raising something that I had not even thought about.
Lord Cope of Berkeley: Like the noble Lord, Lord Berkeley, I was interested in the match, or lack of it, between Schedule 5 and Schedule 6. I noticed that the Aviation and Maritime Security Act and the Aviation Security Act 1982 are still in Schedule 6, even though the Civil Aviation Authority has been taken out of Schedule 5. Clause 35 says that a regulator means somebody designated in Schedule 5 or somebody with powers relating to Schedule 6. It occurs to me that, although the Civil Aviation Authority is not in Schedule 5, it will still be involved in this because it is caught under Clause 35(1)(b), which states that,
under Schedule 6—I paraphrase what it says. It seems to me that maybe the Civil Aviation Authority is still involved. That may also explain some of the other peculiarities between the two schedules.
Baroness Wilcox: Amendment No. 111A is in this group. It is a drafting amendment to ensure consistency within the Bill and that the sanctions it suggests will be in line with current legislation.
Many new pieces of legislation come from Europe and are enacted through the European Communities Act 1972. Provision is made in Clause 4(3) for relevant functions in Part 1 of the Act. Clause 22(1)(a) uses the same definition. However, no such consideration is given to the Part 3 sanctions available. Instead, a definitive list is provided in Schedule 6.
The European Communities Act, which is key legislation, is absent from the list. The list in Schedule 6 covers the Trade Descriptions Act 1968, which is vital legislation for protecting both consumers and business. That will be repealed and replaced when the Unfair Commercial Practices Directive is implemented by the Consumer Protection from Unfair Trading Regulations in April this year. Without provision in the Bill for such legislation, the sanctions will not apply to this new legislation, which is anticipated both in the UK and Europe as a step forward in providing the consumer protection regime that citizens deserve.
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It may be that the amendment would have been better worded to amend Clause 36 to follow the same format as Clause 4:
The Bill team have indicated that they do not wish to include the European Communities Act in Schedule 6, as they believe that there is provision in the ECA to create an order to add the Part 3 powers from the Bill to the new legislation. If this is the case, and the Minister is not of a mind to accept the amendment, will he give a commitment to ensure that the necessary steps are taken to include provision for the Part 3 sanctions to be available for the Consumer Protection from Unfair Trading Regulations in April 2008?
Lord Bach: Amendments Nos. 110A, 111 and 111ZA propose additions to Schedule 5. Prior to the Bill being introduced to Parliament, the Government carried out a full public consultation. As part of the process, we consulted national regulators on whether they wished to be included in the scope of the Bill. Ofgem, Ofwat and Postcomm all stated that they did not want to be included in the Bill as they already have sufficient civil and criminal powers to carry out their regulatory function.
On the Office of the PPP Arbiter, the sanctions under Part 3 may only be granted in relation to criminal offences. The Office of the PPP Arbiter does not enforce any criminal offences, and therefore the powers under Part 3 could not be made available to it. Finally, the Water Industry Commission for Scotland and the Northern Ireland Authority for Utility Regulation cannot be included under Part 3 as their functions concern devolved matters and are outside the scope of this Bill.
On Schedule 6, I refer noble Lords to the Explanatory Notes. I know that they have no more force that just being explanatory, but they say:
“The first group of regulators is those listed at Schedule 5 ... For these regulators, ‘relevant offence’ ... means an offence in an Act in relation to which the regulator has an enforcement function ... such as investigating an incident of regulatory non-compliance”.
“The second group of regulators are those bodies with an enforcement function in relation to an offence contained in any enactment listed at Schedule 6. This group will largely consist of local authorities and Ministers. For these regulators, ‘relevant offence’ means an offence which is contained in the enactments listed at Schedule 6 in relation to which the regulator has an enforcement function. The enactments at Schedule 6 cover regulatory areas such as agriculture, animals, the environment, food safety, consumer protection, transport and health and safety ... Orders under Part 3 only confer powers in relation to offences in existing Acts. Those are offences in existing Acts enforced by those regulators listed in Schedule 5; and offences in the enactments listed in Schedule 6. It is intended that, in future, Acts which create regulatory offences will themselves create whatever civil sanctions are necessary”.
My noble friend Lord Berkeley asked, “Why include an offence in Schedule 6 when there is no regulator?”. The offences in Schedule 6 are all enforced by some kind of regulatory body. Generally the offences in Schedule 6, as I have said, are enforced by local
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That takes me lastly, but not least, to Amendment No. 111A, which was spoken to by the noble Baroness, Lady Wilcox. I shall explain why the European Communities Act has not been included in either Schedule 6 or Schedule 7. The powers under Section 2(2) of the ECA are considered to be sufficiently wide—the noble Baroness made this point—to confer administrative penalties for criminal offences created under the ECA. We do not think that there is any need to use the powers in Part 3 of the Bill to create administrative penalties for those criminal offences. We do not think that it is necessary to list the Acts in Schedules 6 or 7. Having said that, we expect any new civil sanctions created under the ECA to follow the principles of the Macrory review and the model set out in Part 3.
5.30 pm
Lord Selsdon: When one looks at the comparisons of Acts and Bills, and one takes the Office of Gas and Electricity Markets, in Schedule 6 there is the Energy Act 1976, but not the Energy Act 1989 or the Energy Conservation Act 1981. Who decides which of these Acts are put in? Is this the interpretation given by the ministry, or who? I cannot understand the difference between them all.
Lord Berkeley: Perhaps I could pose a supplementary question. The Minister kindly mentioned the Civil Aviation Authority wishing to be withdrawn from Schedule 5. If that is agreed, as I am sure the Committee will agree, that presumably means that there are no offences that the CAA would wish to enforce as the CAA rather than someone else enforcing them, which comes under Clause 35(1)(b),
In other words, it is done by someone else, as my noble friend said. Are we in danger of something falling between two stools if an organisation’s name is not in Schedule 5 but there are things that these authorities and many others might have the power to enforce but do not?
Lord Bach: I do not think that we are in danger of falling between two stools. In answer to both noble Lords, we have consulted all government departments and regulators about the offences for which they are responsible and which should be in the Bill. Human error is more than possible in long lists, and we are very grateful for the points that have been raised in this short debate. If there are any that should not be there for any reason, we will ensure that they do not remain there. A lot of work has gone into producing Schedule 5 and, in particular, Schedule 6. We think that they effectively speak for themselves.
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Lord Selsdon: I do not want to nitpick, but if the Government do not yet know which ministries have which powers for which Bills or Acts—as the noble Lord said yesterday, a major study is being undertaken which will be ready in the autumn—I have a problem when I look at the regulations and Acts in this Bill; they do not tie in with others for which I know certain ministries have responsibility. Is the schedule correct at present?
Lord Bach: The noble Earl is quite right to return to this, because I did not cover it before. It depends whether the legislation sets up a criminal offence that is relevant to Part 3; in other words, if it talks about enforcing a regulatory offence, it will be in Part 3, but if the Act of Parliament does not do that, there is no reason for it to be in Part 3.
Lord Selsdon: The noble Lord mentioned animals. There is a relationship between the Animal Health Act 2002 and the Animal Welfare Act 2006. Both create criminal offences, but one is on the schedule and the other is not.
Lord Bach: I have to say that my knowledge does not compare to that of the noble Lord. I will of course have that looked into by my officials and we will write to him on whether he has a good point—or not, which is unlikely.
Lord Razzall: We have listened to what the Minister said, which seems to raise a point of principle, not just of detail. I understood him to say that when the department contemplated introducing the Bill, it had consultations with the public and various regulatory bodies. A number of them said that they did not want to be part of this procedure because they thought that they already had sufficient and adequate criminal and civil sanctions. Is that not missing a pretty fundamental point that there are other interests here—those of the consumer and, indeed, the Government, who are legislating on the basis that the Macrory review recommended that these powers should be given to regulators? Are we really saying that the Government simply sit there passively and say, “Well, the gas and electricity regulator does not want to take any notice of this, therefore we will not put it in the Bill”? That seems to ignore Macrory’s significant recommendations that the Government are asking us to implement—contrary to the wishes of the noble Lord, Lord Lyell.
Lord Bach: The noble Lord raises a fair point, but we do not just have the consultation, hear what the national regulator says and not include it in the Bill if it does not fancy it. We consider carefully whether we deem its powers to be sufficient. If they were not sufficient, we would have impressed upon it that it should be included in Schedule 5. So thought was given to each of the comments made by the regulators and we think that we have it right.
Before the noble Lord, Lord Razzall, rises, perhaps I may say to the noble Lord, Lord Selsdon—I hope that I am not misusing this opportunity—were the two Acts he mentioned the Animal Health and Welfare Act 1984 and the Animal Welfare Act 2006?
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Lord Selsdon: I am sorry; it should have been the Animal Health Act 2002. There are lots of animals around these days.
Lord Razzall: The Minister has lifted a further veil on the Government’s position, because what we have been told hitherto was that the regulators had said that they did not want the powers, because they were sufficient already—and therefore that was it. If the Minister is saying that not he, but his officials, have looked in detail at what particular civil and criminal sanctions the regulators believe they have that are just as good if not better than the sanctions they would have under the Bill, it would be helpful for the Committee if the result of that work could be made available to us in written form before we debate this matter on Report. As I said, he has lifted the veil, we would like to see the—well, perhaps I had better not pursue the metaphor any further. He knows what I mean. On that basis, I am happy to withdraw the amendment.
Lord Lyell of Markyate: Before the noble Lord does that, perhaps I may ask a question. The Housing Corporation is one of the designated regulators. That was another answer to my question that I received. It was surprising, because the Housing Corporation said that it did not prosecute at all and that the prosecutions in that area are done by the police. Now the corporation will be given the power to impose fixed and variable penalties. It may be difficult for the Minister to reply at the moment, but perhaps he would add that answer in his letter to us.
Lord Bach: It was already going to be a long letter—it is now going to have an extra paragraph. I know that the noble Lord is keen to withdraw his amendment, or I hope that he is. By way of example, on the draft Bill Ofwat, Ofgem and Postcomm all stated that they did not wish to be included, as he knows. They are confident that their current mix of civil and criminal powers is sufficient to carry out their regulatory duties. Under their existing civil powers, Ofwat may impose enforcement orders or financial penalties up to 10 per cent of turnover and accept undertakings; Ofgem may impose enforcement orders or financial penalties, again up to 10 per cent, and a stop notice, too. I do not forget that the noble and learned Lord was quite positive about stop notices. Postcomm may impose enforcement orders and financial penalties, again up to the 10 per cent maximum. We heard what they had to say about that; we considered that it was satisfactory, which is why they do not appear in Schedule 5.
Lord Lyell of Markyate: In that case, I do not quite understand why the water and gas Acts are in Schedules 6 and 7, which brings them back within the scope again, so these authorities will have the opportunity—if the relevant orders are used—to use these provisions for penalties.
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Lord Bach: The reason why they are there, I am advised, is because there may be other regulators that are in Schedule 5 or that may not be in that schedule because they are local authorities that have responsibility for offences created by those Acts. There may be joint or separate responsibility from those that declined to be in Schedule 5, but there may be more than one regulator that has to look after a particular enforcement from an Act of Parliament.
Lord Berkeley: Before my noble friend sits down, it would be very helpful in this long letter that he is going to send us if he could give us one or two examples. We have talked about the Energy Act; bits of that Act do not require Ofgem to enforce, so who will enforce under Clause 18, as it is in Schedule 6? It would be very helpful if he could do that.
Lord Bach: I am forced into the position—although I hope that I do not do so reluctantly—of saying that we will write a letter on this matter to the noble Lord, Lord Razzall, as it was his amendment that started this. However, I promise that it will not be a very long letter as it will not deal with every single case, although I hope that it will give some examples, especially the ones raised in Committee today.
Lord Razzall: That was the point that I was going to make. We do not really want the Minister’s officials to empty the full content of their brains on to paper. We should like a few examples to satisfy us that the Government have looked at the matter properly. In the mean time, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 111 to 111ZA not moved.]
Schedule 5, as amended, agreed to.
Schedule 6 [Enactments specified for the purposes of orders under Part 3]:
[Amendment No. 111A not moved.]
Clause 37 [Fixed monetary penalties]:
Lord De Mauley moved Amendment No. 112:
The noble Lord said: The amendment seeks to render understandable the amount of a fixed monetary penalty. Members of the Committee will be aware from other amendments that we and other noble Lords have tabled how much concern there is about, among other things, the quantification of the fixed penalty. In the Bill as drafted, a fixed monetary penalty can be either, as set out in subsection (3)(a), a prescribed amount, which, as the Minister may want to confirm, presumably means an amount defined in pounds sterling with increments at least determined by precedent and which is on the record, or it can be, as set out in subsection (3)(b),
Our concern is that those criteria can change at any time and to anything so a fixed monetary penalty could be anything at all. I beg to move.
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5.45 pm
Lord Lyell of Markyate: I shall speak to my Amendment No. 117 in this group. Currently, the Bill says,
At present, I think that is normally at level 5. I suggest that it may not exceed half the maximum amount of the penalty. We hear a lot about proportionality and light touch, and these are fixed penalties. I see from the Regulatory Enforcement and Sanctions Bill that the example of a fixed monetary penalty given to work out costs and expenses is put at £1,000, which I suppose is in the minds of the ministerial team at the moment. It is very rare in a court for a maximum penalty to be given. A maximum penalty is not normally given unless the person has been a serial offender or the Act is very out of date and, for some reason, the available penalties have not been increased to take into account modern money values. That the fixed monetary penalty could be the maximum sounds like getting off to a disproportionate start and it may be more sensible to make it half, but I shall listen with care.
Lord Bach: On Amendment No. 112, the Bill allows some flexibility in the calculation of fixed monetary penalties. The penalty must be either a prescribed amount or calculated solely by reference to prescribed criteria. Flexibility is necessary to ensure that the penalty is an effective deterrent. For example, the level of penalty could differ, as we have already said, according to whether the person liable is an individual or a large company. It could also ensure that small businesses are not disproportionately affected by fixed monetary penalties. The regulator, however, will have no discretion in setting the level of penalty. The Bill will require the method for calculating monetary penalties to be published in the penalty guidance, so there will be that level of transparency in the process.
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