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Secondly, if this is the case, the regulators code also needs amending because that refers to both categories as being part of a regulatory function. It is all to do with the internal workings of the regulator. That is not the purpose behind the RegulatorsCompliance Code. That code was about the enforcement of regulation. It does not refer to whether a regulator is internally efficient, which is the construction that the Minister is trying to put on my amendment. From my perspective, effective means fulfilling its functions and efficient means that it is doing it in a way that is the minimum burden to the person who is being regulated. That is to say, is it sending four or five individuals to check where one would do; and are various other aspects of the operation not being fulfilled in an efficient way and a way that is likely in the longer term to place a burden on the regulated business, bearing in mind that what we have here can be charged to the regulated company or the regulated entity? I am unsatisfied and I wish to test the opinion of the House.
The noble Lord said: My Lords, spurred on by that enormous success, I return to Clause 5 and the objective relating to general functions. I can be briefer on this occasion than I was on the previous amendment. I again wish to add an additional objective. The amendment requires the LBRO to have regard to the work of local authorities,
According to page 6 of the guidance, the Bill implements the Hampton agenda, which includes a principle that regulation should recognise that a key element of activity will be to allow, or even encourage, economic progress and to intervene only where there is a clear case for protection. Somewhere in this better regulation Bill we need to recognise the importance of entrepreneurial and economic activity to the future of this country. It is too easily overlooked.
I am afraid we do not believe that it is necessary or desirable to include provision in the Bill requiring the LBRO to ensure that local authorities carry out their functions in a way that allows or encourages economic progress ... it is hard to believe that a local authority would do the opposite.[Official Report, 21/1/08; col. GC 42.]
I wish I always had his confidence. In deference to him, I shall leave aside the wilder shores that his party reached in the 1970s, which brought this country to its knees, but there is a much more prevalent, softer and insidious possibility because local authorities can be very risk-averse. The benefits from economic success, entrepreneurial activity and dynamism accrue to those involved, but when there is a failure, the fallout can rebound on the local authority. The local press can ask, Who allowed it? How was it permitted? Should someone not have stopped it? What was the local authority doing?. We need to make sure that we have a better way of dealing with this, and I think that if we fail to mention in the Bill the fact that economic progress is the wellspring or activity that will enable us to do many of the things that we, whatever our political persuasion, think are desirable for this country, we are failing the better regulation agenda, and we are failing what Hampton set out as his principles. I beg to move.
Baroness Hamwee: My Lords, I have a problem with this amendment too. Local authorities have powers in regard to the three limbs of sustainable developmenteconomic, environmental and socialand to extract one and put it in the Bill would distort the picture. I have written a note to myself that this goes too far. The remit of the LBRO is quite specific and clear, and this is outside the way in which the Government have designed it. It also goes too far for local authorities.
That is not to say that economic progress should not be encouraged but it would distort the responsibilities of local authorities to have this provision in the Bill, both by specifically separating it from the other roles and duties which are spelt out, and from the constraints and criteria on how they exercise their regulatory functions. I am sorry to disappoint the noble Lord again.
Lord Bach: My Lords, I am also sorry that I am going to disappoint the noble Lord again. As was said in Committee, the phrase the noble Lord seeks to get into the Bill is echoed in the regulators compliance code, which comes into force in April this year. The code states:
However, the code also includes a number of other obligations based on the Hampton principles to which local authorities must have regard. These are: carrying out comprehensive and effective risk assessments; improving compliance through support and advice; not inspecting without a reason; balancing the need
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I know that the noble Lord, Lord Hodgson, is keen to ensure that we acknowledge in the Bill the importance of economic activity to the prosperity of this country. The Bill recognises the importance of economic activity and it is designed to ensure that the UK regulatory environment is world class. Where a local authority exercises its relevant functions effectively and in a way that does not give rise to unnecessary burdens, is transparent, accountable, proportionate, consistent and targeted only at cases in which action is needed, economic progress will follow.
I accept that we may not have made it as clear as possible how the work of the LBRO will relate to the code and that this will have to be addressed. If the noble Lord has done nothing else, he has made that point. The most appropriate place to do this is in the guide that accompanies the Bill. I do not agree with him that this should be included in the Bill and I invite him to withdraw the amendment.
Lord Hodgson of Astley Abbotts: My Lords, the importance of economic activity and success is hard to overestimate. I accept entirely the Ministers point about other matters referred to in the Hampton report. The economic prosperity of this country is so critical that its position vis-Ã -vis our regulatory framework is central, in a way that some of the other headings that he referred to, while important, are not. Having said that, if the Government are clearly not minded to accept that point of view, I do not propose to ask the House to troop through the Lobbies, as I did a few minutes ago. I beg leave to withdraw the amendment.
We debated the clause in Committee, where I was concerned to understand the difference between acting proportionately, which is required in the same clause, and targeting. During that debate the noble Lord, Lord Whitty, said that he thought that only was incorrect, and that it,
had been spelt out previously. I think that he was right. Rereading the clause, it seemed that targeting only, if it is not tautologous, is very close to being tautologous and it is too tight. The noble Lord, Lord Whitty, asked the Minister to have another look at the
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Lord Bach: My Lords, we spent some time in Committee discussing the principles of good regulation, which feature prominently in the LBROs objective. Local authorities are already required to have regard to the principles of good regulation, under the provisions in the legislative and regulatory reform order. That order applies the principles as listed in Section 21 of the Legislative and Regulatory Reform Act 2006. The fifth of the principles, which we are talking about here, states that,
A change in wording here would send somewhat contradictory messages to the LBRO and to local authorities, and would clearly be undesirable. However, I acknowledge that concerns were raised in Committee that only, which here is attached to the fifth principle of targeting, could cast a cloud over some important work performed by local authorities.
The clause specifies that regulatory activities should be targeted only at cases where action is needed. That does not mean that local authorities may only act where there is a specific problem. It means that they should target their activities where they are needed more generally. There is no doubt that local authorities will need to do some investigative work to determine if there is a specific problem in the first place. I give an example: a fire authority may want to do random inspections of high-risk premises in its area or a food authority may need to take random samples of food to test for contamination. Clearly those are both cases where action is needed. Local authorities could not do their work in protecting the public adequately without that action. It would not, therefore, be excluded by the principle. However, the principle of targeting suggests that purely routine inspections, with no such meaningful rationale, should not go ahead, and that is obviously right.
Baroness Hamwee: My Lords, the Government seem to be hung up on the fact that they have used this phrase in previous legislation. The Ministers argument seemed apart from that to support not only everything that I saidI said it quite quicklybut everything that I thought. I have not looked at the 2006 Act in this context, but if the phrase is wrong here, it would not be right to compound what is perhaps not quite right in that Act. I shall withdraw the amendment, but urge the Government to take another look at the matter. I understand the need to
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The noble Viscount said: My Lords, before moving the amendments, I acknowledge the great assistance that I have had, both in letters from the Minister and from the Bill team, which directed me to one of the longest links that I have ever tried to tap into my laptop. In the end, I obtained the information for which I was looking. I am truly grateful for that and the other comments that have been transmitted to me in the dialogue on who should have the power to direct.
The power to direct is intended as a backstop power that might be used where, for example, one or more local authorities persistently acts with disregard for a particular piece of guidance and that disregard is, frankly, detrimental to business or the public or, as could often happen, both.[Official Report, 23/1/08; col. GC 111.]
That is a pretty stern test. This important statement was and remains welcome as a description of the need for the backstop power. In what follows, I am usingI hope, without plagiarismpersistent disregard as the way of looking at the situation.
The Minister also said on a more personal note that I was a sturdy champion of local government, a charge which I fully accept. However, my concern on this occasion is centred on the relationship between Ministers and Parliament. As the Delegated Powers Committee reported, directions can have a legislative effect. It is one thing when they are used for administrative matters, but another when, as in this case, they change the legal position of the person directed. I believe that the Constitution Committee of your Lordships House would agree.
Therefore, Parliament needs to be very careful as to whom it gives the power of direction. In this case, when the Ministers test of persistent disregard comes to be considered, it will most probably be when a local
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There are several other good reasons for this conclusion. Non-departmental public bodies do not now have powers of direction, nor should they. An analogy with the Food Standards Agency has been suggested and I am grateful for a full briefing from it. There is one power of direction which enables the agency to bring a food authority into line, subject to an order in the High Court. This power has never been used. It is certainly not a precedent for the interrelated purposes of Clauses 6 and 7.
Further, the giving of the power to the LBRO would make it in all essentials judge and jury, not only in its own approach to persistent disregard but also on behalf of regulators, thus widening the power in a completely unprecedented way. Then there is the obvious point that an unelected public body can enforce compliance on an elected local authority. Finally, the LBRO will face a steep learning curve. It is to be a temporary body. To whom might its powers of direction be transferred when it is dissolved? For all these reasons, the LBRO is the wrong choice.
I hope the Minister will forgive me emphasising from business. It is possible to see the picture quite differently. There was no consultation on the power to make directions because there was no Clause 7 in the draft Bill. The parliamentary procedure of direction was not mentioned; instead, questions were asked.
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