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At one end of the guidance scale, it could be thought to be good public policy to bring a supposedly recalcitrant authority into line as quickly as possible by direction as a result of perceived disregard of Hampton to date. Is there such an authority to be used as example, as per Admiral Byng? At the other end of the scale, it could be good public policy if a direction were never issued—taking a leaf, so far, out of the Food Standards Agency’s book—instead, pursuing co-operation and continuous improvement, thus building public confidence in the achievement of better regulation while lessening burdens. What is the Government’s position? Is it that there are local authorities that need to be brought into line as quickly as possible or that a true measure of the LBRO’s success would be that no direction was ever issued? The Government have decided to give this untried temporary body the draconian, centralising and authoritarian power of direction. Surely a year to find out whether such a power should be used is only to be expected. It is realistic and should be accepted. I beg to move.
Baroness Hamwee: My Lords, I support the noble Viscount. He did not explain that the error in the amendment was not of his making. He is to be congratulated on his reticence. This is a modest amendment and makes a reasonable brake on the use of direction by the LBRO and, I suppose, the Secretary of State because they will have to work in tandem. My objection to the power of direction in Clause 7 is not just semantic. I have never been comfortable with the notion of a direction to comply with guidance—the underlying thought about a power of direction is a particular issue—because guidance should be something that one has regard to, but is not bound by. The noble Lord, Lord Borrie, objects to my criticism of the wording. The substantive point about the extent of the power of direction is important. We and the noble Viscount have had problems about it throughout the passage of the Bill. At Third Reading, the noble Viscount has quite properly not taken us back to the objection to the whole of the matter but is proposing a reasonable brake on the use of the power. He has built on what we have heard so far. I hope we can get some assurances from the Government on the use of the power. In principle, we support what the noble Viscount said.
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Lord Borrie: My Lords, I apologise to the noble Baroness, Lady Hamwee, for making visible on my face that I disagree with what she said. It was partly because Clause 6 states:
That is an important part of Clause 6. Without a back-up or reserve power of some sort, as there is in Clause 7, it would be very odd. To avoid that oddness, it seems quite right that in Clause 7 the LBRO may direct a local authority to comply with guidance. As the noble Baroness herself said, the Government and the LBRO must work together—I think that that is a fair way of putting it—because of the provision in Clause 7 that:
That is a useful safeguard for those who, like the noble Viscount, feel that we have here an untried body that might ride roughshod over local authorities.
I return to the basics of Clauses 6 and 7. The whole point of the Local Better Regulation Office is that it has some degree of surveillance over local authorities and can give guidance to them, especially in the use of their regulatory powers. That beneficial power is the basis of Part 1.
The noble Viscount is not being as root and branch in his opposition as he was at earlier stages. I am glad of that. Perhaps he accepts, as I think that he did in his speech today, that there might be such a thing as a recalcitrant local authority that does not comply, will not comply and is determined not to comply with the guidance offered by the Local Better Regulation Office. I oppose his amendment to delay the effect of any enforcement until a year has passed because, if the local authority is recalcitrant, it may be recalcitrant right from the word go. It may be determined from the word go not to comply with particular guidance. In those circumstances, what is the point of having a year’s delay before the LBRO can enforce the guidance that it thinks right to give? Imposing such a time limit would be an unfortunate hobbling of the new body and not at all beneficial to the public interest and the interest of the electorate in the local authority areas concerned.
Lord De Mauley: My Lords, like the noble Baroness, Lady Hamwee, I support my noble friend Lord Eccles in his amendments to Clause 7 and the powers that it gives to the LBRO to issue guidance on behalf of the regulators. I share my noble friend’s nervousness over whether the LBRO should be given that considerable power, especially as there has been no adequate definition of what such guidance will entail. The need for a definition is even more pressing given that the LBRO has now been in existence for close to a year.
Will the Minister reassure the House on the few details demanded by my noble friend, details that are needed to ensure that the Bill works? What makes us on these Benches nervous is that the Bill proposes that what is only guidance can lead to enforcement. Is it not clear that such a premise changes the nature of guidance from being a nudge back in the right
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That leads me to ask: how much enforcement do the Government expect there to be? If guidance and enforcement become one and the same, will there be adequate checks to prevent draconian punishment of businesses? I very much hope that the Minister will offer us some concrete reassurance at this stage, as it is important that we all recognise that the best regulation is when businesses and regulators work in co-operation together.
3.30 pm
Lord Bach: My Lords, the House is grateful to the noble Viscount, Lord Eccles, for the concerns that he has expressed throughout our proceedings—at Second Reading and at various stages since then—about the power of direction in Clause 7. His amendments today would curtail significantly and in a new way the scope of the direction-giving provision.
There are some technical difficulties with the amendments. Although I will talk mainly about the substance of what the noble Viscount has argued, as that is what we have difficulty with, I will set out briefly what those technical difficulties are. We suspect, having heard the noble Viscount, that the amendments are intended to ensure that directions to comply with guidance may not be used until the guidance in question has been published for a year. However, the amendments would simply freeze the LBRO’s ability to give directions until the first anniversary of its very first set of guidance, whatever that might be and whatever it might affect.
Amendment No. 2 specifies that one year after guidance—any guidance—has been issued under Clause 6, specifically, to quote the amendment,
the LBRO may start using its direction-giving power under Clause 7. We do not believe that that is what the noble Viscount intends, but we are afraid that it might be the effect of his amendment. We have looked at Clause 7(1) many times in this House. The subsection makes it clear that the LBRO may give directions to local authorities to comply either with its own guidelines issued under Clause 6 or with other relevant statutory guidance issued by another body.
The noble Viscount said a few minutes ago that he deliberately omitted Clause 7(1)(b) from the effect of his amendment—he is nodding. If he meant to refer to Clause 6 guidance—and of course he did—the amendment makes sense only if read as meaning the first guidance that the LBRO publishes under Clause 6. In effect, therefore, the countdown to the LBRO’s power of direction in Clause 7 would start on the day on which the LBRO publishes its first guidance under Clause 6. Once a year has elapsed after that event, the amendment would in practice have no further effect. There are therefore technical difficulties with the amendment.
Let me move on to the points of substance that the noble Viscount has raised. In Committee and on
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We have also discussed the closest precedent for this provision: the powers conferred on the Food Standards Agency to give directions to a local authority requiring it to comply with its code of practice. The primary restriction on the Food Standards Agency’s power is that it should consult Ministers before exercising it. That is not the position in the Bill. When we introduced the Bill, the key restriction was that the LBRO’s exercise of the direction-making power—the Clause 7 power—required the consent of the Secretary of State. That goes further than our precedent, but we added two further safeguards in Committee and on Report.
First, we accepted in full the recommendations of the Delegated Powers and Regulatory Reform Committee of this House that, where directions apply to more than one local authority, parliamentary consent is needed by way of an order subject under Clause 7(4) to the negative procedure. Secondly, we have been persuaded by the case made by the noble Baroness, Lady Hamwee, that local authorities should be consulted before the LBRO uses this power. Noble Lords who have read the list of amendments will know that, shortly, a government amendment on this will be moved and, I hope, carried. I argue that those are significant concessions, which mean that the LBRO’s ability to issue directions will be subject to three important safeguards. The LBRO will need to pass a number of hurdles before it can issue directions under Clause 7.
Let us suppose that guidance has been issued but that it becomes clear, alas, that some local authorities have decided to ignore the guidance, which places the public at risk or places a significant burden on the regulated community. Under government Amendment No. 3, the LBRO will be required to consult the local authorities involved regarding its proposal that the authorities be directed to comply with the guidance. To meet its statutory duties, the LBRO will have to do so in a meaningful way and give the local authority the time and opportunity to respond. The next step will be that the LBRO must prepare a case for intervention to the Secretary of State. The LBRO must wait for the consent of the Secretary of State—consent that will certainly not be given lightly. Finally, if the directions apply to more than one local authority, orders will have to be drafted and approved by Parliament.
The point of going through that rigmarole is to show that the existing safeguards in the Bill simply will not allow the LBRO to issue a direction with undue haste unless there is a good reason for it to do so. We believe that the amendment is unnecessary, but
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Secondly, directions will not be used in trivial cases. If it makes sense for the directions to be applied, it will almost certainly make sense for them to be applied quickly. As we have seen, delay is inherent in any effective system of safeguards, but there is no justification for building delay into the system for its own sake. We have dwelt in some depth throughout our deliberations on a directions clause, which we believe is unusually well safeguarded. We have focused closely on the Food Standards Agency example, but noble Lords may be surprised to hear that the LBRO’s powers over local authorities fall well short of those exercised by comparable bodies in other respects.
I shall end by saying that we are grateful for the care with which the noble Viscount has scrutinised the Bill, but we believe that we need to get this very limited power—this backstop power with its many safeguards—into perspective. We do not want to see the LBRO directing local authorities as a matter of routine, but these are backstop powers and we have amply provided against misuse.
I have been asked a number of questions and I shall do my best to answer some of them. The noble Viscount asked about the LBRO. He said that it is untested and that we are giving it draconian powers. However, if the government amendment in the next group succeeds, there will be a review of the LBRO after three years. Noble Lords will recall that there were discussions about that on Report. The noble Viscount said that the FSA powers have never been used. The FSA has made it clear to, I think, the noble Viscount that, although the powers have not been used, they nevertheless provide,
We hope that the LBRO’s powers will not need to be used, but that does not mean that the clause is unnecessary. The noble Viscount suggested that other guidance could include anything. Our answer to that is, no, it could include only statutory guidance relevant to the scope of the LBRO’s objectives. He also raised other issues, which I shall be happy to answer in writing in due course.
Perhaps I may summarise why we disagree with the noble Viscount on this issue. First, let us forget for the moment the technical aspect of his amendment, although we think that that is important. If his amendment were passed, it could give local authorities the impression that it is acceptable not to take any account of the guidance in the first year after publication. Secondly, the LBRO will use its power of direction only in
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I have done my best to respond to the amendment tabled by the noble Viscount and I hope that, after he has considered what I have said, he will consider withdrawing it.
Viscount Eccles: My Lords, the noble Lord, Lord Bach, and I occupy such different ground that it is difficult to know how we can meet in the middle. However, I am grateful to the noble Lord, Lord Borrie, for his persistence in scrutinising this aspect of the Bill.
First, no one is against the words “must have regard to”. I think that there is general agreement that that is a perfectly reasonable phrase to use in relation to guidance given by a body entrusted with the statutory duty of knowing how to achieve better regulation under Hampton principles and putting out guidance on how that is to be done. The contributions of the Minister and the noble Lord, Lord Borrie, would lead one to conclude that one could not test whether the local authority has had “regard to” the guidance. However, one can do that by going to court and asking whether or not the authority has given proper regard to the guidance and whether it has acted reasonably. According to the Minister and the noble Lord, Lord Borrie, one would assume that no such remedy was available. It is indeed the case that directions take a matter out of the purview of the courts, which is at the root of our worries about the provisions in this part of the Bill.
Secondly, no evidence has been produced to show that there is out there a recalcitrant local authority getting ready to thumb its nose at the LBRO. In fact, no evidence has been produced to show that any authority is now persistently disregarding Hampton, and the Hampton principles have been in existence for quite a while. Moreover, what constitutes persistent disregard? How do you judge such behaviour on the part of an authority and for how long does it have to go on? Is it for only a week? I have suggested a year. The break, as the noble Baroness, Lady Hamwee, pointed out—I am grateful for her contributions—and as my noble friend Lord De Mauley, said, is a modest one. It is not draconian, unlike directions. It offers time to pause for thought. Here I refer to my experience of non-departmental public bodies—I did not mention the then Monopolies and Mergers Commission, about which the noble Lord, Lord Borrie, knows a great deal. We did not get a great deal done between the OFT and the commission in a year, as I remember it. It usually took rather longer to come to a judgment about what was and was not in the public interest.
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On the technical matters, luckily the Bill still has a long way to go. It is going to another place and, if there are technical problems, they can easily be put right, so that is not an argument against my amendment. I wish to test the opinion of the House.
3.46 pm
On Question, Whether the said amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 115; Not-Contents, 133.
Addington, L.
Anelay of St Johns, B. [Teller]
Astor of Hever, L.
Avebury, L.
Barker, B.
Bowness, L.
Bradshaw, L.
Bridgeman, V.
Bridges, L.
Brougham and Vaux, L.
Campbell of Alloway, L.
Cathcart, E.
Clement-Jones, L.
Cope of Berkeley, L.
Craigavon, V.
Crickhowell, L.
De Mauley, L.
Denham, L.
Dholakia, L.
Dixon-Smith, L.
Dykes, L.
Eccles, V.
Eccles of Moulton, B.
Elton, L.
Erroll, E.
Falkner of Margravine, B.
Fowler, L.
Freeman, L.
Garden of Frognal, B.
Geddes, L.
Glentoran, L.
Goodhart, L.
Goodlad, L.
Hamilton of Epsom, L.
Hamwee, B.
Hannay of Chiswick, L.
Hanningfield, L.
Hayhoe, L.
Hooper, B.
Howe, E.
Howe of Aberavon, L.
Howe of Idlicote, B.
Howell of Guildford, L.
Hurd of Westwell, L.
Jay of Ewelme, L.
Jenkin of Roding, L.
Jopling, L.
Kingsland, L.
Laming, L.
Lamont of Lerwick, L.
Lawson of Blaby, L.
Leach of Fairford, L.
Lester of Herne Hill, L.
Luke, L.
Lyell of Markyate, L.
MacGregor of Pulham Market, L.
McNally, L.
Maddock, B.
Marlesford, L.
Masham of Ilton, B.
Mayhew of Twysden, L.
Methuen, L.
Miller of Chilthorne Domer, B.
Monson, L.
Montgomery of Alamein, V.
Morris of Bolton, B.
Naseby, L.
Neuberger, B.
Neville-Jones, B.
Newton of Braintree, L.
Nicholson of Winterbourne, B.
Noakes, B.
Northover, B.
Palmer, L.
Parkinson, L.
Pearson of Rannoch, L.
Powell of Bayswater, L.
Ramsbotham, L.
Rawlings, B.
Razzall, L.
Redesdale, L.
Rees-Mogg, L.
Roberts of Conwy, L.
Roberts of Llandudno, L.
Roper, L.
Ryder of Wensum, L.
Seccombe, B. [Teller]
Selborne, E.
Sharples, B.
Shutt of Greetland, L.
Slim, V.
Soulsby of Swaffham Prior, L.
Stern, B.
Stevens of Ludgate, L.
Stoddart of Swindon, L.
Swinfen, L.
Taverne, L.
Taylor of Holbeach, L.
Tebbit, L.
Tenby, V.
Teverson, L.
Thomas of Gresford, L.
Thomas of Walliswood, B.
Thomas of Winchester, B.
Tope, L.
Trimble, L.
Tugendhat, L.
Tyler, L.
Ullswater, V.
Verma, B.
Waddington, L.
Wakeham, L.
Warsi, B.
Wilcox, B.
Windlesham, L.
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Acton, L.
Ahmed, L.
Allenby of Megiddo, V.
Ampthill, L.
Anderson of Swansea, L.
Andrews, B.
Archer of Sandwell, L.
Ashley of Stoke, L.
Ashton of Upholland, B. [Lord President.]
Bach, L.
Barnett, L.
Bassam of Brighton, L.
Bernstein of Craigweil, L.
Boothroyd, B.
Borrie, L.
Brookman, L.
Brooks of Tremorfa, L.
Butler-Sloss, B.
Campbell-Savours, L.
Christopher, L.
Clarke of Hampstead, L.
Clinton-Davis, L.
Corbett of Castle Vale, L.
Corston, B.
Craig of Radley, L.
Crawley, B.
Davidson of Glen Clova, L.
Davies of Coity, L.
Davies of Oldham, L. [Teller]
Dean of Thornton-le-Fylde, B.
Desai, L.
Dixon, L.
Donoughue, L.
D'Souza, B.
Elystan-Morgan, L.
Evans of Parkside, L.
Falkender, B.
Farrington of Ribbleton, B.
Ford, B.
Gavron, L.
Gibson of Market Rasen, B.
Gould of Potternewton, B.
Graham of Edmonton, L.
Gregson, L.
Griffiths of Burry Port, L.
Grocott, L.
Harries of Pentregarth, L.
Harris of Haringey, L.
Harrison, L.
Hart of Chilton, L.
Haskel, L.
Haworth, L.
Henig, B.
Hilton of Eggardon, B.
Hollis of Heigham, B.
Howarth of Breckland, B.
Howarth of Newport, L.
Howells of St. Davids, B.
Hughes of Woodside, L.
Hunt of Kings Heath, L.
Irvine of Lairg, L.
Jay of Paddington, B.
Joffe, L.
Jones, L.
Jones of Birmingham, L.
Jones of Whitchurch, B.
Jordan, L.
King of West Bromwich, L.
Lea of Crondall, L.
Lipsey, L.
Macdonald of Tradeston, L.
McIntosh of Hudnall, B.
MacKenzie of Culkein, L.
Mackenzie of Framwellgate, L.
McKenzie of Luton, L.
Mallalieu, B.
Malloch-Brown, L.
Massey of Darwen, B.
Maxton, L.
Mitchell, L.
Morgan of Drefelin, B.
Morgan of Huyton, B.
Morris of Aberavon, L.
Morris of Handsworth, L.
Morris of Manchester, L.
Morris of Yardley, B.
Moser, L.
Murphy, B.
Patel, L.
Patel of Blackburn, L.
Paul, L.
Pendry, L.
Plant of Highfield, L.
Ponsonby of Shulbrede, L.
Prosser, B.
Ramsay of Cartvale, B.
Rendell of Babergh, B.
Richard, L.
Rogan, L.
Rooker, L.
Rosser, L.
Rowe-Beddoe, L.
Rowlands, L.
Royall of Blaisdon, B. [Teller]
Sawyer, L.
Scotland of Asthal, B.
Sewel, L.
Sheldon, L.
Simon, V.
Smith of Leigh, L.
Soley, L.
Stone of Blackheath, L.
Strabolgi, L.
Symons of Vernham Dean, B.
Tanlaw, L.
Taylor of Blackburn, L.
Taylor of Bolton, B.
Thornton, B.
Tomlinson, L.
Truscott, L.
Tunnicliffe, L.
Turner of Camden, B.
Vadera, B.
Walpole, L.
Warwick of Undercliffe, B.
Watson of Invergowrie, L.
West of Spithead, L.
Whitaker, B.
Whitty, L.
Wilkins, B.
Williams of Elvel, L.
Williamson of Horton, L.
Young of Hornsey, B.
Resolved in the negative, and amendment disagreed to accordingly.
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