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3.57 pm

Lord Bach moved Amendment No. 3:

“(za) the local authorities in England or Wales to whom the direction is to be given;”

The noble Lord said: My Lords, I shall speak also to Amendments Nos. 4, 5 and 6, all of which are government amendments which address a number of issues raised by noble Lords on Report.

We discussed the matter raised by Amendment No. 3 in our previous debate. The noble Baroness, Lady Hamwee, put forward an amendment on Report that would have required the LBRO to consult local authorities before the exercise of its power to give directions. We agreed that it was an important safeguard in the use of this power and took it away for consideration. We are pleased to say that Amendment No. 3 will give effect to it.

The noble Lord, Lord Cope, who has played a very active role on the Bill, argued in Committee and on Report that the LBRO should have a role in advising government on the development of regulations and legislation. We share his belief that much of the LBRO’s value as an adviser to government will come from its ability to help to shape legislation and regulations before they are enacted. Amendments Nos. 4 and 5 will make it absolutely clear that the LBRO will be able to do so when it is advising UK and Welsh Ministers respectively. We thank the noble Lord for having raised that issue with us.

Amendment No. 6 fulfils a commitment that we made on Report to provide for a statutory review of the LBRO three years after the Bill has effect. The amendment will require the Government to conduct a review into the extent to which the LBRO has met its objective and the extent to which it has functioned efficiently and effectively. The review must be published and laid before Parliament and the Welsh Assembly. I hope that there will be a general welcome for the amendment around the House. It will create a structure for an effective review of the way that the LBRO operates in practice, without the uncertainties that a sunset clause would have created for businesses and local authorities alike.

These are the last amendments to Parts 1 and 2 of the Bill. The Government thank noble Lords on all sides of the House for the part that they have played in improving Parts 1 and 2 in Committee and on Report. We hope that this penultimate set of government amendments will put the Bill into the best possible shape as it moves to the other place. I beg to move.

4 pm

Lord Cope of Berkeley: My Lords, I am glad to see Amendments Nos. 4 and 5 and grateful to the Minister for moving the amendment and for his remarks. He was sympathetic to amendments along these lines both in Committee and Report. I was not the first to put forward this point; the noble Lord, Lord Haskins, made it at Second Reading. He said, rightly, that this aspect of the LBRO’s work will be one of its most useful functions as time goes on. I also

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welcome the new clause in Amendment No. 6, as far as it goes. However, I have two questions with regard to that amendment.

The review, as the noble Lord, Lord Bach, said, must take place after a period of three years. Is that when it is expected that the LBRO will have achieved its objectives? The Minister will recall that at Second Reading the noble Lord, Lord Jones, who was then leading on the Bill, said that it would be wound up when it had achieved its objectives and implied that that would be in the not too distant future. Is three years the Government’s estimate for when that may happen? I was surprised by the remark at the time and have referred to it a number of times in the intervening period in our debates, without ever really getting a satisfactory answer.

Will the review include the functions under Part 2 as well as under Part 1? I have two reasons for a slight doubt on this point, which is why I would like the Minister to clear it up. First, subsection (3)(b) of the new clause refers specifically to the earlier parts of the Bill—to Part 1, effectively. Secondly, this is being inserted at the end of Part 1 and not Part 2. That made me wonder whether Part 2 was included. The Minister will know that I am rather cynical about the desirability of some aspects of Part 2. I do not want to develop the general argument again at Third Reading, but I am cynical about making compulsory what now takes place voluntarily by way of co-ordination, and about taking the powers away from local authorities and giving them to a quango. Will the functions of the LBRO under Part 2 also be encompassed in the review?

Lord Neill of Bladen: My Lords, I have a problem with Amendment No. 4, although no doubt it is my own folly in misunderstanding it. A clear distinction is drawn between subsections (1) and (2) of Clause 9. Subsection (2) says:

So it must follow—and it would be the natural reading of subsection (1)—that no request whatever has been made by any Minister of the Crown for advice. In that context, what does “proposed legislation” mean? Is it something that has been mentioned at a party conference? I took that example merely by way of illustration. Is it some document that has been passed to the LBRO? If it is the latter, it would seem to fall within the “if requested to do so” category. I may be making some foolish error, but I do not understand why this is being dealt with in this way or what “proposed legislation” means.

Baroness Hamwee: My Lords, it would be churlish of me not to thank the Minister and the Government for the first of the amendments in this group. It is always gratifying to be able to help the Government to work out what they are going to say by continuing to rabbit on for a moment or two—but it is also gratifying to see one’s small amendments appear in legislation.



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Lord Bach: My Lords, I am grateful for the welcome for these amendments and the contributions to them. I will do my best to respond to the points that have been made. I am not sure whether the noble Lord, Lord Cope, was speaking tongue in cheek, but he asked whether the period of three years before the review takes place was chosen because it was hoped that by that stage there would be no longer be a need for the LBRO and its services. I am an optimist, but I am not as optimistic as the noble Lord. I would be very pleased if there were no need for the LBRO after that time because everything was working perfectly, but I fear that we will need LBRO for longer than three years. I, too, remember the debate that we had on that in Grand Committee.

The noble Lord also asked about Part 2 being part of the review. I am happy to say that, in so far as the LBRO manages the primary authority scheme, the review will take into account and report on the effectiveness and efficiency with which it has administered the scheme. I hope that the noble Lord is satisfied with that answer.

On the contribution of the noble Lord, Lord Neill, I am advised that the,

by the Minister to be found in Clause 9(2), to which he referred, means any request for advice by a Minister formal, informal, written or spoken. In relation to the point about future legislation, we know when we see what legislative proposals are intended what future legislation may bring. In those circumstances, what the noble Lord, Lord Cope, asked for would be advised on. If I am wrong about that, I intend to write to the noble Lord with a rather fuller answer than I have been able to muster at this short notice.

Lord Borrie: My Lords, perhaps I may briefly interrupt to help either the Minister or the noble Lord, Lord Neill. The noble Lord, Lord Neill, asked, perhaps somewhat lightly, whether proposed legislation included something proposed at a party conference. In that context, I thought that proposed legislation meant something proposed by the Government in a fairly definite form such as a White Paper or draft legislation, and not something that the government party was thinking or something at an early stage of thought put forward by the party conference or by the Law Commission.

Lord Bach: My Lords, not for the first time during the passage of the Bill my noble friend Lord Borrie has helped me out. Listening to what he had to say, I am fairly certain that that is what is intended here. If not, of course I will write to the noble Lord. I do not think that his example of something stated at a party conference quite fulfils the requirement here.

Lord Neill of Bladen: My Lords, that is still a little puzzling because it involves the LBRO going through White Papers and so forth to pick up anything where a contribution might be needed. If that is what is intended it would be nice if the Minister could spell that out.



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On Question, amendment agreed to.

Clause 9 [Advice to Ministers of the Crown]:

Lord Bach moved Amendment No. 4:

On Question, amendment agreed to.

Clause 10 [Advice to Welsh Ministers]:

Lord Bach moved Amendment No. 5:

On Question, amendment agreed to.

Lord Bach moved Amendment No. 6:

(a) whether LBRO is discharging its functions effectively and efficiently, and(b) the extent to which LBRO, in discharging its functions under sections 6 to 10, has attained the objective in section 5.(a) the Welsh Ministers, and(b) such other persons as the Secretary of State considers appropriate.

On Question, amendment agreed to.

Clause 35 [Power to make orders providing for civil sanctions]:

Lord Lyell of Markyate moved Amendment No. 7:

The noble and learned Lord said: My Lords, I welcome the noble and learned Baroness the Attorney-General. I am very honoured that she should be here. I thank her and her noble friend Lady Vadera for their courtesy in seeing me on Friday. I hope to prove more persuasive today.

I move Amendment No. 7, which seeks to leave out Clause 35(1)(a), which provides for fixed monetary penalties, and speak to Amendment No. 8, which seeks to leave out Clause 38(1) on the same topic. I will also say a word about Amendment No. 9, which I cannot move for technical reasons but which would give regulators the power to impose variable monetary penalties of unlimited size. I have carefully left in the regulators’ power to make stop orders and compensation orders; otherwise, my remarks apply in principle also to variable penalties.



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The purpose of all these amendments is to urge the Government to think again about the blanket nature of the powers that the Bill gives to regulators, and which both the Constitution Committee and the Delegated Powers and Regulatory Reform Committee of this House have described as unprecedented. The Bill as drafted will, subject only to a final resort to and appeal to a tribunal, enable the Government to give every regulator in this country the power to be investigator, prosecutor, judge, jury and sentencer in their own cause. The way this is done in the Bill is unnecessary and disproportionate. Sensible alternatives are promoted by the Government in another Bill before this House which were suggested by the Delegated Powers and Regulatory Reform Committee. I suggested them in Grand Committee and on Report. I very much hope that the Minister—I think it may be the noble and learned Baroness the Attorney-General—will address in her reply what I believe is a thoroughly constructive suggestion. The noble Baroness, Lady Vadera, shakes her head but whichever Minister replies, I should be very grateful if the point is addressed.

I make it clear once again that I am in favour of sensible and proportionate regulation and regulators having what Professor Macrory described as a toolkit, provided it is reasonable and proportionate. I believe that his approach has a good deal to recommend it. Unfortunately, I believe that the Government have simply passed the Hampton report, which I also commend, and the Macrory report to parliamentary draftsmen and told them to provide for blanket powers to construct whatever system the Government choose, much of which—for example, the size and variety of fixed penalties—they acknowledge that they have not yet thought through.

The doctrine of separation of powers and the entitlement to due process before a citizen or business is punished for an alleged crime are both part of the bedrock of a free society. These powers are being given to 62 regulators identified by Hampton and 56 identified by Macrory, as well as to more than 400 local authorities with regulatory responsibility. I am grateful to the Government for those figures. This adds up to tens of thousands of regulators. The blanket powers are justified on the grounds of efficiency. Highly authoritarian powers given to the state are typically justified on these grounds but for a free and fair society there must be adequate checks and balances. Those have not been provided.

I am not against civil penalties in principle. They are proving their worth for minor offences such as parking and speeding and for some time, and sensibly, they have been part of the powers of major regulators such as the Office of Fair Trading, Ofwat, Ofgem and other utility regulators and the tax authorities, whether for ordinary taxes or VAT. Those who are regulated—and they need regulation—are rich and powerful in those areas and often enjoy near monopoly status. They have teams of high-quality executives and abundant access to lawyers. They can well cope with the system with equality of arms. Likewise, we are learning to have to live with the smaller penalties, where court procedures would indeed be too cumbersome and expensive.



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4.15 pm

It is in the intermediate range that the Bill, if allowed to go unmodified, is in danger of leading to injustice and oppression. The problem does not lie in the tribunals themselves, to which there is an ultimate right of appeal. Those tribunals will, I am sure, be competent, fair and I hope skilful. But for the smaller business or individual, the whole process of notice, letters in opposition, imposition of the penalty by a public servant, internal appeal to that regulator, confirmation of the penalty and ultimate right of appeal to a tribunal which, however expert, may well seem distant and daunting, is likely to prove expensive. Nor is it a process that the citizen can stop. Until that final stage, when they get before the tribunal, which I am sure will do its utmost to be fair and helpful all around, the whip hand is always with the regulator.

The model does not have to be so unbalanced. The Delegated Powers Committee referred to the simpler model in which the citizen, in its example a shopkeeper accused of selling alcohol to a minor, can accept a modest penalty without being taken to court. That same opportunity applied in the recent, much televised example of the half-open dustbin lid in Cumbria. There, the citizen was given an opportunity to pay a fixed penalty of £110 but chose, rather unwisely, to refuse, and was taken to a court which fined him £225. Though the photograph was grainy, the dustbin clearly was overfilled, and the citizen had to have been given a number of warnings; fair enough. Why cannot the Government be satisfied with a similarly proportionate approach in these cases?

If the Government were as joined up as they rightly exhort themselves to be, they would realise that they are concurrently in this House bringing forward just such legislation in Clause 82 of the Health and Social Care Bill, where the regulator can impose a fixed penalty of a maximum of 50 per cent of the potential fine, which the citizen has a right either to accept or to choose to be taken to court. We in the Opposition are suggesting that this method could be improved by introducing the same initial notice that the Government have kindly accepted in this Bill; and I welcome that aspect. This is a constructive way ahead. My proposals—although at this stage I cannot rewrite their Bill for them—are intended to be constructive and proportionate.

I will just say a word about the tribunals, which I have described as having great qualities but as potentially being rather distant. Along with the noble and learned Baroness, Lady Butler-Sloss, whom I am delighted to see in her place, I have received a helpful letter from Lord Justice Carnwath, the Senior President of Tribunals, in which he makes it clear that the system of tribunals, with a number of chambers and jurisdictions, is not finally settled. He has kindly written to offer to discuss our concerns, and I should be glad to take him up on that. I am sure that they have an important role to play, but there are also magistrates’ courts all around the country. They have been unfairly criticised in the context of this Bill where, in my view, the fault has almost certainly lain with inadequate explanations by

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regulators or prosecutors. I therefore very much hope that the Minister in her reply will be able to demonstrate a willingness to give serious and constructive consideration to these suggestions. I beg to move.

Baroness Wilcox: My Lords, the amendment of my noble and learned friend Lord Lyell of Markyate, proposes to remove Clause 31(a), which provides for fixed monetary penalties, and his Amendment No. 8 on the same topic would remove Clause 38(1). I urge the Minister to consider these changes, especially in light of the fact that they have been advocated by the Delegated Powers Committee and the Constitution Committee of this House.

I agree wholeheartedly with my noble and learned friend that we cannot give the unelected, unaccountable Civil Service of this country the powers to be investigator, prosecutor, judge, jury and sentencer in its own cause. The Bill leaves businesses with only the final resort of an appeal to a tribunal. This goes against years of English legal practice, in which people, once accused, have had the right to appeal to the courts, which have the best expertise and training to pass judgment—judgment that the Civil Service does not have. The business or person accused must have the power to question the process of sanctioning before it reaches the final stage in which a tribunal is brought into the equation. I very much hope that the Minister might reconsider her past decisions this afternoon.

Lord Borrie: My Lords, we have heard an important speech by the noble and learned Lord, Lord Lyell of Markyate, as we have done on previous occasions. I was, however, somewhat disappointed that both he and the noble Baroness, Lady Wilcox, repeated what I think is a false illustration of procedure when they referred to the regulator as being, in one and the same case, prosecutor, investigator, judge, jury and sentencer. That is a false illustration because we are talking not about criminal trials in which that little list would be most inappropriate. Indeed, it would be completely against the traditions of this country if a criminal trial were to be conducted on the basis that the same person, the regulator, had all those different roles.

We are talking not about criminal trials but about alternative procedures which the noble and learned Lord knows well, from the Macrory report and elsewhere, are more suitable and more proportionate, depending on the problem at issue, whereby civil sanctions, fixed penalties, discretionary penalties and various alternatives are put forward. That range of powers is designed to ensure not just greater flexibility for the regulator, but a greater opportunity for the trader, the businessman at the other end of the action, to take a course by his own choice to influence the regulator.


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