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The Deputy Chairman of Committees (Lord Haskel): I have to tell the Committee that if there is a Division in the Chamber while we are sitting, the Committee will adjourn as soon as the Division Bells are rung and will resume after 10 minutes.
(a) if satisfied beyond reasonable doubt that the person
(i) has committed an offence under this Act, or
(ii) has (otherwise than by committing an offence under this Act) contravened a restriction or requirement imposed by or by virtue of this Act, or
(b) with the express agreement of the person concerned.
Lord Henley: In the absence of my noble friend Lord Bates, I shall be moving the Conservative amendments today. I trust that we shall make good progress so that I can adjourn later to the Chamber to give our views on the Cohabitation Bill. I do not know whether the Minister will be dealing with that; I think that one of his colleagues will be.
I shall speak also to Amendments 49, 53 and 57. Again, these are probing amendments. They seek to require that the commission may negotiate the acceptance by the person, the registered party, the registered third party or the permitted participant concerned of a discretionary requirement. The amendment will allow this negotiation even if the commission is not satisfied beyond reasonable doubt of an offence or contravention and/or the person concerned does not accept that such an offence has been committed. This works together with our desire to strengthen the Electoral Commission and enhances its powers and the proportionate use of the new range of flexible sanctions.
It also usefully reflects the provision put forward in Schedule 2, paragraph 15, where the person concerned has the power to accept undertakings to take action so that the offence or contravention does not recur and the position is, as far as possible, restored to what it would have been if the offence or contravention had not taken place, or is action of a prescribed description. The difference is that our amendment means that the commission rather than the person concerned can take the initiative.
I understand from briefing that has been produced by the Electoral Commission that it feels that these amendments, among others to Schedule 2, would provide the commission with considerable flexibility to impose the most suitable sanction in each case. It deserves a response from the Government and I would be grateful to hear what they have to say. I beg to move.
The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Bach): The amendments seek to amend the paragraphs of this part of the schedule that define the circumstances in which the commission may impose a discretionary requirement on a person, a registered party, a recognised third party or a permitted participant. Each amendment replaces the relevant paragraph with a new paragraph, which retains much of what is currently in the Bill.
However, there are some important differences that we are unable to accept. First, these amendments remove the word prescribed from these sections when referring to offences. We dealt with this in Committee yesterday. We do not believe that this approach is desirable as the full details of which offences may be punished with a civil sanction should be set out in secondary legislation, subject to affirmative resolution and thus to full scrutiny of both Houses.
Additionally, the amendments significantly depart from the current drafting of the Bill by adding a new heading (b), which states that a discretionary requirement may be imposed with the express agreement of the person or organisation involved. In effect, the amendments propose that a person could come forward and give their agreement to the commission to impose a discretionary requirement. We are not sure that the provision of such a step is logical in procedural terms. A civil penalty, by its nature, should accompany a breach as defined by the commission, and it is for the commission, not for the person concerned, to decide whether a breach or contravention has taken place. If a person should be allowed to volunteer themselves for a sanction in this way, the commission would presumably need to investigate the claim in order to determine the level of the penalty, but it might in fact decide that an offence had not occurred. It appears that these amendments could create potential for unnecessary administrative burdens on the commission where there was no need.
If the commission were presented with evidence of a breach, it could decide to act on that evidence. As a regulator, it should not be seeking express agreement from those regulated in order to perform its duties. Moreover, if the purpose is to provide an option to encourage co-operation and compliance, that is of course admirable. However, we argue that it is unnecessary as the Bill already provides for such co-operation in the form of enforcement undertakings, to which the noble Lord, Lord Henley, referred. An enforcement undertaking is where a person enters into agreement with the commission and gives an undertaking to take a particular course of action. The amendments seem
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So far as concerns the commissions view on this, as we understand it, it agrees that removing the word prescribed would give flexibility, but it expects that Parliament would want to give a view, which is the Governments position.
Lord Henley: I am grateful for that explanation from the noble Lord. If I heard him correctly at the beginningperhaps he would nod to confirm itin due course regulations will come before the House dealing with how the commission should operate in this matter and these will be affirmative. The noble Lord referred to some affirmative regulations and we will be seeing those some time after the passage of the Bill. Is that correct? For the sake of the record, I state that the noble Lord nodded and made noises that sounded as though he affirmed my statement. That being the case, we will have a further chance to look at these matters in due course, and I am grateful to the noble Lord for making it clear that the regulations will be affirmative. With that in mind, I beg leave to withdraw the amendment.
Lord Henley: I shall not be moving the two other amendments in this groupAmendments 60B and 62as I think that we discussed them to some extent yesterday. I apologise again to the Committee for the fact that I was unable to be present when my noble friend dealt with them. However, perhaps noble Lords will bear with me if I briefly touch on Amendment 60A, which I do not think need take up too much of the Committees time.
As the noble Lord will see, the amendment inserts promptly after the word shall, so that the commission imposes a discretionary requirement on someone promptly. I hope that that is as simple and self-explanatory as possible. It stems from a desire to ensure that the commission demonstrates good practice if it hopes for similar good practice in return from those with whom it deals. Having said merely that, I would be grateful to hear what the Minister has to say. I beg to move.
Lord Bach: We understand the desire that the commission should act in a timely manner. We all wish to see the commission act professionally when enforcing the regulatory regime. However, we do not believe that the amendment will have this effect, nor do we think that the wording is necessary.
It is already clear that the commission will be required, in accordance with general public law principles, to apply these sanctions in a reasonable manner. Were it to act in a way that is not proportionate and timely, it could form the basis for grounds of appeal against the resulting sanction. This constraint is more powerful and effective than amending the provision in the way suggested by the amendment.
The commission is well aware of the need, with these new sanctions, not only to act cautiously but also to proceed in a timely fashion. However, we are wary that any attempt to be more prescriptive over the commissions procedures, however well intentioned, may produce unintended and unwanted consequences. For instance, could inserting this kind of language in the Bill create the possibility of the commission feeling that it must make a hasty decision on prosecution rather than a correct decision?
In drafting this schedule on civil sanctions, we have sought to follow as closely as possible the framework established for other regulators by the Regulatory Enforcement and Sanctions Act. As my right honourable friend the Minister of State has maintained throughout this process, and as I said yesterday, we do not think it appropriate to depart from this model unless it is absolutely necessary. After all, why should the regulator that enforces the law for those of us involved in politics be subject to a set of provisions different from those for regulators in other fields? I again thank the noble Lord for raising the point, but we do not feel that we can accept his amendment.
Lord Henley: I am grateful to the Minister. I understand clearly that if one puts promptly in one piece of legislation, it changes ones possible interpretation of other legislation, because the use of promptly in the former would imply that there was no need for promptness where the word was not used.
Nevertheless, it was a point worth briefly making, because I think that all of us think that it would be good practice for the commission to actthe Minister put it better than mein a timely manner. However, promptly is perhaps is overprescriptive. I am grateful to the Minister for his explanation and shall therefore beg leave to withdraw the amendment.
Lord Henley: I shall speak also to Amendment 71. The amendments are designed to stimulate a brief discussion on early discount payments by removing the possibility of them. I understand that the matter was raised on Report in another place and that the Minister there resisted because he wanted to maintain the greatest amount of flexibility, saying that the provision was modelled on the Regulatory Enforcement and Sanctions Act 2008. We are troubled by the potential
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Early payments would precede the final notice of penalty, so the notices that we are discussing are intended to notify a proposal to implement a penalty rather than the final penalty itself. We fear that while a discount may encourage early payment, it could also diminish the authority of the commission and trivialise the very important message that it sends out. I beg to move.
Lord Rennard: I understand why the Electoral Commission opposes this amendment. It suggests that it may ultimately cost more to the public purse if it has to pursue through legal avenues recovery of what is owed to it, as opposed to the payment of late penalties. However, if you had sufficiently large late penalties, you would get more money in, so it depends on what your legal costs would be as against the amounts from the late penalties. I think that it is better to have a system of late penaltiesand I say that as someone responsible for running a partybecause it is clearer and simpler. You know where you are; if you do not pay on time, you effectively pay more. I would not like to encourage the commission to think that it had time to get into legal arguments to pursue the payments; you should know that if you do not pay on time, you pay more.
Lord Bach: This amendment and Amendment 71 grouped with it both relate to provisions in the Bill for the commission to offer early payment discounts and late payment penalties. Amendment 61 removes reference to early payment discounts or late payment penalties for compliance with discretionary requirements. Amendment 71 would remove paragraph 18 (1)(a), which allows the Secretary of State to make a supplementary order to allow the commission to offer,
These incentives are replicated from the Regulatory Enforcement and Sanctions Act 2008, which give those on whom a sanction is imposed an incentive to accept it, and deal with it in a timely fashion. This may encourage compliance, reduce the workload that late payment would create for the commission, and is a proportionate mechanism to help encourage compliance with these penalties. While the Bill may provide for these procedural discounts and penalties, the commission is not compelled by the Bill to offer them in all instances. It is a matter for the commissions judgment, to apply its expertise and experience to decide where and when they would be appropriate. We believe that the availability of these options provides a tool that they may decide to use to ensure this. Indeed, as the noble Lord, Lord Rennard, suggested, the commission has said that it does not support Amendment 61 because,
I do not believe that the availability of these provisions degrades these sanctions in any way. It is important to see the financial penalties contained in the Bill as just part of an overall package. The commission will also have access to other discretionary requirements of a non-financial naturefor instance by requiring a person to take particular actions to ensure compliance, or by entering into an enforcement undertaking with the person concerned, or, in extreme cases, by using a stop notice. Again, we are following closely the provision of the Regulatory Enforcement and Sanctions Act 2008, which includes provisions for early payment discounts and late payment penalties. We have sought to provide the commission with a proportionate and flexible system which is available for a range of other regulators. It is precisely to ensure that the commission is able to act in a proportionate way according to the facts of the circumstances of individual cases that we have followed this model and we think that there are no compelling arguments, on balance, to move away from it in this case.
Lord Henley: Again, the noble Lords argument seems to be that we must follow the precedent of an earlier Actin this case the Regulatory Enforcement and Sanctions Actand have both the early payment discount and late payment penalties. Obviously, there are arguments for both. I noticed that the noble Lord, Lord Rennard, from the Liberal Democrat Benches, was saying that they agreed with us that late payment penalties was the route to go down and there was no need for early payment discounts as well.
I listened carefully to what the Minister said and I will read it with some care. It might also be worth having discussions with the noble Lord, Lord Rennard, before we look at this again on Report. At this stage, the best thing to do is to withdraw the amendment but say that we may want to return to it at a later stage.
Lord Henley: We now come to the end of this batch of opposition amendments. In moving Amendment 72, I shall also speak to Amendment 73. I hope that I can be fairly brief because they are more probing than anything else.
It is obviously very important that the commission should have some form of flexibility and, in terms of reporting, that is very useful. However, this could go too far because as it stands there is no requirement that the commission's opinion as to the lawfulness or any adverse effects of publishing certain information
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Lord Bach: The amendments would slightly alter the language used to describe the circumstances in which the commission may leave information out of a report. I am sorry to disappoint the noble Lord in telling him that I will resist the amendments on the grounds that they are unnecessary and would hamper in one case the commissions operational effectiveness.
Amendment 72 would add the word reasonable to the provision relating to the application of the commissions opinions. At the risk of repeating myself, the commission must already act in a reasonable way. Failure to do so risks judicial review. It is implicit in the drafting that any opinion that can be taken into account must be one that is reasonably held.
It would not be open to the commission, as a body subject to the usual principles of public law, to form a manifestly unreasonable opinion and then act on that, so I do not think that we need to add this here. It might set a slightly unhelpful precedent and imply that other regulators in a similar position would be able to hold and act on unreasonable opinions.
Amendment 73 causes us greater concern, because this could have an adverse effect on the commissions operational effectiveness in some cases. The Bill states that the commission may leave out details from its report on sanctions if including them,
We use it because it allows the commission to apply its general judgment and knowledge of specific cases to make decisions about what might subsequently impact on an investigation. At the time that a judgment is required to be made about what to include in a report it may be very difficult or impossible to say whether something definitely would have an adverse effect on the potential outcome of an investigation or proceedings, particularly if the investigation or proceedings are at an early stage. In its latest briefing on the Bill, the Electoral Commission, in opposing Amendment 73, notes that it may not always be possible to be certain whether or not such information could affect a current case.
Positively requiring the commission to identify whether information would have an adverse effect could be highly damaging. It is only right that the commission be given a reasonable degree of latitude in making potentially fine value judgments in these sorts of circumstance. Our proposal to retain might will achieve the correct result without fundamentally reducing the level of transparency that the reporting requirement is, of course, intended to provide.
Lord Henley: The noble Lord took a stronger line on the second amendment, rather than on the first. I was perfectly happy to drop the first amendment, given that adding reasonable before opinion is
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(a) ensure that the nominated person has relevant experience in the conduct of elections and the organisation of political parties; and
(b) have regard to the desirability for the overall composition of the Commission to benefit from diverse representation.
Lord Tyler: I should remind the Grand Committee, as I mentioned at Second Reading, that although I do not have any pecuniary interest, I was a member of the informal advisory group of parliamentarians convened by the previous chair of the Electoral Commission. I am not quite clear as to whether I still exist in that role, because that group has not met since the appointment of the new chair.
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