Seventh Report
Instruments Drawn to the
Special Attention of the House
The Committee has considered the following instruments
and has determined that the special attention of the House should
be drawn to them the grounds specified.
A. Draft Assets of Community
Value (England) Regulations 2012
Date laid: 4 July
Parliamentary Procedure: affirmative
Summary: The Localism Act 2011 ("the 2011
Act") includes provisions relating to assets of community
value ("the Assets Scheme"), requiring a local authority
to maintain a list of buildings and other land in its area which
are of community value, and ensuring that when such land is to
be sold local community groups will have the opportunity to delay
the sale, to enable them to prepare a bid to buy it. These draft
Regulations specify details necessary to bring the Assets Scheme
into force, covering requirements for both local authorities and
owners of listed land, including exemptions and rights to appeal
and compensation, and safeguards against non-compliance and the
penalty where non-compliance exists.
This instrument is drawn to the special attention
of the House on the grounds that it gives rise to issues of public
policy likely to be of interest to the House.
1. The Department for Communities and Local Government
(DCLG) has laid these draft Regulations, with an Explanatory Memorandum
(EM) and impact assessment (IA). The Regulations are laid under
the Localism Act 2011 ("the 2011 Act") which provides
for the introduction of the Assets Scheme, requiring a local authority
to maintain a list of buildings and other land in its area which
are of community value.
2. In the EM, DCLG states that the Government's
policy in introducing these provisions is to assist local community
groups to preserve buildings or land which are of importance to
their community. The Department refers to the fact that, in recent
years, communities have "lost" local amenities and buildings
of importance to them through the sales process, and to evidence
that a lack of awareness of a proposed sale, and the speed with
which local assets may be sold, are important factors in the inability
of a local community to make an alternative proposal for use of
the site. The focus of the Assets Scheme is to give the local
community early warning of sales and to enable eligible local
groups to delay sales by six months, so as to provide time for
them to put together a competitive bid to buy the asset.
3. When the Localism Bill was under consideration
by this House, the Government acknowledged that its provisions
had an impact on the rights of private property owners, and confirmed
that a compensation scheme would be provided in the Bill, enabling
private property owners to claim for costs or loss incurred as
a result of complying with the procedures required by the provisions.[1]
In the EM to this instrument, DCLG explains that section 99 of
the 2011 Act allows for compensation to be provided under the
scheme, and that Regulation 14 of this instrument sets out the
detail. In particular, the EM states that Regulation 14(1) and
(2) enable a private owner of listed land, or previously listed
land, to claim compensation for loss or expense incurred while
they were the owner of the land; confirms that the Government
recognise that the policy does affect private property ownership
rights, and the compensation provisions are intended to minimise
this impact; and explains that the amount of compensation is to
be determined by, and paid by, the local authority.
4. The IA shows that there will be significant
costs to local authorities from the Assets Scheme: a one-off cost
to set up the list of assets of community value, of £379k
(for year 1 only); the cost of managing the list process and five-year
review of the list, of £2.5m per annum; the cost of paying
compensation to asset-owners for loss of asset value, expected
to average £233k per annum over nine years; and the cost
of enforcement, of £35k per annum over 10 years. DCLG has
told us that the costs to local authorities will be covered by
central Government during the Spending Review period, but that
thereafter local authorities will have to cover their additional
costs from within their budgets.
5. DCLG carried out consultation on the statutory
instruments for the Assets Scheme between February and May 2011,
and has published a summary of the responses.[2]
In the EM, DCLG states that many local authorities were supportive
of the aims of the proposals, but expressed concern about additional
burdens on local authorities in terms of costs and human resources
to administer the scheme and the number of delegated powers on
the face of the Bill.
6. We note the statement by DCLG in the EM that
"the responses to the consultation have shaped the Regulations".
The published summary of responses records that one of the consultation
questions asked whether compensation claims should be considered
and paid for by the local authority; that 87 of the total of 178
respondents disagreed that local authorities should do so, because
this would impose additional costs and burdens on them; and that
these numbers included a total of 74 local authority respondents,
of which 55 said "no" to the question. As noted above,
Regulation 14 relates to compensation, and gives effect to the
Government's intention, notwithstanding these consultation responses,
that the amount of compensation payable under the Asset Scheme
is to be determined by, and paid by, the local authority. We put
questions to the Department on this issue and publish the answers
that we received (see Appendix 1). The Government have said that
they understand the concerns expressed by some local authorities,
but believe that the support provided through the New Burdens
doctrine and the provision of a safety net will help to mitigate
these worries.
B. Draft Housing Benefit (Amendment)
Regulations 2012
Date laid: 28 June
Parliamentary Procedure: affirmative
Summary: This instrument stems from section 69
of the Welfare Reform Act 2012 and introduces the "under-occupancy"
savings to Housing Benefit first announced by the Chancellor as
part of the June 2010 Budget. From 1 April 2013 working age claimants
living in the social housing rented sector will have their Housing
Benefit calculated on the basis of the number of bedrooms the
claimant's household needs, not on the size of the property they
occupy: Housing Benefit will not be paid for "spare"
bedrooms. DWP states that around 660,000 claimants are likely
to be affected by this measure with an average weekly loss of
about £12 for claimants under-occupying by one bedroom and
about £22 for those under-occupying by two or more bedrooms.
This instrument is brought to the special attention
of the House on the grounds that it gives rise to issues of public
policy likely to be of interest to the House.
7. These Regulations have been laid by the Department
for Work and Pensions (DWP) accompanied by an Explanatory Memorandum
(EM) and an Impact Assessment (IA).
8. This instrument stems from section 69 of the
Welfare Reform Act 2012 and introduces the "under-occupancy"
savings to Housing Benefit first announced by the Chancellor as
part of the June 2010 Budget. From 1 April 2013 working age claimants
living in the social housing rented sector will have their Housing
Benefit calculated on the basis of the number of bedrooms the
family needs, not on the size of the property they occupy: Housing
Benefit will not be paid for "spare" bedrooms.
9. DWP states that introducing restrictions in
the social sector from April 2013 to reflect household size, using
the same size criteria as currently used for calculating Housing
Benefit for private sector claimants under Local Housing Allowance
rules, will ensure that all tenants, regardless of their tenure
type, are treated consistently.
10. The Department published analysis of the
potential impacts of these changes during the parliamentary passage
of the Welfare Reform Act 2012 but this has now been updated.
Overall the average weekly loss for existing claimants is now
expected to be around £14, with an average weekly loss of
about £12 for claimants under-occupying by one bedroom and
about £22 for those under-occupying by two or more bedrooms.
Around 660,000 claimants are likely to be affected by this measure.
11. From 1 April 2013, using information on the
number of bedrooms in a claimant's property and details of people
living in the claimant's household, the size criteria will be
used to assess whether a claimant is under-occupying his or her
accommodation. One bedroom will be allowed in the size criteria
for each of the following:
· A couple
· A person who is not a child (age 16 and
over)
· Two children of the same sex
· Two children who are under 10 years of
age
· Any other child
· A non-resident overnight carer.
12. All occupiers (except foster children[3])
will be taken into account and the size criteria applied to establish
whether or not the claimant is under-occupying their home and,
if they are, by how many bedrooms. Where a claimant is deemed
to be under-occupying, one of two percentage reduction rates will
be applied:
· 14% where under-occupying by one bedroom
· 25% where under-occupying by two or more
bedrooms.
13. The reduction will apply to the total eligible
rent for the dwelling including any eligible service charges and
will affect all existing working age claimants who are under-occupying
their accommodation from 1 April 2013 and anyone who makes a new
claim after that date.
14. Paragraph 7.9 of the EM mentions that in
response to the concerns raised in the consultation responses
about the potential impact of this measure the Government have
announced an additional £30m a year for the Discretionary
Housing Payment budget from 2013-14. "This additional funding
is aimed specifically at two groups:
· Disabled people who live in significantly
adapted accommodation, and
· Foster carers, including those who need
to keep an extra room when they are in between fostering".
15. The House however may wish to note that the
£30m additional funding being given to the Discretionary
Housing Payment fund ("the DHP fund") is not ring-fenced. DWP
states:
"It is for individual local authorities to manage
their fund according to local priorities and needs. However the
guidance,[4] which
is currently being reviewed, will set out the importance of supporting
both foster carers and those living in adapted properties. We
know from talking to local authorities that they welcome and do
follow the guidance we provide.
Anyone receiving Housing Benefit or Council Tax Benefit who
does not receive sufficient benefit to meet their rent or council
tax liability can make a claim to the DHP fund. However each local
authority manages their own fund and prioritises those that they
consider most in need of help."
16. The Government anticipate that the introduction
of size criteria restrictions to the calculation of Housing Benefit
for working age claimants living in the social rented sector will
achieve total Exchequer savings of around £1bn in Great Britain
by 2014/15, that is around a fifth of the expected annual savings
of more than £2bn to result from the Housing Benefit reforms
announced in the Emergency Budget and Spending Review in 2010.
The Government also anticipate that the change will make better
use of available social housing stock and increase mobility in
the social rented sector. However, actual savings and behaviour
will depend on how claimants and social landlords react to this
change and the effects will be monitored with an initial report
in early 2014 and a final report in late 2015.
17. The instrument also simplifies the administration
of Local Housing Allowance by removing the requirement for claims
to be reviewed on the anniversary of the claim date, as up-rating
will be done as part of the general review in April of each year
that will increase the benefit in line with the Consumer Price
Index.[5]
C. Draft Online Infringement
(Initial Obligations) (Sharing of Costs) Order 2012
Date laid: 26 June
Parliamentary Procedure: affirmative
Summary: The Digital Economy Act 2010 (DEA) contained
measures to address the rise in online infringement of copyright
by introducing a system of "mass notifications designed to
educate consumers about copyright and bring about a change in
consumer behaviour."(Impact Assessment page 3) The policy
objective is to reduce online infringement of copyright by 75%
through a range of policy measures. The proposed system requires
copyright owners to identify instances of unlawful file sharing
and notify the Internet Service Provider (ISP) that an internet
address has been connected with unlawful activity by means of
a Copyright Infringement Report (CIR). The ISP will be obliged
to notify the subscriber identified and to maintain lists of who
infringes and how often. The DEA requires Ofcom to produce an
Initial Obligations Code that sets out how the provisions of the
regulatory scheme will work in practice. The Code will be underpinned
by this Sharing of Costs Order which sets out that the "relevant
costs" will be apportioned 75:25 between copyright owners
and ISPs. The division of costs has been controversial and the
scope of the costs to be shared by ISPs has been reduced following
a judicial review. The Order also imposes a £20 charge for
subscriber appeals: this has proved particularly contentious both
in principle and in detail - and we have received a number of
evidence submissions on this aspect which are published on our
website. We seek clarification on whether £20 is the appropriate
amount given that significant parts of the structure of the scheme
and the appeal mechanism are still undecided.
WE ALSO NOTE THAT THERE ARE RESERVATIONS EXPRESSED
IN BOTH THE EM AND IN THE IMPACT ASSESSMENT (IA) ABOUT THE DEGREE
TO WHICH THE COPYRIGHT OWNERS WILL OPERATE THE SYSTEM OF MASS
NOTIFICATIONS IN PRACTICE. DCMS STATE REPEATEDLY IN THE IA THAT
THE LEVEL OF COPYRIGHT HOLDERS' PARTICIPATION IS DIRECTLY DEPENDENT
ON THE NUMBER OF APPEALS - WHICH IS AN UNPREDICTABLE FACTOR. COPYRIGHT
HOLDERS STATE THAT, IF THE PROPORTION OF APPEALED NOTIFICATIONS
INCREASES, FEWER CIRS WILL BE SENT WHICH RAISES QUESTIONS ABOUT
WHETHER DCMS'S POLICY OBJECTIVE OF REDUCING ONLINE INFRINGEMENT
OF COPYRIGHT BY 75% IS ACHIEVABLE. THE HOUSE MAY WISH TO PRESS
THE MINISTER FOR GREATER REASSURANCE ABOUT WHETHER THIS SCHEME
WILL FUNCTION EFFECTIVELY AND WE THEREFORE DRAW THE ORDER TO THE
ATTENTION OF THE HOUSE ON THE GROUNDS THAT IT MAY IMPERFECTLY
ACHIEVE ITS POLICY OBJECTIVE.
This instrument is drawn to the special attention
of the House on the grounds that it gives rise to issues of public
policy likely to be of interest to the House and it may imperfectly
achieve its policy objective.
18. The Order has been laid before the House
by the Department of Culture, Media and Sport (DCMS) along with
an Explanatory Memorandum (EM) and an Impact Assessment (IA).
We received well-argued evidence submissions on the proposed legislation
from Consumer Focus, Copyright for Knowledge, the Taxpayers Alliance
and Which. They are published on the Committee's website, and
referred to in the relevant sections below.[6]
BACKGROUND
19. The Digital Economy Act 2010 (DEA) contained
measures to address the rise in online infringement of copyright
by introducing a system of "mass notifications designed to
educate consumers about copyright and bring about a change in
consumer behaviour." (IA page 3) The policy objective is,
through a range of policy measures, to reduce online infringement
of copyright by 75% (IA page 12). Under the DEA copyright owners
will identify instances of unlawful file sharing and notify the
Internet Service Provider (ISP) that an internet address has been
connected with unlawful activity by means of a Copyright Infringement
Report (CIR). The ISP will be obliged to notify the subscriber
identified and to maintain lists of who infringes and how often.
If they chose to do so, copyright holders may identify serious
infringers from this list and seek to prosecute them under the
Copyright, Designs and Patents Act 1988.
20. The DEA requires Ofcom to produce an Initial
Obligations Code that sets out how the provisions of the regulatory
scheme will work in practice. The Code will be underpinned by
this Sharing of Costs Order which sets out that the "relevant
costs" will be apportioned 75:25 between copyright owners
(against whom the infringement takes place) and ISPs. The IA states
that the Sharing of Costs Order does not itself introduce any
regulation, but sets out provisions to be included in Ofcom's
Code.
21. The Order also requires a subscriber accused
of infringement to pay a £20 fee to appeal.
TIMETABLING FOR THE REGULATORY SCHEME
22. DCMS's EM assumed a level of familiarity
with the wider policy objectives around this scheme and we asked
them for additional information to set this Order in context.
DCMS explained that there are three main elements necessary
for the implementation of the online copyright provisions of the
DEA:
· First, under section 124D of the Communications
Act 2003, Ofcom are to make a Code for the purposes of regulating
the initial obligations. That Code is set out in a draft statutory
instrument which is currently under consultation and will be made
and laid before Parliament in due course, following the consultation
and consideration by the European Commission under the Technical
Standards Directive. DCMS expect the Code to be in force and Ofcom
to have obtained legally binding CIR volume commitments from copyright
owners by February 2013.
· Second, under section 124M of the Communications
Act 2003, the Secretary of State may make an order setting out
provisions as to the sharing of costs which must be included in
the Code. That is the statutory instrument which is currently
before the House and is the subject of this Report.
· Third, this draft instrument requires
Ofcom to determine the precise amounts which will be due from
copyright owners to ISPs in any given year. Ofcom is currently
consulting on the implementation of the draft Sharing of Costs
Statutory Instrument in anticipation of it being laid before Parliament.[7]
The consultation runs until 18 September 2012 and Ofcom will publish
a statement in due course, currently anticipated in December 2012.
Ofcom are currently consulting on options, but anticipate
there being up to one year of set-up (to build the ISP system,
establish an appeals body and establish a measurement approach)
to allow the scheme to begin in the first quarter of 2014.
COST SHARING
23. The Sharing of Costs Order was originally
laid in January 2011 but was withdrawn because of drafting errors
identified by the Joint Committee on Statutory Instruments[8].
Other elements of the legislation have also been amended in the
revised draft Order in the light of a judicial review brought
by the ISPs over whether they should be liable for "qualifying
costs" and "case fees".
24. This revised Order sets out that all the
"qualifying costs" and "case fees" will be
met by the copyright owners, but the "relevant costs"
will be apportioned 75:25 between copyright owners and ISPs. DCMS
tell us that the ongoing consultation "envisages an iterative
process to enable copyright owners to determine participation
and likely volumes of CIRs. Negotiations on the tariff and volumes
will begin between Ofcom and copyright owners once the Code is
made and laid in Parliament by January 2013."
25. Amongst those who sent in submissions, opinion
about the division of costs was divided: Consumer Focus felt the
Order relied on inconsistent reasons for imposing 25% of costs
on ISPs, whereas Which were content with the revised distribution.
EFFECTIVENESS OF THE SCHEME
26. We note that there are reservations expressed
in both the EM (see paragraph 12) and IA (for example at the foot
of page 6 or at the top of page 9) as to the degree to which the
copyright owners will operate the system. Given the costs of set-up,
and that the system is entirely for the copyright owners' benefit,
we asked DCMS for what reassurance they could provide that the
scheme will function effectively:
"The system is being set up for the benefit
of copyright owners and whether copyright owners participate is
a matter of whether they consider that the benefits outweigh the
costs. This is a commercial decision for copyright owners that
we cannot pre-empt.
However, for the purposes of the impact assessment,
copyright owners indicated that they intend to send 2 million
copyright infringement reports per annum. There have also been
public statements in support of the DEA from, for example, the
Creative Coalition Campaign.
The Committee should also note that removing or reducing
the subscriber appeal fee would increase the impact on copyright
owners, consequently increasing the risk that they decide not
to participate in the system."
FEE FOR APPEALS
27. The revised Order also requires a subscriber
accused of infringement to pay a £20 fee to appeal. This
is a new development so we asked the DCMS about precedents for
such a charge. They said:
"Precedents of appeal mechanisms that require
a fee are considered in Ofcom's 2011 advice to Government on appeals,
Digital Economy Act Online Copyright Infringement Appeals Process:
Options for Reducing Appeals Costs (page 33-35). Indirect parallels
can be drawn with exam fees, immigration appeal fees and to a
lesser extent court fees. However, there is no notion of vexatious
appeals in these circumstances.
Ofcom's study on appeal costs noted other appeals
procedures in the UK that charge appellants a fee. These include
GCSE and GCE Examinations Appeals and court fees. The study also
notes appeals systems that may award costs to appellants. Government
has also recently introduced non-refundable fee charges for certain
types of appeal to the Immigration and Asylum Chambers of the
First-Tier Tribunal and the Upper Tribunal. These appeal systems
are not directly comparable. Ofcom's study therefore noted a paucity
of evidence from a lack of directly comparable appeal systems,
which is why the Government has committed to review the fee after
12 months of the initial obligations being in effect with the
benefit of evidence gathered of the impact of the fee on appeals
during this period."
28. Because such a charge is controversial we
asked what consultation had been done. DCMS replied:
"The Government first announced our decision
to set the fee at £20 in our document titled Next steps for
implementation of the Digital Economy Act published in August
2011. There has not been a formal public consultation on this
level of fee. We also committed in August 2011 to review the fee
level after 12 months of notifications being sent to subscribers
to make sure it is still appropriate.
The collection of the appeal fee and service of infringement
letters are matters for the Code and not for the Sharing of Costs
Statutory Instrument. The draft Code envisages infringement letters
being sent by first class post.
The appeals body will establish procedures setting
out details of how the appeals process will work, including service
of appeal notice and payment of appeals fees. Those procedures
will be subject to Ofcom approval. Ofcom will begin the process
of appointing the appeals body in 2013"
29. We also asked the basis for setting the fee
at £20 as both Which and Consumer Focus felt this figure
had been chosen arbitrarily. DCMS replied:
"Ofcom's 2011 study on appeals costs modelled
the impact of a £5 and £10 fee on the number of appeals
based on the assumptions set out in their study. The Government
used this model to extrapolate the impact of a £20 fee, because
we concluded that £10 was an insufficient deterrent to vexatious
appeals intending to disrupt the system and potentially drive
up costs to an unworkable level. Our extrapolation is set out
in the Sharing of Costs Impact Assessment and assesses the impact
on appeal costs in six scenarios.
We have not proposed means testing because the fee
will be refunded in full if the appeal is successful and a fee
of £20 is relatively small. Means tested immigration appeal
fees in comparison are £80 or £140. Ofcom's study also
found little reliable evidence of the likely impact of a fee on
low income subscribers.
Government and Ofcom have taken steps to benefit
subscribers in terms of appeals. These are set out in Ofcom's
draft Initial Obligations Code and therefore are not directly
related to the Sharing of Costs Statutory Instrument. For example,
Ofcom will approve copyright owners' evidence gathering procedures
and intends to introduce technical standards which will both reduce
the risk of a subscriber receiving a letter as a result of incorrect
or inadequate evidence. The appeals body will also be independent
of Ofcom and Government."
30. Para 10.2 of the EM says "the [appeal]
fee at this level will successfully deter vexatious appeals whilst
not deterring those with legitimate grounds for appealing".
We asked DCMS to supply the evidence that underpins this statement:
"The Government has based its estimates on the
best available evidence including comparisons with other appeal
processes. Both Ofcom and Government have made extensive efforts
to identify comparators. This has included examples from abroad
and systems used to appeal decisions in the UK on traffic offences,
public examinations and planning applications. These are noted
in Ofcom's 2011 study on appeal costs. However, it is difficult
to benchmark the level of fee against comparable systems, because
of the weak parallels between the appeals mechanism outlined here
and other systems.
The Government intends to review the level of the
fee after 12 months of notifications being sent to subscribers,
in order to assess whether the £20 level is still appropriate
and will take into account any evidence that subscribers with
legitimate grounds for appeal are being deterred. In cases where
appeals are upheld, individuals would have their £20 fee
refunded."
31. We also note that DCMS offer no robust definition
of what they interpret as "vexatious" or "frivolous"
appeals.
EXTERNAL COMMENTS ON THE PROPOSED FEE FOR APPEALS
32. The evidence we received also expressed concerns
about how the legislation would impact on specific groups. The
Taxpayers Alliance queried the position of small firms, such as
internet cafes, which will be put to great cost and inconvenience
to appeal notifications from infringements by passing customers
in order to avoid being placed on the copyright infringement list.
Similarly Copyright for Knowledge questioned the position of the
educational networks provided by public and university libraries
which, under the definitions in the DEA, would appear to be treated
as individual subscribers and consequently may have to expend
significant time and resources to follow up notifications received.
33. In response, DCMS told us that:
"These issues will be addressed in Ofcom's Initial
Obligations Code which will be put before Parliament later in
the year rather than in the Costs Order.
This issue is covered by Annex 5 of the Code consultation.
Ofcom consider that such undertakings should be considered non-qualifying
ISPS and therefore not legitimate recipients of infringements.
ISPs that meet the threshold of 400,000 subscribers will be required
to comply with the initial obligations - these large ISPs will
be known as qualifying ISPs. Libraries and universities, will
not meet this threshold and will be considered non-qualifying
ISPs of the internet networks to library members and students.
In respect of internet cafes, upstream qualifying
ISPs must identify their subscribers accurately, and any such
small business can explain to its upstream provider why it should
be treated as a non-qualifying ISP and not a subscriber."
34. On this issue, we note that paragraph 10.4
of the EM says first that under the Initial Obligations Code libraries
offering public access networks will not be considered to be ISPs
but in the following sentence the EM says that they can claim
that they are ISPs. We find this confusing; and we remain unclear
whether or not such institutions will be charged the £20
appeal fee.
CONCLUSION
35. Some of the questions raised by the Committee
and in the evidence we received apparently relate to parts of
the wider implementation package that will follow this Order.
DCMS should have given the House a much clearer explanation of
how this Order fits into the wider policy context. We hope some
of the additional information included in this Report will assist
the House to understand the specific function of this Order.
36. We were also concerned about the unusual
situation where DCMS have laid before Parliament an Order that
is the subject of an ongoing consultation. DCMS assured us that
the consultation relates only to the implementation of the Order
and not to the instrument itself. However, if DCMS is not yet
clear about how the scheme will be implemented, it raises questions
about how can they set the level of an appeal fee that satisfies
the terms of the Treasury Rules for full cost recovery. DCMS also
state explicitly that removing or reducing the subscriber appeal
fee would increase the impact on copyright owners, consequently
increasing the risk that they would decide not to participate
in the infringement system. On this basis the Committee does not
have sufficient information to judge whether £20 is the appropriate
amount given that significant parts of the structure of the scheme
and the appeal mechanism are still undecided.
37. What concerns us most is that the copyright
owners, for whose benefit this scheme is being set up, have set
strict budgetary limits on their use of it - although a working
assumption of 2 million CIRs is mentioned, we do not know what
proportion this represents of the breaches identified in previous
years. DCMS tell us that "Negotiations on the tariff and
volumes [of CIRs] will begin between Ofcom and the copyright owners
once the Code is made and laid in Parliament in January 2013."
So it is not yet clear to what extent the copyright holders will
operate the scheme. This Order makes a division of costs based
on a large number of currently unknown factors, and those who
are required to operate it have made it clear that their cooperation
is entirely dependent on financial considerations. This raises
questions about whether DCMS's policy objective of reducing online
infringement of copyright by 75% is achievable. The House may
wish to press the Minister in debate for greater reassurance about
whether this scheme will function effectively; and we draw the
Order to the attention of the House on the grounds that it may
imperfectly achieve its policy objective.
Health and Safety (Fees) Regulations
2012 (SI 2012/1652)
Date laid: 28 June
Parliamentary Procedure: negative
Summary: These Regulations mainly replace the
2010 fees scheme for licensing and approval functions, but also
introduce a new "fee for intervention" - that is, a
fee to allow HSE to recoup its costs where a business has been
found to be in material breach of Health and Safety law. The fee
will be charged at £124 per hour up to the point where the
matter is resolved or when the case is handed over for prosecution,
details of the system are set out in guidance note HSE47. There
is a procedure for review of disputes - requests for information
or clarification will be free but disputes that follow the formal
route will incur additional costs at the hourly rate if the HSE
action is endorsed. The HSE estimate that this will transfer £39m
per year of the cost of regulation from taxpayers to the non-compliant
duty-holders. The Committee has received several submissions on
the Regulations which express concerns about the hourly rate,
what constitutes a "material breach" and how disputes
will be addressed. Many of these points are explained in HSE 47
but the House may be interested to note industry's particular
concerns about the composition of the dispute panel and the potential
impact on the safety culture.
These Regulations are drawn to the special attention
of the House on the grounds they give rise to issues of public
policy likely to be of interest to the House.
38. These Regulations have been laid by the Health
and Safety Executive accompanied by an Explanatory Memorandum
(EM) and Impact Assessment (IA). These Regulations revoke and
replace the 2010 fees scheme, which mainly relates to licensing
and approval functions, without increase. However they also introduce
two new charges: a fee for onshore borehole notifications and
a "fee for interventions".
39. The Government announced its intention in
March 2011 to extend the principle of full cost recovery to the
cost of putting things right in businesses that are found to be
in material breach of health and safety law. The rate is set at
£124 per hour and further information on how the rate has
been calculated is published in guidance note HSE 47 on HSE's
website.[9] The fee will
not be payable where the firm is compliant or the breach is trivial
but where the inspector notifies a person in writing that, in
the inspector's opinion, there has been a breach of the relevant
health and safety obligations, for example an Improvement Notice.
Fees will accrue up to the point that the matter is resolved or
when the case is handed over for prosecution. There is a procedure
for review of disputes[10]
- requests for information or clarification will be free but disputes
that follow the formal route will incur additional costs at the
hourly rate if the HSE action is endorsed. The HSE estimate that
this will transfer £39m per year of the cost of regulation
from taxpayers to the non-compliant duty-holders.
40. The Committee has received several submissions
about the "fee for interventions" which are published
in full on our website: from the Chemical Business Association
(CBA), the National Farmers Union (NFU) and the Forum of Private
Business. Common concerns expressed are that the hourly rate is
disproportionately high and that the heavy impact of costs on
small businesses will deter them from reporting incidents and
act against a culture that promotes safety. They would also like
a clearer definition of what constitutes a "material breach"
preferring that it should only apply where a statutory Improvement
or Prohibition Notice is issued. The CBA comments that the dispute
panel will have two HSE members and only one external representative
which appears to be "structurally imbalanced". The Forum
of Private Business is concerned about the consistency of inspection
and argue that the "fee for intervention" structure
should be scaled according to the size of the business as a flat
rate fee will bear disproportionately on small firms. The NFU
are also concerned about how consistency between inspectors in
different parts of the country will be achieved and note the discrepancy
where a Local Authority is the inspector, because no charges will
be made for a parallel offence.
Other Instruments of Interest
Draft Green Deal Code of Practice
Green Deal (Disclosure) Regulations 2012 (SI
2012/1660)
Green Deal (Acknowledgement) Regulations 2012
(SI 2012/1661)
41. In our 5th Report (HL Paper 22), we drew
to the attention of the House a number of affirmative statutory
instruments relating to the Green Deal and the Energy Company
Obligation.[11] The Department
for Energy and Climate Change (DECC) has now laid these instruments
as well, to supplement provisions made in the draft Green Deal
Framework Regulations 2012.
42. The Green Deal (Disclosure) Regulations 2012
specify the time when information about a Green Deal plan at a
property must be disclosed to prospective buyers, tenants and
licensees. Where a Green Deal property is sold or let out, the
prospective electricity bill-payer will need to give an acknowledgment
to demonstrate that they are aware that there is a Green Deal
plan at the property; the Green Deal (Acknowledgment) Regulations
2012 specify the form that this acknowledgment must take.
43. The draft Green Deal Code of Practice sets
out requirements for Green Deal providers, Green Deal assessors,
or Green Deal installers ("Green Deal Participants"),
or certification bodies. DECC states that the requirements in
this Code of Practice are designed to ensure that all Green Deal
Participants and certification bodies operate fairly and transparently;
deliver good customer service; have appropriate levels of training
and expertise, and provide appropriate redress mechanisms for
customers.
Care Quality Commission (Healthwatch England
Committee) Regulations 2012 (SI 2012/1640)
44. The instrument makes provision for the structure
and appointment of the Healthwatch England Committee of the Care
Quality Commission. The Health and Social Care Act 2012 put forward
Healthwatch as the new consumer champion for both health and social
care. It will exist in two distinct forms: Healthwatch England
is the national level. The 2012 Act also made provision for Local
Healthwatch organisations by amending Part 14 of the Local Government
and Public Involvement in Health Act 2007. Healthwatch England
will have between six and 12 members in addition to the chair,
which is consistent with the intention that Healthwatch England
acts as a strategic organisation. The non-chair members will be
appointed by the chair and a majority of members must be drawn
from outside the Commission.
Plant Protection Products (Sustainable Use)
Regulations 2012 (SI 2012/1657)
45. The Regulations, laid by the Department for
Environment, Food and Rural Affairs (Defra), transpose the requirements
of Directive 2009/128/EC on the sustainable use of pesticides
("the Directive"). The Directive includes a requirement
for the United Kingdom to adopt a National Action Plan for the
implementation of the Directive, and provisions aimed at achieving
the sustainable use of pesticides by reducing risks and impacts
of their use on human health and the environment. It applies to
plant protection products which are agricultural pesticides used
to protect plants from pests and diseases, employed in agriculture,
the amenity sector, and domestic gardens.
46. Schedule 3 to the Regulations deals with
powers of authorised persons. Paragraph 1 of the Schedule, covering
powers of entry, provides that an authorised person may enter
any premises for the purpose of ensuring compliance with the Regulations.
Paragraph 2 contains provisions on search warrants, which may
be issued subject to various conditions, including that an authorised
person has been refused admission. This approach is in line with
provisions on powers of entry which have been included in other
instruments laid by Defra, and which have prompted us to question
the way in which those powers may be exercised, in particular
where admission is refused without a warrant having been issued.
We have been assured by Defra that the powers are essential for
effective enforcement, and that the Department has received no
complaints about their use by authorised persons.
Instruments not drawn
to the special attention of the House
The Committee has considered the instruments set
out below and has determined that the special attention of the
House need not be drawn to them.
Draft Instruments subject to annulment
Green Deal Code of Practice
Instruments subject to annulment
SI 2012/1586 National Health Service (Charges
to Overseas Visitors) Amendment Regulations 2012
SI 2012/1588 British Nationality (General) (Amendment)
Regulations 2012
SI 2012/1604 Social Security (Notification of
Deaths) Regulations 2012
SI 2012/1616 Jobseeker's Allowance (Members of
the Reserve Forces) Regulations 2012
SI 2012/1631 National Health Service (Clinical
Commissioning Groups) Regulations 2012
SI 2012/1634 Social Security (Industrial Injuries)
(Prescribed Diseases) Amendment (No.2) Regulations 2012
SI 2012/1635 Prosecution of Offences Act 1985
(Specified Proceedings) (Amendment) Order 2012
SI 2012/1640 Care Quality Commission (Healthwatch
England Committee) Regulations 2012
SI 2012/1641 NHS Commissioning Board Authority
(Abolition and Transfer of Staff, Property and Liabilities) and
the Health and Social Care Act 2012 (Consequential Amendments)
Order 2012
SI 2012/1644 Local Authorities (Exemption from
Political Restrictions) (Designation) Regulations 2012
SI 2012/1646 Electricity (Exemption from the
Requirement for a Supply Licence) (MVV Environment Devonport Limited)
(England and Wales) Order 2012
SI 2012/1650 National Health Service (Travel
Expenses and Remission of Charges) Amendment Regulations 2012
SI 2012/1653 Education (Student Fees, Awards
and Support) (Amendment) Regulations 2012
SI 2012/1654 General Medical Council (Constitution)
(Amendment) Order 2012
SI 2012/1655 General Dental Council (Constitution)
(Amendment) Order 2012
SI 2012/1656 Social Security (Benefit) (Members
of the Forces) (Amendment) Regulations 2012
SI 2012/1657 Plant Protection Products (Sustainable
Use) Regulations 2012
SI 2012/1660 Green Deal (Disclosure) Regulations
2012
SI 2012/1661 Green Deal (Acknowledgement) Regulations
2012
SI 2012/1666 Safety of Sports Grounds (Designation)
(No.2) Order 2012
SI 2012/1673 First-tier Tribunal and Upper Tribunal
(Chambers) (Amendment) Order 2012
1 See "Assets of Community Value - Policy Statement"
(September 2011):
http://www.communities.gov.uk/publications/localgovernment/assetscommunityvaluestatement
Back
2
http://www.communities.gov.uk/publications/localgovernment/righttobuyresponses Back
3
Foster children are not included in the assessment of any income-related
benefits but any fostering allowances paid for that child/children
are disregarded in full. Back
4
Current DWP guidance on Discretionary Housing Payments http://www.dwp.gov.uk/docs/dhpguide.pdf
a revised version is due to be published in the summer.
Back
5
The Rent Officers Order (Housing Benefits Functions) (Amendment)
Order 2012 (SI 2012/646) changed the uprating of Local Housing
Allowance to be in line with the Consumer Price Index with effect
from April 2013 Back
6
See www.parliament.uk/seclegpublications Back
7
http://stakeholders.ofcom.org.uk/consultations/infringement-implementation/ Back
8
16th Report of Session 2010-12, HL Paper 103 Back
9
www.hse.gov.uk/pubns/hse47.htm Back
10
Based on Regulation 25(5)-(6) and described in more detail on
page 11 of Guidance Note HSE 47. Back
11
The draft Green Deal Framework (Disclosure, Acknowledgment, Redress
etc.) Regulations 2012; the draft Green Deal (Energy Efficiency
Improvements) Order 2012; the draft Green Deal (Qualifying Energy
Improvements) Order 2012; and the draft Electricity and Gas (Energy
Company Obligation) Order 2012. Back
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