Regulatory Enforcement and Sanctions Bill [HL]

My Lords, I declare an interest in the same form as the noble Baroness, Lady Wilcox, as a vice-president and former president of the Trading Standards Institute, which represents hundreds of dedicated public servants who are employees of local authorities and responsible day to day for enforcing numerous items of consumer protection legislation. I have long been an enthusiast for effective, consistent and proportionate enforcement by trading standards officers, environmental health officers and others, and sought to promote such during my lengthy term of office as head of the Office of Fair Trading. My noble friend has a past, too. As he and other speakers have reminded us, during his period as director-general of the CBI he inveighed long and hard against the burdensome nature of many regulations imposed on business. In the present Bill, which my noble friend is bringing forward, I feel that he is being extremely broad-minded and fair-minded in drawing out his concern for over-burdensome regulation but, alongside that—with which I can find much common cause—he wants regulators to focus their efforts on those mischiefs that pose the greatest risk to consumers. In the Bill, he articulates the value of consistent, proportionate and effective enforcement. I think that enforcement officers will value the greater flexibility introduced by the Bill, which, as my noble friend outlined, will give them a range of alternative sanctions for enforcement besides the familiar and traditional sanction of criminal prosecution. I should say, however, because no one else has quite said it so far, that I am certainly not one of those who is opposed to criminal sanctions in this field of trading malpractice. The statutory offences in the Trade Descriptions Act 1968, for example, have for nearly 40 years proved invaluable in keeping traders, big and small, up to the mark in terms of honest and fair behaviour. One of the great merits of criminal prosecution in the courts, usually the magistrates’ courts, and the spotlight of publicity given to court cases is that they have proved a useful deterrent against false and misleading descriptions of goods and services. The Minister cited Professor Richard Macrory’s report on regulatory justice, on which the Government rely in their Explanatory Notes as part of the background to the Bill. I, too, quote Professor Macrory, who said that the Bill recognises that: "““The criminal law still has an important role to play in achieving regulatory compliance””." With regard to a wider range of possible sanctions, Professor Macrory uses the phrase, ““Evolving the sanctioning toolkits””. I am still trying to work out exactly what that means, but surely it should be welcomed by enforcement officers up and down the country, by enforcement agencies, and—I should say to the noble Baroness, Lady Wilcox—by consumer organisations and consumers. None of these regulations against trading malpractice is there for the sake of the regulators. The regulations are there for the sake of the consumers, and surely it cannot be correct that consumers are left out of consideration, given the clear purposes of the Bill for more effective enforcement. Part 3 provides for fixed monetary penalties, variable monetary penalties, stop notices and compliance notices requiring certain actions to be taken. I have no doubt—I think I noticed this in the useful remarks by the noble Lord, Lord Razzall, on this matter—that Clauses 37 to 39 on the procedures for imposing fixed monetary penalties should receive the close attention of this House, bearing in mind the absence of any involvement of the courts unless there are limited so-called judicial-review grounds of challenge. We all know in this House, whether we are lawyers or not, that the normal requirement on a prosecutor for a criminal offence is that he proves to a court beyond reasonable doubt that the defendant has committed the offence. Under Clause 37, the requirement on a regulator before imposing a fixed monetary penalty is merely that he satisfies himself. He does not have to satisfy any external body, court or otherwise; he merely has to satisfy himself beyond reasonable doubt that the offence has been committed. I have always understood that one of the grumbles about regulation made by major retail companies—I am delighted that the speaker following immediately after me is the noble Lord, Lord Sainsbury of Preston Candover, who will surely mention his own great retail concern—with outlets in many different parts of the country has been that, with enforcement in the hands of local authorities in hundreds of different local areas, there may be a high degree of inconsistency in enforcement between one local authority and another. Major supermarkets often complained to the Office of Fair Trading when I was there that enforcement was tough in one area and lax in another, and that conflicting advice about what was permissible under the law was given by local authority offices in different areas. Thirty years ago—I mention the number of years because it is quite a longstanding practice now—local authorities sought to respond to that complaint through adopting the home authority principle, so that the local authority where the headquarters of the business concerned was located would be the enforcement authority wherever the alleged offence took place. That has worked well to a surprising degree, but the location of a company’s headquarters is often incidental to the company’s principal geographical areas of operational activity. The Government’s plans in the Bill for the establishment of the Local Better Regulation Office with statutory powers to promote greater consistency between local authority enforcement are very important. They provide for considerable oversight and surveillance—words which I think are broad enough to cover what is being required—over local authority departments, for the need for this new office to consult with trade bodies, such as the Trading Standards Institute and the Chartered Institute of Environmental Health, and for working together with national regulators, such as the Environment Agency—about which, no doubt, the noble Baroness, Lady Young of Old Scone, will talk—the Food Standards Agency and the Office of Fair Trading. Clauses 23 to 28 carry forward the idea of the home authority principle, but with greater flexibility, by enabling the LBRO to nominate a local authority as the primary authority for the exercise of particular regulatory functions. The primary authority idea is surely a natural successor to the home authority principle, and puts it on a statutory basis. I have noted the concerns of the Local Government Association that it reduces local authority autonomy. I cannot deny that it does. If a body is supervising and has different views from a local authority determination, of course it interferes with its authority. The case for reducing local authority autonomy, based on the working of the home authority principle over 30 years, is made out by the Government’s Bill. I am doubtful about Part 4, which is quite short and looks as though it has been tagged on. Perhaps I may say to my noble friend that it smacks more of old-fashioned CBI rhetoric from the 1980s than carefully drafted legislative policy. Anyone exercising a regulatory function must ensure that he does not impose an ““unnecessary”” burden. Do we think that we know what ““unnecessary”” means? The provision applies only if the Minister has by order applied it to a regulatory function, but I looked in vain for an interpretation clause which might define ““unnecessary””. It is not surprising that a responsible body such as the Food Standards Agency should say of Part 4 that it could potentially limit a regulator’s ability to protect the public. Once more, I say to the noble Baroness, Lady Wilcox, that whether consumers get enough specific mention is a moot point. But, ultimately, the intentions are that the consumer should benefit throughout. The greater powers of the LBRO, the co-ordination of local authority regulators and so on, has got that end in mind. Because of that, I support most of the Bill and, therefore, commend it.