Regulatory Enforcement and Sanctions Bill [HL]

The noble Viscount has added a lot of clarity and has put our position well. What he said was right. I shall try to expand on it a little. Clause 20 defines the scope of Part 2 of the Bill, limiting it to regulated persons, be they a business, a charity or another organisation that is regulated by more than one local authority. The crucial words for this debate are to be found in Clause 20(1)(a); that is, "““a person carries on an activity””" in the area of two or more local authorities. I stress the words ““carries on”” and ““activity””. Franchises present a difficult case in this context. Depending on the level of control that a franchisor exercises over its franchisees, it is questionable whether a franchisee is subject to regulation by more than one local authority and therefore whether it should have access to the primary authority scheme. Where a franchisor exercises extensive control over its franchisees and the franchisor is in effect regulated by a number of local authorities through its franchisees, it is appropriate that the franchisor has access to the primary authority scheme. The Bill makes provision for this. I can confirm that this type of franchise would be able to benefit from Part 2. However, the scope of Part 2 does not capture franchises where a franchisor exercises very little control over its franchisees. The amendments would have the effect of including the latter type of franchise within the scope of Part 2. It would not be appropriate for that type of franchise to have access to the primary authority scheme as it is made up of a series of individual business that are regulated by only one local authority. Part 2 has been deliberately drafted to capture only businesses that are regulated by more than one local authority, as it is those businesses that are faced with the difficulties and costs that result from inconsistent advice and enforcement. I understand that the form of words in Clause 20(1)(a), ““carries on an activity””, is found also in competition legislation which deals with this issue. If a franchisor exercised no control over its franchisees with regard, for example, to health and safety, and there was no central policy on it, it would not be appropriate for that franchisor to have a primary authority partnership with respect to its health and safety functions. Likewise, if a franchisor drew up a promotional scheme—for example, a ““buy-one, get-one-free”” scheme—but did not oblige its franchisees to instigate the promotion, it would not be appropriate for the franchisor to have a primary authority partnership with respect to the promotional aspects of its trading standards function. The noble Lord, Lord De Mauley, asked about managed or tenanted pubs. I am afraid that the answer is not exactly what he sought: it will depend on the levels and types of control within the business. There is no single answer for all claims. I hope that goes some way to clarifying the position. The course we have taken is not original, and is to be found in other legislation.