Regulatory Enforcement and Sanctions Bill [HL]

I am grateful to my noble friend for raising this point and speaking to her Amendment No. 95. She has invited me to rehearse the Government’s intentions in proposing our approach to the Bill, which I agree would be useful. I have to say, however, that were this clause to be replaced with the proposed new provision, it would significantly undermine the primary authority scheme we have set out by putting it on a different and, more importantly, less rigorous basis. Let me try to explain why. The approach as demonstrated in Amendment No. 95 sets out an alternative to the primary authority partnership. I accept absolutely what my noble friend says about this being a helpful attempt to make the primary authority scheme better, and not a gesture from those who object to it principle. It is therefore hardly surprising that it is an approach very similar to one proposed by LACORS during the public consultation process. LACORS was a significant stakeholder in that process, and has helped to mould and set out the provisions in the Bill. The Government thank the organisation for that. Having said that, we do not think that the amendment provides the assurances that businesses need to be prepared to enter into a primary authority partnership. The intention behind the amendment, of course, is to minimise bureaucracy and to protect the absolute discretion of local authorities to perform any enforcement action they choose. We are not convinced, however, that it would deliver the benefits that are expected. As we have debated already, local authorities have worked informally to promote better co-ordination among themselves through the home and lead authority schemes. They have encouraged open and systematic communication between local authorities when handling regulatory issues affecting a firm that operates across local authority boundaries. Yet, as we have heard, in practice conflicts and inconsistencies continue to arise. These result in significant and unnecessary costs to business as well as significant and unnecessary work for local authorities. Businesses have asked us to provide access to a scheme which will provide more dependable advice and much quicker resolution of disputes between authorities, thus giving greater certainty and clarity and providing an effective basis for planning their operations across the country. We start from the principle that where a business and a local authority have gone to the trouble of establishing a regulatory partnership, there should be a presumption that the advice given by one professional is respected by other professionals across the country unless there are good reasons for local variation. One of our criticisms of Amendment No. 95 is that it would not provide such a presumption. Its approach would effectively put existing practices, as recognised in the voluntary home-lead schemes, on to a statutory footing. Our view is that that is not enough to deliver the certainty that businesses have a right to expect. If local authorities adhere strictly to the current scheme, consultation in this way, without any suggestion of a right to block an action, would deal with the inconsistencies that businesses face. Yet cases occur where authorities proceed to prosecution without any attempt to contact the primary authority to determine its advice; and where they do contact the primary authority, cases of persistent disagreement still arise, creating costs for businesses and local authorities alike. The benefit of the Government’s scheme is that the primary authority’s right to direct that a particular action should not take place is operative only where the primary authority concludes that the enforcement action conflicts with advice it has previously given to the business. We do not want it broader than that. We debated earlier about ““appropriateness””. It has been argued that where a primary authority has publicly expressed the advice it has given to the business, this will make it harder for other authorities to initiate enforcement actions that run counter to that advice. However, the argument only works on the basis that the cases will end up in court, either as criminal prosecutions or as litigation that challenges the enforcement action. The mere existence of a primary authority’s advice will not deter enforcement actions or the threat of enforcement actions which do not end in court proceedings. This approach would also deny the enforcing authority the right to take the matter to arbitration if it disagreed with the primary authority’s advice. So the enforcing authority is effectively stuck with the primary authority’s advice and any disagreement will be harder and more expensive to test through the courts rather than the LBRO if the enforcing authority is convinced that the primary authority has it wrong. The approach in Amendment No. 95 is less systematic than the one in the Bill and will give local authorities and businesses alike less effective protection. We understand the concerns that remain among those in the enforcement section about the primary authority or LBRO effectively having jurisdiction over the enforcement actions that a local authority may wish to pursue. We recognise that this is a significant change from the existing practice but it is essential. As I have said, it is narrowly circumscribed. Our arguments against Amendment No. 95—again, we are grateful to my noble friend for raising the issue—is that, first, the disincentive to taking action in Amendment No. 95 is not strong enough; secondly, it denies the enforcing authority the right to arbitration if it disagrees with the primary authority’s advice; and, thirdly, it is less systematic. My noble friend asked about exemptions for harm to health, harm to the environment and harm to consumer protection. Exemptions will be made along these lines by order and we will have an opportunity to consider them later today. I assure the Committee that the primary authority scheme will not be made operational, as I have already said, until these exemptions are accepted by Parliament. In his robust way, the noble Viscount referred to how the price of consistency may be too high. I will put it the other way: the price of inconsistency may be fairly high for both major and small businesses which have outlets in two different local authorities. We are seeking to find the right balance in the Bill—we may or may not succeed in the noble Viscount’s eyes— between the flexibility that local authorities need in practice and the legitimate demands of business for consistency where necessary. The balance is slightly tilted towards local variation. There will of course be cases where local issues are paramount—a business with excellent health and safety standards may have a negligent manager in a particular store, for instance—but enforcement action, if the scheme works, can go ahead in any such case after a pretty quick check with the primary authority. However, there are areas where consistency should be protected. For example, a label for a line of clothing should be valid from a trading standards point of view wherever in the country it is sold, or a particular type of sink should be just as safe in whichever store or warehouse it is sold anywhere in the country. We are attempting to achieve the right balance and, we hope, to take the Committee along with us. The noble Lord, Lord Cope, asked to see the exemption order before Report. It did not surprise me that he should do so. Page 22 of the guide to the Bill—the noble Lord was right that we should not put too much on it—seeks to give a full outline of the likely content of any order. We want to continue to consult fully with local authorities, after which the order will be laid. Without making any firm promises, I have already told the Committee that my noble friend and I will try to get as much information as possible to Members of the Committee by Report. I apologise again—I seem to be apologising a lot today—for having spoken for a long time, but my noble friend’s amendment is important and I wanted to answer it for the Committee’s benefit.