Regulatory Enforcement and Sanctions Bill [HL]

I thank my noble friend Lord Borrie for his confidence in what I have to say. As an aside, I wish to take on the point made by the noble Viscount, Lord Eccles, about medium-sized businesses. During my time as director-general of the CBI I tried so often to reach out to them, thinking they had specific issues that were not covered by other big businesses—which I also thought looked after themselves, and I was wrong about that—or by small businesses, which everyone, every agency and parliamentarian, is usually all over like a rash. After a series of initiatives, I found that I was wrong: such businesses do not have different issues. They do not feel that they are medium-sized; they see themselves as either a small big company or a big small company. We ought not to concentrate too much on looking at medium-sized businesses. I agree with the noble Viscount that we ought to think about taking them into account separately, but when I did that at the CBI it met with a stony silence. The amendments relate to a relatively restricted direction-issuing power for the LBRO. I recognise the anxieties of the noble Baroness and the noble Viscount about conferring any powers of direction on to the new body. I am going to repeat quite a bit of what my noble friend said last time and I shall clarify the reason for the inclusion of these specific powers in the context of LBRO arbitration. The primary authority scheme gives particular multi-site businesses the right to an advisory partnership with a local authority, the core of what we are trying to achieve, and the right to a process whereby that local authority should screen actions by other local authorities for consistency with the advice it has given. Businesses across the land badly want consistency. That is their main complaint. The lack of it is a waste of the implementation of regulation—as opposed to regulation itself—because of the effect of multi-site businesses, the harm that does to productivity and the frustration it causes in so many parts of the country. Schedule 4 allows for arbitration on request by all three parties. The results of that arbitration will be binding. In many cases the outcome of a referral to the LBRO will be of interest to other businesses and local authorities; indeed, it will be another route to ensuring that we have lack of failure in the implementation of regulation on multi-site businesses. At Second Reading, a number of noble Lords questioned what benefits the scheme would bring to smaller businesses or to those that operate on one site only and would have no need for access to the primary authority scheme. The latter could be a very big business operating on one site; although there are very few of those around, it is not about the size of the business. The powers of direction in paragraph 7 deal with precisely that issue. They permit the LBRO, if appropriate, to give other businesses the benefit of the same certainty that the business which is relevant to the case can rely on, by extending the implications of a decision to local authorities across the country. This is being done not to add obfuscation, nor to give someone enormous power, but to make business more productive and to make the implementation of the regulatory regime more efficient. The powers will also help deal with one of the risks of the primary authority scheme: that, when the advice given by different primary authorities diverges, multi-site businesses will find themselves subject to increasingly different regulatory standards in practice. The powers of direction are limited by the requirement that they should relate to a specific enforcement action submitted to referral to the LBRO. They cannot be used more widely or arbitrarily. Paragraph 7 provides an essential part of the LBRO’s continuing responsibility to promote a consistent regulatory framework for all businesses. This goes to the core of what we are trying to achieve: not only consistency, but ensuring that the whole implementation process is more productive and efficient.