Regulatory Enforcement and Sanctions Bill [HL]

I am sympathetic to the intentions behind Amendments Nos. 97 and 98. The noble Baroness, Lady Wilcox, was kind enough to say that one of the reasons I came into government was to try to sort out some of this regulatory nightmare, and I have taken a personal interest in Amendments Nos. 96, 97, 98 and 98A. I have always compared regulatory environments and, indeed, the implementation of regulations. In countries such as France, there seems to be more regulation on the books than in Britain and yet, somehow, businesses seem to operate in a far more laissez-faire way. In the past, those implementing regulation in Britain have put themselves up in opposition to those who operate business. I disagree with the noble Lord in that I do not think regulation is there just to protect the public; it is also there to protect law-abiding businesses. I often see officials here implementing regulation in opposition to business, whereas on the Continent they often seem to work in the same groove, going the same way, and they see themselves as partners. In one way, Clause 28 will play an essential role in encouraging a much more co-ordinated and strategic approach, especially in relation to multi-site businesses, and implementing their problems at a local level. Businesses rightly resent the time and cost involved in unjustifiable and meaningless inspections. One of the Hampton principles is that there should be no inspection without a reason. That has been put on a statutory footing with the recent publication of the statutory regulator’s compliance code. It will save time and money for local authorities and businesses alike. Once a primary authority and a business have developed and published an inspection plan and a notice that that inspection plan will be developed together—working in the same groove for once—then other local authorities will be required, first, to have regard to the plan when carrying out an inspection of the business concerned; secondly, to notify the primary authority when they depart from the plan—this is important because a multi-site business headquarters and a primary authority may have settled something and then another local authority somewhere else may wish to depart from it because it has always done it its own way and no one else understands its issues—and, thirdly, to give reasons for doing so in their notification. That will ensure that inspections are not undertaken lightly and without due consideration having been given to the inspection plan which has been agreed. Inspections can be triggered by a wide range of factors, including a complaint that needs to be followed up quickly or a recurring problem with management in a particular outlet of a multi-site business. An inspection plan agreed with a primary authority cannot take account of all these factors—who knows which ones will apply?—and, if the inspection authority had to seek the consent of the primary authority before undertaking an inspection, especially if one was needed urgently, the result would be a deluge of notifications to the primary authority, bogging down the system on a large scale and preventing quick inspections when these needed to take place. You would get very swift disengagement and the whole system would not work. To avoid that outcome, primary authorities would be likely never, or very rarely, to contest proposed inspections and would draw up meaningless low-level, low-hurdle inspection plans. It is likely that any agreed plan would be extremely general and so hedged with caveats as to be practically meaningless. That would help no one—certainly not local authorities and least of all business and, by implication, members of the public, whom, in part, these regulations are there to protect. Clause 28 seeks to allow for the preparation of robust and meaningful inspection plans. Businesses will rightly expect that, having gone to the trouble of drawing up an inspection plan with their primary authority partner, they should not be subject to arbitrary inspections on spurious grounds. I was considering this very recently and came to the conclusion that the biggest problem would be where a primary authority was faced with a notification from the inspecting authority after the event. That notification, while factually accurate, would be of no benefit to this system and would cause problems to the business. It strikes me that a more effective approach would be to require notification, not consent, because with consent the primary authority would have to invest a great deal of money, time, effort, people and, therefore, delay in doing it all beforehand. As is so often the case, for there to be credibility in the system, things have to be done quickly. Notification before the inspection took place would mean that many inspecting authorities would have to consider whether it was necessary and whether it was going along the lines of what we all intend. At the end of the day, I would hope to get rid of that old bête noir of, ““Well, we do it this way because we have always done it this way””. I encourage the noble Lord and the noble Baroness not to press this amendment because I should like to consider the matter further and return to it on Report. I move on to Amendments Nos. 96 and 98A. Clause 28 has also been deliberately drafted to minimise the likelihood of an inspection plan contradicting any recommendations made by a national regulator or the LBRO regarding inspections. Subsection (5) requires a primary authority to, "““take into account any relevant recommendations relating to inspections which are published by any person (other than a local authority)””." I can confirm that ““any person”” captures both national regulators and the LBRO. Therefore, although I understand the intention behind Amendment No. 96, I do not believe that it is necessary. The protection that is needed is already there. I am grateful to the noble Baroness for tabling Amendment No. 98A and for allowing me an opportunity to clarify what the Government expect regarding the content of inspection plans. Clause 28(3) lists examples of what can be included in an inspection plan as, "““the frequency at which, or circumstances in which, inspections should be carried out””," and, "““what an inspection should consist of””." This list is not exhaustive and the Government expect inspection plans to include recommendations and information on a wide range of issues relating to a business with which a primary authority has a partnership. The most important thing here is that that inspection plan will have been developed in partnership between the primary authority and the business. At last, we will have a situation where the business cannot complain afterwards if it has had ““skin in the game”” on the inception of the plan. The guide to the Bill lists some examples of the content of these inspection plans, including details of improvements that a business undertakes to improve its health and safety procedures. There, the inspection will presumably be about how those improvements are coming along—whether people are doing what they said they would do. The inspection would be specifically relevant and not just general. The guide also includes details of ongoing problems relating to compliance to which other local authorities should pay particular regard. From my experience, an example would be where one store was having a problem, perhaps through bad management, when other stores in the same group were ““doing fine, thank you””. I believe that all the issues included in Amendment No. 98A can be addressed in an inspection plan under Clause 28. It is certainly the Government’s intention that that should be the case. However, the amendment would also remove the key requirement that local authorities should have regard to a registered inspection plan and notify the primary authority when departing from it. As I said, giving notification beforehand does not mean that consent is being sought but at least it means that one is forced to write down the reasons. The Government expect inspection plans to help to reduce unnecessary inspections of businesses and to facilitate knowledge-sharing between the primary authorities and the enforcers. Achieving those aims rests on an enforcing authority having regard to an inspection plan and informing the primary authority of its reasons for departing from it. Amendment No. 98A would remove that requirement and significantly undermine the effectiveness of having an approved inspection plan. It would undermine the fact that business can at last work in a groove to ensure that primary authorities, enforcers and business form a partnership to make regulatory compliance productive and not destroy value. Therefore, I hope that Amendment No. 98A, alongside Amendments Nos. 97 and 98, will not be pressed and that Amendment No. 96 will be withdrawn.