Regulatory Enforcement and Sanctions Bill [HL]

I am extremely grateful to my noble friend because he is right. Indeed, I am tempted to ask the noble Lord, Lord De Mauley, whether he is really suggesting that it is wrong to ask local businesses to charge, or whether he is not going quite that far—it would be a long way—and is asking only how local businesses will pay. If he is really against this charging structure, what does he have in mind to put in its place? It is a legitimate question and I put it to the noble Lord. As I understand it, some businesses currently pay for home and lead partnerships. In agreeing to be a primary authority, a local authority is agreeing to take on a host of new functions and responsibilities for the benefit of a specific company. Carrying out these functions effectively may be costly, and in their responses to the consultation on the Bill, many local authorities expressed concern that they would not have sufficient resources to enable them to carry out the role of a primary authority effectively. The provisions in Clause 29 address these concerns by allowing a local authority to recover the costs it incurs when carrying out its functions as a primary authority. Moreover, regardless of that provision, it is likely that local authorities that volunteer to become primary authorities would have the right to charge under general local government legislation, a point made by my noble friend. Clause 29 makes it absolutely clear that all local authorities may charge for their services as a primary authority if they wish to do so, regardless of whether they have volunteered or have been nominated by the LBRO. It is a carefully drafted clause to ensure that a local authority cannot derive any profit from its work as a primary authority. It may charge fees that represent only, "““the costs reasonably incurred by it in the exercise of its functions””." Further, if it were completely unreasonable in its charges, for a start I do not think that the business would pay, but if it did, it would have a potential remedy—the noble Lord, Lord Hodgson, is looking at me carefully because I think he knows what is coming—in terms of judicial review. As a further safeguard, local authorities must have regard to any guidance issued by the LBRO under Clause 31 in relation to costs recovery. That particular safeguard is important. In putting his case, the noble Lord, Lord De Mauley, argued that the provisions in Clause 29 amount to a kind of double taxation as businesses already pay for regulatory services through business rates. However, partnerships in the primary authority scheme will give multi-site businesses access to a range of services over and above those available to businesses in general. If a business has a primary authority, it will benefit, first, from the advice and guidance the authority can offer as the first point of contact on regulatory issues; secondly, it will have the right to a review of all significant enforcement action by the primary authority before such action is taken against it; and, thirdly, a right to refer proposed enforcement actions to the LBRO where it thinks that the actions are inconsistent with the advice it has been given. Not surprisingly, these benefits come at a cost. However, I do not believe it would be appropriate for these costs to be met through general rates on business, including those that do not enjoy access to the primary authority scheme, or charges on local council taxpayers. At Second Reading the noble Baroness, Lady Wilcox, asked what might be done to ensure that the primary authority scheme does not divert valuable local authority resources away from small businesses. We argue that the inclusion of the power to charge will provide clarity and be an important safeguard for the interests of small businesses; for example, those that carry out their business in only one local authority area. Clause 29 will ensure that small businesses can confidently expect that where a local authority becomes a primary authority, it will not divert resources away from the advice and support that they are entitled to look to their local authority to provide. I am delighted to say that Clause 29 has been welcomed by small business representatives for just that reason. Representatives of some of the bigger, multi-site businesses have put it to us that charging would not be unwelcome so long as the scheme delivers the real consistency that they need. There is, of course, a cost to the inconsistency that has taken place until now. That is the argument on the other side. Unless there is a serious alternative to this system—I look forward to hearing about it if there is—I invite the noble Lord to withdraw his amendment. I hope he will feel satisfied with my explanation of why we have taken the course we have.