Regulatory Enforcement and Sanctions Bill [HL]

moved Amendment No. 157: 157: Clause 52, page 24, line 12, leave out from ““Part”” to end of line 15 and insert ““shall provide for the making of an appeal to— (a) the magistrates’ court, or (b) the Crown Court.”” The noble Baroness said: My noble and learned friend Lord Lyell apologises to the Committee that he cannot be present this afternoon. The object of Amendments Nos. 157 and 160 is to probe the wisdom or otherwise of excluding the jurisdiction of the ordinary courts and allowing appeals only to a specialist tribunal. As my noble and learned friend said last Thursday, the advantage of the ordinary courts is that they are part of a well established and trusted system and they exist all over the country. Provided that the prosecuting authority—that is, the regulator—makes clear the reasons for the prosecution and the injury done and/or costs saved by the alleged wrongdoer, the courts are well capable of imposing the appropriate penalty. Those penalties can indeed be substantial. To oust the jurisdiction of the ordinary courts on such a wide scale is unprecedented and a serious attack on the liberties of the subject. The Statistics Board—the last regulator mentioned in Schedule 5—provides a good example of how the present system is well capable of bringing pressure to bear on wrongdoers without even proceeding all the way to court. The Written Answer to my noble and learned friend Lord Lyell from the noble Lord, Lord Davies of Oldham, on 28 January shows that in past three years the Office for National Statistics issued 90 summonses but proceeded with only 17 prosecutions, in every case obtaining a conviction. The noble Lord, Lord Davies, went on to say: "““Businesses served with a summons can then choose to comply with the legislation, which accounts for the lower number of cases going to court””.—[Official Report, 28/1/07; col. WA 92.]" In other words, in 73 of the 90 cases where summonses were issued, that alone was sufficient to bring about compliance, and in all the other 17 cases the wrongdoers were convicted. However, it is said that the courts do not give adequate penalties. In his Second Reading speech, at col. 1242 of Hansard, the noble Lord, Lord Jones, cited a bad case of the unlawful disposal of 184 drums of toxic waste, for which the wrongdoer was fined only £30,000 when he had earned £58,000 for supposedly disposing of it lawfully and it had cost the waste authorities another £167,000 to dispose of it themselves. It seems surprising that the court, had it been told of these facts, would have given such a low penalty. Can the Minister investigate and tell us before Report in which court this occurred and how much of the above information was put before it? Could the case have been referred to the Attorney-General to put before the Court of Appeal as an unduly lenient sentence? We look forward to these answers before Report. I draw the Minister’s attention to the executive summary of the impact assessment, obtainable from the Printed Paper Office, which says at paragraph 75 on page 25 that the Macrory review identified anecdotal evidence of a compliance deficit whereby, "““non-compliance … is identified but no enforcement action is taken because the regulator lacks the appropriate tool to effectively sanction””." The evidence Macrory found pointed to, "““the heavy reliance on formal criminal sanctions””," which, "““makes the resolution of cases a costly and time-consuming exercise for both businesses and regulators””." However, the experience of the Statistics Board referred to above shows that the mere threat of prosecution or issue of a summons is highly effective. Furthermore, the impact assessment says: "““In instances where there has been no intent or wilfulness relating to regulatory non-compliance, a criminal prosecution may be a disproportionate response””." Quite so, but the mere threat is likely to be sufficient and is in no way costly. According to the impact assessment on page 24, even Professor Macrory simply says that he, "““identified anecdotal evidence of a compliance deficit””." Paragraph 74, also on page 24, says: "““Current tools are not sufficient to deter the ‘truly’ criminal or rogue operators, and equally when cases do reach the courts, sentences imposed are not considered by industry to be a sufficient deterrent or punishment for the offences in question … A further concern from the business community is that some regulatory non-compliance is not sanctioned at all””." Is this not the likely effect of ousting the jurisdiction of the courts? The truly rogue operators should continue to be prosecuted, but the unintentional offender will find a host of penalties slapped on him under a new tick-box system. Alternatively, large penalties will be imposed on the rogues by officials, but they simply will not pay them. Is the Minister aware that the analysis in the impact assessment is actually very slight? How many cases were analysed when the supposed costs and benefits were being worked out? The answer is one; I refer noble Lords to paragraph 87 on page 27. Yet the number of cases with large penalties is likely to go up. According to paragraph 89, the number will jump from a total of 15,000 prosecutions to almost 19,000 a year in order to close the anecdotal compliance deficit. The impact assessment does not say what proportion of these penalties will be fixed and what proportion will be variable. How many cases will the appeal tribunals set up under Clause 52(1) be expected to hear? What will each tribunal cost per day simply to provide the tribunal? Unlike magistrates, the members of the tribunal will have to be paid. They will also have to be identified and trained. Will they be independent? Will the Minister give some examples of real rogues? Finally, could we have more explanation of the annexe to the full impact assessment issued by BERR? According to figure 4 at paragraph 36, the estimated savings in administrative burdens on business of this whole scheme are calculated at between £45 million and £65 million, as against administrative burdens imposed by regulators, the total cost of which is £3.631 billion. The overall cost of administrative burdens has been estimated at £13.7 billion. Out of 105 respondents, seven business representatives and 42 government and local authorities commented on the impact assessment. Will the Minister place these responses in the Library for us all to see? In conclusion, our concern about this new administrative penalty system is well summarised in the peroration of the Minister himself when he talked about, "““something that is, on the face of it, a well-intentioned piece of regulation””," going on, "““to cause unnecessary expense, bog down wealth creation, kill enterprise—specifically small businesses—and drive commercial activity into a mire of bureaucratic compliance””." For the present, we look forward to the Minister’s answers to our questions before Report, but at the same time we ask the Government to think again carefully about the whole of Part 3. They can achieve their laudable objective of better regulation without it. I beg to move.