Regulatory Enforcement and Sanctions Bill [HL]

The suspension power is intended to provide a safeguard against any improper use of the new sanctions and was added to the Bill in response to concerns raised by the business community during the consultation on the draft Bill. It is designed to be simple to operate either when removing or restoring sanctioning powers. The power will be exercised by the Minister who made the order giving the regulator access to the new sanctions. It is not intended that the power will be used to challenge a decision in an individual case of regulatory non-compliance. It is designed to tackle persistent failings by a regulator, and I should add that the reference to ““an offence”” in Clause 64 is not to individual cases. In particular, Clause 64 is intended to act as an interim, temporary measure that is designed to give the regulator an opportunity quickly to put right any failings, but stopping short of full revocation of the order that gives it access to the new powers. Our fear is that subjecting this process to the affirmative resolution procedure, which would be the effect of these amendments, would offer little advantage over full revocation of the order. It would mean that a Minister would not be able to respond as quickly to address the serious misuse of the sanctions by a regulator, nor—more significantly—would a regulator be able quickly to regain the use of the sanctions once any such misuse had been addressed if each time it had to go through regulations laid in Parliament. As such, it is doubtful whether the suspension power would ever be used. It is not intended that it will be used often but, if it is necessary to come to Parliament each time, we wonder whether it will ever be used. The Government have the utmost respect for the Select Committee on the Constitution, chaired by the noble Lord, Lord Goodlad. We are grateful to him for coming to the Committee today to move his amendment but our concern is that we disagree with the committee on this point. We understand its specific concern about the procedure for the suspension of the proposed new sanctioning powers. From what the noble Lord said, the intention behind the amendments is clear—to ensure that there is sufficient parliamentary scrutiny of any decision made by a Minister to suspend a regulator’s access to the powers. Perhaps I may give some reassurance that, while the Minister’s direction will not be subject under the Bill to direct parliamentary oversight, the Minister will be required by Clause 64 to report to Parliament on any direction that he gives to a regulator either suspending or revoking suspension of the powers. There will have to be consultation before making any direction and the regulator will have to publish the details of the direction. As has been said by all Members of the Committee, the Bill will allow regulators access to a range of important powers, and that is obvious from looking at the Bill. Some of the new sanctions could be particularly significant. Business needs to be assured that regulators will use these sanctions in a correct, consistent and proportionate manner and that, if they do not, their powers will be suspended, if only temporarily. That is why we think that this clause provides an important additional safeguard. Our view is that the process outlined in Clause 64 gives those that are subject to the regulatory regime the transparency and certainty which the noble Lord’s amendments seek to provide. To make it a necessity for a Minister to come to Parliament and lay an order here would, in practical terms, make the suspension power very difficult to operate. I put those views forward on behalf of the Government in the hope of persuading the noble Lord but, even if he is not persuaded, I hope that he will withdraw the amendment.