Regulatory Enforcement and Sanctions Bill [HL]

My Lords, I am grateful for the opportunity that the amendments give to discuss our reason for the inclusion of the measures in Clause 7. I am doubly grateful to the noble Viscount for his thanks particularly to the Bill team for the help that he says that it has given him. It is very good of him to say so because Bill teams do not often receive that kind of plaudit, although they do extraordinarily hard work—one hopes for all Members of the House. I acknowledge, too, that the noble Viscount has moved his position to some extent from the one he held in Committee. The amendment would no longer remove the power that the LBRO has to direct compliance with guidance; it would retain the approach adopted in Clause 7 but would put the power to give directions into the hands of the Secretary of State. I understand why the noble Viscount is testing the provisions in the clause further, but I shall try to explain to the House why we do not feel that this particular change would be helpful. We have already set out the thinking behind the inclusion of the LBRO’s power to direct. It has its origins in the Hampton report, which recommended the creation of a public body with significant powers, along the lines of those which are already held by the Food Standards Agency, to which the noble Viscount referred. It is important that the LBRO should have a backstop power to be used when, for example, as my noble friend Lord Borrie argued, one or more local authorities persistently act with disregard for a particular piece of guidance, and this disregard is detrimental to business or the public. The use of the power will be subject to important controls. The most important of these is that any use of the powers of direction is subject to the consent of the Secretary of State. One question that has been raised has been the one of precedents for the Clause 7 power. As we discussed in Committee, the Hampton report recommended the creation of a body with powers broadly comparable to the Food Standards Agency. We believe that it is relevant, despite what the noble Viscount has said, that the closest precedent is the power exercised by the Food Standards Agency under the Food Safety Act 1990 in Section 40, where the agency may give directions to a local authority to take steps to comply with a code of practice, much as the LBRO may require that a local authority complies with guidance. The FSA only has to consult the Secretary of State, however—that Act does not contain the stricter requirement of consent from the Secretary of State that Clause 7 sets out. Not only does this power have a clear precedent therefore, but the measures before the House have rather more stringent controls than does the precedent. The noble Viscount is concerned to ensure that appropriate democratic accountability is brought to the way in which the LBRO gives directions to a local authority. We believe that the ministerial consent requirement will have a similar effect in practice as the approach set out in the amendment. The LBRO will propose directions, but Ministers will be accountable for consenting to their use. The provisions in Clause 7 are vital in enabling the LBRO to achieve its objective; sufficient safeguards are in place to ensure that the LBRO uses its power to direct compliance with guidance in a responsible manner. The noble and learned Baroness, Lady Butler-Sloss, asked how the LBRO could enforce its directions. Of course, local authorities, as she will know probably better than anyone else in the House this evening, are required to comply with directions. Failure to do so would be a breach of their statutory duty. The LBRO can seek to enforce the breach and third parties can sue if they are harmed by that breach of statutory duty. So it puts the local authority at risk of being sued by third parties. We mentioned in Committee—and the noble Viscount dealt to some extent with this argument in moving his amendment—that the inclusion of this power has the support of business, notably the British Retail Consortium. It certainly does. The CBI has written this week to the Government, saying that it would welcome moves to maintain the powers of the Local Better Regulation Office. It said: "““Business has been promised a better regulatory environment if regulators are awarded new powers. But this requires regulators to deliver on this, and we think it important that the LBRO is given the appropriate powers to ensure that local authorities do just this. Maintaining Clause 7 as currently drafted, which gives the LBRO powers of direction, would help achieve this””." Noble Lords may have seen the briefing notes from the major stakeholders, but I remind them of the position of other bodies that by no stretch of the imagination could be described as businesses. The Trading Standards Institute said that it believes that, "““it is necessary that LBRO has the power to direct local authorities that are at odds with central guidance in order to ensure a consistent regulatory environment””." The National Consumer Council said: "““The LBRO cannot secure consistency of practice if local authority regulatory services are free to choose to ignore its guidance. Indeed, we are concerned that the requirements on LBRO to consult and obtain the consent of the Secretary of State before issuing a direction are too onerous and might work to dissuade LBRO from legitimately exercising this power””." They go further than the Government do. Clearly, it would be unhappy with this specific amendment which would put the use of the power even further from LBRO’s hands. I will just sum up our case on this. We believe LBRO’s powers in Clause 7 are precedented; based squarely on Hampton; have the support of business, and not just business but also consumers and the professions, particularly the Trading Standards Institute; are subject to controls recommended by the Delegated Powers and Regulatory Reform Committee which we have accepted in full; and are designed in such a way as to ensure the appropriate accountability to Parliament. For those reasons, I am afraid that we stick with our view that Clause 7, as drafted, is appropriate in this case. These are intended as backup powers and it is in that context that we suggest that they are appropriate for this Bill.