Regulatory Enforcement and Sanctions Bill [HL]

My Lords, the noble Lord, Lord Cope, has made clear since Second Reading his concern to ensure that the Bill does not work against the interests of independent businesses and, sometimes, smaller businesses. I am confident that, far from doing so, the Bill will bring better and more consistent standards of enforcement for all businesses. We know that local authorities are under a duty to have regard to the principles of good regulation, under the Legislative and Regulatory Reform Act. Clause 5 of this Bill would require that LBRO works to ensure that local authorities carry out their regulatory activities in the same way. Part 2 will work to bring greater consistency to the treatment of businesses operating across more than one local authority. Consistency in other respects is also important, not least consistency between businesses. Promoting consistency between businesses, in this sense, will be just as much a part of LBRO’s work. Its power of giving guidance to which local authorities must have regard will be its most effective tool in this instance. The primary authority scheme will not interfere with those areas where local discretion is necessary. It will promote consistency in areas where there is simply no good reason why standards should not be the same across the country. Businesses have spoken to us about the very substantial costs they face where standards differ. In such cases as the brand name on a line of clothing, a method of preparing rice for cooking, or the kind of footwear necessary for staff working in a specific type of warehouse, an approach that was unproblematic from the home authority’s point of view was challenged elsewhere. There is no good reason why, in cases like these, standards that are acceptable in one part of the country should not be equally acceptable in another. That is why businesses, including the Federation of Small Businesses, so overwhelmingly support the aims of the Bill. The main issue put to us by smaller businesses during the consultation was not that they disliked the primary authority scheme in principle. In fact, many smaller businesses operating over a handful of local authorities, face problems of consistency themselves, and will benefit from it directly. Their concern was that local authority resources would be diverted away from them. We included a cost-recovery clause in the Bill, which we believe has removed that risk completely. The Bill foresees, and deals in paragraph 7 of Schedule 4, with the risk that enforcement practice may diverge between businesses as primary authorities give subtly different advice on compliance by conferring on LBRO the right to give guidance and, if need be, directions relating to specific actions which have been subject to arbitration. That is, lessons learnt from particular arbitration cases can be disseminated more widely to all businesses and local authorities if necessary. The noble Lord and others who have spoken are concerned that local authorities must be even-handed. I ask the House to remember that local authorities are under a duty to be proportionate under the Legislative and Regulatory Reform (Regulatory Functions) Order 2007. We referred to levels of inspection for independent and multi-site businesses. The accusation is that inspection plans will somehow give multi-site businesses an unfair advantage. The inspection plans will not mean that multi-site businesses will somehow get less inspection; they mean that their inspection will be focused on known strategic problems for that business. We believe that they will improve the level of service that local authority enforcers will be able to give their communities just by improving the information available to inspectors. Finally, on the ““patchwork”” issue that the noble Lord, Lord Cope, is concerned about, there will be different standards in some areas, but we do not think that that will affect matters which really count for local people. In fact, the residents of local authorities everywhere will benefit from much better intelligence-sharing between councils, which will focus the energies of their local authority enforcement officers on the important issues associated with multi-site firms. If need be, the powers of direction in Schedule 4 will allow the LBRO to bring more consistency between and within businesses. We do not believe that the extremely well meaning amendment of the noble Lord is necessary because of the way in which this system will work.