Regulatory Enforcement and Sanctions Bill [HL]

My Lords, the limit that would be set by Amendment No. 54 appears to be regardless of sector. For example, some offences within the scope of Part 3 relate to failure to hold a permit. In the environmental field, this fee could be as high as £3,000. Some offences of this kind might in future be dealt with by means of a civil sanction. However, the noble and learned Lord’s amendment would preclude the use of a fixed monetary penalty altogether, as the Minister would be unable to prescribe a fixed monetary penalty at a level that reflected the benefit that a business might accrue in not obtaining a permit. We have also tried to design the measures in Part 3 so that there are no perverse incentives for regulators to pursue a particular course of action. Restricting the level of fixed monetary penalties could upset that balance. It could, for example, encourage the regulator to pursue criminal prosecutions instead of imposing a civil sanction, given that the fine in the courts could be double the level of the fixed monetary penalty. I understand the concerns of the noble and learned Lord regarding proportionality. I should stress that the Bill simply sets a maximum level for fixed monetary penalties. It will be the order made under Part 3 that sets the actual levels of fixed monetary penalties for a particular offence and clearly this will not be set at the maximum level in every case. At this point, we should not arbitrarily restrict the ability of Ministers to set fixed monetary penalties at an appropriate level so as to provide an effective deterrent. The noble and learned Lord asked about the various levels at which fixed monetary penalties could be set. As the noble and learned Lord knows, the Bill is enabling legislation and applies to a wide range of regulators and regulatory offences in a wide range of circumstances for a wide range of sectors. As I mentioned earlier, in the environmental field, the fixed monetary penalty may have to be as high as £3,000 to reflect the benefit gained by not obtaining a permit. We would expect most fixed monetary penalties to be much lower. It should be noted that the Minister must set out in the order the penalty amount for each offence and must consult before making that order. It will, of course, be subject to the affirmative resolution procedure and, no doubt, the noble and learned Lord will have views to express at that time. Parliament will, therefore, have the ultimate say on whether the penalties for a particular regime are set at the right level. It is not accurate to suggest that they will be set arbitrarily at varying and different types of levels. The fixed monetary penalties will have to be appropriate and will be debated and set in order, with the relevant sectors and businesses in mind.