Clause 39
Regulatory Enforcement and Sanctions Bill [Lords]
5:15 pm
Pat McFadden (Minister of State (Employment Relations and Postal Affairs), Department for Business, Enterprise & Regulatory Reform; Wolverhampton South East, Labour)
It is a very good example. The previous Government introduced such penalties and civil sanctions for late filing, exercised by Companies House. That came up on Second Reading and, if I am right, rates of compliance following the introduction of those penalties went up. In 1991, the compliance rate was 86 per cent. In 1992 it immediately increased to 92 per cent., and it continued to increase to a level of 96 per cent. It shows that the previous Government were correct to introduce civil penalties in those cases. My hon. Friend is right that it is a good example, which I believe can be built on in some of the areas that we are talking about.
Turning to the clause, subsection (2) requires that regulators may only impose a fixed monetary penalty when
“satisfied beyond reasonable doubt”—
that is an important point referring to the criminal standard of proof—
“that the person has committed the relevant offence.”
Subsection (3) states that the amount of the penalty will be specified by the order made by the Minister. For example, the level of the fixed monetary penalty could differ according to whether the person liable is an individual or a body corporate. Subsection (4) caps the level of fixed monetary penalty at the maximum fine that would have been available for that offence if it had been tried summarily in the magistrates court. That is usually £5,000. There are other safeguards in clauses 40 and 41 for persons upon whom the fixed monetary penalties are imposed.
The clause sets out the basic regime for fixed monetary penalties. It is one of a number of sanctions that Professor Macrory recommended. We believe that, if enacted, it will be an important addition to what regulators can do to ensure compliance. It is also, importantly, an addition with safeguards built in for those who are subject to these procedures.