Patrick McFadden (Minister of State (Employment Relations and Postal Affairs), Department for Business, Enterprise & Regulatory Reform; Wolverhampton South East, Labour)

That is one danger of capping in every case. I am not saying that a cap would never be appropriate in any circumstances, but the amendment  as I understand it would cap in every case. Making the punishment fit the crime, or imposing a penalty appropriate to the gain accrued to a business for its non-observation of the law, is an important and relevant problem.

A list of possible criteria for the variable monetary penalties is set out in page 38 of the guide to the Bill. They include the seriousness of the non-compliance, the business’s disciplinary record and whether the business has taken any action to address the harm caused by non-compliance, and they may differ from area to regulatory area. A business will, of course, be able to raise objections to and make representations about the level of penalty after the notice of intent is issued and, again, will be able to appeal against the penalty if it considers the amount unreasonable. If the tribunal agrees with the appellant, it will have the power to withdraw or vary the penalty imposed.

To sum up, requiring a cap on variable monetary penalties in every case might mean that regulators were tempted back down the road of criminal prosecution. There is no limit on Crown court fines, and many of the offences that we are discussing would be triable in Crown court. We do not want to create an incentive between the two regimes for regulators to favour criminal prosecution in the Crown court, which has no cap, to a system with a cap in every case. I understand the point made by the hon. Member for Hertford and Stortford, but I hope that he will decide on that basis not to pursue his amendment.

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