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

I rise because clause 52 relates to a debate that we had earlier. The hon. Member for Hertford and Stortford asked about discounts, to which the clause relates. It might be helpful to the Committee if I outline what is covered here.

Clause 52 deals with the enforcement of monetary penalties. The clause allows the order made by the Minister under this part of the Bill to make provision for discounts for early payment of a monetary penalty and for the payment of interest as a financial penalty for late payment of the original penalty. However, the total amount of any late payment must not exceed the total amount of the penalty imposed—there is a limit on that.

I hesitate to use the parking fine analogy because the situations that these clauses deal with are significantly more important and on a greater scale, but the principle of early payment in such situations is one that we are all familiar with from that context. The Government believe that early payment discounts can be a helpful incentive to encourage businesses to comply promptly with fixed monetary penalties. Late payment penalties could provide a useful enforcement tool for regulators. We had a discussion the other day about the Companies House precedent and the potential for penalties for late filing. The Government also believe that if financial penalties are to be effective, there needs to be an enforcement process. Subsection (2) provides for the enforcement of unpaid penalties and any interest or late payment charges through the civil courts. It allows the order to create a more streamlined process accompanied by treating the penalty as if it were payable under a court order. In practice, that would mean that the regulator could skip the initial stages of registering a claim for the unpaid sum in the courts and then proceed more swiftly to enforcement action. The principle is one that we are familiar with: incentives to pay early and penalties for paying late.

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