Clause 52

Education and Skills Bill – in a Public Bill Committee at 4:30 pm on 21st February 2008.

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Financial penalties

Photo of Nick Gibb Nick Gibb Shadow Minister (Education) (Schools)

I beg to move amendment No. 92, in clause 52, page 28, line 18, leave out from beginning to ‘must’ in line 19.

Photo of John Bercow John Bercow Conservative, Buckingham

With this it will be convenient to discuss amendment No. 100, in clause 52, page 28, line 20, leave out ‘to’ and insert ‘made by’.

Photo of Nick Gibb Nick Gibb Shadow Minister (Education) (Schools)

Given that this is likely to be my last contribution to the debate under your chairmanship, Mr. Bercow, may I say how fair, objective and precise you have been in chairing our proceedings and how grateful we are for the time that you have devoted to them? We wish you all the best in your future endeavours in the days ahead.

Photo of Nick Gibb Nick Gibb Shadow Minister (Education) (Schools)

Indeed—the weeks, months and years ahead. I meant your remaining time in Committee, Mr. Bercow.

The purpose of the amendments is to remove a conflict of interest that would be created if the local authority received the proceeds of any financial penalties rather than the Treasury direct. The old adage of administrative law is that he who levies the fine should not benefit from the proceeds of that fine. Alas, it is an adage that has been honoured more in the breach than in observance in recent decades. If a body benefits from the proceeds of its own fines and penalties, there is an inbuilt incentive and pressure to impose those penalties that removes impartiality from the process. It makes it less objective and opens up the authority to accusations that it is simply revenue- raising.

The classic example is parking fines. When the power to levy parking fines was transferred to local authorities, together with the proceeds, we started to see parking attendants patrolling quiet residential streets at 8.31 am waiting to catch residents who had not moved cars that had been left overnight on parking meters. Westminster council raised £38 million through parking fines that way last year. I do not contend that penalty notices under the Bill will be issued solely for revenue-raising purposes or that they will raise hundreds of thousands of pounds—or even millions—for local authorities. I am just arguing that, as a matter of principle, all fines should be remitted directly to the Treasury with no re-remittance back to the body that levied them in the first place. It is an important principle that Governments of both parties have ignored during the past 20 years to the chagrin of the hard-pressed public.

Photo of John Bercow John Bercow Conservative, Buckingham

I am very grateful to the hon. Gentleman for his generous remarks.

Photo of Oliver Heald Oliver Heald Conservative, North East Hertfordshire

I support my hon. Friend’s amendment. Those of us on the Back Benches, too, are grateful for the way in which you have allowed us to intervene, Mr. Bercow, and to take part in the proceedings even when we were a bit lengthy. It might be of interest to you that the subtitle of William Morris’s book, “News from Nowhere”, to which my hon. Friend the Member for South Holland and The Deepings referred is what you are about to enjoy—“An Epoch of Rest”.

Photo of Jim Knight Jim Knight Minister of State (Schools and Learners), Department for Children, Schools and Families, Minister of State (Department for Children, Schools and Families) (Schools and Learners)

It would be wrong of me not to take this opportunity to thank you for your stewardship of the Committee over the past few weeks, Mr. Bercow. I, too, hope that you have a restful time next week while we wrestle with the rest of the Bill. However, if you miss our musings on Proust, liberalism and William Morris, your presence in the Public Gallery to observe our proceedings would be more than welcome.

Amendment No. 92 would require all money received by local authorities as a result of penalty notices to be paid directly to the Secretary of State and could risk funding being diverted from other local authority services to cover the cost of penalty notices. The effect of amendment No. 100 would be to leave it unclear to whom any money received by a local authority and not used for the purpose of administering the penalty notice should be paid, but I accept that it is a probing amendment that sets out a few things and asks a few questions.

Should the financial penalties that we have provided for under the Bill ever be used, it is important that the money received from them can be used to cover the costs of administering the notices, so that funding is not diverted from other services to cover those costs. It is usual practice for money received by the Government from the payment of fines to be used in that way. It is also important that money received from financial penalties can be used only for the purposes of administering the process, and not used by local authorities in the way in which the hon. Member for Bognor Regis and Littlehampton described. That is why we will specify in regulations that the only function for which the money can be used is the administering of penalty notices themselves. I hope that the hon.  Gentleman will welcome and celebrate those regulations when they are published, perhaps through an early-day motion. The clause, as drafted, therefore requires any money not used for that purpose to be paid directly to the Secretary of State in accordance with regulations. That is entirely consistent with the way in which unused funds from penalty notices issued in respect of unauthorised absence from school have been handled since 2004. I therefore urge the hon. Gentleman to withdraw his amendment.

Photo of Nick Gibb Nick Gibb Shadow Minister (Education) (Schools)

On the basis of those assurances, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 52 ordered to stand part of the Bill.

Clause 53 ordered to stand part of the Bill.

Further consideration adjourned.—[Mr. Michael Foster.]

Adjourned accordingly at twenty minutes to Five o’clock till Tuesday 26 February at half-past Ten o’clock.