Clause 25

Regulatory Enforcement and Sanctions Bill [Lords] – in a Public Bill Committee at 12:30 pm on 17 June 2008.

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Primary authorities

Question proposed, That the clause stand part of the Bill.

Photo of Pat McFadden Pat McFadden Minister of State (Department for Business, Enterprise and Regulatory Reform) (Employment Relations and Postal Affairs), Member, Labour Party National Executive Committee 12:45, 17 June 2008

The clause is important because it deals with the establishment of primary authorities. As I said, it is important that all businesses operating across multiple local authorities have some access to this scheme. The Hampton report highlighted two problems. First, not all local authorities are prepared to take on the role, leaving some businesses without an effective regulatory partner. The hon. Member for Hertford and Stortford talked about the importance of that. Secondly, the division of labour between local authorities is sometimes unfair, with some councils taking responsibility for a large number of partnership schemes to the advantage of local authorities elsewhere that may host none.

The clause is designed to tackle those problems by giving businesses more certainty and allowing LBRO to facilitate a fairer distribution of responsibility for hosting the primary authority partnerships. The relationship of  primary authorities and enforcement authorities is at the heart of part 2 of the Bill. The clause and those that follow are particularly important in setting up that relationship.

Photo of David Drew David Drew Labour, Stroud

I agree that this is an important clause, but does the Minister agree that it would be better if services were delivered under one authority, particularly in the areas of trading standards and environmental health? There is a strong argument for unitary authorities.

Photo of Pat McFadden Pat McFadden Minister of State (Department for Business, Enterprise and Regulatory Reform) (Employment Relations and Postal Affairs), Member, Labour Party National Executive Committee

We have made relatively speedy progress this morning, Mr. Chope. I suspect, if not fear, that pausing for a discussion on which form of local authority is best may detain us for some time. In the fine city of Wolverhampton, we have a single unitary authority. In other parts of the country, we have a different system. I will resist the temptation to pronounce on which model is best. That is a debate for another day.

The clause is designed to do something a little different, which is to begin setting out in the Bill how the relationship of primary authority and enforcement authority is to run.

Photo of Mark Prisk Mark Prisk Shadow Minister (Business, Enterprise and Regulatory Reform)

I am grateful for the Minister’s opening remarks on the clause. It is important and establishes the principle of primary authorities. Key to this matter is moving on from the familiar and established procedure of home authorities. If I made an unkind and unnecessary remark towards the city of Liverpool, I am more than happy to withdraw it. It is good to see that there are collaborations. I gather from the Minister that there are collaborations in the west midlands. The car dealership that he referred to, which we will now know as McFadden Motors, will clearly be able to trade across the west midlands with some confidence.

The primary authorities established by the clause lead me to the written evidence submitted by Hertfordshire county council, which I saw this morning. It raises a good and practical series of points. There is one particularly important point on the practical and resource implications of changing from the home authority to the primary authority. I am a Member of Parliament for Hertfordshire and county hall is in Hertford in my constituency. For those who are not familiar with Hertfordshire, it is already established as a home authority for Tesco, Dixons, Nissan, Renault and Orange. It has three dedicated offices working on that role.

I refer hon. Members to the first page of the document from Hertfordshire county council. It states:

“Under the current proposals in the Bill it is estimated that this resource”— the resource in terms of homes for primary authorities—

“would need to increase by at least 100% assuming that only the largest businesses take advantage of the Bill's provisions. If smaller businesses take advantage of the primary authority provisions in the Bill, this increase could be multiplied several times. We estimate that up to twelve full time officers would be needed to service the increased needs of the thousands of businesses based in Hertfordshire under the requirements of the Bill.”

Three officers are currently required, but that figure could rise to 12. Even if only the largest of the businesses—say only six of them—currently working with the council  as a home authority continue to work with it when it is a primary authority, the latter’s resource commitment will double.

The Minister and most Committee members will be aware of the long-held understanding between the Local Government Association and Her Majesty’s Government that additional duties placed on local authorities, in legislation, will be reflected in formula funding. Will that understanding be honoured? Will any duties placed on local authorities under this Bill be directly reflected in their formula funding?

Photo of Pat McFadden Pat McFadden Minister of State (Department for Business, Enterprise and Regulatory Reform) (Employment Relations and Postal Affairs), Member, Labour Party National Executive Committee

I am grateful to the hon. Gentleman for raising the submission given to the Committee by Hertfordshire county council. I read it with interest last night, and discussed it with Bill officials. Some were surprised by the submission, given how closely that council was involved in the Bill’s development over some months. I shall not take issue with its figures for the number of such staff currently employed, but it is very different from that understood by the Bill team.

The council’s note, however, fails to make reference to the provisions in clause 31, which allows primary authorities to recover costs incurred in the carrying out of its new tasks. The council’s central point is that there are resource implications for local authorities in exercising their functions as primary authorities, which is only right. Clause 31 takes account of that by allowing for cost recovery, the principle of which has resulted in small businesses giving a warmer welcome to the Bill than might have been the case. Without that provision, they might have been concerned that the resource implications would result in too much attention being given to the national chains and not enough to their own. I believe, therefore, that Hertfordshire council’s concerns are met by clause 31. As I said, we were quite surprised to receive such a note from a local authority that has been so heavily involved in the consultation and discussions on the development of this policy.

Question put and agreed to.

Clause 25 ordered to stand part of the Bill.