Clause 46

Regulatory Enforcement and Sanctions Bill [Lords] – in a Public Bill Committee at 9:00 am on 19 June 2008.

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Stop notices

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

We have made fairly brisk progress so far. Let us see what today holds for us.

When we adjourned the other day, we were in the midst of discussing part 3 and had completed our debates on clause 45. Part 3 offers a new range of options to regulators as alternatives to criminal prosecution in order to ensure compliance. One important option, set out in clause 46, is the stop notice.

The stop notice would apply to situations in which there was an ongoing dangerous activity—for example, the leak of hazardous material on to land or water or in a factory. In such situations, the regulator would have to do exactly what it says on the tin and say stop. A stop notice would prohibit a business from carrying on the activity specified in the notice, and the notice would remain in place until the person had taken the steps specified in it.

Subsections (4) to (6) give the grounds for issuing a stop notice. They state that the notice may be issued only if the activity

“is causing, or presents a significant risk of causing, serious harm to...human health...the environment...including the health of animals”— or the “financial interests of consumers”. The regulator must also “reasonably” believe that the activity as carried on by the business

“involves or is likely to involve the commission of a relevant offence”.

The provisions are important because they also allow the regulator to impose a notice when an offence has already been committed and if an offence is likely to happen. The Government believe that in certain circumstances a regulator should be able to issue a stop notice to prevent an offence from occurring if there is a risk to the public or the environment. Indeed, it would seem odd to instruct regulators to sit back and wait if they believed that that could happen.

Subsection (7) ensures that the steps specified to be taken in the notice must be limited to compliance steps. Given the sometimes onerous nature of stop notices we feel that it would be inappropriate to allow regulators to include broader steps in the notice.

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

I do not profess to be an expert on non-criminal sanctions, but will the Minister clarify whether the cases identified in subsection (4) mirror those of the stop notices currently available in law? The subsection has three specific provisions, and I want to be sure that there is no significant variance from established cases.

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 happy to confirm that.

I was approaching the end of my remarks. I now conclude. Stop notices will be an important part of the regulator’s toolbox and will provide important protection for the public. Alongside the fixed and variable monetary penalties that we have already discussed, they have an important function.

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

I thought when the Minister began his speech that he was going to say it was a “Prisk” process, but it seems that we have made brisk progress. After that fourth-form attempt at humour, I shall move swiftly on.

Stop notices have considerable merit. The Minister rightly spoke of instances when immediate action is required and urgency is the essence. We have been assured that the cases are the same as under established stop notices. In principle, we have no problems with the use of the sanctions in those circumstances, although we will have questions about procedure when we discuss clause 47.

Photo of Lorely Burt Lorely Burt Shadow Minister (Business, Innovation and Skills), Chair of the Liberal Democrat Parliamentary Party

Welcome back to the Chair, Mr. Chope, to what may be the last day of our considerations.

On behalf of the National Consumer Council, I want the Minister to explore the nature of stop notices. The council is concerned that the test that the regulators must prove before issuing a stop notice is too high and that

“a significant risk of causing...serious harm” is perhaps too high a barrier. I understand the grave importance to any business of having a stop notice issued against it. However, if an activity could be described as having a harmful consequence but not necessarily falling into a serious category, I am worried about how much leeway an individual inspector might have before issuing the stop notice.

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

In some ways, the hon. Lady has answered her own question. As she rightly pointed out, subsection (4)(b) states that there is a case when

“the regulator reasonably believes that the activity as carried on by that person is causing, or presents a significant risk of causing, serious harm”.

The provision is onerous in some ways, but we are talking about serious and significant harm. The hon. Lady asked for an example. Hazardous material or toxic substances could be leaking on to land or into the environment, and of course that is serious. A stop  notice being issued in those circumstances could mean that the business closes down completely until the problem is sorted out. If someone is wielding a power that can cause a business to close down, it is right that the threshold at which that happens should be high. That is why, in some ways, the threshold is higher for stop notices than for some other penalties under the Bill.

Stop notices will not be an everyday occurrence when a breach might have happened. I use the word subjectively—the breach could be minor, or it could be fixed with restorative action by the person or business concerned. There could be breaches of regulations that are not in themselves a danger to human health or the environment, so there could be another sanction in such circumstances. However, given the seriousness—I intend no pun—of stop notices, the use of the words “significant” and “serious” probably set the bar at the right level.

Question put and agreed to.

Clause 46 ordered to stand part of the Bill.