Clause 52

Regulatory Enforcement and Sanctions Bill [Lords] – in a Public Bill Committee at 9:30 am on 19 June 2008.

Alert me about debates like this

Monetary penalties

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

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.

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

I do not have a huge objection to the idea of early payment discounts, but the discount should not be so deep that it skews the system, such that many small businesses feel they should just pay up and move on. The danger is that the system would start to become imbalanced. The Minister has indicated previously, however, that businesses would not be at any disadvantage financially should they seek to challenge or make objections. My principal concern is to ensure that if someone wishes to challenge and question what has happened, they are able to do so and are not at any financial disadvantage.

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 absolutely understand the point that the hon. Gentleman is making and I agree with him about not being at a disadvantage if one pursues the processes that are outlined in the Bill. We had an exchange on this subject a few moments ago. He was keen to say to me that I had clarified what had not been clear in the Lords. I should make it clear that this is not a new change in the Bill; it is how the tribunal system  will work under section 29 of the Tribunals, Courts and Enforcement Act 2007, which created first-tier tribunals. The tribunal has the power to award

“The costs of and incidental to” any proceedings before it. That covers the point that the hon. Gentleman is making but it is not an addition to the Bill; it is actually already in place in that Act, which created the tribunals to which the appeals will be made.

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

I shall conclude my remarks by saying that we have probably exercised this issue up and down and in and out. On that basis, I shall not delay the Committee any further.

Question put and agreed to.

Clause 52 ordered to stand part of the Bill.

Clause 53 ordered to stand part of the Bill.