New Clause 5

Regulatory Enforcement and Sanctions Bill [Lords] – in a Public Bill Committee at 2:15 pm on 19 June 2008.

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Compliance plan

‘(1) A primary authority may, after consultation with a regulated person, publish a compliance plan in respect of that person.

(2) A compliance plan under subsection (1) shall be a plan containing information regarding the regulated person.

(3) A compliance plan under subsection (1) may, in particular, set out information which may be of use to other local authorities, which may be enforcing authorities in respect of the regulated person, regarding that person’s operation including—

(a) processes and procedures employed by the regulated person to ensure compliance with legal requirements relating to relevant functions;

(b) planned improvements in that person’s premises or processes which affect compliance;

(c) planned employee training relating to compliance;

(d) external accreditation or audit relating to compliance;

(e) suggested priorities for inspections and other interventions; and

(f) other information of use to local authorities in carrying out their regulatory functions.

(4) LBRO may publish compliance plans and bring them to the notice of relevant local authorities.

(5) The primary authority may from time to time revise compliance plans following consultation with the regulated person.’.—[Lorely Burt.]

Brought up, and read the First time.

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

I beg to move, That the clause be read a Second time.

The new clause would broaden the scope of the suggested inspection plans to enable the primary authorities to publish a broad range of information about businesses that would be of benefit to other local authorities when exercising their functions. Furthermore, it would remove the bureaucracy associated with such plans by removing the requirements for written notifications and justifications if, for any reason, a local authority needs to carry out an inspection in response to local circumstances that fall outside the approach detailed in the published plan.

Clause 30 would have limited value in helping local authorities effectively co-ordinate and target their enforcement activities. It focuses only on planned inspections, which are only a small part of the regulatory work of regulators. The new clause allows for the publication of information that is far more useful to councils and enables regulated persons or entities to get information to all councils about safeguard systems and planned improvements. The clause would also fetter local authorities’ ability to respond at a local level to local issues, and it would add a level of bureaucracy that ultimately has no impact.

The new clause would still require a local authority to have regard to any published compliance plan, but it would remove the requirement for it to notify and justify to a primary authority why it acted in a way that did not fall within a published plan. It adds no value for a primary authority to stop another local authority acting outside the plan. A regulated person or entity has the right to complain via a local authority’s complaints procedure and, if necessary, via the independent local government ombudsman or judicial review if it considers that a local council has acted inappropriately.

If a primary authority can set out in the plan how often inspections should take place, I am concerned that the plan will lack the flexibility to deal with the very situation to which Lord Jones referred in another place. I cite the example of inspectors at the Tesco store at Olive avenue, Coventry, which is not a million miles away from my constituency. They undertook five inspections  of the store, four of which were in response to customer complaints, and alleged that food was on sale past its use-by date. In total, 142 items of food were found available for sale past their use-by date. Despite alerting both branch managers and Tesco head office on each and every occasion, the failings within the store were not rectified. By the fourth visit, the situation was getting worse and officers discovered 73 items on sale past their use-by date, including 11 that were 10 days past it.

The point of the story is that Tesco began its submissions by apologising to the court for its failings and attempting to argue that its due diligence system was good, even though it accepted that it had not been correctly implemented this time. It argued that the failings were due to human error and placed the blame on the store manager. Clearly, the court decided otherwise, and Tesco was eventually fined £133,400 with £8,976 in costs. The point is that the local store failed to act on what was an acceptable company policy. In such cases, the primary authority could not be expected to know as well as the local authority which local stores were failing to comply with company policy. It could therefore set an inspection regime based on the assumption that a nationally agreed process was being implemented everywhere. As a result, a local authority might be prevented from undertaking inspections at a store that was not living up to national standards, and nothing would be done until an outbreak of food poisoning or, in a different type of environment, an accident.

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

To some extent, my difficulty with this new clause is similar to my difficulty with the last one. The primary authority principle tries to give the regulator some sense of clarity and consistency about what to expect. The inspection plans set out in clause 30, which this new clause would replace, are part of doing that. Clause 30(3) gives examples of what could be in an inspection plan, mentioning

“the frequency at which, or circumstances in which, inspections should be carried out;” and

“what an inspection should consist of”.

The list is not exhaustive and the Government expect inspection plans to include other information such as recommendations, enforcement and information on a wide range of issues relating to a business with which a primary authority has a partnership. The guide to the Bill, which I have referred to several times, includes some of those issues, suggesting details of improvements that a business is undertaking to improve its health and safety procedures, or details of ongoing problems relating to compliance that other local authorities should pay particular regard to. The issues in the new clause can be addressed in the inspection plan in clause 30. LBRO will take the issues raised into account when giving guidance to local authorities on implementing the inspection plans.

I have another point about the hon. Lady’s new clause. I am not sure that what she said was correct. She said that the new clause still required the enforcing authority to have regard to the plan—I am not sure that it does. It removes the key requirement for local authorities to have regard to a registered inspection plan when undertaking inspections and to notify the primary authority before departing from it. This is not only a replacement  for the inspection plan; it puts a far lower level of onus on the enforcing authority to pay any heed to it. The Government expect that inspection plans will help to reduce unnecessary business inspections and facilitate knowledge sharing between primary and enforcing authorities. The compliance plan, as set out in the new clause, would not provide for that, because it would break the relationship whereby the enforcing authority has to have regard to the plan. Achieving those aims rests on ensuring that enforcing authorities have regard to an inspection plan and that they inform the primary authority of the reasons that they might depart from such a plan.

The hon. Lady talked about the need for flexibility, which is absolutely right. Of course we need flexibility in dealing with, for example, the problem of selling out-of-date food. That was a fair point. Inspection plans should always allow for the capacity to respond effectively to emergencies or, in particular, local circumstances, and plans will need LBRO sign-off to ensure that they are not unreasonable or totally inflexible. Through the primary authority principle, and the inspection plans in particular, we are trying to promote a relationship that offers consistency to those regulated, and a dialogue between local circumstances and the primary authority. I am afraid that, on those counts, her new clause would take us away from the aims of the Bill, so I hope that she will not press it to a vote.

Photo of Lorely Burt Lorely Burt Shadow Minister (Business, Innovation and Skills), Chair of the Liberal Democrat Parliamentary Party 2:30, 19 June 2008

I thank the Minister for his enlightening comments. I still feel that my proposal has many merits, particularly on information sharing and the spreading of best practice among local authorities. However, I take on board a number of his points, and I do not wish to press the new clause. I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.


That certain written evidence already reported to the House be appended to the proceedings of the Committee.—[Mr. McFadden.]

Question proposed, That the Chairman do report the Bill, as amended, to the House.

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 thank the Committee for the way in which our business has been conducted over the past couple of days. In particular, I thank my hon. Friend the Member for Stafford for the questions that he put to me on clause 65—it was a welcome and enlightening intervention. I also thank my hon. Friend the Member for Amber Valley, who serves on the Regulatory Reform Committee, for bringing her expertise to our deliberations. My hon. Friend the Member for Glasgow, North kept us in line in regard to Scottish law and gave us some legal advice, which I think in former life might have cost us a great deal more. Her help was extremely valuable. I resisted the attempts by my hon. Friend the Member for Stroud to divert us into a discussion on the merits or otherwise of two-tier and single-tier local government. I would like to thank all my other hon. Friends for their contributions.

I thank the hon. Member for Solihull, who has been labouring under extreme sickness—from the sound of her coughing—and I hope that she gets well soon. She  moved a number of amendments, and raised a number of issues, that were also raised in another place. They are important issues, and we take them very seriously. Of course, I also thank the hon. Member for Hertford and Stortford, who has probed and occasionally pressed with great skill and courtesy, for the way in which he has conducted the debate on the Bill and his amendments. I am conscious that there are a couple of points on which I have said that I will write to him, and I have not forgotten those.

Finally, of course, I wish to thank you, Mr. Chope, for your skilful, impartial and enlightening guidance in getting us through the Bill over the last couple of days. This is, as the hon. Member for Hertford and Stortford said, an important Bill, if a technical one. In all the discussion of the individual clauses and amendments, we should not lose sight of the aims, which, as I have said, are to tackle the two problems of inconsistency and inflexibility in the current regulatory regime. If we manage to do that, we have done a significant service to the general public, to those who are regulated, and we will also have saved business in the country a significant sum of money—an estimated sum of up to £200 million—in regulatory costs. That is important because we want business to concentrate on the business of doing business, rather than the kind of costs that can hopefully be reduced by legislation such as this.

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

At the beginning of our deliberations I said that I would try to be precise in scrutiny and concise in my remarks, and although I have not been entirely perfect in those terms, I hope that I have not detained the Committee longer than was necessary. We have had some useful debates. We have seen at least eight concessions, or clarifications, from the Minister on the way that the law will work; they are crucial to those whom it will affect. He has just alluded to the fact that there will be two or three occasions when he needs to write to us as a Committee to set out the Government’s position. We fully understand, and it is important that that is on public record. When those concessions or clarifications are viewed in combination with the dozen or more important concessions acceded to in the other place, it can be seen that Parliament has undertaken its duty of proper, effective and focused scrutiny.

It falls to me to extend a few thanks. I should like to thank the Minister for his considered approach to my probing and pressing on various matters in Committee. I know that very often people outside this place assume that Prime Minister’s questions is the sole way that we can do our business, and although that is important—indeed, very important, but occasionally some Members get a little carried away, although obviously not on my side—what is important, nevertheless, is deliberations of the type that we have had. They have been measured and considered, and I thank the Minister for that.

I also extend my thanks to my hon. Friends, particularly my hon. Friend the Member for Billericay, who has been a tremendous support, and other hon. Members who have made individual and particular contributions. Could I also, as the person who has been more than happy to table one or two amendments, thank the Clerks and Officers of the House, who are fantastic in the way in which they patiently take us through measures that are self-evidently nonsensical and turn them into something that has a semblance of order? I am very grateful to them for that.

Last but by no means least, indeed most importantly, I should like to thank you, Mr. Chope, for the light-touch and speedy way in which you have regulated our proceedings.

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

The Committee has been a shining example of how we can work together as a Committee, composed of Government and Opposition parties, in a concise and constructive way to examine clause by clause a Bill that had already greatly benefited from examination and amendment in another place. Our work was not unduly onerous, so I should like to convey my thanks, particularly to the Clerks, who have laboured with my strange and unusually phrased amendments, and have turned them into something acceptable. I thank the Minister for the helpful and constructive way in which he has dealt with the queries and amendments that I  have raised. Finally, I thank you, Mr. Chope, for your wise guidance during the proceedings.

Photo of Christopher Chope Christopher Chope Conservative, Christchurch

I have always been in favour of self-regulation, and what has happened during the proceedings of this Committee is an exemplary example of self-regulation. I am grateful to the Minister for his comments, and to the hon. Members for Hertford and Stortford and for Solihull for what they have had to say. I should like to echo their thanks to the Clerks of the House, to the police, to Hansard, the Badge Messengers and everybody who has enabled our proceedings to move so smoothly. The person who will probably be most thankful for all this is the hon. Member for Carlisle who will not be troubled as co-Chairman of the Committee.

Question put and agreed to.

Bill, as amended, to be reported.

Committee rose at twenty minutes to Three o’clock.