These amendments are intended to probe, as is becoming customary this morning. Amendments 52 and 53 probe the penalties for those who fail to comply with a CAA request, by notice, to provide information or documentation. I hope that the Minister will take the opportunity to explain why the level for a fixed penalty is set at £2 million in subsection (4). We suggest, with no particular rationale, that that should change to £3 million. We also suggest that the daily penalty of £100,000 should be changed to £150,000. That gives the Minister the opportunity to explain— I am sure she is looking forward to it—why she set those levels, and the rationale behind them.
Amendment 54 also relates to penalties for those failing to comply with a CAA request to provide information or documentation. Subsection (9) gives the Secretary of State the ability, by regulations, to replace the amount at which a fixed penalty can be set, either for a daily penalty or a fixed penalty. The amendment would prevent the Secretary of State being able to undermine the CAA’s ability to penalise non-compliance with its notices, if the Secretary of State was minded to choose to reduce the level of the penalty.
If the regulating power could only increase a penalty, it would be used only if the CAA’s maximum penalty was deemed insufficient by the Secretary of State. Can the Minister envisage any situation in which she would seek to reduce the penalty? If not, why not simply accept our amendment?
The hon. Gentleman’s main question concerned the rationale for selecting the figures. One rationale is that the penalties set out in clause 51 are broadly in line with those of other regulators in other systems of economic regulation. For example, they are in line with the maximum penalty provided for Ofcom in section 139(5) of the Communications Act 2003. The Government and I consider the maximum fine proposed in the clause sufficient to dissuade and have a significant deterrent impact. Indeed, in May 2011, Ofcom increased its maximum penalty to that level. I do not believe that we have heard a cogent case for a higher level than the Bill currently provides for.
Clause 51(9) gives the Secretary of State the power to make regulations to vary the amount that we have discussed. In amendment 54, the Opposition seek to change the Secretary of State’s power to vary those amounts so that she would be able only to increase them. The power and the flexibility provided by subsection (9) are an important element of the regulatory framework that we are setting up, ensuring that the maximum amount set in the Bill can be adjusted over time to reflect changes in monetary value. It will also ensure that the amount of the penalty remains dissuasive and a proportionate means of enforcing compliance.
I agree that it is not very likely that the power will be used to decrease the maximum penalty; if a change is made, it is far more likely to be in an upward direction. It is conceivable that there might be circumstances in which a decision is made to decrease the penalty. I do not see that a case has been made to place a further restriction on this power. Inevitably, when one talks about fines and monetary values, there is merit in ensuring that we have flexibility to respond to changing circumstances in the future. Of course, any powers given to the Secretary of State in secondary legislation are subject to the appropriate scrutiny processes in Parliament.
Did the Minister look at any other industries in setting the figures, in terms of the particular offence that she discussed under the power to obtain information?
As I mentioned, there is a direct comparison with the regulatory regime applicable in the communications industry. I am not sure whether the same approach is taken in different sectors, but that is certainly an example of where a similar system already operates without causing problems.