On a point of order, Mr Speaker. Members of the House are aware of their responsibilities in relation to the rules about not abusing their position in the House and about their personal and financial business interests. Therefore is it appropriate—

Order. The hon. Gentleman should resume his seat. I am grateful to him for what he has said so far, but an allegation of improper use of House resources, which I understand to be the kernel of his point, is not a matter for the Chair. I thank him for giving me notice of his proposed point of order, but I should tell him that any complaint about alleged misuse of such resources should be made to the Parliamentary Commissioner for Standards. Very simply, it is not a matter that should be raised on the Floor of the House. I hope that is helpful to the hon. Gentleman and to other right hon. and hon. Members.

If there are no more points of order, we come now to the ten-minute rule Bill. I call Mike Freer. May I appeal to right hon. and hon. Members who are leaving the Chamber to do so quickly and courteously, affording to the hon. Gentleman the same courtesy as they would wish to be extended to themselves in such circumstances?

I beg to move,

That leave be given to bring in a Bill to require the Chancellor of the Exchequer to commission a review of the timelines with which tax refunds owed to taxpayers by Her Majesty’s Revenue and Customs are made; as part of that review to consider the merits of making such refunds payable on the day they are calculated and applying interest and penalties to such refunds 30 days after they are payable; and for connected purposes.

I realise that I may be tempting fate, as I will be submitting my own tax return to HMRC within the next few weeks.

HMRC does pay interest, but the late payment rate is six times the unpaid refunds rate. Currently, with record lows in interest rates, the late payment rate is 3%, but the unpaid refunds rate is just 0.5%. When we look at penalties, the inequality is starker. Yes, there are a wide range of penalties applying to virtually every tax. For instance, if a taxpayer has not received a self-assessment notification, has not realised that they may need one and so does not ask for one, they may have to pay a penalty of up to 30% of additional tax due, even if they did not know the process they had to follow. A taxpayer, whether personal or business, who makes an inaccurate return through carelessness, not deliberate error, may also have to pay a penalty of up to 30% of the extra tax due. I am not aware of HMRC being penalised if it makes a mistake or its systems and processes contribute to late or unpaid refunds, yet that happens for the taxpayer.

The system is designed to push unpaid refunds into a suspense account. Errors can easily be made. For example, section 4 of the online form asks who will receive some or all of the overpayment. If a taxpayer does not provide bank details, rather than the Revenue simply issuing a cheque, the moneys are not issued and are held in a suspense account. The Revenue states that no repayment will be made automatically until the taxpayer contacts it. It could be argued that the taxpayer could and should provide accurate details and that the Revenue is right to withhold payment, but that would not prevent the Revenue from issuing a cheque. It simply chooses to withhold the money.

The key issue before us is the discrepancy between the penalties and interest rates levied by HMRC and the interest rates and lack of penalties levied on it. This is particularly relevant when the taxpayer has followed the rules but it has taken months for refunds to be paid. The Chartered Institute of Taxation has advised me that the catch-all reason for late payments is the security checks used to validate the identity of taxpayers, which appear to cause delays of up to several months. HMRC is right to combat fraud by undertaking such checks, but they are left to the very end of the refund process and are deliberately designed to delay the refund. Taxpayers and tax advisers often think that that is more to do with cash management by the Treasury than combating fraud.

Organisations assisting low-income groups have told me that delays in receiving expected refunds can cause disproportionate financial hardship for low-income taxpayers. Having coped with the delays in the onset of the process, when routine correspondence can take up to 12 weeks, the problem is then compounded in some cases by further delays of up to eight weeks for security checks to be made. For example, a pensioner I know of waited four months for a refund of just £70. That might not sound like a lot of money, but it is for a pensioner living on the basic state pension. The pensioner said, “We have always been prompt in settling our dues and expect the same in return.” The pensioner was living in the west midlands. The tax that was erroneously collected was paid to the Cardiff office, an apology for the mistake was received from the Portsmouth office and the cheque eventually arrived from the Glasgow office. No doubt the Revenue has reasons for handling different parts of the process in different parts of the UK, but a multi-part process handled in multiple offices cannot be conducive to efficiency.

How can we focus the Revenue on improving its customer service? In my experience of dealing with the public sector, if we grab them by the budgets, minds will follow. If the Revenue had to pay real rates of interest and penalties, it might be motivated to streamline its processes and issue refunds promptly. It fulfils an important role. The taxes it collects fund our essential services, and I have no issue with that. Being rigorous in collecting overdue tax is fair, but it seems oblivious to the scale and impact of tardy refunds.

My hon. Friend the Exchequer Secretary to the Treasury confirmed in a written answer to my hon. Friend the Member for Sevenoaks (Michael Fallon) that the Revenue does not hold information on the average length of time taken to process a repayment. It is simply not important enough to it. In my business experience, what gets measured gets done.

The Treasury Committee agrees. In its report in July, it commented on HMRC service standards, and one of its recommendations was that the HMRC work closely with professional bodies, charities and businesses to develop a series of performance indicators that credibly reflect customers’ end-to-end experience of dealing with the Revenue. Those indicators should be regularly published. If the interest paid on late payments and the penalties on those were published, I suspect that we would see a shift in the relationship between the HMRC and the taxpayer.

The issue of fairness is paramount in this Bill. Taxpayers should be entitled to the same level of interest and penalties on late refunds as the Revenue expects to levy on late payments. In this place, we often say that we govern only with the consent of the people. We have allowed the relationship between the Revenue and the taxpayer to deteriorate to that of master and slave. It is time to rebalance that relationship.

Question put and agreed to.

Ordered,

That Mike Freer, Mr Matthew Offord, Andrew Percy, Justin Tomlinson, Priti Patel, Andrew Bingham, Jesse Norman, Jane Ellison and Simon Hart present the Bill.

Mike Freer accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 30 March 2012, and to be printed (Bill 259).

I beg to move,

That an humble Address be presented to Her Majesty, praying that Her Majesty will appoint Professor Sir Andrew Likierman to the Office of Chair of the National Audit Office.

This is the first time that a Prime Minister has moved a motion to appoint the chair of the National Audit Office, and it is a direct result of the legislation that we have brought forward to implement the Public Accounts Commission’s recommendations on strengthening the governance of the National Audit Office, including through new board arrangements and an independent chair.

At a time when we are getting to grips with a record budget deficit, and when families and businesses up and down the country are working hard to make ends meet, it is more important than ever that we get the best possible value for money in public service delivery. That is why, for example, this Government have delivered £3.7 billion of savings in just 10 months—enough to pay the salaries of 200,000 junior nurses or 150,000 secondary school teachers.

The National Audit Office has a vital role to play in holding the Government to account and in ensuring that we achieve the greatest possible value for money. The proposed chair is Professor Sir Andrew Likierman, currently the NAO’s acting chairman. He was appointed following an open competition by my predecessor the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) and the former Chair of the Committee of Public Accounts, my hon. Friend the Member for Gainsborough (Mr Leigh). The intention was that Professor Likierman should become the chair of the new NAO in due course, and he has indicated his willingness to continue in the role for a further three years.

Professor Likierman is a distinguished public servant with extensive knowledge and experience of business and public service. Since taking up the acting chair role, he has established the NAO’s board as an effective governance body, providing support and independent challenge to the NAO’s decision-making process. He has also provided counsel and advice to the Comptroller and Auditor General at a time of change for both the NAO and the central Government bodies that it audits.

I believe it is desirable for Professor Likierman to be appointed under the new legislation in order to provide continuity as the NAO formally adopts its new governance arrangements, and I have no hesitation in commending this motion to the House.

I am pleased briefly to take part in the debate and to confirm the appointment of Andrew Likierman as chair of the National Audit Office.

In my role as Chair of the Committee of Public Accounts, may I take this opportunity to endorse what the Prime Minister has said about the suitability of Sir Andrew? Although it was my predecessor, the hon. Member for Gainsborough (Mr Leigh), who was involved in the appointment of Sir Andrew as acting chairman of the NAO, it is clear that in any field of open competition Sir Andrew’s qualifications are outstanding. He brings with him a wide breadth and depth of experience in financial reporting, Government finance and issues of governance. His distinguished career has encompassed both the public and private sectors in an academic and a professional capacity. He is a past managing director of the Treasury and head of the Government Accountancy Service. He has advised the Treasury Committee and is currently dean of the London Business School. His suitability for this role is unquestionable.

As the Prime Minister said, Sir Andrew has already played an important role at the NAO. He has been instrumental in establishing the new governance arrangements and providing the leadership to form an effective board during a time of organisational change. He has already contributed to enhancing the credibility, reputation and influence of the National Audit Office in supporting both Government and Parliament to secure better value for money, particularly in the current fiscal environment. I have no doubt that Sir Andrew has had a great and positive impact since he was first appointed in 2009 and that he will continue to do so in future. I wish him well.

I support the motion moved by the Prime Minister. I remember that his predecessor was a bit cross about having to come to this rather quiet little affair, with all his other very heavy responsibilities, especially as he had already appointed the previous Comptroller and Auditor General as an acting Comptroller and Auditor General.

It is worth emphasising that the reason it is important that the Prime Minister is here is that this is the one job—in fact, there are two jobs, the Comptroller and Auditor General and the chair of the National Audit Office—that is not in the sole gift of the Prime Minister. At least there is one job he does not appoint; I am sure that he is prepared to concede this one. It is very important that he is not in sole control and that he appoints the heads of both these bodies—the chairman of the NAO and the CAG—with the Chairman of the Public Accounts Committee. By definition, my right hon. Friend is a member of the Government—that is obvious—and, by changing the rules of this House to create a unique rule, we have ensured that the Chairman of the Public Accounts Committee is always a member of the Opposition. The two people who run the National Audit Office are therefore appointed on a genuinely all-party basis. That is essential.

Of course, I welcome this sealing of the appointment of Sir Andrew. I could hardly say anything else, as I appointed him in the first place. He is a superbly well qualified person for this job. The reason we created the new role of chairman of the board—I worked with Alan Williams, the former Father of the House, to whom, once again, I pay tribute for his many long years of service to this House—was that previously the Comptroller and Auditor General was, in effect, a dictator. He had sole control of the organisation; there was no board, and none of his judgments should be questioned. It is quite right that when the CAG looks at the accounts of Government— when he is holding the Government to account—he should be completely independent and act on his own, and nobody must be able to gainsay him. He must be able to look into every filing cabinet, summon every civil servant, and expose every scandal. However, in terms of running a modern organisation like the National Audit Office, it was right that we should modernise, move with the times, and create a proper board that could oversee the organisation as opposed to the policy, and that is what we did with the appointment of Sir Andrew. He is a good candidate and I welcome his appointment.

I, too, rise to support the motion. Sir Andrew Likierman is a highly suitable candidate.

I must say that at first, I had doubts—not about Sir Andrew, but about the office of chairman of the National Audit Office and the suitability of having a board. I was concerned about maintaining the independence of the Comptroller and Auditor General and making sure that his independence was no way impinged on by any further statutory inhibitions of any kind. I am now satisfied, especially as Sir Andrew has served as the shadow chairman for the past 18 months to two years, that that will not happen and, moreover, that the arrangements between the National Audit Office and its chairman, and in relation to the statutory functions of the Comptroller and Auditor General, which must not be impeded, have been satisfactorily worked out.

Those functions include access, if required, to every filing cabinet. May I say to the Prime Minister that that includes, if required, access to Cabinet papers? That is not—because the Comptroller and Auditor General, as we all know, is statutorily prohibited from looking at policy questions—in order to question policy, but to see that the right judgments were arrived at in obtaining value for money. In the light of the recent discussions that have been held on this subject in relation to the Ministry of Defence, I am pleased that the system worked as it should and that, as in the past, the National Audit Office ultimately had access to Cabinet papers. This was not exceptional—the NAO has done it before—and the system worked as it should. That shows that the judgments that the National Audit Office reached, having had access to Cabinet papers, were the right ones. Because of that, and because of Andrew Likierman’s suitability, I am very happy to support the motion.

It is an honour to support the Prime Minister and the right hon. Member for Barking (Margaret Hodge) on the motion to appoint Professor Sir Andrew Likierman as chair of the new National Audit Office. I should like to echo the tributes of other Members, including my hon. Friends the Members for Gainsborough (Mr Leigh) and for South Norfolk (Mr Bacon), regarding the fine contribution that Professor Likierman has already made as shadow chairman of the National Audit Office and his qualifications for the role.

Since becoming shadow chairman, Sir Andrew has done tremendous work to establish the shadow board as an effective and authoritative governance body. This has set the basis for the future as the NAO takes on its full responsibilities. As the House is aware, the new governance arrangements for the NAO were enacted following a report by the Public Accounts Commission in the previous Parliament. That report recommended that the NAO, led by the Comptroller and Auditor General, should remain the Government’s auditor, independent of Government and answerable directly to Parliament through the commission. The commission also recommended that the NAO should be a corporate body, with existence separate from, but providing resources and support to, the Comptroller and Auditor General.

The new NAO will have a board with a majority of non-executives, including an independent non-executive chair, who will be a Crown appointment, appointed by the Crown in the same way as the Comptroller and Auditor General. The Comptroller and Auditor General will have a fixed 10-year term—previously it was unlimited—and remuneration of the CAG will be agreed by the Prime Minister and the Chair of the Committee of Public Accounts, rather than being linked to permanent secretaries’ remuneration. The report also recommended that the NAO’s audit reports continue to be laid in Parliament, and that the Committee of Public Accounts should continue to hold scrutiny hearings on some of them.

The report’s recommendations were accepted by the previous Government, and provision was included in the Constitutional Reform and Governance Bill, which received cross-party support in the Commons. As the House will be aware, those clauses were lost in the other place during the wash-up stage before the general election, but this year the Government included the provisions in the Budget Responsibility and National Audit Act 2011. The governance reforms envisaged in the provisions strengthen the independence and accountability of the Comptroller and Auditor General in holding the Government to account.

These reforms are entirely in line with the coalition Government’s commitment to transparency and accountability in the public finances, including by implementing whole of Government accounts. As the right hon. Member for Barking noted, effective independent oversight of the efficiency of Government spending is especially important when public resources are under pressure, and these reforms are intended to ensure that the Comptroller and Auditor General and the NAO can fulfil that role.

I support the motion and Sir Andrew Likierman’s appointment as the first independent chairman of the new National Audit Office.

Question put and agreed to.

I beg to move,

That Ms Angela Eagle be appointed to the Speaker’s Committee for the Independent Parliamentary Standards Authority in place of Hilary Benn, until the end of the present Parliament, in pursuance of Schedule 3 to the Parliamentary Standards Act 2009, as amended.

The Speaker’s Committee for IPSA is a statutory Committee set up under the Parliamentary Standards Act 2009, and its role and membership is determined by that statute. It has two key responsibilities: to consider the candidates proposed by the Speaker following fair and open competition for the posts of chair and members of IPSA, and to approve IPSA’s annual estimate of resources. The Speaker’s Committee’s current membership includes you, Mr Speaker, the Chair of the Standards and Privileges Committee, and me, by virtue of our offices. Its membership also includes five Members of Parliament appointed by the House and three lay members appointed by the House in January 2011.

The motion was tabled at the request of the Opposition. It will remove the right hon. Member for Leeds Central (Hilary Benn) from the Committee and add the shadow Leader of the House in his place. This is a matter for the Labour party and the Government are happy to facilitate it. As a member of SCIPSA, I would like to thank the right hon. Gentleman for his work on the Committee, including in some lively meetings under your chairmanship, Mr Speaker. I look forward to welcoming the hon. Member for Wallasey (Ms Eagle), should the House agree to the motion, to the Committee. I know that she will add great value to our proceedings.

I commend the motion to the House.

Question put and agreed to.

I beg to move,

That this House considers that the Draft Regulation of the European Parliament and of the Council to introduce a Common European Sales Law (European Union Document No. 15429/11 and Addenda 1 and 2) does not comply with the principle of subsidiarity, for the reasons set out in Chapter 5 of the Forty-Seventh Report of the European Scrutiny Committee (HC 428-xlii); and, in accordance with Article 6 of Protocol (No. 2) of the Treaty on the Functioning of the European Union on the application of principles of subsidiarity and proportionality, instructs the Clerk of the House to forward this reasoned opinion to the Presidents of the European Institutions.

I will start by making some general contextual comments. I am pleased that this debate has been called because the proposed common European sales law is important both politically and legally. I know that it is of interest to Parliament and the public.

This debate makes use of article 6 of protocol 2 to the Lisbon treaty, the subsidiarity protocol, which enables national Parliaments to put forward a reasoned opinion challenging a proposal by the European Commission on the grounds that they do not consider that it complies with the principle of subsidiarity. I believe that this is the fourth time that this House has considered such a motion. The first three related to financial services and this is the first in the area of justice. I note with interest that a debate on the same proposal was held in the German Bundestag last week, where it was accepted unanimously that the proposal for the common European sales law was contrary to the principle of subsidiarity. I am sure that fellow member states and their Parliaments will listen with interest to what is discussed and concluded here today.

I should make it clear at the outset that the drafting of a reasoned opinion is a matter for Parliament, not for the Government. The European Union treaties have given the role of the supervision of subsidiarity to national Parliaments. It is therefore Parliament’s task to decide whether to present such an opinion to the European Union institutions. I should also say that the Government are considering a report by the Procedure Committee relating to the handling of reasoned opinions such as this. I hope that the House will understand if I do not speculate on what the outcome of those considerations will be.

Subsidiarity is a word that we hear much about when dealing with European legislative proposals. It may assist the House if I say a few words about it. The concept is defined in article 5 of the treaty on European Union:

“in areas which do not fall within its exclusive competence, the Union shall act only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member States, either at central level or at regional and local level, but can rather, by reason of the scale or effects of the proposed action, be better achieved at Union level.”

It follows that subsidiarity is a specific legal and political concept. In simple terms, it means that decisions should be taken as closely as possible to the citizens whom they affect, and that the European Union should act only when outcomes can be better achieved at European Union level. Subsidiarity is different from the principle of proportionality, under which any action taken by the European Union should not exceed what is necessary to achieve the stated objectives.

Successive Governments have supported the principle of subsidiarity. I am told that the United Kingdom pushed for it to be strengthened in the Lisbon treaty. The treaty includes a requirement that all legislative proposals should include a statement making it possible to appraise their compliance with the principles of subsidiarity and proportionality. It also introduced the power for national Parliaments to transmit reasoned opinions relating to subsidiarity, such as that which we are debating today. The European institutions—the Commission, the Council and the European Parliament—are obliged to take account of all such opinions.

Moreover, if one third of the national parliamentary chambers throughout the European Union submit such opinions, the Commission must review its proposal. I do not think that any proposal has yet been objected to by a third of the national parliamentary chambers. If that did happen, it would represent a powerful political signal, which the Commission would do well to heed. It cannot be denied that one third is a high threshold. To achieve it will require a great deal of co-ordination between national Parliaments. As I have said, this is a matter for Parliament and not for the Government. I can only encourage the European Scrutiny Committee and other interested parties in Parliament, both in this House and the other place, to make the best use of their contacts with other national Parliaments in this regard.

Will the Minister give way?

I would like to give my hon. and learned Friend the chance to make his substantive comments in the course of the debate and I will then reply. However, if it is a question on the point that I was making, I will of course give way.

I am extremely grateful to the Minister for giving way. Will he indicate for the House how many Parliaments, apart from the Westminster Parliament, have asked for a reasoned opinion to date?

My hon. and learned Friend was unhappily absent at the beginning of my remarks, when I reported to the House that the Bundestag gave a unanimous opinion last week that this proposal was contrary to the principle of subsidiarity. I am not aware of any other parliamentary chambers that have undertaken to do so. To illustrate the difficulty of achieving the level of one third of chambers taking a view and reporting a reasoned opinion, the Bundesrat has not taken a view. Therefore, of the two German Chambers, only one, the Bundestag, has taken a view. Only half of the German Chambers have taken a view, whereas the hurdle that has to be achieved is a third of national parliamentary chambers. My hon. and learned Friend will understand that it is quite a hurdle in those circumstances. Of course, it is a matter for the other place whether it takes a view on this matter.

You will be aware, Mr Speaker, from reading the Government’s explanatory memorandum on this proposal that, provided that it is demonstrated that the difference in national contract laws is a genuine obstacle to cross-border trade, the Government’s view is that the subsidiarity test is likely to be met. The Government do, however, share the European Scrutiny Committee’s concerns about the necessity for this proposal in the first place. We question whether an optional common European sales law or one with such a wide scope is the right way to address this issue. These matters will form part of the consultation that the Government plan to hold. I shall therefore listen to Members’ views with great interest.

I will now turn to the substance of the proposed regulation. This proposal has a long history. The European Commission and the European Council have been engaged in the general issue of contract law for a decade or so. I believe that the European Parliament’s involvement stretches back even further. The European Union contract law project lay dormant for some time, but gained momentum again in July 2010 with the publication of a Commission green paper on options for progress towards an EU contract law for business and consumers.

The green paper set out various options for reform, including to continue with the development of a legislators’ toolbox. That would provide a common frame of reference, drawing together the most common concepts and terms used in contract law, which would be the commonly agreed basis to be used by the authors of future European Union laws relating to contract law. The aim of that would be to reduce or remove the current differences and the difficulties that they cause. The green paper invited views on seven options, from a specific directive or a regulation providing an optional European Union-level regime, right through to a mandatory black letter European code of contract law. The conclusion of the Commission green paper’s analysis, and of views received on a feasibility study published by the expert group in May, have culminated in the proposed regulation for a common European sales law.

More recently, the Commission’s proposal was published on 11 October. It contains a set of uniform contract law rules that parties to a contract could choose to govern their contract. The use of such rules would be optional, but that optional law would form part of the national law of each member state and could be used as an alternative to what is currently offered under national law. That alternative regime would be available for cross-border business-to-consumer and business-to-business contracts when at least one party was a small or medium-sized enterprise.

Although the Government intend to consult widely on the detailed policy implications of the proposed regulation, our initial assessment indicates that it would be neither simple nor easy to use. Although it is designed to be free-standing, it remains unclear what relationship it would have with other Union laws such as the Rome I regulation. It also seems that a range of matters that could affect the legal relationship between the parties have not been addressed in the proposed regulation. That has the potential to undermine the aim of removing the need for businesses to incur transaction costs on legal advice on another country’s law.

The scope of the proposal could prove difficult, with its wide application to business-to-business and business-to-consumer contracts whether they are concluded at a distance, away from business premises or on the premises. The Government are not sure whether such an all- encompassing regulation is the correct way to address the different problems that traders and consumers may experience. In addition, current arrangements already provide that any state’s law can be chosen as the law of contract. In that sense, a trader could already choose which law to apply to his or her contract, and in most cases that is likely to be their own. The anticipated net value of the regulation remains to be tested and quantified against the costs of introducing a new law.

The Government are also concerned about the treaty base used in bringing the regulation forward. The proposed legal basis is article 114 of the treaty on the functioning of the European Union. That basis is normally used for harmonising laws in order to further the establishment of the internal market. The Government have doubts about the appropriateness of that, particularly as most other optional instruments that operate in parallel to domestic law are brought forward on other legal bases.

The Government have been working closely with interested parties through the process leading to the proposed regulation. Indications so far are that opinion is divided. Some interested parties see an optional contract law for cross-border sales as a potentially useful tool for aiding the internal market, but others see such a new law as risky, over-complex and unnecessary.

The Government intend shortly to consult United Kingdom interests on the proposed regulation. The views received will be used to develop and inform the Government’s position on the likely impacts of such a regulation, as well as on any benefits or disadvantages that are likely to occur for the various sectors that it could affect. We will not form a concluded view on our approach to the proposal until after the consultation has been concluded and there has been proper time to analyse the results. For today, I am of course grateful for the chance offered by the debate to hear the specific concerns that Members may have.

I am grateful to the Minister for his comments. As he knows, the European Scrutiny Committee’s conclusion is that the proposal does not respect the principle of subsidiarity. I heard what he said about the difference between the two chambers in Germany. We know that the Bundestag takes the same view as us, and the fact that the Bundesrat does not fails to alter the fact that there is a powerful reason for us to pursue the points that led to the reasoned opinion that we are submitting.

Many organisations have been consulted or have offered evidence on the matter, and their evidence is very powerful from a practical point of view. I have in mind the evidence of Which?, Consumer Focus, the Federation of Small Businesses and the Law Society. It would be invidious to go through each of the objections and arguments that they have made, but in general there are questions about whether there is clear evidence that the regulation is needed and about legal uncertainty, cost and potential confusion.

There is no doubt that throughout the whole business community, there is grave concern about the range and extent of such a provision. In a nutshell, the question whether there is compliance with the principle of subsidiarity is essentially one of practicality as much as of constitutional propriety. The whole object of subsidiarity is to determine whether a matter is better handled at national level than under the aegis of the European legal framework. It remains to be seen whether other national Parliaments enable us to reach the threshold necessary for the matter to be returned to the Commission, but all the evidence that we have received demonstrates that the UK should adopt the reasoned opinion and send it to the presidents of the Commission, the Council of the European Union and the European Parliament before 12 December.

All the arguments are set out in the papers that are in the Vote Office. As I said, I do not think it is necessary or desirable to take the House through every jot and tittle of them—they are so powerful that I really do not think there is any need for me to do so. I would, however, say that it is axiomatic that an optional sales law common to all member states is something that can be better achieved at EU level than at national level. However, that is to assume that the proposed common sales law is necessary and will produce clearer benefits by reason of its scale and effect than action by member states. Based on the evidence to which I have referred, the European Scrutiny Committee doubts whether either requirement has been met.

In addition, the Committee finds that the Commission has again failed to prepare a detailed assessment, in accordance with article 5 of protocol 2 to the Lisbon treaty. That is a very important point. It makes it exceedingly difficult for national Parliaments to determine whether there has been compliance with the principles of subsidiarity within the eight-week period. We were greatly assisted in this case by the submissions that we received from the organisations in the UK to which I have referred. Where their concerns overlapped, we found that there was a convergence of views. That was particularly instructive and helpful to the Committee, and we are grateful for that. In fact, I would go further and say that I wish more business organisations would make submissions more frequently on many such matters that come before my Committee. It is one thing for us to form a judgment, but it is also extremely important to know that it is based on firm practical considerations.

The Commission’s failure to provide a detailed statement amounts, in our view, to an infringement of the essential procedural requirements laid down in protocol 2. We therefore recommend that the House adopt a reasoned opinion to be sent to the Presidents of the Commission, the Council and the European Parliament before the deadline of 12 December. We retain the draft regulation under scrutiny pending a further update on the negotiations, and we are particularly interested to hear the outcome of the discussions on the appropriate legal base. As far as we are concerned, the communication itself can be cleared from scrutiny.

I therefore submit that the draft reasoned opinion of the House should be adhered to and submitted accordingly, and that we should do all in our power to get as much support as possible from other member states, because of the serious breaches of the procedural arrangements and because of the breach of the subsidiarity principle. I look to the Government to do that.

I rise briefly to highlight some concerns with the proposals. The perspective of Which? and Consumer Focus is that the different contract laws do not stop consumers or businesses from cross-border trading to any significant degree. It is not clear that the proposal would lead to an expansion of such trade, and it could lead to greater complexity and therefore increase business transaction costs.

There is no legal certainty that the measure would be applied uniformly across the EU. It therefore has the potential to create legal uncertainty and confusion for customers, and it would not provide them with choice, because they would continue to be limited to accepting the contract offered to them by the supplier.

There are grave reservations in relation to the potential for the measure to lead to back-door harmonisation of contract law. I am sure that if my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes) had been in a position to stay for the whole debate, he too would have made those points.

I understand the Government’s perspective of subsidiarity, but the measure is an optional change, not an imposed one. Can subsidiarity in all cases overrule something that is optional and not mandated? The Minister rightly said that the regulation would not be simple to use and that complexity is involved, but have the Government assessed whether the proposal is more complex than the current legislation? Do they recognise that the Federation of Small Businesses says that small businesses need to be able to afford to compete in different markets in the EU?

The proposal raises many more questions than it resolves, and therefore a detailed and extensive consultation is required.

I rise simply to say that the City of London corporation has also provided a method of objection and to add it to the other representative organisations I mentioned.

Order. There is some confusion here. I think the hon. Gentleman either thought or hoped he was intervening on the right hon. Member for Carshalton and Wallington (Tom Brake), but the latter is signalling that he has concluded his remarks. I am sure that that fact will be of close and abiding interest to the hon. Member for Stone (Mr Cash), knowing what a great interest he takes in the observations of other hon. Members.

I rise to make a short contribution to the debate, and to make some of the points that were made to my hon. Friend the Member for Stone (Mr Cash) and others on the European Scrutiny Committee by the City remembrancer of the City of London, who has provided us with a briefing that contains a number of salient observations on the measure, which are important for the House to consider in deciding whether the motion should carry.

The first and most worrying of those observations—I attribute these views not at all to the City of London or the City remembrancer; these are my words—is that there is considerable concern that the measure is the thin end of a uniform contract wedge that is being deployed by the Commission in an attempt to undermine the universality of English contract law, which is used in transactions not only between businesses within the EU but across the world, where, alongside New York law, it is the predominant way in which international trade is regulated. I should like to hear more from the Minister on that.

Were there any doubt that the Commission has in mind that the proposed regulation is the thin end of a uniform contractual wedge, it would be removed by article 15, which makes clear that the Commission would be obliged to review the measure after five years,

“taking account of…the need to extend the scope in relation to business-to-business contracts, market and technological developments in respect of digital content and future developments of the Union acquis.”

Given that the Justice Commissioner has already indicated that he plans to announce consideration of a European common insurance law next year, there ought to be grave concern on both sides of the House that the measure is the first step in an attempt to impose upon this country a uniform European contract law. I suspect that many hon. Members would be extremely concerned about that.

The second concern to which it is worth drawing the House’s attention is the speed with which the draft regulation was drawn up. It was drawn up in a very short period of some 11 months by a so-called expert group which, I must tell the House, consisted predominantly of academics. It consisted for the most part not of those who actually practise law or indeed of those who would have the option to use this contract law were it to be introduced. In those circumstances, if the proposals were to go ahead, there would, in my respectful view, need to be a much greater consideration of what practitioners have to say on the subject of contract law and the draft regulation, and a much greater consideration of what business wants.

Those are two initial concerns about the regulation, but there are others. Essentially, the regulation would establish an optional contract law that would lie alongside national contract law, but that could cause conflict between almost identical contractual situations as they apply between those who are negotiating within the EU, and possibly even between those within member states. The position would essentially be that someone who selects the option of the EU contract law might gain greater rights than someone who does not do so—the latter, through the application of conflict of laws rules, would have the contract containing his rights and obligations subjected to some wholly different system of law. That must be a grave concern, because it could result—naturally—in different decisions being taken by national courts in relation to precisely the same facts, depending on which law applies. That might be acceptable when the laws that apply are of different nations, which would be selected pursuant to established conflict of laws rules, but it cannot, in my judgment, be acceptable when the laws in question are on the one hand common law, as in this country, and on the other hand an optional community contract law, both of which none the less hold sway in the same jurisdiction. That is therefore a very great reason why the measure is not in the interests of the City of London, or of this or any other European country.

Establishing a new contract law—even one that has been written by a group of academics—is, moreover, destined to lead to much greater litigation, uncertainty, increased costs, and increased transactional costs, because there will be no established body of law and no binding juridical opinion by reference to which those who are obliged to be consulted on difficult legal problems arising out of contracts can form settled views as to the correct answer in respect of their clients’ rights, entitlements and obligations.

Growing that body of law—it could grow only in this country, where we have a system of precedents—could take several decades. If small and medium-sized enterprises, and perhaps even larger businesses, adopted the optional contract law, their rights and obligations would necessarily be unclear during that time. That is not only most unsatisfactory from the perspective of those who seek to do business in international markets, but wholly unsatisfactory from the perspective of the development of the law.

On the question of legal base, does my hon. and learned Friend recall that originally the Secretary of State for Justice took the view that he had doubts over whether article 114 was appropriate? There was then the question of whether article 352 might not be more appropriate. Unfortunately, because of the enactment of the European Union Act 2011, primary legislation had to be passed before the Government could give their consent to the adoption of the proposal on article 352. Therefore, there is a serious question over whether there has been complete compliance not only with the principle of subsidiarity but with the legal base.

The principle of subsidiarity is important, but there is also a very important principle of interventions, and that is brevity.

I am extremely grateful to my hon. Friend for his intervention, brief or not. I will not fall into his elephant trap of discussing what precisely is necessary under the European Union Act 2011, but I will say that I agree with him. It is right that there is no justifiable legal base under article 114, not least because the European Court of Justice has itself made it clear that that article cannot be used for the harmonisation of laws within the European Union.

I was on the point of saying that there is a real problem with running in parallel two systems of contract law, particularly where that might lead to different results and where one has not been the subject of extensive judicial consideration. In such a case, it is inevitable that there would be differences of opinion among those who are called on to provide advice on the rights, obligations and entitlements of parties to contracts, and they are the ones who are subject to this new system of optional contract law were it to be in place. For those reasons, it must be entirely right that we should not seek to accommodate the Commission’s proposals to have in place two parallel systems of contract law in this country. That would be detrimental to the interests of the United Kingdom and consumers and businesses all over the European Union. For those reasons, I urge the Minister to make those points as strongly as he can to his colleagues in Europe, and I make those points, albeit through you, Mr Deputy Speaker, to the other national Parliaments who really need to require the Commission to justify its proposals.

This is not a new matter. In European Committee B, which met on 24 May, the Under-Secretary of State for Justice, the hon. Member for Huntingdon (Mr Djanogly) noted that European contract law had been more than 10 years in its formation. Indeed the Minister has referred to that again today. Despite the length of that period, the actual draft law has been put together in some haste.

In the Committee, I raised a number of concerns and expressed the view that the Commission had not come up with any reliable evidence for its proposals; that many other barriers to trade need to be addressed as more of a priority than this issue; and that adopting another set of contract rules was unnecessary and possibly harmful.

The Committee was supportive of the toolbox approach, but not more. According to the Hansard report of that Committee, I said that I was concerned that the exercise on the Commission’s part, namely the green paper and the whole thrust of things, seemed to be a way of trying to push through option 4 instead of doing what it should be doing, which was putting together the toolbox. I therefore urged the Under-Secretary of State to go back to the Commission and make representations in the strongest terms to get things back on track and promote the toolbox and not the draft contract law. What has changed since May? Sadly, I think nothing positive has changed and so the Opposition agree that a reasoned opinion should be sent to the presidents of the European institutions, in effect, to reject the draft regulation.

The draft European sales law has caused a great deal of concern for many individuals and organisations and little support appears forthcoming from any quarter. Let me be gently mischievous here and suggest that other than the Lord Chancellor—whose generally Europhile stance accords with that of his party—I am not aware of any quarter where this particular proposal has received any positive comments at all.

The aim of the proposed regulation seems laudable enough. It is to reduce what the EU perceives as barriers to cross-border trade and thereby improve the ability of traders to exploit the common market and help consumers gain access to products across member states. That is all very laudable in theory, but let me explore that aim.

The evidence base from the European Union seems flimsy to say the least. Evidence from UK representative organisations shows just how weak the EU research appears to be. The survey of the Federation of Small Businesses demonstrated that just 18% of its members thought that a European Union sales law would make their life easier, but that seems to me to be a very low figure given the aims of the regulation.

The consumer organisation Which? opposes the regulation, saying that the proposed law would not contain a satisfactory level of consumer protection, that there would be a risk to consumer protection both cross-border and domestically, and that there would not be a resultant increase in cross-border trade to benefit consumers.

That view is supported by various Eurobarometer and Flash Eurobarometer surveys that show fairly comprehensively that the problem is not the absence of a common EU sales contract. Consumer Focus does not support the Commission’s proposals because of insufficient evidence of need, legal uncertainty and cost. We know, therefore, that there is no proven case for bringing in this regulation.

Let me now turn to the issue that has vexed many commentators and is the basis of the reasoned opinion—subsidiarity. Subsidiarity is crucial, and I will not repeat the Minister’s explanation of this term, which was very good. As I have said, the evidence from the Commission is poor, and that lack of evidence in itself breaches the requirements of article 5 of protocol 2 of the treaty on the functioning of the European Union. As well as breaching the procedural requirements, the proposed regulation breaches the principle of subsidiarity. We are clearly on unsound foundations when looking at this proposed regulation and we all know what happens, especially in a European context, when things are built on insufficient foundations.

I hope that other Parliaments take a similar view and that they hear the views expressed today. Will the Minister assure the House that the Government will actively seek to persuade other European Union member Parliaments that they too should approach this matter in a similar way?

I could explore the issues around legal complexity and legal uncertainty. I could elaborate on the impact on domestic contract law where cross-border trading puts domestic traders at a competitive disadvantage. I could raise the damage that may arise to consumer rights from bringing in this proposed EU sales law, which would actually set back the improvements that we have seen. However, given that the House seems to be unanimous in wishing to see this draft regulation sent back to the European institutions with the reasoned opinion opposing it, I am content to draw my remarks to a conclusion.

In closing, may I commend those who have served on European Committee B and urge the Government to apply pressure at a European level—perhaps with the support of others in Europe—to ensure that we do not have to consider poorly evidenced proposals again? On that basis, let me say I do not wish to delay the House any further or object to this motion.

With the leave of the House, Mr Deputy Speaker, let me reply to the points raised in the course of this debate. I have taken careful note of all the points raised and they will of course further guide our work as we consult on this proposal in the next phase. As the House is aware we will have a proper public consultation on the proposed regulation in the new year. I know, however, that our general approach to this dossier has to date been supported by the scrutiny Committees in both Houses.

Let me pick up the particular points that have been made this afternoon. I commend my hon. Friend the Member for Stone (Mr Cash) and his Committee for the work that they have done on this instrument. I particularly welcome his contribution to the debate today. He drew attention to the contributions that have already been made by Consumer Focus, the Federation of Small Businesses and the Law Society. I want to answer the Opposition spokesman’s characterisation of the position—he said that absolutely no one out there thinks there is any merit in this measure apart from the Lord Chancellor—which is wrong on both counts. However, I will return to that and correct him.

My hon. Friend the Member for Stone made a substantive point in an intervention on my hon. and learned Friend the Member for Sleaford and North Hykeham (Stephen Phillips), who confirmed that he was entirely right to say that if article 352 were used, the European Union Act 2011 would require an Act of Parliament before a Minister could agree to it. The legal base is therefore important, and I have made clear the Government’s views, including our doubts about whether article 114 applies, which is an entirely open question.

My right hon. Friend the Member for Carshalton and Wallington (Tom Brake) asked whether the Government had assessed whether the new law would be more complex than that which currently exists, whether businesses could choose to opt into the process and whether that would leave them in a better position. There is a concern that having two alternative regimes could lead to confusion. It might also be too complex for many consumer transactions. The existing common law emphasises certainty—a point made by my hon. and learned Friend the Member for Sleaford and North Hykeham—but the law proposed in this case does not appear to have that emphasis. Again, this is an area where we need detailed legal analysis, which is ongoing. We will consider the views of interested parties, many of whom have significant expertise in this area.

That is an appropriate note on which to turn to my hon. and learned Friend. He drew on the remarks of the remembrancer of the City of London, who has suggested that the proposed measure might be the thin end of a wedge intended to introduce European contract law, thereby undermining the universality of English contract law. It is important to draw attention today—when Her Majesty is opening the Rolls building, a new and impressive commercial court—to the extremely extensive service that the legal profession in London provides to the entire world of commerce. That point ought to be given importance in our consideration of this matter.

As to whether this measure is the thin end of the contract wedge, I should point out that the scope of the draft regulation has been narrowed since the initial discussions began some years ago. The proposal that we are discussing covers the sale of goods and does not extend more widely into contract law. We would have to address any such proposals carefully, and will watch extremely closely if any proposals are made to widen the scope. Each will be considered on its merits. I can also reassure the hon. Member for Stoke-on-Trent South (Robert Flello), who spoke for the Opposition, that my right hon. and learned Friend the Lord Chancellor and I—and, indeed, the whole of Her Majesty’s Government—see no need for a general system of European contract law.

The tenor of the argument produced by my hon. and learned Friend the Member for Sleaford and North Hykeham was extremely clear, as was the expertise that he used to make it. He made a powerful point about the potential for increased transactional costs, not least because lawyers would face considerable difficulties in giving clear advice to small and medium-sized enterprises. He very properly pointed out to the House that if the measure were introduced, the cost of growing case law in this area to provide the necessary certainty would lead to a process that might take decades. The businesses using this form of law would bear the costs, as they would find out—either to their cost or otherwise—through the legal process of testing its bounds.

Finally, let me repeat, so as to make it perfectly clear, that the hon. Member for Stoke-on-Trent South wholly misrepresented the views of the Lord Chancellor. [Interruption.] I am grateful to hear the hon. Gentleman’s sedentary reassurances on that point, but it would be a service to the House if in future he did not seek to misrepresent positions that he plainly does not appreciate or understand. He then said that absolutely nobody was in any way positive about this measure. He was wrong about that as well.

I am sure that the Minister normally follows every word I say very closely, but sadly he must have been distracted when I said that there was very little support outside. I did not say that there was no support, because the Federation of Small Businesses has said that it supports the measure. However, I reiterate the point that only 18% of people think that it would make a difference.

I am grateful for that intervention, because I had misheard the hon. Gentleman and would not want to mischaracterise his arguments. He makes the point that I was coming to, which is that the Federation of Small Businesses says in its submission that it sees an argument in principle for the measure, a point that was reflected in what my hon. Friend the Member for Stone said. In a sense, it is axiomatic that, at the European level, there would be a case for such a measure. The FSB has made it clear that its support for a common European sales law is dependent on its being clear and simple for small and medium-sized enterprises to use, without placing unreasonable burdens on business. We will look closely at those details in the consultation.

I can assure right hon. and hon. Members that any development in the Government’s position on the dossier will be made on the basis of good evidence of need and a robust analysis of the impacts. The Government will pay particular consideration to whether the proposed regulation is a proportionate response to the problems envisaged by the Commission, whether that response complies with subsidiarity and whether the treaty base is appropriate for the measures proposed. We will work with all those most affected by the change, engaging with business and consumer groups in particular. I hope and expect that we will incorporate contributions from Governments in other member states and from the European Parliament.

Let me answer the point made by the hon. Member for Stoke-on-Trent South, who suggested that Her Majesty’s Government should go around trying to encourage Parliaments in other member states to take an interest. We do not think it proper for Her Majesty’s Government to do that. Indeed, he will have heard the suggestion in my opening remarks to the effect that parliamentary groups and authorities should take up the challenge that he has thrown down to them. Given the law of unintended consequences, I fear that if the Government tried to do that, it might be less convincing than fellow parliamentarians trying to act on other national Parliaments, which might be rather more effective.

It is indeed important that our Parliament should liaise with EU Parliaments on that point. Last week I had the pleasure of meeting some Danish parliamentarians—my counterparts on their equivalent to the European Scrutiny Committee—who are also opposed to this European measure. It is important that those representations are made through you, Mr Deputy Speaker, to other European Assemblies.

I think you have just had a request for action, Mr Deputy Speaker, from my hon. Friend the Member for Crawley (Henry Smith). I commend the work done by members of the European Scrutiny Committee, who have done a particularly good job here. We are going to work with Members here and in the other place and, of course, with the European Scrutiny Committee in taking forward work in this area.

Question put and agreed to.

Resolved,

That this House considers that the Draft Regulation of the European Parliament and of the Council to introduce a Common European Sales Law (European Union Document No. 15429/11 and Addenda 1 and 2) does not comply with the principle of subsidiarity, for the reasons set out in Chapter 5 of the Forty-Seventh Report of the European Scrutiny Committee (HC 428-xlii); and, in accordance with Article 6 of Protocol (No. 2) of the Treaty on the Functioning of the European Union on the application of principles of subsidiarity and proportionality, instructs the Clerk of the House to forward this reasoned opinion to the Presidents of the European Institutions.

I beg to move amendment 5.

With this it will be convenient to discuss amendments 6, 8, 7, 9 to 14, 21 and 35 to 39.

This Bill has been before the House for four years. Earlier this year, it went through an Opposed Bill Committee and as a result of the diligent work of its Chairman, my hon. Friend the Member for Great Yarmouth (Brandon Lewis), and its members, including my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) and the hon. Members for Scunthorpe (Nic Dakin) and for Gateshead (Ian Mearns), some of the clauses that were a cause of concern on Second Reading were removed. Many of those clauses were the subject of petitions.

Sadly, however—this is no criticism of the Opposed Bill Committee—sufficient consideration was not given to the clauses that were unopposed in the sense that they were not the subject of petitions. It is incumbent on us as legislators to assure ourselves that we are satisfied with the contents of these private Bills and that those contents are consistent with the principles that we apply to our law in general. What the Bill tries to do—this is why it is a private Bill—is to create a separate legal regime among the 33 London authorities or in certain circumstances just within the City of Westminster. As I say, it is incumbent on us to pay careful attention to the detail. That applies particularly to the powers relating to penalty charges, enforcement and recovery of costs—the powers that are dealt with in this group of amendments.

Amendment 5 to clause 3 would insert after “payable” in line 14 of page 3

“by the person being served”.

The fact that that phrase is omitted from the Bill exemplifies what I would describe as the sloppy, haphazard drafting, which often happens with private Bills. I think that when a private Bill has been before Parliament for four years, it should have been tidied up. Clause 3(1) reads at the moment:

“Where a designation order under section 38 of the Police Reform Act 2002 applies paragraph 1 of Schedule 4 to that Act…to any person, that person shall have the power of a borough council to serve a penalty charge notice…where he has reason to believe that a penalty charge is payable to the borough council”.

It does not say that he has to believe that the penalty charge notice is payable by the person on whom the notice is being served. It seems to me that that is pretty basic material, and that we should not have people going around serving penalty charge notices on people they do not believe to be the persons to whom the penalty charge applies.

Is it really the case that the Bill as drafted means that these officers could go around willy-nilly serving charges on people who had nothing to do with the penalty committed? Is my hon. Friend not absolutely right to say that this shows the shoddy drafting of the legislation?

My hon. Friend is absolutely right to say that that would be the consequence and that it indicates the shoddy drafting. One has to ask why the provision is so broad brush. That is why I tabled amendment 5. It is only a small amendment; it does not address all that I think is wrong with clause 3, but it would at least remove part of the wide ambit and prevent people who have not been the subject of penalty charges from being served with penalty charge notices. One might ask whether it really matters if penalty notices are served on people who should not be served with them. It does if we also look at clause 4. If the person being served with a penalty charge notice to which he should not be subject, as he has been wrongly accused of having liability for it, is asked to give his name and address and refuses to do so, he then becomes under clause 4 a criminal and is liable to a summary fine on strict liability of up to £1,000.

I hope my hon. Friend will forgive me for saying this, but could it not be argued that his amendment, too, is guilty of sloppy drafting? What would happen if his amendment were accepted and the responsibility belonged to a body corporate? Surely it would mean that the person serving the notice could not hand it to a director, but would have to post it or deliver it to the company’s registered office. That is what would happen if my hon. Friend’s amendment were accepted.

If a body corporate were liable for the penalty charge, it could be served on its director. My right hon. Friend, who will have looked assiduously at the Bill, will know that there are references in clause 20 to the liability of directors for offences committed by a body corporate. I am not sure, therefore, that my amendment would be out of order in that sense. I think it would improve the Bill, given that the issue of corporate liability is covered by clause 20. Although I say it myself, I believe that amendment 5 will bring about a modest improvement in the drafting.

Amendment 6 is the second in the group; it would leave out subsection (2) of clause 3. That subsection talks about giving these powers, to which I have already referred, not just to the police or police community support officers, but to an “accredited person”. It proposes to make these significant powers available to anybody who is an accredited person. My amendment would leave out the provision to enable those accredited people to have the powers given to PCSOs.

Amendment 7 would likewise leave out subsection (3), which is consequential, as it states:

“An accreditation may only specify that subsection (2) applies to an accredited person”

and so forth. That will be taken out, so that clause 3 would not apply to accredited persons.

Can my hon. Friend explain who accredits those persons? How do they become accredited?

That is a very good question, but it is probable that only the promoters of the Bill can answer it definitively. It seems to be a rather murky area. I do not think that we should build up a bureaucracy in this country in which a lot of officials are going around with powers to ask people for their names and addresses and to ensure, if they refuse to give them, that they are subject to criminal penalties including fines of up to £1,000, when it is not known who those officials are. There will be plenty of opportunities for bluff and bluster. Who will do the accrediting, how will those who do the accrediting be made accountable, and who will know who they are? I trust that my hon. Friend the Member for Finchley and Golders Green (Mike Freer), will be able to respond to those and other questions, because I understand that there is a fair amount of support among the Bill’s supporters for an extension of the powers to accredited people.

I think that the answer to my hon. Friend’s specific question can be found in the schedule to the Police Reform Act 2002 that contains definitions relating to accredited persons. However, I must admit that the interaction between those definitions and what is in the Bill is not exactly as plain as a pikestaff to me.

I am grateful to my hon. Friend for giving way to me again. He is being very generous.

We all know that a police officer who is involved in the issuing of a fixed penalty ticket will have been trained in the rules of evidence, and will know that the starting point should be a presumption of innocence. What assurances does the Bill give us that an accredited person will have been given similar training in our law? Does it contain any provision to prevent a local authority from putting an accredited person on a pay scale enabling that person to receive a bonus based on the number of tickets that he or she issues? In other words, might the accredited person have a vested interest in giving out tickets willy-nilly, even when no offence has been committed?

My right hon. Friend has made a powerful point. There is evidence that local authorities have given just such financial incentives to their officials, based on the number of people to whom they can issue tickets for offences, or alleged offences. The Bill would give those same officials an additional power to issue penalty notices.

One of the weakest parts of the “accredited person” concept, which does not apply under the present law, is that someone who declined to give his name and address to an accredited person would be guilty prima facie of an offence, but the accredited person himself would have no power of arrest. What would he do then? Would he just wait there? If he were a police community support officer, he would be able to ask the person to wait for up to half an hour for a police officer to arrive, and the police officer could exercise his own power to arrest the person concerned for not having given his name and address. However, no such power extends to accredited persons. This provision would not work in practice, and I do not think that it has been thought through by the promoters.

I am grateful to my hon. Friend for giving way again. Perhaps he could answer two questions. First, will the accredited people have to wear a uniform of any kind? I wondered whether they might wear bowler hats, for instance, so that it would be clear that they were from the council—proper, thoroughgoing bureaucrats. Secondly, would an accredited person who used his bowler hat to detain someone whose name he wanted be potentially guilty of false arrest?

The answer to my hon. Friend’s second question is yes. As for what uniform would be appropriate, I think that there is much to be said for requiring the accredited people to wear bowler hats, because they could be easily identified. People would know when an accredited person was approaching, and would be able to scarper. There is a lot of common sense in that suggestion from my hon. Friend. A better solution, however, would be not allowing the Bill to extend the power to accredited persons in the first place.

Amendment 8 mirrors amendment 5, again proposing the insertion after the word “payable” the words

“by the person being served”.

I do not think that I need go into it further.

Why not?

I am grateful to my hon. Friend for his sedentary intervention, because it has given me an opportunity to welcome him to the Chamber. Unusually for him, he has been a bit late in arriving. I am afraid that he will have to look at the Official Report to find out what I said in support of amendment 5.

Amendment 9 proposes that clause 4 should be left out completely. Clause 4 relates to the power to require names and addresses. This goes to the heart of the whole issue of civil liberties. Increasingly in this country, we are seeing a departure from the principle that people cannot be required to give their details to anyone who comes up to them and says, “I require your name and address.”

In preparation for the debate, I looked at a website called freeBEAGLES, which provides “legal advice for activists” and includes some helpful advice on when people are and are not required to give their details. For instance, it states:

“Other than under road traffic and anti-social behaviour legislation, you do not commit an offence in English law by refusing to give your name and address to the police.”

The Bill refers not to the police but to accredited people and police civilians. The advice continues:

“However there are certain situations where the police may arrest you if they cannot establish your name and address”

—Members should note that it is the police who can do the arresting—

“and if you are arrested and charged with an offence you will be unlikely to be granted bail unless they can establish these details.”

It adds that the general principle

“is that you never have to give your name and address to the police prior to arrest”

unless

“the police reasonably suspect you of a non-arrestable offence, and require your name and address for the service of a summons …where you are the driver of a vehicle…where the police say they suspect you of ‘anti-social behaviour’”.

Will my hon. Friend explain how this will work in practice? If someone who is asked for his name and address by a representative from the council makes up a name and address, what mechanism will the council have to check the information and establish whether it was genuine?

At present, a council officer has no more power than any other individual. Let me cite a constituency case. Someone with a shopping trolley ran into and damaged a car belonging to one of my constituents in Christchurch. My constituent saw that the trolley had dented the car, but the person who had been pushing it then got into her own car and drove away. My constituent tried to identify the person by asking the Driver and Vehicle Licensing Agency for details of the registered keeper of the vehicle. The DVLA could not give her the details, however, because no criminal offence had been committed. It might have been accidental criminal damage, but it was a civil matter and therefore the DVLA could not release the details that would have enabled her to bring a civil action against the individual.

That is similar to the situation before us: if somebody commits a civil offence but their identity cannot be ascertained or they were not photographed, hard luck! Nothing can be done about it. Obviously if the person is driving a vehicle, specific laws apply requiring them to give their name and address to the police. [Interruption.] My hon. Friend the Member for Shipley (Philip Davies) looks a bit perplexed and disappointed, but if he analyses the matter, I am sure that he would agree that it would be wrong to allow people to make accusations and then immediately, on the back of those accusations, require people to give their names and addresses, and to back that up with criminal sanctions for failure to give either a name and address or an accurate name and address.

I absolutely agree with my hon. Friend—I take his point and I support his amendment—but there is one thing that I still do not understand. The clause that he wants to delete states that someone

“commits an offence if…he gives a false or inaccurate name or address”,

and would be liable to conviction and a fine. If his amendment is not accepted and someone gives a false name and address, how on earth would they be found out in order for a fine to be imposed?

My hon. Friend makes a good point that the sponsor of the Bill may wish to address later.

I am sorry to keep on interrupting my hon. Friend, but his speech is so compelling and raises so many fascinating aspects of each clause. If councils can find out people’s names and addresses, would they need a gigantic and expensive national database of names and addresses? If so, who would pay for it—Westminster city council or Her Majesty’s Government?

I hope neither, but my hon. Friend is right that as sure as night follows day, what follows from this sort of power is the establishment of databases. That is very sinister.

I sympathise extensively with what my hon. Friend says about the civil liberties issues, but on this specific matter I suspect that the official concerned would have computer access to the electoral register and could therefore make at least a cursory check, although that might not necessarily resolve the matter. Is his concern—it is a relatively valid one, and I would be interested to hear what the promoters think—that were clause 4 to be deleted, law-abiding citizens would find themselves subject to the penalties under clause 3, while less law-abiding citizens would get away scot-free? In other words, there would be a strong disincentive for those willing to play by the rules, while others would find a way of avoiding the consequences. Although I accept his civil liberties argument, surely there is a concern that many pedlars of no fixed abode, or of an abode many miles away, could get away with such things more easily than others.

My hon. Friend almost answered his own point in his preamble, when he said that this was a civil liberties issue. I think that he and I agree. If there is a civil liberties issue, on the whole our instinct is to come down on the side of maintaining the civil liberty rather than giving an arbitrary power to an official to intervene—a power that might be subject to abuse or result in oppression, and which would certainly undermine the long-standing principle in this country that people are not required to give their name and address to any Tom, Dick and Harry whom they happen to meet in the street.

Following on from the point made by my hon. Friend the Member for Cities of London and Westminster (Mark Field), will my hon. Friend explain how somebody of no fixed abode could give a false address? If someone does not have an address, they cannot give either a right one or a wrong one. Would they be penalised simply for being of no fixed abode?