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Grand Committee

Volume 698: debated on Monday 21 January 2008

Grand Committee

Monday, 21 January 2008.

The Committee met at half-past three.

[The Deputy Chairman of Committees (BARONESS McINTOSH OF HUDNALL) in the Chair.]

Regulatory Enforcement and Sanctions Bill [HL]

(First Day)

I remind the Committee that, in the event of a Division in the Chamber, the Committee will adjourn immediately the Division Bell sounds and will resume after 10 minutes.

Title postponed.

Clause 1 [LBRO]:

A1: Clause 1, page 1, line 5, leave out “Better Regulation” and insert “De-regulation”

The noble Baroness said: This is a probing amendment to draw the attention of the Committee to the apparent disparity between the stated aims of the Bill in the Long Title and the clause that immediately succeeds it. Despite the Bill promising deregulation to make provision for,

“the reduction and removal of regulatory burdens”,

the office to facilitate that is named the “Local Better Regulation Office”. While Her Majesty’s Government may have pulled the wool over the eyes of the noble Lord, Lord Jones of Birmingham, they have not succeeded with us on these Benches. Better regulation is not deregulation. I also suggest through this amendment’s removal of the adjective “better” that, as the office stands in the Bill, “Local Better Regulation Office” is a misnomer for something that will produce more hideously complex and heavily bureaucratic regulation.

While the Bill promises a change from Her Majesty’s Government’s past record on regulation, I fear that no such promise will be fulfilled. This is the third piece of supposedly deregulatory legislation to pass through Parliament since 2000. In 2001, Her Majesty’s Government introduced an Act that produced only 27 deregulations in four years. In the same period, more than 600 new regulations were introduced. How can a Bill that creates a fantastically complicated primary authority partnership, which potentially allows one local authority to have jurisdiction over another, even pretend that it is deregulatory? I believe that the Bill will cause resentment between local authorities, resentment between big businesses competing to secure the best primary authority and resentment from small businesses in relation to their larger competitors, which will have an unfair chance to choose their primary authority. All that resentment will burden the Local Better Regulation Office with more complaints to field and more and more disputes to oversee.

I wonder whether I am being unreasonable to suggest that, cast in this problem-fixing role, the office will be inhibited from proaction in either properly implementing better regulation or seeing whether better regulation could be implemented. As I said at Second Reading—I shall reiterate it—all that the Bill does is to introduce more regulation in an optimistic bid to mend a broken system. I would be much reassured if the Minister could tell me where in the Bill is the impetus to deregulate. I do not find it anywhere. I beg to move.

I oppose the amendment. It may have been tabled—I apologise if I am incorrect—to have a bit of fun at the beginning of our debates. Almost the whole Bill, perhaps with the exception of Part 4, is concerned with better regulation. The Bill sets up the Local Better Regulation Office, which will try to achieve, by way of monitoring and review, the better co-ordination of regulation that otherwise might be inconsistent from one local authority to another, for example.

The Better Regulation Task Force, which has been in existence for some years, used to be called the Deregulation Task Force. However, it was realised that that was something of a misnomer, because sadly, if only the noble Baroness would recognise it, regulation is needed across a whole range of matters, whether health and safety, food standards or consumer protection, an issue that has, I know, always been close to her heart. If the amendment is not frivolous—in a way, I would prefer that it was—but is meant to be serious, much of Parts 1 to 3 of the Bill, which are concerned with making regulation better, would not have any sense. To call the LBRO the “Deregulation Office” would be to misname it, given its job according to the Bill.

I wonder whether the Minister agrees that, within the definition of “better regulation”, you could include less regulation than you might otherwise have.

That is exactly the point that I was going to make: better regulation must encompass deregulation. Rather than spending time on the road down which the noble Baroness tempts us, I should like to observe that it might have been desirable to call the new office the “Better Local Regulation Office”, rather than the Local Better Regulation Office, as that would have described what its job is to be.

I am grateful to the noble Baroness, regardless of whether she was trying to have some fun, for moving the amendment and allowing me the opportunity to attempt to explain why the Local Better Regulation Office has been established and, indeed, why the Government chose to name it as they did. As the Committee knows, in 2005 Philip Hampton, in his important report, reported to the Government on the enforcement of regulation in the UK. He noted that local authorities regulate an extremely diverse range of issues and he drew attention to the debt that we all owe local authorities for the protections that they provide—I pay tribute to them for that. I was sorry not to hear the noble Baroness make any reference to the necessity for regulation—and sometimes for new regulation—so that we can live in a more civilised country.

Local authority regulatory enforcers sit at the centre of this system, which has grown up over decades and has been shaped and reshaped by numerous Governments, including the noble Baroness’s, through initiatives and regulators. The system is inevitably complex, even very complex. Because of this complexity, local authority regulatory enforcement, as I think is generally accepted—

[The Sitting was suspended for a Division in the House from 3.37 to 3.47 pm.]

I was telling the Committee that the system that has been set up is complex and local authority regulatory enforcement has not always been as effective as it might have been. LBRO has been established to address that problem and to drive forward essential improvements in local authority regulation services. Its core aim is to support local authorities to regulate more effectively. It will be judged, of course, on its ability to reduce burdens on business and to build the capability of local authority regulatory services to deliver what has come to be known as the better regulation agenda. LBRO will work with local authorities to build on the many examples of good practice that are already emerging on the ground.

In addition, LBRO will use its statutory functions to ensure that local authorities comply with the principles of better regulation and to prepare and publish a concise list of national priorities for local authority regulatory services. While the organisation will have to work alongside national regulators and central government to achieve its objective, and may well advise the Government to implement deregulatory measures, its central concern—here, I am repeating myself—is to ensure the implementation of the better regulation agenda at the local authority level.

There are about 400 separate local authorities’ regulatory powers. Sometimes, hardly surprisingly, those powers are used in a conflicting or uncertain way. We argue—we very much hope that the Committee agrees with us—that it is better for those that are regulated and for the regulators that this organisation exists. I emphasise that regulations are vital for a civilised society generally, so just to look to deregulate and not to use deregulation as part of the better regulation process would be an error.

We are committed to regulatory reform. The noble Baroness’s Government were committed to regulatory reform. As the noble Lord, Lord Razzall, told us at Second Reading, this is not easy. These are not easy measures, but all Governments have to do what they can to make sure that regulations are better. We have listened to businesses, the public sector and voluntary organisations and we are currently undertaking one of the most radical reform agendas in the world to strip away unnecessary and burdensome regulations. Of course, regulatory reform is essential for economic growth, global competitiveness and the delivery of better public services, and the Government are taking genuine action to reduce excessive regulation. We recognise, as must all Members of the Committee, that regulation brings valuable benefits, such as fair competition, employee welfare and the protection of our environment. The benefits of regulation have to outweigh the costs and burdens that it imposes. Better regulation is a light touch while upholding the valuable protections that regulations provide. As my noble friend Lord Borrie told the Committee, LBRO’s work relates to better regulation, not deregulation. It is appropriate for the office to be named the Local Better Regulation Office.

In moving the amendment, the noble Baroness seemed to attack the idea of the primary authority. I would be disappointed if she and her party maintain that attitude because, as I understand it, the idea is very much supported by a number of those who have been in touch with her and with us. I did not detect from her Second Reading speech that she was unutterably opposed to the primary authority, but when we get to that stage in the Committee’s proceedings—who knows when that will be?—I look forward to hearing what she says about it.

I am in danger of making a Second Reading speech. I refer noble Lords to the speech made by my noble friend Lord Jones of Birmingham at Second Reading, who put much better than me—

I insist. He put much better than me the advantages of better regulation. I thank the noble Baroness for raising this issue and I ask her to withdraw her amendment.

I thank the Minister for his response. This is the beginning of a very long four days—minimum—and the amount of amendments that we have tabled shows that an awful lot of people have an awful lot of worries about what was to be an awful little Bill. It is a very little Bill; after all, it is the third shot at a regulatory Bill. Here we go again. We know how much regulation people are suffering from. We do not want to go back to Second Reading speeches, but we are saying that it is a worry that small businesses spend three days a month coping with bureaucracy when they could be out there running their businesses.

I am sorry that the noble Lord, Lord Borrie, thought that I was playing around. It has always been a great strength in this House that sometimes the most important things are said with a light touch. I felt particularly in this Room, where we are all rather cheek by jowl and where we will all be together for a few days, that what I was saying was so important that it could cope with the light touch of a girl who went to a girls’ boarding school where we all behaved like that all the time. It is amazing what we get done.

The noble Baroness, Lady Hamwee, offered a different way of putting this. All in all, what we are saying as we start is that we are worried that this will create more and more confusion and more and more levels. I should have said that I was president of the Institute of Trading Standards Administration; I am now a vice-president, as is the noble Lord, Lord Borrie. I was also chairman of the National Consumer Council and I am the president of the National Consumer Federation. Therefore, the noble Lord, Lord Borrie, and I know well how all these systems work.

I know that trading standards bodies are worried about some of the things that are happening and that LACORS is finding things difficult. When I asked LACORS and the Trading Standards Institute for an organisational chart in our joint meeting, they did not have one to give me, although they have since done their darnedest to produce one for me. I know, because I checked with the Clerk, that it is not appropriate for me to talk to a document that the other Members of the Grand Committee have not received, but I would be happy to show the Minister a tiny glimpse of the simplicity of what this will look like when it is done and to give him a copy of the document. This is what we are trying to work with and what everyone else will be trying to work with. Although I see that I am not going to get anywhere with my amendment, I hope that it has helped us to start airing our serious worries and concerns, albeit in a light-touch way. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 1 agreed to.

Schedule 1 [LBRO: supplementary]:

1: Schedule 1, page 34, line 16, at end insert—

“( ) At least 25% of the ordinary members shall have current or recent direct significant experience in local government.”

The noble Baroness said: The amendment takes us—a little oddly right at the start of our consideration of the Bill—to the first schedule, which provides the detail of what is much more easily expressed as LBRO than the Local Better Regulation Office—as I said when I spoke to the previous amendment, I find the order of the words quite curious. The amendment deals with the criteria for membership. Other amendments dealing with membership have also been tabled but have been degrouped from this one.

I am aware of the appointments that have been made to the company that already exists and from which the statutory organisation will take over. This is not, however, simply a matter of who is appointed at the very beginning; it is a question of who are the members throughout the life of the organisation, whatever that life may be. I hope that current members would not need this to be said, but I will say it anyway as a matter of courtesy; this is not an attack on any of them. The Liberal Democrats’ main concern about Parts 1 and 2 is that—the noble Baroness, Lady Wilcox, has already alluded to this—we may end up with a greater burden on local authorities rather than a reduction of the burden. I therefore felt it important to ensure that the board members of the LBRO were as well informed about the practice of local government as they were about the theory. Life in a local authority is not always quite as tidy as Whitehall and academia sometimes think that it is. The members of the LBRO need to understand in their gut as well as in their head the impact of what they are undertaking. My amendment therefore proposes,

“current or recent direct significant experience in local government”,

on the part of at least 25 per cent of the ordinary members. I beg to move.

First, I declare an interest as a director of various companies, both private and public, at least some of which are on the Stock Exchange list. They are all shown in the Register of Members’ Interests.

I have some sympathy with the noble Baroness’s point and the objectives of her amendment. The way in which the structure of the LBRO has been laid out in parts 2 and 3 of Schedule 1 is very loose and quite difficult, and may over time be open to some form of abuse and cosiness. However, I think that her amendment suffers in two ways. First, there is a technical problem, because using percentages on small boards produces some odd results. Let us say that the board is finally constituted of six members—it can have between five and 10 members. In that case, 25 per cent would mean two members from local government. Percentages are probably the wrong way to go about this. I would prefer to see it expressed as representation from the area that the noble Baroness is concerned about, which is local government.

My more fundamental point is that it is not just local government that is concerned with the impact of the Bill. A minute ago, the Minister, in his opening, quasi-Second Reading speech, reminded us that the intention of the Bill is to reduce the burdens on business, so it would be appropriate for there to be some representation for those who are going to be in the regulated community: commerce and industry in our cities, towns and villages across the country. They will have real-life, practical experience to offer about how LBRO is working, or not as the case may be.

Secondly, there are several clauses in the Bill concerned with links with Wales: Clause 10 is entitled “Advice to Welsh Ministers” and Clause 16 is entitled “Guidance or directions by Welsh Ministers”. In addition to having all that stuff, which is slightly ex post in the sense that it is the cart after the horse, it would be better to find a way to have some Welsh involvement in the LBRO.

While I am extremely sympathetic to what the noble Baroness is seeking to achieve and I agree that we need more precision about how the LBRO will be constituted, I would like the amendment to be less prescriptive about percentages and to include a chance to bring in some of the other people who will be affected, particularly those in Wales and in the business/commercial community.

I, too, am sympathetic to the noble Baroness, Lady Hamwee, who mentioned more than once the need for people with real experience of local government. She did not say it, but I think that she would agree with me that that experience should be of both officials and elected members—she is nodding her head to that. I know that she will have looked at the current list of members. It is of some significance that the chairman is a former chief executive of a local authority and the chief executive is a former trading standards chief from Staffordshire. They are very experienced in local government. There are other people, but I know only their names so I am not sure what their provenance is—perhaps the Minister will enlighten us.

Given the significance of this Act, as it will be, in relation to local government, I find it difficult to imagine that the Minister’s choice will not inevitably include people who have experience of local government. However, like the noble Lord, Lord Hodgson, I feel that other people who are regulated—businessmen, commercial people and people from businesses of all kinds—probably ought to be represented. In addition and—if I may be forgiven for saying so—perhaps even more important are people who can be said to represent the public, in whose interest the regulatory scheme is meant to be. Those who are being regulated may be represented, but it is important that people representing the public in general should also be on the LBRO.

The wording of the amendment is surely much too prescriptive and restrictive in its approach. It is perhaps difficult to follow the sense of “recent”, “direct” and “significant”; lawyers such as the noble Baroness and I could argue for a long time over whether anybody came within those interesting categories. That emphasises that the wording is too restrictive. There must be an element of trust in those who make the choices. It is inconceivable that local government, both elected and official members, would not be well represented not just now but into the indefinite future.

The amendment tabled by the noble Baroness, Lady Hamwee, gives us an opportunity to ask about the local aspect. I sympathise with her objectives. One of my worries about the Bill is that little discretion will be left to the elected members at the level of the locality.

I declare an interest as a small farmer. Farming is highly regulated, and necessarily so. But leaving that aside and looking at the wider environment, one often hears grumbles about a particular official overdoing things. In those cases, people can talk to their local councillor and the message feeds back. A lighter touch often, and sensibly, arises. I would be grateful to know, now that we have the Local Better Regulation Office—everybody recognises, although you have to read the Bill pretty carefully, that it is actually central and national—how these local concerns are to be fed into the system. I am afraid that diktats will come from on high; perhaps that is an unkind way of putting it for the LBRO. The Hampton principles will be asked for.

I notice that Professor Macrory says in a lot of his writing that penalties are not big enough and costs should be required. One can see Ministers under Treasury pressure being asked to ensure that more is recovered to pay for the cost of this and that. So there is a genuine worry that the Local Better Regulation Office and the system, which is no doubt being advanced in all good faith, will do almost the opposite. One can bleat to one’s member of the local authority, who will find that the officials are now judge and jury in their cause, and very powerful people, unless and until the subject of regulation appeals to a tribunal. Local authority members will have little influence. That is a worry, but perhaps the Minister can calm my fears.

We support the thoughts of the noble Baroness, Lady Hamwee. Having listened to the noble Lord, Lord Borrie, my noble friend Lord Hodgson and my noble and learned friend Lord Lyell, I can see that this is perhaps not exactly the right way to have done this. However, we are on to something. The amendment would ensure that at least some members of the new Local Better Regulation Office would have experience in dealing with the demands and rigours of local government.

I, too, am concerned about the public interest and the representation that we will receive in that regard. I have listened again to people saying that this sounds like a good idea but wondering how it is to work and how difficult it will be. I have yet another organisational chart here, this time from the LBRO; this one is so complicated that there is a dotted line on the bottom that says “Europe”. I am not sure whether that is where you go if all of this does not work very well. It is slightly less complicated than the other design but shows the same problems. I, too, would support the Government looking at this again and seeing whether it is possible to bring experience to bear.

I thank the noble Baroness, Lady Hamwee, for tabling this amendment, although she will not be surprised that the Government do not agree with her. Perhaps I may explain why. As she acknowledged, the directors who have been appointed so far bring strong local government experience to the table.

I was asked by my noble friend Lord Borrie to say a bit more about them. They cover—the noble Lord, Lord Hodgson, I think, will be particularly delighted about this—business representation and Welsh representation in the figure of one member; namely, the chairman of the board, who apparently meets those qualifications admirably. The other eight, plus a chief executive who is also a member of the board—I shall not go through this in detail—include a member of the Security Industry Authority; a senior partner at Global Consulting; someone with Scottish Executive health department experience; someone who was an important member of the Department for Transport; the chief executive of the London Borough of Enfield; a commissioner with the Independent Police Complaints Commission; and a justice of the peace, who was formerly head of legal services for Sainsbury’s. The chairman, to whom I have already referred, is a company director and was until three years ago director-general of the Audit Commission in Wales. Moreover, the chief executive was, as has been said, a distinguished head of trading standards and community safety at Staffordshire County Council. So the board has a broad scope at the moment. Of the nine directors, six have experience of local government, while two have recent or current experience of local government.

I remind the Committee that the directors were appointed in full compliance with the recommendation of the Office of the Commissioner for Public Appointments. In practice, that means that the current board has been appointed using a process with the agreed higher standards. It is our intention that this would allow the current directors to transfer to the new body, which the Bill will form, without a further appointment process. The Office of the Commissioner for Public Appointments has specifically confirmed that that is an appropriate step.

It is not the Government’s intention that the LBRO board be representative of all the groups with an interest in its work, nor do I believe that members of the board should represent particular interest groups. The board should be made up of those people most capable of ensuring that it achieves its objective while taking into account the opinions and expertise of all its key stakeholders. For those reasons, we disagree with the noble Baroness in suggesting that a specific percentage of the board should come from local government.

The noble and learned Lord, Lord Lyell, raises an important and interesting point, to which I think we will return in Committee. I shall try to start the ball rolling on this issue. We do not agree that the LBRO is a kind of centralising force. It is about consistency where appropriate. I emphasise to the Committee that it will remain for local authorities to decide whether and when they should take regulatory action, and what that action should be, subject to this sensible requirement for some consistency. Macrory was not really about bigger penalties; the report was about targeted, flexible and appropriate enforcement, with lighter enforcement and penalties where appropriate. It was not about having people convicted of offences where that was completely inappropriate. I know that we will have interesting debates around Part 3 and Macrory. I say that just as a starter in reply to the noble and learned Lord and I look forward to the continued debate on that point.

As far as reassurances going ahead are concerned—the noble Baroness was concerned about that—the problem of a representative board is that, frankly, the LBRO has too many stakeholder groups. They involve business, small business, consumers, professional organisations such as the Trading Standards Institute and devolved Administrations. There are other stakeholders, too, for want of a better word. Where do we stop with appointments to the board? We firmly believe that the LBRO cannot function without a lot of input from the sector. That will be as important with future appointments as with the current board. I invite the noble Baroness to withdraw the amendment.

Can the Minister confirm, therefore, that there is no one on the first board who has any direct experience of small business, and that there is no intention of that in the future either?

I pause because I am looking at the lengthy CVs of the various members of the board. I am delighted to say that the board member who is a commissioner with the Independent Police Complaints Commission has held a number of board and operational positions in small businesses during her career. She also has extensive experience of local government. That is—

As the noble Baroness says, that is a relief to me. I know that it will also be a relief to the noble Lord, Lord Cope.

I am grateful to everyone who has thrown their various concerns into this ring. I started by saying that I wanted to understand the criteria for appointments. Simply saying that something has gone through proper processes in the Office of the Commissioner for Public Appointments does not answer the question about criteria. I was not for a moment challenging propriety. Indeed, there are a lot of stakeholders—that is a terrible term. It is perhaps almost impossible to have every interest represented. There is certainly an argument to be made that one wants not necessarily representation but the ability to understand work of which one has no direct experience or general wisdom, and so on. The main point is about understanding how the Government or the chair, who will make future appointments, are going to approach the task.

To answer some of the points that have been made, I say to the noble Lord, Lord Hodgson, that I went for a percentage because there will be issues about the size of the board and we could have a variable number. I entirely take the point that there is no one right way of doing this. I did not table an amendment that included representation from the business world; I sometimes leap perhaps a little too fast to champion local authorities. I had assumed that the Conservative Front Bench would table amendments for the representation of business; perhaps that was wrong. I simply thought that business would have more champions.

There are distinct approaches from the local government world and the business world. Many noble Lords will be aware of London First, which is now a business organisation but which had, when it was originally formed, I think in the 1980s, a rather wider membership. It was a very different organisation. I was one of the local authority members. When someone made a proposition, there were two distinct reactions. From the business community, there was, “That’s a good idea; let’s do it”. From the local government world, there was, “That’s a good idea; let’s consult about it”. One needs to get the right mix of backgrounds in any organisation such as this one.

I was particularly taken by the point about local concerns, which the noble and learned Lord, Lord Lyell of Markyate, made. This is not about a particular locality but about an understanding of what it feels like to have very local interests and to see things at a micro, but very important, level. I do not know whether there is any way of reflecting that in legislation, but the point was extremely well made.

This is Grand Committee and, with thanks to everyone, I have no alternative but to withdraw my amendment. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

2: Schedule 1, page 34, line 32, at beginning insert “half”

The noble Lord said: We are in the same territory as the noble Baroness, but I shall explore a little further the structure of the board and the way in which it is proposed that it will be built up. I was delighted to hear the Minister’s assurance in response to the noble Baroness’s amendment that all the current appointments have been made with due process—not that I doubted that, but it is good to have it on the record.

I look forward to the future and to what might happen in other times and other circumstances. As I understand it, we have two classes of members. There are the ordinary members, who are appointed by the Secretary of State—although I note in paragraph 3(4) that the chairman must be consulted before those members, who include the chairman, are appointed—and the ex officio members, who include the chief executive and who are to be appointed by the chair after consulting the chief executive. I found the wording, particularly in line 27, quite strange. It certainly does not meet general corporate governance principles. When you serve on the board of a company, you have some say in who will join that board. The chairman does not appear one morning, saying, “Here is your new member”. He may lead the process, set the executive search people going and arrange the interviews. He may do all that—undoubtedly he and the chief executive will have considerable influence on how the shortlist is drawn up—but the members of the board will have some say.

What is set out in the paragraph is an unfortunate way to proceed, because it gives the chair huge power in the board. Although one cannot foresee what will happen, one is always concerned where there are no proper checks and balances. This is not just a theoretical question, because if the Bill is enforced in its current form and we have, say, four ordinary and four ex officio members—half and half, as laid down—on a board of eight, we would have three ordinary members and the chairman and three ex officio members and the chief executive. It is perfectly clear at that point that the chairman, the chief executive and the ex officio members will all be in the same loop. That is because the chief executive and chairman work closely together—if they do not, we are in some difficulty—and because the three ex officio members are appointed through the chairman’s say-so.

Either we should limit the number of ex officio members and so limit the chairman’s power, as my amendment would do by saying that their number should not exceed half the number of ordinary members—I accept that the noble Baroness, Lady Hamwee, will say that half is 50 per cent, so it is just the same as saying four out of the eight—or we should find some other way in which the number will not be equal, thereby reducing the chairman’s power. Alternatively, we need to find a way—this is not in my amendment—to improve the appointment process for ex officio members so that, beyond peradventure, how these people are to arrive on the board is written into the Bill. The paragraph is not up to modern corporate governance practice and the Local Better Regulation Office should adhere to the best practice around in British commerce, industry and public life. I beg to move.

The noble Lord is quite right to raise the issue of the number of employees on the board. I was not going to tease him about 50 per cent but, as he has raised the matter, it occurs to me that he could try 50 per cent minus one, which would always be fewer than the non-employees.

I support my noble friend. Like the noble Baroness, Lady Hamwee, and others, he has highlighted an important concern about the composition of the LBRO, which also relates to the powers of the chairman. It is clearly an important point. Will the Minister take this away and consider whether and how something can be done to improve matters?

Yes, I will take it away and consider it. This may be a surprise to the Committee, but we hope that the Bill that comes out of this process will be better than the one that went in. This is one of those points where we think that the noble Lord, Lord Hodgson, has a substantial argument in his amendment. We are persuaded that there is a need for a limitation of some sort on the number of ex officio members beyond what is currently in the Bill. There will be a need for some consideration of the precise formula, which I hope the noble Lord will understand. I invite him to withdraw his amendment so that we can return to this matter on Report.

The noble Lord, Lord Hodgson, was making a point about the method of appointment rather than just the numbers. He is worried about the power of the chair. There are two things to examine about that: first, who has the power to appoint ex officio members; and, secondly, whether there should be non-voting members. That would perhaps satisfy the numbers problem.

I am grateful to all noble Lords who have spoken in support of this amendment and to the Minister. I never suggested that this amendment was the bee’s knees; it was intended to get the point over, and I am grateful that the Minister has taken it up. I am delighted to beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

3: Schedule 1, page 35, line 6, leave out “five” and insert “three”

The noble Lord said: Encouraged by my previous amendment, I am going on for a major prize. In paragraph 6(2) of Schedule 1, a person is appointed as an ordinary member of the LBRO for a term of less than five years and paragraph 6(5) states that the total term may not exceed 10 years—that is, two terms of office. I do not want the Minister to feel persecuted by me, but this is another place where his department must look outside at what is going on in the wider world. Almost everywhere there is now a maximum of three three-year terms—nine years. The purpose of that is quite simple. You have a year or 18 months to learn about the business, get involved in it and understand it, and a basic three-year term. If it has been a failure and you have not contributed, it can be brought to an end at three years. You then have another three-year term when you are contributing majorly to the discussions; if you are really contributing, you can be given a third three-year term, after which you should retire because you have probably become part of the furniture rather than part of the critique. Those three three-year terms are now enshrined in British corporate life.

This point is not just about what is going on in the wider world. A bad chairman for five years can do an enormous amount of harm. I am not saying that we will have a bad chairman, but we could. He or she could make this organisation lose its reputation. Shorter periods of time are part of the modern practice, so people are being properly assessed on whether they are delivering on what is part of their basic role. We have been through this again and again. We went through it at some length in the Charities Bill. There we were getting two five-year terms, but the noble Lord, Lord Phillips of Sudbury—sadly, he has now taken leave of absence—persuaded the Government that three terms of three years was the right way to proceed.

This is an easy win for the Minister. There is no need to redraft; even the parliamentary draftsmen could not find a reason why this had to be taken away to be redrafted. All the Minister has to say is, “I understand that this is modern corporate governance practice and I am happy to accept it”. I encourage him so to do. It would set us off in the right form and with a spring in our step. I beg to move.

I am not at all sure of the rightness of the argument of the noble Lord, Lord Hodgson. I am not at all sure that the practice of corporate governance—meaning business—is necessarily the right one to be brought into the public sector, particularly when we are talking about posts that are part time.

I accept the technicality, but the body is working in the public area as distinct from the commercial or business area. My point is that it takes some time to get to know the ropes in an organisation that is full of people working part time. It is quite different if you turn up Monday to Friday every week, for weeks and months on end. This is a part-time post and it will take a considerable time to learn the ropes, whatever the person’s background and experience. Of course, the members have to get to know one another, their strengths and weaknesses, the staff and so on.

There is provision for reappointment, so three years does not seem to be too short a period in one sense. However, in another sense, you get into the swing of things and get to know what you are doing in the second year; in the third year, if you are interested in the job, you are concerned about whether you will be able to continue in it. You may give a lot of attention to whether you will be reappointed and whether you will upset the Secretary of State if you go in a certain direction. The Secretary of State, in consultation with the chairman, will determine reappointment. Of course, there is no magic, whether the period is three years, five years or six years. All sorts of organisations have had similar periods and have changed; there is no absolutely correct way. I suggest that three years seems a little short for a part-time position in a public body. You would soon get to the third year and be thinking of retirement or reappointment and attitudes may change because of that. I am not at all sure that the Government have got it wrong.

The noble Lord, Lord Borrie, attracted me to his view when he pointed out that, if the members served for five years, they would be more likely to stand up to the Secretary of State.

The noble Lord did not quite put it like that, but that was clearly what he intended. I admit that when I first saw Amendments Nos. 3 and 4—I think that they are a pair—it seemed to me that there would be greater flexibility to the Secretary of State and the chair of the new body if they were able to keep that balance, which is essential, between continuity and turnover of people. If you can serve three terms of three years, with a total of nine years, and everyone else has three terms of three years, I believe that statistically you can achieve a balance of continuity more easily than if people can do only two terms, with half leaving every time you get to the end of the five-year period. It seems to me from a management point of view that it might be easier to do this as my noble friend suggests rather than as the Bill states.

The intention of my noble friend in proposing a reduction in the length of tenure of the ordinary members is to ensure that the membership does not become entrenched and set in its ways and to ensure that there is potential for a more frequent turnover and a refreshment of ideas. The amendment would also bring the LBRO into line with other contemporary analogous bodies, such as the Charity Commission. I support my noble friend in believing that such an amendment would ensure that the office is and continues to be fresh and dynamic, equipped to deal with the ever evolving system of regulation.

This amendment and the next group are welcome in that they provide us with an opportunity to discuss the provision that we have made for the LBRO’s constitution and accountability. We do not believe that the amendment is necessary. I hope that I have not given false encouragement to the noble Lord by making a concession on the previous amendment. I know that he is too experienced to expect too many presents.

I understand very well the arguments made by the noble Lord in moving his amendment, but I can confirm that the provisions regarding the appointments to the board closely follow a recent precedent. The precedent on which I rely for five years being the maximum period—I emphasise “the maximum”—in the relevant paragraph of the schedule is the model set for the Serious and Organised Crime Agency. Although the three-year cycle argument is interesting, there are perhaps two points to make about it. Most of the public appointments here are on a three-year basis already, but I argue that that does not take away from the fact that there should be a five-year maximum. Of course, the noble Lord will know that appointments can be revoked because of paragraph 6(4) of Schedule 1, which states:

“The Secretary of State may remove a person as an ordinary member of LBRO at any time”.

I am sorry to interrupt the noble Lord again. There is a Division in the Chamber. We shall resume after 10 minutes.

[The Sitting was suspended for a Division in the House from 4.37 to 4.44 pm.]

I was just completing my reply to the amendment moved by the noble Lord, Lord Hodgson. I should point out—I am grateful to my noble friend Lord Desai for this—that paragraph 6(5) states:

“A person who has ceased to be an ordinary member is eligible for reappointment for a further term or terms”.

That makes the point that the five years is a maximum that may or may not be used. Our view is that that is a useful flexibility. For those reasons, we are tempted to stick by what is in the schedule.

I am grateful to all those who contributed to this debate, particularly to my noble friend Lord Cope for his support. I accept entirely the point made by the noble Lord, Lord Borrie, about the dangers of re-election, although we have reached a slightly sorry state of affairs if we think that we are appointing people who in the last year of their office will keep looking over their shoulder at the Secretary of State. I hope that we shall have rather more principled men and women than that. However, his other point about the “getting to know” time applies to any non-executive director on any board anywhere. Therefore, if you are appointed to, for example, GlaxoSmithKline, you will be on a three-year term. That is a big organisation to get to know and you will probably take the first year and a half to do so. Nevertheless, shorter terms of office are considered more appropriate than longer ones.

I say to the Minister that I accept the SOCA precedent, although I am not sure that that body is quite the same as the LBRO. However, he is slightly fooling himself—I use those words carefully—if he thinks that the Secretary of State will step in and use the powers given to him in paragraph 6(4). That would create a row and who wants a row? Let the guy or the girl serve out their time. People will not do this job under such conditions. If the maximum becomes the de facto minimum, of course the power will be there, but one should not say to somebody in the middle of their term of office, “We’re going to take you out of this. We don’t think you’re doing a good enough job”. That is why reviews are needed every three years. I have not convinced the Minister this afternoon, but I give him notice that I will probably come back and have another crack at persuading him—

Before the noble Lord withdraws the amendment, can the Minister answer a point with which we have all been grappling? The Secretary of State has the power to sack a board member if, among other things, he or she has,

“failed to comply with the terms of his or her appointment”.

That takes us back to what each board member is supposed to be doing. I do not think that it is just a case of turning up once every three months for two hours. I am sorry to have come in so late on that point, but what the noble Lord said provoked me to look at it.

I am extremely grateful to the noble Baroness for what is another valuable bit of artillery. I hope that the shrapnel will miss the Bill team but that the team understands the seriousness of what we are seeking to achieve. We may want to come back to it at a later stage, but in the mean time I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 4 not moved.]

5: Schedule 1, page 36, line 29, leave out paragraph 12 and insert—

“(1) As soon as practicable after the end of each financial year, LBRO shall publish a report on—

(a) the discharge of its functions,(b) the extent to which, in its opinion, its objectives (see section 5 of this Act) have been met,(c) the performance of its general duties, and(d) the management of its affairs, during that year. (2) LBRO shall lay a copy of each such report before Parliament.

(3) In sub-paragraph (1) above, “financial year” means—

(a) the period beginning with the date on which LBRO is established and ending with the next 31st March following that date, and(b) each successive period of 12 months ending with 31st March.”

The noble Lord said: We now move to the annual report, which is provided for in paragraph 12 of Schedule 1. I would like the Minister to accept that the way in which the annual report is to be drawn is too sketchy. It is too vague in its layout and it would benefit greatly from being made a bit more prescriptive so that the LBRO has to be judged against better criteria than the rather bland phrase, “discharge of its functions”, which comes in line 30 on page 36. If this is to work, it is important that we set the bar high so that the LBRO does well—we will discuss that when we debate Clause 5—and that it can be seen by those concerned with its operation that it is meeting those high standards. The “discharge of its functions” is perhaps a general, important statement that it should make, but it also ought to look at the way in which it has fulfilled its objectives as laid out in Clause 5. We will be debating those and perhaps amending them, but we really want to make sure that it has done what it has been asked to do in Clause 5.

The LBRO also needs to say something about general duties and something about its management of affairs, bearing in mind that under Clause 14 it can enter into agreements, borrow money and acquire property. There is a whole series of things that it ought specifically to be asked to report on each year. Yes, it should report on its functions, but it also ought to deal with objectives, its general duties—where it is giving advice about central or local government and where it is dealing with enforcement—and the management of its affairs. That would make a better, more cohesive annual report, which would enable everyone to see whether the LBRO was performing in accordance with what was originally planned for it. That is not covered by the present formulation of the schedule. I beg to move.

The formula that we have adopted in the Bill on the LBRO’s annual report closely follows the legislation setting up SOCA, as well as the legislation, with which I was involved, that established Natural England. Many of the requirements set out in the amendment—and I am grateful to the noble Lord for moving it—are already captured in the Government’s guidance on the accountability of public bodies. I assure the Committee that we have every intention of conforming to the highest standards for the LBRO. Treasury guidance on financial reporting, set out in the model statement for financial management of NDPBs—the LBRO will become an NDPB—makes it clear that annual reports should contain management information of the sort required in the noble Lord’s amendment. I can confirm that the LBRO will be consistent with these standards. On that basis, we do not feel it necessary to put the noble Lord’s carefully thought-out wording into the Bill.

I am disappointed by that. Of course I accept that the Minister has said that guidance will be followed; I am sure that he means it and that it will happen like that. But after three, four or five years, our great debates here will be lost. He cannot bind his successors in any way. The promise of guidance does not meet the central issue, which is that there are concerns on all sides of the Committee about how well this body can work. It must show that it is meeting its objectives, functions and management. I do not see how the operation of the LBRO would be hindered by the fact that its annual report had to meet standards set out in the Bill, as opposed to mere guidance that might or might not be given in years to come. The Minister is slightly undermining the credibility of this organisation if it is not to have the highest possible standards of reporting and accountability. I understand that we can go no further here today, but I hope that the Minister and the Bill team will think carefully about this and the thrust of what I am seeking to achieve before we reach the next stage of the Bill. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

6: Schedule 1, page 37, line 4, at end insert—

“Annual public meeting(1) LBRO shall hold a public meeting (“the annual meeting”) for the purpose of enabling a report under paragraph 11 above to be considered.

(2) The annual meeting shall be held within the period of three months beginning with the day on which the report is published.

(3) LBRO shall organise the annual meeting so as to allow—

(a) a general discussion of the contents of the report which is being considered, and(b) a reasonable opportunity for those attending the meeting to put questions to LBRO about matters to which the report relates.(4) But subject to sub-paragraph (3) above, the annual meeting is to be organised and conducted in such a way as LBRO considers appropriate.

(5) LBRO shall—

(a) take such steps as are reasonable in the circumstances to ensure that notice of the annual meeting is given, and(b) publish notice of the annual meeting in the way appearing to it to be best calculated to bring it to the attention of members of the public.(6) Each such notice shall—

(a) give details of the time and place at which the meeting is to be held,(b) set out the proposed agenda for the meeting,(c) set out the proposed duration of the meeting, and(d) give details of LBRO’s arrangements for enabling persons to attend.(7) If LBRO proposes to alter any of the arrangements which have been included in notices given or published under sub-paragraph (5) above it shall—

(a) give reasonable notice of the alteration, and(b) publish the notice in the way appearing to it to be best calculated to bring it to the attention of members of the public.”

The noble Lord said: The amendment would create a new paragraph requiring the LBRO to hold an annual public meeting. I partly employ the point made earlier by my noble and learned friend Lord Lyell. The LBRO is, in fact, an NBRO: I know that it will have plans to operate locally, but it is operating nationally. We therefore need a means for people at local level to make a fuss about a national body operating at too high a level, as opposed to at the specific level we need if it is to be effective.

My amendment would require an annual public meeting. That would give the LBRO a chance to show that it is working with the grain and gaining public support. However, it would also be a chance for those who are not convinced to make a fuss; that may be uncomfortable, but so be it. The amendment merely lays down a series of broad criteria to be met for the annual public meeting. The meeting must be held within three months of the publication of the annual report and time must be found to allow for discussion of the report and questions on it. The LBRO must also give proper notice of the meeting and publicise it reasonably widely. Subject to that, however, the LBRO can more or less organise it in any way that it wishes.

I cannot see the objection to the LBRO being required to hold one public meeting a year; indeed, there are arguments that there should be more than that. I would like written into the Bill the potential link between those at the grass roots who are being regulated and what is inevitably a national organisation with some pretty high-level people, judging by how the Minister described them, who may or may not always be in touch with what is happening at the lowest level where their activities are having the most effect. I beg to move.

Our Amendment No. 6, if I understand it, is an adaptation of paragraph 12 of Schedule 12 and the section on public meetings on page 87 of the Charities Act 2006. It suggests that a consultation be arranged annually to discuss the annual report once it has been published. Given my own history of consumer representation, I welcome the amendment because it would let the consumer public have some point of contact with the LBRO. Such an annual meeting could be a fortuitous forum for an exchange of questions and answers that will all, one hopes, contribute to the improvement of the LBRO’s performance in the year ahead. It is important that the Bill should create more opportunities for consultation, as the Minister said earlier, between regulators, consumers and all the stakeholders in this. In making the Bill, the Government seem to have forgotten that sometimes not only business but the consumer is affected by regulation; the consumers must either benefit or suffer its consequences. I am therefore hopeful that the Minister, given his earlier words, will look at the amendment sympathetically.

I do not have much experience of business meetings, but I know that many annual meetings are a great problem for people to attend. The principle behind the amendment is right: the LBRO should be open to public consultation and to public knowledge. I wish the noble Lord had proposed a website, a cyber meeting or a virtual annual meeting, which would be a much more efficient way of doing this. People running small businesses do not really have time to get down to London or Cardiff to listen to the LBRO. It is a good idea, but perhaps one should think more creatively about how we can have much more consultation between the public and the LBRO.

We agree that an annual general meeting is a good idea; the issue between us is whether it should be provided for in the Bill. The lack of an explicit requirement for such an annual open meeting—again, I am conscious that I am repeating what I said in the debate on the previous amendment—follows the SOCA legislation as well as the Natural England legislation. The noble Lord, Lord Hodgson, knows that the Cabinet Office guidance on NDPBs strongly recommends that an annual open meeting should be held for them where possible. I confirm again that the LBRO will be consistent with those standards. Whatever the statutory position, it will hold an annual public meeting, even in its current form, as a company wholly owned by guarantee. If the noble Lord is concerned that there will be no annual general meetings, his concern, if I may say so, is unwarranted. We do not feel that it is necessary for this to be in the Bill.

This is a question of trust. The Minister clearly has huge confidence in all those who will hold his office after he departs. I do not doubt that he will hold the LBRO’s feet to the fire on this. Perhaps the noble Lord, Lord Desai, and I can get together and add a cyber sub-paragraph, which would enable us to think creatively about how to do this. I accept his point that even when a meeting is held people cannot always afford to come because they run small businesses and have to travel a long way. I will reflect on what the Minister said. I am grateful to my noble friend Lady Wilcox for her support. We will think about this and may want to pick it up again at a later stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 1 agreed to.

Clause 2 agreed to.

Schedule 2 [Replacement of the LBRO company by LBRO]:

7: Schedule 2, page 40, line 4, after “necessary” insert “(whether to LBRO or any other party)”

The noble Baroness said: Schedule 2 is about replacing the company that already exists with the LBRO as trailed by the Bill. Paragraph 4 deals with continuity between the existing company and the future organisation and provides that anything done up to the point of handover is,

“so far as is necessary for continuing its effect”,

to be regarded as still effective. I am almost certainly going to be told that it is not necessary to qualify “necessary”, but I wonder why it is necessary to say this at all, or to put it in this way. Why not simply say that everything done before the handover continues to have effect? I am sorry to keep using the word, but why is it necessary to consider whether everything that has been done should be put into a category of necessary or not necessary? When I started to think about that, I thought that those who are considering this will probably see it from the LBRO’s point of view, whereas there are others who will have an interest. That was what led to my amendment. I beg to move.

The noble Baroness need not apologise for using the word “necessary” a number of times. The Committee will find itself discussing that word at some length during our proceedings. We understand the intention of the amendment, but the noble Baroness is quite right that we do not think it necessary. She pointed out that paragraph 4 of Schedule 2 provides:

“Anything done by or in relation to the LBRO company which has effect immediately before the day on which section 2 comes into force is, so far as is necessary for continuing its effect … to have effect as if done by or in relation to LBRO”,

which is the statutory corporation. We believe that the phrase,

“so far as is necessary”,

captures those matters that are necessary for the LBRO company and those that may be necessary for another party—I know that that is what is behind the noble Baroness’s amendment—that has carried out an action in relation to the LBRO company. That means that, were the LBRO company to establish a training programme, for example, or be subject to court action, those would continue after the company had been dissolved and the statutory LBRO established. I hope that that gives the noble Baroness some comfort in deciding what to do with her amendment.

I have no choice about what to do with my amendment today. I understand the point of the provision. Perhaps I should have thought of an amendment that more clearly expressed my concern about why it is necessary to assess whether something is necessary to continue. I may be regarded as dancing on the head of a pin over this, although I assure the Committee that I am no angel.

I do not know whether that comment comes from our long experience of sharing Bills but on different sides. One can see that it might be possible to argue that a particular provision should not continue or, indeed, that it should. It seems to me that this measure, as drafted, provides potential for complication where none need exist. However, I am angelic enough to beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 2 agreed to.

Clause 3 [“Local authority]:

8: Clause 3, page 2, line 5, after “county” insert “, unitary authority”

The noble Lord said: This small amendment is almost certainly not necessary. However, in my part of the country we are locally governed not by a county council or a district council but by a unitary authority. Unitary authorities are not listed in the Bill. They are not county councils or district councils. Presumably, all this apparatus is intended to apply to them. How does it apply? I beg to move.

I support my noble friend’s amendment. A few years ago I spent rather a long time wandering about the country as a member of the commission that set up these new authorities, so I know that they exist. I, too, shall be interested to hear what the Minister has to say in response to my noble friend’s question.

Clause 3 defines “local authority” for the purposes of Part 1. Although the term “unitary authority” is not explicitly included in the definition, I assure the Committee—this was as much of a surprise to me as it may have been to the noble Lord and the noble Baroness—that they are captured by Clause 3. While the term “unitary authority” is often used when discussing local government, such authorities do not actually exist as entities distinct from county or district councils and the term has no meaning in any legal sense. A county council can be a unitary authority if it includes some of the activities of a district council, and likewise a district council where it includes some of the activities of a county council. However, as I say, the term has no meaning in any legal sense. “Unitary authority” simply means a county, or more often a district council, that exercises the functions of both a county and a district. Therefore, through the inclusion of county and district councils in England and Wales in the definition of “local authority”, Clause 3 captures the notion of unitary authorities.

Like the noble Lord, Lord Cope, I am particularly interested in local government, and fought hard for a unitary authority for the city close to which I live—and one that I know is close to the noble Lord’s heart. He and I know what I am talking about, but the Committee should know that it is the city of Leicester. Bristol is in the same category. I hope that that is a sufficiently satisfactory explanation to allow him to withdraw the amendment.

I think that I had better accept it, but it seems to me a peculiar legal fiction to say that the authorities are one or the other, particularly as the noble Lord did not seem clear which they are. Nevertheless, as he says, Leicester—the city in which I was born—is an example of this, but there are also the examples of Bristol and of Bath and North East Somerset, where I now live. I shall withdraw the amendment, but I point out that “local authority” is defined for the purposes not only of Part 1 but also of Part 2. With that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 3 agreed to.

Clause 4 [Relevant function]:

9: Clause 4, page 3, line 3, at end insert “and specifically referred to in an order made by the Secretary of State subject to annulment in pursuance of a resolution of either House of Parliament”

The noble Baroness said: Amendment No. 9 is grouped with my Amendment No. 62, which is consequential, and with government Amendment No. 16, which I was glad to see. Relevant functions relate to relevant enactments, which are those specified in the long schedule, Schedule 3, or enactments to which subsection (3) applies, which relates to Section 2(2) of the European Communities Act 1972 and eight topic areas. I hope that the Minister will not be shocked—I do not think that he is that shockable—if I say that I have not followed through every single reference in Schedule 3, but at least Schedule 3 has them so that I and others will know where to refer to. The enactments referred to in Clause 4(3) are not listed in detail. I said to one of the organisations that will be concerned with the implementation of the Bill that I was concerned about that. The response was, “Yes, we are concerned in case anything is left out”. I said that my concern was whether there was more in here than I really understood. That relates to the lack of an authoritative list of the regulatory powers at issue here.

The amendment dealing with Clause 4(3) is perhaps even more fundamental in that we are asked to agree that anything that falls into those topic areas falls within the Bill. I have had some exchange with the Bill team on this, for which I am grateful, but the team’s answer was that listing all the regulations would be impractical. I simply do not think that that is good enough. We are making law and, regardless of whether it is impractical, tough or difficult to do, to my mind it still has to be done. If it is impractical for those in the department, is it practical for those who are outside the department who will have to implement all this? Should they be required to make their own assessment on whether a particular regulation is covered?

My amendment has two objectives: one is about clarity and requiring enactments to be listed in an order from the Secretary of State; the second is to give Parliament an opportunity to say no. If I am told that there is nothing, for instance, about animal welfare under the European Communities Act 1972 that will be outside a local authority’s regulatory aegis, I have to accept it, but I am not comfortable with it.

Government Amendment No. 16 deals with both issues. I am glad that the point, to some extent, is dealt with. It says:

“The Secretary of State may by order determine whether … an enactment”,

is under the 1972 Act. In legislative speak, does that mean that the Secretary of State “shall” or, in common parlance, “may but equally may not”? I cannot claim that the Government have responded to my amendment; I am well aware that the Government have responded to the Delegated Powers and Regulatory Reform Committee. How life will be for those affected by this new raft of legislation needs to be dealt with carefully. I beg to move.

It might be appropriate for me to say at this stage that a government amendment tries to answer this point and the point made by both the noble Baroness and the Delegated Powers and Regulatory Reform Committee. I shall answer the noble Baroness’s amendment by speaking to my Amendment No. 16. Then, of course, other noble Lords will no doubt join in and, if necessary, I will come back, as we are in Committee. The amendment and its associated Amendment No. 62 would implement the recommendations of the Delegated Powers and Regulatory Reform Committee on Clause 4 directly. I hope that, in the light of the explanation that I am about to give on the approach taken in our Amendment No. 16, the noble Baroness will eventually feel able to withdraw her amendment.

The Bill does not list the many relevant regulations that have been made under the European Communities Act 1972 but instead, in Clause 4, gives a list of those categories of regulation that will be considered to be in scope. The committee questioned the treatment of these directions in the Bill and recommended that specific ECA regulations should be listed individually, either in the Bill or by secondary legislation. Listing all the regulations that exist, whether in the Bill or by statutory instrument, would frankly be impractical. Regulations under the ECA 1972 are made frequently and any list would quickly be out of date; we would have to lay an order practically every day. Regulations under the ECA—particularly on agriculture, food safety, consumer protection and environmental health—are made in large numbers: 3,000 statutory instruments between January and October 2007. They generally, but not always, list the subject in the heading.

Our approach in the Bill makes it clear which regulations are in scope. In the majority of cases, it will be clear whether particular ECA regulations fall within the category headings in Clause 4(3), as they generally include the relevant subject heading—animal health, consumer protection and so on—leaving no room for doubt. However, cases of doubt may arise and the committee questioned the appropriateness of the provision in Clause 4(7) that allows the Secretary of State to specify by direction whether specific regulations fall within one of these headings. It will be important to maintain the flexibility of the approach to listing the orders that we have taken in the Bill, but we accept that the process for clarifying the position regarding particular regulations should be subject to parliamentary oversight through the negative resolution procedure. That is what Amendment No. 16, which I will move in due course, seeks to do.

The Minister said that the negative resolution procedure will apply under Amendment No. 16. I was surprised by that. After all, Clause 18 says that any order under Part 1 shall be made by affirmative procedure. Unless there is to be a further amendment along the lines of Amendment No. 62, the procedure will be the affirmative one.

I must say, going slightly wider than that—I will be interested to hear the Minister’s reply to my noble friend—that the noble Baroness has an extremely strong point. I am not clear whether we are getting an authoritative list; I think that we will not because, as the noble Baroness said, it would be impractical to do so. Presumably, the LBRO will have to get a list, whether or not it is impractical, because that is what it will have to be concerned with. Someone somewhere will have to prepare some formulation, amended however frequently, because the Minister has made the case for better regulation. There have been 3,000 pieces of regulation in 10 months, which underlines the points that we have all been making.

I am not clear on this. I look forward to hearing whether the noble Baroness feels that what we have here goes close enough to making it possible for a reasonably well informed person to understand what it is that he or she has to comply with and whether that is done in a way that is clear and up to date. We want the LBRO and the people who are regulated to understand the duties that are being placed on them. I seek information, but the point made by the noble Baroness is important.

By chance, I am a member of both the Delegated Powers and Regulatory Reform Committee and the Merits of Statutory Instruments Committee. I will not comment on Amendment No. 16, except to give the personal view that it is always welcome when a direction is turned into an order. As I say, that is a personal view. The letter has been written to the chairman of the committee—the noble Lord, Lord Goodhart—and I think that the committee has not yet responded.

On the point made by the noble Baroness, Lady Hamwee, I thought that people in general had a right to understand the laws under which they have to live. Simply to say that it is very difficult to tell people—this is entirely the point made by the noble Baroness—and that it is a nuisance to make a list does not seem to be good enough. Apart from anything else, the bodies concerned will take legal advice and their legal advisers will have to create a database of the European regulations and the transposition of those regulations through the statutory instruments that follow a lot of them. Otherwise, they will not be in a position to give their clients the right advice. However the issue is tackled, it is not really good enough to say that it is impracticable.

Can the Minister tell the Committee what—forgive the pun—practical arrangements either the department or the LBRO have in mind as to how to publish the list of statutory instruments that are relevant?

I am not in a position to help the Committee very much on the practical way in which this will be dealt with. I will write to the noble Baroness after Committee stage about the way in which we intend to deal with this, and everyone else will receive the letter.

I congratulate the noble Lord, Lord Cope of Berkeley, on his close reading of the Bill; I would expect nothing less of a former Chief Whip. Apparently, the answer is to be found in government Amendments Nos. 59 to 61. So, with a sense of mystery and expectation, we will wait until we debate those amendments to see whether the noble Lord is satisfied. I have spoken to Amendment No. 16 already. I will write to answer the noble Baroness, Lady Hamwee, on how we will practically deal with this issue.

The Minister may be intending to ask the Committee to agree this amendment at this stage, but I would be unhappy if that were the case. On a previous Bill, I discovered the problems. If the Committee has already agreed a government amendment, it is not possible—at least, without some finessing that I have not yet achieved—to reopen the issue at a later stage.

I take the noble Baroness’s point completely. Perhaps we may bring back Amendment No. 16 on Report. I know that the usual custom is for government amendments to be passed at this stage, but I will not seek the consent of the Committee today, for the reasons that I think the noble Baroness understands.

I thank the Minister for that. It is very helpful. We have all made our positions clear, so for the moment I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

10: Clause 4, page 3, line 5, leave out “or to remove any enactment from it”

The noble Lord said: We are still working our way through Clause 4, “Relevant function”, and we are looking at another aspect of the issue that we have just discussed. Under Clause 4(4), the Secretary of State has the power to add or to remove items under either Schedule 3 or subsection (3), which is the point raised by the noble Baroness, Lady Hamwee. This is a probing amendment. I am searching for truth with or without an authoritative list.

Schedule 3 is a hugely lengthy list of legislation over four pages. My noble friend Lord Cope of Berkeley was particularly interested in the Pedlars Act 1871, which the noble Lord, Lord Bach, and I toyed with once over regulatory reform in this Room. I understand the need for the power to add, but I am not quite so clear about the need for deletions. I presume that if one of the Acts in Schedule 3 is repealed, it automatically drops out of the list, as a consequential amendment from the passage of a piece of primary legislation. I have a slight suspicion that if a particular Act is causing trouble to the Government at a future date—I do not mean for the Minister—it might be deleted. One might move to do that because an Act was causing difficulties and problems, and the LBRO was throwing its weight about in a way that was unhelpful and disobliging to the Government of the day.

It is not just that this is a big and extensive power. Under subsection (5), there are even greater powers; I know that the noble Baroness, Lady Hamwee, has an amendment for discussion on that. I am looking for reassurance from the Minister about why we need powers of deletion. Addition is fine, but I question the deletion of something that will not have been repealed; as I said, it would just drop away of its own volition. I suppose that those who are of a suspicious turn of mind will think back to what happened with legislation such as the corporate manslaughter Bill, when the Government sought to exclude themselves from the provisions of the Bill, in relation to the police and the Prison Service, which caused quite a controversy. Down the road in the future, a Secretary of State faced with a disobliging LBRO might say, “I will tell you what we will do. We will delete that provision under the powers I have under Section 4(4)”. I would be grateful for enlightenment from the Minister. I beg to move.

My Amendment No. 12 in this group would provide that the Secretary of State had to undertake consultation before making an amending order. I hope that I will be told either that the amendment is accepted or that—so that we have it on the record—I should have no such fears because the Secretary of State would consult anyway. The noble Lord, Lord Hodgson, raises an important point. If an enactment is not applicable or appropriate for this regime, it is not necessary to delete it if it simply does not fall within the scope—I think that that is probably the right term. However, as the noble Lord says, if there is a problem with the enactment—that it is a bit difficult but is within the regime—it should not be deleted just by the Secretary of State deciding to amend the schedule. On the previous amendment, perhaps I should not have said that I had not been through Schedule 3 in detail; those who will have to operate this will have done. If the department is finding some difficulty, the difficulties should be sorted out—certainly before we complete the Bill. If a difficulty is found later, it should be dealt with in an even more formal manner than is suggested here.

We on the Front Bench are happy to support my noble friend Lord Hodgson’s amendment. He made it clear that he is looking for reassurance as to why the Secretary of State will need this power of deletion. We look forward to hearing the Minister’s response.

Clause 4 defines the local authority functions that are within the scope of Part 1 of the Bill. These functions fall into four broad categories of local authority regulatory activity: first, trading standards; secondly, environmental health; thirdly, entertainment licensing; and, finally, fire and rescue. In order to capture the functions falling within these categories with sufficient certainty, “relevant function” has been defined by reference to the list of enactments in Schedule 3. As we discussed in the previous group, in view of the complexity and volume of secondary legislation made under Section 2(2) of the European Communities Act 1972, special provision has been made for this by reference to the list of subject matters given at Clause 4(3).

Clause 4(4) provides that the Secretary of State may by order—that is, by affirmative order, for the reason that the noble Lord, Lord Cope of Berkeley, reminded us of in the previous debate—add or remove enactments from Schedule 3 and add or remove a subject matter from subsection (3). From the Government’s point of view, where a Secretary of State has to do that through an affirmative order, there is—I hope, in particular, that the noble Viscount, Lord Eccles, will agree—a safeguard as far as any Secretary of State behaving completely wilfully is concerned.

I think that I am right in saying that one of the government amendments that we will come to removes one of the items in Schedule 3. Sometimes these items no longer apply and have to be removed from the list. I have not yet heard a better way of doing it, which is both practical and proper, than by an order that has to be agreed under the affirmative procedure.

While there is currently no intention to extend or reduce the scope of Part 1, this power provides the flexibility needed for appropriate changes to be made without the need for primary legislation, which I argue would be an absurd course to have to take. The power also ensures that repealed legislation can be removed from Schedule 3 quickly and efficiently. Our belief is that the provisions in Clause 4 for removal are an essential part of this process if the scope of Part 1 is to remain accurate and up to date, as it is important that it should.

Amendment No. 12 in the name of the noble Baroness, Lady Hamwee, would require the Secretary of State to consult before laying such an order changing the LBRO’s legislative scope. Who can be but sympathetic to the intentions behind such an amendment? The noble Baroness will know that the Government’s code of practice sets a high standard for consultation relating to any new area of policy development. That is important for a number of reasons, not least the interests of better regulation.

As Members of the Committee may be aware, the Government have recently reviewed their processes of consultation and will be revising their code of practice shortly. I assure the Committee that any use of the order-making powers in Clause 4 to change the LBRO’s scope would be subject to full and proper consultation as well, of course, as the parliamentary process of the affirmative resolution procedure. Again, an explicit statutory requirement to do that is unnecessary in this case.

I accept the Minister’s stricture that this is subject to the affirmative resolution procedure. I am grateful to him for that and for giving the commitment that there will be full public consultation. However, I could not help but reflect, as he said that we need to ensure that everything is accurate and up to date, that we cannot produce a list because it is “impractical” to do so. I am therefore not clear how we will know that everything is accurate and up to date.

However, let us not go over ground that we have already covered. The nub of the argument is that Governments always want flexibility and Oppositions feel that every possible opportunity for flexibility should be denied because it tends to lead to difficulties. I will reflect on what the Minister has said. I think that I am persuaded that there are enough checks and balances here; I am just sorry that he could not produce an example of where they might happen. Even so, I hope that the Government will take the Pedlars Act 1871 out of Schedule 3, as that would please my noble friend Lord Cope greatly. In the mean time, however, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 11 and 12 not moved.]

13: Clause 4, page 3, line 10, leave out “(including” and insert “(but may not make”

The noble Baroness said: I speak also to Amendments Nos. 14, 15 and 28. Amendments Nos. 13 to 15 all amend the same sentence in Clause 4(5), which would say that an order under subsection (4) may make different provision for different purposes, but may not make different provision in relation to different local authorities which fall within the same paragraphs of Clause 3(1)—which are, in other words, within the same category of local authority.

Now I look at Clause 4(5) and wonder about,

“different provision for different purposes”.

Although it is not part of the amendment, can the Minister explain what that means? It is so familiar a term that I did not pause on it when I was considering amendments for the Bill. What struck me was that, in a Bill that seeks to reduce confusion and apply a standard regime, this subsection has the potential to increase confusion because it would apply differences.

Amendment No. 15 is probably unnecessary because any legislation will make clear which type, sphere or level of local authority is to undertake the regulation. The Minister may be able to confirm that. Amendment No. 28 to Clause 6, which provides that guidance given to one or more local authorities,

“shall be given to all local authorities which fall within the same paragraph of section 3(1)”,

is again a matter of consistency. I appreciate that Members of the Committee may be struggling to see where all that comes in. I would be if I were reading somebody else’s amendments, but the point about consistency underlies all of this. I beg to move.

We support Amendments Nos. 13 and 14 which affect one of the stated aims of the Bill, the aim of consistency. Regulations cannot change one authority to another; that is not fair regulating. The geographical location of a given business should not determine the strictures under which it is put. Furthermore, for a multi-site business, inconsistent regulating under the primary authority partnership has the potential to create a bureaucratic nightmare. Jones the butcher in Luton could be found to be transgressing fire regulations in Luton Borough Council and yet be complying with the fire regulations of his home authority, Westminster. Such regional differences threaten to swamp the resources of the LBRO, diverting it from important work. So consistency is a pre-requisite for the LBRO managing effectively and efficiently to co-ordinate our regulatory system.

The first three amendments in the group, Amendments Nos. 13, 14 and 15, require that any orders in respect of LBRO scope must address equally authorities within a category in Clause 3(1) and do not allow differential provision to be made in respect of authorities in England and Wales within the same order. The fourth amendment requires that the guidance given to more than one local authority is given to all local authorities within the same category in Clause 3(1). For example, guidance given to one county council in England would need to be given to all county councils. Our view is that the first three amendments are not necessary, although we are very grateful to the noble Baroness, Lady Hamwee, for having spoken to the Bill team about them. The second part of the group—Amendment No. 28—would significantly hamper LBRO’s ability to respond appropriately to issues that may affect only smaller groups of local authorities.

Dealing with Amendments Nos. 13, 14 and 15 first, the relevant subsection simply allows for orders under Clause 4 to make different provision for local authorities in Wales and those in England. These orders can amend the scope of Part 1 of the Bill by allowing enactments to be added or removed from Schedule 3. That reflects the devolution settlement and the fact that Welsh Ministers may take a different view on the extension of LBRO’s work into the new areas. The orders may specify enactments but may not pick and choose particular authorities to which they should apply.

On Amendment No. 28, Clause 6 specifies that the LBRO may issue guidance to one or more local authorities, guidance to which they will, in the words of the clause, have to have regard. This ability to specify groups of authorities gives the organisation the flexibility to respond to particular regional or sectoral issues without the need for all local authorities—frankly the guidance will be irrelevant for many as they will already be following best practice and implementing the better regulation agenda—having to access it, study it, review it and then look at their procedures against it and possibly, we believe, reinvent the wheel unnecessarily. We believe that Amendment No. 28 would cause considerable unnecessary bureaucracy for those local authorities which, frankly, are not concerned. That is our argument against Amendment No. 28.

The noble Baroness asked about the expression,

“different provision for different purposes”.

That will allow the same order to be used to add an enactment to Schedule 3 and perhaps to remove an enactment from Schedule 3, which will avoid the necessity for separate orders for each separate purpose.

I am grateful for the Minister’s explanation. The last part had not occurred to me. He seemed to be justifying the words in parenthesis,

“different provision in relation to local authorities in England and Wales”,

as if that was the totality of the different provision for different purposes, which it is clearly not. Is he saying that when different provision is given to different local authorities it will only be to distinguish between England and Wales? I can understand the devolution argument in that respect. If this clause extends more widely, so that a county council in the north-west is differently affected from a district or county council in the south-east of England, I follow him less easily. Shall I give him a moment to respond to that, or is it something we have to come back to? The Minister seemed to be justifying the England and Wales distinction. While he is considering that point, I shall say with regard to Amendment No. 28 that I follow what he is saying, but I would like to consider it a little further in order to understand the implications.

Before the noble Baroness decides whether to withdraw her amendment, I shall try to answer the question that she has just posed. The “different provision for different purposes” clause does not permit different provision for different local authorities. That situation cannot arise. I hope that clarifies it to some extent.

It ought to, were it not for the word “including” which introduces that section. This is probably becoming a little tedious for other Members of Committee, and at this stage I am happy to beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 14 to 16 not moved.]

Clause 4 agreed to.

Schedule 3 [Enactments specified for the purposes of Part 1]:

17: Schedule 3, page 41, leave out line 39

The noble Lord said: I shall speak to Amendment No. 17 very shortly and then deal with Amendments Nos. 58 and 64. Amendment No. 17 removes the Fire Precautions Act 1971 from Schedule 3, and it is the example that I was trying to find a few minutes ago. The Fire Precautions Act 1971 has, as I am sure the Committee knows, been repealed and should not therefore be included in Schedule 3. This amendment will ensure that Schedule 3 is accurate and up to date.

Amendments Nos. 58 and 64 are technical amendments that follow from the power to dissolve the LBRO that is included in Clause 17, which we will debate later. These powers allow the Treasury to make detailed provision for the treatment of tax associated with any transfer of the LBRO’s property rights or liabilities to another person—which is likely to be a government department or other public body—at the point of its dissolution. Any order made under Clause 17 will be subject to the negative resolution procedure.

The new clause would allow the Treasury to provide by order for the treatment of the tax implications associated with the transfer. That would ensure that there are no adverse consequences for the public purse. The use of an order-making power to this effect allows for possible changes in tax law between now and dissolution. There are comparable provisions in Section 5 of the Legislative and Regulatory Reform Act dealing with any comparable transfers between bodies made by a legislative and regulatory reform order. I beg to move.

On Amendments Nos. 58 and 64, I should like to ask not so much about the substance as the procedure. I must have led a very sheltered life, because I cannot recall ever seeing the Treasury—we all know that it happens in practice—being able to over ride a Secretary of State put in print in quite those terms. Is this the normal way to express that the Treasury can do something or that the Secretary of State cannot do something unless the Treasury consents?

As a former Treasury Minister, I can assure the noble Baroness that it is extremely frequent and all over the place in legislation, but I shall allow the Minister to add some detail.

I may have heard wrongly, but I thought that the Minister said that Amendment No. 64 sorted out my noble friend Lord Cope of Berkeley’s problem on whether an order was negative or affirmative. I raise that only because it perhaps needs one more thought.

I hope that I gave the right amendments when I spoke earlier. Amendments Nos. 59 to 61 deal with that issue.

I do not mind whether the noble Lord, Lord Cope, or the Minister answers this question. Who is the Treasury? Is it the Chancellor of the Exchequer?

It is the Lords Commissioners of the Treasury—the First Lord of the Treasury being the Prime Minister, the Second Lord being the Chancellor of the Exchequer and the other lords being Government Whips in the Commons. In practice, although it is of academic rather than practical interest, the powers of the Chancellor of the Exchequer are almost entirely the powers of the Lord Commissioner to the Treasury. His duties as Chancellor of the Court of the Exchequer are minimal, but his duties as the operative Lord Commissioner of the Treasury are very wide indeed, and they include any reference to the Treasury. That has been so for some centuries and that is really how it works.

We have been privileged to hear a seminar, albeit a short seminar. As we have my noble friend Lord Desai on this side of the Committee, I hope that the noble Baroness, Lady Hamwee, is satisfied with that, because I certainly cannot do any better.

On Question, amendment agreed to.

Schedule 3, as amended, agreed to.

Clause 5 [Objective relating to general functions]:

18: Clause 5, page 3, line 29, at beginning insert “economically, efficiently and”

The noble Baroness said: This is a short amendment. Clause 5 provides that the LBRO must, among other matters, ensure that local authorities,

“exercise their relevant functions effectively”.

“Effectively” is a well known term in the local government world, but it almost invariably goes along with “economically and efficiently”. I believe that has been the case for more than 20 years. I wondered why only one of those three words was included, or why the other two were omitted. Is effectiveness to be given greater importance in this area than economy and efficiency? Since a local authority must have regard to all three of those criteria or characteristics, it is not desirable for legislation to omit some of those terms. I beg to move.

I still have to tell the Committee that if Amendment No. 18 is agreed to, I cannot call Amendment No. 19 because of pre-emption.

I am intrigued by the Chairman’s intervention because, following on from the noble Baroness, Lady Hamwee, surely it would have been a good idea if Amendment No. 19 was grouped with this amendment. However, the noble Lord, Lord Hodgson, may not have wanted that.

I can answer the noble Lord, Lord Borrie, very quickly. Owing to a misunderstanding with the Government Whips’ Office, it was degrouped this morning. It was grouped earlier and I thought that was still the case, but it became degrouped. It was only when I saw the final Groupings List that I realised it had been degrouped. With the leave of the Committee, I hope that I may make a short contribution to the amendment now and not move Amendment No. 19 when we come to it.

The noble Lord, Lord Bach, will remember that in this Room we discussed the Regulators’ Compliance Code. I wish to quote from the first paragraph of the general introduction to the code, headed “Purpose of the Code”. Paragraph 1.2 states:

“This Code supports the Government’s better regulation agenda and is based on the recommendations in the Hampton Report. Its purpose is to promote efficient and effective approaches to regulatory inspection and enforcement which improve regulatory outcomes without imposing unnecessary burdens on business, the Third Sector and other regulated entities”.

So I cannot see why we do not have the phrase “economically and efficiently” in the Bill, because that is what is in the Regulators’ Compliance Code and that is what the LBRO will link with very closely, as we will see in a later clause. It is in the Hampton report; it is what Hampton said; and this is all about Hampton. I believe that the words “efficiently” and “economically” should be included in the Bill. I support the amendment moved by the noble Baroness, Lady Hamwee.

I wanted to support the noble Baroness, Lady Hamwee, before raising the point about the similar amendment that was to follow. The comments of the noble Lord, Lord Hodgson, are most helpful. He is quite right—the Hampton report referred to efficient enforcement, supporting compliance across the range of business and delivering targeted, effective intervention without unreasonable cost to business. Economic progress and efficiency are surely key aspects of the Hampton principles which very much lie behind the Bill. Therefore, I strongly support both the Liberal Democrat and Conservative Benches in these two amendments. I hope that the Government will likewise agree.

As a complete stranger to these matters, I would have thought that any one of those three words would do because they imply the best way of doing something. If you do something effectively, you cannot have done it inefficiently or uneconomically. It makes no sense. I may be completely wrong; it may be necessary to have three words where one would do. I would have thought, however, that if you say that something should be done effectively, that should be the end of the matter.

Under Clause 5, the LBRO is required to ensure that local authorities carry out their relevant regulatory functions “effectively”. The word is carefully chosen. The LBRO is charged with enforcing the code to which the noble Lord, Lord Hodgson, refers. The word “effectively” is there to ensure that as the new body works with local authorities to ensure that the burdens of regulation are reduced, it does not neglect the interests of consumers and the public, whom the regulations are designed to protect.

The primary statutory duty of local authority regulators is to enforce the provisions in legislation that Parliament has put in place to protect the public. Better regulation is a matter of finding the right balance between securing those protections and doing so in a way that does not impose unnecessary and counterproductive burdens on business. It is government policy that burdens should not be reduced at the expense of the protections that regulation provides. It should not hamper effective enforcement. Emphatically, the word should not in this context be taken to mean that the LBRO will routinely scrutinise the internal management processes of particular local authorities. As the noble Baroness, Lady Hamwee, said at Second Reading, local authorities have become familiar with the management trinity of the three Es: efficiency, economy and effectiveness.

The way in which local authorities manage their particular services in detail will not be a matter for the LBRO. The body will not overlap with a function that is already performed successfully by the Audit Commission. The LBRO’s role is different; it will be about working to ensure that the whole regulatory system—the system in which local authorities play a critical role—works in the best interests of businesses and consumers alike. It will be as much about effective strategic oversight in the way in which central government plays its part as about working to disseminate the many examples of good practice that local authority regulatory services already have. That is why the phrase that may be widely used in management and local government is not appropriate for the LBRO and why the three E words are to be resisted. What has given me food for thought is the reminder from the noble Lord, Lord Hodgson, that an early part of the code—how will anyone who took part in the proceedings on that code in this Room ever forget?—specifically mentions the word “efficiency”.

These are two separate amendments. I mean no disrespect to the noble Baroness, Lady Hamwee, but I ask her to withdraw her amendment because we think that using the three E words would be an error and would give the wrong impression about how closely the LBRO would be involved in the mechanics of a local authority’s management. As far as the word “efficiency” is concerned, without any promise at all to the noble Lord—I am now talking to the next amendment—I will take that back and consider whether his point about the code is unanswerable or false.

Perhaps the noble Lord will glory in that on the next amendment. I am grateful for the comments. I do not believe that effectively, economically and efficiently are tautologous; they do not at all mean the same thing. Economically and efficiently may be fairly close, but you can be economical without being effective, for instance. The Minister described it as a trinity; I have written “mantra”; it comes to rather the same thing. Of course I agree with him that one needs to look at all of this from the point of view of the consumer. I was concerned that local authorities should not fall foul of the Audit Commission by being required to pay attention to one of these matters and not all three. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 19 not moved.]

20: Clause 5, page 3, line 29, at end insert—

“(positively and proactively);”

The noble Lord said: This is a further look at the way in which the objectives relate to the general functions. Just as I have confused the Committee by allowing Amendment No. 19 to be degrouped, this amendment should not be in brackets—I have had a run of bad luck—but should be a new paragraph (b) in Clause 5(1). I apologise to the Committee for that lack of clarity.

I do not want to bore the Committee or the Minister, but going back to our regulators, I remember that the Minister said that the Bill was not about the code, and he is quite right. I quoted:

“This code supports the Government’s better regulation agenda”,

of which this is another part. This is running in parallel. I do not think that he should discount the code, particularly given that we are going to be discussing relationships between the LBRO and other regulators under Clause 12 in a few minutes—or a few hours. I seek to insert the requirement for general functions to be carried out “positively and proactively”. Why have I chosen those words? Perhaps I can go back to paragraph 1.3 of the code:

“The code stresses the need for regulators to adopt a positive and proactive approach towards ensuring compliance by helping and encouraging regulated entities to understand and meet regulatory requirements more easily; and responding proportionately to regulatory breaches”.

It seems to me that if we are trying to create a cohesive approach to this area, and accepting the point that a balance needs to be struck, we should not pick and choose the bits that should be in the LBRO/local authority ambit. We really want to find a way to ensure that innovation is not penalised. Very often, innovation can be penalised. Innovation, to regulators and others can be dangerous, because it represents risk. What if it goes wrong? Sometimes competitors may add to the pressure against an innovation because they see it as a competitive threat. We need to think about a positive aspect to this area, which the Government recognise in the Regulators’ Compliance Code and which should also be reflected in the Bill. It is no good just being a dead hand. We need a positive approach. I beg to move.

I listen to this debate very much as an outsider. I am not a local government person, although the Local Government Association has been in touch with me about the Bill. The amendment’s wording is a little over the top—if the noble Lord does not mind me saying so—and has a sense of interference about it. I know from what the Local Government Association has written to me that it is sensitive about possible interference and so on, and does not want to feel fettered in the use of its powers.

I hope the noble Lord does not mind me saying so too. My noble friend has it just right. There is a danger of giving an inch. The noble Lord can be forgiven for relying on the same argument to go just a little further, but there is a difference here.

Amendment No. 20 adds further criteria to the LBRO’s objectives. A number of amendments have been laid to the Bill seeking to alter the objective, and I will take this opportunity to explain why the LBRO has been given its objective as drafted in Clause 5. Under Clause 5, the LBRO is required to secure that local authorities exercise their relevant functions in a way that is effective, does not give rise to unnecessary burdens and complies with the five principles of better regulation.

Those principles of good regulation were first set out by the Better Regulation Task Force, chaired by the noble Lord, Lord Haskins, in 1997. They have stood the test of time pretty well and are increasingly being integrated into the legislative framework for regulators. They also feature in Ofcom’s founding legislation, for instance, and many regulators are required to have regard to them under the Legislative and Regulatory Reform Act 2006. It is essential that the principles of better regulation are embedded at the local level, and it is appropriate for the LBRO to take on the task of achieving that. In addition, it is vital that the LBRO secures that local authorities carry out their functions in a way that reduces regulatory burdens and is effective; that is, in a way that reduces those burdens without compromising regulatory outcomes or the valuable protections that regulations provide.

On Amendment No. 20, we are utterly confident that the LBRO will look to promote proactiveness and positivity on the part of local authorities but do not believe that that should be added to the objective. There is a risk, in statute, of overloading the LBRO with multiple objectives; that should be avoided to reduce the possibility of unnecessary confusion. The noble Lord’s amendment is just a step too far.

I acknowledge the firm smack I have had from the noble Baroness, Lady Turner of Camden; I will reflect on that. A difficulty, a drawback recounted about this country in general terms—I do not mean over five or 10 years, but since the war—has been a reluctance to innovate, the danger that we prefer what is tried and tested. We often find pushing forward more difficult. I am anxious that, for better local regulation, nothing should inhibit people from innovating and trying new ways and approaches. That was the purpose behind my amendment.

I am not surprised that the Local Government Association opposes my amendment because it is just one more duty. I understand why people would find it easier to push it to one side. However, in the interests of UK plc and the prosperity of the country writ large, it has merit, notwithstanding the effective demolition job that the noble Baroness, Lady Turner of Camden, gave it. However, I will reflect carefully. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

21: Clause 5, page 3, line 31, at end insert “, and

(d) in accordance with any code issued from time to time under section 22 of the Legislative and Regulatory Reform Act 2006 (c. 51)”

The noble Lord said: My proposed paragraph (d), would formalise within the objectives of the LBRO the requirement that local authorities exercise their functions in accordance with the compliance code. I am grateful for the assistance of the British Retail Consortium in drafting these amendments. A key motive for establishing the LBRO is to encourage a culture among local authority enforcement services in which the approaches recommended by the Hampton review of regulatory enforcement would be followed. Essentially, those are better co-ordination and consistency, a risk-based approach, targeting of rogue traders, securing compliance as the objective rather than punishment and prosecution, and education and information taking a central roleas the preferred means of securing compliance. That approach is expressed officially in the compliance code.

It is also relevant that when Professor Macrory recommended the introduction of administrative penalties, he said that they should be introduced only for regulators that were consistently Hampton-compliant. It is appropriate that the objectives of the LBRO should include ensuring that local authorities exercise their functions in accordance with the compliance code. I beg to move.

I have in this group Amendments Nos. 23 and 48, which deal with the same point in Clauses 5 and 13; that is, to take out the paragraph providing for the principle that regulatory activities should be targeted only at cases in which action is needed. I am not against targeting, but in this context I am confused about the difference between targeting and proportionate. Under Clause 5(2)(a), regulatory activities have to be carried out in a way that is, among other things, proportionate and consistent. I am not entirely clear how one can be those two things but targeted.

I will confine my remarks to opposing the noble Baroness, Lady Hamwee, on targeting in Amendments Nos. 23 and 48. In the first place, it is clear that Clause 5(2) is in precisely the same words as Section 21(2) of the Legislative and Regulatory Reform Act 2006. That does not necessarily make it right, but it does mean that the Government are being consistent. If the Government are not consistent from one year to the next—this was only about 18 months ago—it would be somewhat unusual.

In principle, the value of targeting for local authorities is that, taking into account both national and local priorities, they focus their resources on high-risk enterprises and give a much lighter touch to those businesses that are compliant. That ensures that traders who flout the law and deliberately go against the rules that they are required to follow are dealt with effectively—or should I say effectively, efficiently and economically?— providing in those cases vital protection for consumers, businesses and the environment. It seems to me that we should follow the precise words of the 2006 Act and not delete them, as the noble Baroness wishes.

I am sorry to clash with the noble Baroness, but I hope that the Government will not be tempted by her two amendments, because that would be completely inappropriate. I entirely agree with the noble Lord, Lord Borrie. I suspect that Clause 5(2)(a) is the generality of the approach, and Clause 5(2)(b) is talking about individual cases where activity is needed. Unless we find a way to ensure that we focus the available resources in areas where action is needed—I accept that action will be needed—we will have the lowest common denominator where everybody is treated the same. There will be no reward for good behaviour, for behaving properly and owning up to mistakes when they occur, and the good boys will be treated the same as the bad. I hope that the Government will not be tempted by those two amendments.

Until my noble friend Lord Borrie intervened with the novel principle that the Government should be consistent from one year to the next, I was tempted to support the amendment of the noble Baroness, Lady Hamwee. The clause seems seriously to overstate risk-based regulation. I am not against targeting or risk-based regulation, but the word “only” seems not to provide the kind of protection for consumers and others that my noble friend spelt out earlier. As this is my first intervention in the debate, I suppose I should declare an interest as chair of the National Consumer Council, following in the footsteps of the noble Baroness, Lady Wilcox.

The wording was probably wrong in 2006. It does not say “intervention” or “enforcement”, but “activities”. Unless there is a degree of randomness about inspection, for example, that protection is not achieved. Certainly, for a bulk of resources, the totality of enforcement probably needs to relate to high-risk premises, companies and activities. But “only” overstates the risk-based principle; if it is in the 2006 legislation there is nothing I can do about that. But as Clause 5(2)(a), as the noble Lord, Lord Hodgson, just said, states the generality, why do we not just leave it at that and accept the noble Baroness’s amendment? I do not expect the Minister to agree to this, but perhaps he could have another look at it to see if the risk-based approach to regulation in 2008 could be better expressed, slightly more subtly.

I begin with Amendment No. 21, which would add further criteria to the LBRO’s objective. Of course, the statutory regulators’ compliance code was recently issued under the 2006 Act. The scope of the code coincides closely with that of Parts 1 and 2 of the Bill and the LBRO will naturally take a strong interest in the performance of local authorities in delivering their duties under the code.

However, it is unnecessary to include provision in the Bill requiring the LBRO to secure that local authorities act in accordance with the code. Local authorities are already under a statutory duty to have regard to the code under the 2006 Act. The inclusion of a provision to this effect in the Bill would not add anything and might create duplication and confusion where none exists. That is our simple argument against Amendment No. 21 of the noble Lord, Lord De Mauley.

On the interesting amendment tabled by the noble Baroness, Lady Hamwee, and supported by my noble friend Lord Whitty, he is right: the Government will not accept it. We are more on the side of my noble friend Lord Borrie and the noble Lord, Lord Hodgson. It would of course remove the five principles of better regulation from the Clause 5 objectives, and its duty not to impose unnecessary burdens which stipulates that action should be targeted only at cases where action is needed.

I go back to the Better Regulation Task Force publication that attempted to describe the principles. It described the attributes of “targeting” as follows: first,

“Regulation should be focused on the problem and minimise side effects”;

and secondly,

“Guidance and support should be adapted to the needs of different groups”.

We argue that these should remain. They are surely important aspects of any regulator’s work and are critical to the future success of our local authority regulatory services. Indeed, we—the consumers as well as the Government—certainly expect the local authorities and the LBRO alike to live up to them. They add something and should remain.

I am grateful to the Minister for his response and to my noble friend Lord Hodgson and the noble Lord, Lord Borrie, for at least focusing their guns on the poor noble Baroness, Lady Hamwee, who I do not think necessarily meant her amendment to be taken in quite the way it was. I hear what the Minister says and will consider whether we want to return to this later. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

22: Clause 5, page 3, line 31, at end insert “, and

(d) in a way which allows or encourages economic progress”

The noble Lord said: We have had a lot of discussion about the impact of these provisions, and the Minister has reminded us frequently of the need for a light touch, but we have not said anything about the importance to all of us of economic activity as a means of building the prosperity of this country, from which all good things will flow. It is worth having some reference to that activity in Clause 5. I therefore seek to insert a new paragraph (d) into the objectives relating to general functions in subsection (1). I do not doubt that the matter is infelicitously drafted, but we have failed to hammer home this important central point.

I do not want to keep quoting the general introduction to the compliance code, but it says:

“Effective and well-targeted regulation is essential in promoting fairness and protection from harm”—

two issues to which the Minister has referred several times this afternoon. The code goes on:

“However, the Government believes that, in achieving these and other legitimate objectives, regulation and its enforcement should be proportionate and flexible enough to allow or even encourage economic progress”.

The phrase “or even encourage” is very strange, but never mind; encouraging economic progress is critical to us all, no matter what our political persuasions may be, if we are to achieve some of the desirable outcomes that we discuss here and in the Chamber. I have taken out the word “even” and have merely lifted these words from the code as something else to be taken into account. If they are good enough for the regulators’ compliance code, they are good enough for the Bill. The Bill needs to address somewhere the importance of economic activity to the future prosperity of this country, and the LBRO should have regard to that issue in its operation and relationships with local authorities. I beg to move.

The more I listen to this debate, the more astonished I am at how local authorities carry on. Noble Lords opposite are business-like, and it is business-like to use as few words as possible, to get on with the job and to do it well. If you add that the LBRO should do things proactively and encourage economic progress, why not add happiness? Do we really believe that economic progress will occur if you put those words into the Bill, and that economic regression will occur if you do not? The LBRO will be neutral to whether there is economic progress or not. As long as it does its job effectively, that is all you need. You do not need to pile it with multiple objectives; that diverts its energy.

I wish that I had intervened in this regulatory debate earlier; I could have cut out a few of these objectives, which seem totally unnecessary.

I take this opportunity briefly to restate what we expect from the LBRO. As I said, its core aim will be to support local authorities to regulate more effectively. Key will be embedding the principles of better regulation at the local level. It will be judged on its ability to build the capacity of local authority regulatory services and to reduce the regulatory burdens experienced by business. We strongly believe that local authority regulatory services have an essential role to play in encouraging economic progress. The LBRO will play a key role in ensuring that local authorities continue to do this. However, I am afraid we do not believe that it is necessary or desirable to include provision in the Bill requiring the LBRO to ensure that local authorities carry out their functions in a way that allows or encourages economic progress. We take the point of my noble friend Lord Desai—it is hard to believe that a local authority would do the opposite. We believe that there is a risk of overloading this organisation with multiple objectives that could well prove confusing and could undermine its central objective of better regulation. Therefore, I hope that the noble Lord will withdraw the amendment.

I am grateful to the Minister. I assure the noble Lord, Lord Desai, that I do not believe economic progress flows from the code or from this Bill. Economic progress flows from men and women who wish to pursue entrepreneurial activities and to develop ideas, approaches and businesses; and they are to be applauded. All I am saying is that this code should operate, and the LBRO should relate to the local authority, in such a way that the local authority does not inhibit those activities.

Without adding a discordant note, in the last 25 or 30 years we have seen that some local authorities have not wished to develop an economic model in tune with that of the rest of the country. We have only to think back to some of the things that went on in the 1970s to know that was the case. It is not beyond the bounds of possibility that such a situation might arise again. Somewhere in this Bill an awareness of the importance of economic progress and the economic prosperity of this country needs to be placed on someone’s shoulders to ensure that we are not just putting another burden on entrepreneurs, businessmen, shopkeepers and the people who engage in commercial activity, as that would slow down the development of the United Kingdom. We need to do this in the name of more proportionate, light-touch regulation.

Although I shall, of course, withdraw the amendment, I feel more strongly about this than I do about the previous amendment, on which the noble Baroness, Lady Turner of Camden, smacked me down so rapidly. This is an issue to which I shall wish to return but in the mean time I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

22A: Clause 5, page 3, line 33, after “out” insert “by sufficient numbers of trained and qualified professionals”

The noble Baroness said: This amendment deals with consultation with experienced professionals. If the Bill is to realise its stated aim of regulating better, it must register the need for local authorities to delegate their regulatory activities to trained and qualified professionals. Such competent authorities will have adequate numbers of staff to deal with the workload and, more importantly, staff will have specialist knowledge of the given regulatory field, thus enabling the correct and proper implementation of a regulation. I believe that the regulatory system would not only work much more smoothly and more efficiently if such subsidiary agencies were utilised but that would be less of a burden for local authorities to bear. We know that at the moment under this Government six new regulations are coming into effect every day.

Even the large and prosperous local authorities will have difficulty finding the resources to manage these ever-increasing commitments without some external help. If an authority is over-stretched it will undoubtedly make mistakes—or misregulate—and therefore invariably disadvantage businesses and consumers alike. I ask the noble Lord why local authorities should penalise themselves and try to be jacks of all trades when there are many masters of one, like the Trading Standards Institute and the Chartered Institute of Environmental Health at hand to do the job with expertise. The Bill needs to encourage an effective and efficient use of resources. I beg to move.

I support the amendment as it is written, rather than everything that the noble Baroness said in favour of it. A problem with providing the capacity for local authorities to regulate effectively and efficiently—the risk-based approach that we advocate here—is that the number of TSOs, environmental health officers and other inspectors and professionals within local authorities has been squeezed with other priorities. It seems to me that whether local authorities employ such inspectors themselves or whether they subcontract in the way that the noble Baroness suggested, effective operation of regulation by local authorities requires a high level of professional expertise to fulfil the objectives of better regulation and to protect the consumers and the environment and every other area that is protected by the vast list of regulations listed in Schedule 3. Therefore, I think it is appropriate to have some reference to the professionalism of local authorities in the objectives of the LBRO.

The argument for setting up the LBRO in the first place was that it should not only improve consistency across local authorities but the quality and capacity of local authorities to regulate. In this area of professionalism I think we need some reference. If the Minister is going to say “not here” because this is the same wording that we have used in the 2006 Act, that is fair enough, but where will he refer in the Bill to the professionalism of those on whom the local authorities will rely in delivering this regulatory outcome?

This amendment addresses the LBRO’s potential role in ensuring that local authorities carry out their duties with sufficient professionalism. We believe that this issue is already adequately addressed by the inclusion of the word “effectively” in objectives set out in the clause, although we sympathise with the spirit of the amendment.

The professional bodies representing the sector—the Trading Standards Institute and the Chartered Institute of Environmental Health—were closely involved in pre-legislative scrutiny of the Bill, and we welcome their continuing interest in the LBRO. I pay a compliment to those bodies and to others that carry out such a professional and important job. The regulatory service professions are critical to so many important protections but, all too often, their contribution is underestimated and wrongly attacked. I can confirm that the LBRO will be working closely with those professional organisations in raising the profile and consolidating the importance of the professions, both on the enforcement front line and in the leadership of our local authorities. Sympathetic as we are to the amendment, we do not agree that it needs to be written into the Bill because the word “effectively” covers the position as well.

I thank the Minister for his reply. I particularly thank the noble Lord, Lord Whitty, for his support for the breadth of what I was saying, rather than the detail of how I said it. Although I am not completely happy with the answer, I understand that the Minister has taken on board the sympathies that are required and that the noble Lord, Lord Desai, nodding vigorously as he did when the Minister used the word “effectively”, is warming to the use of these adjectives. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 23 not moved.]

24: Clause 5, page 3, line 36, at end insert—

“(c) regulatory activities should be carried out on the basis of a risk assessment of the regulated person which should include that person’s propensity to comply with a regulation”

The noble Lord said: Crucial to the Hampton approach to enforcement is the concept that the aim should be to secure compliance rather than to seek prosecution. That activity should be focused on those who are most likely to disregard the law and fail to take remedial measures voluntarily. For this, it is essential that the emphasis of enforcement should be on those assessed as those who are likely to break the law and it seems strange that this key requirement should have been omitted, so this amendment seeks to achieve it. I beg to move.

I support the amendment, as can be seen on the Marshalled List. I have suggested two other places where the same words should be added in Amendments Nos. 49 and 105, which are in this group. My noble friend has set out exactly why we have pressed these. When dealing with this point, the CBI stated:

“The Hampton review recommended that all regulatory activity should be on the basis of a clear, comprehensive risk assessment. The LBRO should be given the powers to ensure that any sanctions, or inspections, must follow a risk-assessment by the regulator or local authority. By targeting those who present higher risks, resources can be freed up, rogue traders cracked down on, and compliant business can be rewarded with a light-touch enforcement regime”.

That expresses it extremely well.

Amendment No. 105 refers to sanctions in the later part of the Bill, but it is the same point. Amendment No. 49 is also slightly later. But the same point occurs at all three points in the Bill. Hence, it is right to discuss the three together. I hope that the Minister will be persuaded by the arguments of my noble friend and the CBI.

On a general point, I have been listening with great interest to these amendments, which are designed to make Clause 5 more interesting. It is fairly conventional stuff. The Minister has given us two descriptions. The noble Lord, Lord Desai, expressed a certain frustration—“Why do we not just get on with it? I mean, for goodness’ sake, we do not need all these extra words”. But we have had “less is more”. We have had a Better Regulation Task Force. We have had, I think, a commission at some point. We have had Hampton and now we have the Better Regulation Executive. What in Clause 5 means that the LBRO will add any value to the things that have already been going on, as we have already been told, for the past 10 years or so?

I am puzzled, because it does not seem to me that anyone, whether a regulator, a local authority, a business or a member of the public, should be in any doubt about, as described by the Minister at the beginning, the intent to achieve better regulation. Who has not heard the argument or does not accept the argument or needs to be told again? I find it very difficult to put my finger on exactly what the LBRO will add. It will be a national body, but we already have one. Who will be dissolved to make room for the LBRO? Otherwise, why do we need it?

I am sorry that Clause 5, and particularly Clause 5(2), is not exciting enough for the noble Viscount, but he should not be too worried that it may repeat words and expressions that he says are widely known as they are also at the very heart of what the Government are trying to do to achieve better regulation. On a couple of occasions already I may have gone on at too great length about what the LBRO is there to do. One of its jobs is to establish greater consistency in the way in which regulation is carried out. Although we praise what local authorities do, there have been unnecessary inconsistencies, and for regulation to be better, it is important to remove as many of those inconsistencies as possible.

Under the clause, the LBRO is required to ensure that local authorities exercise their relevant functions effectively—I repeat that now—and in a way that does not give rise to unnecessary burdens and that complies with the five principles of good regulation. I repeat that they have stood the test of time pretty well and are becoming integrated. They featured, as I have said, in Ofcom’s founding legislation and the 2006 Act.

Amendments Nos. 24 and 49 would add a further principle to those listed, requiring in Clause 5(2) and in Clause 13(3), to which the amendment of the noble Lord, Lord Cope of Berkeley, refers, that the LBRO must ensure that,

“regulatory activities should be carried out on the basis of a risk assessment”.

Noble Lords will be aware of the task force’s subsequent publication, The Principles of Good Regulation, which expanded on the principles and the best means of implementing them. This covers the issues to which the amendments give rise. The publication states that targeting, for instance, demands that,

“Enforcers should focus primarily on those whose activities give rise to the most serious risks”.

I agree that the assessment of risk should be at the heart of regulatory activity, but this is captured by the words “targeted” and “proportionate”, as a targeted and proportionate approach should be based on the assessment of risk. That alone means that we do not need the amendments to Clauses 5 and 13. They are unnecessary because of the inclusion of the principles that I have outlined.

Amendment No. 105 would require the LBRO to certify that local authorities that have been awarded the civil sanctioning power in Part 3, which we will come to one day, have been conforming with these principles. The Government have accepted that before a Minister confers the new powers on a regulator, he must be satisfied that the regulator will act in accordance with the principles referred to in the rather dull Clause 5(2). This is set out in Amendment No. 164 in the name of my noble friend Lord Jones of Birmingham after Clause 62. If we come to Part 3 one day, goodness knows when we will come to Amendment No. 164. We will come to it later in the proceedings. I hope that what I have said may mean that the noble Lord will withdraw his amendment.

I am most grateful to the Minister for his response, which is very helpful. I will consider whether I can envisage a situation in which enforcement action is targeted and proportionate but is not on the basis of a sensible assessment of the risks. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

25: Clause 5, page 3, line 36, at end insert—

“(c) regulatory activities should be carried out in a way which ensures regulatory stability”

The noble Lord said: I seek to make Clause 5(2) more exciting by adding another principle, which is about regulatory stability. Let me explain what I am trying to get at. If you talk to people who are involved in commerce or industry at a high or low level, one of their complaints is about the constant regulatory change. While they can accept that from time to time there needs to be a fundamental change, too often the changes that they are faced with are tinkering with the system. The costs of complying with tinkering can be very high indeed, such as management time, even for a small firm, amendment to the IT and HR systems, changes to fixed asset registers and building up compliance records to ensure that the firm has been complying with the tinkered change.

In the amendment—I accept that the wording is probably not quite right—I say that the principles to be followed should include the need to try to minimise the rate of change with which firms are having to comply. It is this constant drip, drip, drip, and maybe the individual drips are not that significant, but nevertheless they have to be complied with, and the changes that I described have to be made.

What I am seeking from the Government is an acceptance that rapid rates of regulatory change are unhelpful to the regulatory framework and unhelpful to economic progress for companies big and small; and some of the smaller companies find them most damaging and difficult to comply with. If the Minister is unable to accept my wording—I hazard a guess that he will be unable to—he might be able to come back with wording that will enable us to have as a principle to be followed the need to try to minimise the constantly changing framework with which British industry and commerce—big, small and voluntary organisations—have to put up with. I beg to move.

I had not originally thought that I would say anything on this amendment, although I agree with it and the principle behind it. It is worth while going back to something that the Minister said earlier this afternoon. In connection with EU regulations, he said, “Look here, we cannot possibly be expected to list all the regulations; there were 3,000 in a few months last year. We cannot possibly be expected to list them. There are too many to list in the Bill or even on another piece of paper”. Yet, the trader or businessman is expected to obey all 3,000. Of course, they will not all apply to every trader, I well understand that, but he must make certain which of them do, and that in itself is a burden. Obviously, the trade associations and the other bodies are extremely helpful in that.

It is also a tremendous burden on the local authorities. Any individual local authority potentially has to take account of all 3,000 regulations. That was just in the space of some months; I think that the noble Lord said it was January to October. The local authority has got to take account of all of them. This is part of the whole difficulty with all this regulation. We all agree that some regulation is necessary and that particular regulations are necessary, and no doubt all of us who have been in politics for any length of time have called for more regulation from time to time when something has gone wrong. In my previous existence in my constituency I heard, “There ought to be a law against it”. In every pub in England, someone says once a night, “There ought to be a law against it”, about something, and MPs pick it up and repeat it. Sometimes they are right—but not all the time—and that is why we have all these regulations. However, the 3,000 in a few months is an enormous number. That is why the principle embodied in this amendment is of the first importance.

Following my noble friend Lord Cope of Berkeley, I want to refer to the statutory instruments bit of the 3,000. The number of statutory instruments—they will be in the next annual report of the Merits Committee—that have a real impact on the public and the institutions about which we have been talking is about 1,200 a year. It is a lot, but it is not quite as many as was indicated. There are many statutory instruments about temporary speed limits when motorway repairs are being carried out and many very technical ones which do not have any substantial effect on the public. Of those that do there are 1,200. The other missing bit is that some aspects of European legislation find their way into British law without necessarily going through the transposition of a British statutory instrument. I do not know those figures because they do not come to the Merits Committee. The European regulations that come to the Merits Committee, and which are included in that 1,200, are the ones that need to be transposed into British secondary legislation.

I support the amendment tabled by my noble friend Lord Hodgson which stipulates that regulatory activity should be conducted to ensure regulatory stability. My noble friend has justified the clause from a business perspective and I would like to do the same from a consumer perspective. As the Committee will be aware, if regulations are inconsistent, there could be variations in services and standards from one business to the next. It is difficult for the consumer who will surely be disadvantaged if the Government are unable to issue clear and consistent directions. Inconsistency will lead again to the LBRO being swamped with complaints; that is, assuming that the consumer will be aware that yet another regulatory body has been established and that their complaint should be directed here rather than to their local authority which no longer has power to officiate in this. It seems certain that the introduction of such a system will mean that consumer concerns will take even longer to be addressed than they are now. Realising that this is a real and potential problem, will the Minister consider this amendment, if only to appease me, so that the consumer will be protected from the effects of the Bill’s increasing bureaucracy?

If possible, one of my aims is certainly to appease the noble Baroness, but I am not sure that I shall succeed. On the interesting discussion aroused by this amendment concerning the number and type of European regulations, I shall include in the letter that I have already promised to write about this issue—found in Clause 4 but also relevant to this clause—some comments about what has been said by the noble Lord, Lord Cope, and the noble Viscount, Lord Eccles.

We say that the amendment is covered by the word “consistency” in any event. I went back to the 1997 report of the task force in which the principles of good regulation were first published. Let us look at it in slightly more detail, particularly at the task force’s subsequent publication, The Principles of Good Regulation, where each of the five principles was expanded upon. The task force stated that the principle of consistency demands that regulation should be predictable to bring consistency and regulatory stability.

So the inclusion of consistency in the LBRO’s objective means that the LBRO is already required to secure that local authorities exercise their regulatory functions in a manner that ensures regulatory stability. Therefore, we do not believe that the amendment is necessary because we believe that it is covered already by the word “consistency”.

I am grateful to the Minister. I am particularly grateful to my noble friend Lord Cope who hammered home the points with an elegance and vigour that I cannot hope to match. I am relieved and reassured by this definition of “consistent” to include predictability and regulatory stability. Since I have quoted codes at the Minister at length, I am slightly hoisted by my own petard. Having had those reassurances from the Minister about the interpretation of “consistent”, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 5 agreed to.

26: After Clause 5, insert the following new Clause—

“Duty to secure compliance with principles

Where a local authority has been granted powers under Part 3 of this Act, LBRO shall have the duty of ensuring and certifying that authority is compliant with section 5(2) of this Act.”

The noble Lord said: When he recommended the introduction of administrative penalties, Professor Macrory said that they should be introduced only for regulators that were consistently Hampton-compliant. The Government have not included any such requirement in the Bill, even though the Prime Minister, when Chancellor, accepted the report in full without, incidentally, taking any further consultation with stakeholders on behalf of the Government. This amendment seeks to put that right. I had felt that this could have been achieved by requiring the LBRO to certify compliance with the code, but as the Minister rejected this in the debate on Amendment No. 21, this amendment presents an alternative approach to that problem.

It is the view of many in business that administrative penalties as set out in Part 3, including fixed penalty fines, could end up as parking-ticket style fines which do little to encourage compliance. The requirement that they should be issued only by those who have adopted a Hampton culture, where prosecution and punishment are a last resort, is therefore an essential safeguard. This is even more important for the hundreds of local authorities which cannot be monitored effectively by central government. This Hampton approach is supposed to be embodied in the code of practice and the principles set out in Clause 5(2). I beg to move.

I understand the thrust of what the noble Lord is saying but I was interested in his comment that hundreds of local authorities cannot be monitored effectively by central government. If you are one of those local authorities, you feel that you are being monitored by central government, if not effectively. But in this context we are talking about monitoring by a single organisation—the LBRO. I am rather unhappy about what I interpret as applying an extra layer of bureaucracy. I believe that we have managed to get to 11 minutes past seven without using that term, which is quite extraordinary. This would mean another stage in the control. Each local authority will have guidance in any event. This would be an additional stage which would probably be too much for the local authority in practical terms and perhaps too much for the LBRO as well; it would certainly add to costs. So, reluctantly, I part company with the noble Lord on this one.

Amendment No. 26 would give the LBRO an additional duty over local authorities, certifying that where an authority has been awarded the right to use the sanctioning powers in Part 3, it is compliant with the better regulation principles in Clause 5(2). This would be extremely burdensome and would hamper the LBRO’s ability to effectively carry out its core functions and deliver its objective. While the Government will look to the LBRO for advice on whether local authorities are generally compliant with the principles of better regulation, it would be inappropriate for the LBRO to certify each authority individually. It is more appropriate that the Secretary of State is satisfied that a regulator—either national or local—is acting, or is capable of acting, in a way that conforms with the principles of good regulation before awarding the sanctioning power. That is why we will, in due course, move government Amendment No. 164 which will do precisely what the noble Lord is looking for:

“The relevant authority may not make any provision under or by virtue of this Part conferring power on a regulator”—

it then sets out the various possibilities under Part 3—

“unless the authority is satisfied that the regulator will act in accordance with the principles referred to in section 5(2) in exercising that power”.

It has always been the Government’s intention that only those regulators who are capable of acting in a way that is compliant with the principles of better regulation should have access to the new sanctions. In due course, Amendment No. 164 will achieve that.

I do not want to enter the argument now, but we do not believe that the fixed monetary penalty will be like parking fines. We will come back to that, and I look forward to it in due course. I hope that this is a satisfactory answer to the noble Lord’s amendment.

I am most grateful to the Minister for his response, particularly for drawing the attention of Members of the Committee to government Amendment No. 164, which I shall take away and look at carefully. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 6 [Guidance to local authorities]:

27: Clause 6, page 3, line 38, after “authorities” insert “and police forces”

The noble Lord said: I shall engage in a little off-piste skiing on this amendment, but I would like to draw the Government’s attention to some important issues which I would like them to find a way to address. I am encouraged to do so because the Minister has earlier, in talking about the purposes of the Bill, talked about avoiding powers being used in a conflicting way and about consistency, and he has just told us a little bit about regulatory stability.

I am afraid that I must say—and I do so with due deference—that too often the enforcement of regulation and the position of the police vis-à-vis local business and commerce can be quite finicky and difficult to deal with. It can represent a considerable regulatory burden. That is why I seek to change Clause 6(2), where it says,

“Guidance … may be given to … local authorities”,

to say that guidance can be given to one or more local authorities “and police forces”.

I shall illuminate the Minister’s thinking with a couple of examples. The Register of Members’ Interests will show that I am a director of a brewery and pub operator. We have 2,500 pubs around the country. The idea that we can achieve regulatory consistency with the licensing laws is a joke. The different police forces enforce in different ways. Different approaches are taken within different towns. We have just had a case where two young women came into a pub. One, clearly above the drinking age, orders two drinks and asks her colleague to pay. The colleague pays, whereupon the woman at the front says “I am a police officer and that is an under-age person who has just paid for the drinks”. This sort of activity is going on quite widely, and if we are going to have better regulation—this is not about encouraging binge drinking, I am all for stopping binge drinking—we have to find a way that firms, businesses and individuals who are affected by the activities of local police forces are able to find a way to talk to the Local Better Regulation Office about how their interests might be protected.

I shall give three more, very quick, examples. I have an association with a chain of children’s clothing shops, one of which is in Kensington High Street. It is told not to report shoplifting because, as a friendly sergeant said, “We don’t want to record a case because we probably can’t clear it up, and then our clear-up rate diminishes and we are not hitting targets”. If we are going to find a way to have better regulation, the shopkeeper, who has health and safety, the minimum wage and all the other things—and quite right too—is entitled to make sure that regulation of another sort that could benefit him is being fairly and proportionately applied. If one talks to smaller firms across the country, one of the things they raise is fly-tipping. They can find the person who is doing the fly-tipping, and they will be responsible under the environmental requirements of Clause 4(3)(e), but will the police enforce something when the person is found? There are businesses that face incursion by Travellers, who break down fences, enter premises and set up camps, but can they get the police to remove them?

I understand that the Bill is about better regulation and local authorities, but there is a large tranche of activity where police forces are not acting in a way that in any way approaches the Hampton principles. They are looking for easy hits and fail to respond to the genuine requirements of individual firms, individuals and businesses large and small. While I do not doubt for a moment that the Minister is going to tell me that this amendment is out of order here, the Government have to think of a way whereby people can have more confidence and a more realistic expectation that the sorts of issues that I have raised—I have raised only four to try to illuminate the point I am making—can properly be addressed in the cause of better regulation. I beg to move.

The Committee will be grateful to the noble Lord, Lord Hodgson, for tabling this amendment, speaking to it and giving us some real-life examples of the problem he set out. It gives me an opportunity to comment on the range of work undertaken by local authority regulatory services. Their work to protect the public under many different headings often involves direct co-operation with the police; for instance, where trading standards officers tackle major organised scams or licensing officers work to tackle the implications of under-age sales for community safety.

The overlaps are many and we expect—I am sure it will happen—the LBRO to liaise routinely with the Home Office, not least through its powers to give advice to Ministers on any matter relating to the exercise of the relevant functions by local authorities. That may well extend to questions of overlap and liaison with the work of other relevant authorities, including the police.

However—I suspect that the noble Lord thought a “however”, if not a “but”, was coming—it is clear that a direct extension of the LBRO’s work in the manner proposed, which one can see from reading further on in Clause 6 would require the police to have regard to its guidance, would be a significant departure from the body that we have consulted on. It would require a complete review of many other aspects of the legislation, not least the LBRO’s objective, which the noble Lord has been trying to widen during the course of our proceedings this afternoon. We do not think his amendment is the answer, but I reassure him, if I can, that this evening he has proved the relevance of the connection between police work and regulatory work by local authorities.

I began by saying that I was going to do some off-piste skiing, and I did not expect this to be welcomed with open arms by the Minister. I am grateful for the sympathetic noises. It will be important that we find a way to encourage the LBRO to liaise with the police forces and for the police forces to take proper note of what the LBRO says to them if we are to get the cohesive approach that will be needed if we are to get the regulatory system that we are all striving for in this Bill. I shall read carefully what the Minister said. I thank him for his comments and am glad that he appreciates that this is a widespread problem about which people feel quite strongly around the country. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 28 not moved.]

29: Clause 6, page 4, line 2, at end insert—

“(d) may relate to the priorities for the allocation of resources by local authorities in respect of relevant functions.”

The noble Baroness said: In moving Amendment No. 29, I shall also speak to Clause 11 stand part. A number of amendments tabled in the name of the noble Viscount, Lord Eccles, are also in this group.

My amendment is about resources. It adds the issue of priority in the allocation of resources to the guidance section and deletes the rather more heavy-handed, as I read them, provisions in Clause 11. Every Bill tends to assume that there are unlimited resources for its own subject matter, but we are talking about a cake where the slice for a particular subject may not be enough to do all that everyone wants. If the LBRO is to have the influence that we have been assuming and welcoming, it should face up to the fact that the slice of cake may not be adequate and advise local authorities on how they should prioritise the resources that are available. Clause 11 provides for enforcement priorities, including resources. It is a rather heavier hand. The Minister may be able to explain the relationship between Clauses 6 and 11 and say whether one has more effect than the other. I beg to move.

This may be a convenient moment to support the noble Baroness, Lady Hamwee, in her approach to Clause 11 and to speak to my Amendments Nos. 40A to 40D and 42A. I entirely agree with the description “heavy handed”. That is the problem with this clause. The noble Baroness would deal with that if she proposed an amendment to strike the clause out. My proposal is to amend the clause. The principle behind the amendment seems to be that the emphasis throughout the Bill should be on advice and not on instructing or second-guessing local authorities; still less on encouraging them into box-ticking lists.

My amendments have two objectives. One is to bring the LBRO and local authorities together in their pursuit of effective ways of achieving better regulation. They should not be in opposition to each other. Each local authority will have its own approach to an experience of regulatory activities, and in that regard I feel rather short of evidence of all this inconsistency, slack behaviour and lack of regard to all the work that has been done to achieve better regulation to date. Each local authority will have been, or can be, persuaded to set priorities. How else can a local authority control its expenditure—another point made by the noble Baroness?

The second objective is that if the dialogue between the LBRO and local authorities becomes and remains friendly and positive, both pursuing the same objective, there is no need for the Secretary of State to intervene or to be involved in their programme of continuous improvement. If the Secretary of State is not involved, that enhances the independence of the LBRO, which is quite threatened throughout the Bill by the described relationships between the Secretary of State and the LBRO, which are pretty directional. Hence my amendment would leave out Clause 6(5) to (8) inclusive, thus removing the Secretary of State from the scene.

Local authorities have repeatedly requested that the Government clarify their priorities for local authority regulatory enforcement. In March 2007, Mr Peter Rogers, chief executive of Westminster Council, carried out the first cross-cutting review of national regulatory priorities. The Government accepted the Rogers recommendations, and for the first time local authorities have been presented with a clear, evidence-based account of the issues which the Government believe should be prioritised in their work.

Clause 11 makes provision for the LBRO to carry this valuable work forward, and I emphasise that this has been strongly supported by both business and local authorities. The provisions in the clause will not prevent councils from giving due regard to their own priorities; nor will they reduce the regulatory standards that businesses need to meet. The clause will guarantee that central government continues to give a clear message to local authorities about their priorities. As I say, local authorities seem to welcome that.

Removing Clause 11 and replacing it with the provisions in Amendment No. 29 would remove the detailed provisions on the LBRO’s function of preparing and publishing a list of national regulatory priorities. Significantly, the amendments would remove the obligation placed on the LBRO to prepare and publish a list of national regulatory priorities. In short, under Clause 11, the LBRO must prepare and publish a list of regulatory priorities, but under Amendment No. 29, the LBRO may issue guidance on local authority priorities in allocating resources. Given the importance of the Government issuing clear messages to local authorities and the strong support expressed for the LBRO preparing and publishing a list of regulatory priorities, our view is that the LBRO should be obliged to play this role. Clause 11, which obliges it to play that role, is therefore appropriate.

Amendments Nos. 40A to 40D and Amendment No. 42A, all in the name of the noble Viscount, Lord Eccles, would remove the key safeguard from Clause 11. In particular, these amendments would allow the LBRO to publish a list of regulatory priorities without first receiving the consent of the Secretary of State. I know why the noble Viscount is concerned about that, but in this instance that may be mistaken. We think that the consent of the Secretary of State is a safeguard here and that it is appropriate for him or her to be ultimately responsible for the content of any list published by the LBRO, because the Secretary of State is accountable to Parliament. These amendments would also remove the obligation placed on the LBRO to review a list of priorities on its own initiative and when requested to do so by the Secretary of State. It is vital that any list of priorities is reviewed to ensure that it remains up to date. Our view is that the LBRO should be obliged to do that.

Amendment No. 41 has not been moved. I have been through the amendments in this group as best I can. It is for the reasons I have stated that we think that the noble Baroness is wrong. She makes an interesting point, but Clause 11 is of significance and is widely supported.

I wondered whether the noble Viscount wanted to come back on any of that. I am grateful to him for his support. I forgot to say in my opening remarks that I have put a tick against a number of his amendments in this group, which is my code for saying that I agree with them. The Minister says that local authorities want central government to be clearer about their priorities. It does not seem to me that it needs to have Clause 11 to do that, because Clause 11 amounts very closely to the Secretary of State setting priorities, which is the heavy hand to which I refer.

Some of these are difficult issues, but local government saying that it wants something like this is almost surrendering in a way which I am very disappointed to hear. I have to say that I have not had a briefing from the Local Government Association for this stage of the Bill. I went to find my mail because briefings so often arrive as one is walking into a Committee.

Hansard should record that general consensus. I have not had a briefing. I would naturally have taken very seriously anything that the LGA has to say. However, I hear what has been said. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.