I shall make the usual routine announcement. If there is a Division in the Chamber while we are sitting, the Committee will adjourn as soon as the Division Bells are rung and will resume after 10 minutes.

Clause 6 [Guidance to local authorities]:

moved Amendment No. 30:

I have a lot of sympathy for what the noble Lord has just said but a point occurs to me. Local authorities must have regard to guidance. There is an issue concerning the weight of guidance, which we shall come to. I do not know whether the noble Lord has it in mind that a request made by one authority will have force as regards all other authorities, but it seems me to that he makes a very good point here. Whether it is about guidance in the formal sense or the less formal sense in which we would probably use the term outside this building, I do not know, but, having identified the point, there may be some implications which have not been foreseen and which one might think through after today.

The amendment would transform the way in which the LBRO operated. Clause 6 sets out its function of giving guidance to which local authorities must have regard. Guidance can be issued to one or more local authorities, in relation to one or more relevant regulatory functions and, where necessary, in relation to particular cases. The subject matter of any such guidance is rightly a matter for the LBRO’s discretion. In practice, we would expect the LBRO to feel able to give advice to businesses and local authorities on an ad hoc basis where this would be helpful. This amendment would require the LBRO to give guidance on request.

We see two risks here, both of them quite serious. First, the LBRO would quickly become completely overloaded with requests for guidance. I emphasise that it has always been our intention that the LBRO should not be a huge organisation, but a compact one. Secondly, even though there is a cost element in the noble Lord’s amendment, we still think that vexatious use could easily be made of this process. A business might delay effective enforcement action by calling in the LBRO.

The LBRO’s responsiveness to topical issues in regulatory enforcement by local authorities will of course be critical. Perhaps I may add that if the LBRO is asked for guidance and it refuses quite unreasonably to give it, its refusal could be challenged by way of judicial review. Whether such an application is successful would depend on the level of unreasonableness, but we think that we have this right. The amendment would open the door too wide.

I am grateful to the noble Baroness, Lady Hamwee, for her sympathy. I expected that the Minister would not like an obligation on the LBRO and I accept the force of the arguments about administrative overload and vexatious use. I understand too what the Minister has said about how the LBRO will be expected to be responsive. However, in any practical case, I have to say that it is unreasonable to think that a business will go to judicial review to try and get the LBRO to give advice. That would never happen because it would not be worthwhile. If, in practice, as the Minister hopes—and I share those hopes—the LBRO responds positively, that will be fine. If, however, the LBRO finds that it is in a sticky position and uses delaying tactics to avoid having to make difficult decisions, I suspect that some of its value will be undermined because I do not think that those seeking advice would ever wish to go to court to try and force the LBRO to give advice as appropriate. However, I just wanted to explore the issue. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendment No. 31:

As the Explanatory Notes and the guide accompanying the Bill make clear, the Government have every expectation that the LBRO will consult relevant local authorities before issuing any guidance under its Clause 6 powers. Subsection 6(4) already requires the LBRO to consult those who are the subject of regulation—in other words, businesses.

I accept the argument for a specific statutory requirement to consult relevant local authorities as well. The noble Baroness has a good point here. If businesses are to be consulted under Clause 6, so should relevant local authorities. I hope that she will understand that, having made that concession, we would like to take her amendment away to consider the right form for a later stage. If she will be kind enough to withdraw it, she knows that we are sympathetic to it.

That deals with Amendment No. 32. However, I am afraid that I am not able to give ground on Amendment No. 31. Of course we understand its intention that the LBRO should be required to consult prior to varying or revoking guidance that it has issued under Clause 6. As the noble Baroness forecast when speaking to the amendment, we do not believe that that is necessary.

Under Clause 6(6), the LBRO may only vary or revoke guidance that it has issued under Clause 6 with further guidance issued under that clause. In effect, that means that the LBRO must comply with all provisions in Clause 6, including those regarding consultation at subsection (4), prior to varying or revoking guidance. I hope that that satisfies the noble Baroness.

Turning to Amendment No. 40E, I reassure the Committee that it is the Government’s expectation that the LBRO will consult representative bodies such as LACORS, the Trading Standards Institute and the British Retail Consortium, when preparing a list of regulatory priorities under Clause 11. I emphasise that this amendment relates to Clause 11, which is rather different from Clause 6—the guidance clause. While “representative bodies” are not specifically mentioned in Clause 11, the guide to the Bill makes clear our intentions regarding this point. Subsection (3) makes sufficient provision regarding the LBRO’s obligation to consult prior to publishing a list of regulatory priorities.

I hope that the noble Baroness will be pleased rather than sorry at my response to her amendments.

We are all accustomed, when the spirit of an amendment is accepted by the Government, to having it taken away and made absolutely perfect. There was one occasion in my career here when a previous Lord Chancellor said, “The noble Baroness’s drafting is better than mine”, and I have treasured the memory of that moment; but it happened only once—it was some 14 years ago. I am grateful to the Minister.

With regard to what he said about the contents of the Explanatory Notes and the guide to the Bill, while I entirely take his good faith, they have a health warning and should not take the place of the Bill. I am glad that on this occasion the Minister accepts that the Bill should state what is in the Government’s mind.

On Clause 6(6), I had in mind a question as to whether, in order to revoke guidance and not replace it with anything, it is necessary to issue guidance that says, “Dear reader … Love and kisses”, and nothing in between—that is what the clause seems to suggest. There is no guidance. That seems to be nonsense. I am glad to say, for Hansard, that the noble Lord, Lord Borrie, seems to be nodding. Perhaps he is just indicating that he understands my thinking, while not agreeing with it—I would not like to commit him too much. I leave that matter for the Government to consider. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 32 not moved.]

moved Amendment No. 32A:

The noble Lord mentioned representative bodies and I am inclined to agree with him. Do they include trade unions? It is astonishing to me that the LBRO will deal with local government, which is in the public sector in which the unions are strongly organised, but they are hardly mentioned in any connection with this Bill. If the noble Lord intends “representative bodies” to include unions, I would support him.

The amendment has no restriction on any representative body. I wish every representative body to be able to take advantage of this change. With the wind provided by the noble Baroness in my sails, perhaps I can push the Minister a little harder.

The noble Lord can push as hard as he likes but he has given the answer to his own amendment. I can assure the noble Lord and the Committee that the use of the word “persons” will include representative bodies. That is the legal position, so he can feel fairly happy.

I am grateful for that reassurance. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 6 agreed to.

Clause 7 [Guidance to local authorities: enforcement]:

moved Amendment No. 33:

I repeat that I am a member of the Delegated Powers and Regulatory Reform Committee. I have not seen a reply from the committee to the Minister’s letter of 10 January to the noble Lord, Lord Goodhart. I am therefore seeking more information, and do not know whether the committee will write back to say, “Thank you very much” or “So far, so good, but please go further”. We shall no doubt find that out.

It is mainly Amendments Nos. 33 and 52 that concern me. I hope that I understand them correctly; I have no doubt that the Minister will correct me if I do not. Where the LBRO could have issued a direction to all 400 authorities, it will be able, as a result of the amendments, to issue only to one. How often could it issue a direction to one authority? On Monday, it could issue a direction to one, on Tuesday, it could issue a direction to another and on Wednesday, it could issue to a third. For what is it intended that the LBRO might use these directions? As the Minister said, under Clause 15, the Secretary of State can start the process by giving the LBRO a direction to make a direction. It would help the Committee enormously if we understood what it is intended that the power of direction might be used to achieve.

In seeking clarification, I may reveal ignorance, which certainly exists. Do the amendments have this effect in Clause 7(1), which reads:

“LBRO may… direct one or more local authorities… to comply with”

whatever the directions are? It has been suggested that it might be more appropriate if it said,

“direct local authorities in England and Wales to have regard to”

so that the guidance is less than mandatory but is none the less valuable. Will the amendments have that desirable effect? If not, why not?

We are very sorry that the noble Lord, Lord Jones, who is supposedly leading on the Bill, is again, on the second day of Committee, not here. We are fortunate to have with us a Minister as experienced as the noble Lord, Lord Bach, for what is turning out to be a complicated, difficult Bill, which requires attention and skill. It is working very well in the quiet of the Moses Room, in which I do not normally like to work. I thank the Minister for his care in handling the Bill and once again register our disappointment that the noble Lord, Lord Jones, is not here for the second day.

I, too, am pleased that the Minister has listened to the Delegated Powers and Regulatory Reform Committee’s concern over the LBRO’s ability to direct one or more local authorities into compliance. However, while the Minister might attempt to persuade us that there is no longer a problem with the LBRO issuing a directive if there is now only a single local government recipient—by arguing that such employment of a directive falls into the traditional remit of the situation of last resort when the Secretary of State is forced to take control of an errant body and bring it back into compliance according to the will of Parliament—I argue in support of my noble friend Lord Eccles that the amendment does little to change the Secretary of State’s capabilities. In fact, the Secretary of State can realise exactly what the original clause in the Bill allowed him to do, only now he must limit himself to issuing a given direction, serially, and not in one fell swoop. I hope that the Minister will assure us that this will not happen.

I am grateful to Members of the Committee for discussing these important amendments. I will do my best to respond, first, to the noble Viscount, Lord Eccles. Our amendment fully implements the recommendations of the Delegated Powers and Regulatory Reform Committee on this point. It was concerned that,

“directions under clause 7 should (if they will affect more than a single authority) be contained in an instrument subject to the negative procedure”.

On the noble Viscount’s question about the LBRO giving directions to local authorities sequentially, one at a time, effectively circumventing this amendment, if that were the case, the LBRO would certainly be acting against the Government’s intentions in laying our amendments. Anticipating Clauses 15 and 16, were the LBRO to act in this way, the Government would certainly consider using their powers of direction to stop it doing so. But the LBRO needs the discretion to take administrative decisions on particular authorities if such issues arise, and the amended provision allows for this.

The noble and learned Lord, Lord Lyell, asked whether Amendment No. 33 made a difference to the mandatory position of Clause 7. I am sure that I disappoint him by saying that it does not: it is still a direction clause rather than a guidance clause—the “have regard to”. When we are discussing whether Clause 7 should stand part of the Bill, I will explain why we—and not just us; there are some perhaps surprising allies on this—felt that there had to be a sort of backstop compulsory element in case this did not work.

Directions would require that local authorities comply with them. I hope we are satisfying the Delegated Powers and Regulatory Reform Committee in agreeing that this was not suitable for ministerial diktat but needed to go through an order under the negative procedure. In other words, Parliament would have a role before such a direction could be issued. I hope that that answers the noble Viscount’s question to some extent, and hope to do better when we talk about whether Clause 7 should stand part.

I am grateful for what the noble Baroness, Lady Wilcox, said. If she will be patient—and I know that she is a very patient woman—she will see my noble friend Lord Jones very shortly.

We have language like “backstop” and “compulsory”, and a letter the noble Lord, Lord Jones, wrote to me in December, after Second Reading, contained the words “reserved power”. We are seeking some enlightenment. The only thing the Minister said was “administrative purposes”. Administrative purposes come every day. What is this power intended to be kept for? If local authorities thought that it was likely to be frequently used, they would simply sit on their hands and say, “We had better wait until we are told”.

Let me try to do a bit better than before, and I will move forward a bit. The point of Clause 7 is as follows. We understand the concerns relating to it. It allows the LBRO to give directions to one or more local authorities to comply with guidance that it, or another body, such as a national regulator, has issued. The power to direct is intended as a backstop power that might be used where, for example, one or more local authorities persistently acts with disregard for a particular piece of guidance and that disregard is, frankly, detrimental to business or the public or, as could often happen, both.

It is not intended that the LBRO will be directing local authorities as a matter of routine, and its use of this power is subject to important controls. Let me set those out. It may only use the power to direct a local authority: first, with the consent of the Secretary of State, or Welsh Ministers where applicable; secondly, after consultation with any relevant regulator; and, thirdly, after consultation with such other persons as the LBRO considers appropriate. We believe that that will include local authorities, LACORS and professional bodies such as the Trading Standards Institute and the Chartered Institute of Environmental Health.

The Committee will know that the Government have accepted the recommendation that that should be subject to a statutory instrument process where directions apply to more than one local authority.

Our view is that these provisions are vital in enabling the LBRO to achieve its objective and that sufficient safeguards are in place—I know that this is what the noble Viscount will be looking for—to ensure that the LBRO uses its power to direct compliance with guidance in a responsible manner.

The Government recognise that there are legitimate anxieties about the use of powers of direction by public bodies at the centre in the context of local democracy. I suspect that that is what the noble and learned Lord, Lord Lyell, and the noble Viscount, Lord Eccles, are getting at in their questions. It is easy to caricature this debate as one of central versus local government, but the LBRO needs to be able to address the particular issues facing regulatory services which are, frankly, of critical national importance but, perhaps too often, although certainly not always, have an extremely low priority for local authorities in practice.

When we were discussing the composition of the LBRO board early on Monday afternoon, I talked about the range of stakeholders potentially involved. I know that I am taking up the Committee’s time, but this is an important group, so it may be helpful to review its attitude to the question under discussion.

Our consultation produced an overwhelming view from business that the LBRO would need significant powers of compulsion beyond those of merely issuing guidance. Perhaps that is not very surprising. But business is not alone in that view; many of those who understand the sector well, and have its best interests at heart, take the view that a small, strategic body with significant powers is critical to the future success of our local regulatory services.

I refer the Committee to the briefing on the Bill provided by the National Consumer Council, which has expressed its support for the LBRO’s power to direct, urged the Government to ensure that the LBRO is provided with sufficient discretion to use the power effectively, and stated that,

“LBRO cannot secure consistency in practice if Local Authority Regulators are free to chose to ignore its guidance”.

There is also briefing from the Trading Standards Institute, which believes that a power to make guidance compulsory—precisely what we have drafted—will be necessary in some cases.

It is right that where legislation seeks to give a body this sort of direction power it should be explained as fully as it can be; but I pray in aid the support of experts in this field, not least people involved in local government, who think that this cannot work unless there is some backstop power of direction. I hope that I have gone some way to answering the questions that have been raised.

On Question, amendment agreed to.

moved Amendment No. 34:

I will speak to the Question whether Clause 7 should stand part of the Bill, which is grouped with the amendment, with no great expectation that the Government will accept it. We have already been reminded that there are organisations—which I would not suggest would readily go to “war-war” beyond “jaw-jaw”—that have said that they want an opportunity for a degree of compulsion.

It is important that we address what is, in some ways, at the heart of the matter. We will come to other relevant clauses, but this is about local democracy, the autonomy of each local authority and, somewhere else in the forest, the need to ensure proper regulation. My objection is, of course, to the power of direction. I have heard so much over the years about local authorities’ freedoms and flexibilities and yet, too often, we come to a point where it is freedom “so far but no further”. There may be a direction to a recalcitrant individual authority or to all local authorities. Perhaps the Minister can tell us whether the requirement in subsection (4) that the LBRO consult before giving a direction will extend from the individual authority to all local authorities. This follows our debate on an earlier clause. At the moment the consultation is with “such other persons”, other than the relevant regulator, “as LBRO considers appropriate”.

Either way, having given guidance, if the LBRO is then faced with the question of whether it should give a direction, I would say that it has pretty much failed because its guidance has not taken everyone along with it, and that is the style that we are being encouraged to assume will be adopted. It will also have corrupted the English language in the process, because while a direction about guidance is not a contradiction in terms, perhaps it should be.

Under Clause 6, local authorities must have “regard” to guidance. Every local authority will have a published enforcement policy, it will be required to comply with the statutory regulator’s compliance code, and the manner in which functions should be conducted is expected to be clear, proportionate and transparent. If a local authority does not have due regard—which properly allows for rejection; due regard cannot mean rolling over and saying yes to everything—to guidance, there are legal appeal mechanisms, a corporate complaints procedure and the local government ombudsman. All of this has been pointed out by the Local Authorities Coordinators of Regulatory Services in its very good briefing.

I would like to use this opportunity to apologise to LACORS because on Monday I indicated that I had not had a briefing from the LGA. I thought that when the noble Baroness, Lady Turner, referred to the LGA briefing it was a separate document, but it was the one we have had from LACORS with the LGA. It was not tardy at all, as I might have implied, so I apologise for that.

The main point is whether a power of direction, that heavy hand of “war-war”, should remain.

I notice that the noble Baroness, Lady Hamwee, has referred to the briefing from LACORS because of her particular point that the Local Government Association is mentioned in it. I thought that this briefing, while in some respects interesting and useful, is particularly weak on Clause 7. It refers to:

“Removal of the power of the LBRO to direct local authorities to comply with its guidance”.

Local authorities are already required to have regard to LBRO guidance. In thinking that Clause 6 is unnecessary, surely the LGA is thinking of the generality. Indeed, as my noble friend the Minister indicated a short while ago, the LBRO is not going to jump in just because of a difference of view between them as to whether the guidance issued should be followed.

Enforcement is completely unnecessary if on all occasions every local authority up and down the country complies with what the LBRO says is significant and important. But what if a wayward local authority persistently takes no notice of the guidance? It makes no sense for the LBRO to be given no provision in statute to deal with an exceptional case. Statutes have to deal with the exceptional case as well as ordinary circumstances, and let us not forget the safeguards. There has to be ministerial consent, or the consent of Welsh Ministers, and Clause 7(4) provides that:

“Before giving a direction … LBRO must consult—

(a) any relevant regulator, and

(b) such other persons as LBRO considers appropriate”.

So safeguards are built in. There is no intention that the new body should rampage over local authorities. However, if it has given guidance, and it is clear that that is not being taken notice of by a particular local authority, especially persistently, surely there has to be a back-up power, which is what Clause 7 is.

I wish that I were comforted by the persuasive arguments of the noble Lord, Lord Borrie, but I am not. It is bold to assert that if one makes provisions in legislation of the kind in Clause 7, nobody will use them in an untoward way in the future.

My noble friend Lord Hodgson spoke of the difference between talking and going to war. I remind the Committee that if one goes to war, one has to have a pretty good reason to believe that one would win. I cannot think that any single local authority would rate its chances very highly. It seems that all the leverage is on the side of central government.

The Minister said that the amendments give Parliament the right to pass a negative resolution to stop directions being given to more than one authority. Nevertheless, another sentence in the report of the Delegated Powers and Regulatory Reform Committee states:

“We consider that the Minister should provide a list of the guidance to which Clause 7(1)(b) refers”.

As the noble Baroness said, there is something called “advice” and there is something called “guidance”, which is written. Some of my questions on the previous amendment sought more information on the level of certainty of the guidance at which somebody, in the Secretary of State’s office, because of Clause 15, in a regulator’s office, because of some of the provisions in Clause 7, or in the LBRO’s office began to think that it was getting time to have a direction. It is not as though it is a normal situation where a Secretary of State is giving directions to a public body; many more players are involved who can initiate the process.

I apologise for going on at length. It has been claimed that support exists. I do not know whether Members of the Committee have read a famous old book by a chap called Dr Eric Berne, called Games People Play. There is a famous game in it called “So you made me do it”. When government pray in aid stakeholders and supporters, and list trading standards, institutes and all the rest, it is moving very close to a game of “So you made me do it”.

The power for the LBRO to make directions in Clause 7(1) as amended today by Amendment No. 33, which will introduce subsection (3A), still raises two major issues. Before I go into them, I point out that the clause has a contradictory title: Guidance to local authorities: enforcement. I have always been brought up to believe that when Daddy or Grandaddy gave me guidance, they were not intending to enforce it, and I was hoping to find that they had no power to do so.

Further, I can find nothing in the Rogers report, which was cited by the Minister on Monday. It is 187 pages long and, on first reading, looks like a most diligent and excellent report. I think that a huge amount of work has gone into it. I find nothing in its recommendations which goes beyond a request that the Government agree the proposed six priorities, which are set out—the Government had asked for five; Rogers came up with six—and that local authorities, having been given the approval, which will assist them at all times but particularly in times of straitened resources, get on with the job, and that the LBRO be the guardian and monitor of best practice. It is clear that Rogers is fully in support of the LBRO being the guardian and monitor of best practice; he says nothing about enforcement by the LBRO upon local authorities. Nor is there good evidence that enforcement upon local authorities was part of Hampton, still less of Macrory. They were all looking for enlightened, continuous improvement in the process of regulation by consent.

The first big issue in Clause 7 is that it gives the LBRO, a non-departmental public body, the power to make guidance mandatory by direction, and a direction compels compliance. I have had some correspondence with the department, as the Minister will know, and I believe that this is an unprecedented use of the power to direct. If there is a precedent, will the Minister provide the Committee with it? The main reason I believe it to be unprecedented is its indirect nature and the number of parties involved. I cannot find an instance as complex as this one.

The second issue is that the width of the duty upon the LBRO to give guidance and to support the giving of guidance by regulators under their respective Acts means that a direction made by the LBRO will still have legislative character. This raises the question as to whether the powers contained in the Bill can be justified. Before attempting to give my answer, it is necessary for me to go back to something the Minister reminded the Committee about—the interaction between Clauses 15 and 7. Although Clause 7 has the safeguard of the Secretary of State needing to give consent to an LBRO proposal to direct, nevertheless, under Clause 15, the Secretary of State could give the LBRO a direction to direct a local authority, thus overriding Clause 7. That is not altered by the amendments put forward today. This combination of powers to direct places the control of the scheme laid out in the Bill unequivocally in the hands of the Secretary of State.

Amendments Nos. 33 and 52 do not change the fundamental position; they reduce the powers so that they can only be exercised without parliamentary scrutiny if they are applied to one local authority. Thus, if it were judged that the regulatory behaviour of Camden in response to guidance was inconsistent with that of Cornwall, and that both were in error, a direction could be given first to one and then to the other to get into line. It seems extremely unlikely that one ever could achieve consistency between Northumberland and Hackney, for example. The process could either start under Clause 7 with the LBRO or under Clause 15 with the Secretary of State.

At this stage—again I apologise for speaking at some length—I will say more about how directions have come to be used to seek powers as wide as those in Clause 7, which need compelling justification. There are two reasons. As directions never have been, and are not, subject to parliamentary scrutiny and approval—and usually must be complied with—successive Governments have introduced them into Acts for limited purposes. The two accepted purposes are, first, for administrative reasons—matters such as how to prepare accounts or keep asset registers in line with Treasury practice—and, secondly, as a power of last resort. That is why one was pursuing backstop, compulsory and reserve powers. A power of last resort is to be used if and when a public body moves too far away from the purposes set for it by Parliament—so far, so good—and is well recorded in accepted commentaries such as Bennion and Craies. Later in the Bill, we will come to amendments which follow the Constitution Committee’s similar views on the subject of directions and the need to be cautious because of the lack of parliamentary scrutiny.

I turn to my second main issue. In recent years, the use and potential use of directions have been widened to include things such as general and policy directions and, in this instance, to include two ways—one direct and one indirect—in which guidance can be turned into an instruction on behalf of the Secretary of State, either on the LBRO’s own initiative or as a result of an initiative by a regulator. I believe that this puts local authorities in an impossible position. If so little confidence is shown in their ability to follow and resolve regulatory issues and if the determination of how they should be resolved is to move them into the hands of a centralised public body doing the bidding of the Secretary of State, why should local authorities be diligent? They could tell themselves and their constituents that, once again, they must do what they are told. It is no fun barking when a bigger dog is about to tell you how and when to do so.

These unprecedented powers are constitutionally undesirable in their own right and will damage the performance of local authorities. The clause should be dropped from the Bill.

I share the concern of the noble Baroness and my noble friend Lord Eccles over this clause because of the weakening of local authorities’ independence and freedom of action, which Clause 7 and, for that matter, some of the other provisions, including those in Clause 15, represent. I understand that in negotiating or trying to get someone to do something, it is a good idea to speak firmly and even better if you also have a big stick behind your back that the other party knows is there and that you can wave at them. Clause 7 is the big stick to follow the guidance.

I was interested to read the guide to the Regulatory Enforcement and Sanctions Bill, which the Minister kindly had put in the Printed Paper Office. I was particularly interested in the sections dealing with when guidance will be given. Question 10 of the document is headed, “What will LBRO issue guidance about?”. The answer is that it will,

“focus on issues relating to good practice in implementing the principles of better regulation”,

but that it will,

“not issue guidance on technical interpretation of legislation”.

It is all about good practice, apparently.

Turning to Clause 7, the guide says that in relation to the power to direct a local authority to comply with the guidance on good practice, the LBRO might choose to,

“use this power where, for example, a local authority persistently acts with disregard for a particular piece of guidance and the consequences of this disregard are detrimental to businesses”.

There is no mention of the consumer, just businesses. Someone with my background might be expected to approve of that aspect of it but it is interesting nevertheless. My point is that if the local authority decides—and goes on deciding and thus persistently disregards the guidance—that it wants to proceed in a particular manner which is not what the LBRO and, for that matter, the Secretary of State think is good practice, then it will be stamped on. Is that right? That is taking away from the local authority the power to regulate which it has otherwise been given by Parliament.

I am not in the least surprised that the bodies which the Minister mentioned as being in support of this sort of thing should be. They are national bodies; they want uniform restrictions all over. They do not want local authorities to have independence; they want everything centrally laid down. But local authorities have no point if they have no independence. The more we take it away from them, the less point there is in having them at all.

My noble friend Lady Wilcox regretted the absence of the noble Lord, Lord Jones. Of course, I share that thought, but we have the advantage in this Grand Committee of the noble Lord, Lord Bach. I urge him to think back to his extensive local government experience, and to how he would feel if he were still running a big local authority—or even a small one—and found that how he enforced legislation on businesses, shops and everything else in his area was going to be so crimped, confined and built in by national diktat, backed up by the big sticks of Clauses 7 and 15. The local authority merely has to carry it out. What is the point of being elected to carry it out if you are answerable not to the people who elected you for those responsibilities but to the LBRO and, above that, to the Secretary of State? All you can do is follow what they think is good practice, whether or not it seems to work in your particular local authority area.

This is a new regime, and a new and apparently important Bill with the LBRO. That being the case, there is nothing to be lost by writing further assurances into the Bill for people who would otherwise feel unhappy about it. That is why I wonder whether the wording in Amendment No. 34 could not be accepted. It refers to people who may be affected being kept informed, which seems quite a reasonable suggestion. It would mean that people who might be affected would have the right to be informed. I therefore wonder whether the Minister might consider accepting it on the grounds that this kind of amendment will give assurances to people who would otherwise feel rather suspicious about the new body because they do not know how things will work.

I hate to disagree with my noble friend, but I have always been puzzled in Committee on this Bill. Every amendment would add more and more words. Very few words are sufficient, but people want more and more. The word “appropriate” in Clause 7 is a good one. You must then rely on the intelligence of those issuing these documents to know that if they issue something then those affected ought to be informed. If you want to defy business practice and write essays—as an academic I would love to write longer essays and think of many more exceptions to this rule—then do it, but you are not adding anything substantial to the Bill.

As to the Question whether the clause shall stand part, again I am puzzled. I have never been involved in a local authority and, therefore, do not have the great regard for local authorities that some people involved in them have. However, I know one law of British politics: when parties are in opposition, they extol the freedom and value of local authorities and say that they should be able to do what they want, but when those parties get into power they see to it that local authorities are told what to do—or else. That has been my observation of local authority life for at least the past 42 years.

The appropriate paragraph—paragraph 11—in the guidance states that the power is a reserve measure and lots of safeguards are added as to when the LBRO may be able to use it. However, in these days of bird flu and all kinds of problems that might arise on which swift and effective action is necessary, it may be a requirement for the regulatory authority to tell the local authority, “I don’t want there to be any choice in this matter. I want you to get on with it and do it quickly, otherwise you are going to spread disease and destruction”. Businesses are often responsible for providing clean, efficient or effective services, so that consumers are not badly affected.

Therefore, I see Clause 7 as a good reserve power, which will not necessarily be used frequently but occasionally. Given government Amendment No. 33, which implements the recommendations of the Delegated Powers and Regulatory Reform Committee, I am astonished that people are still worried about this. The party opposite has forgotten its glorious days in power, and I do not want to remind it of them, but they were not designed to give lots of freedom to local authorities.

On the point that the noble Lord made about urgent matters such as avian flu, there are later amendments that absolutely take up those matters and suggest that the Bill might say rather more about them. I have now remembered what comes afterwards in the song—“I didn’t wanna do it; he made me do it, and all at once I rue it”.

I am sorry to detain your Lordships further and will try to be brief, but this is clearly an important point. I shall deal, first, with the intention to oppose Clause 7, to which the noble Baroness, Lady Hamwee, and my noble friend Lord Eccles have put their names. As Clause 7 stands, it gives the power of direction to local authorities, as many noble Lords have said. Therefore, we face a situation in which an unelected, non-departmental body is issuing a direction, which comes with a duty to comply, to elected local government bodies.

The Minister may say in mitigation that there are plenty of instances in which an unelected body might have the advantage of a non-partisan approach that is necessary to guide or even instruct an elected chamber. He could argue that we are in such a place. However, I do not believe that he can feasibly argue that the LBRO is independent. He has pointed out today that it is subject to the direction of the Secretary of State, so it is clear that it is not a non-departmental body but an arm of government that implements directions, not all of which, as my noble friend Lord Eccles said, are to be laid before Parliament. It is a flagrant bypassing of the constitutional process.

I shall be interested to see how the Minister attempts to defend this in the light of such a departure from traditional procedure. I suggest that this clause is a far cry from two of the stated aims in Clause 5—transparency and accountability. Therefore, I support the demand of my noble friend Lord Eccles that the Minister give us sufficient justification as to why this unprecedented relationship should be created. If he were able to do that, I would support my noble friend Lord Hodgson, whose Amendment No. 34 replaces the original instruction to publish any direction, subject to the opinion of the LBRO, to ensure that it gets into the hands of those who need to know.

As it stands, Clause 7(6) only pretends to the earlier stated aims of transparency and accountability. Its promise is cut short by the condition that only the matters that the LBRO considers appropriate are published. I wonder whether what the LBRO considers appropriate for public scrutiny is necessarily what the public would deem appropriate.

We have had a full debate on Clause 7; in many ways it deserves a full debate. The approach taken by some noble Lords who have spoken suggests that Clause 7 will be implemented and used on a regular, day-to-day basis and that local authorities will be directed and told what to do, or else, almost from the very start. I attempted to describe the Government’s view on this when dealing with the previous amendment moved by the noble Baroness, Lady Hamwee, but I need to try again in order to persuade the Committee that these are not savage powers that will be used by a ruthless organisation which is the creature of government; it is a sensible provision which is supported by business, by the National Consumer Council and by the Trading Standards Institute.

I disagree with the noble Lord, Lord Cope. He said that because this is a national body, it is not bothered at all, effectively, about local government independence. I do not accept that. The people who will make up that body will have been working in trading standards for many years. The noble Baroness, Lady Wilcox, I believe, is a distinguished ex-president of that body and an even more distinguished vice-president of it now.

So is the noble Lord, Lord Borrie.

As is my noble friend Lord Borrie. I am surprised that they have shown such restraint when it was suggested that that organisation was somehow not bothered about how local government trading standards officers conducted their business. They have the best interests of local government at heart and they show that by supporting Clause 7, with all its safeguards.

It has been a long time since the noble Lord, Lord Hodgson, moved Amendment No. 34. Our attention has been drawn to it because it has support from other noble Lords and we understand the intention behind it. Clause 7(6) requires the LBRO to publish directions that it issues under Clause 7 in such a manner as it considers appropriate. Clause 7(6) does not explicitly state that the LBRO must publish its directions in such a manner as to ensure that those affected are informed; its general duties as a statutory corporation require it to do this. In particular, it is under a general public duty not to carry out its duties or functions irrationally. Frankly, if it were to issue a direction and not inform those that it affected, the direction would be likely to be struck out in any judicial review challenge. There could hardly be a greater irrationality than for the LBRO not to inform those affected. On balance, we feel that, although very well intentioned, the noble Lord’s amendment is not necessary.

The accusation is that Clause 7 is all about centralism. We make no apologies for responding appropriately to the Hampton report, but it may interest the Committee that when Hampton proposed the Consumer and Trading Standards Agency, he envisaged it being a large non-departmental public body with powers comparable to the Food Standards Agency, which would have given the LBRO a detailed audit function and the right to take over the management of particular local services on direction by the Secretary of State. That is much more than what we propose in the Bill. Hampton went further than us. We have modified Hampton to try to meet criticisms that the Bill is just about centralism.

Noble Lords should accept that this is a distinctive area of policy that calls for a distinctive sectoral solution. There is too much complexity in the way in which regulations are imposed and enforced. Frequently, enforcement is a very low priority for local authorities. It is absolutely right that enforcement should belong with the experts at local level, but their work has national implications. The LBRO exists to improve co-ordination.

The noble Baroness, Lady Hamwee, asked whether there is a duty to consult under Clause 7(4). The answer is that there is.

To consult whom? The amendment makes the same point as in the previous group and relates to those considered “appropriate”.

There would be a duty to consult any relevant regulator. That would clearly be a regulator who was being directed to do something and other persons whom the LBRO considered appropriate.

I say with the greatest respect that the noble Viscount, Lord Eccles, who is a sturdy champion of local government and is rightly always conscious of the dangers of central government becoming overbearing, has gone too far so far as concerns this clause. He used the analogy of his daddy or granddaddy giving him “guidance” and said that, as far as he was concerned, that certainly did not mean that they were insistent. However, if his daddy or granddaddy had given him guidance and he wilfully refused to accept it—not once or twice but wilfully refused to accept it—I fear that his daddy or granddaddy might have insisted on that guidance being implemented. That is not a bad analogy with what we are discussing. To continue the analogy, I say that only a naughty authority or series of local authorities which continued unreasonably not to follow that guidance and to take no notice of it at all would be subject to Clause 7. That would be justified.

The noble Viscount mentioned Mr Rogers’s report, and I was grateful for the praise that he heaped on it. However, that report deals only with Clause 11 and the list of priorities. I hope that I have never prayed Mr Rogers in aid when debating Clause 7.

The noble Viscount quite rightly reminded me that the committee on which he sits with distinction—the Delegated Powers and Regulatory Reform Committee—asked my department for a list of the guidance that might be involved in the LBRO’s powers of direction at Clause 7(1)(b). The Bill restricts this power to guidance that is issued to local authorities,

“under an enactment … which relates to the exercise of a relevant function”.

We replied:

“In effect this will mean guidance issued by other bodies with statutory powers to issue guidance relating to the exercise by local authorities of the functions that fall within LBRO’s scope”.

The noble Viscount also asked whether there were any precedents to this specific approach. In the letter that I wrote to him a few days ago, I said:

“I can only answer in relation to the Bill, which is specifically geared to the particular issues associated with regulatory services, and the difficulties of inconsistency and service which impacts adversely on the interests of businesses and consumers alike. Here as elsewhere in the Bill we have sought to find a means of creating a body charged with setting the best possible regulatory framework for UK businesses, without impacting adversely on local authorities’ operational requirements”.

I shall say a little more about the fact that there is no precedent for these powers. We have not found a direct precedent but there are powers that we would argue are equivalent. For example, the Food Standards Agency can, under legislation, take over the food safety regulatory functions of a local authority where it considers that authority to be failing in its duties. Whether that is a precedent or not, I would argue that it is not a bad equivalent example.

The noble Viscount and the noble Lord, Lord De Mauley, also mentioned that under Clause 15 the Secretary of State’s powers of direction seem to be unencumbered. However, they are encumbered, and we will eventually come to my Amendment No. 52, which I mentioned in passing a few minutes ago. That amendment states that the Secretary of State cannot give the LBRO directions relating to its functions under Clause 7 in relation to two or more local authorities. That is exactly what the Delegated Powers and Regulatory Reform Committee recommended. If the Secretary of State wants to direct the LBRO, he can do so only by order, subject to parliamentary oversight by the negative procedure. Therefore, the Secretary of State will also be encumbered in his powers. I hope that that goes a small way towards satisfying noble Lords.

If businesses require a tough Clause 7, as the noble Lord, Lord Cope, suggested, I do not think that implies that that will not be in the interests of anyone else. I argue that it will also be in the interests of consumers. Perhaps I may quote briefly from the National Consumer Council. It is a very distinguished body and has been chaired by equally distinguished Members of this Committee, including my noble friend Lord Whitty, who is not in his place now but was here and spoke the other day. On Clause 7—I argue that this is relevant—it said:

“Although we recognise the concerns of local authorities, we consider this measure is necessary to ensure that consumers do not experience a postcode lottery. The LBRO cannot secure consistency of practice if [local authority regulatory services] are free to choose to ignore its guidance”.

The council goes further than us, adding:

“Indeed, we are concerned that the requirements on LARS to consult and obtain the consent of the Secretary of State before issuing a direction are too onerous and might work to dissuade LBRO from legitimately exercising this power. The requirement on LBRO to conform to the better regulation principles should be sufficient to ensure LBRO uses this power appropriately”.

Our contention is that the National Consumer Council is absolutely right on this issue. I rely heavily on what my noble friend Lord Borrie said when, early in this debate, he argued that Clause 7 was just a sensible course to take in the Bill. My noble friend Lord Desai agreed with him.

Unlike my noble friend Lord Desai, I am a great fan of local government, and I am grateful to the noble Lord, Lord Cope, for reminding me that he served on two different authorities some time ago. I have the greatest respect for its independence. I cannot for a moment accept what my noble friend said about how, when they come to power, Governments change their mind about the independence of local authorities. That certainly does not apply to my own Government.

I hope that noble Lords will bear in mind what I have had to say when they consider this clause, and I am conscious that I have gone on for some time. But this power will be used sparingly; it is a backstop provision and brings with it considerable safeguards. I do not think that noble Lords on the other side who have spoken have explained how this particular structure, one which is there to assist us in better regulation by local authorities, can possibly succeed without it.

I hope that I am following the proper procedure if I make one or two comments now. The noble Lord says that this is no place in which to have the argument about centralisation and decentralisation, but I remember very well a speech by the noble Lord, Lord Desai, in which he said more or less that while you may think that you can pursue decentralisation, you should not have the slightest hope that it will ever work. It was an extremely good speech, but of course it was completely wrong. He has also said that one Government after another get beguiled by the need to keep powers in the hands of Secretaries of State and to be good centralisers. To a certain extent he is absolutely right, but there is always hope of amendment of life. Under the new leader of the Conservative Party, I think that we might just possibly get there.

I want to touch on just a couple of difficulties before responding to the full and helpful reply made by the Minister. There has been a lot of discussion about business. The Committee should remember that the whole deregulation/better regulation thing came about as a result of initiatives taken by business in dialogue with the political system. I suspect that that dialogue was of the kind that says, “If we go on like this and impose all these costs, we shall become globally uncompetitive”. That is certainly what happens in Brussels and is the kick-start for all this. A number of noble Lords have pointed out that there is a balance to be struck between the undoubted correctness of the approach being made by business and the interests of an awful lot of other people—and in those of course I include consumers and the way in which local authorities operate on their behalf.

In that connection, I should mention that the second priority out of the six in the Rogers report is alcohol. I wonder whether the regulation of alcohol can ever be expected to be wholly consistent in every part of the country. When the Minister prays in aid the aim of consistency, has exactly what that means really been thought through? In that regard, the Committee is moving along with very little evidence. There are not too many hard examples of things where you can say, “Yes of course, if the regime were to be changed, that would go better”, in the documents I have read. On the matter of precedence, I shall certainly have a close look at the Food Standards Agency direction. I would be interested to see whether it has ever been used or looks likely to be.

Lastly, on the question of the frequency of use of a power to direct, of course that is something the Committee would be right to take into account. How often it is used is important. But one of the problems here is that there is no central database about directions. As far as I can see, it is extremely difficult to find out when directions have been used and what they were used for. As always I have had good assistance from the Library, but the librarians are finding that information difficult to track down. We have had again today all the assurances about safeguards, about the stop-gap and a reserve power, and how there is no intention to use it except when it is really necessary, but again the evidence for whether that has happened to date and whether it will continue to happen in the future is quite scanty.

Having said that, I am grateful for the response, but I shall read Hansard carefully and might wish to come back to this matter at a later stage.

I used the term “jaw-jaw” followed by “war-war”. We have had 54 minutes of fairly heavy artillery exchange on my rather more narrow amendment.

I am grateful to the Minister for his response to my amendment. I have some sympathy with the belief of the noble Baroness, Lady Hamwee, that direction about guidance might be a contradiction in terms. My noble friend Lord Eccles referred to alcohol. As I tried to make clear in one of our debates on Monday, much alcohol regulation comes from the police, because they have a major input into the matter, but they are quite outwith the whole of this legislation anyway, so a lacuna exists.

I was grateful to the noble Baroness, Lady Turner, for her support for my rather modest change. We come back always, as has the Minister at least twice today, to my amendment being refused on the grounds that general duties will oblige the LBRO to do it—therefore, judicial review. Having to keep going for judicial review is hardly the light regulatory touch that we are seeking. People simply will not do it—they will just accept the heavy-handed nature of what is being proposed.

When Ministers say words like, “We need distinctive sectoral solutions”, I begin to think, “Hello, this is something special here”. There is a new formulation of words to justify something special. The Minister went on to say that the LBRO exists “to improve co-ordination” in the context of enforcement, but co-ordination is hardly enforcement. I therefore have some sympathy with the views expressed. The left jab is: “Don’t worry about this because we can go to judicial review”; the right cross is: “Well, the clause is needed, but it won’t be used, so you needn’t worry about it; it is just there as a backstop. Don’t worry about it”.

The noble Lord, Lord Desai, began by saying that my amendment was wrong because it would add words to the Bill. However, the other amendment in the group would cut out the whole clause, which would reduce the Bill quite a lot. He must decide whether he wants a longer or a shorter Bill; he cannot have it both ways. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 7, as amended, agreed to.

Clause 8 agreed to.

Clause 9 [Advice to Ministers of the Crown]:

moved Amendment No. 35:

These amendments give me an opportunity to say a little about the reasons for creating the LBRO. Of course there is some scepticism about the ability of a new public body to tackle bureaucracy. Sir Philip Hampton’s report on regulatory enforcement was articulate about the confusion and complexity of the regulatory system that local authorities have to interpret and then put into action. They stand at the enforcement front line, but have to interpret and implement regulations issuing from a multiplicity of government departments and national regulators—regulations which can on occasion be frankly difficult to reconcile.

The LBRO will have a new and unique role in this system, getting the system as a whole to work in a way that is better for businesses, for the public and for local authorities themselves. This will sometimes involve giving a little more urgency to the dissemination of the many cases of good practice out there. Sometimes this will frankly mean telling home truths to the Government about the framework that it sets. Its role as adviser to the Government will be absolutely critical to its success. This is not a technical reason why this clause tells us about the LBRO’s powers on giving advice or making proposals to a Minister of the Crown; it is an important part of the new scheme we are attempting to set up.

A number of questions were raised at Second Reading about the LBRO’s role here. Will it be able to give its view, publicly if necessary, on new regulations and how they are being implemented? Will it be able to give its own recommendations for areas of existing law where a rethink is needed? Its power to give advice and make proposals to the Government under this clause will allow it to do both. I hope that the Committee will welcome that.

We are emphatically not seeking to create a new body along the same lines as, for example, the Law Commission, dedicated primarily to in-depth reports on particular aspects of regulation. The LBRO will be small with significant operational responsibilities, but it will have the power under the Bill to make any proposals that it sees fit from its particular expert perspective. We also think we have the wording right in Clause 9.

Amendment No. 35A, which is a probing amendment, would add another subject to those on which the LBRO might advise Ministers. We do not think that the amendment is strictly necessary as the existing provision at Clause 9(1)(a) permits the LBRO to give advice to Ministers on the way in which local authorities exercise their relevant functions. There is no reason why this should not include advice on the effectiveness of the way in which they do so. Indeed, we think that that will be a critical part of their role. I hope that, with that explanation, the noble Baroness will be able to withdraw her amendment.

That is helpful and I am grateful to the Minister. As we are on this territory—it arises from a point that I made in speaking to the amendment— perhaps I may ask a little more about what has to be spelt out to enable the LBRO to undertake a particular action. I have just been looking at Clause 14, which is the usual “ancillary powers” clause. According to subsection (1), the LBRO can do anything necessary or expedient in connection with, or for the purpose of, exercising any of its functions. Four examples are then given in subsection (2), and they are all practical, mechanical matters: entering into agreements, acquiring property and borrowing or investing money. Perhaps I may ask a hypothetical question. Would Clause 14(1) have allowed the inclusion of Clauses 9 and 10, which we have just been debating, if those matters were not spelt out? I ask that without having given any notice. If the Minister would prefer not to answer that question now, I shall be very happy to discuss it following the Committee.

Perhaps I can try to answer the hypothetical question. The answer is: possibly. It would have been possible under Clause 14(1) for the LBRO to give advice to Ministers or Welsh Ministers but, because we think that it is an important part of its role—I hope that the Committee will agree with that—it is set out in the Bill in Clauses 9 and 10.

I understand that point. It occurred to me that it would be right to check on the extent of the LBRO’s powers because we are concerned that it should be able to do everything that everyone wants it to do. I am grateful for that and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 35A and 36 not moved.]

moved Amendment No. 37:

The amendment proposed by the noble Lord, Lord Cope of Berkeley, is interesting, but he has recognised in his own speech its negative aspects. The word “overload” is simple enough but it means a great deal. The Minister has spoken of the LBRO as a small authority, so it is not appropriate to overload it with responsibilities. On the wording of the amendment, the use of the term “must” rather than “may”, which is used in Clause 9(1), is disturbing. As he quoted it, Clause 9(1) gives the LBRO the role of advising on the,

“effectiveness of legislation relating to the exercise by local authorities in England or Wales of their relevant functions”.

The noble Lord will know that this limits the LBRO’s responsibilities concerning how it chooses to give advice. It also limits regulatory matters on which it would advise to “relevant functions”, which harks back to Clause 4. The noble Lord’s amendment seems to suggest that the new office must give advice on any legislative proposals from Europe or from Ministers about any regulations, not just those concerned with “relevant functions”. If the LBRO had to do that, I am not sure that it would have much time to do its essential work of co-ordinating and ensuring greater consistency between local authorities. Clearly, the noble Lord has a case for saying that someone should be doing that job, including looking at all new legislation to do with regulations or otherwise, wherever it comes from, but the scope of his amendment is surely much too broad.

I will defend my drafting in one respect at least. I grant the noble Lord, Lord Borrie, his point that I should perhaps have said something about the LBRO’s “relevant functions” in drafting the amendment. That is clearly what I had in mind and what I think the noble Lord, Lord Haskins, had in mind on that occasion. On “must give advice” rather than “may”, I was following the precedent of Clause 9(2), which concerns advice to a Minister, rather than Clause 9(1), which concerns advice that the LBRO chooses to give.

We fully support the amendments of my noble friend Lord Cope, which concern the better regulation that we are all supposed to be bringing about. We therefore support the need for there always to be a two-way consultation process in which the Government speak to the LBRO and the LBRO, ideally placed as it will be, speaks to the Government. The amendment will stipulate such communication as a duty of the LBRO and, it is hoped, will go some way to preventing the introduction of unnecessary or irrelevant regulations. The LBRO would be able to tell the Government how proposed regulations would fit and whether they might cause an intolerable burden for the regulators. Surely the Minister thinks it is a good idea for Her Majesty’s Government to receive as much advice as possible if they really are, to quote the Minister,

“undertaking one of the most radical reform agendas”.—[Official Report, 21/1/08; col. GC 3.]

As is so often the case, my noble friend Lord Borrie has got this right. I take the amendment of the noble Lord, Lord Cope, as a probing amendment on this issue. I think he will agree that not only the word “must”, which appears in his Amendments Nos. 37 and 40, but also the word “any” in the same line would imply every single regulation and piece of legislation. With the best will in the world—and I think that the noble Lord has accepted this—that would be too much to ask the LBRO to do.

Having said that, the noble Lord has raised an important issue. It is part of the LBRO’s role in advising government to look at legislative proposals. Clause 9(1)(b), as the noble Lord said, covers that to some extent but, even if it does not, Clause 9(1)(d) does. I would argue that,

“any other matter relating to the exercise by local authorities in England or Wales of their relevant functions”,

must include new legislation, new orders, and regulations coming from Europe. This should be an important part of what the LBRO does—to anticipate what the Government and national regulators intend and give advice about such regulations. I thank the noble Lord for moving his amendment but respectfully ask him to withdraw it.

I am grateful for the spirit in which the Minister replied. In effect, he said that the LBRO will spend a good deal of time looking at future legislation as it comes along. He did not refer to Clause 9(2), which is quite nicely put. It states that the LBRO shall give advice,

“if requested to do so by that Minister”.

It will be requested but it must give the advice, so it is not really a request; it is an order. Perhaps “requested” is a polite way to put it. Do Ministers intend to use that power to require the LBRO to give advice on legislation that they are contemplating making? It would be helpful if that were so.

Yes, part of the point behind Clause 9(2) is that Ministers will ask for advice on future legislation and on legislation going through Parliament at the time. I hope that that is some comfort to the noble Lord.

I find that extremely helpful. I am glad to know the spirit that lies behind the provision and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 9 agreed to.

Clause 10 [Advice to Welsh Ministers]:

[Amendments Nos. 38 to 40 not moved.]

Clause 10 agreed to.

Clause 11 [Enforcement priorities]:

[Amendments Nos. 40A to 40E not moved.]

moved Amendment No. 41:

I want to make a small addition in support of what my noble friend has already said about publishing “forthwith”. Amendment No. 41 would prevent the situation whereby a list was buried away from scrutiny by being published such a long time after a matter had been reported on that it was rendered useless. Does the Minister agree that we must make sure that any promises made in the Bill to ensure transparency and accountability are not false?

Local authorities have repeatedly requested the Government to provide clarity regarding their priorities for local authority regulatory enforcement, and that is what Clause 11 is intended to do. Amendment No. 41 would require that the LBRO published “forthwith”,

“any representations made to it”,

when preparing a list of regulatory priorities. Under Clause 11(4), the LBRO is required to publish representations made to it when preparing such a list. I do not know whether I am pleased or sorry to disappoint the noble Lord by relying again, as he forecast I would, on the fact that, under its general duties as a statutory corporation, the LBRO is required not to carry out its duties or functions irrationally—so irrationally that it would become subject to judicial review. The LBRO must carry out its functions in an appropriate manner. This means that in effect it is already under a duty to publish any representations made to it within a reasonable timeframe. My second point is that I am not sure what the word “forthwith” means in this context but, even without that comment, the amendment is not necessary.

Amendment No. 42 would require the LBRO to publish the names of anyone who made representations to it, pursuant to its preparation of a list of regulatory priorities. We believe that the LBRO should have the flexibility to withhold the details of those who make representations where that is appropriate, because the publication of personal data may contravene legal provisions—in particular, the Data Protection Act 1998. We do not think that we could get round that legislation in this way. Amendment No. 42 would remove the flexibility required to withhold details when it was appropriate to do so. I am sorry not to have been able to satisfy the noble Lord on either of his two amendments.

I am disappointed about this because, although I understand the fall-back on the old argument about judicial review, which is not a convincing one given the clumsy nature of that procedure—a point I have made several times today—I am concerned to ensure that these lists are prepared quickly. The opportunity to see what representations had been made could come only very close up against the actual publication of a list. There could be a situation where a list was prepared under a certain amount of time pressure, as we know often happens. People might welcome the chance to reflect on the representations being made as part and parcel of the drawing up of the list.

I am no lawyer and know little about the provisions of the Data Protection Act but I find it astonishing that if you choose to make a representation to a public body such as the LBRO, you are entitled to complete confidentiality. It is astonishing that someone can claim that. If you are a private citizen, fair enough, but if you put your head above the parapet in the wish to influence public policy by approaching a public body, but pray in aid the wish not to be identified, that is a quite extraordinary extension of the provisions. I am surprised that the department—

I am thinking of the possibility that people may want the body they represent to be listed but not the names of the individuals concerned. That is perfectly feasible. Under the noble Lord’s amendment, the names of the people making the representations would have to be listed. Further, if the intention is to expose people who are pushing their own cart in the local authority, as it were, the smart ones will hire others who have nothing to do with it to make the representations. There may be some sensitivity about the names of individuals appearing on a list, but not about the bodies or firms they represent.

Clearly my amendment is faulty in that it does not use the word “persons”. But, as the noble Lord, Lord Bach, said in response to an earlier amendment, “persons” includes “bodies”, so it could be a person who is revealed, but it could be a body if he chose to make representations through a body.

We are not arguing that it is essential there should be complete anonymity. We are saying that the data may be personal and will be held by a public body, the LBRO. I am a lawyer but I am no expert on the Data Protection Act—I make that absolutely clear—and the advice I receive is that that Act may apply. I put it in that way.

I am most grateful to the Minister and to the noble Lord, Lord Desai. I do not think that we shall extract much more juice from this orange today. We will take it away, talk to someone who knows about the Data Protection Act and may come back at a later stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 42 and 42A not moved.]

On Question, Whether Clause 11 shall stand part of the Bill?

I want to ask the Minister a question on this because I have just become aware of the guide to which the noble Lord, Lord Cope, referred. I wonder whether there is not, on page 15—

“Current National priorities for local authority enforcement”—

a fairly serious gap. I know that the Government and, in particular, the department represented by the noble Lord, Lord Bach, is interested in businesses. Better regulation has always been interested in businesses and, to some extent, voluntary organisations. I have never been so sure that it is interested in the interests of members of the public. It ought to be. I have never been certain that the department sees its role as better regulation for the benefit of members of the public, although, of course, within the list of priorities on page 15 they gain some advantage.

The gap here concerns anti-social behaviour. An enormous amount of local authority time and money is spent dealing with anti-social behaviour. They are all members of crime and disorder partnerships which they share with a number of other local bodies. It is not good enough to say that that is nothing to do with regulation because in a number of cases it certainly is. For instance, we have listed here,

“entertainment and late night refreshment licensing”,

as one item that is a priority. Fair enough, anti-social behaviour often arises in that connection. But so it does in a number of other areas where local authorities have to carry out regulatory functions. For instance, they have to ensure that people behave themselves in public parks—the definition of anti-social behaviour is extremely wide these days—they have to deal with noise, which is often a matter of anti-social behaviour, and they deal with housing management. If they do not do it themselves because they have sold off their housing stock to an arm’s-length management organisation or some similar body, they nevertheless have a residual power and duty to help those bodies to deal with anti-social behaviour in the housing management field.

This is a fairly major issue in a number of places and, as I am sure the noble Lord knows, I spend a great deal of time going around inspecting local authorities on the question of privacy. Anti-social behaviour is left out of the list. Is it a mistake or is it because the department does not consider that it is anything to do with businesses and, therefore, it does not need to be included? I can tell the noble Lord that many local authorities finding that a list of priorities did not include anti-social behaviour would think that the Government had seriously let them down. I did not have an opportunity to give the noble Lord notice because I saw the list only today, but I would very much welcome his response on that point.

I apologise to the Committee because this matter was included in an earlier group, but some of today’s debate has led me to ask the Minister about the relationship of Clause 11 to Clauses 6 and 7. Clause 11 is about setting priorities. Although I do not wish to have it confirmed that I am correct in this, I suspect that the list of priorities can be incorporated in guidance and, if necessary, a direction given about the priorities referred to in the clause.

I hope that Clause 11 is taken forward. I am grateful for the contribution of the noble Viscount; he has a wealth of experience in this field and what he has to say is important. The priorities to which he referred are those that I believe he saw in the guide and are the result of the Rogers independent review, which the Government have accepted. We agree that many other significant issues are involved here and, because the noble Viscount has taken me slightly by surprise, I do not wish to flannel him off with words. If he will be kind enough to allow me to do so, I intend to write to him with a fuller answer to the issue he raised, particularly about ASBOs. That is the best that I can do this afternoon to give a proper answer to his question.

The list that he referred to is evidence-based and is drawn from extensive consultation with business, regulators, consumer groups, local authorities and government. It was drawn up independently by Rogers, who is the distinguished chief executive of Westminster City Council. He is not employed by the Government in any capacity and his report was accepted in full.

I will write to the noble Viscount but I want to make it clear that my department is concerned with successful business, regulatory reform and enterprise, and has an important role to play in the consumer field. So although it is business and consumer-orientated, the department is part of government and the noble Viscount’s queries demand a proper response. That is what they will get.

I would be happy for the noble Lord to write to me but I am astonished that Mr Rogers did not consider this point. It is not strictly within the regulatory function that the noble Lord and the Bill seem to be dealing with but it is nevertheless a fully regulatory activity of local authorities. Housing management is a difficult job and some areas are rife with anti-social behaviour, but local authorities have to deal with it and take steps to eradicate it as far as they can. The fact that it was left out by Rogers is no answer at all. If the local authorities are being told to allocate their resources to relevant functions, and the relevant functions do not include this one, they are being told in effect that this activity is being downgraded.

The Government have been emphasising for some time the importance of tackling anti-social behaviour. I hope, therefore, that the Minister will include in his letter to me an answer to the point about whether it is still considered to be important by the Government. I believe it is important. It is certainly important to the public because they hate it.

I thank the noble Viscount. Something I should have known, but did not, is the fact that Schedule 3 to the Bill, which lists the enactments specified for the purposes of Part 1, includes the Anti-social Behaviour Act 2003. That is no answer to the noble Viscount’s question but it is worth pointing out.

With respect, it is not an answer to the question. Although it deals to some extent with housing management, it does not deal with the generality of anti-social behaviour—for example noise, behaviour in parks, what happens outside pubs and nightclubs when they close. It is useful legislation but it does not cover the totality of this problem.

I support my noble friend Lord Colville. I was struck forcibly when reading the evidence given to Rogers that a lot of people in the local authority system were asking to be given priorities. That is the point made by the Minister on Monday. The reason for that is because local authorities are short of resources and so, unless they know what it is the Government really want them to do, they do a bit of this, a bit of that and a bit of the other rather than concentrating on the things that really matter. Quite a large amount of evidence of exactly that type was given to Rogers. It reinforces the importance of the need for the Government to consider whether the six priorities they have accepted actually cover the areas they should and whether they do not miss anything of perhaps equal importance.

Clause 11 agreed to.

Clause 12 [Relationship with other regulators]:

moved Amendment No. 42B:

These amendments are extraordinarily wide in their scope. One of the examples just given by the noble Lord—the Highways Agency—is not even listed in Schedule 5. If all the regulators listed in Schedule 5 were added here, there would be a considerable increase in the work of obtaining memoranda of understanding as required by Clause 12.

There is of course a problem of local authorities receiving mixed messages from central government, which is why there is a mention of memoranda of understanding here at all. The LBRO is a non-departmental agency of central government; so are the other regulators listed here and those in Schedule 5. Having some memoranda of understanding is vitally important: it helps to improve the consistency of messages coming through to local authorities from central government. However, the LBRO, as has already been said in debates this afternoon, is a small organisation. It must focus its efforts. Subject to correction from the Minister, I understand that these five specific regulators—not 30-plus, or whatever—are listed in Clause 12 because they have the greatest amount of day-to-day contact and interaction with local authorities. Many of the others in Schedule 5 do not.

The Office of Fair Trading was specifically mentioned, the central regulator which I headed at one time. It then had, and today has, almost constant day-to-day contact with trading standards departments of local authorities up and down the country on individual cases involving a whole lot of different legislation. The reason that the Food Standards Agency and the Health and Safety Executive are listed among the five is that they, too, are central bodies that have almost constant contact. Therefore, it is important that each of those bodies has an understanding with the LBRO so that they do not tread on one another’s feet when they are dealing and interacting with local authorities. It is most desirable that there should be a list, but it should surely be limited.

Where I shared the views of the noble Lord, Lord Hodgson, in moving the amendment was in his thinking that if that list is finite forever, it might not be sufficient. In other words, it might be desirable if, let us say, some power was held by the Secretary of State to add to that list if evidence showed that, this year, next year or in 10 years, some other agency ought to be added to that list.

I thank my noble friend for giving way. I am advised that subsection (1) of Clause 14, which is the ancillary powers clause, would give the LBRO the power to enter a memorandum of understanding with any other regulator that it chose.

I am much obliged. I did not have any further remarks in any case.

I am grateful to both the noble Lord who moved the amendment, and to my noble friend Lord Borrie for the way in which he hit the nail on the head in identifying the reason why the five regulators have been chosen.

Perhaps I may explain the rationale for Clause 12. The five national regulators listed will have frequent contact with the LBRO, because they and the LBRO will issue guidance to local authorities. It is only right that the boundaries between them, which could become confused, should be clarified to avoid any confusion for local authorities.

The national regulators’ role, to look out for particular aspects of local authority enforcement, is different from that of the LBRO. The LBRO is designed to bring more co-ordination and strategic thinking to a system that includes both the local authorities and the regulators.

There is a risk of overlap, and the memoranda of understanding will set out the basis on which the LBRO and each regulator will operate to remove any risk of, for instance, contradictory guidance being issued. Both regulators and local authorities have welcomed the clarity that this clause will bring to some of the important relationships that the new organisation will need to develop. Other regulators are of course involved, and the LBRO has the power, but not the duty, to enter agreements with any additional regulators under Clause 14.

If it is intended that the LBRO should be required to enter MoUs with all regulators, rather than just those mentioned in the Bill, there is a much less resource-intensive way of achieving it through Clause 14. I hope that the noble Lord will see the distinction between those five regulators, whose duty among other things is to give guidance to local authorities, and local authority regulators. A key function of all these regulators is giving guidance to local authorities.

I am grateful to the Minister and I accept the point made by the noble Lord, Lord Borrie, about “must”. I should probably have tabled another amendment to change “must” to “can”, which would have dealt with the administrative burden issue that he described. However, I am very surprised. As I said when moving the amendment, I have no problem with MoUs, but I cannot believe that the Gambling Commission should have more links with local authorities than the Charity Commission, the Football Licensing Authority, the Gangmasters' Licensing Authority, the Housing Corporation and Natural England, all of whom seem to me to have substantial links. I had hoped that we might be able to shorten the Bill, which would please the noble Lord, Lord Desai, by allowing them to enter MoUs with those regulators who they felt were appropriate in the circumstances, rather than be prescriptive, as is the Bill. That does not seem to add anything, apart from a list of agencies. We will think about that but, in the mean time, I am grateful to the Minister for this very thorough response and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 43 not moved.]

Clause 12 agreed to.

Clause 13 [Duty not to impose burdens etc]:

moved Amendment No. 44:

The purpose of the clause is to ensure that, where the LBRO works to minimise unnecessary burdens imposed by the local authority regulatory system, it does not inadvertently create any unnecessary burdens of its own: whether those impact on businesses or on local authorities.

To amend Clause 13 so that the LBRO is under a duty not to impose or maintain disproportionate burdens, as opposed to unnecessary burdens, is in danger of causing some confusion. The amendments would mean that the duty incumbent upon the LBRO in Clause 13 not to impose or maintain unnecessary burdens no longer reflects the provisions of Clause 68 in Part 4, which can be applied to regulators. The difference in phrasing would imply a substantive difference in the duty, which is not intended.

Further, the amendments do not make clear to what the burdens imposed or maintained by the LBRO are to be deemed to be disproportionate. If the amendments were to be accepted, we fear that they may cause confusion and significantly increase the risk of unnecessary litigation. Clause 13, as drafted, places a clear and appropriate duty on the LBRO—one that will ensure that it carries out its functions in a way consistent with the better regulation agenda, which we all hope succeeds. The mention of the word “disproportionate” in Clause 13(2) and “proportionate” in Clause 13(3) captures that expression for the purposes of the clause, but we think that the better word here is “unnecessary”.

Better that I be confused than those who have to comply with the Bill when enacted. I am still not clear how the LBRO can comply with Clause 13(3), exercising its functions in a way that is proportionate, and how that lies with Clause 13(1) and (2). If it exercises its functions in a proportionate way, there is no need to say that it must not impose unnecessary burdens. That is my understanding. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 45 to 49 not moved.]

Clause 13 agreed to.

Clause 14 agreed to.

Clause 15 [Guidance or directions by the Secretary of State]:

moved Amendment No. 49A:

I have Amendments Nos. 50 and 53 in this group and they pretty much speak for themselves. We have come to clauses that put the Secretary of State and Welsh Ministers at the top of the triangle, although I hesitate to use that word, considering the image given us by the noble Viscount—perhaps I should say, “at the top of this tree”. The Secretary of State and Welsh Ministers can require the LBRO to comply with their directions. My amendments are to get on to the record—because I am sure that we will be given assurances—details of the consultation that will be undertaken before guidance or directions are given on this clause and Clause 16.

I have a very short question. I notice that on page 15 the guide that we have been given says that,

“national enforcement priorities will be given statutory force”,

and the first priorities will be air quality and so on, in order of priority. My noble friend Lord Colville referred to that earlier. Presumably, they will be given statutory force by general guidance under this clause. Is that right?

I am grateful for the opportunity presented by these amendments to give assurances regarding the use of ministerial guidance and directions to the LBRO. The Bill has deliberately given the LBRO extensive freedom to work on its own initiative with local authorities and other partners to meet its objectives. As we discussed on Monday, its directors have been drawn from across the range of the LBRO’s stakeholder groups—notably business, local authorities and regulators—and we think that it has the expertise and practical knowledge to be left to get on with the job. That is particularly important in its advisory capacity, where we expect the LBRO to give robust and independent advice to Ministers on the way in which regulatory policy impacts, or might impact, on local authorities and businesses alike.

However, the Secretary of State and Welsh Ministers remain ultimately accountable for the body’s actions, and it is right that there should be a reserve power of this sort. However, I recognise the concerns that the powers might be used improperly by some future Secretary of State or even by some future Welsh Ministers, given the need for the LBRO’s operational independence. Clauses 13(2) and 14(2) already require publication of any guidance.

Noble Lords will know—indeed, it has just been mentioned by the noble Viscount—that the Government, in response to comments by the Delegated Powers and Regulatory Reform Committee, have tabled an amendment that would require parliamentary scrutiny for any direction which would oblige the LBRO to make directions to more than one local authority.

I am happy to say—I hope that noble Lords will also be pleased—that we want to consider all the amendments that have been moved and spoken to in this group before committing ourselves to any course of action. There might be urgent cases, for example, where very prescriptive guidance requirements would be counter-productive. However, I invite the noble Viscount to withdraw his amendment today and we will consider its import and the import of the amendments of the noble Baroness.

I believe that the noble Lord, Lord Cope, is to move an amendment in the next group to the same effect and on the same subject matter. I can tell him in advance that we will ask whether we can go away and consider his amendments in due course, too.

My noble friend Lord Cope mentioned that the guide says that the list of priorities will be given statutory force. There is no power that I can see in this part of the Bill to make statutory instruments. Is the guidance to have statutory force? If so, how is it to be enforced in the courts?

I need to respond to both the noble Viscount and the noble Lord, Lord Cope. The noble Lord asked about page 15 of the guidance document. I am advised that the answer is: no; the priorities will be given force by Clause 11. I do not know whether that is the answer that he was looking for.

I shall do my best to answer the noble Viscount. I understand that the guidance will be statutory on the basis that it is in legislation, but I do not believe that there will be any orders to go with it. The noble Viscount, who has listened patiently today to all the proceedings, will know that I have moved amendments to ensure that there is some parliamentary scrutiny when directions are given, but that does not apply to the guidance per se.

I am grateful to the Minister for his thoughtful—I think that is the right word—reply. I am no parliamentary draftsman. It struck me that if the direction is specific it presumably means that it must be pretty directly related to something already in the Bill; it cannot be something unrelated, it must be close. I have no doubt that a general direction must still be related to the Bill but is much wider. I was concerned with that width. Would it be a back-stop power when the word “general” is used? If it is not a back-stop power, when would it be used? However, I am grateful for the Minister’s undertaking to consider all these matters. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 50 not moved.]

moved Amendment No. 51:

I support my noble friend Lord Cope in these amendments. They seem a reasonable and considered way of dealing with the matter. I know the Minister has said that he will consider them and we will come back to it.

Assuming the Minister does so—and I dare say there will be a number of letters as a result of this Committee—it would be helpful to understand the likely use of Clauses 15 and 16 as opposed to Clause 7. Looking at them both, I see Clause 15 as the converse of Clause 7. For example, the LBRO can give a direction with the consent of the Secretary of State on certain specific matters. It may be that, under Clause 15, the Secretary of State wants to require the LBRO to do something. Can we get an explanation of which directions are specific and which are general? “Specific” is certainly intended to be left in, in any event. Clarity on that relationship would be useful.

We do not see any relationship between this clause and Clause 7, on which we have rightly spent so much time today. On the amendments in the name of the noble Lord, Lord Cope, I have already said that we would like to consider them. We want to see transparency through publication of the directions to the LBRO made under these clauses and the post-implementation review to be conducted under Clause 63, further on. The Bill requires the Minister to publish the directions and the results of the review in a manner that the Minister decides, but we have some sympathy with the suggestion of the noble Lord that copies should be laid before Parliament. I hope that he will be kind enough to let us take these amendments away and consider them.

In the light of that sympathy, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendment No. 52:

moved Amendment No. 55:

moved Amendment No. 56:

I should tell the Committee that if Amendment No. 56 is agreed to, I cannot call Amendment No. 57 by reason of pre-emption.

It may be sensible for me to speak to whether Clause 17 should stand part of the Bill because one of my thoughts is one that the noble Lord, Lord Cope, has touched on, that is, if there is to be a provision for dissolution, one might want to see it linked to some sort of sunset provision. To have it unattached, as it were, leads me to my second point, which is simply to say that it is a little odd that a body created by primary legislation can be dissolved without further primary legislation. That is especially unusual since the LBRO will be able to make transfers, which presumably will include things like the enforcement of proceedings, to another body. I therefore support the points made by the noble Lord, Lord Cope.

I apologise. I forgot to speak to Amendment No. 57 which is also in the group. I was not trying to put words into the mouth of the noble Lord, Lord Jones, but to suggest that if he had a period of five years in mind, we should put it into the Bill.

I am delighted that the noble Lord, Lord Cope, has now spoken to both amendments. He rightly quoted from the guide the clear reference to the Government’s intention, as of now, that at some point the LBRO should be dissolved. I share the noble Lord’s surprise or scepticism as to that coming about, but for different reasons. I see value in the LBRO, particularly on matters relating to consistency and the role of the primary authority.

I am sorry that my noble friend Lord Sainsbury is not in his place today because he could speak from personal experience of the different ways in which firms such as his are treated in different parts of the country by different local authorities. He has grumbled for years about the lack of consistency in the attitudes of trading standards officers, environmental health officers and others, and would perhaps welcome a number of the powers in the Bill.

The Government want us to speculate that one day it will not be necessary for the LBRO to continue. However, I do not like either of the noble Lord’s amendments. On Amendment No. 56 and the phrase found in the guidance and the Explanatory Notes about the intention to dissolve the LBRO when it has achieved its objective, I am not sure how that can sensibly be put into legislative form. At some point someone might say, “We consider its objective has been fulfilled”, but someone else might think the contrary. Can he then take the matter to court and say, objectively, that the objective of the LBRO has not yet been fully achieved? I am a little worried about that.

I certainly do not like the noble Lord’s second amendment because it is entirely arbitrary; it may be five years, 10 years, or who knows. I am all in favour of the Government reviewing the matter from time to time to see whether from the point of view of consumers, business and consistency—I gave the example of Sainsbury’s—it has achieved its objective or whether there are still business and public interest reasons for continuing with the LBRO. I am all in favour of the matter being looked at again by the responsible people—Ministers especially—and pressed by Parliament and others, but to put on the face of the Bill that in exactly 2013 the LBRO will be dissolved is not appropriate at all.

It would be a pity if the Government did not maintain their ability to change and modernise things and dissolve bodies to do with better regulation. After all, we had the Better Regulation Task Force and we are losing the Better Regulation Commission into another body, as was announced on 16 January. The Better Regulation Executive is a powerful body within the department and I can visualise a time when that body will take over nearly all the role of a national better regulation body called the LBRO. I do not see any reason to quarrel with the Government’s wish for this body to have a limited life and then disappear. It would be entirely in accordance with policy.

The best way to deal with these two amendments is to combine them and say, “when the objective of the LBRO has been achieved, or five years, whichever is later”.

The Minister is spoilt for choice.

Yes. Every possibility is before me but I commend the noble Lord, Lord Cope, for his almost religious reading of the Second Reading speeches and using them in the amendments. I do not think many of us would be capable of such diligence.

It was not reading; it was listening to the Second Reading speeches.

I am sure the noble Lord remembered them word for word when he came to write his amendments. I apologise for suggesting that he did not.

We have every confidence that the LBRO will achieve its objective of enhancing the delivery of local authority regulatory services. When it has done so, it may well be appropriate for it to be dissolved. The LBRO will be a relatively small body working at the centre of a complex and sometimes disparate regulatory system. It will need time to establish itself, to develop effective working relationships and to use its influence and statutory functions to effectively deliver its objective. We consider it unrealistic to expect the LBRO to achieve all this in only five years. If it were to do so, all the better, but it is not appropriate to place such a time limit on its work.

On Amendment No. 56, to limit the LBRO’s dissolution merely to when it has achieved its objectives—the noble Lord, Lord Cope, will probably agree with this—would be slightly dangerous. Let us say—of course, this will not happen—that after a few years we found that the body was not doing the job we intended it to do, and far from achieving its objective it was doing precisely the opposite, it would be a very good moment to dissolve it. But that could happen before five years or long after. As the noble Viscount implied, what would happen if future legislation were to overcome this legislation? I should make it absolutely clear that we do not anticipate either of these events occurring, but we have to bear them in mind when responding to an exact series of amendments such as these.

We think we have got this right. It is important that the Committee understands that if the organisation were to be dissolved, as we hope one day it will be, it would be by the affirmative resolution procedure. The alternative would be to dissolve it through primary legislation, but I think the Committee will agree that the affirmative resolution procedure would be satisfactory. Under Clause 17(2)(b) the functions of the primary authority could be transferred to another body on the dissolution of the LBRO.

I have been asked to justify Clause 17 by the noble Baroness, Lady Hamwee, which is a fair request. The LBRO has some ambitious objectives, but we anticipate that there will come a time when its objectives have been achieved and local authority regulatory services are implementing regulations in a way consistent with Hampton and the principles of better regulation. We have therefore made provision for its dissolution. The order may make provision for the transfer of property rights and the liabilities of the LBRO to another person, and may provide for the transfer of its functions to another person.

The Delegated Powers and Regulatory Reform Committee expressed some concern regarding the provisions for transferring functions under Clause 17(2)(b) and asked that the provision be justified. I shall attempt to do so now. Some of the LBRO’s functions in relation to the primary authority scheme will be ongoing. They will need to be performed in the future regardless of the overall quality of local authority regulation. This is relevant to Part 2. For example, the register of primary authority partnerships will still have to be maintained and the LBRO’s arbitration function will have to continue. The Government’s intention is that the provision should allow for another person to take on these functions so as to ensure the continuing and effective functioning of the primary authority once the LBRO has been dissolved. I hope, therefore, that Clause 17 will stand part of the Bill.

I am no clearer about how long the Minister thinks it will take to achieve all these objectives. Indeed, I am slightly disappointed that he thinks the LBRO might fail before it even starts, but it is a possibility that he has to allow for.

I do not for one moment think that it will fail. I am confident that it will succeed, but we have to think of all options.

I am reassured by that. The Minister has explained a little of what is in the Government’s mind and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 57 not moved.]

Clause 17 agreed to.

moved Amendment No. 58:

moved Amendment No. 59:

moved Amendment No. 60:

I should inform the Committee that if Amendment No. 61 is agreed to I cannot call Amendment No. 62 by reason of pre-emption.

moved Amendment No. 61:

moved Amendments Nos. 63 and 64:

moved Amendment No. 65:

On behalf of my noble friend Lord Hodgson I shall speak to Amendments Nos. 65A and 65B, which are grouped with Amendment No. 65. They are probing amendments to explore a particular point. For example, what will happen with a company owning the fabric of public houses, some of which may be managed by employees of the company? The business is clearly under the ownership of the company and if, for the sake of argument, the company is headquartered in Wolverhampton, it might choose the local authority of its headquarters as its primary authority. As the Bill is drafted, I think it is the intention that the primary authority would have jurisdiction over all the managed pubs in the company. Would the tenanted pubs, the fabric of which are owned by the company but each of whose tenants are running small businesses in their own right, also have the cover of the same primary authority?

I hope that we can have clarity about this. I understand what the noble Lord, Lord Jones, said at Second Reading; that is, if there is a franchise which has more than one branch in different local authority areas, it plainly falls within the scope of the clause. However, if it is trading under the name of a multiple chain, but is nevertheless an individual franchise in only one local authority area, it is unlikely that it falls within Clause 20. Similarly, although a pub may come within an overall chain of pubs, its tenant, operating in a single authority, would not fall within Clause 20. We need clarity about this.

The noble Viscount has added a lot of clarity and has put our position well. What he said was right. I shall try to expand on it a little.

Clause 20 defines the scope of Part 2 of the Bill, limiting it to regulated persons, be they a business, a charity or another organisation that is regulated by more than one local authority. The crucial words for this debate are to be found in Clause 20(1)(a); that is,

“a person carries on an activity”

in the area of two or more local authorities. I stress the words “carries on” and “activity”.

Franchises present a difficult case in this context. Depending on the level of control that a franchisor exercises over its franchisees, it is questionable whether a franchisee is subject to regulation by more than one local authority and therefore whether it should have access to the primary authority scheme.

Where a franchisor exercises extensive control over its franchisees and the franchisor is in effect regulated by a number of local authorities through its franchisees, it is appropriate that the franchisor has access to the primary authority scheme. The Bill makes provision for this. I can confirm that this type of franchise would be able to benefit from Part 2.

However, the scope of Part 2 does not capture franchises where a franchisor exercises very little control over its franchisees. The amendments would have the effect of including the latter type of franchise within the scope of Part 2. It would not be appropriate for that type of franchise to have access to the primary authority scheme as it is made up of a series of individual business that are regulated by only one local authority. Part 2 has been deliberately drafted to capture only businesses that are regulated by more than one local authority, as it is those businesses that are faced with the difficulties and costs that result from inconsistent advice and enforcement. I understand that the form of words in Clause 20(1)(a), “carries on an activity”, is found also in competition legislation which deals with this issue.

If a franchisor exercised no control over its franchisees with regard, for example, to health and safety, and there was no central policy on it, it would not be appropriate for that franchisor to have a primary authority partnership with respect to its health and safety functions. Likewise, if a franchisor drew up a promotional scheme—for example, a “buy-one, get-one-free” scheme—but did not oblige its franchisees to instigate the promotion, it would not be appropriate for the franchisor to have a primary authority partnership with respect to the promotional aspects of its trading standards function.

The noble Lord, Lord De Mauley, asked about managed or tenanted pubs. I am afraid that the answer is not exactly what he sought: it will depend on the levels and types of control within the business. There is no single answer for all claims. I hope that goes some way to clarifying the position. The course we have taken is not original, and is to be found in other legislation.

I respectfully say to the Minister that it does not clarify the position. We will have a system with a register and website, and the local authority will know that a multiple of some sort, which has a business in its area, enjoys the protection of a primary authority. They will be able to look that up. But if it is a brewery which owns a lot of pubs, there may be a primary authority which looks after that brewery overall.

However, it is not true to say that, merely because it is on the register, the local authority will know whether a particular pub is subject to overall control by the brewery or whether it is in the hands of a tenant who can do more or less what they wish in terms of health and safety, hygiene and all the rest of it. How is the local authority to know on which side of the line a particular outlet falls? I do not see anything in the Bill that helps us.

It will be necessary for the local authority to ask the necessary questions to ensure that its database is appropriate and satisfactory. I started by saying that this is not an easy issue. The noble Lord, Lord Cope, is quite right to raise it at this stage, but it is not beyond the wit of local authorities to sort it out. Some franchises are effectively single businesses running in one place. Others, and their policies, are clearly controlled from elsewhere. It may not always be easy to work out which is which, but that will have to happen if this concept of the primary authority is to succeed in a particular locality.

The local authority in whose area the tenanted pub or individual franchise operates currently has the regulatory duties. It can go in and take action if there is a breach of something which must be enforced. Is the Minister seriously saying that, before it does so, the local authority must go behind the façade of the business, look at the accounts and the policy statement of the overall owner of the business and decide which side of the line it will fall? If so, it will add greatly to the bureaucracy that the Bill imposes on local authorities. That is extremely undesirable.

I take the point. I think that I made an error in saying that the database would, as it were, be run by local authorities. The LBRO’s database is the important thing here. But we should not forget that the enforcing local authority has a role, too. The local authority in which the noble Viscount’s public house is to be found will be the enforcing authority for that local authority district. The issue is whether the primary authority in that area of business—breweries—will have a role in ensuring that the enforcing authority carries out its enforcement in accordance with the guidance it may have received. The LBRO’s database will determine whether the primary authority has a role or not.

I was seeking clarity in this matter and I am afraid that I cannot say that I have achieved it, except that the issue seems a lot more complicated than the noble Lord, Lord Jones, suggested in the single sentence that referred to the matter in his letter to me. This will be difficult, because my understanding of what the Minister said was that a business, a franchisee, may find itself in a position whereby some of its activities with regard to health and safety, hygiene and so on, because of the nature of its agreement with the franchiser, will be regulated by the primary authority arrangements that apply, but other activities in health and safety and hygiene—which are not specifically dealt with in the franchise arrangement between the franchiser and the franchisee—will be subject only to the local authority. This will be confusing for the business, but will be even more confusing for the local authority, as the noble Viscount, Lord Colville, suggested, because it does not have immediate access to the franchise agreement that will decide the matter.

This may lead to disputes about which local authority is in charge. The crunch will come when something has gone wrong, there is enforcement, action is taken, fines are imposed, court cases are pending, and that sort of thing. The question would then arise as to whether or not the action being taken was correct and which side of the line it fell—was it part of the primary arrangement or not, or had the local authority intervened on the right basis? There is still some confusion on this matter, but the Minister is trying to intervene after taking further advice, so maybe he can clear all of this up.

I do not think so for a moment, but I want to make two points. The first is that on contact with the local authority, if it has a primary authority, the business will have every incentive to tell the authority. Businesses have been asking for a primary authority. Given the remote possibility that that has not clarified the matter completely for the Committee, perhaps I may write to the Members of the Committee with a longer clarification of this issue in good time before Report. This issue is worthy of a letter.

Can the noble Lord add a further point to his letter? Suppose that the local authority makes a mistake and the enforcing authority chooses to enforce and uses one of the civil sanction powers that we shall consider later in the Bill. In fact the authority should have obtained the approval of the primary authority before it did anything, but did not. Can that be raised as a defence by the person who is subject to the civil sanction? Will or will it not be a defence in a criminal case that the procedures set out in the Bill were not carried out? I do not expect the Minister to give an answer now, but could he include that point in the letter, because this matter will lead to greater complications later on? If there is a challenge, it will go to the first-level tribunal and, in some cases, the courts, because it may not go through a civil sanction system. There will be further trouble later on down the line unless this matter is clarified at the beginning.

I will ensure that the letter that I write to the noble Viscount, which of course will be given to other Members of the Committee and placed in the Library, will include an answer to his last question.

The noble Viscount, Lord Colville, has put much greater precision on what I said about when it comes to the crunch. That is exactly the sort of thing that I was talking about. I am most grateful to the Minister for undertaking to clarify all that in writing, including the point made by the noble Viscount. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 65A and 65B not moved.]

Clause 20 agreed to.

Clause 21 agreed to.

Clause 22 [“Relevant function”]:

moved Amendment No. 66:

moved Amendment No. 67:

We stand behind my noble friend Lord Cope and strongly support the amendment. As he says, its wording may not be quite to the Government’s liking, but it stipulates that one local authority must agree in writing to give away its power to another local authority when entering into a primary authority partnership. I remind noble Lords that I and others spoke at Second Reading about our apprehension that the primary authority partnership will spark much resentment when one local authority is empowered to take over the jurisdiction of another in relation to a multi-site business or, say, the description we have just had of a high street. I believe that acquiring written consent may lessen the inevitable resentment as it will hand back to the local authority some semblance of consultation and courtesy in the process.

We believe that there is a strong case for considering Amendment No. 67, which would require any voluntary agreement between a primary authority and a business to be made in writing. In practice, the LBRO is likely to establish a relationship only where it has received notification of the agreement in writing, but we accept that it might be a helpful guarantee of the local authority’s interests to ensure that this is formalised in the Bill. We want to consider the amendment in more depth and we are grateful to the noble Lord, Lord Cope, for raising it because it seems like common sense. If he is kind enough to withdraw his amendment today, we shall return to the matter on Report.

Amendment No. 71 is useful in raising the procedural issues that may need to be taken into account, but we believe that the matters they raise can and will be dealt with administratively without the need for explicit statutory provision. The LBRO is obliged to maintain a register of primary authority partnerships. This is going to take the form for practical purposes of an online database to which local authorities will have routine access as a means of securing effective mutual consultation. This will be accessible to all local authorities and it will be a comparatively simple matter to decide whether there is a partnership in existence in relation to a particular business. This removes the need for a formal notification requirement on either the business or the primary authority of the sort set out in the noble Lord’s amendment. The responsibility for bringing the partnership to the attention of all the local authorities which need to be aware of it remains firmly with the LBRO, thus removing a potential burden from both the primary authority and business.

The question for the enforcing authority is this: is there a primary authority in relation to the particular regulatory service? There is a clear, once-and-for-all answer in the register that the LBRO will hold. We do not believe that there will be any difficulty whatsoever for the enforcing authority—the “local” local authority—in checking this before it takes any action.

While it may be comfortable and enjoyable to start spreading gloom about prospective confusion and muddle, this database is about as simple a system as there could be. It is not a question of the enforcing authority giving up its power; that is not how this system will work. With the greatest respect, I ask the noble Baroness whether her party is in favour of the principle authority scheme or not.

On Amendment No. 67, I am most grateful for what the Minister said. It is not a huge point, but it is worth raising and I am glad that he will think carefully about it. I have been given as near to a green light as I could expect on that one.

On Amendment No. 71, what the Minister said was extremely reassuring to those of us who believe that government electronic systems—databases and so on—always work wonderfully and never go wrong. My experience in government was not like that, and the experience of the Government over the past few months has not been like that. The Minister paints a rosy picture of how it will all function through this magic database. He said that it would settle things once and for all. It will not. Changes will be going on the whole time: looking at our high street, branches of these great multiples open and shut with great frequency, as far as I can see. The database will be constantly changing. Nevertheless, what the Minister said gave at least some reassurance that the points are being considered and thought through. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Before she gets to her feet, the noble Baroness, Lady Hamwee, is about to move an important amendment—Amendment No. 68—and there are other amendments of importance within that group. I think the general consensus is that this may be a convenient moment for the Committee to adjourn.

The Committee stands adjourned until Monday 28 January at 3.30 pm.

The Committee adjourned at 7.32 pm.