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Regulatory Enforcement and Sanctions Bill [HL]

moved Amendment No. 7: 7: Clause 35, page 16, line 17, leave out paragraph (a) The noble and learned Lord said: My Lords, I welcome the noble and learned Baroness the Attorney-General. I am very honoured that she should be here. I thank her and her noble friend Lady Vadera for their courtesy in seeing me on Friday. I hope to prove more persuasive today. I move Amendment No. 7, which seeks to leave out Clause 35(1)(a), which provides for fixed monetary penalties, and speak to Amendment No. 8, which seeks to leave out Clause 38(1) on the same topic. I will also say a word about Amendment No. 9, which I cannot move for technical reasons but which would give regulators the power to impose variable monetary penalties of unlimited size. I have carefully left in the regulators’ power to make stop orders and compensation orders; otherwise, my remarks apply in principle also to variable penalties. The purpose of all these amendments is to urge the Government to think again about the blanket nature of the powers that the Bill gives to regulators, and which both the Constitution Committee and the Delegated Powers and Regulatory Reform Committee of this House have described as unprecedented. The Bill as drafted will, subject only to a final resort to and appeal to a tribunal, enable the Government to give every regulator in this country the power to be investigator, prosecutor, judge, jury and sentencer in their own cause. The way this is done in the Bill is unnecessary and disproportionate. Sensible alternatives are promoted by the Government in another Bill before this House which were suggested by the Delegated Powers and Regulatory Reform Committee. I suggested them both in Grand Committee and on Report. I very much hope that the Minister—I think it may be the noble and learned Baroness the Attorney-General—will address in her reply what I believe is a thoroughly constructive suggestion. The noble Baroness, Lady Vadera, shakes her head but whichever Minister replies, I should be very grateful if the point is addressed. I make it clear once again that I am in favour of sensible and proportionate regulation and regulators having what Professor Macrory described as a toolkit, provided it is reasonable and proportionate. I believe that his approach has a good deal to recommend it. Unfortunately, I believe that the Government have simply passed the Hampton report, which I also commend, and the Macrory report to parliamentary draftsmen and told them to provide for blanket powers to construct whatever system the Government choose, much of which—for example, the size and variety of fixed penalties—they acknowledge that they have not yet thought through. The doctrine of separation of powers and the entitlement to due process before a citizen or business is punished for an alleged crime are both part of the bedrock of a free society. These powers are being given to 62 regulators identified by Hampton and 56 identified by Macrory, as well as to more than 400 local authorities with regulatory responsibility. I am grateful to the Government for those figures. This adds up to tens of thousands of regulators. The blanket powers are justified on the grounds of efficiency. Highly authoritarian powers given to the state are typically justified on these grounds but for a free and fair society there must be adequate checks and balances. Those have not been provided. I am not against civil penalties in principle. They are proving their worth for minor offences such as parking and speeding and for some time, and sensibly, they have been part of the powers of major regulators such as the Office of Fair Trading, Ofwat, Ofgem and other utility regulators and the tax authorities, whether for ordinary taxes or VAT. Those who are regulated—and they need regulation—are rich and powerful in those areas and often enjoy near monopoly status. They have teams of high-quality executives and abundant access to lawyers. They can well cope with the system with equality of arms. Likewise, we are learning to have to live with the smaller penalties, where court procedures would indeed be too cumbersome and expensive. It is in the intermediate range that the Bill, if allowed to go unmodified, is in danger of leading to injustice and oppression. The problem does not lie in the tribunals themselves, to which there is an ultimate right of appeal. Those tribunals will, I am sure, be competent, fair and I hope skilful. But for the smaller business or individual, the whole process of notice, letters in opposition, imposition of the penalty by a public servant, internal appeal to that regulator, confirmation of the penalty and ultimate right of appeal to a tribunal which, however expert, may well seem distant and daunting, is likely to prove expensive. Nor is it a process that the citizen can stop. Until that final stage, when they get before the tribunal, which I am sure will do its utmost to be fair and helpful all around, the whip hand is always with the regulator. The model does not have to be so unbalanced. The Delegated Powers Committee referred to the simpler model in which the citizen, in its example a shopkeeper accused of selling alcohol to a minor, can accept a modest penalty without being taken to court. That same opportunity applied in the recent, much televised example of the half-open dustbin lid in Cumbria. There, the citizen was given an opportunity to pay a fixed penalty of £110 but chose, rather unwisely, to refuse, and was taken to a court which fined him £225. Though the photograph was grainy, the dustbin clearly was overfilled, and the citizen had to have been given a number of warnings; fair enough. Why cannot the Government be satisfied with a similarly proportionate approach in these cases? If the Government were as joined up as they rightly exhort themselves to be, they would realise that they are concurrently in this House bringing forward just such legislation in Clause 82 of the Health and Social Care Bill, where the regulator can impose a fixed penalty of a maximum of 50 per cent of the potential fine, which the citizen has a right either to accept or to choose to be taken to court. We in the Opposition are suggesting that this method could be improved by introducing the same initial notice that the Government have kindly accepted in this Bill; and I welcome that aspect. This is a constructive way ahead. My proposals—although at this stage I cannot rewrite their Bill for them—are intended to be constructive and proportionate. I will just say a word about the tribunals, which I have described as having great qualities but as potentially being rather distant. Along with the noble and learned Baroness, Lady Butler-Sloss, whom I am delighted to see in her place, I have received a helpful letter from Lord Justice Carnwath, the Senior President of Tribunals, in which he makes it clear that the system of tribunals, with a number of chambers and jurisdictions, is not finally settled. He has kindly written to offer to discuss our concerns, and I should be glad to take him up on that. I am sure that they have an important role to play, but there are also magistrates’ courts all around the country. They have been unfairly criticised in the context of this Bill where, in my view, the fault has almost certainly lain with inadequate explanations by regulators or prosecutors. I therefore very much hope that the Minister in her reply will be able to demonstrate a willingness to give serious and constructive consideration to these suggestions. I beg to move.