ukpga/2016/12 — Enterprise Act 2016

Enterprise Act 2016 2016 c. 12 An Act to make provision relating to the promotion of enterprise and economic growth; provision about Sunday working; and provision restricting exit payments in relation to public sector employment. [4th May 2016] B e it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:— PART 1 The Small Business Commissioner The Commissioner Small Business Commissioner 1 1 A Small Business Commissioner is established. 2 The Commissioner's principal functions are— a to provide general advice and information to small businesses (see section 3), and b to consider complaints from small businesses relating to payment matters in connection with the supply of goods and services to larger businesses, and make recommendations (see sections 4 to 8). 3 Schedule 1 makes provision about the Commissioner. “Small businesses” Small businesses in relation to which the Commissioner has functions 2 1 In this Part “ small business ” means a relevant undertaking which— a has a headcount of staff of less than 50, b if the business threshold condition applies to the relevant undertaking, meets that condition, and c is not a public authority. 2 The Secretary of State may by regulations (“ SBC scope regulations ”) make further provision about the meaning of “small business” in this Part. 3 For the purposes of subsection (1)(b), the business threshold condition applies to a relevant undertaking if— a SBC scope regulations provide for that condition to apply in relation to all relevant undertakings, or b the relevant undertaking falls within a description of undertakings to which SBC scope regulations apply that condition. 4 A relevant undertaking meets the business threshold condition if it has a turnover, or balance sheet total, of an amount less than or equal to the small business threshold. 5 SBC scope regulations may (amongst other things) make provision about— a the date (“the assessment date”) on which, or the period (“the assessment period”) for which, a relevant undertaking must meet a requirement of subsection (1)(a) or (b) in order to be a small business; b the calculation of the headcount of staff, turnover or balance sheet total of a relevant undertaking at the assessment date or for the assessment period; c the circumstances in which a relevant undertaking which has been established for less than a complete assessment period is to be regarded as meeting a requirement for that period. 6 SBC scope regulations may provide that a relevant undertaking of a specified description is not a small business even if it falls within the definition. 7 SBC scope regulations may— a make transitional or transitory provision or savings; b make different provision for different purposes. 8 SBC scope regulations are to be made by statutory instrument. 9 A statutory instrument containing SBC scope regulations may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament. 10 In this section— “balance sheet total”, “headcount of staff”, “turnover” and “small business threshold” have such meanings as may be specified; “ relevant undertaking ” means a person who is carrying on one or more businesses and whose registered office or principal place of business is in the United Kingdom; “ specified ” means specified in SBC scope regulations. General advice and information General advice and information 3 1 The Commissioner may publish, or give to small businesses, general advice or information that the Commissioner considers may be useful to small businesses in connection with their supply relationships with larger businesses. 2 In considering under subsection (1) what advice and information may be useful, the Commissioner must, in particular, consider how useful any advice or information would be for the purposes of encouraging small businesses to resolve disputes with larger businesses or preventing such disputes arising. 3 General advice or information published or given under subsection (1) may include general advice or information about— a principles of the law of contract; b other sources of rights or obligations in relation to the supply of goods or services; c dispute resolution. 4 General advice or information published or given under subsection (1) may also include general advice or information about— a complaint-handling bodies, ombudsmen, regulators or other persons (other than courts or tribunals) who, in connection with small businesses' supply relationships with larger businesses, may be able— i to resolve or facilitate the resolution of disputes, or ii to give other advice or assistance to small businesses; b statutory rights to refer disputes in connection with such relationships for adjudication by a person other than a court or tribunal. 5 The Commissioner may publish, or give to small businesses, general advice or information about— a complaint-handling bodies, ombudsmen, regulators or public authorities (other than courts or tribunals) who, in connection with the supply relationships of small businesses with public authorities, may be able— i to resolve or facilitate the resolution of disputes, or ii to give other advice or assistance to small businesses; b statutory rights to refer disputes in connection with such relationships for adjudication by a person other than a court or tribunal. 6 Advice published or given under this section must be impartial, and information published or given under this section must be presented in an impartial manner. 7 The powers conferred on the Commissioner by this section to publish or give general advice or information may be exercised by making arrangements with any other person in accordance with which that person publishes or provides that advice or information. 8 The Commissioner may make recommendations to the Secretary of State about the publication, or provision to small businesses, by the Secretary of State of advice or information of a kind which the Commissioner is authorised to publish or give under this section. 9 Where a recommendation is made under subsection (8), the Secretary of State must inform the Commissioner whether anything is to be done in response to the recommendation and, if it is, give details of the action to be taken. 10 For the purposes of this section a small business has a “supply relationship” with a larger business or public authority if— a the small business has an agreement to supply, has supplied or may supply, goods or services to the larger business or public authority, or b the larger business or public authority has an agreement to supply, has supplied or may supply, goods or services to the small business. 11 In this section— “ dispute ” includes any difference; “ larger business ” means a person carrying on one or more businesses who— is not a small business, has a place of business in the United Kingdom, and is not a public authority. Complaints scheme The SBC complaints scheme 4 1 The Commissioner must establish, maintain and administer a scheme (in this Part referred to as “ the SBC complaints scheme ”) under which the Commissioner— a enquires into, considers and determines relevant complaints, and b may make recommendations as to how the issues raised by those complaints may be remedied, resolved or mitigated or how similar issues may be prevented from arising in future. 2 The Commissioner must establish, maintain and administer the SBC complaints scheme in accordance with regulations made by the Secretary of State under section 7 (scheme regulations). 3 “ Relevant complaint ” means a complaint which— a is made by a small business (“ the complainant ”) which has an agreement to supply, or has supplied or may supply, goods or services to a larger business (“ the respondent ”), b relates to a payment matter (see subsection (4)), and c is not excluded from the scheme (see subsection (5)). 4 A complaint relates to a payment matter if it relates to— a a request or other act, or a failure to pay or other omission, in relation to a payment— i for or in connection with the supply of goods or services, or ii in connection with the relationship or possible relationship between the small business and the larger business so far as relevant to the supply, or b any provision made or proposed to be made in connection with the supply or that relationship which restricts, or purports to restrict, any right of the small business to make a complaint under the SBC complaints scheme or to have a complaint enquired into, considered or determined under the scheme. 5 A complaint is excluded from the scheme if— a it relates to the appropriateness of the price payable or proposed to be payable under a contract for the goods or services supplied or to be supplied by the small business under the contract by comparison with those goods or services, b it concerns matters which are currently the subject of legal proceedings or adjudication proceedings, c it falls within the jurisdiction of an ombudsman, regulator or public authority (other than the Commissioner, a court or a tribunal), d the complainant has a statutory right to refer the complaint for adjudication by a person other than a court or tribunal, e the complaint relates to— i an act or omission which occurred before the appointed start date, or ii an act or omission in accordance with a term of a contract entered into before that date, where that term has not been varied on or after that date, or f it is of a description specified by regulations made by the Secretary of State. 6 For the purposes of paragraph (e) of subsection (5), “ the appointed start date ” means the date appointed by the Secretary of State by regulations. 7 Regulations under this section may— a make transitory or transitional provision or savings; b make different provision for different purposes. 8 Regulations under subsection (6) may appoint different dates for different areas. 9 Regulations under this section are to be made by statutory instrument. 10 A statutory instrument containing regulations under this section (other than regulations under subsection (6)) must not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament. 11 In this section “ larger business ” has the meaning given by section 3(11). Enquiry into, consideration and determination of complaints 5 1 This section applies where a complaint is to be determined under the SBC complaints scheme. 2 The Commissioner may ask the complainant or the respondent to provide the Commissioner voluntarily with any information or documents relevant to the complaint. 3 The Commissioner must give the respondent, and may give the complainant, an opportunity to make representations to the Commissioner. 4 In enquiring into, considering and determining a complaint, the Commissioner must act impartially as between the complainant and the respondent. 5 A complaint is to be determined under the SBC complaints scheme by reference to what is, in the Commissioner's opinion, fair and reasonable in all the circumstances of the case. 6 The determination may contain one or more recommendations as to the steps that ought to be taken by the complainant or the respondent to remedy, resolve or mitigate any issue which is the subject of the complaint or to prevent a similar issue from arising in future. 7 Where a complaint has been determined, the Commissioner must prepare a written statement of the determination. 8 The statement must give the Commissioner's reasons for the determination (including any recommendations). 9 If the determination does not contain any recommendations, the statement must contain the Commissioner's reasons for this. 10 The Commissioner must give a copy of the statement to the complainant and the respondent. 11 A determination made under the SBC complaints scheme is not legally binding. Reports on complaints 6 1 The Commissioner may publish a report of the enquiry into, consideration and determination of a complaint under the SBC complaints scheme. 2 A report under subsection (1) must not identify the complainant, unless the complainant consents. See also section 7(7) which requires provision to be made about factors to be taken into account when deciding whether to identify the respondent in a report. 3 A report identifies a person if it— a mentions the person's name, or b includes any particulars which, in the Commissioner's opinion, are likely to identify the person. 4 Before publishing a report under subsection (1), the Commissioner must give the respondent and the complainant an opportunity to make representations to the Commissioner about the proposed publication of the report (including, in the case of the respondent, about any proposal to identify the respondent in the report). Scheme regulations 7 1 The Secretary of State must make regulations (“ scheme regulations ”) about— a the making of complaints for consideration under the SBC complaints scheme, b the consideration and determination of complaints by the Commissioner, and the making of any recommendations, and c the preparation and publication of reports under section 6. 2 Scheme regulations must— a provide that a complaint (or part of a complaint) is, except in specified circumstances, to be dismissed if the Commissioner considers that the complainant has not previously communicated the substance of the complaint (or part) to the respondent and given the respondent a reasonable opportunity to deal with it; b provide that a complaint is not to be entertained under the SBC complaints scheme unless the complainant has referred it under the scheme before the expiry of the applicable time limit (determined in accordance with the scheme regulations); c provide that the Commissioner may extend that time limit in specified circumstances. 3 Scheme regulations may, among other things— a make provision about the content and form of a complaint and the manner in which it is to be made; b allow the Commissioner to fix time limits for any aspect of the proceedings and to extend a time limit; c provide that a complaint may, or may in specified circumstances, be dismissed, if or to the extent that the Commissioner considers— i that the complaint is frivolous or vexatious, ii that the complaint concerns matters which are more appropriately dealt with in another way, iii that the complainant has not suffered, and is not likely to suffer, any financial loss, material distress, material inconvenience or other material adverse effect, as a result of the matter to which the complaint relates, iv that the matter to which the complaint relates has been remedied, v that the complainant is seeking an outcome other than a recommendation of the kind that can be made under the scheme, vi that the complaint concerns matters that have been the subject of legal proceedings or adjudication proceedings, vii that the matter to which the complaint relates has previously been considered under the SBC complaints scheme or by another complaints-handling body, ombudsman or regulator, viii that any other condition specified by the scheme regulations is met, or ix that there are other compelling reasons why it is inappropriate for the complaint to be dealt with under the SBC complaints scheme; d provide that a complaint is to be dismissed if or to the extent that it becomes the subject of legal proceedings or adjudication proceedings; e require the Commissioner to notify the person who makes a complaint under the scheme if the Commissioner considers that it is not a relevant complaint or it is dismissed in accordance with the scheme regulations; f authorise or require the Commissioner to notify the person against whom a complaint is made if it is not a relevant complaint or it is dismissed in accordance with the scheme regulations. 4 For the purposes of regulations under subsections (2)(a) and (3)(c) and (d) it does not matter whether there has been a consideration of the merits of the complaint by the time it is dismissed. 5 Scheme regulations must also specify matters which are to be taken into account, or are to be taken into account in specified circumstances, by the Commissioner in determining under the scheme whether an act or omission was fair and reasonable. Those matters must include any relevant law. 6 But nothing in this section requires or authorises scheme regulations to specify that particular practices are to be regarded by the Commissioner, in making that determination, as “fair” or “unfair”. 7 Scheme regulations must make provision about factors which are to be taken into account, or are to be taken into account in specified circumstances, by the Commissioner when deciding whether to identify the respondent in a report under section 6(1). 8 Scheme regulations may— a confer a discretion on the Commissioner; b make transitional or transitory provision or savings; c make different provision for different purposes. 9 Before making scheme regulations the Secretary of State must consult such persons as the Secretary of State considers appropriate. 10 Regulations under this section are to be made by statutory instrument. 11 A statutory instrument containing regulations under this section must not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament. 12 In this section— “ relevant complaint ” has the meaning given by section 4(3); “ specified ” means specified in scheme regulations. Confidentiality 8 1 The Commissioner may not make a disclosure of information that the Commissioner considers is likely to cause someone to think that a particular person has made a complaint under the SBC complaints scheme, except where subsection (2) applies. 2 This subsection applies if— a the Commissioner has obtained the consent of the person concerned, b the disclosure is made by the Commissioner to the respondent in relation to the complaint or in a report published under section 6, c the disclosure is required for the purposes of any assimilated obligation , d the disclosure is required, under rules of court or rules of a tribunal, or an order of a court or tribunal, for the purposes of legal proceedings of any description, or e the information has already been made available to the public from other sources. Reports and reviews Annual report 9 1 After the end of each reporting period, the Commissioner must prepare and publish a report which— a describes what the Commissioner has done during the period, b contains a summary of the matters which the Commissioner considers to be the most significant matters raised by small businesses with the Commissioner during the period, and c states the Commissioner's recommendations (if any) as to how any of these matters might be addressed. 2 As well as publishing the report, the Commissioner must send a copy to the Secretary of State. 3 The Secretary of State must lay a copy of the report before Parliament. 4 In this section “ reporting period ” means— a the period beginning with the day on which section 1 comes into force and ending with the following 31 March, and b each successive period of 12 months. Review of Commissioner's performance 10 1 The Secretary of State must review the Commissioner's performance for each review period. 2 For the purposes of subsection (1), the Secretary of State may direct the Commissioner to provide the Secretary of State with information specified in the direction. 3 The first review period is the period beginning with the day on which section 1 comes into force and ending 2 years after the following 31 March. 4 Subsequent review periods are each successive period of 3 years after the first review period. 5 A review must, in particular, assess how effective the Commissioner has been in carrying out his or her functions, and in doing so may, in particular, assess the impact of the Commissioner's actions on— a improving payment practices in commercial transactions; b the awareness of small businesses of, or the use by small businesses of, alternative dispute resolution procedures. 6 As soon as practicable after a review period, the Secretary of State must— a publish a report of the findings of the review for that period, and b lay a copy of the report before Parliament. Power to abolish Power to abolish the Commissioner 11 1 The Secretary of State may, by regulations, abolish the office of Small Business Commissioner if, as a result of a review under section 10, the Secretary of State is satisfied that— a it is no longer necessary for there to be a Small Business Commissioner carrying out the functions under this Part, or b the Commissioner's role has not been sufficiently effective to justify the office's continued existence. 2 For the purposes of subsection (1)(b), the Secretary of State must, in particular, take account of the Commissioner's role in— a carrying out any of the functions under this Part, b improving payment practices in commercial transactions, and c improving the awareness of small businesses of alternative dispute resolution procedures. 3 For the purposes of giving effect to the abolition of the office of Small Business Commissioner, the regulations may amend or repeal this Part or any provision made by or under any other enactment (whether passed or made before or after this Act). 4 Regulations under this section may make incidental, supplemental, consequential, transitional or transitory provision or savings. 5 Before making regulations under this section, the Secretary of State must consult— a the Small Business Commissioner (unless that office is vacant), b such other persons as appear to the Secretary of State to be persons affected by the regulations, and c such other persons as the Secretary of State considers appropriate. 6 If, as a result of consultation under subsection (5), the Secretary of State considers it appropriate to change the whole or part of the proposed regulations, the Secretary of State must carry out such further consultation with respect to the changes as seems appropriate. Regulations under section 11: procedure 12 1 In this section “ regulations ” means regulations under section 11. 2 If after consultation under section 11, the Secretary of State considers it appropriate to proceed with the making of regulations, the Secretary of State may lay before Parliament— a draft regulations, and b an explanatory document. 3 The explanatory document must— a explain why the Secretary of State considers that one of the conditions in section 11(1) is met, and b contain a summary of representations received in the consultation. 4 The Secretary of State may not act under subsection (2) before the end of the period of 12 weeks beginning with the day on which the consultation began under section 11(5). 5 Subject to subsections (6) to (13), if after the expiry of the 40-day period the draft regulations laid under subsection (2) are approved by a resolution of each House of Parliament, the Secretary of State may make regulations in the terms of the draft regulations. 6 The procedure in subsections (7) to (10) applies to the draft regulations instead of the procedure in subsection (5) if— a either House of Parliament so resolves within the 30-day period, or b a committee of either House charged with reporting on the draft regulations so recommends within the 30-day period and the House to which the recommendation is made does not by resolution reject the recommendation within that period. 7 The Secretary of State must have regard to— a any representations, b any resolution of either House of Parliament, and c any recommendations of a committee of either House of Parliament charged with reporting on the draft regulations, made during the 60-day period with regard to the draft regulations. 8 If after the expiry of the 60-day period the draft regulations are approved by a resolution of each House of Parliament, the Secretary of State may make regulations in the terms of the draft regulations. 9 If after the expiry of the 60-day period the Secretary of State wishes to proceed with the draft regulations but with material changes, the Secretary of State may lay before Parliament— a revised draft regulations, and b a statement giving a summary of the changes proposed. 10 If the revised draft regulations are approved by a resolution of each House of Parliament, the Secretary of State may make regulations in the terms of the revised draft regulations. 11 For the purposes of this section regulations are made in the terms of draft regulations or revised draft regulations if they contain no material changes to their provisions. 12 In this section, references to the “ 30-day ”, “40-day” and “60-day” periods in relation to any draft regulations are to the periods of 30, 40 and 60 days beginning with the day on which the draft regulations were laid before Parliament. 13 For the purposes of subsection (12) no account is to be taken of any time during which Parliament is dissolved or prorogued or during which either House is adjourned for more than four days. 14 Regulations are to be made by statutory instrument. Definitions Definitions used in Part 1 13 In this Part— “ adjudication ” includes arbitration; “ the Commissioner ” means the Small Business Commissioner; “ the complainant ” has the same meaning as in section 4; “ legal proceedings ” means civil or criminal proceedings in or before a court or tribunal; “ public authority ” means— a public authority within the meaning of section 3(1) of the Freedom of Information Act 2000, ... a Scottish public authority within the meaning of section 3(1) of the Freedom of Information (Scotland) Act 2002 , or the Advanced Research and Invention Agency. “ SBC complaints scheme ” has the meaning given by section 4(1); “ small business ” has the meaning given by section 2; “ the respondent ” has the same meaning as in section 4. PART 2 Regulators ... Extension of target to provisions made by regulators 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reporting requirements Duty to report on effect of regulators' code 15 After section 23 of the Legislative and Regulatory Reform Act 2006 insert— Code of practice: performance reports and information requirements 23A 1 A relevant regulator must prepare and publish a performance report in respect of each reporting period. 2 A performance report is a report about the effect of performance of the duties in section 22 (duties to have regard to code of practice) on the way the relevant regulator exercised its relevant functions. 3 A relevant regulator is a person with regulatory functions to which section 22 applies, other than a local authority. 4 A performance report must include— a the relevant regulator's assessment— i of the views of persons carrying on businesses about the effect mentioned in subsection (2), and ii of the impact on such persons of that effect; b a description of the effect the relevant regulator expects performance of the duties in section 22 to have on the way it exercises its relevant functions in future. 5 In preparing and publishing a performance report a relevant regulator must follow any guidance given from time to time by a Minister of the Crown, unless the regulator considers that there is a good reason not to do so. 6 Guidance under subsection (5) may, in particular, include guidance as to— a information or other matters to be included in a performance report; b information to be obtained for the purposes of a performance report; c the means by which information should be obtained for the purposes of a performance report. 7 A performance report must be published no later than three months after the end of the reporting period concerned. 8 A reporting period is a period of 12 months, except as provided by subsection (13)(b). 9 A new reporting period begins immediately after the end of each reporting period. 10 A relevant regulator other than the Commission for Equality and Human Rights must give to a Minister of the Crown any information that the Minister may from time to time request which relates to— a the effect of performance of the duties in section 22 on the way the relevant regulator performs, has performed, or is expected to perform, its relevant functions, b the views of persons carrying on businesses about the effect mentioned in paragraph (a) or the impact on such persons of that effect, or c any aspect of a performance report in relation to which it appears to the Minister that guidance under subsection (5) has not been followed. 11 This section is subject to any express restriction on disclosure imposed by another enactment (ignoring any restriction which allows disclosure if authorised by an enactment). 12 In this section— “ local authority ” means— a county or district council in England; a London borough council; the Common Council of the City of London; the Sub-Treasurer of the Inner Temple and the Under-Treasurer of the Middle Temple; the Council of the Isles of Scilly; a port health authority in England; an authority established under section 10 of the Local Government Act 1985 (waste disposal authorities for Greater London and metropolitan counties); a county or county borough council in Wales; a fire and rescue authority in Wales; a port health authority in Wales; a council constituted under section 2 of the Local Government etc (Scotland) Act 1994; a district council constituted under section 1 of the Local Government Act (Northern Ireland) 1972; “ relevant functions ” means functions in the exercise of which a relevant regulator is required by section 22 to have regard to the code of practice under subsection (1) of that section. 13 A relevant regulator's first reporting period— a begins— i on the day on which section 15 of the Enterprise Act 2016 comes into force, or ii in the case of a person that becomes a relevant regulator after that day, on the day on which the person becomes a relevant regulator; b is of a length determined by the relevant regulator, but is not to exceed 12 months. Duty to report on effect of economic growth duty 16 1 After section 110 of the Deregulation Act 2015 insert— Duty under section 108: performance reports and information requirements 110A 1 A person with regulatory functions to which section 108 applies (a “regulator”) must prepare and publish a performance report in respect of each reporting period. 2 A performance report is a report about the effect of performance of the duty under section 108(1) on the way the regulator exercised its functions to which that section applies (its “relevant functions”). 3 A performance report must include— a the regulator's assessment— i of the views of persons carrying on businesses about the effect mentioned in subsection (2), and ii of the impact on such persons of that effect; b a description of the effect the regulator expects performance of the duty under section 108(1) to have on the way it exercises its relevant functions in future. 4 In preparing and publishing a performance report a regulator must follow any guidance given from time to time by a Minister of the Crown, unless the regulator considers that there is a good reason not to do so. 5 Guidance under subsection (4) may, in particular, include guidance as to— a information or other matters to be included in a performance report; b information to be obtained for the purposes of a performance report; c the means by which information should be obtained for the purposes of a performance report. 6 A performance report must be published no later than three months after the end of the reporting period concerned. 7 A reporting period is a period of 12 months, except as provided by subsection (12)(b). 8 A new reporting period begins immediately after the end of each reporting period. 9 A regulator must give to a Minister of the Crown any information that the Minister may from time to time request which relates to— a the effect of performance of the duty under section 108(1) on the way the regulator performs, has performed, or is expected to perform, its relevant functions, b the views of persons carrying on businesses about the effect mentioned in paragraph (a) or the impact on such persons of that effect, or c any aspect of a performance report in relation to which it appears to the Minister that guidance under subsection (4) has not been followed. 10 A regulator is not required by this section to include in a performance report, or to give to a Minister of the Crown, information about the exercise of functions in relation to a particular person. 11 This section is subject to any express restriction on disclosure imposed by another enactment (ignoring any restriction which allows disclosure if authorised by an enactment). 12 A regulator's first reporting period— a begins— i on the day on which section 16 of the Enterprise Act 2016 comes into force, or ii in the case of a person that becomes a regulator (see subsection (1)) after that day, on the day on which the person becomes a regulator; b is of a length determined by the regulator, but is not to exceed 12 months. 2 In section 111 of that Act (interpretation of sections 108 to 110)— a in the heading and subsection (1) for “110” substitute “ 110A ” , and b in subsection (4) for “and 110” substitute “ to 110A ” . Application of regulators' principles and code of practice Power of Welsh Ministers to apply regulators' principles and code of practice 17 In section 24 of the Legislative and Regulatory Reform Act 2006 (application of regulators' principles and code of practice to functions specified by order)— a for paragraph (c) of subsection (3) (Wales: limit on power of Minister of the Crown to specify functions) substitute— c a Welsh regulatory function. ; b in subsection (4) (power of Welsh Ministers to specify functions) for “regulatory functions exercisable only in or as regards Wales” substitute “ Welsh regulatory functions ” ; c in subsection (10) (definitions) at the appropriate place insert— “ Welsh regulatory function ” means a regulatory function, so far as exercisable in relation to Wales, if or to the extent that the function relates to matters— a within the legislative competence of the National Assembly for Wales (see section 108 of the Government of Wales Act 2006), or b in respect of which functions are exercisable by the Welsh Ministers. Removal of restrictions 18 Omit subsection (5) of section 24 of the Legislative and Regulatory Reform Act 2006 (which prevents the regulators' principles and code from being applied to regulatory functions of the Gas and Electricity Markets Authority, the Office of Communications, the Office of Rail and Road or the Water Services Regulation Authority). Secondary legislation: duty to review Secondary legislation: duty to review 19 In section 30 of the Small Business, Enterprise and Employment Act 2015 (meaning of “provision for review” in section 28(2)(a) of that Act), in subsection (3)— a after “must” insert “ so far as is reasonable ” , and b omit third “the”. PART 3 Regulatory Enforcement and Sanctions Act 2008 Extending the primary authority scheme 20 1 For Part 2 of the Regulatory Enforcement and Sanctions Act 2008 (co-ordination of regulatory enforcement) substitute— PART 2 Regulatory Enforcement Introductory “Regulated person” and “regulated group” 22A 1 A person is a “ regulated person ” for the purposes of this Part if the Secretary of State is satisfied that— a the person carries on, or proposes to carry on, an activity, and b a qualifying regulator has a relevant function which is, or would be, exercisable in relation to the person in respect of the activity. 2 A group of persons is a “ regulated group ” for the purposes of this Part if the Secretary of State is satisfied that— a a member of the group carries on, or proposes to carry on, an activity, and b a qualifying regulator has a relevant function which is, or would be, exercisable in relation to the member in respect of the activity. “Qualifying regulator” 22B 1 In this Part, “ qualifying regulator ” means— a a local authority, or b a specified regulator. 2 In this Part, “ local authority ” means a local authority in England, Wales, Scotland or Northern Ireland. 3 In this Part— a references to a local authority in England or Wales have the same meaning as in Part 1; b references to a local authority in Scotland are to a council constituted under section 2 of the Local Government etc (Scotland) Act 1994; c references to a local authority in Northern Ireland are to a district council constituted under section 1 of the Local Government Act (Northern Ireland) 1972. 4 In this Part, “ specified regulator ” means a person (other than a local authority) who— a has regulatory functions, and b is specified for the purposes of this Part by regulations made by the Secretary of State. 5 Regulations under subsection (4)(b) require the consent of the Welsh Ministers to specify a regulator whose functions relate only to devolved Welsh matters. “Relevant function” 22C 1 In this Part, “relevant function”— a in relation to a local authority in England or Wales, has the same meaning as in Part 1; b in relation to a local authority in Scotland, means a regulatory function exercised by that authority and specified for the purposes of this Part by regulations made by the Secretary of State; c in relation to a local authority in Northern Ireland, means a regulatory function exercised by that authority and specified for the purposes of this Part by regulations made by the Secretary of State; d in relation to a specified regulator, means a regulatory function exercised by that regulator and specified for the purposes of this Part by regulations made by the Secretary of State. 2 Regulations under subsection (1)(b) or (c) may only specify a regulatory function— a which is a relevant function for the purposes of Part 1 in relation to local authorities in England or Wales or both, or b which, for the purposes of local authorities in Scotland or Northern Ireland, is equivalent to such a function. 3 Regulations under subsection (1)(d) may only specify a regulatory function— a which is a relevant function for the purposes of Part 1 in relation to local authorities in England or Wales or both, or b which, for the purposes of the specified regulator, is equivalent to such a function. 4 Regulations under subsection (1)(b) or (d) may not specify a regulatory function so far as exercisable in Scotland, if or to the extent that the function relates to matters which are not reserved matters. 5 Regulations under subsection (1)(c) or (d) may not specify a regulatory function so far as exercisable in Northern Ireland, if or to the extent that the function relates to matters which are transferred matters. 6 Regulations under subsection (1)(d) require the consent of the Welsh Ministers to specify a regulatory function, so far as exercisable in relation to Wales, which relates to a devolved Welsh matter. 7 Regulations under subsection (1)(d) may make different provision for— a different purposes; b different areas. Primary authorities Primary authorities for regulated persons and regulated groups 23A 1 For the purposes of this Part, the Secretary of State— a may nominate, in relation to a regulated person, a qualifying regulator to be the “primary authority” for the exercise of the partnership functions in relation to that person (a “direct primary authority”); b may nominate, in relation to a regulated group, a qualifying regulator to be the “primary authority” for the exercise of the partnership functions in relation to the members of the group (a “co-ordinated primary authority”). 2 The “partnership functions” are the functions specified by the nomination under subsection (1) as covered by it. 3 A function may be so specified only if condition A or B is met. 4 Condition A is that the function— a is a relevant function of the primary authority, and b is, or (in the case of an activity proposed to be carried on) would be, exercisable by the primary authority in relation to the regulated person or a member of the regulated group. 5 Condition B is that the function— a is a relevant function of a qualifying regulator other than the primary authority, b is, or (in the case of an activity proposed to be carried on) would be, exercisable by that other regulator in relation to the regulated person or a member of the regulated group, and c is equivalent to a relevant function of the primary authority. 6 The Secretary of State may from time to time revise the specification of partnership functions included in a nomination under subsection (1) if— a the requirements of subsections (3) to (5) are met in relation to the revised specification, b in the case of a nomination under subsection (1)(a), the primary authority and the regulated person have agreed in writing to the revision, and c in the case of a nomination under subsection (1)(b), the primary authority and the co-ordinator of the regulated group have agreed in writing to the revision. 7 This Part applies to a revised specification of partnership functions as it applies to a specification of partnership functions under subsection (1); and references in this Part to the partnership functions include partnership functions in the revised specification. Nomination of primary authorities 23B 1 The Secretary of State may only nominate a qualifying regulator as a direct primary authority if the regulator and the regulated person have agreed in writing to the nomination. 2 The Secretary of State may only nominate a qualifying regulator as a co-ordinated primary authority if— a there is a co-ordinator of the regulated group, and b the regulator and the co-ordinator have agreed in writing to the nomination. 3 The Secretary of State may at any time revoke a nomination under section 23A(1). 4 The Secretary of State must— a maintain, or cause to be maintained, a register of nominations under section 23A(1), and b make the register available for inspection free of charge. “Co-ordinator” of a regulated group 23C 1 For the purposes of this Part, there is a “co-ordinator” of a regulated group if there is a person nominated by the Secretary of State to be the co-ordinator of the group. 2 The Secretary of State may only nominate a person under subsection (1) if the person has agreed in writing to the nomination. 3 The Secretary of State may at any time revoke a nomination under subsection (1). 4 If at any time the co-ordinator of a regulated group is unable to act, the Secretary of State may nominate another person to exercise the functions of the co-ordinator of the group under this Part. 5 Subsections (2) and (3) apply to a nomination under subsection (4) as they apply to a nomination under subsection (1). 6 The Secretary of State must secure that the register of nominations maintained and made available under section 23B(4) includes, in relation to each co-ordinated primary authority, the name of— a the co-ordinator of the regulated group concerned, and b any person nominated under subsection (4) to exercise the co-ordinator's functions. Membership of a regulated group 23D 1 This section applies where a qualifying regulator is nominated as a co-ordinated primary authority. 2 The co-ordinator of the regulated group concerned must— a maintain, or cause to be maintained, a list of members of the group, and b secure, as far as is reasonably practicable, that the list is accurate and kept up-to-date. 3 The list must include in relation to each member— a the member's name and address, b when the person became a member, and c if applicable, when the person ceased to be a member. 4 The co-ordinator of the regulated group must make a copy of the list available free of charge, on request, to— a the Secretary of State, b the primary authority, and c a qualifying regulator who has a function which is both a relevant function of the regulator and a partnership function. 5 The copy must be made available as soon as is reasonably practicable and in any event not later than the end of the third working day after the day on which the request is received by the co-ordinator. 6 For the purposes of this Part, the list is conclusive as to whether a person is a member of the group at a particular time. Application of sections 24A to 28B 23E 1 The following provisions apply in each case where a qualifying regulator has been nominated under section 23A(1) as a primary authority— a section 24A (primary authority advice and guidance); b sections 25A to 25D and Schedule 4A (enforcement action); c sections 26A to 26C (inspection plans); d section 27A (power for primary authority to recover costs); e section 28A (support of primary authority by other regulators); f section 28B (other regulators to act consistently with primary authority advice etc). 2 References in those provisions to “the primary authority”, “a partnership function” and other terms defined in or for the purposes of this Part are to be read accordingly. 3 But see sections 29A to 29D in relation to cases where more than one qualifying regulator has been nominated as the primary authority for the exercise of the same function in relation to the same person. Advice and guidance Primary authority advice and guidance 24A 1 The primary authority, if it is a direct primary authority, has the function of— a giving advice and guidance to the regulated person in relation to each partnership function; b giving advice and guidance, in relation to each partnership function, to other qualifying regulators as to how they should exercise it in relation to the regulated person. 2 The primary authority, if it is a co-ordinated primary authority, has the function of— a giving advice and guidance to the co-ordinator of the regulated group in relation to each partnership function; b giving advice and guidance, in relation to each partnership function, to other qualifying regulators as to how they should exercise it in relation to a member of the group. 3 The primary authority may make arrangements with the regulated person or the co-ordinator of the regulated group as to how the authority will discharge its functions under subsection (1) or (2). 4 In the case of a co-ordinated primary authority, the co-ordinator of the regulated group must notify any advice or guidance given to the co-ordinator under subsection (2)(a) to those members of the group to whom the co-ordinator considers it may be relevant. 5 Advice or guidance may be given under subsection (1)(b) or (2)(b) only with the consent of the Secretary of State. 6 Subsections (1)(b) and (2)(b) do not require advice and guidance to be given to a qualifying regulator in relation to a partnership function if it is not a relevant function of that regulator. Enforcement action “Enforcement action” 25A 1 In this Part, “ enforcement action ” means— a action which relates to securing compliance with a restriction, requirement or condition in the event of breach (or putative breach) of a restriction, requirement or condition; b action taken with a view to, or in connection with, the imposition of a sanction (criminal or otherwise) in respect of an act or omission; c action taken in connection with the pursuit of a remedy conferred by an enactment in respect of an act or omission. 2 But the Secretary of State may by regulations, with the consent of the Welsh Ministers, specify— a action which is to be regarded as enforcement action for the purposes of this Part or any provision of this Part specified in the regulations; b action which is not to be regarded as enforcement action for the purposes of this Part or any provision of this Part specified in the regulations. 3 Regulations under subsection (2) may make different provision for different purposes. Enforcement action by primary authority 25B 1 This section applies if— a the primary authority proposes to take enforcement action against the regulated person or a member of the regulated group pursuant to a relevant function of the primary authority which is a partnership function, and b in the case of proposed enforcement action against a member of the regulated group, the primary authority is aware that the member belongs to the group. But see section 25D (which imposes a duty to prescribe circumstances in which this section does not apply). 2 The primary authority— a must notify the regulated person or the member in writing before taking the proposed enforcement action, and b may not take the action during the referral period mentioned in paragraph 5(2) of Schedule 4A (period in which the regulated person or the member may refer the action to the Secretary of State) unless notified in writing by the regulated person or the member that no such reference is to be made. 3 Parts 1 and 3 of Schedule 4A contain provision for questions arising under this section to be referred to the Secretary of State. 4 Where another enactment limits the period within which the primary authority may take the proposed enforcement action, any time during which it is prohibited under this section or paragraph 5(7) of Schedule 4A from taking the action is to be disregarded in calculating that period. Enforcement action other than by primary authority 25C 1 This section applies if— a a qualifying regulator other than the primary authority proposes to take enforcement action against the regulated person or a member of the regulated group pursuant to a relevant function of the regulator which is a partnership function, and b in the case of proposed enforcement action against a member of the regulated group, the regulator is aware that the member belongs to the group. But see section 25D (which imposes a duty to prescribe circumstances in which this section does not apply). 2 The qualifying regulator (the “enforcing authority”)— a must notify the primary authority in writing before taking the proposed enforcement action, and b may not take the action during the relevant period. 3 If— a the enforcing authority fails to notify the primary authority under subsection (2)(a) of the proposed enforcement action, but b the primary authority is notified of it by the regulated person or the member or the co-ordinator of the regulated group, the primary authority must notify the enforcing authority in writing that the enforcing authority is prohibited by subsection (2)(b) from taking the action during the relevant period. 4 If the primary authority determines, within the relevant period, that the proposed enforcement action is inconsistent with advice or guidance previously given by it (generally or specifically), it may direct the enforcing authority in writing not to take the action. 5 Any such direction must be given as soon as is reasonably practicable, and in any event within the relevant period. 6 If the enforcing authority is not directed under subsection (4) not to take the proposed enforcement action, and continues to propose to take the action— a it must inform the regulated person or the member, and b it may not take the action during the referral period mentioned in paragraph 5(4) of Schedule 4A (period in which the regulated person or the member may refer the action to the Secretary of State) unless notified in writing by the regulated person or the member that no such reference is to be made. 7 Parts 2 and 3 of Schedule 4A contain provision for questions arising under this section to be referred to the Secretary of State. 8 Where another enactment limits the period within which the enforcing authority may take the proposed enforcement action, any time during which it is prohibited under this section or paragraph 5(7) of Schedule 4A from taking the action is to be disregarded in calculating the period. 9 For the purposes of this section, the “ relevant period ” means the period which— a begins when the primary authority is notified under subsection (2)(a) of the proposed enforcement action or the enforcing authority is notified under subsection (3) that it is prohibited from taking the action during the relevant period, and b ends— i at the end of the fifth working day after the day on which the period begins, or at such later time as the Secretary of State may direct, or ii if earlier, when the enforcing authority is notified in writing by the primary authority that no direction is to be given under subsection (4) (unless the notification states that the primary authority has referred the action to the Secretary of State under paragraph 4(1) of Schedule 4A or that it intends to do so). Enforcement action: exceptions 25D 1 The Secretary of State must by regulations, with the consent of the Welsh Ministers, prescribe— a circumstances in which section 25B, and Schedule 4A so far as relating to cases within section 25B, do not apply, and b circumstances in which section 25C, and Schedule 4A so far as relating to cases within section 25C, do not apply. 2 In particular, the Secretary of State must exercise the power under subsection (1) to secure that those provisions do not apply— a where the enforcement action is required urgently to avoid a significant risk of serious harm to— i human health, ii the environment (including the health of animals or plants), or iii the financial interests of consumers; b where the application of those provisions would be wholly disproportionate. 3 Where a qualifying regulator other than the primary authority takes enforcement action against the regulated person or a member of the regulated group in circumstances prescribed under subsection (1)(b), the qualifying regulator must inform the primary authority of the action as soon as it reasonably can. Inspection plans Inspection plans 26A 1 Where a partnership function consists of or includes a function of inspection (an “inspection function”), the primary authority may make an inspection plan in accordance with this section. 2 An “inspection plan” is a plan containing recommendations as to how the inspection function should be exercised by an inspecting regulator in relation to the regulated person or a member of the regulated group. 3 A person is an “inspecting regulator” if— a the person is a qualifying regulator, and b the inspection function is a relevant function of the person. 4 An inspection plan may, in particular— a set out what an inspection should consist of; b set out the frequency with which inspections should be carried out; c set out the circumstances in which they should be carried out; d require the inspecting regulator to provide the primary authority with a report on the inspecting regulator's exercise of the inspection function. 5 Before making an inspection plan the primary authority must consult the regulated person or the co-ordinator of the regulated group. 6 When making an inspection plan the primary authority must take into account any relevant recommendations relating to inspections which are published pursuant to a regulatory function by a person other than an inspecting regulator. 7 When it has made an inspection plan, the primary authority may apply to the Secretary of State for consent to the plan. 8 If the Secretary of State consents to a plan under subsection (7), the primary authority must notify the plan to— a the regulated person or the co-ordinator of the regulated group, and b inspecting regulators. 9 If, in the case of a regulated group, an inspection plan is notified to the co-ordinator under subsection (8)(a), the co-ordinator must— a notify the plan to those members of the group to whom the co-ordinator considers it may be relevant, b prepare a list of the names and addresses of those members, c secure, as far as is reasonably practicable, that the list is accurate and kept up-to-date, d provide the primary authority with the list, including any updates to it, and e notify any member whose name is included in the list or removed from it of the inclusion or removal. 10 If a list or update is provided to the primary authority under subsection (9)(d), the primary authority must notify the list or update to inspecting regulators. Effect of inspection plans 26B 1 If the Secretary of State consents under section 26A(7) to an inspection plan in respect of an inspection function, the primary authority must have regard to the plan when it exercises the inspection function in relation to— a the regulated person, or b a member of the regulated group whose name is included in the list provided to the primary authority (and, where applicable, updated) under section 26A(9)(d). 2 If an inspection plan of the primary authority is notified to an inspecting regulator under section 26A(8)(b), the inspecting regulator may not exercise the inspection function in relation to the regulated person or a member of the regulated group otherwise than in accordance with the plan, unless— a the inspecting regulator has notified the primary authority in writing of the way in which it proposes to exercise the function, and the primary authority has notified the regulator in writing that the primary authority consents to that proposed exercise, or b in the case of a regulated group, the member's name is not included in the list notified to the inspecting regulator (and, where applicable, updated) under section 26A(10). 3 A notification by an inspecting regulator under subsection (2)(a) must include reasons for exercising the function otherwise than in accordance with the plan. 4 A primary authority is to be treated as having given the notification of consent described in subsection (2)(a) if— a it is notified by the inspecting regulator as described in that subsection, and b it fails to notify the inspecting regulator in writing, before the end of the fifth working day after the day on which it received the notification, whether it consents as described in that subsection. Revocation and revision of inspection plans 26C 1 A primary authority may, with the consent of the Secretary of State, revoke an inspection plan made by it under section 26A. 2 If a primary authority revokes an inspection plan, it must notify the following that the plan is no longer in effect— a the regulated person or the co-ordinator of the regulated group; b inspecting regulators. 3 Where the revocation of an inspection plan is notified to the co-ordinator of a regulated group under subsection (2)(a), the co-ordinator must notify the revocation to those members of the group to whom the co-ordinator considers it may be relevant. 4 A primary authority may from time to time revise an inspection plan made by it under section 26A. 5 Sections 26A and 26B and this section apply to a revised plan as they apply to a plan made under section 26A; and references in this Part to an inspection plan include the revised plan. Primary authority's costs Power to charge 27A 1 The primary authority— a may, in the case of a regulated person, charge the person such fees as the authority considers to represent the costs reasonably incurred by it in the exercise of its functions under this Part in relation to the person; b may, in the case of a regulated group, charge the co-ordinator such fees as the authority considers to represent the costs reasonably incurred by it in the exercise of its functions under this Part in relation to the regulated