Grand Committee
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Deregulation Bill
(10 years, 1 month ago)
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Lord Tunnicliffe
Lord Tunnicliffe (Lab)
My Lords, in moving Amendment 92C, I will also speak to Amendment 92D, and—this may sound peculiar—I will specifically not speak to Amendment 93. What arguments I shall make in speaking to these two amendments should not be read across to our position on Amendment 93, which stands up on its own, and which will be well presented by the noble Lord, Lord McNally, and supported by my noble friend Lady Thornton.
Essentially, the amendments probe Clauses 83 to 86. Once again, we have degrouped from the proposed original grouping the question that Clause 83 stand part of the Bill. We did that because we want to make it clear that we are not against the underlying concept of this group of amendments, providing that they are benign in intent, and that the Government are willing to accept either our amendment or appropriate other amendments which secure the benign nature of the intent.
It is interesting to look at just how important these clauses are. The Minister, Oliver Letwin, who has the wonderful title of Minister for Government Policy, said in another place:
“In that context, clause 61”—
which is now Clause 83—
“which is probably the single most important clause in the Bill, creates a growth duty”.—[Official Report, Commons, 3/2/14; col. 37.]
Therefore the Minister for Government Policy thinks that it is the most important clause in the Bill.
In Second Reading in the House of Lords, the noble Lord, Lord Wallace of Saltaire, was a little more careful. He said:
“Clauses 83 to 86 create a statutory duty for non-economic regulators to consider economic growth when carrying out their functions. This duty will be supplementary to”—
we may come back to those words, perhaps not today, but in the course of the passage of the Bill—
“and will not supplant, the regulators’ other statutory obligations. It will make them take economic growth into account as they exercise their regulatory functions. Guidance on this has just been published”.—[Official Report, 7/7/14; col. 16.]
I will come on to that guidance.
The importance of this clause is a matter for appraisal. It rates the positive value of this set of clauses between zero—which is pretty low—and £240 million per annum. I am reminded of Tesco’s “Every little helps”. However, it is a little. Some £90 million may be a big figure, but it is stretched across the whole gross domestic product of something over £1.5 trillion, and I ran out of noughts while trying to find out what percentage it is of that. A more down-to-earth figure is that it represents £3 per annum, per worker. Therefore this is a push in the right direction, if you believe in all the benefits, but not that significant a push. If it is the most important clause in the Bill, as the Minister said in the other place, it does not say a lot for the other clauses.
The reason I stress the size of the impact is that when we make a piece of law, we have to consider the unintended consequences. This set of clauses could have serious unintended consequences, because they go to the root of the concept of regulation. To quote Oliver Letwin, a right-wing Tory Minister:
“I will begin by saying something that several in the House might find mildly surprising in the context of this debate: regulation is often sensible and necessary. It is no part of the Government’s plans or our view of life to suggest that regulation is never useful. Indeed, like previous Governments, this Government are presiding over an immense amount of regulation, much of which is constructive and helpful”.—[Official Report, Commons, 3/2/14; col. 35.]
I passionately believe in regulation. I believe that it is the essence of what creates a society. It is the process by which individuals are protected from abuse by persons—I draw the distinction in the sense that “persons” includes firms, the state and all different collections and interests—while enabling the flourishing of society in general. It is essential to civilisation and for most people, it is barely noticed. That is one of the problems with regulation: there is little appreciation of how important it is in society. It is as old as history, of course. The first regulations that we tend to learn about are the Ten Commandments, and they go on and on. We call them laws but, in many ways, criminal laws are just as much regulations as regulations which are not criminal laws, and they overlap.
In this House, due to our longevity, one can pray in aid the Clean Air Acts. One has to be fairly old, but the noble Lord, Lord McNally, will remember the 1962-63 smog in London, which brought the city to a halt, a phenomenon which was common.
Lord Tunnicliffe
We were there together. The regulations that cleaned up the atmosphere totally changed the city of London. It was worth cleaning the buildings afterwards. Nobody knows about the Clean Air Acts, but they are central to our lives.
When I was young, aeroplanes used to crash quite frequently. Being an airline pilot was a dangerous pastime. People used to go on to aeroplanes wondering whether they would get to their destination. People do not think about that now. They assume that it is safe. What makes it safe is a great feast of regulations that governs every bit of that activity to make it incredibly safe. We do not think about regulation when we go into a restaurant; we go in assuming we are not going to be poisoned. Why can we make that assumption? Because there is a raft of regulation that makes sure food is safe; everything from what varieties are allowed into this country in the first place to how it is handled, how it is checked and so on. Regulation is a crucial part of our lives but most people do not notice it.
I notice it because I have been involved in regulation for 50 years. My initial training was as a pilot, and you immediately realise how regulation contributes to the safety of the operation. Over those 50 years I have been a pilot, an air operator, a railway operator, chairman of the United Kingdom Atomic Energy Authority, chairman of the Rail Safety and Standards Board and involved in safety in the MoD. Finally, as a Whip, I had to explain the failure of regulation that caused the Nimrod crash in Afghanistan and killed servicemen unnecessarily. I am a passionate believer in regulation and its protection.
Let us turn to what the clauses do. One of the most useful documents when looking at legislation is the impact assessment. The reason it is useful is that it is usually written by reasonably junior people and they are, putting it nicely, less nuanced than some of the more superior documents. You frequently get to what people are thinking about when they have the legislation in mind. The relevant part of the impact assessment is pages 16 and 17. It is all relevant, but pages 16 and 17 set out the areas of advantage that the impact assessment envisages these clauses will bring about. They include: reduction in duplication costs for information, £28.17 million; reduction of information requirement costs, best estimate, £41.43 million; reduction in time required for inspections, £7.21 million; reduction in unexplained duplication of inspection, £1.01 million; reduced reliance on external contractors, £12.4 million. I remind the Committee that the range is nought to £240 million and the best estimate is £90 million. Those impacts of these clauses are benign. They are about the process of implementing regulations. They are about being sensible with the regulator and making sure there is no duplication, that regulators talk to each other and that processes are efficient. If all these clauses have impacts like those, they are benign, and we support them.
The problem is the clauses themselves. Clause 83(2) states that,
“the person must … consider the importance for the promotion of economic growth of exercising the regulatory function in a way which ensures that … regulatory action is taken only when it is needed, and … any action is proportionate”.
Those words by themselves seem a pretty high test for a regulator. As I tried to illustrate, our lives are made acceptable and benign by regulators acting pretty well as they do at the moment to protect us. So are these new clauses a licence for regulators to approve regulations that kill people to save money? When you put it like that, I am sure everybody will say, “Of course not”. Nobody could believe that the intention of these regulations is to kill people to save money. The trouble is that in my very long career in regulation I have heard discussions about killing people to save money. Nobody uses terms like that. They will say: “The risk of this event is so low and the costs we are having to put in to prevent it happening are so high that it is unreasonable. Why are you forcing us to spend this money for this mitigating measure?”. These conversations go on. They go on in more complex circumstances. They go on in situations where a new regulation is being introduced which, as a consequence, mitigates most of the risk in a particular area as well as mitigating other risks. Other people can then say, “The residual risk is now so small, surely you do not want that regulation to continue in place, costing money, when people only kill other people very occasionally”. In other words, the risk is small enough to be put to one side. Do we intend praying in aid quite strong words such as necessary and proportionate for those sort of circumstances to be envisaged?
Lord Rooker (Lab)
My Lords, I had not intended to speak in this debate but, given that my noble friend raised the Food Standards Agency, I want to put a couple of points on the record.
I had the privilege of serving as chair of the Food Standards Agency between 2009 and 2013—that is, during the genesis of this issue. The list of non-economic regulators on pages 21 and 22 of the guidance—I have not counted them; there are about 50—vary between executive agencies of government departments, non-departmental public bodies and free-standing, non-ministerial government departments. The staff of these regulators are either civil servants or non-civil servants, so there is a variety there. For example, the staff of the Environment Agency are not civil servants.
I make it clear that the Food Standards Agency is a non-ministerial department. Ministers have no role whatever in food safety regulation in this country. The legislation relating to food safety is entirely a matter for the board of the Food Standards Agency. The best thing about the board is that it meets in an open and transparent way and it transmits its meetings on a webcast. That is the only time that the board discusses policy. Of course, that is not the case with the rest, which are political departments operating behind closed doors.
My point is that the doubts about food safety do not hold water. That is not to say, of course, that people do not come with a try-on. During my time at the agency, at one point we were ordered—and Star Chamber’d more than once—over this Red Tape Challenge nonsense, which I keep coming back to because it is the Achilles heel here, not to inspect kitchens in village halls or the kitchens at paid childminder services. I told Ministers, as my successor has done, “Dirty kitchens kill and we’re going to carry on doing it. It’s as simple as that”. However, there was no problem whatever in embracing the growth duty. For example, the meat industry in this country is a £6 billion industry and exports are a big part of that. Exports to new markets such as China and Russia are crucial. You cannot export meat out of this country unless the premises in which it is prepared are signed off by the regulator—in this case, the Food Standards Agency, not Defra or the Department of Health. The certificates given to the Russians and the Chinese come from the FSA.
We saw that as our contribution to part of the growth duty. When we were asked to act, we got on and did it pretty quickly. Sometimes the requirements of the Russians in respect of food safety in the meat industry are greater than those of the European Union. Therefore, we came across companies which had to up their game in order to fulfil the export market. We needed to get in there quickly so that there was no delay. We once had a Member of Parliament churlishly complaining at Prime Minister’s Question Time on behalf of a company, but the abattoir in question was not up to Russian standards. I will not name it but it is on the record in Hansard. The fact was that it had to up its game, and we saw that as our positive contribution. We made sure that, when we got a request, we dealt with it pretty smartly and arranged early inspections.
The other part of the growth duty concerns retail. Anybody preparing food can get, free of charge, a Safer Food, Better Business pack. It almost tells people how to run a business, whether it is a care home kitchen, a retail kitchen or a restaurant, and it is provided free of charge by the FSA. It tells them how to run a better business by providing safer food. That is part of the growth agenda: making sure it is clear and applicable to small businesses. We did one especially for small and medium-sized businesses because we realised it does not always apply. Then the FSA was able to say to Ministers, who were actually asking us not to inspect kitchens used by vulnerable groups in village halls and childminders, that dirty kitchens kill. In other words, off you go. However, our contribution to the growth agenda was the two examples I have just given, so it is a balance.
Lord Rosser (Lab)
I support the amendment that has been so ably moved by my noble friend Lord Tunnicliffe. In particular, I will raise some questions about how the Government see the terms of Clauses 83 to 86 impacting on bodies exercising regulatory functions, including those coming under the auspices of the Home Office. At the moment, subject to what the Minister says in response, one rather gets the impression, as my noble friend Lord Tunnicliffe suggested, that Clause 83 may be a bit of a lawyers’ paradise and a basis for legal proceedings against regulatory functions, whether or not they have taken that factor into consideration and thus the creation of considerable uncertainty.
As I understand it, the Home office bodies it is intended should fall within the scope of these clauses include the animals and science regulation unit, the Disclosure and Barring Service, the Gangmasters Licensing Authority, the National Counter Terrorism Security Office and the Security Industry Authority. It will be a requirement under this Bill for these bodies in exercising their regulatory functions to have regard to the desirability of promoting economic growth and, in particular, for the regulator to consider the importance of the promotion of economic growth of exercising the regulatory function in a way that ensures that regulatory action is taken only when it is needed and that any action is proportionate.
The Explanatory Notes quote as background to these provisions a report by the noble Lord, Lord Heseltine, which the notes say,
“recommended that the government should impose an obligation on regulators to take proper account of the economic consequences of their actions”.
That is not actually the same as promoting economic growth. Unlike Clause 83, taking proper account of the economic consequences of actions would, for example, include at least some if not all of the issues referred to in my noble friend Lord Tunnicliffe’s amendment, including exercising the regulatory function in a way that does not cause significant detriment to consumers, employees, the environment, health and safety and equality rights.
One of the regulatory bodies under the Home Office is the Disclosure and Barring Service, which is a regulator only as it relates to the conditions of registration under the Police Act 1997 that apply to bodies registered or wishing to register with the DBS to be able to submit applications for individuals for criminal record certificates. If I am correct in saying that, presumably the provisions in Clauses 83 to 86 would relate only to this element of the DBS functions. But I would be grateful if the Minister could say in his response exactly what part of the functions of the Disclosure and Barring Service is intended should be covered by Clauses 83 to 86.
Will the Minister also say in his response how it is considered the Disclosure and Barring Service has operated up to now in a way that has not complied with the provisions of Clause 83 and thus what change he considers that Clause 83 will make to the way in which the DBS will in future carry out its regulatory role compared with the way in which it has carried out its role to date?
The Gangmasters Licensing Authority also comes under the umbrella of the Home Office. The GLA describes itself as a regulator with licensing, enforcement and compliance functions, all of which combine to create a prevention framework for the protection of workers from exploitation. It has two regulatory sanctions—revocation of a licence and prosecution of unlicensed organisations and those who use unlicensed companies. The GLA has told us that it operates within a regulatory framework, with independent and objective accountability, taking decisions that have a regulatory impact on businesses that are appropriate and proportionate where such impacts benefit the economic growth of compliant businesses.
Bearing in mind the fact that the regulatory function of the GLA is to protect workers from exploitation by unscrupulous companies and in so doing level the playing field for organisations that wish to trade and operate ethically, will the Minister explain in what way Clauses 83 to 86 will result in a change in the way that the Gangmasters Licensing Authority will be expected to carry out its regulatory role in future under the Bill compared with the way in which it has carried out its regulatory role to date? If the Government deem it necessary for the GLA to be required under the law to have regard to promoting economic growth, do they not think it equally important that it should be in the Bill, as provided for in my noble friend’s amendment, that a body whose reason for existence is to prevent exploitation of workers should, in meeting its new statutory duty to have regard to the promotion of growth, also have a statutory duty under the Bill not to take regulatory action that would cause significant detriment to employees?
The Explanatory Notes state that the post-implementation review of the regulators compliance code found that regulators had a tendency to regard economic growth as subsidiary to their statutory duties. How many regulators fell into that category? Was it all of them and, if not, which are the ones that operate in the regulatory bodies that it is intended will be covered by Clauses 83 to 86?
The Government clearly believe that Clauses 83 to 86 will change the way in which regulatory bodies and regulators will carry out their role, including the decisions they make; otherwise, why is this clause being included? If the Government are not going to accept my noble friend’s amendment, that will also indicate that the Government are seeking to change the balance of regulators’ decisions to the detriment of the groups and factors mentioned in my noble friend’s amendment; otherwise, they would accept the amendment.
The question is: what will Clauses 83 to 86 mean in reality? Can the Minister please provide a list of the regulatory bodies expected to be covered by these clauses, showing the extent to which the Government consider that each one does or does not already meet the terms of Clause 83 in carrying out its role? If the Government do not consider that they already operate in accordance with the terms of Clause 83, can the Minister please provide information on decisions that those regulatory bodies have previously made which the Government consider would have been different had Clause 83 been on the statute book? It is only with that information available that we will be able to form a view on whether the clause is basically verbiage for show or whether it will change decisions being made by regulators. If so, in what way, and to whose benefit and to whose disadvantage would that be?
Lord Grantchester (Lab)
I support my noble friend Lord Tunnicliffe on these amendments. While the Minister may contend that these words are unnecessary due to the phrase,
“the desirability of promoting economic growth”,
being in the clause, my noble friend’s wording provides a better balance by referring to the need not to cause harm. I have always believed that, were there to be an 11th commandment, it would be, “Thou shalt not commit pain”.
I declare my interest as a farmer. In agriculture and the environment there is often a conflict between economic development and the environment. I remember that when my noble friend Lord Whitty, who unfortunately cannot be in his place today, took the Natural Environment and Rural Communities Bill through your Lordships’ House in 2005, there was much debate concerning a conflict clause and how regulators were to balance the competing claims of economic well-being and the environment. My noble friend Lord Knight was the Minister in the Commons at the time. At the moment, he is taking part in a debate in the Chamber.
In the NERC Act we got the balance right. In that context, the regulatory functions were carried out by the Environment Agency and Natural England. While the NERC Act set up Natural England, it was correct not to include a conflict resolution clause applying to its work outside certain designated areas such as national parks, areas of outstanding natural beauty and conservation sites. In these areas, the level of importance of biodiversity and landscape had already been determined. To have included a conflict resolution clause would have seriously constrained Natural England’s independent decision-making ability, and here I echo the remarks of my noble friend Lord Rooker on his experience with the Food Standards Agency.
However, it is imperative to include the amendment in order to underline the necessity to have regard to economic development. After all, Natural England also operates in urban green spaces. It is easy to slip into automatic rejection of renewable energy—for example, solar development—as it will necessarily result in the loss of agricultural land. Each case must be taken on its merits.
I contend that the rural economy by and large already operates to the standards outlined by these clauses. However, if we are to have Clause 83 in the Bill—and here I do not wish to preclude the remarks of the noble Lord, Lord Greaves, in his stand part debate, which is to follow—we need this amendment. In the rural economy, there is already a need to balance economic, environmental and social obligations. All these factors are usually combined into the word “sustainability”.
If the intention in Clause 83 is further to alter the balance in favour of the economic dimension of sustainability and that regulators can be held accountable for the degree to which they have had this due regard, then, without this amendment, the regulating organisations could find themselves in difficulty and their environmental focus blunted. The Gangmasters Licensing Authority could find its labour exploitation focus blurred. The Food Standards Agency could find its public health focus diminished. The Veterinary Medicines Directorate could find its animal health objective confused.
Lord Kennedy of Southwark (Lab)
My Lords, I support my noble friend’s amendments and I concur with the comments of my noble friends Lord Rooker, Lord Rosser and Lord Grantchester. I would like the noble Lord, Lord Wallace of Saltaire, when he responds, to clarify how the clause applies to the Legal Services Board, which came into force in 2009. Its overriding mandate is to ensure that regulation in the legal services sector is carried out in the public interest and that the interests of consumers are placed at the heart of the system. It oversees 10 separate bodies, the approved regulators which directly regulate practising lawyers.
The board oversees the organisation that handles consumer complaints about lawyers, the Office for Legal Complaints. It works to eight regulatory objectives, which are: protecting and promoting the public interest; supporting the constitutional principle of the rule of law; improving access to justice; protecting and promoting the interests of consumers; promoting competition in the provision of services in the legal sector; encouraging an independent, strong, diverse and effective legal profession; increasing public understanding of citizens’ legal rights and duties; and promoting and maintaining adherence to the professional principles of independence and integrity, proper standards of work, observing the best interests of the client, complying with the duty to the court and maintaining client confidentiality. Will the Minister confirm that, whatever comes out of this, the Government do not see that this new duty in any way overrides the regulatory objectives to which I referred, that nothing would change in that respect, and that all that it would do is re-emphasise competition in the provision of service in the legal sector?
We are talking about growth, but I hope that at the end of all this we are not just creating more work for lawyers. As other noble Lords have said, it is certainly confusing, and that cannot be the Government’s intention. I hope that the Minister, if he cannot accept my noble friend’s amendment, will respond very carefully to the points raised. These are serious matters, and it cannot be the Government’s intention to create more work for lawyers and more expense for business.
Baroness Thornton (Lab)
My Lords, I support my noble friend’s amendment. My noble friend Lord Hunt cannot be with us this afternoon, so I shall expand on the issues around the CQC which he raised in Grand Committee last time. He asked for an explanation of why the CQC would not respond to a request that sought its views on this matter. We asked it for its views on the clause and were informed by the Department of Health that it had told that CQC that it was not appropriate for it to respond to our inquiry. Indeed, my noble friend forwarded to me a copy of the letter that he received from the department as a result of his exchange with the noble Earl, Lord Howe. The letter says:
“CQC sought views from the Department of Health and Cabinet Office before responding to the request. The CQC is a non-departmental public body, and is part of the Government landscape”—
whatever that means. It goes on,
“As such, it was not considered appropriate for the organisation to give its views to the Opposition on a piece of legislation. This is in line with the civil service code. I understand that the CQC replied to confirm it would not be appropriate for them to comment and suggested that the Office of the Leader of the Opposition contact the Department directly should there be any further queries”.
So we might take that one up anyway.
This letter raises more questions and concerns than it answers. Given that today marks the publication of guidance for NHS organisations on the duty of candour and the fit and proper persons requirement, it seems rather ironic that a press release from the CQC says:
“One week to go before new NHS regulations to improve openness and transparency”.
Well, yes.
I shall ask the Minister for some further points of clarification in this context. If the CQC cannot answer the questions directly that we want to put, I would like to know what we should do. These are the questions that we think that it would be legitimate to ask. I quote from the CQC’s website on the principles of that body. It says:
“Throughout everything we do, we always … put people who use services at the heart of our work … have an open and accessible culture … are independent, rigorous, fair and consistent … work in partnership across the health and social care system … are committed to being a high-performing organisation … promote equality, diversity and human rights”.
As those of us who were involved in the legislation two or three years ago know, the CQC is accountable to the public, Parliament and the Secretary of State for Health for the regulation of most of England’s healthcare provision, including hospitals, both NHS and private, GPs, dentists, care homes and other institutions. It does a very important job. Surely we have to be confident of the CQC’s independence and that it will have only patients’ interests in mind in all the work that it does. How will this work alongside the duty to consider economic growth? I really do not expect to hear soothing sounds from the Minister about this because the House needs to know that this has been tested in some way and that questions have been asked and hypothetical cases have been put, such as a care home whose business interests are at risk because of the work of the CQC, with a loss of jobs, meaning that economic growth is therefore in jeopardy. Those are totally legitimate questions to put about the duty being imposed on the CQC. Those are the unintended consequences that my noble friend referred to in his opening remarks. We need to know whether the CQC would find itself in a policy clash situation. Does the Minister accept that any danger that the economic growth regulation might have a chilling effect is actually disastrous when talking about the country’s foremost health regulator? It is completely legitimate that the Committee should want to know the answers to these questions before the CQC is included in this legislation.
I was not at all comforted by reading the draft guidance. Point 5 on page 7 says:
“The impact that regulators can have on sector-level economic growth will depend on the context and/or sector(s) within which they operate. In order to understand sector level impacts, where possible regulators should consider how their actions impact on indicators such as consumer confidence and fair competition”.
In the context of the health service, where competition is being put at the heart of service delivery by the Government, that seems to be an extremely important point and raises questions about the problems that the CQC might face. We know that the health service—which we face having to save yet again after the general election—is already a lawyers’ playground. How much more of a lawyer’s playground will it be if these issues are not resolved?
Lord Collins of Highbury (Lab)
My Lords, I, too, want to support my noble friend in his amendments today. I particularly want to focus on one element of regulation in relation to gambling and the Gambling Commission. I would also like to focus my remarks on what my noble friend Lord Rosser said, in the sense of asking what the Government’s view is on the role of the Gambling Commission in terms of its acting contrary to Clause 83. Is there evidence, which the Minister might want to put before the Committee, that says that this clause is required? At the end of the day, the gambling market is a unique one, where the public expect fair rules. They want independence for the regulator, because they want to ensure the rules are applied by the people operating in that market.
In the recent debate on the Gambling (Licensing and Advertising) Bill, we heard several calls that this market needs even further regulation, because it has a huge social impact, not least in terms of problem gambling—addiction—and the harm that it causes to both individuals and families. When we debated the Bill, we were focused on the need for adequate research to fully understand the consequences of our actions. That was certainly the Government’s view, and it is certainly the view of the Opposition: think before you act, and understand the consequences. This comes back to my noble friend’s view about unintended consequences, of which there were two here.
The Gambling Commission expressed a view during pre-scrutiny of the Bill, which I want to repeat. It focused on this matter of unintended consequences. It is a regulator that does understand the economic consequences. It is not a regulator that wants to ban gambling; it wants to facilitate it. In fact, the more it acts to regulate, in a sense, the more the market can grow, because this is about public confidence and public trust. This is where I believe the draft guidance, in seeking to clarify, may actually create uncertainty, which again comes back to these unintended consequences.
The Gambling Commission itself spoke about the need to be wholly independent, impartial and objective, and the need to have public confidence. It says that it does not think that the wording will impair its objectivity at all—it believes that it is acting in a way that could meet the requirements of this clause. However, as it says, if it gets confused or conflated with the promotion of the commercial interests of specific economic sectors, and it appears to the public that it is part of the commission’s role to promote the industry as opposed to permitting the industry to promote itself and grow so far as is compatible with consumer protection, the likely outcome is a reduction in public confidence and a consequent reduction in the public acceptance of gambling as a mainstream leisure activity. This clause could have the complete opposite effect of what it was intended to do. It could harm an industry that is a legitimate part of our economic activity. There are unintended consequences.
The Gambling Commission raised another point, which is important with regard to what my noble friends have said on the guidance and the fact that you could be creating uncertainty. They say that the guidance to the growth duty will be important. That is absolutely right, and it helps to develop better policy for the industry to have a real input in determining the economic impact of any regulatory change. It is very important for the industry to be clear how that should be done and to have some assurance that its views are taken into account. However, the reform measure designed to reduce burdens on an industry and foster economic growth may have the unintended consequence of the regulator and parts of the industry expending time and money on unproductive and costly delaying tactics if the guidance does not encourage speedy and transparent decisions.
I can see what is coming as regards the new regulations we had under the Gambling Bill. I can see that people entering the market may say, “We want to challenge the commission on this because it denies our ability to enter this market and our ability to grow economically”. In a sense, instead of the commission regulating fairly and being able to build public confidence, this could undermine that, which is a bad unintended consequence that the Government need to address and answer today.
Lord McKenzie of Luton (Lab)
My Lords, it may come as no surprise that I, too, support my noble friend’s amendment and express reservations about disturbing the current arrangements for the Health and Safety Executive. The very essence of the HSE’s role has positive implications for growth. It is about encouraging leadership from the top of an organisation, having effective systems, good employee engagement—key attributes for an effective business. Of course, its role in promoting safe and healthy workplaces is typically linked with higher profitability, productivity and worker loyalty. That is what the data used to show, and I believe they still do. However, IOSH states that,
“good workplace health and safety already supports growth”.
It expresses concerns that the new explicit duty could “cause confusion” and undermine the focus and judgment of the HSE. Therefore, perhaps the Minister can be more specific about the benefits to growth of these provisions being applied to the Health and Safety Executive, and about what changes to the way the HSE goes about its business the Government expect if they should be applied.
The impact assessment accompanying these proposals specifically identifies as good practice the HSE’s existing role in working with a number of trade associations and local authorities to create sector or topic-specific guidance. The HSE has of course been subject to a number of reviews in recent years, most recently that of my noble friend Lord Young of Graffham, of Professor Lofstedt, and the triennial review led by Martin Temple. Those have, in a variety of different ways, found the HSE and the regulatory regime, fit for purpose.
The blueprint for the HSE as it currently exists was set out in Lord Robens’ 1972 report, Safety and Health at Work. His vision of a goal-setting, risk-based and proportionate health and safety framework has endured. That is reflected in the HSE’s current business plan, which includes in its goals,
“drawing a distinction between real health and safety and bureaucracy and ‘overinterpretation’; making it even easier for people to understand and do what is required; devoting a greater proportion of effort where risks are highest and where we can have greatest impact; and continuing to hold to account those who expose their employees and others to unnecessary risk”.
The HSE can justifiably currently claim that it keeps the burden on business productivity to a minimum. Indeed, it effectively enhances it. It is proportionate in its decision-making and understands the business environment.
Understanding the business environment does not necessarily equate to reducing regulatory activity. Downturns in the business environment may engender a more focused approach. For example, if the North Sea sector is struggling for growth, the temptation to cut back on maintenance of the infrastructure may be strong; that has happened in the past. That would signal an environment where more, not less enforcement is needed. Conversely, the HSE is alert to circumstances where a pickup in a sector signals the need for more regulatory activity—housebuilding and refurbishment being one—where worker demand can, at least initially, outstrip available skills, so there is the prospect of more enforcement activity because of growth in the sector. I presume that the Government are content with that. We should be mindful of the risks of the growth duty undermining compliance and enforcement.
IOSH makes reference to the HSE’s enforcement management model, which uses “economic advantage deliberately sought” as a contributing factor to prosecution. How does that approach sit with the growth duty? Reference is also made to case law, in which the judgments specifically acknowledge that adverse economic effect on the business had to be accepted as a consequence of improving safety.
What discussions have the Government had with the HSE about that duty? What assessment have the Government made about the prospect of greater challenges to the HSE’s enforcement proceedings with the new duty? Is it considered that any change is required to the HSE’s enforcement management model? The health and safety system is working well in the UK. There are risks that the provisions will cause unnecessary confusion. Why fix what is not broken, where no advantage is to be expected?
We had a response to our circular from the Homes and Communities Agency; I thank it for its reply. It states:
“The HCA, when acting as social housing regulator, is classed as one of the ‘non-economic’ regulators to whom this proposed duty will apply”.
I guess that that is accepted. It says:
“Regulation of social housing has existed for approximately 40 years and is currently delivered under powers contained in the Housing and Regeneration Act 2008, which came into force in April 2010 ... The Act requires that we discharge what are termed the ‘economic regulation objective’ and the ‘consumer regulation objective’. The main way in which we deliver these objectives is by setting ‘economic standards’ and ‘consumer standards’, and regulating against these”.
It goes on to say:
“We are precluded by legislation from proactive monitoring of the consumer standards so in effect are an organisation primarily focused on our economic regulation remit”.
It sets out what its economic objectives are; that is,
“to ensure that registered providers of social housing are financially viable, properly managed, and perform their functions efficiently and economically … to support the provision of social housing sufficient to meet reasonable demands (including by encouraging and promoting private investment in social housing) … to ensure that value for money is obtained from public investment in social housing … to ensure that an unreasonable burden is not imposed (directly or indirectly) on public funds … to guard against the misuse of public funds”.
It says:
“In many respects the sub-clauses of the economic objective are mutually reinforcing. For example, Registered Providers have an excellent track record in meeting their obligations to lenders, consistent with the Regulator’s objective to ensure providers are financially viable. This is also a key factor in their ability to borrow at competitive margins and therefore invest in the supply of new homes. However, on some issues and on some providers we also need to strike a balance between encouraging investment (typically in new development) and safeguarding the viability of providers and historic taxpayer funding”—
so there is a potential conflict. It continues:
“This is reflected in our standards, the way we obtain assurance that standards are being met, and in the action we take if providers do not comply with the standards”.
The HCA has the following questions, which I pose to the Minister, about the new duty coming into effect. It asks:
“How the duty will interact with existing duties. If the duty is ‘free standing’ then we will need to consider how it is balanced against the full range of our regulatory objectives and how we balance this in our decision making”.
It also asks:
“How widely regulators will need to consider economic growth. As set out above we already have a duty to support the supply of social housing, which is a growth related objective. We would need to understand if the duty is to be interpreted in a way that goes beyond our existing objective, and if so the impact on our regulatory remit and the potential impact on resources”.
It further asks:
“Whether the duty will be about minimising burdens or alternatively about being fully mindful of economic growth implications when making decisions? In our particular sector, and again referring to our obligation to support the provision of social housing, there is a strong argument that having in place strong regulation makes the sector attractive to on-going investment and therefore growth”,
and how that will sit with the overall growth duty obligation. It also raises the point:
“Whether the duty will apply to regulatory policy design or to all day-to-day decisions and all levels of decision making in between. It is the regulator's view that application of such a duty on the micro level of individual case decisions is not straightforward and that a similar outcome can be gained from a more strategic approach”,
and asks how,
“decision making might be challenged in relation to compliance with the duty”.
These are highly relevant questions and we hope that the Minister is able to deal with them fully, either today or in writing afterwards.
Lord Stevenson of Balmacara (Lab)
My Lords, we have had a very interesting and full debate on some aspects of the clause. As I am sure the Minister has picked up, this is a probing amendment and we hope to have a constructive dialogue. It seems to me that there is scope for further discussions outside the Grand Committee Room should the Minister wish to do so. We on this side would welcome that because there are things that need to be explored in a more concise way.
I do not want to add any more complexity to the Minister’s job of trying to reply to this debate but I was a bit confused about territoriality and I wondered if he could look at that. Clause 89 is an extent clause. Subsection (5) says:
“Sections 59, 60, 67, 79, 80 and 83 to 88”—
which includes the clause we are discussing today—
“this section and sections 90 and 91 extend to England and Wales, Scotland and Northern Ireland”.
It does not include places that are not mentioned in that list, presumably the Isle of Man, the Channel Islands and so forth. That is all grist to the mill for a Minister with such experience as the noble Lord, Lord Wallace.
However, with reference to the functions to which Section 83 applies, Clause 84(3) states:
“An order under this section may not specify … a regulatory function so far as exercisable in Scotland … a regulatory function so far as exercisable in Northern Ireland … a regulatory function so far as exercisable in Wales”.
All of these are caveated by the comment about the extent to which these matters have been devolved to the respective territories.
Lord Wallace of Saltaire
My Lords, I thank the many noble Lords who have contributed to this debate. When I was on the opposition Benches I did on one occasion attempt to challenge the extent clause of the Bill at about 9.45 in the evening, to the deep discontent of those on all Benches. My particular concern was with how far the legislation applied to the Crown dependencies—the Isle of Man, Jersey and Guernsey. It is clearly something that, at some point—as I said a good five years ago—the House of Lords could usefully devote some time to because of the extent to which UK law extends to the Crown dependencies, and how far they can cherry pick what they accept from UK law is a matter of considerable interest to us all. Perhaps that is something that the noble Lord and I could explore further off the Floor of the House. Part of the problem with extent clauses is that one almost always reaches them when everyone is exhausted by the Committee stage of the Bill and does not want to have another long debate.
However, this has been a long, serious and useful debate. We are of course ready to discuss further off the Floor to provide what assurance we can and to discuss whether the current drafting and guidance is adequate or whether it could usefully be strengthened. We have some time before Report to set that process in train.
The aims of the Bill are to reduce duplication. The consultation on this clause, as with others, produced a number of examples of duplication of different bodies attempting to regulate the same thing or requiring information from businesses for different purposes. If possible, we wish to reduce that and provide simplification. This is not an attempt to destroy vast areas of regulation. We all recognise that an effective and efficient market is a well regulated market. Our aim is better regulation. Efficient regulation also means no more regulation than is needed, but that is where many of the most difficult issues come up. How much regulation does one need? How efficiently and effectively is it maintained? That is the area that we clearly need to discuss further.
I was interested that the noble Lord, Lord Tunnicliffe, regarded the Ten Commandments as regulation. I rather regarded them as commandments, which is a stronger term. Leviticus and Deuteronomy, where one gets into dietary laws and cleanliness, are where one gets into the regulatory parts of the Old Testament. Again, that is a matter that we might discuss further.
I was interested that the noble Lord sees the Clean Air Act as being in the very distant past. When I was in my first job as a junior lecturer at the University of Manchester in 1967, if I left my papers on my desk on a Friday, I had to blow the smuts off on the Monday. It is not that long ago that we were still cleaning up the air, particularly in northern cities. I think it was probably in the late 1980s that I got off the train in Leeds and realised that I could actually see the hills in the distance. That was a mark that the air in Leeds had at last started to become clean again after probably about 150 years.
The constant message from all those who have spoken is that we have to be concerned about unanticipated consequences. I recognise that that is where we have to provide the best reassurance that we can and, in particular, to provide reassurance that those involved in the consultations that have already taken place have done their very best to consider what those consequences could be.
To start with, and before I answer any of the questions, perhaps I may set out as clearly as I can my understanding of the purposes of this clause. The purpose of the duty for non-economic regulators to have regard to economic growth—or the “growth duty”, which we have all been discussing—is to give regulators a statutory obligation to carry out their primary duty of protection in a way which does not undermine economic growth but is supportive of it, if possible.
The draft guidance, published in January, makes it clear that the growth duty will not override, undermine or cut across powers of protection; nor does it compromise the independence of regulators. It provides examples of ways in which regulators can have regard to growth without compromising protections. For example, they can: first, keep administrative burdens to a minimum; secondly, be proportionate in their decision-making; and, thirdly, understand the business environment and tailor regulatory activities accordingly.
This guidance is subject to the approval of each House of Parliament, and those who are subject to the growth duty are under a requirement to have regard to it. The growth duty does not permit regulators to ignore illegal behaviour—with particular reference to the Gambling Commission—nor does it diminish the responsibilities of businesses to comply with the law. The Government recognise that an environment where legitimate business is trusted and where protections are in place is a key factor in facilitating economic growth, as the noble Lord, Lord Collins, particularly made clear.
It is not appropriate for government to dictate how the growth duty should rank in relation to other duties and factors which regulators also need to consider. Some regulators will rank it higher than others for unavoidable reasons. Regulators are best placed to weigh up the desirability of economic growth against each of the other factors that they must consider and to tailor their approach accordingly. It will be for each regulator to use their expertise in deciding how much weight to afford to each factor in their decision-making. I hope that that makes it clear that we do not intend to compromise the independence of regulators.
A third of the regulatory bodies that were consulted replied that they already considered that they did take account of the need to promote and to have regard to economic growth in their interpretation of their duties, so we are talking about a tweaking of the range of functions concerned, not a revolution.
Listening to the debate, I was thinking that I might have a conversation with the noble Lord, Lord Rooker, as a former head of the Food Standards Agency, about the effect of tightening up the control of slaughterhouses some years ago in north Yorkshire on the reduction in the number of slaughterhouses. I know the area well because I walk there a lot and have done quite a lot of politics there. There was a much larger reduction in the number of slaughterhouses than I am told had been intended, and it had a very adverse effect on what one might call the home production of quality food by specialist producers. That is a good example of where, if they had thought about the importance of food exporting from farm industries in north Yorkshire, they might have paid attention to a slightly different interpretation of the regulation. I am not an expert on this and perhaps I might come for a tutorial with the noble Lord, Lord Rooker, at a later stage, but that is the sort of thing that we are looking at.
Lord Rooker
There is no need for that, because the story is that those slaughterhouses were not paying their proper costs. The fact is that the taxpayer subsidises the meat industry because neither Government have allowed the Food Standards Agency to reclaim its costs for checking the abattoirs. In that case, the smaller ones were paying a disproportionate amount for regulation—which is governed by Europe, by the way, as most of our food is—so it is probably to do with collecting the fees that they were required to pay for inspections. In that part of the sector there are charges and the FSA is not allowed to collect its full costs. Full cost recovery does not apply because Governments of both parties have not wanted to challenge the meat industry.
Lord Wallace of Saltaire
I thank the noble Lord for that clarification; I was sure he would know the answer. I thank him for his extremely helpful contribution.
The duty will, I stress, complement existing duties and will not override or cut across regulators’ other powers of protection. The growth duty requires regulators to consider growth when carrying out their regulatory functions, so environmental and other issues that I mentioned will not be overruled by this. I should say in passing that when I saw the noble Lord’s amendment I was immensely impressed. My first instinct was to wonder whether we could add a government amendment to the amendment to add four or five additional things that people should take into account.
Those who have been regulators, such as the noble Lord, Lord Rooker, would probably say that a good regulator takes into account a wide range of issues and then attempts to strike the best balance among them. We also accept that, as the noble Lord, Lord Tunnicliffe, said in moving the amendment, the issue of how much risk, if any, one is prepared to accept in regulation is one of the most difficult issues in regulatory powers. You cannot guarantee that you can ever provide a situation of nil risk, but the question of how far away from nil you are prepared to move is one of the most difficult issues.
I am not sure that I can answer absolutely all the questions that have been asked about specific agencies, but again I am very happy to discuss this further off the Floor. However, on the question of responses to the consultation, a wide variety of respondents welcomed the growth duty. Many businesses and trade associations said that the first priority of regulators should be protection and that the growth duty should be added but should not take precedence over others, and we have taken that into account. I have already remarked that over one-third said they considered that regulators already had regard to growth. Respondents cited a variety of ways in which regulators could support growth. These include co-ordinating, providing more targeted advice, being generally risk-based and proportionate, and helping businesses to achieve compliance. I also mentioned that a care to avoid duplication of regulation—particularly the sort of regulation that asks businesses for information—is one of the areas that we wish to look at. The growth duty should make a difference in precisely those areas where there is duplication and where regulators have not thought about the growth dimension, but again we are not suggesting that this is a revolution—this is a modest change of balance.
The noble Lord, Lord Tunnicliffe, asked whether the growth duty would have teeth. The answer is that, as with all other aspects that regulators take into account, businesses will have the chance to challenge a regulator which has not had regard to one of the dimensions of their task. They can challenge them though the regulator’s own internal mechanisms or statutory appeal mechanisms. They can, if necessary, challenge the enforcement decisions in court and, in the last resort, they can pursue judicial review if a regulator has failed to apply the duty, or applied it in a way that is clearly unreasonable. Again, we do not expect or anticipate that that would be a frequent dimension.
Lord Rosser
The Minister has accepted that Clause 83 may lead to additional legal action. I appreciate that he attempted to dismiss it by saying that it would not happen very often but, if we are talking about businesses, the pockets of some of them that might think about taking legal proceedings in relation to Clause 83 may be somewhat deeper than those of the regulatory bodies. First, how would the Government intend to address that situation to ensure that a regulatory body did not feel that it could not contest proceedings for fear that it might lose them and find itself paying quite considerable bills? Secondly, as I understood it, the Minister said that the provisions of Clause 83 should not carry any greater weight than any other requirements on a regulatory authority or any other issues that it should take into account. Is it the Government’s intention to write that into the Bill?
Lord Wallace of Saltaire
The Government’s position is that the guidance plus the statutory instruments, which Clauses 84 and 85 deal with—I recognise that we are in effect discussing all four of these clauses on the basis of this amendment—will be sufficient. However, that is also a matter which we are prepared to discuss between Committee and Report to make sure that we can agree a satisfactory level of what needs to be in the Bill, in guidance and in further regulations or statutory instruments as we go through.
Lord Rosser
What about the question of financing any legal action taken against a regulator or authority, bearing in mind that it could involve some quite large businesses whose pockets would certainly be deeper than those of the regulator?
Lord Wallace of Saltaire
I shall take that back, too, and we will discuss it between Committee and Report. I hope that I have managed to answer a number of questions. I recognise the concerns that have been expressed. We have a well operating system of regulation in the United Kingdom. The question of balance between good regulation, better regulation, sufficient regulation and efficient regulation is something around which a great deal of hard politics revolves. All of us who read the Daily Mail as loyally as the noble Lord, Lord McKenzie, and I do know that its constant campaign against all health and safety regulations is one end of the spectrum, but the other end of the spectrum is the overregulation that we all also have to be concerned about. That is going to be a continuing basis of politics, and this clause aims to strike the right balance.
Lord McKenzie of Luton
Does the Minister accept that his Prime Minister is also at the Daily Mail end of the spectrum?
Lord Wallace of Saltaire
I could not possibly comment. I do not begin to think that the Prime Minister accepts the Daily Mail approach to health and safety. He knows as well as everyone else that there is always a difficult balance to be struck in this area. I am well aware that there are a number of things, from his own personal experience, that the Prime Minister feels very strongly about in terms of proper provision of public services and proper regulation.
Lord Deben (Con)
On that point, surely it is not right to say that everyone else knows that. The Daily Mail does not know that and, unfortunately, it tends to say to a lot of other people that they should not know that either. I just think that we ought to remind ourselves that the common sense that he and the Prime Minister put forward is rather important.
Lord Wallace of Saltaire
Writing common sense into law is one of the most difficult things that we all spend our time on, however.
Baroness Thornton
I was not particularly surprised at the Minister’s response on the CQC. Given that we know that the CQC cannot answer the Opposition’s questions about this, why would we be surprised to hear that the CQC said that it is fine? The Department of Health has said that it has to say that it is fine. We now know that it is being told what to do by the department, which is worrying. As for the questions I asked, which are those that need to be asked in order to test this legislation, the Minister cannot tell me that those questions have been asked and what the answers were, and we therefore need to pursue that further.
Lord Wallace of Saltaire
My Lords, we are all very conscious that we are talking about a range of regulatory bodies which, as has already been said, have different relationships with Governments. Some are entirely independent, some are agencies of departments, and that is part of the universe with which we need to deal. I have already offered to discuss this between Committee and Report and I recognise, as I have already said, the concerns which have been expressed in this debate.
Lord McKenzie of Luton
The Minister has said that there is a possibility of further discussion between now and Report, but will he nevertheless undertake to arrange for written answers to be available to each of those questions in advance of that meeting? In order to make sure that nothing slips from people’s view, it would be very helpful if he would commit to getting us written answers where we have asked for them.
Lord Wallace of Saltaire
My Lords, I shall do my best to ensure that written answers are provided to the very large number of questions that have been posed in this debate about a substantial number of different agencies. On that basis, I hope that the noble Lord will be willing to withdraw his amendment.
Lord Rooker
Before my noble friend gets up, as we are in Committee, and as the Minister has been very open in wanting to discuss issues that my noble friends have raised, I shall raise another for him, which I failed to do when I was at the FSA. Let us take all these regulators here. They are all a pinprick on the main department by which they either get funded or are attached to. They are not really the big player; they are a very small part of each function of a government department. As such, they never really get any parliamentary scrutiny. The issue arose when I arrived at the FSA in 2009, because at no time since 2000 had it ever been called before a Select Committee to look at what it does on the tin—the business plan or the forward plan, the strategic plan or the general plan. The Health Committee deals with doctors, nurses and hospitals, the sexy political bit of policy. I raised the issue with the Leaders of both Houses of Parliament. Because it is the non-politically sexy part that is ignored by MPs, it is ideal for this House.
I suggested after talking to people that this House should have a Select Committee on regulators; maybe every three years, every regulator would get in front of a Select Committee, not because something has gone wrong, in which case the regulator would certainly come before the departmental committee, but to check that it is doing what it says on the tin, to be asked about function, finance, forward and business and plans, and for some of them the science base. It would give them a raison d’être to know that they are actually accountable to Parliament—because that is the reality; at the end of the day, they are. But I was told, “Oh, we don’t want any more Select Committees”. As I say, I raised it with the Leaders of both Houses, the noble Lord, Lord Strathclyde, and Sir George Young, who was Leader and then retired and came back as Chief Whip.
I still think that there is a missing function for this House, in that regard, because it does not compete with the other place; all the big issues are dealt with by the departmental Select Committees, but they will never run the rule over the regulators, particularly when there are no problems, when they are carrying out their normal regulatory function. But once in a while—say, every three years—it would be quite useful for them to come for a couple of hours or an hour and a half before a committee to explain what they are doing and why and how they are doing it. In going back to have a think about things with the powers that be, perhaps this should be thought about, because it is a genuine issue of parliamentary accountability.
Lord Wallace of Saltaire
That is a very interesting point but very wide of the amendment under discussion. I am very happy to discuss that also with the noble Lord off the Floor. Perhaps I could add that the pre-legislative scrutiny committee thought that the clause was a useful part of the Bill. So in recognising all the critical comments that have been made by the opposite side, we are pleased that the committee examined this and thought that it was a valuable addition to a Deregulation Bill. Having made all those comments, and looking forward to further discussions, I hope that the noble Lord, Lord Tunnicliffe, will be willing to withdraw his amendment.
Lord Tunnicliffe
My Lords, I thank all who have participated in this debate. I can respond immediately to the point that has just been made. Our concern about these clauses is not about their existence but about their unintended consequences. The general view is that regulators should do their business in a way that aids society. The vehicle here for society is growth, but forget that—what we are talking about is getting regulators to have a wider concern for society. That is not contested; what is contested is whether the wording is safe and does not have grave unintended consequences. As I said at the beginning, and as the debate has proved in its sheer volume, depth and complexity, these clauses go to the essence of regulation, which is so important.
I very much thank the Minister for his offer to have discussions off the Floor. I think we will probably have to have discussions about discussions first, because we would have to try to bring some focus to those discussions. Clearly, with the CQC, we would particularly like its representatives in one form or another to try to explain how these growth clauses might affect it.
Lord McNally
“(d) a regulatory function of the Equality and Human Rights Commission”
Lord McNally (LD)
My Lords, I do not think I have ever seen such a galaxy of talent on the Opposition Benches. I counted eight Front-Benchers in that debate. It was extremely interesting and I do not envy my noble friend in his further discussions.
I did not find it entirely helpful of the noble Lord, Lord Tunnicliffe, to remind us that it was 52 years since he and I first met at University College London in that fierce, harsh winter of 1962-63. He and I think the noble Lord, Lord Rooker, also mentioned arm’s-length bodies. I am the chair of an arm’s-length body at the Ministry of Justice—the Youth Justice Board—but it is not in this capacity or due to anything related to that responsibility that I put this amendment down. It relates instead to my experience as an MoJ Minister responsible for human rights. With my right honourable friend Maria Miller, who was then Secretary of State for Culture, Media and Sport, I conducted a very vigorous campaign to help the Equality and Human Rights Commission gain UN accreditation.
I may be able to shorten the Committee’s debate on the basis of a letter that has been sent to the chairman of the ECHR by the Secretary of State for Business, Innovation and Skills, Vince Cable. Before I touch on that, I shall explain that at the moment, thanks to that exercise we conducted, the commission has the highest possible UN accreditation—A status—as a national human rights institution rated against the UN Paris principles which clearly and unequivocally require NHRIs to be independent of government. In addition, as a national equality body under EU equality directives, the body must be able to provide independent assistance to victims of discrimination. This need to operate independently is reflected in domestic legislation.
In the commission’s analysis, subjecting the commission to the growth duty presents a real risk of the UN NHRI A status being downgraded for non-compliance with the Paris principles because the growth duty is or could be perceived to be a constraint on the independent exercise of the body’s core functions. The growth duty also has the potential to compromise the ability to fulfil the requirement under EU law to provide independent assistance to victims of discrimination.
I hope that we are dealing with what the noble Lord, Lord Tunnicliffe, referred to as unintended consequences and that it was never the Government’s intention to compromise the EHRC in this way and that they wish to clarify the matter. Just to be clear, the Equality and Human Rights Commission believes that it needs to protect its ability to operate independently in order to preserve its a status as a United Nations-accredited national human rights institution and the UK’s compliance with European Union law, and to ensure that it can exercise that function and powers in accordance with clear and foreseeable legal limits. That is the objective of the amendment.
I was very pleased that, with his usual courtesy, Vince Cable, the Secretary of State for Business, Innovation and Skills, copied me in on a letter that he sent to the noble Baroness, Lady O’Neill, the chair of the Equality and Human Rights Commission, in which he writes:
“I would like to take this opportunity to state that the Government has taken the decision to fully exclude the EHRC from the growth duty. This decision was taken to ensure that the Government mitigated the risk of this policy unintentionally triggering a review of the important ‘A’ status that EHRC holds as a National Human Rights Institution”.
At that point, I said “Yippee! I’ll be in and out in two minutes”. However, I thought it was worth checking with the commission what its reaction was. It said:
“While we welcome this undertaking we understand that this doesn’t mean that we’ll be removed on the face of the Bill”.
All I can say to my noble friend in the usual constructive way that I try to approach these matters is: get this out of the way clearly and now. If he is going to tell me that the letter is sufficient, or that somehow it will all be dealt with in the washing, he is inviting further grief and pain.
Lord Rooker
My Lords, as chair of the Joint Committee that scrutinised the Bill, to the best of my knowledge none of the regulators is mentioned in the Bill. The only time they are mentioned is in the guidance notes in preparatory work for the statutory instruments. If that is the noble Baroness’s worry—Ministers can confirm this—to the best of my knowledge, none of these regulators is mentioned in the Bill.
Lord McNally
Of course it is not mentioned in the Bill. Only one of the regulators is in fact part of an international scrutiny and accreditation process. The longer the noble Lord, Lord Rooker, stayed in office and had responsibility, the more a stickler he became for the rules. I am saying that this is an exception. I have already heard one argument that this would open the floodgates, but this is an exception, and a very important one. My amendment makes it very clear that it may be the only organisation mentioned in the Bill, but I assure the Committee that it is the only organisation where a great deal of work was done to get its A status accreditation with the UN. That A status accreditation is very important for the status of the organisation.
The letter from BIS is very welcome and very timely. I urge the Minister to consider accepting the amendment, although it concerns the exception that the noble Lord, Lord Rooker, referred to. Indeed, it is almost the kind of declaration that I want: that we are determined to declare beyond peradventure that this important international body, with its A status in the UN, is not part of this domestic legislation. That would most certainly remove any unintended consequences. I fully accept from conversations with my noble friend that these are unintended consequences, but those who are involved in this area believe that it is a real threat and could cause real damage, and I believe that my amendment is a very simple, quick, clean way of handling the situation. I beg to move.
Baroness Thornton
My Lords, I have put my name to this amendment for the obvious reasons outlined by the noble Lord, Lord McNally. I very gently say to the noble Lord that it was my Government who set up the EHRC. In fact, the threats to it have come from his Government from time to time, the first time being in 2010. The review of the EHRC as an A status body is next year. The noble Lord is completely right to say that its inclusion in the list of regulators which have to have regard to economic growth in their regulatory functions would jeopardise its independence. There is no doubt about that.
The United Nations International Coordinating Committee, which is responsible for the accreditation of human rights bodies, wrote to the Minister for Equalities. It said that independence from government is an essential element of an NHRI—a national human rights institution. In considering whether an NHRI is independent, the ICC looked at all the ways in which the NHRI is subject to control or direction. The Bill may not intend to affect the independence of the EHRC but attaching an additional duty which could be seen as competing with or limiting its existing duties or core functions would have a direct effect on its decision-making. Being subject to ministerial direction and the possibility of legal challenge to its work could have a detrimental effect on its ability to make decisions in relation to upholding human rights. These clauses, combined with the existing connections and accountabilities to the British Government, would raise questions about the compliance of the EHRC with the Paris principles. That is absolutely right.
I shall add only one other matter to this debate. There is another reason why you would not want to have the EHRC included in this list, which is not just to do with its international status as a unique body. Part of its reason for existence is to make businesses behave better and make people behave better towards each other. That is good for business and you would not want to jeopardise that.
I am pleased to support the amendment. I realise that the Government have a dilemma. Do they include the amendment in the Bill and therefore mention the body or do something in another way? Whatever they do, they need to remove the EHRC from that list.
Lord Wallace of Saltaire
My Lords, when I first stood up today, I realised that I should have apologised to the Committee. I unintentionally misled the Committee the other day when I said that industry interests had not lobbied on the question of liqueur chocolates. I apologise because, on checking back, I discovered that there had indeed been some conversations in that regard. I trust that that corrects the record.
I am impressed by the youth of my noble friend Lord McNally and the noble Lord, Lord Tunnicliffe. I first met my noble friend Lord Deben in the winter of 1959-60 when we were undergraduates. The noble Lord is a mere stripling compared with my noble friend Lord Deben and me.
The issue at stake is simply whether one need include this body in an exceptional way in the Bill or whether this can be dealt with under secondary legislation. The noble Lord will be well aware that listing inclusions and exemptions in a Bill is not generally regarded as appropriate because primary legislation would then need to be amended each time a regulatory function were changed or created.
No specific regulatory functions of any other named body are listed in the Bill and the Government’s argument is that it is not necessary to do so in relation to the regulatory functions of the EHRC. The regulatory functions to which the growth duty is to apply will be set out in secondary legislation subject to the affirmative procedure to enable proper parliamentary scrutiny. Before any secondary legislation is made bringing the non-economic regulatory functions into the scope of the growth duty, the Minister must consult any person exercising functions to be specified in the order and such other persons whom the Minister considers appropriate. This consultation should provide enough opportunity for scrutiny, making it unnecessary to include this in the Bill. Naming a particular regulator or function in the Bill would also not allow the necessary flexibility for any new functions to be included.
I have some experience and some past expertise on the operations of international organisations. I know the speed at which they move, and I do not think that the delay between the passage of this Bill and the passage of the secondary legislation would jeopardise the position of the EHRC. I assure my noble friend Lord McNally and the noble Baroness that it is absolutely the Government’s intention that this will not be included in the Bill. I hope that that assurance is sufficient to reassure my noble friend and on that basis I hope that he will withdraw the amendment.
Lord McNally
My Lords, at this stage, I certainly will withdraw the amendment. I fear sometimes that my noble friend, rather like the noble Lord, Lord Rooker, takes responsibility for so long that the iron enters his soul. The truth is that on the international stage, people do not read the fine print. The rumours get about and a status can be undermined. I will discuss with my co-sponsor and will consult with the commission and others in your Lordships’ House who are not here today who have this concern. Although I will withdraw the amendment now, unless I get some good advice to the contrary this amendment will come back on Report with a great deal of support on the Floor of the House.
I say to the noble Baroness that I fully acknowledge the origins of the commission. I hope that when the history of events around 2010 comes to be written, my role in the commission’s survival will not be considered ignoble. I beg leave to withdraw the amendment.
Lord Rooker
“( ) The first time the Minister consults under subsection (2), the Minister must consult on specifying the regulatory functions of the Planning Inspectorate in the first order to be made under subsection (1), but only to the extent consistent with subsection (3).”
Lord Rooker
My Lords, I am really just probing. I flagged this up in October, when there was a debate on construction in the House, in which I spoke. I am pro-growth. There are bags of land for building in this country—we have more land than we know what to do with. While I was preparing for that debate it struck me that there is a lethargy among local government and the planners—they all get the blame, sometimes unfairly. I went back to the list on the growth duty and thought, “Hmm, planning inspectorates aren’t there”. I have to say that I did not personally draft this clause. I knew what I wanted to do, but I could not find a way of doing it in the Bill, so I pay massive tribute to the clerks of this House, who facilitated a form of wording that would get it on the Order Paper. I am incredibly grateful to them.
It is very simple. I support the planning process—I have no problem with it. If I could have done, I would have had an amendment put in a growth duty on planning departments of local government. That is probably where the real problem lies. I chose the Planning Inspectorate because it is the national body. The role of the Planning Inspectorate is obviously a very important one, as a referee—an impartial one in some ways—which would not be compromised by a growth duty. I suspect that parts of its functions are not in any way remotely applicable to a growth duty, but I suspect that it might have some functions that could be.
At the moment, planning is in chaos because it takes too long to prepare local plans. A duty to co-operate was put in the Localism Act, which, frankly, is not working, so nobody takes any responsibility for fixing housing numbers in this country at present. If we had a clear growth duty involved in the planning process somewhere, which would reinforce the report of the noble Lord, Lord Heseltine, because that is what is missing, we would stand a fighting chance of getting to build our 4,000 houses a week, which is what we need.
There is no shortage of land; if you read the Financial Times yesterday, you will have seen that Savills has produced a report which found that the Government own enough land to build 2 million houses. That is basically enough land for 10 years’ building, which is what we want. I do not share the hysterical view of those who, every time somebody talks about having more building, say, “You’re attacking the countryside”. The fact is, 54% of the land of England is not covered by green belt, national park, areas of outstanding natural beauty, or currently built on. That has got to be official, because it is in a PQ back on 15 July, in Written Answer 114-115. Therefore, when you add up green belt, areas of outstanding natural beauty, national parks and existing built-up land in this country—in England—it comes to only 46% of the land. Therefore there are bags of land, and we are dead short of housing.
More pressure needs to be put on the planning system. I fully accept that I am completely misusing this debate but there must be growth and more pressure to build those homes. I currently cannot see the magic bullet for releasing the logjam but I thought that maybe if there was a bit of growth duty somewhere in the planning system that might help. A growth duty could make a difference. It could send a signal, which is the point. If some aspect of the planning inspectorate function would be amenable to a growth duty, and that was said, it would be a message well received outside. I beg to move.
Baroness Andrews (Lab)
I never thought that I would be taking issue with my noble friend Lord Rooker. I followed him as a Minister and found that we sometimes contradicted each other in minor ways, but having arrived in time for this amendment I want to make some cautionary statements about putting a growth duty on the inspectorate. There is a growth duty on the inspectorate, in effect, in the sense that there is a presumption for development in the planning system. That presumption for development is really important because planning inspectors have to arrive at a balance in their decisions. That is why we invest them with such authority. They are the arbiters of various pressures that go into deciding what is a good and sustainable development and what is harmful development.
There are ways of determining what is harmful development, for example, in relation to the financial, physical and historical environment. What worries me about my noble friend’s amendment is that if we were to put a growth duty specifically on to the planning inspectorate, we might disturb the ecology of the ability of the planning inspector to make such a balanced judgment. In the National Planning Policy Framework, we worked very hard to get the balance right. I could not agree more with my noble friend about the need for housing—my goodness, it is an open and shut case—but the presumption for development needs to be balanced against those protections that are absolutely essential to maintaining the other things that we need in this country, which is a care for open spaces; he is a great advocate of that. From my point of view, it is also about care for the historic fabric of this country, and we have the historic protections that are there explicitly to be taken into account to protect against significant harm.
I know that my noble friend says it is a probing amendment but we need to be really careful about putting explicit duties on to the planning inspectorate, which could damage its ability to make balanced judgments. Decisions do have to be made.
Lord Wallace of Saltaire
I congratulate the noble Lord, Lord Rooker, on getting this within the scope of the Bill. I recognise exactly the motivation as we are facing more delays in getting our housing industry going again than we ever anticipated. It is deeply frustrating for all parties, and anything that one can do to give an extra push in the right direction is desirable.
My speaking note points out, however, that the majority of the planning inspectorate’s functions do not fall within the definition of “regulatory functions” in the Bill. Further work would be required to establish whether the functions of the planning inspectorate which do fall within that definition are non-economic in nature and could be brought into scope. If the Government consider in the future that the planning inspectorate regulatory functions could be subject to the duty they will consult on the proposal to include those functions before a final decision is made. That is a rather po-faced answer to a very determined intervention. I think that the answer to the noble Lord is that we should all encourage him to keep pushing in this direction on all occasions. We all share his view to get housing construction going again, but this may not be the most appropriate Bill in which to give it that particular push. On that basis I hope that the noble Lord will withdraw his amendment.
Lord Rooker
I shall certainly do that. I was astonished at my noble friend’s hysterical outburst, though. I deliberately avoided going down the road of the hysterical stuff from the former chair of the National Trust, because that is not what it is about. There is bags of land to build on in this country. As Savills identified, the Government own enough land to build 2 million houses. That is 10 years’ worth of work. Yes, I will gladly withdraw the amendment, but I have a parting shot, because I did not raise this. If there is a real inability to get going, my other suggestion, which I made in the construction debate, is that, if I were responsible for the machinery of government—which heaven forbid, I shall never be—I would moving planning policy to BIS. I would get it away from the mafia of local government and put it in BIS. That might be the ultimate solution to this.
I beg leave to withdraw the amendment.
Lord Gardiner of Kimble
Lord Gardiner of Kimble (Con)
My Lords, Clause 87 provides for the Secretary of State to make, by order made by statutory instrument, such provision as is appropriate in consequence of the Act. Subsections (3) and (4) provide for the affirmative procedure to be used for statutory instruments which repeal, revoke or amend any provision of primary legislation. In contrast, the negative procedure is used for other statutory instruments made under this provision, including those which modify primary or subordinate legislation.
Amendments 95 and 96 simply ensure that statutory instruments made pursuant to the power to modify primary legislation are also subject to the affirmative procedure rather than the negative procedure. This is in line with the recommendation made by the Delegated Powers and Regulatory Reform Committee, which stated that if the power to modify were to be retained, it should be subject to the affirmative procedure. I beg to move.
Lord Gardiner of Kimble
Lord Gardiner of Kimble
“( ) Section (Motor racing: consequential amendments)(10) to (13)) extends only to Scotland.”
Lord Gardiner of Kimble
“(1) The following provisions come into force on the day on which this Act is passed—
(a) section 31;(b) section 32;(c) section 34;(d) section 67;(e) sections 84, 85(1), (2) and (4) to (8) and 86;(f) sections 87 to 89, this section and section 91.“(1A) The following provisions also come into force on the day on which this Act is passed but only so far as is necessary for enabling the exercise on or after that day of any power to make provision by an order or regulations—
(a) section 1;(b) section 38;(c) sections 46 to 48;(d) Parts 1 and 4 of Schedule 1, Schedules 2, 4 and 8, Part 6 of Schedule 9 and Schedule 18 (and the sections to which those Schedules relate).”
Lord Gardiner of Kimble
My Lords, Amendment 99 seeks to amend Clause 90, which deals with commencement. Clause 90 provides for the commencement of the different provisions in the Bill, specifying which provisions come into force on the day on which the Act is passed, which provisions come into force two months after that day and which provisions come into force by order.
Amendment 99 has two parts. The substantive element of the first part of the amendment alters the commencement clause to bring certain additional provisions into force on Royal Assent, for example, Clause 31—which rectifies an unintended aspect of the law about tenancy deposits—and Clause 67, which gives HMRC power to disclose information for the purposes of mesothelioma litigation. Each of these has received law officers’ consent for early commencement. Clause 67 is perhaps a particularly good example of where prompt commencement would be beneficial, as it helps the families and dependants of the victims who have died from diffuse mesothelioma.
The second part of the amendment does not bring any legislation into force but activates selected powers to make subordinate legislation by statutory instrument on Royal Assent. This aims to facilitate the making of subordinate legislation, so that progress can be made as quickly as possible. As a result of this amendment, it would be possible to lay statutory instruments very soon after Royal Assent. I emphasise that the usual timeframes and rules about parliamentary scrutiny which apply to subordinate legislation would continue to apply. The clauses included in the second part of the amendment are the provisions relating to health and safety, civil penalties for parking contraventions, child trust funds, driving instructors, agricultural holdings, the provision of passenger rail services and the testing of vehicles, as well as some of the provisions relating to apprenticeships.
Amendment 101 is consequential to Amendment 99, and Amendment 105 is a minor and technical change which makes drafting improvements. I beg to move.
Lord Stevenson of Balmacara (Lab)
I am sure that the hearts of noble Lords opposite will sink as I rise to address these not very major—although they are not unimportant—amendments. However, I wanted to say that when I started the Bill, I had a very poor opinion of it. Having spent what seems like an endless time in Committee—although it has been only eight sessions, one of which was on the Floor of the House—my substantive view of the Bill is unchanged. I still think it is not the way to deal with much of the legislation we should be doing but I want to put on record how much I have enjoyed the process of being disappointed. The Bill team has been very good at providing material when we have needed it, and I have enjoyed the discussions with noble Lords and Ministers. We have drawn an attentive and often expert audience to some of our debates, if not to all of them, and those who have contributed have done so with the best spirit.
I know that it is customary to give thanks for the work done towards the end of a Bill, but given the way this Bill is organised and structured, the meat of the debate has been in Committee. We have done a very thorough job of going through areas that have sometimes reflected the wildest extremes of government legislation of past decades, which I have always been interested in. I just wanted to put that on the record.
Lord Gardiner of Kimble
As the noble Lord has raised the issue, it would be appropriate to say that my colleagues and I feel that we have been well served by officials. There is a force for good in the measures, and we seek deregulation where it is seemly. We are grateful for the support that we have had, but there will obviously be issues that we do need to look at. We look forward to discussions with the noble Lord and other noble Lords so that, before Report I hope, there will be general satisfaction about the measures we wish to proceed with.
Lord Gardiner of Kimble
“( ) section (Road traffic legislation: use of vehicles in emergency response by NHS) and Schedule (Road traffic legislation: use of vehicles in emergency response by NHS);”
Lord Gardiner of Kimble