Better Regulation

Baroness Donaghy Excerpts

Thursday 7th December 2017 Lords Chamber

[Baroness Donaghy (Lab)]

My Lords, I remember that, when the noble Lord, Lord O’Neill of Gatley, put productivity centre stage, I said in a debate on the economy:

“I congratulate the Minister on emphasising the importance of productivity. If I were his public relations adviser, I would caution against setting himself up as such an easy target”.—[Official Report, 10/9/15; col. 1497.]


The noble Lord now sits in wistful self-imposed exile on the Cross Benches; admittedly, that is not related to productivity.

So when I saw that the noble Baroness, Lady Neville-Rolfe, had initiated a debate on regulation, I felt like handing out the same cautionary advice to her. As the Minister who steered the Trade Union Act through this House, I will say that trying to advocate that the Government should pursue a balanced approach to regulation is very bold. However, I doubt that she would want me as a public relations adviser. I will say that it is typical of her frank, human and no-nonsense approach that she has initiated this debate in the sure and certain knowledge that some of us will be in disagreement. In July this year my noble friend Lady Andrews initiated a debate, which has already been referred to, on deregulation. I think her speech was definitive on that subject.

I have direct experience of employment regulation, both as a trade unionist—a member of NALGO and Unison—and subsequently as chair of ACAS; I had in-depth experience of health and safety in the construction industry when I produced a report for the Labour Government on fatalities in that industry; I have taken an active interest in the scourge of short lets in London and the work of trading standards officers; and I live, like millions of others, in an area that is rife with fly-tipping and air pollution, so I hope that I can be allowed an element of indignation that this Government claim to have a balanced approach to regulation. They have created a wasteland where lack of public funding means that even existing protections are not pursued.

The Government charged for employment tribunals, which led to a 79% drop in overall claims, and they are now having to pay back the money. This will be no compensation to those who could not afford to pursue their case. Citizens Advice says that seven in 10 potentially successful cases were not pursued by employees—mainly women and the low-paid. Since April 2016, tribunal enforcement officers have been able to impose financial penalties on defaulting employers in the minority of cases where the applicant won their case but the employer did not pay up. BEIS confirmed that there had been 60 penalty notices as a result of 164 warning notices for failing to comply with employment tribunal orders. In the period of April 2016 to February 2017 the total paid out by employers on these fines was £83,000—not each; that is the total—yet the myth of large payouts is still perpetrated by the press.

The Government reduced protections for workers in small business by amending the Health and Safety at Work Act. Trading Standards has lost 60% of its staff, meaning that tracking down faulty or fake goods is more difficult. That means that bad companies can get away with faults in their products with virtual immunity, while good companies are undercut by fake goods when what they want is a level playing field.

The Government deregulated lettings, and the impact in London on short lets is changing the nature of settled residential blocks, to the detriment of existing residents. The Government maintain that they are supporting a sustainable environment, yet new homes no longer have to be carbon-rated.

Last month, as my noble friends Lady Andrews and Lord Whitty have already said, the Government agreed to introduce with immediate effect a de minimis threshold for the independent scrutiny of regulatory impact assessments. Departments will no longer have to submit an RIA to the independent Regulatory Policy Committee for regulatory provisions where the direct business impact of the measure is less than £5 million per annum. Anything under that threshold will be handled by the departments—which, it is said, should be more proportionate to the scale of the regulation’s impact.

As has been said, the Regulatory Policy Committee is an advisory, non-departmental public body with eight independent committee members from business, civil society—in this context, the TUC—the legal profession, academia and two professional economists. The committee verifies the impact of all regulatory proposals in relation to the business impact target, including non-qualifying proposals. It comments on the quality of evidence, not the policy itself.

The committee had already expressed concern at the continually varying standards of impact assessments and the general disregard for regulatory impacts on wider society. The latest change to a de minimis approach reduces the role of the Regulatory Policy Committee to a rump. I wonder whether this is a deliberate tactic to push the committee members into resignation mode. I am sure that the Minister is far too gentle a creature to collect scalps, but he has said that this more permissive regime will enable timely delivery of legislation, especially that related to EU exit. I find that very worrying. It looks like a clarion call to the buccaneers. What assurances can he give us that the Government will at least adhere to existing standards and that Parliament will still have the opportunity to scrutinise future regulatory changes in a meaningful way?

My report on the underlying causes of fatal accidents in construction nearly nine years ago recommended a regulation imposing a duty of care on persons carrying out work to do so safely. This regulation would have been be enforced by building control surveyors and officers. I said:

“This would extend their enforcement from the safety of what is built to include the safety of the building process”.


I made that recommendation in the context that many areas of construction—particularly, but not exclusively, the small building or refurbishment sector—were,

“out of sight below the Plimsoll line”.

Companies striving for excellence felt let down by those who did not pursue the same standards, and were crying out for a level playing field. I felt that more local oversight would be an important step towards improving safety standards in the hard-to-reach sector. The remit of building control would be extended to include health and safety requirements and integrate them into the building process. The role of the building control surveyor would be to check that the safeguards were included in the particulars of how a client intended to build—and, if they were not, to advise accordingly.

At the time, the Department for Communities and Local Government was consulting on the future of building control. I understood the emphasis at the time on sustainability, but I went on to say that,

“safer construction sites and safe maintenance of completed buildings is no less important and there is an opportunity here to make a step change in construction safety”.

I regret that my recommendation was not accepted and, while not claiming a direct link, the Lakanal House fire, which happened in the same year as my report and in which six people died, led to recommendations by the coroner which, nine years later, have still not been actioned. I watched the smoke from the building from my street, and it made a lasting impression on me. Let us hope that we are not still waiting on action from the Grenfell Tower tragedy in nine years’ time.

In preparation for my report, I spent a number of days with the Health and Safety Inspectorate. Its impact is disproportionate to its numbers. I accept that it is impossible to deal with health and safety simply by increasing the number of inspectors to thousands, but I never expected that the HSE would be cut to ribbons or that the number of inspectors and inspections would be cut. Of that the Government should be ashamed.

In conclusion, the Government have taken away the means for proper enforcement. They have pursued a policy of cost cutting rather than cost effectiveness, and the balance of their regulatory approach has led to a more unfair and a less safe society.