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.

Fuel Poverty

Baroness Donaghy Excerpts

Thursday 19th October 2017 Lords Chamber

Asked by

[Baroness Donaghy]

To ask Her Majesty’s Government what is their estimate of the number of households in fuel poverty; and what action they intend to take to reduce that number.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Prior of Brampton) (Con)]

My Lords, the latest official statistics show that in 2015 there were 2.5 million households in England living in fuel poverty. Some 70% of the £640 million energy company obligation is focused on improving the energy efficiency of these households. We also propose to bring an end to high energy prices by putting in place a price cap on standard variable and default tariffs and retaining the warm home discount.

[Baroness Donaghy (Lab)]

I thank the Minister for his Answer. It appears ironical to me that a Question on fuel poverty is answered by saying that all consumers are being ripped off. The figures that we have been given may be the tip of the iceberg, as many older or infirm people need extra heating and do not appear in these statistics. The Minister will be aware, because of his previous responsibilities, of the premature deaths due to cold houses and the increase in childhood illnesses. The Government are missing their own targets and not fulfilling their legal obligations on this issue. Can the Government give us some information about what practical steps are being taken to eliminate the scourge of fuel poverty in the approaching winter?

[Lord Prior of Brampton]

I assure the noble Baroness that we take fuel poverty extremely seriously. Interestingly, there are 835,000 fewer fuel-poor homes within bands E, F and G than there were in 2010, so there are signs that targeting the energy company obligation more specifically at lower-income families is having an effect. With the Digital Economy Bill having gone through the House of Commons, I hope that we can target our resources more accurately to ensure that we meet the obligations set out in the sustainable growth paper that came out last week.

Taylor Review of Modern Working Practices

Baroness Donaghy Excerpts

Tuesday 11th July 2017 Lords Chamber

[Lord Prior of Brampton]

My Lords, the terms of the report did not include discrimination. Unless I have missed something in the report—I read it last night—it does not come with up recommendations around discrimination but looks purely at new forms of employment: that is, the relationship between self-employment and people working in the gig economy, who may now be called dependent contractors. It does not deal directly with the issues that the noble Lord raised.

[Baroness Donaghy (Lab)]

I welcome the statement that,

“the best way to achieve better work is through good corporate governance, good management and strong employment relations”.

That is an extremely good summary, and if that is what the eventual recommendations and implementation achieve, it will have been a historic report. I have three brief questions. First, one of the problems about our low-wage economy is that we are getting a lower tax base. Therefore, this is not necessarily good news for HMRC; a lot of the so-called independent contractors and bogus self-employed do not pay very much in the way of income tax.

Secondly, there has been increasing confusion between the statutory national minimum wage and the national living wage; people are getting very confused about those two things, to the detriment of both issues. Thirdly, there are recommendations about changing the remit of the Low Pay Commission—I declare an interest as one of the founding commissioners in 1998. One of the reasons for the tripartite success of the commission is that it has focused on a fairly narrow range of issues. My concern is that if these were widened to include quality of work on a sectoral basis, it might eventually weaken the power of its recommendations. Would the Minister care to comment on that?

[Lord Prior of Brampton]

My Lords, the noble Baroness is clearly right about the lower tax take. Clearly, if earnings are higher, the tax take will be higher. It is rather shocking. These are the figures in America: in 1970 the average median salary among the lowest-paid 90% of people was $34,000; in 2013 it was $31,000—it has gone down. This is the problem that all western economies face: earnings are stagnant and falling. Our children’s generation may be facing a less prosperous future than we do. This is the huge dilemma that we all face. When she says there will be a lower tax base, she is absolutely right. The whole point of improving productivity is to improve earnings. It is in all our interests to improve earnings—to see wages grow.

The noble Baroness also talked about the confusion between the living wage and the national minimum wage. She has now confused me so I shall have to write to her. She went on to talk about the Low Pay Commission. When the previous Government brought in the living wage and the trajectory for it, that was a political decision; it was not made by the Low Pay Commission. One of the criticisms of the minimum wage is that politicians cannot resist the temptation to get involved in it. To some extent, the Low Pay Commission has been subverted by politics. I guess that was inevitable. Actually, the increase in the living wage was one of the great triumphs of the coalition Government.

Industrial Strategy Consultation

Baroness Donaghy Excerpts

Monday 23rd January 2017 Lords Chamber

[Lord Prior of Brampton]

We will certainly bear that in mind. Clearly, the rates of tax, whether that is corporation tax, business rates or any other costs to business, are critically important. I take on board his comments about the importance of the rural economy.

[Baroness Donaghy (Lab)]

My Lords, I am glad that the Minister seems to be enjoying his new brief, and I welcome the new Green Paper and its wish list. However, I am a bit concerned about research and development. The same announcement as that in the Green Paper was made last autumn—they are identical—and that is in the context of a 50% cut in research and development since 2010. Therefore, to announce an increase when there has been a real cut over a period of five years seems to be not a good start to the discussion on research and development. The Minister himself has said how important research and development is. Will this be a real increase, and will it be sustainable?

Fuel Poverty

Baroness Donaghy Excerpts

Tuesday 25th October 2016 Lords Chamber

Asked by

[Baroness Donaghy]

To ask Her Majesty’s Government what is their estimate of the number of households currently in fuel poverty; and what action they intend to take to reduce that number.

[The Minister of State, Department for Business, Energy and Industrial Strategy (Baroness Neville-Rolfe) (Con)]

My Lords, the latest official statistics show that there are 2.38 million households living in fuel poverty in England. We are reforming the energy company obligation to improve the energy efficiency of the households that most need support. Combined with the support from the warm home discount, almost £1 billion a year will be spent on tackling fuel poverty from 2018. We also propose to raise the standards of energy efficiency in the private rented sector.

[Baroness Donaghy (Lab)]

I thank the Minister for her reply. She will know that the Prime Minister said:

“It’s just not right that two-thirds of energy customers are stuck on the most expensive tariffs”.

The Minister will also know that the figures she gave the House are a conservative estimate, because they do not include those who are in need of extra warmth because of old age or ill health. Could she elaborate on the Government’s intentions to achieve this improvement?

[Baroness Neville-Rolfe]

As the noble Baroness said, the Government are very focused on this issue. We are trying to improve the various schemes to focus them more on low-income and vulnerable people. We have a report from the Competition and Markets Authority looking at price, and at the key issue of pre-payment meters, which are extremely important for the poor and vulnerable—and which Lord Ezra, who used to ask questions on this subject, did so much to bring to everyone’s attention.