Product Regulation and Metrology Bill [HL]

Earl of Lindsay Excerpts

2nd reading
Tuesday 8th October 2024 Lords Chamber

[The Earl of Lindsay (Con)]

My Lords, after a first-class maiden speech and with her impressive CV, I warmly welcome the noble Baroness, Lady Winterton of Doncaster, to this House. Equally, I welcome the Bill, but before I say why, I should declare two interests: first, as the chair of the United Kingdom Accreditation Service, UKAS, which is the Government-appointed body for the accreditation of organisations providing testing, inspection, certification and similar evaluation services; and, secondly, as the president of the Chartered Trading Standards Institute, the CTSI, a role in which I was preceded by the noble Baroness, Lady Crawley.

The provisions set out in the Bill will help to ensure that the UK’s product safety and metrology regulatory framework is fit for purpose. I therefore agreed with my noble friend Lord Lansley when he said that this legislation is necessary. As the Minister set out, the majority of the United Kingdom’s product safety and metrology framework derives from the European Union, transposed into UK law using powers in the European Communities Act 1972. The repeal of the European Communities Act means that we need new powers to update this body of law and, furthermore, it is timely that we do this. The world is changing, consumer products are changing, and the marketplaces through which consumers access those products are also changing.

The Bill recognises that, as technology continues to develop, new powers will be needed to update our regulations so that they can address both current and future threats and hazards. It recognises that both products and marketplaces are evolving and they will continue to evolve in tandem with new technologies. The United Kingdom needs to be able to keep pace with these technological advances and to be in a position to respond with agility to new product risks and opportunities as they arise.

The increased risk from more complex and often digitally or AI-enabled products may mean that they require additional testing and independent inspection or certification to monitor and assess regulatory compliance. With my UKAS experience, I welcome the fact that the Bill will enable that. UKAS is already a long and well-established part of the product regulation regime. We work closely with the Government to provide trust and assurance that all higher-risk products requiring third-party conformity assessment are subject to assessments that have been conducted by independent, impartial and fully competent organisations, as demonstrated by their conformity with UKAS’s robust and rigorous requirements as the UK’s national accreditation body.

We are likely to see more higher-risk products in the future, as has been evidenced by some of today’s speakers, and the regulatory powers within the Bill—which include the power to place requirements on UKAS and all involved with conformity assessment—will help to mitigate that risk. Importantly, as part of this future- proofing of the regulatory framework, the Bill intends that new and emerging supply-chain business models will also be identified, ensuring that the responsibilities of those involved in the supply of products, such as online marketplaces, are clear. This will enhance compliance and enforcement, and in my CTSI role, I applaud the Bill’s intentions to create both a clearer definition of “online marketplace” and a more level playing field between high-street retailers and online marketplaces.

Also welcome is the focus on entities controlling access to online marketplaces. This aligns with the CTSI’s call for a clearer regulatory framework to cover intermediaries, such as fulfilment service providers, ensuring that they, too, bear responsibility for the compliance and safety of goods where there is no UK-based manufacturer or importer. These expanded definitions are crucial for ensuring that both current and future innovations in online commerce are regulated effectively to protect consumers and legitimate businesses.

I also acknowledge that the coalition of product safety organisations, as mentioned by the noble Baroness, Lady Crawley, of which the CTSI is a member, wants to see the Bill strengthened to properly safeguard consumer safety, with a clear and enforceable duty placed on online marketplaces. This was also mentioned by the noble Lord, Lord Foster of Bath. This would provide confidence for consumers, businesses, and the online marketplaces themselves, together with the extension of liability to online marketplaces for defective products, particularly those sold by third-party sellers. The coalition similarly sees the need for greater clarity regarding the specific obligations placed on fulfilment houses and clearer definitions of key terms to ensure that all existing and future online marketplaces and products cannot take advantage of gaps to avoid responsibility. Of course, these more detailed points will be explored in Committee and on Report.

Also deserving of special scrutiny in Committee and on Report are the nature and extent of the delegated powers being proposed in the Bill, as focused on by my noble friend Lord Sandhurst. As a member of the Delegated Powers and Regulatory Reform Committee of this House, I am aware that the committee will be considering the Bill tomorrow and reporting to the House shortly thereafter, but for the moment I welcome the Bill. It aims to preserve the UK’s status as a global leader in product regulation, supporting both businesses and consumers. It seeks to ensure that the UK can maintain high product standards and be better equipped to address modern-day safety concerns with agility, while also taking advantage of opportunities for economic growth. It strives to create a level playing field between high street retailers and online marketplaces—at long last—and it will update enforcement requirements and the legal metrology framework.

Finally, I welcome that the Bill gives the UK the choice to mirror or diverge from updated EU rules, so that we can maintain high product safety while supporting businesses and economic growth. I also support the specific power to make changes to legislation to manage divergence and take a UK-wide approach where it is in the UK’s interests to do so.

Procurement Bill [HL]

Earl of Lindsay Excerpts

Report stage
Monday 28th November 2022 Lords Chamber

[Baroness Finn (Con)]

My Lords, much has been made of the importance of social and environmental goals in public procurement. Of course, as many noble Lords have said, these goals have their place—but they should not be the driving force behind a procurement system, forcing it to run slowly and inefficiently and increasing cost to the public purse while disincentivising innovation and the participation of small businesses.

The Bill is a once-in-a-generation opportunity to put in place a robust procurement system that encourages procurers to focus on outcomes that deliver productivity improvements and innovation, reduce the cost to the public purse, and drive efficiency. It should do away with unnecessary and excessive procedural requirements that make it much more difficult for smaller businesses to compete and grow.

We should not lose sight of the fact that there is already much flexibility in the Bill, which is good news for delivery on social and environmental principles. This flexibility is evident in the Bill from the very outset, with the objective to maximise the public benefit and to allow economic, social and environmental matters to be considered. When it comes to awarding contracts, Clause 22 allows for a broad range of award criteria to be included in procurements where they are relevant, including those relating to social and environmental aims.

The Bill also includes a facility for a specific expression of government policy in the form of the national procurement policy statement and the Wales procurement policy statement. These can be used to create obligations to consider social and environmental goals of the day, such as net zero, without compromising the importance of maintaining an efficient and workable procurement regime. That is why I agree with my noble friend the Minister that we must avoid at all costs the inclusion of broad and unfocused obligations in relation to social and environmental matters.

Amendments to the Bill that would place requirements on contracting authorities always to have to include social and environmental benefits when awarding their contracts would slow down the procurement regime and increase risk. They would also significantly disincentivise small and medium-sized enterprises, which do not have the back-office capability to maintain huge reams of social and environmental policies and practices.

In summary, I am heartened that the approach the Government are already taking in the Bill will allow contracting authorities the flexibility to deliver procurement outcomes that address these important social and environmental objectives on a case-by-case basis while retaining value for money at the forefront. With this Bill, we are leaving behind a slow and bureaucratic procurement system that is unnecessarily restrictive in nature. Let us not change one set of restrictive procurement practices for another.

[The Earl of Lindsay (Con)]

My Lords, in speaking to Amendments 58 and 82 in my name, I reiterate my support for the opportunity that the Bill offers to reduce burdens on business, especially small businesses, by simplifying the UK regulation of public procurement. I also welcome the Bill’s objective of promoting an open and accessible business culture and practices.

That said, we must be careful that important safeguards currently in place in public procurement are not mistakenly, unwittingly or lightly discarded, hence these two simple and straightforward amendments, Amendments 58 and 82, which align with the Bill’s overall objective. In speaking to them, I declare an interest as chair of the United Kingdom Accreditation Service, UKAS. As the national accreditation body for the UK, appointed in statute, UKAS is the sole body recognised by government for the accreditation of organisations providing testing, inspection and certification services, collectively referred to as conformity assessment bodies. In short, we check the checkers, against internationally recognised standards.

The current procurement legislation, the Public Contracts Regulations 2015, stipulates that where conformity assessment is required by a contracting authority as part of a public procurement exercise, that conformity assessment must be accredited. This requirement for accreditation occurs either where the technical specification in the procurement mandates conformity assessment, such as testing or certification, or where an economic operator—a supplier—is required to hold certification as part of its proof of technical competence or management capacity.

The requirement for accreditation within current public procurement legislation is there for a purpose. It provides critical safeguards. It means that the competence, integrity and impartiality of a body delivering a test, inspection or certification must have been verified against international standards, on an ongoing basis, by an independent third party—in other words, by the nationally appointed accreditation body. The removal of these safeguards, which would disappear as the Bill is drafted, could have unintended and damaging consequences. For example, a contracting authority could require products to be tested to a specified standard but, without the safeguard of accreditation, any test certificate would have to be accepted. There would be no assurance of the quality or rigour of either the test or the tester. We saw what happened during the Covid pandemic with the profusion of substandard products that had false or inadequate certificates.

The NHS, when procuring PPE or anything else where it is critical that a product conforms with a specified standard, needs to be able to rely on a robust certification process. Likewise, a contracting authority could require a supplier to have a certificate for its management system, environmental management system, information security system or anti-bribery management system. If the certifier does not need to be accredited to perform that certification, the contracting authority cannot be certain that the relevant certificate is from a body whose technical competence, capabilities and impartiality have been verified by a third party against internationally recognised standards, but the contracting authority would none the less be obliged to accept the certificate.

Hence the serious concerns about the Bill that have been expressed to UKAS by public sector procurers such as the Ministry of Defence. Noble Lords will understand that the MoD—apart from being one of the United Kingdom’s largest public sector procurers—is uneasy at the prospect of purchasing goods and services from companies whose management system certificates have been issued by bodies that might not have been accredited to perform those assessments. In case anyone is wondering, several certification bodies in the market are not accredited to or compliant with international standards. It is important to guard against the unintended consequences of encouraging the proliferation of non-compliant conformity assessment and accreditation practice and all the risk that involves. It is equally important to avoid undermining certification bodies that operate as nationally accredited entities.

The safeguards proposed by these two straightforward amendments are rooted in the United Kingdom’s national quality infrastructure, which in turn reflects global best practice. They also align with the WTO’s Agreement on Technical Barriers to Trade and the Government’s commitment to international regulatory co-operation. Furthermore, they would bring the Bill into line with existing government policy on national accreditation.

In closing, I add that the drafting of these two amendments is also aimed at minimising trade barriers by recognising accreditation from any national accreditation body that is a signatory to the global mutual recognition agreements.

Brexit and the EU Budget (EUC Report)

Earl of Lindsay Excerpts

Thursday 6th April 2017 Lords Chamber

[The Earl of Lindsay (Con)]

My Lords, I, too, thank the noble Baroness, Lady Falkner, for introducing the report. In so doing, I should record my appreciation for the engaged and effective style with which she chairs the committee and chaired all our witnesses. I will also take this opportunity to thank the clerks, the policy adviser and our support team.

We have heard that the report looks at the financial issues that will have to be addressed in the negotiations when seeking a Brexit settlement. In particular, as has been explained, the report seeks to explore the certainties and uncertainties that attach to those issues, and how they might be addressed and calculated.

Before I look at one area of uncertainty, I should remind noble Lords that there is a fundamental question which it would sensible for the UK and EU negotiating teams to consider before detailed discussions begin. After the contribution from the noble Lord, Lord Thomas of Gresford, it could perhaps be called the Reform Club question. The question is well articulated in the title of the recent publication by the Bruegel think tank, to which the noble Lord, Lord Butler, referred: Divorce Settlement or Leaving the Club? A Breakdown of the Brexit Bill. At the beginning of its text, the report expands on that question as follows:

“The key question is whether one considers Brexit to be a cancellation of a club membership or a divorce. In the former case, the UK would have no claims on any EU assets but would still need to pay its outstanding membership fees. In the latter case, both assets and liabilities would have to be split”.


Every pronouncement from leading EC and EU figures since last June’s referendum suggests that they have been determined from the outset to see the Brexit negotiation as a divorce settlement. Their focus appears, from their public utterances, to have been on what share the UK owes in terms of EU liabilities. For whatever reason, they appear to have given no consideration to the possibility that treating the Brexit negotiation more as the cancellation of a club membership than a divorce settlement might avoid many months—possibly years—of detailed wrangling over the complications that come with striking an agreement on the UK’s share of the EU’s assets and liabilities.

It might be a better direction of travel for both the UK and the EU to see this as a cancellation of a club membership—or it might not, but at the very least the option should be considered, in case it has merits and serves both parties’ interests. I would be interested to hear from my noble friend whether Ministers accept that the Brexit settlement will be treated as a divorce settlement or whether alternative approaches could be on the table.

One of the complications that our report considers, which has already been referred to in this debate, is in respect of pensions and how the UK’s share of pension liabilities might be calculated and allocated. As we heard from the noble Lord, Lord Butler, in the EU’s 2015 annual accounts, accrued pension liabilities were shown at a capitalised figure of €63.8 billion. This raises two key questions: first, is the UK under a legal obligation to make a contribution towards those long-term pension liabilities; and, secondly, if it is, how should the UK’s share of this €63.8 billion be calculated?

A number of our witnesses appeared to be very confident that it is an unavoidable and enforceable obligation on the UK that we will have to meet. Their focus was on the different ways in which the UK’s contribution should be calculated. A range of propositions was suggested to us: for instance, that it should be based on the UK’s contribution to the EU budget, either with or without the UK rebate being taken into account; or that it should be based on the past and present numbers of UK nationals employed in EU institutions; or that it should be based on the proportion of those in receipt of an EU pension who are UK nationals; or that it should be based on the UK’s share of the EU population. In other words, among all those witnesses who agreed that there was a binding obligation on the UK to make a contribution to accrued pension liabilities, there was no agreement on the right methodology to calculate that contribution.

Beyond that, there were also differing views on how EU enlargement over the years of the UK’s membership could be overlain on some of those methodologies, and there were queries about the actuarial and accrual accounting methods that had been used to calculate the €63.8 billion capitalisation of the long-term pension commitments.

Other witnesses challenged the assumption that the UK is legally liable for a share of accrued pension liabilities, especially those liabilities not falling due until after the date when the UK ceases to be a member of the EU. They also offered us a range of propositions to support that view. For instance, it was pointed out that pension liabilities, unlike other member state budgetary liabilities, relate to rights that are accrued by individuals through their service in European institutions; that the nationality of employees or pensioners is irrelevant; and that the legal responsibility for meeting those pension entitlements clearly rests, in the first instance, with the employing European institutions and thereafter with the EU, with member states acting as guarantors—but a member state cannot be retrospectively liable as a guarantor after it has ceased to be a member state. We also heard that the UK might claim that it had overcontributed to EU pensions over the years of its membership.

From the conflicting views and evidence that the committee received, it is difficult to conclude that the UK is subject to a clear-cut and unarguable legal obligation to make a contribution either towards accrued long-term pension liabilities as part of a Brexit divorce settlement or to any continuing enforceable post-Brexit liability for accrued pension entitlements thereafter.

It was put to us that, regardless of any uncertainties around the legal position, the UK is none the less under a moral obligation on both counts. Once again, the evidence we heard was conflicting and suggests that this may be one of those moral obligations that is in the eye of the beholder, compelling to some but unseen by others. In other words, if the UK is subject to a moral obligation, like the legal position it is not clear-cut.

However, regardless of the differences of opinion on whether or not a solid legal or moral obligation exists, there was perhaps a greater consensus around the view that the UK will very likely be under a strong political obligation to address expectations around EU pensions. If, as we have heard, the UK wants a Brexit deal that achieves a new strategic partnership, beneficial trade arrangements, future UK participation in EU programmes and, as my right honourable friend the Prime Minister said and the noble Baroness, Lady Falkner, quoted,

“a new deep and special partnership”,

it is difficult to contemplate those objectives being achieved without the UK being prepared to come to some agreement with the EU on pension liabilities.

At the same time, if the obligation to reach a deal on pensions is largely political and the Brexit negotiations descend into territory that either could be called a bad deal or that raises the prospect of no deal, the UK may indeed be able to disregard the need to reach that agreement on pensions and to avoid any gesture or contribution towards long-term liabilities.

The EU negotiators may disagree with that scenario and claim that they have both the law on their side and access to the jurisdiction and enforcement processes post Brexit that will enable them to compel the UK to honour its share of accrued pension liabilities. They may be right—but, on the balance of the evidence taken by the committee, there have to be doubts about whether such confidence would be well founded.

This leads me to offer the following conclusions, which are very much in line with what the noble Baroness, Lady Falkner, said in introducing this debate and the comments of the noble Lord, Lord Butler, about the sense of a reasonable agreement being reached and the benefits that will accrue to both sides of the negotiation. If the UK wants a good Brexit deal, it must be ready to contribute to the EU’s pension liabilities, regardless of the fact that the UK may not be under a legal or moral obligation to do so. Equally, if the EU wants the UK to contribute to the EU’s accrued pension liabilities, the EU must be ready to address what the UK is seeking from the rest of the Brexit negotiations. If both parties approach the negotiations with that mindset, I do not see pensions necessarily holding up the Brexit discussions.

There is one other way to avoid pensions becoming a time-consuming blockage in the negotiations—and this goes back to the Reform Club question. It is to treat pensions within the negotiations as being a resignation of membership issue rather than a divorce settlement issue.

Charities (Protection and Social Investment) Bill [HL]

Earl of Lindsay Excerpts

Wednesday 10th June 2015 Lords Chamber

[The Earl of Lindsay (Con)]

My Lords, I welcome the maiden speech of my noble friend Lord Bridges of Headley and I congratulate him on his appointment as a Minister. I share with him the experience while on the Front Bench of carefully prepared briefs being shredded by the noble Lord, Lord Williams of Elvel. That is a memory that will not fade.

First and foremost, I welcome the Bill, and in doing so I should declare an interest in having various roles in or links to charitable bodies as listed in the register. In principle, I support any measures that can be sensibly developed to give the public greater confidence in the probity and good governance of the charities they choose to support, and to provide charities themselves with greater protection from individuals who are either unfit to be trustees or who might seek to exploit them. I therefore support the Charity Commission being given new powers to take action when necessary against individual trustees or, where appropriate, against the charities with which they are involved.

Public and donor confidence in the probity and governance of charitable bodies strikes me as essential. In supporting the increased powers that are being proposed for the Charity Commission, I acknowledge at the same time that even with these increased powers, the scale, magnitude and extraordinary diversity of the 160,000-plus charities for which it is responsible will continue to pose a considerable challenge for it, given the resources that it has available—and that is before one considers the large number of unregistered charities, as mentioned by my noble friend Lord Hodgson of Astley Abbotts. The figures are startling. There are probably a third of a million charitable bodies throughout the UK with more than 1 million trustees.

Recognising this continuing challenge for the commission along with the Government’s commitment to a more intelligent approach to regulation and its enforcement, I want briefly to explore an additional, parallel opportunity for improving confidence in the governance of charities and the fitness of trustees to perform their duties. It is an opportunity that I believe could be developed alongside the enactment of the new statutory powers being proposed for the commission. As well as delivering greater confidence, it could assist the commission in enabling it to focus its efforts and resources in a more risk-based manner, and to resort less frequently but more effectively to the exercise of its proposed new powers.

In raising this opportunity, I should declare an interest as the chairman of the United Kingdom Accreditation Service—UKAS—which is the country’s national accreditation body, as it is in this role that I have been involved in exploring a number of different initiatives to promote demonstrable good governance and management in the charity sector. I should add that UKAS, as the national accreditation body, already supports voluntary and regulatory standards across a broad range of policy areas in a way that benefits both the regulator and the regulated. There are therefore some useful precedents in other policy and regulatory areas on which to draw.

Current discussions with a number of relevant parties in the sector are exploring whether agreed standards, underpinned by accredited certification or inspection, might be a useful and robust means by which the quality of a charity’s governance or the calibre of a trustee can be demonstrated to a donor, a regulator, or indeed the public interest. In recent years, bodies such as the NCVO have developed a number of different voluntary standards and codes of practice for the sector, and many charitable bodies have adopted one or more of them. However, given the general need for greater confidence in governance and the calibre of trustees, the current discussions are exploring whether there might be multiple benefits from aligning these voluntary standards more closely with the regulatory requirements and underpinning those certifying the charities for their compliance against them with UKAS accreditation.

It has also been recognised that such an approach might at the same time be an opportunity to address the challenges that many charitable bodies face, such as how the multiplicity of standards, codes of practice and awards makes it difficult for organisations to decide which ones to use. There is a need to identify which standards or marks are valid and meaningful, along with the need for a more coherent and rationalised approach. Such an approach, intelligently designed and configured so that it complements the objectives sought by this Bill and intelligently endorsed so that compliance is recognised and, where appropriate, rewarded by external parties such as the regulator, could have a significant effect on improving the standard of both charities’ governance and trustees’ abilities. It could be value-adding for charitable bodies that choose to be certified as having adopted the relevant standards. It could increase public, regulatory and donor confidence in certified charities, and assist the Charity Commission by enabling it to better direct its efforts and resources to where there is the greatest need for oversight or intervention, thereby making it a more robust regulator. It could also reduce the need for costly legal action.

While potentially having a significant impact where it matters most, such an initiative could none the less remain entirely voluntary. It would be largely owned and driven by the sector, and it could be managed so that the bodies for which it is not relevant do not feel compelled to participate. At the same time, a more robust and better-recognised standards-based option, underpinned by accredited certification, might be helpful in respect of the large number of charities that are not registered with the Charity Commission, and obviously to the large federated charities.

As I said at the start, I fully support the Bill and the proposals that it will bring forward, but I believe at the same time that there may be an opportunity to develop a credible regime of voluntary, well-designed, sector-owned standards, underpinned by accredited certification that will, in conjunction with the provisions of the Bill, help to address the concerns surrounding governance in the charities sector.

Deregulation Bill

Earl of Lindsay Excerpts

Wednesday 4th March 2015 Lords Chamber

[Baroness Hayter of Kentish Town]

My Lords, with the leave of the House I will move Amendment 28, which was tabled by my noble friend Lord Hunt of Kings Heath. Our concern is about the impact of the economic growth clauses on these health regulatory bodies and the risk of a negative impact on their overriding responsibility to protect the public. On Report, the Minister denied that that would happen and stated that the economic growth duty would sit alongside the other factors that a regulator must consider. However, “sitting alongside” suggests that it has some—or even the same—weighting and therefore cannot be ignored. The Minister also quoted the draft guidance, but the guidance adds to our concern. It states:

“The growth duty does not automatically take precedence over or supplant existing duties held by regulators”.

The term “not automatically” implies that it is entirely possible that it will take precedence, and that must put the protection of the public at risk.

The two health regulators, the Professional Standards Authority and the Human Fertilisation and Embryology Authority, were debated on Report. They are the subject of Amendment 28. My noble friend Lord Hunt questioned whether the Professional Standards Authority is indeed a regulator, given that it oversees nine statutory regulators, including the GMC, but is not itself a regulator. We say that there is no need for it to be covered in the Bill. Can the Minister confirm that the Government do not consider that the PSA is covered by the economic growth clauses because it is not such a regulator?

The HFEA performs a crucial and difficult task. We worry that the economic growth duty could make its task even more challenging. On 24 February this House had an excellent debate on mitochondrial donation and agreed the regulations. However, we did so only on the basis that the HFEA’s regulatory processes were robust. The HFEA—which, as we know, is highly respected as a model for the regulation of fertility and embryology treatments and research—has acknowledged on its website that it is not an economic regulator. Perhaps the Minister will confirm that that is so. However, I hope he will go further and address our concern that any growth duty could impact on the HFEA’s ability to regulate effectively. There is no requirement in the HFE Act to consider growth, thus the new duty could upset the delicate balance on embryo research which has served this country well.

At the centre of the balance is a settlement between science and society which involves a clear set of rules that enable scientists and clinicians to experiment while maintaining public confidence. The existing regime has enabled growth. Surely it is no accident that the UK is the first country in the world to allow mitochondrial donation; it is a by-product of a thriving bioscience sector combined with intelligent regulation. Good rules, flexibly applied, can foster growth. Ironically, the growth duty could upset that balance and even hinder growth in the sector. It risks HFEA decisions being judicially reviewed. For example, those who are against embryo research might argue that the HFEA will favour research because of the growth duty and challenge it on that basis; science-based companies might argue that if it fails to consider growth, it will be failing the growth duty.

I have some questions for the Minister. Do the Government accept that our bioscience sector has thrived and that HFEA regulation has contributed to that success? If so, what is the point of making the growth duty apply to the HFEA? Can the HFEA decide to ignore the growth duty if it is inappropriate in particular cases, for example in respect of patient safety or for new treatments such as mitochondrial donation? Can the Minister assure the House that the HFEA will not be more likely to be judicially reviewed because of the growth duty? Will statutory guidance make this clear so that the HFEA can refer to such guidance if challenged in court? Will the Government commit to exempt the HFEA from the regulation?

Perhaps I may also mention the relationship between the economic growth duty and the EHRC, an issue that has featured not only in this Bill but in the Small Business, Enterprise and Employment Bill. The Minister will be aware of the argument that the EHRC enjoys an A status as a national human rights institution. It is therefore right that the Government should always be crystal clear that it is not appropriate to apply general regulations to the EHRC. The A status is awarded by the UN International Coordinating Committee, which regularly reviews the EHRC’s compliance with the Paris principles, which require the EHRC to be independent. We have to avoid the perception—or the reality—that there is interference in the commission’s ability to perform its functions, and ensure that it is always independent. If that independence were jeopardised, it would jeopardise the A status which is vital to the UK’s international standing.

Last night, in response to these sorts of arguments in this House, the Minister, the noble Baroness, Lady Neville-Rolfe, agreed to look again at provisions regarding the EHRC in the Small Business, Enterprise and Employment Bill. Will the Minister agree to do the same thing with these two regulators in this Bill? I beg to move.

[The Earl of Lindsay (Con)]

My Lords, I speak to the amendment moved by the noble Baroness, Lady Hayter, from my perspective as a member of advisory bodies that advised the previous Government on better regulation—the Better Regulation Commission and the Risk and Regulation Advisory Council. I am also a member of a body that advises this Government on regulation—the Better Regulation Strategy Group.

I say immediately that if the growth duty compelled either the PSA or the HFEA, or indeed any other regulator, to pursue growth at the expense of undermining the protection of sensitive sectors or sensitive activities, I would have sympathy with this amendment. However, that is not the case. The growth duty does not compel the HFEA or other regulators, as suggested in the amendment, to pursue growth at the expense of undermining protections in the area that they regulate. What it does do is require regulators to consider the economic impact and any unnecessary, disproportionate or excessive bureaucratic burden that they might be imposing on those whom they regulate when carrying out their regulatory processes, producing guidance and so forth.

From my experience of better regulation, better regulators and better enforcement of, or compliance with, regulation, I can see absolutely no reason why the HFEA cannot consider the burden it is imposing on the businesses and organisations it regulates while continuing to ensure that patient protection remains its primary objective.

The growth duty is not a duty to achieve or pursue economic growth. Therefore, it is not a duty that would require the HFEA to drive growth in the fertility sector, for instance. Nor does it dictate that a regulator must attach a particular weight to growth. Therefore, the HFEA, or any other regulator obliged to have regard to the business and bureaucratic experience of being regulated, may reasonably decide that it will attach little or no weight to business factors in relation to a particular decision and that it must attach more weight to its other duties. In the HFEA’s case, prominent among those other duties would be patient safety. Therefore, the growth duty will not undermine or override regulators’ primary responsibilities in delivering protection.

Applying the growth duty to the HFEA will not affect its robustness as a regulator, and it will not affect its ability to protect the public, which was one of the concerns expressed by the noble Baroness. In that sense, the title of the Bill is, I think, misleading, in that the growth duty is more about better regulation than deregulation. It does not loosen regulation; nor does it remove any regulatory duties or responsibilities. Rather, it enables their delivery and enforcement, when and where appropriate, to be more sensitive and more user-friendly.

Also of relevance to this amendment is the fact that the HFEA is already within the scope of another of the better enforcement programme measures—namely, the Regulators’ Code—as it was with its predecessor, the Regulators’ Compliance Code. The Regulators’ Code is a clearly defined, simple and principles-based framework of good practice for regulators in engaging with those whom they regulate. To my thinking, the HFEA would apply the growth duty in a way that complements the existing requirement to which it is already subject through the Regulators’ Code. More importantly, it would, and can, do so without compromising its rigour as a regulator.

I can understand why exceptions might be made in requiring regulators to adopt this duty where it is an irrelevance to the way they regulate or to the areas they regulate, but I cannot see any sense in exempting the HFEA from the growth duty.

Deregulation Bill

Earl of Lindsay Excerpts

Wednesday 11th February 2015 Lords Chamber

[Baroness Andrews (Lab)]

I rise to support my noble friend’s amendment and congratulate him not only on the way he exposed the ambiguities in the Bill but on how he introduced the argument on protection and balance. That is an argument I want to pursue. The amendments that we have just debated have totally exposed the fact that the language of the Bill is a morass of ambiguity. I am thinking of terms such as “have regard to” or “not automatically”, and the suggestion that it should be up to the regulators to interpret the Bill as will suit their best purposes.

In this amendment, we are giving the Government an opportunity to do what they say that they want to do: to have a clear intention of purpose with regard to regulation; to put in the Bill exactly what they mean by their expectations of regulators; to show that they understand what regulators do, can do and should do; and to put clarity into the Bill that leaves no one in any doubt about the limits to what they can do.

I want to talk about balance and growth in another context—in relation to the built environment and the protections that surround our environment. That is a parallel argument to the one that my noble friend made. One danger of the ambiguity is that it introduces an additional requirement for growth, although the Government say that it is complementary. Will that additional requirement sit alongside or above the existing growth duties that regulators have to implement and which they are bound by law to do? With the National Planning Policy Framework, the Government very wisely embraced the advice of statutory bodies such as English Heritage, which retained the essential point about planning law—that it is a balance between development and protection of landscapes and precious spaces, the ancient and characterful environment with which we all live.

The need for appropriate development in the right place and time is not in dispute, but it is balanced with the need to protect and sustain what this country is uniquely known for. We already have a presumption of growth in the National Planning Policy Framework; in short, we have a duty to promote growth. But that is balanced by a requirement to protect our precious landscapes and the heritage of our built environment. The balance has worked well, and it was very gratifying that, after a lot of discussion, when the National Planning Policy Framework was introduced, it repeated and reflected those traditional, tested balances that had been in the previous planning law. The statutory agencies know how to do that, in the full knowledge that there must be scope for development and a response to housing pressures and the need for infrastructure, but there is also a prior duty to protect what they are there to protect.

All this amendment does—I urge the Government to think about this, because they will get themselves out of a real problem if they do—is to make clear beyond doubt that the duty to promote growth must be consistent with the proper exercise of existing regulatory functions. Everything that I have heard the Government say, in their letters, suggests that it is what they want. So what is the difficulty about putting a clear, unambiguous, crisp statement in the Bill? It is vital that we have that assurance, because it will tell all the practitioners and the country as a whole that the Bill does not change or challenge that balance, and it does not override the scope of the functions of protection. It does not create an unnecessary diversionary distraction in the shape of another growth duty.

If the amendment is not accepted, that will send the opposite signal. It will send a signal to the developers, for example, that there is an imperative of growth, which is undefined—we have perhaps lost the argument that sustainable growth should have been specified; that would have been infinitely more acceptable and sensible—and that that imperative can be taken to override the other protective functions.

I think that there will be a chilling effect on regulators, because if it is up to them to try to interpret what is meant by a duty to “have regard to” something in the exercise of their proper functions, they will always be looking over their shoulder. They will always know that there will be a challenge from people who think there is a higher imperative— in many cases, an inappropriate economic imperative.

The local and national authorities will suffer from the same fear—that they are getting it wrong. They will be faced with a further layer of confusion. We all know that what the planning system needs above everything else is certainty. This provision will introduce another layer of uncertainty, and will have perverse consequences. It will cause further delays while people argue about whether the regulator has had proper regard to something. For that reason, it would hand greater scope and power to developers. My great fear is that the balance, which the noble Lord spoke about in relation to health and safety, will also be compromised or lost in relation to the protection of the environment.

We have had a very successful planning system to date, which has been supported by all Governments. The regulatory bodies are extremely experienced, well intentioned and well practised in their duties. Without the simple and incontrovertible logic of the amendment, which spells out what the Government themselves want to achieve, we will introduce more confusion and delay. So I hope that the Minister will listen seriously to the arguments for it.

[The Earl of Lindsay (Con)]

My Lords, in speaking to the amendment moved by the noble Lord, Lord Tunnicliffe, I should note my current involvement with the Better Regulation Strategy Group, the independent body that advises the present Government on better regulation. I should also note, as it is relevant to my perspective on the amendment, my former involvement in the two predecessor bodies that advised the previous Government—the Better Regulation Commission, of which I was vice-chairman, and the Risk and Regulation Advisory Council.

Based on my experience of those three independent bodies advising government on better regulation, I question the need for Amendment 44A. If the proposed duty as set out in the Bill were to override regulators’ powers of protection, compromise their decision-making or supersede their existing regulatory duties—or if there were any ambiguity about those three important assessments—I would wholly understand the need for the amendment. But in my judgment that is not the case.

The proposed growth duty will not override or cut across regulators’ powers of protection. It is simply an additional factor for regulators to take into account when they are making their decisions. It will not compromise their decision-making and, as I understand it, it will not supersede regulators’ existing duties. It will not remove the responsibility of businesses to comply with what the law or regulations require of them. The duty will therefore not compromise the independence of regulators. They will continue to have decision-making autonomy, exactly as they do now. Regulators will therefore remain free to decide how best to incorporate the duty into the decision- making involved in performing their primary statutory functions.

I have been looking at the published draft guidance that the Government issued in January, and I believe that it makes very clear many of the points that I have just mentioned. I understand that the guidance is continuing to be developed in discussion with the regulators so that it can be finalised before the policy comes into force. That guidance makes it clear that the proposed duty does not encourage regulators to reduce protections or to ignore non-compliance.

For the benefit of noble Lords who have not seen the published draft guidance, Non-economic Regulators: Duty to Have Regard to Growth, I draw their attention to the beginning of chapter 2, on page 5, which sets out the purpose of the duty. The very first sentence reads:

“Regulators exist primarily to protect people or achieve other social or environmental outcomes”.

That is an important headline sentence, which reminds us of the principal duty that regulators must subscribe to. The second paragraph on that page says:

“The duty requires that economic growth is a factor”—

not the factor, but a factor—

“to be taken into account alongside regulators’ other statutory duties … The duty does not set out how economic growth ranks against existing duties as this is a judgment only a regulator can and should make … The duty does not oblige the regulator to place a particular weight on growth”.

Those are only a few extracts from one page of the draft guidance, but they set out a clear proposition in terms of the importance of maintaining the balance between regulators having regard, as appropriate, to growth and their maintaining protections. As I see it, the proposed duty will complement existing duties and will not override or cut across regulators’ powers of protection, nor their responsibilities for ensuring protection. It will be for a regulator to weigh up the desirability of economic growth against each of the other factors it must consider, and tailor its approach accordingly.

In some circumstances those factors will sit well together; in others the regulator will need to decide how much weight to afford to each factor for the best outcome. On the basis of the wisdom that was developed through the Better Regulation Commission, the Risk and Regulation Advisory Council and so on, I believe that the regulator’s expertise means that it is best placed to decide what weight it is appropriate to afford growth in the relevant circumstances.

I therefore disagree with the insistence of the noble Lord, Lord Tunnicliffe, that only Parliament can rank those factors. In a good regulatory regime there should be discretion for the regulators to make judgments between parallel factors, because they can take account of the exact circumstances in which they are regulating. Therefore, although the growth duty clause as drafted requires that growth be put on the same footing as other duties—in other words, it enables regulators to have regard to growth—it also ensures that essential protections are maintained.

We should not lose sight of the importance of the new growth duty and the benefits that will flow from it. Regulators spend some £2 billion each year on regulatory activities, and still to this day more than half of businesses see regulation as a barrier to their success. The duty is required to clarify the fact that growth is an important factor for regulators to take into account, and it will ensure that regulation is delivered in a way that best supports growth. It will also ensure that the protection intended to be given by regulations is still delivered. On those grounds, although I understand the motives behind the amendment, I genuinely believe that it is unnecessary, and that the balance will be not only maintained but enhanced by the Bill as drafted.

[Lord Wallace of Saltaire]

My Lords, we have heard three excellent and very sober speeches on the amendment, for which I thank noble Lords. There is only a small difference between the noble Lord, Lord Tunnicliffe, and myself, on behalf of the Government. We are talking about balance—the balance among a range of factors that we wish regulators to consider.