Enterprise and Regulatory Reform Bill

Lord Bradshaw Excerpts

Tuesday 18th December 2012 Grand Committee

[Lord Berkeley]

My Lords, I had just about finished, but want to conclude by saying that I hope that the Minister and our other colleagues will look at the proposed new clause very carefully before Report, because there are some serious things wrong with it. I commend the amendments of my noble friend Lord Whitty for consideration.

[Lord Bradshaw]

I endorse what has been said by the noble Lord, Lord Berkeley. The proposed new clause states:

“The Secretary of State may by order made by statutory instrument amend any enactment so as to remove from a sectoral regulator either or both”.

How long is that going to take? If there is a weakness in the regulation, which is apparent, and even if the Secretary of State can recognise it, how long is the remedial action which is set in the Bill likely to take to bring into force? If a regulator is incompetent, surely there must be other ways of getting him to move over. He has a board of his own which, if he is exaggerated in his actions, can take action to rein him in. However, the whole edifice which is built here is wrong. I know two of the regulators involved and I have known some of the regulators in the past. Generally speaking, they are extremely competent people and probably more competent than the people who would advise the Secretary of State to use these powers. I believe that the powers are heavy-handed and very long-winded into the bargain.

[Lord Berkeley]

What would the noble Lord, Lord Bradshaw, think if there developed a debate between the Office of Rail Regulation, which is the regulator that we probably both know best, and the Government, and the Government said to the ORR, “You’re not pursuing this competition case in the way that we think you should, and it should go to somebody else who, like the CMA, could do it better.”? Is that not serious interference in the independence of the regulator?

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[Lord Bradshaw]

Yes. Perhaps I may take another example; the Civil Aviation Authority, which I do know something about. It has a most excellent regulator—it is somebody whom I know personally, although I have never had any dealings with him as regulator of that industry—but issues of competition are likely to emerge in the airports business. He is a really independent person, and I cannot believe that somebody whose functions are created according to the mechanism set down here is likely to do the job any better.

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[Lord Marland]

All that is important is that the consumer or customer, by which we mean the general public, recognises that if there is malpractice—a rare event—misinterpretation or something like that, someone ultimately has to be able to intervene in that process to ensure that it is put on the right track. One would hope that people would do the honourable thing and resign. However, sadly, we are not entirely in that world any more; it passed us by a few years ago, to my great regret. One could not therefore ultimately rely on that happening and you need a deterrent for it. The noble Lord, Lord Berkeley, knows this better than I do. He knows regulators backwards and has been involved closely with them. I have huge respect for his knowledge in that area.

All this seeks to do is complement the existing reforms that we are putting in the Bill. As I have said, it is a good government amendment and the amendments enunciated by the noble Lord, Lord Whitty, are of interest and not unnecessarily unreasonable, but they could be clarified.

[Lord Bradshaw]

Perhaps the noble Lord would answer my question about how long it will take to bring the machinery into effect. If, for example, the Government are dissatisfied with the way an industry is being regulated, they presumably will make that clear. But if they have to resort subsequently to producing a statutory instrument, how long will it take for that to have an effect?

[Lord Marland]

The Secretary of State would intervene only if an agreement had not been reached with the various parties on the direction of travel. As we all know, that is a big “if”. He then has to do an impact assessment and would have to consult for three months. I apologise, it would be for 12 weeks. Whether it is 12 weeks or three months is a very important differentiation because sometimes we work on working weeks and on others we do not. Therefore, let us say 12 weeks.

I do not think that any of this is unreasonable. If we have failed to determine through the channels of discussions why something is being done wrong, or are getting nowhere with it and feel that the public are better protected by the action that we are going to take, we have to have a way to be able to do it. That is all that we are seeking to do.