Better Regulation

Lord Curry of Kirkharle Excerpts

Thursday 7th December 2017 Lords Chamber

[Lord Curry of Kirkharle (CB)]

My Lords, I welcome this debate and am grateful to the noble Baroness, Lady Neville-Rolfe. I must begin by declaring my interests. I farm in Northumberland and, as the noble Lord, Lord Whitty, said, I chaired the Better Regulation Executive from 2010 to the end of 2015. In that time, I was responsible for the adoption of the one-in, one-out and one-in, two-out processes, as well as the Red Tape Challenge and focus on enforcement programmes. Collectively, these initiatives led to a reduction in regulatory costs for business of around £2 billion per year, as confirmed by the Regulatory Policy Committee—a significant development for the business community at that time. When I took the chair in 2010, 62% of businesses regarded regulation as an obstacle to progress. Five years later, this figure had dropped to 51%. The programme was successful and brought greater discipline to government departments and their legislative ambitions. It definitely stemmed the flow of new regulations. I supported then, and still do now, the principle of establishing a business impact target introduced in the Small Business, Enterprise and Employment Act 2015, which we debated at length in this House. However, this needs to be realistic, and the cranking-up of the challenge from one in, two out to one in, three out in 2016 was a step too far.

The noble Baroness, Lady Neville-Rolfe, referred to the tragic Grenfell Tower disaster. The building where our own apartment is, a 10-minute walk from here, apparently has 40% coverage with the same offending panels and in construction may have contravened building regulations. It was rebuilt in 2003, long before the one-in, two-out policy was introduced in 2011. I question whether there is still a systemic issue within the construction industry.

I am absolutely clear that the programme we put in place did not put lives at risk or undermine confidence in our regulatory systems. In fact, as was stated by the noble Lord, Lord Whitty, it is perfectly possible to remove regulatory burdens that benefit employers, businesses, employees and citizens by adopting smarter processes and better-targeted inspections. Enforcement can actually be enhanced.

Today’s debate focuses on the need for regulation to be balanced or proportionate, cost effective, easy to understand and properly enforced, and I support that objective. We need to protect UK citizens, their health and well-being, our environment and natural capital, while creating a favourable business environment. This will be even more important post Brexit. It is crucial that businesses continue to want to reside here in the United Kingdom, to build capacity here and to contribute to our economy after March 2019.

According to the World Bank, the UK is currently the seventh most favourable country in the world in terms of ease of doing business—this is an important benchmark for us—and we want to ensure that we continue to be at the forefront of global business, positioning ourselves as the best place in Europe. This must be in terms of the ease of establishing a business as well as the ease of growing a business.

As the EU withdrawal bill is going through the Commons and heading in our direction, it puts us, as the Prime Minister has said, in an unprecedented position. We have no choice initially but to translate EU legislation into domestic law, but we should take the opportunity to simplify, consolidate and reduce the volume of guidance notes wherever possible to suit our circumstances here in the United Kingdom. However, we must also recognise that we will not be able to access important markets unless we have appropriate regulation in place. Having concurrent regulation with the European Union will help to pave the way for our future trading relationship. The wishful thinking of some Brexiteers that we can demolish regulation at a stroke when we leave the European Union and still trade on the global stage is naive. We need to strike a balance. It will be important to have at least equivalent standards with other countries and the EU if we want to maintain our business relationships. In fact, we need to present ourselves as having high standards of compliance and make a virtue of our regulatory standards. Our own British public expect us to have meaningful and appropriate regulatory standards in place.

Given my particular interest in the agricultural sector, which I am delighted has been mentioned twice already, I could not speak on this topic without referring to the impact on agriculture. I fully agree with comments about the red tractor scheme; these voluntary schemes provide valuable evidence of the status of farm businesses and allow for a policy of earned recognition to be applied to inspection regimes. There is no question that this issue of regulation and bureaucracy is one of the reasons that many people voted to leave the European Union, particularly the farming community. The assumption is that about 40% voted to leave.

In the design of our post-EU agricultural policy, we need to make sure that we reduce the complexity and bureaucracy which has been a feature of the common agricultural policy. We have a chance to create simpler, less onerous structures and we need to take that opportunity. We must resist the temptation to surrender to complex admin systems. The Defra Secretary of State, Michael Gove, has stated that he will establish a new environmental regulator to replace the accountability currently residing with the European Commission to hold government to account. I support this requirement but in doing so government must review the regulatory landscape, in parallel with this decision, and seriously question whether we need three environmental regulators. How confusing would that be?

Finally, I will comment on the structure in place to manage and administer the Government’s regulatory policy. The Better Regulation Executive has a hugely important role but it does not have executive powers, so the title is slightly misleading. The Regulatory Policy Committee also has a crucial function, as was highlighted by the noble Baroness, Lady Andrews, and the noble Lord, Lord Whitty, in auditing economic impact assessments. It is essential in monitoring the business impact target but does not have influence on policy and is not truly independent. Both bodies are subject to the whims of Ministers. The responsibility within government is split between BEIS and the Cabinet Office, while the BRE has not had an independent chair since I stood down in 2015. This structure does not provide sufficient independent challenge. It provides less than in the past, it is potentially confusing and there is overlap. It should be reviewed as a matter of urgency, particularly in light of the huge workload as a result of the withdrawal Bill. As has been mentioned earlier, EU regulation has been exempted from the current scrutiny by the RPC. This will not be the case when we leave the European Union.

When I chaired the BRE, I firmly believed that tax administration should have been included in the target and subjected to the same RPC scrutiny. I still believe that and firmly agree with the Federation of Small Businesses. My view is that we need an even more effective structure to monitor regulation going forward than we have today, not a lesser one.