Retained EU Law (Revocation and Reform) Bill

Debate between Lord Fox and Lord Hodgson of Astley Abbotts

Committee stage
Wednesday 8th March 2023 Lords Chamber

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, I will move Amendment 134ZA and speak to Amendment 134B.

We have had pretty extensive debates over the past four days in Committee about how we need to improve the parliamentary involvement of both Houses on this framework, skeleton Bill. These two amendments shift the Committee’s attention to the existing scrutiny procedures which, while generally regarded as inadequate, do at least provide some level of scrutiny, and therefore hold the Government to account. However, even with these existing procedures, the Government are, as I shall explain, behaving increasingly casually and often ignoring existing statutory obligations.

Amendment 134B concerns impact assessments, which are required to be produced at the same time as the relevant regulation is published. Amendment 134ZA is concerned with post-implementation reviews. Together, they implement two of the recommendations made in the Secondary Legislation Scrutiny Committee’s report, Losing Control?: The Implications for Parliament of the Retained EU Law (Revocation and Reform) Bill.

I will deal first with Amendment 134B, concerning impact assessments. This requires an impact assessment to be laid simultaneously—an important word—with the laying of each regulation. Impact assessments were introduced by the Small Business, Enterprise and Employment Act 2015—I think my noble friend Lady Neville-Rolfe was the Minister at the time. The impact assessments are to be produced whenever the impact of a particular regulation exceeds £5 million.

A good impact assessment should inform policy development and evolve with it. This enables both Houses of Parliament to see and evaluate the various methods for dealing with a particular policy issue that the Government have thought about and then explains why a particular selection was made to give the policy effect. No less important, publishing an impact assessment in a timely manner gives people outside Parliament who will be particularly affected by a proposal a chance to make their views known. This narrows the gap between the governors and the governed, which some people feel has grown in recent years. As people often say, law that has been consulted on is often better law and is nearly always better-accepted law, because people feel that they have a chance to make their views known.

I will give two examples of the sorts of issues that are affected by how the Government have been rather casual about impact assessments. The Misuse of Drugs (Amendment) (Revocation) (England, Wales and Scotland) Regulations 2022 may sound a dull title, but in this the Home Office was going to revoke the ability to license a chemical because it could also be used as a drug. The Home Office believed that there were only 65 firms that used it and would be affected by it. When they produced the impact assessment, they found that there were about 7,500. Therefore, the effect of the impact assessment was to make sure that those 7,500 firms were not deleteriously affected.

My noble friend the Minister will no doubt say that this shows that the system is working—to which I would reply that it is effective when the impact assessment is provided. Too often, impact assessments are produced too late to be effective or, in some cases, not produced at all. Let me give an example of each, briefly: first, on an impact assessment being too late to be effective.

The Committee will recall that a big decision was made about whether we should require care home staff to be compulsorily vaccinated. There was considerable concern about how many members of staff would resign as a result, either because they had religious beliefs against vaccination or because they were young women concerned about the impact on their fertility. When the regulation was published, no impact assessment was provided at all, so the SLSC asked the Minister to give evidence and explain why. The regulation having been published in late June, he came to see the committee in July and, after what I like to think was a fairly thorough grilling, he agreed and undertook to bring forward an impact assessment. He did, but he brought it forward in November. By then, everybody had been vaccinated or had not been, and the reason for producing the impact assessment was completely vitiated.

As an example of the latter—no impact assessment at all—a Minister from the Department for Transport told the SLSC, during an evidence session on the draft Motor Vehicles (Driving Licences) (Amendment) Regulations:

“It did not cause delay because the regulations went through without the impact assessment.”


In the committee’s report, titled Losing Impact: Why the Government’s Impact Assessment System is Failing Parliament and the Public, there are 20 or 30 examples. I have given just a couple to show the extent and prevalence of the problem.

Each department has a Minister responsible for making sure that SIs and their attached impact assessments are produced properly and to time. Each of those Ministers reports to a Minister at the centre. Until two or three weeks ago, my noble friend Lord Callanan was that luckless Minister trying to corral this herd of cats. He gave evidence to the committee and he said that he was keen to prioritise, and I do not doubt that at all, and that

“because we have no statutory means of enforcing the writ of impact assessments, we are relying on peer pressure to encourage and cajole departments to do it”.

I hope that my noble friends Lord Callanan and Lady Neville-Rolfe—she is going to reply—are pleased to see Amendment 134B riding to their rescue by inserting the words “at the same time” into the clause. It says that

“under this Act … laid before Parliament, the instrument, or draft instrument, must be accompanied at the same time by a regulatory impact assessment”;

in other words, no impact assessment, no regulation. By any measure, the level of parliamentary scrutiny of the outcome of the Bill is low. If the Government avoid producing IAs at the right moment, promptly, it will be another nail in the coffin of scrutiny. That was my amendment on impact assessments.

My Amendment 134ZA concerns post-implementation reviews—PIRs. I have long since lost count of the number of times I have sat in committees or in the Chamber and heard Members of your Lordships’ House say that post-legislative scrutiny is a really important way of holding the Government to account. It measures performance against promises; it provides a Bill’s institutional memory, as to what worked and what did not; and it enables those outside Parliament to understand the effect, deleterious or otherwise, of any particular regulation. In essence, PIRs are post-legislative scrutiny for regulations.

Sections 28 to 32 of the Small Business, Enterprise and Employment Act, to which I have already referred, require that any regulatory provision that passes the impact assessment test—the £5 million threshold—should be reviewed five years after commencement and every five years thereafter. Despite this being a statutory provision, it is something that we are very far from being able to rely on. We took evidence from Christopher Carr of the Better Regulation Executive. He suggested that between only 25% and 40% of regulations that required PIRs were getting them. In fairness to my noble friend, he wrote to say that he thought the figure was 72%, so I put that on the record.

However, with Clause 20(5) the Government are writing off the PIR system. It has gone. I strongly believe that this is a mistake. PIRs, properly conducted and publicised, play a very important role in monitoring, and so improving, government performance. If they play an important role in general, they do a great deal more in the particular circumstances of this Bill, because all parties, even the Government, recognise that we are entering terra incognita—unknown territory—with the provisions of the Bill. It is impossible to foretell how these decisions, inevitably taken quickly under the pressure of the 31 December deadline, will work out in practice. It must surely be sensible for the Government and Parliament to have in place a formal process to review the real-life results. This amendment simply restores the requirement for there to be a PIR, undertaken and published for each regulation, three years after the regulation comes into force.

To conclude, an age ago—actually a week ago, but it feels like an age ago—in my remarks on Amendment 32, I said that during my three years as chairman of the SLSC

“I have seen the sands of power and influence trickling through Parliament’s fingers”,—[Official Report, 2/3/23; col. 433.]

weakening Parliament’s relative power against the Executive, the Government. This is yet another example of mission creep on behalf of the Government. It is wrong in principle and in practice, and I hope the Government think again. I beg to move.

[Lord Fox (LD)]

My Lords, I thank the noble Lord, Lord Hodgson, for his very comprehensive review of two important amendments. It is a shame that we have got to the last sands of the Bill here. I am not going to add to what he has said, particularly on Amendment 134B, but I have a question that formed when I read the Bill in the first place: why is Clause 20(5) in the Bill; in other words, why did the Government actively choose to disapply this process? What made them think that they want to do this?

If I were a conspiracy theorist, I would say, with all the assurances that we have had that most things would stay the same and therefore not require the treatment that the noble Lord just described, this would not be an onerous task. However, if there was wide-scale revocation of regulations—including those that go beyond tagging the ears of fighting bulls, reindeer and all the others we are told about—that have an effect in the United Kingdom today, and if there is reformation, another word for change, a great deal of reviews would be required for those regulations to continue. Why was it decided to include Clause 20(5) in the legislation as drafted?

National Security and Investment Bill

Debate between Lord Fox and Lord Hodgson of Astley Abbotts

Report stage
Thursday 15th April 2021 Lords Chamber

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, I have put my name to Amendments 11 and 12, tabled by my noble friend Lady Noakes, which concern mandatory notifications, as she made clear. However, I am equally enthusiastic about Amendment 13, tabled by my noble friend Lord Lansley—even though I have not put my name to it—which addresses voluntary issues as well.

I will add a couple of points in support of these two approaches. As my noble friend made clear on Amendments 11 and 12, the use of the phrase “practicable” or “reasonably practicable”—it is not clear why we have one in one place and one in another—has come in for some pretty widespread criticism. As we have discussed before and heard from various legal advisers, the word “possible” would be a big improvement on “practicable”.

Mandatory notifications will be at the sharp end of the Bill and can be expected in many cases to be controversial. There will be a temptation for a Secretary of State, faced with a controversial decision, to try to delay it. It is common ground that, while we need to take appropriate steps to protect our national security interests, it is also in our national economic interest to encourage as much investment as possible in the chosen 17 sectors which will collectively have a significant impact on our economic future.

With great respect, I understand what the noble Baroness, Lady Bennett of Manor Castle, is trying to say, but the reality is that this is a balance; if we are in a competitive market around the world for investment and are unable to balance it properly, people will go elsewhere. It is as simple as that. Her idea of having an open-ended arrangement for the Secretary of State to make up his or her mind is a recipe for an outflow of investment which might otherwise come here to support this country, with its worldwide reputation in tech and other sectors.

On my noble friend Lord Lansley’s amendment on voluntary notifications, we have been around this course many times before; there will be a substantial flow and the new unit at BEIS may find it difficult to cope. In Committee, we discussed a number of amendments to try to help the Government with this and focus the new regime on the really significant cases. Amendments by various Members of your Lordships’ House, including me, proposed inter alia to exclude intra-group investments, to require only one trigger event for each group of companies and to limit notifications to assets used in connection with activities carried on in the UK—in other words, to limit the extraterritoriality of this Bill’s provisions.

The Government declined to accept any of these, arguing that they needed the widest possible strategic view to prevent evasive tactics by unwelcome purchasers. I must accept the force of that argument, but it means the Government must live with the consequences of those decisions. To provide an appropriate level of certainty for investors, we simply cannot risk a situation where, if a flood of voluntary notifications occurs, the Government could decline to start the 30-day clock.

In his concluding remarks, my noble friend may refer to Amendment 27, which the Government have tabled, about the contents of the annual report. If it is accepted by the House, as I expect it will be, it will include details of the number of days taken to give a decision, or the time taken to reach a voluntary notification. I do not want to add to the points the noble Lord, Lord Clement-Jones, made, but I have to say to my noble friend that it is really shutting the stable door after the horse has bolted to be told, a year later, that we have not been able to hit the targets or that they are being missed widely. There is nothing wrong with that, but we are trying to create a balanced regime that hits the ground running, and to learn, a year later, that “the system is overwhelmed”, which a number of us in this Chamber feel is likely to happen, is simply not an adequate answer.

[Lord Fox (LD)]

My Lords, the noble Lord, Lord Hodgson, set out his view of a balance, and I will set out another dichotomy—between thoroughness and timeliness. I do not think any of us in the Chamber are asking for this process to be less thorough. I think we are all saying we want a thorough process. But that thoroughness cannot be at the expense of timeliness, which is what these amendments are seeking to establish.

I do not think it is the Government’s intention to sow the market with uncertainty; I am absolutely sure that is not the intention of the Bill or this element of it. However, we all know that once things get written into law, they move into a departmental process and there is a unit dealing with this, unless there are specific guidelines on achieving timeliness, things will drag and take time. Departmental clocks can run at a different speed to business clocks. We should be clear that that will cost jobs and opportunities, because the longer a transaction takes, the longer it is in play, the fewer opportunities those companies have and the more threat there is for them. This is particularly clear in sales out of distress and in businesses that are already in play. Once they are in play, they become victims of exploitation, and the longer this department maintains a business in play through this process, the more danger those businesses are in.

The Government’s “intent” has come up many times in speeches, and that is an important element here. The way this Bill is currently drafted does not reveal an intent for rapid resolution. It does not reveal an understanding of the importance of timeliness, and that is what these amendments seek to establish.