Enterprise Bill [HL]

Lord Low of Dalston Excerpts

Wednesday 28th October 2015 Grand Committee

[Baroness Hayter of Kentish Town (Lab)]

My Lords, having been given the lead-in, I will rise to speak at this point, and I do so very much from the point of view of the consumer. In the helpful note that was sent to me and, I am sure, to others by the Minister on 27 October, she rightly stresses that the list is not definitive and the views of business, regulators and other respondents will inform the legislation. Something that always worries me, of course, is that business and regulators have whole departments that are able to respond on this while the consumer—or, as I will come to it, the patient—never does. They do not know about these things and therefore we have a particular duty to think about that.

As my noble friend Lord Stevenson has said, the first list sets out the statutory bodies that are under consideration for being brought into scope. I find the inclusion of the Charity Commission difficult to understand. It is to protect the use of charitable money and make sure that it is spent on charitable aims and objectives. It is not to further the interests of business, to make business more efficient or to help growth. It is a protection, particularly for people who donate to charities, to ensure that their money is used correctly, so I find it slightly surprising that the commission is in there. Again, though, I worry about how the sort of people who donate to charities would ever get their views heard if there was a risk that that regulator had in some way to take more account of the interests of businesses that may have a charitable arm than those of individual donors.

There are two others on the list that I worry about for similar reasons. One is the Information Commissioner and the other is the Pensions Regulator. I used to sit on the determinations panel of the Pensions Regulator, but I no longer have that interest to declare. They are both protectors of the interests of groups of the public. The Information Commissioner is in a way quasijudicial because it is looking at whether a company has perhaps misused its mailing lists or, in the case of a bank, its bank details. It would worry me a lot if it was the bank that was giving evidence about whether the regulation of its data by the Information Commissioner was too intrusive while the views of people like us with bank accounts or any other data—our shopping experience with a big retailer or whatever it might be—will not have our views heard when this is looked at. I have concerns about a body like the Information Commissioner that is there to protect the public.

I have similar concerns about the Pensions Regulator, which is also in a sense quasijudicial. Certainly, the sort of cases that I used to hear were dealt with in a court. The regulator is there to protect pensions very often where a company may be in difficulties and there are really difficult issues to be dealt with around its pension scheme. The regulator is there to protect the pensions and to look after those interests. If that regulator is told that it must look at the business interests rather than those of the pensioners, that would worry me. Again, I do not know how would-be pensioners, who have no idea about this or that they may be in a scheme which the Pensions Regulator is looking at, will be heard.

Lastly, although they come under the second sub-heading “Regulators for further discussion”, are the bodies regulated by the Professional Standards Authority for Health and Social Care, which is what I think we used to call the professions allied to medicine, and now with social work included. Again, this is about setting standards to protect patients—which is what they will usually be, although sometimes in social care they will be clients rather than patients. A big care agency may say, “Look, this regulation is a bit hard on us”, but these standards are there to protect us as patients, as people being looked after in care homes or as whatever—the Committee is fairly familiar with the areas that this covers.

These provisions are very much there to protect users, consumers, patients, residents of care homes and anyone who has information held by a big retailer or company, and I hope that the Government can offer a little more justification as to why the regulator will be perhaps nudged to look towards growth and the business aspect rather than the interests of the consumer and the public.

[Lord Low of Dalston (CB)]

My Lords, I will speak very briefly to support the exclusion of the Equality and Human Rights Commission. The noble Lord, Lord Stevenson, has gone through the argument and laid out the case for this exclusion very fully so I will not go over that again, but I want to add one point. Far from imposing extra burdens on business, the Equality and Human Rights Commission does quite a lot to relieve business of burdens by producing things such as guidance and codes of practice that explain the position and help to guide business through the legal maze of discrimination law, making it a good deal easier for business to deal with these issues when they come up. It does not seem appropriate, when that is the function of the Equality and Human Rights Commission and the way that it works, to tie the commission up in the sort of red tape that its work—its codes of practice and guidance and so on—goes quite a long way to ridding business of.

[Baroness Neville-Rolfe]

My Lords, I thank noble Lords for their amendments and their constructive contribution to the Bill. I am delighted that the noble Baroness, Lady Hayter, and the noble Lord, Lord Low, have joined the debate.

As has been said, the amendments would ensure that the EHRC could not be subject to, or required to report on, three key regulatory policies: the business impact target, the growth duty and the Regulators’ Code. Extending the business impact target to statutory regulators is a key part of Government’s aim to ensure that regulators across the board continue to achieve high standards of regulation in order to drive growth and ensure a strong economy. I think we have agreement on that broad principle.

However, although we are asking regulators to be transparent in reporting the impact of their decisions on business, the Bill will give us no powers to interfere in the decisions they take. There is a clear distinction to be drawn. The fact that a regulator may not be aimed at business does not mean that the regulator does not affect business or the voluntary sector. To my mind, there is nothing wrong with having an incentive to look at the impact of the way you design measures to ensure that, for example, they are constructed in a sensible way for small businesses. Regulatory independence of course underpins business confidence, and is vital to all regulators—it is not only true, as has been said, for the EHRC.

We have seen the EHRC’s briefing note on these issues, which says that it produces approximately 30 pieces of guidance a year and operates across the whole economy. So the range of business making use of the guidance is very substantial. For all those businesses to keep track of that guidance is a cost to business. Sometimes it can outweigh the cost to the commission of assessing the impact as and when it issues new guidance.

I know from experience that the EHRC issues very valuable guidance—for example, the religion or belief guidance for employers issued in 2013. I remember when I worked in the retail sector talking to the EHRC about what it might do to address concerns it had among big employers. So there is an interaction. It is important work, but obviously there is a need to ensure that the guidance is appropriately prepared for business and minimises the burden of any such directions. I hope that the EHRC will look carefully at its relationship with business and ensure that it reflects on the cost which it is imposing. This is what inclusion in the business impact target would achieve and why we have proposed it.

The EHRC—I am not sure people are aware of this—is already within the scope of the Regulator’s Code and is also covered by its predecessor, which was introduced in 2008, by the then Labour Administration. I understand that the EHRC already complies with the code and is transparent about its activities reporting annually. That transparency is just what Clause 14 is aiming to achieve. In practical terms, it will make little difference to what the EHRC currently does, which is why I am not convinced of Amendment 48F.

Amendment 49C prevents the reporting requirements for those in scope of the growth duty from applying to the EHRC. We had the debate less than a year ago when considering the growth duty. The Government’s initial view was that the duty should apply. However, in the light of debate and representations from your Lordships, we undertook that the EHRC would be excluded. I am happy to repeat that the Government will not seek to apply the growth duty to the EHRC. I want to be completely clear about that. The assurances were sufficient for your Lordships in the last Parliament and I hope they will be sufficient again.

The key reason given for excluding EHRC from these three policies, as far as I can see, is that it might prejudice their international A status as a human rights body, which is obviously incredibly important. However, there is not a risk with the growth duty, as it does not apply to the EHRC nor does the EHRC have a small business champion for the reasons that we discussed last time and on which the noble Lord quoted me. We know it is not the case with the code, because it has applied successfully to the EHRC for years, and it has been accredited internationally while it has been in place.

The business impact target is a transparency measure. It does not fetter the independence of the regulator to make its own decisions in relation to the changes it introduces. Inclusion in the target would require EHRC to measure and report its impact on business, and have the figures validated by the RPC. The RPC is not government, as we discussed, it is a body of independent experts and looks only at the evidence and analysis.

The noble Baroness, Lady Hayter, talked about the Charities Commission. The point has been made that it does not affect business. However, the business impact target covers the impact on both the private sector and the Third Sector. The Charity Commission certainly affects the third sector. We will consult in the new year on the list of regulators and welcome the views of Peers and regulators. We are trying to reduce red tape in life; reduce red tape for small business. I believe that a lot of charities—the noble Baroness may play this back at me on another occasion—have quite a lot in common with small businesses.

How does the inclusion of the Charity Commission help those who donate? In her inimitable way, the noble Baroness, Lady Hayter, talked about the consumer. Including the Charity Commission would encourage it to minimise burdens on charities ensuring, I would say, that more of donors’ money benefits good causes rather than being tied up in meeting the commission’s requirements.

There was also a point in Amendments 56 and 57 on retrospectivity. The focus of concern is the potential to change the legal effect of actions already taken.