Deregulation: Public Services and Health and Safety

Debate between Lord Patten and Lord Tunnicliffe

Thursday 13th July 2017 Lords Chamber

[Lord Tunnicliffe (Lab)]

My Lords, I too thank my noble friend Lady Andrews for introducing this debate and thank the many Peers who subsequently agreed with her opening speech—there was, of course, one notable exception. In a previous debate on these matters, I claimed to be the most regulated person in the House. I am sure that that is not true, but for 51 years I have been under the control of one regulator or another: the CAA when I was an airline pilot; the Railway Inspectorate and the fire brigade when I was running London Underground; the nuclear inspectorate when I was chairman of the UKAEA; and subsequently, the regulator on the railway system. In various cases, I have also been involved with financial regulation over perhaps the last 10 years. If there is a worst example of what happens when light-touch regulation gets out of hand, it has to be the financial crisis, and I am delighted by the way that both the Government and regulators have reacted to improve things. My enthusiasm for regulation, which will come out, was slightly blemished by the threat of prosecution by the Scottish Environment Protection Agency when my radioactive rabbits escaped, but apart from that, I believe that regulation is good for society and good for good business.

It is vital that we have the right level of government regulation to protect citizens, particularly the poorest and most vulnerable in society. Indeed, when it comes to public services and health and safety, as in finance and other sectors, the destructive effects of dogmatic deregulation have been plain to see and have been laid out very well in this debate. Many good examples have been provided, and I will add another, in the realm of transport. Outside of London, where public bus services have been deregulated since the 1980s, the number of trips has collapsed from 2 billion to 1 billion; in London, where TfL closely oversees transport services, we have seen the opposite, as the number of trips has risen from 1 billion to 2 billion since the 1980s.

If we accept that untrammelled markets can have negative impacts on society, then we accept the case for regulation. The next question is often framed in terms of extent: should we have more or less regulation? This is important to get right. We must have the right level of regulation to protect citizens in the face of highly complex and evolving markets. We must ensure that regulation stands in the shoes of consumers, making their world safe and fair in areas they cannot control for themselves. We certainly must not see deregulation as an end in itself. Less does not equal better.

Although we must not place undue or unnecessary pressures on business, we must not, as we too often hear from parts of the other side, dismiss all regulations as “burdensome red tape” and seek a minimalist approach. On that note, I would be grateful if the Government would confirm whether they support the view of the Red Tape Challenge initiative that EU regulation 305/2011, which aims to harmonise construction material quality across the EU, including external cladding, is a “red tape folly” which is “expensive and burdensome” for business.

Indeed there is a bigger question than whether we need more or less regulation, which has been touched on in the debate, about the quality of the regulation. Yes, we want the right level of regulation, but above all we want good regulation. Health and safety rules, at their core, are about saving lives. To be effective, they must be well evidenced. They must be flexible enough to deal with new techniques and new technologies. We are fortunate in this country to have the Health and Safety at Work etc. Act 1974, which has at its centre the requirement to reduce risk to as low as reasonably practicable. As far back as 1974, the importance of proportionality was understood—proportionality is the key to safety and good regulation.

Of course we must achieve a good balance between enabling businesses and the economy to grow on the one hand and protecting consumers on the other. Consumers are vulnerable if regulations do not exist, or are not monitored and enforced. Where we fall into a trap is when we see those aims in opposition. In reality they are complementary, and as far as possible government should work with business to design and enforce regulation. In this way, regulation can be both pro-business and pro-consumer—indeed, it must be. Although many noble Lords have pointed out the costs of deregulation to public services, we must equally point out the benefits of good regulation.

A sound regulatory framework depends on clear communication about the purpose and importance of the rules. This is no easy task, especially when many wish to undermine the case for regulation for their own purposes, but it has never been more important to make the case for good regulation and to rebuild trust in both government and business, which is at a record low. Part of the challenge is to inject more transparency, and clear lines of accountability, into our regulatory framework. One reason why so many feel powerless in their lives is the steady dilution of accountability. No one is ultimately held responsible, and no one knows who to turn to for redress. This is compounded by rules preventing proper scrutiny of private contractors who profit from public funds. A more accountable and transparent regulatory regime can play a crucial role in returning a sense of power and control to people’s lives.

Those who believe in the good that regulation can do must be especially vigilant in the context of Brexit and the powers proposed in the repeal Bill published today. As the Government aim to convert 40 years of EU regulation into UK law, it is vital that those regulations are made properly applicable and enforceable in the UK. I have not been reassured by a series of Written Answers provided by the Government to my noble friend Lady Hayter. There are 1,369 directly applicable EU regulations that apply just to consumer issues, 191 for health protection, 728 for transport, and many thousands more in related areas. Without converting these with proper scrutiny, we will be left with gaping holes in our regulatory system in many crucial areas that protect lives. Will the Minister update the House on how many of these directly applicable regulations have so far been redrafted so that they can be applied outside of EU membership? When may we see those redrafts?

My noble friend Lady Andrews rightly underlined the Red Tape Challenge, which ran until April 2013, and which the Government boldly estimated would make £10 billion in savings. I reiterate her call for the Minister to give an updated figure on how many regulations have been scrapped and what is the final total of savings calculated as a result of this measure. Further, I would value a categorical assurance that consumer, environmental and societal protection has not been diluted by these savings.

Most of the contributions from noble Lords were in support of the general theme that my noble friend Lady Andrews set out. I liked the openness with which my noble friend Lord Whitty agreed to be part of the nanny state. I am afraid that I cannot agree with the noble Lord, Lord Patten, that one in, three out—or whatever it is—makes any sense whatever. Bad regulations should be eliminated where there are risks in society—

[Lord Patten]

When I talked about one in and three out I was referring to my much-encouraged cull of spads in central government. As the noble Lord’s colleague recognises, we were having a little fun at the expense of spads. I was not discussing the general issue.

[Lord Tunnicliffe]

I am sorry if I misheard the noble Lord. I thought he was demanding one in and one or two out for regulations and had not realised that one in, three out was solely for human beings.

Other noble Lords made some important points. The noble Lord, Lord Stunell, touched on a concept that I have come across in my professional career, which is the idea of having clarity on who is responsible and on the duty of care. My noble friend Lady Young touched on the whole idea of principles. If the principles and themes are debated and got right, the regulation becomes sensible in itself. I liked the approach of the noble Lord, Lord Best, which in my professional career I have found true: getting the regulation right, and then firms and businesses applying it sensibly, means that you will get safer, better operations, and, in the long term, quality in safety and in the environment. Quality pays. My noble friend Lord Hunt touched on the fact that good companies like good regulation—they know the rules of the game and that regulations keep out the freeloaders. The noble Lord, Lord Smith, thoughtfully ran through the tremendously positive impacts that regulations have on the environment, which is extremely important. Like my noble friend Lady Crawley, I too regret that our better-regulation efforts have turned from better regulation to less regulation. It should be about better regulation.

My professional career has shown that regulation, in general, is not burdensome. In general, it requires management to be better and more effective; it makes the world safer, cleaner and fairer; and it means that good managers thrive and that those businesses are not only fairer and safer but more efficient—and, at the end of the day, more profitable.