Leveson Inquiry
Lord Stevenson of Balmacara Excerpts(13 years, 2 months ago)
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Lord Stevenson of Balmacara
My Lords, I thank all noble Lords for their contributions to what has been a really excellent debate today. In particular, I pay tribute to the noble Lord, Lord Trees, for his excellent maiden speech. He may have had to wait but his incisive analysis, his interesting parallels with the professions and his witty quotation demonstrate that the wait was worthwhile. Indeed, the whole debate has been extremely good, including the last few speeches, which took us off in strange and interesting directions. I am not sure that Admiral Byng should really be prayed in aid so late in the debate because I think he deserves more attention than we were able to give him.
There seem to have been four strands in our discussions today. The balance between individual privacy and freedom of the press is obviously the underlying thread of all this, and I will come back to it. The need to deal with the technology shift in our news production and dissemination, with the transfer to the internet and the implications of all that for the current business model in the press, is obviously a really big issue. It was not well covered in the Leveson report, as has been said, but it will be of increasing importance as we go forward, although I do not think it is a blocker on some of the issues that we need to focus on today. The important issue of the concentration of ownership has to be addressed. Again, as has been mentioned, it is not well covered in the report, but there are ways in which we can continue to keep a focus on that; there are a number of opportunities in the near future to do so.
The main debate today, and the one I will spend most of my time on, is on what the noble Lord, Lord Lamont, referred to as a false choice. We must be careful of false choices apparently being offered by the press, between a free press on the one hand and government regulation of the press on the other. Of course, it is a much more complicated and complex issue than that.
I was interested in the speech made by the noble Lord, Lord Hunt, and I think we all applaud his efforts in what he is trying to do. Having said that, one has to bear in mind, as my noble and learned friend Lady Scotland advised, that a lot of what he is about is necessary but it will not be sufficient to get us to where we want to get.
This debate is titled as, and indeed needs to focus on, the report itself. Lord Justice Leveson’s recommendations on the issues that we have been touching on are very clear. He recommends a voluntary system of independent regulation. He recommends a process by which an independent regulatory system devised and set up by the publishers themselves can be verified by a “recognition body”, for the very important reason that the public, particularly the victims, can thereby be confident that it works; in return for that, members of the body can get legal benefits. Lord Justice Leveson suggests that, mainly on cost and efficiency grounds, Ofcom could be the body that undertakes the verification but he refers to and prefers a recognition commission or recognition commissioner. As the noble Lords, Lord Fowler and Lord Lamont, stressed, the powers being taken are of scrutiny not supervision. Lord Justice Leveson considers the recognition requirements the minimum necessary for an independent and effective self-regulator, but some, including the victims, would go a lot further than that.
Let us be clear: we are talking about taking statutory powers that concern process but not content and cover the independence of the people involved in the regulatory body, its financial security, its powers to correct or to seek apologies, to seek sanctions, to undertake investigations and arbitration, and to have the power to publish enough information to allow the public to judge its effectiveness. As has been said, notably by the noble Lord, Lord Skidelsky, it is a very clever balance and we on this side support it. There is more: we need to be clear that despite some of the rhetoric that we have heard today, this package would also guarantee in statute—I think for the first time—the freedom of the press from government. That seems a very important consideration.
Like many noble Lords, I believe that the game changer this time round and the context for this report is the anguish felt by ordinary citizens who have not sought public exposure of their lives but who, like the Dowlers and McCanns, have been subject to outrageous behaviours from the press. The noble Baroness, Lady Hollins, is our own expert by experience and put it very well when she spoke earlier with such dignity. At the end of the day, we in Parliament have to be able to say to those victims that we have seen them right. As my noble friend Lord Giddens said, the public will never forgive us if we cock this up this time round.
We should remember that the public are overwhelmingly in support of the establishment of an independent regulator backed by law. That is born out by a series of polls by the Media Standards Trust, Hacked Off, the Carnegie Trust and the IPPR. The poll recently commissioned by the Sunday Times found that by three to one the public think that the press needs much tougher independent regulation, with fines for newspapers that behave badly. Some 58% think that new laws should be passed by MPs to encourage newspapers to join this new system of regulation, with only 26% opposing such legislation.
There are now four separate initiatives that would deliver for us the recommendations of the Leveson report, the most recent being the suggestion of a royal charter. Others have mentioned during the debate why a royal charter approach is inappropriate. I simply add that it seems wrongly focused in its conception. It is an executive act explicitly associated with the monarch. Despite her recent visit to the Cabinet, or perhaps because of it, it is surely inappropriate to deploy the prestige of the monarch in what might be a controversial and constitutionally inappropriate device, whose purpose is at heart to bypass Parliament. A royal charter can of course be revoked or amended by the monarch at will, which in effect means by her Ministers. As has already been said, she is obliged to accept their advice, so a device to avoid legislation places control of the recognising body in the hands of the Executive. Constitutionally, it is not possible to restrict the ability of the monarch to amend or revoke at will. In addition, a royal charter cannot authorise the body created to raise money or authorise government expenditure, so inevitably we are drawn back to statute to make sure it works in any case. Having said all that, it may be possible to recognise or find a way of creating an independent press regulator by royal charter and to support or underpin it with appropriate legislation. On this side, we will keep an open mind on that matter until such time as the discussions are completed.
Having cleared the ground, the heart of today’s debate is, as my noble friend Lord Alli said, the question of whether we have independent self-regulation backed by law or not. We believe that we need that in statute because the current system of self-regulation has failed—year after year for 70 years and despite seven major reports. St Augustine springs to mind once again. In any case, the problem with a purely self-regulatory body is that there is still an irreconcilable conflict of interest when those doing the judging—the press—are those being judged. Again, what is being proposed by the noble Lord, Lord Hunt, and others is necessary but not sufficient. We believe that Lord Justice Leveson’s answer to that decades-long problem is ingenious: it ensures that the press regulates itself, independent of both government and its own interests, but it also ensures that there is statutory backing for the system.
There are arguments against statute and I want to go through them quickly. The first is that any statute affecting the press automatically ends a free press but, as has been mentioned, the press is already subject to legislation. Section 12 of the Human Rights Act 1998, their carve-out for VAT and the regulations currently under consideration in this House on defamation are examples—there are many—and the Leveson report specifies them. It is absurd to hold that having any law mentioning the press undermines freedom.
Secondly, it is argued that putting the press complaints system on a statutory basis amounts to regulation of the press but such a statute would guarantee only the system, not the regulation itself. The oversight body—the one prescribed by statute—would have no role in hearing complaints, no role in deciding whether they are justified, no role in laying down penalties and absolutely no role in deciding whether anything does or does not go into a newspaper.
Thirdly, there is the argument that if Parliament legislates on this issue, it might be the thin end of the wedge but in our system Parliament is and must remain sovereign. Basically, we have to trust our elected and appointed representatives to make and change laws. That is our system, for better or worse. As the noble Baroness, Lady Boothroyd, said, we also have to bear in mind that the press cannot become a law unto themselves.
Fourthly, it has been argued that what is proposed would inevitably mean cumbersome legislation but, as we have already heard from my noble friend Lady Jay, the Irish law contains provisions that are equivalent to proposals in Leveson recognising the Irish press council. It is simply one clause and one schedule. The Bill that we have recently published—I gather that the others are similar—shows that this is all feasible within a very few pages. Indeed, I hope this is the way forward.
Finally, there is the argument that Lord Justice Leveson’s proposals would undermine freedom of speech but, as the noble Lord, Lord Low, said, the freedom of the press is essential but so, too, is that other freedom: the freedom of a private citizen to go about their business without harassment, intrusion or the gross invasion of their grief and trauma. I was interested in what the noble Viscount, Lord Astor, said on this point but with the deepest respect I disagree. A free press must be a responsible press. It must expose the abuse of power but it must also not abuse its own power. That is what this debate at heart is about. It is an issue which cannot now be left unresolved and that is why we should take forward Lord Justice Leveson’s proposals with all convenient speed.
In conclusion, I join many noble Lords in paying tribute to the work of Lord Justice Leveson, the rigour with which he conducted the inquiry and the humanity with which he enabled victims of some appalling injustices to have a proper hearing. For many of them, it meant reliving the pain and trauma of their abuse by the press but they did so with enormous courage and determination because they had found a safe haven. The stories they told made many people feel moved, incredulous and appalled—and made us all very angry.
As my noble friend Lady Jones said, it is important to remember that the voices heard in the inquiry were just a small sample of press harassment and misrepresentation which has become commonplace, week in and week out, for those struggling with tragedies in their lives—people who never sought to become the story. As we have heard, that is continuing. The fact is that the Leveson inquiry should never have been necessary. The catalogue of incidents that were described and the many more that they represent should never have been allowed to happen. However, let me end with a wish that was also expressed by many noble Lords: that the spirit of consensus which has been so evident across the parties on this issue continues and that we can, working together, solve this problem, but quickly.
Lord Stevenson of Balmacara
It would be helpful for the House if, in closing, the Minister could sketch out the timescale for these debates. I appreciate that it is not entirely in his hands and that other factors may be going on. I think that everyone thought that this process would move reasonably fast. There are difficulties. There is a lot to learn, a lot to listen to and a lot to discuss, but frustration will build up if nothing is going to happen. Perhaps a word on the timetable would be helpful.
Lord Taylor of Holbeach
I cannot give a timetable, because it is not in my gift, of course. There are a number of different bodies involved. But I think it would be helpful, after such a productive debate today, for the usual channels to take notice of it—and we will have time to debate this issue as it progresses. I suspect that this is not going to be a Moses-like event, with tablets of stone coming down. I think that we will work our way towards the truth. I hope that it is the sentiment of Members of this House that we all feel that we have played some part towards getting a solution. I am sure that the usual channels would be quite happy to enable us to talk further about it. I am sorry that I cannot give a timetable.
Enterprise and Regulatory Reform Bill
Lord Stevenson of Balmacara Excerpts(13 years, 2 months ago)
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“(2A) Prior to the subordinate legislation coming into force, the review of the effectiveness of the legislation as set out in subsection (2)(a) will receive the views of businesses, business organisations, civic organisations and trade unions, and any such organisations which the person considers appropriate.”
Lord Stevenson of Balmacara
My Lords, I hope it will be thought appropriate that before discussing the first amendment, we should take note of the resignation announced today of the Minister formerly in charge of this Bill, the noble Lord, Lord Marland. Most people would agree that the noble Lord added a certain amount of colour and indeed, candour when he was on the Front Bench, and I thank him for his friendliness and assistance in the short period we worked together on this Bill. We wish him well in his continuing role as trade ambassador.
Although he is not in his place, I should also like to welcome the noble Viscount, Lord Younger, to his new brief. I hope that he will enjoy his role on this Bill and, more generally, in relation to the department. We are, as it happens, near neighbours in Buckinghamshire. We sing tenor together in the parliamentary choir, and we also deal with the DCMS brief, although I am not sure whether he is continuing with that. We have plenty of reasons for wanting to keep in harmony and to support each other over the fraught times that we will undoubtedly face over this Bill and on other matters. If he is continuing with the DCMS brief, we will have only a short pause after today because we will be facing each other at the Dispatch Box on the Leveson report. It will not have escaped notice that the noble Viscount is the third person to occupy the position of Minister at BIS this Session, and I hope that he has a tenure more akin to that of his predecessor but one, the noble Baroness, Lady Wilcox, than the noble Lord, Lord Marland, and that we will get though the remaining stages of this legislation without further changes.
Going through Hansard for the first four Committee days I counted 10 issues on which the noble Lord, the former Minister, suggested that a meeting or further discussion with officials might resolve a point raised in debate. Clearly little was going to happen during the Recess, but time moves on and I hope that the change in leadership of the Bill will not derail discussions which have been promised. Therefore, I wonder whether, in the spirit of working together on the Bill and to ensure that we have a successful resolution of the remaining stages, we can have an early meeting of the respective Bill teams. I should be grateful if the Minister will consider that.
Moving on to the amendment, in December 2010, the Government published a policy document entitled Reducing Regulation Made Simple in which they announced their intention that all new domestic legislation imposing a regulatory burden on businesses or civil society organisations would be required to include a review clause and a sunset clause. This reflected a commitment made in the coalition agreement to,
“impose sunset clauses on regulations and regulators to ensure that the need for each regulation is regularly reviewed”.
In March 2011, they announced the publication of Sunsetting Regulations: Guidance, intended to,
“assist Departments in implementing the Government’s commitment to introduce sunset clauses in new regulations”.
The guidance covers the application of sunsetting and reviewing to new domestic regulations that impose burdens on business or civil society, including legislation implementing international regulatory obligations.
The aim of this policy is to remove regulatory burdens on businesses and civil society by ensuring that regulations are: subject to regular review, to determine whether the policy objectives that led to the introduction of the regulations still apply and whether regulation is still necessary in achieving those objectives; and that regulations which are unnecessary or burdensome are removed. We agree with that approach. However, we think that it should go further.
Amendment 26EA deals with the need for stakeholders to be given a statutory role. For example, the British Retail Consortium stated in its written submission to the Committee on the Bill in another place:
“We welcome the intention of the introduction of sunset clauses and other deregulatory measures in the Bill ... However, we are not optimistic that these will all deliver their potential, given our experience with the Red Tape Challenge and One in, One out. We need to see genuine sunset reviews when the term is up, with a formal role for stakeholders”.—[Official Report, Commons, Enterprise and Regulatory Reform Bill Committee, 12/7/12; col. 562.]
Businesses and other relevant stakeholders should surely be able to shape the Government’s thinking on business policy in general and sunset provisions in particular. It is of little help to businesses and the wider economy if somebody in Whitehall decides, unilaterally and without consultation, to apply sunset provisions when businesses or other groups might consider them to be successful or not in need of termination. We need to ensure that business policy is not dictated to businesses, but is produced in full consultation with them. In particular, we need to ensure that SMEs are heard: after all, in many respects, large organisations have the ear of the Government because they can employ public relations or lobby organisations.
It may well be argued that this amendment is unnecessary, as Ministers responsible for legislation and regulation will get the views of businesses, civic leaders and so on continuously. But it is interesting that paragraph 39 of the sunsetting guidance states:
“In carrying out reviews, departments will need to consider how best to gather information and views from businesses, civil society organisations, and others affected by the regulation”.
It goes on to note that, “a formal consultation may”— I emphasise “may”—
“form a valuable part of this process”.
Surely, this should be a duty on government and not left as a question of,
“how best to gather information and views from businesses, civil society … and others”.
It may well be appropriate for a proportionate approach to be adopted but certain minimum standards should certainly be present. We think it is important for businesses, business organisations, trade unions and other stakeholders to be assured that they will be consulted on sunsetting proposals. Business policymaking together, between the Government and relevant stakeholders, will always make for better legislation, regulation and policy.
I shall also speak briefly to Amendment 26EB. Like the other amendment to which I have just spoken, this is pro-business. In my role as a shadow Minister, I speak with businesses regularly and one common thing that businesses say is that, more than anything else, they require certainty from government. Provide businesses with a stable and certain policy environment in which government decisions are made—in consultation, obviously, with businesses and other stakeholders—adhered to and announced with sufficient time for businesses to plan and adapt, and businesses will have the ingenuity, entrepreneurial skill and flair to do their bit to boost the economy, create growth and provide employment opportunities.
Conversely, if there is an uncertain environment in which businesses are unsure of the general policy direction of the Government—if the Government lack a “compelling vision” for the economy, for instance, as the Secretary of State for Business, Innovation and Skills recently stated—and there are ad hoc, knee-jerk and ill thought-through policies announced without due consultation with businesses or sufficient time for them to adapt, investment and confidence will undoubtedly plummet.
In a nutshell, the purpose of the amendment is to ensure that changes to non-urgent regulations, particularly the sunset provisions outlined in the clause, come into force or end their period in force on one of only two dates in a year. We have chosen 6 April and 1 October because these dates are already familiar to businesses from the regulatory environment.
The amendment is needed because the Government are not complying with their own principles. I gather that the April 2011 statement on new regulation did not give three months’ notice for any changes to regulations and that it even included changes which had occurred three months previously. As I understand it, the September 2011 statement of new regulation was backward-looking, hardly giving business time to prepare and providing no prior warning of regulation changes. There was hardly any progress with the April 2012 statement of new regulation, which again included no changes to regulations three months prior to their coming into effect but included some changes that had occurred four months earlier. This means that businesses do not have adequate time to plan, adapt and make use of what is coming along. Statutory muscle is needed here; that is the purpose behind this amendment.
Lord Gardiner of Kimble
My Lords, first, I thank the noble Lord, Lord Stevenson of Balmacara, for his generous and thoughtful opening remarks about colleagues. If I may take the recently appointed Minister’s opinions before the noble Lord knows of them, I am absolutely certain that, knowing his style, he will be very keen to continue meetings and dialogue with all interested Members of your Lordships’ House. I am sure that that will be uppermost in his mind as all Members of this House seek to improve legislation as we go forward.
Turning to the noble Lord’s amendment, I say from the outset that the Government are fully committed to the principle of engagement with stakeholders as part of a statutory review, as set out in the published sunsetting guidance. Reviews should draw on a range of evidence, including from those who are being regulated, the regulators, and those affected. It is already the case that the Minister responsible for the review is, under administrative law, obliged to consider any submissions made to him or her in relation to the review. In the view of the Government, a formal statutory requirement to receive views as proposed in the amendment would not change that position but would risk introducing additional and unnecessary administrative burdens.
For practical reasons, there needs to be sufficient flexibility for departments in deciding how to carry out the review, what evidence to use, and how to engage with those affected by the regulation. That could be inhibited if an additional statutory requirement were introduced. Effective engagement with stakeholders as part of the review can be delivered without additional statutory prescription, in a way that allows for an approach tailored to the circumstances of each review.
The Government are fully committed to the principle of common commencement dates for new domestic regulation affecting business. Where the regulation comes into effect on a common commencement date, the sunset date will, in accordance with the Government’s policy on sunsetting, also fall on a common commencement date. In the Government’s view, there is no need to prescribe this in legislation, as proposed in the amendment. Indeed, in some cases, there may be good reasons for temporary legislation to cease to have effect on a date other than 6 April or 1 October. That would be prevented by the amendment. The Government do not believe that there is a need to recast the statement of new regulation as a formal statutory requirement. There is also a risk that this would act as an unwelcome constraint, and make the statement less responsive to developing needs and priorities.
The most recent statement was published on 17 December, a full three months in advance of the April 2013 common commencement date. It provides a comprehensive summary of all the regulations affecting business that are to come into force in the first half of 2013. Regulations that will cease to have effect as a result of a sunset provision will be included in future statements.
The Government are a deregulatory government. Over the past two years, the Government have reduced the annual burden of domestic regulation on business by more than £800 million. By June 2013, a further reduction to more than £900 million is expected.
Based on the assurances that I have provided concerning the Government’s policy on the use of sunset and review provisions and related matters, I would be most grateful if the noble Lord would consider withdrawing his amendment.
Lord Stevenson of Balmacara
My Lords, I thank the Minister for his comments. I note in respect of the first amendment that, while professing that the Government are fully committed to engagement, he still adheres to the idea that somehow by keeping flexibility in whether departments are required to carry out consultation the door is left open to maintaining a lesser standard than is required by the aspirations that he has expressed. We will need to keep this under review. Although I take the point that including a more formal structure for when regulatory statements start and stop might make it more difficult, there is still genuine feeling among businesses that it would be better if the Government would think more closely about the impact of how regulations apply and are started and stopped. We may need to come back to that, but, given what the Minister has said, I am happy to withdraw the amendment.
Lord Stevenson of Balmacara
My Lords, at this stage, I would have expected—and the Committee might have welcomed—my noble friend Lady Andrews to speak to us. She has unparalleled expertise in this area, being chair of the relevant body, and a great deal of experience and knowledge. As the Minister mentioned, she spoke about these issues at Second Reading. Unfortunately, she is struck down with a lurgy. A couple of hours ago, I conversed with her—rather, I spoke and she grunted at the other end of a phone—and I was able to get some assistance in what we might say to the Committee in response to the amendments put forward today.
In relation to this amendment, my noble friend was very concerned that the recommendation of the Delegated Powers Committee should be enacted and I am happy to confirm that I will be able to say to her that that appears to have happened. The recommendation made was quite firm; namely, it considered new Section 26B(2)(g) to be inappropriate. The proposal now put forward seems to satisfy that requirement.
I am also very grateful to the Minister for reading out a section from a letter exchange with my noble friend Lady Andrews which gives the context for how those regulations as regards the heritage partnerships will be applied. I will be able to report to her that they have been indicated as she requested.
Lord Gardiner of Kimble
My Lords, first, I am sorry to hear that the noble Baroness, Lady Andrews, is indisposed. I very much hope that she will make a speedy recovery because there will be continuing amendments to which I would like to speak and which would involve the noble Baroness. Government Amendments 26G and 26H improve the operation of certificates of lawfulness of proposed works to listed buildings. This again was a matter raised by the noble Baroness, Lady Andrews, at Second Reading. These amendments reflect the Government’s positive response. Indeed, my noble friend Lord Marland and the noble Baroness, Lady Andrews, have been in correspondence about these matters.
The certificates of lawfulness will provide a simple, light-touch mechanism for local planning authorities to confirm that listed building consent is not required in cases where proposed works would have no impact on the building’s special interest. As currently drafted, certificates could potentially last for ever but, at the same time, they do not offer the owner of the listed building absolute certainty that the works are lawful. This is not the result that the Government intended, which is why we have tabled Amendments 26G and 26H. These amendments provide that certificates last for a period of 10 years, during which time the lawfulness of any works for which a certificate is in force will be conclusively presumed. A new certificate may be applied for at the end of the 10-year period if required and, if the application is for a new certificate on effectively the same terms as an existing certificate, we envisage there being a light-touch reapplication process.
Amendments 26G and 26H will ensure both certainty for owners of listed buildings and flexibility to respond to changes over time in understanding about heritage significance. Amendments 26J, 26K and 26L make minor and technical amendments to Clause 53. They correct an anomaly in the current drafting by providing that the Secretary of State’s powers to prescribe the procedure for appeals in connection with certificates of lawfulness are exercisable by regulations rather than order. I beg to move.
Lord Stevenson of Balmacara
My Lords, I shall be brief about this. My notes from the noble Baroness, Lady Andrews, confirm that the two issues raised here are in accordance with those requested by English Heritage. The change from an indefinite period to 10 years, and the change to ensure that the certificates are lawful, will help considerably in trying to manage the properties with which the body is concerned. The changes allow a long enough period to be useful to the owner but will obviously reflect the fact that our views of heritage and our attitudes to it change over time and that, therefore, after about a 10-year period, it is appropriate for there to be a new application.
The noble Baroness also wanted a number of points to be made in relation to an exchange of letters that I mentioned in the earlier discussion, and I am happy that they have been mentioned here.
Lord Gardiner of Kimble
My Lords, government Amendment 26P changes the procedure for making a national class consent order. Class consent orders will grant listed building consent for certain categories of work or buildings where the extent of the building’s special interest is well understood, without any need to make an application. The Secretary of State will have the power to make national class consent orders that will apply across England. The Delegated Powers and Regulatory Reform Committee recommended that this power should be subject to the affirmative rather than the negative procedure. Amendment 26P gives effect to this recommendation. It will apply the affirmative resolution procedure and ensure that national class consent orders will be subject to full parliamentary scrutiny.
Perhaps I may respond to the concerns raised at Second Reading by the noble Baroness, Lady Andrews, about the scope of national class consent orders. It is our expectation that national class consent orders will be used to describe specific works carried out by specific organisations in specific locations—for example, works to listed structures by the Canal & River Trust for the functioning of a canal. The Government do not envisage that a more generic national class consent will apply to broad categories of work across the board. We recognise the difficulties of identifying wider categories of work that could safely be carried out across the wide variety of listed buildings without causing some unintended damaging consequence. The provisions already contain the safeguard that requires the Secretary of State to consult English Heritage before making a national class consent order. Amendment 26P will provide additional assurance about the use of such orders.
Perhaps I may also address concerns expressed by the noble Baroness, Lady Andrews, that the minimum annual review period for local class consent orders might prove so onerous that it would inhibit their use. The requirements in the Bill are broadly equivalent to those in force for local development orders, and there is no evidence to suggest that an annual review will be burdensome. The form of review will be prescribed by regulations. We intend to make the review a light-touch but important way of ensuring transparency and accountability. We will consult on the regulations before they are made. I hope that the noble Baroness, in her absence, and noble Lords will be reassured. I beg to move.
Lord Stevenson of Balmacara
My Lords, we are pleased with the amendment and grateful to the Minister for his contextual words. The recommendation brings into play a recommendation from the Delegated Powers Committee. It is important because these national class consent orders were very broad. Although the committee recognised that there was a case for using secondary legislation for this, it was concerned that it needed a slightly higher level of consent. The amendment also fits in with the feelings of English Heritage on the matter, so we are in a good place and it was helpful to have the wider context laid out.
In his speech the Minister mentioned local class consent orders, which are not touched on in the amendment. Here we will register our disappointment that the proposal is not to revise or review the regularity of reporting, which will remain annual.
Enterprise and Regulatory Reform Bill
Lord Stevenson of Balmacara Excerpts(13 years, 3 months ago)
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Lord Stevenson of Balmacara
My Lords, before I start on the detail of what has just been discussed, I welcome the noble Viscount, Lord Younger, to his Front Bench duties on the Bill. We have met on a number of other occasions across this space. I am pleased that he is now able to engage with us on this Bill, which we find of great importance. We look forward to working with him on this and other matters.
We had some doubts about whether we should join in on this clause stand part debate because we were not quite sure where it was coming from. Indeed, I am still not quite sure where the two halves conjoin. There seem to be two different discourses. We are obviously in a two-act drama. Maybe when we get to Clause 21 and hear the other part of the noble Baroness’s speech, we will be able to judge more closely how this comes together. In the debate we have had so far, as so often in clause stand part debates, we begin to distil some of the concerns that have bounced around in some earlier debates. It is worth just reflecting on what we have heard.
From the official Opposition’s point of view, as my noble friend Lord Whitty said, we are not against what is being proposed in principle but have a number of reservations that we will want to feel have been properly tested before we finally sign off on it. We will have opportunities both on Report and possibly at Third Reading to do that. At the moment, having listened to the debate on the first two groups, the jury must still be considered to be out. We have had a lot of confusing signals about what exactly is happening, how the Government wish to approach this and the timing. Very importantly—and it has been the substance of a number of contributions we have heard on this group—what exactly is happening to the functions that are not explicitly stated within the front part of the Bill? Where do they go and with what timing? Most importantly, will the funding required to deliver the functions that are currently being properly delivered be available to support that?
I was very struck by some of the points made by the noble Baroness, Lady Oppenheim-Barnes, about the problems that will come from currently having two separate bodies. The OFT and the Competition Commission have their separate focuses and cultures, one investigative and one judgmental. That careful construction of two separate operations patrolling a common area but with very different functions and levels has been judged over time to be very successful. How will they be brought together and how in particular will the phase one and phase two elements and splits work out? Like the noble Baroness, I looked at the diagram. I did not quite bring out the medical textbook or the nasty intestinal disease analogies that she did, but I can understand where she was coming from in that. It is a rather odd structure. It does not seem to fit any of the management textbooks that I am familiar with in terms of clarity of exposition or additional information that would not be provided by a textual analysis. It is jolly colourful and we should be grateful for that.
We are creating something quite different. As I said, we are not against this but we need to be satisfied about why the Government have chosen this particular route and method of doing it. As was mentioned by the noble Viscount, Lord Eccles, it includes the Public Bodies Bill but also ignores what that says about how to go about this, in creating a body which in a sense already exists. The chair of that body is available should he wish to speak. Perhaps he could share with us what he thinks of the colour diagram that we are talking about—but perhaps he will not. It would be helpful if we could get a little bit more from the Minister about some of the intertextual material that has been brought out in this discussion. I want a better feel for the timing, a sense of certainty about what is or is not being retained within the central core of the CMA and why stuff is being taken out and under what constraints that has been done. Particularly for trading standards and Citizens Advice, I want an absolute assertion from the Minister when he comes to respond that the funding will be available to deliver the sort of services to which we all aspire but which, I am afraid, will not be available in the time.
Viscount Younger of Leckie
My Lords, I say at the outset that I am very grateful for the comments of the noble Lord, Lord Stevenson. I am particularly grateful for the contributions from my noble friends Lady Oppenheim-Barnes and Lord Eccles, who bring a wealth of valuable experience to this debate. I also appreciate the useful meetings that they have had either with me or with officials, or indeed with both.
The UK has one of the best competition regimes in the world but in the current economic environment we need to strive for improvement and further embed conditions in which companies can operate freely in competitive markets that encourage innovation, investment and growth and in which consumers secure the benefits of competition.
Despite its world-class ranking, there are problems with the current regime. As my noble friend Lord Razzall recognises and as he said at Second Reading, the UK competition regime is among the slowest in the world. I am grateful that he has reiterated that point today. Data published in Global Competition Review show that we are one of the three slowest countries when it comes to conducting investigations into anti-competitive agreements, and in the bottom four for investigating abuse of dominance cases. The current regime has also led to problems in terms of the length of time that it takes to conduct market studies and market investigations, which prolongs consumer detriment and uncertainty in markets. For example, between 2002 and 2011, OFT market studies took between three and 21 months, and the end-to-end process of market investigation, including the time taken for the OFT to make a referral, as well as the appeals process, ranged between 33 and 67 months.
Another issue is the uneven nature of references made to the Competition Commission, making it difficult to manage resources. For much of 2006, the Competition Commission was working on five market investigations and in 2008 it was working on four, whereas no references were received in 2008 or 2009. The pattern of merger and regulatory references is also uneven, and that contributes to an overall work pattern of peaks and troughs.
This clause therefore establishes a new Competition and Markets Authority, which will bring together the Competition Commission and the competition and markets functions of the OFT into one body. Despite looking on paper like a medical student’s study sheet—a euphemism for what was mentioned by other noble Lords—the creation of the CMA will mean a single, strong voice for competition which can provide leadership for the sector regulators on competition enforcement. It will mean less duplication and greater consistency of information requests between phase 1 and phase 2, and more flexible deployment of resources and specialist expertise across all its competition tools. It will also mean prompter referrals to phase 2 where necessary, and greater certainty for business from faster and clearer timeframes and more robust decision-making. Finally, it will also mean a one-stop shop for businesses to help them to understand and comply with competition law.
The creation of the CMA has also been welcomed by business groups and practitioners, including the CBI, the Federation of Small Businesses, the Institute of Directors, the Forum of Private Business and the City of London Law Society, which all consider that it will provide efficiencies and boost business confidence. The CMA will be the UK’s premier competition authority and will have at its disposal a full range of approaches to tackle anti-competitive behaviour and make markets work better for consumers and businesses.
This clause therefore gives the CMA a duty to seek to promote competition for the benefit of consumers, both within the UK and internationally. It will be concerned with how firms interact with each other—that is, the supply side—and how firms interact with customers, which is the demand side.
In creating the CMA, we have drawn from the best of the OFT and the Competition Commission. The CMA will therefore retain the separation of decision-making between phase 1 and phase 2 in merger and markets cases, with independent expert panellists taking the phase 2 decisions. These features were highlighted as key strengths of the current regime by Sir John Vickers and some of the other witnesses to the Committee in the other place, and we shall protect those features. The provisions are set out in detail in Schedule 4.
I should like to bring up a matter raised by the noble Viscount, Lord Eccles. He asked what the relationship or distinction was between this Bill and the Public Bodies Act. Section 5 of the Public Bodies Act provides for the modification of the functions of the Office of Fair Trading and the transfer of functions to other bodies. The PBA also allows for the OFT’s functions to be abolished. Further, Section 2 of the PBA provides that the OFT and the Competition Commission may be merged. However, we will not use the Public Bodies Act to enact reforms to the competition regime or to abolish the OFT or CC. Instead, we will be relying on Clause 21, which provides for the abolition of both the OFT and the CC. This is because while the Public Bodies Act allows us to abolish both bodies, and modify and transfer their functions, it does not allow us to create wholly new competition functions and powers for the successor body, the CMA.
I should also like to address a point made by the noble Baroness, Lady Oppenheim-Barnes, on the separation of decision-making in markets and mergers—a matter also raised by the noble Lord, Lord Stevenson. The independence of the phases will be preserved, in as much as paragraph 28 of Schedule 4 specifies that unless otherwise specified, functions of the CMA are exercisable by the CMA board. Similarly to the Competition Commission’s arrangements, paragraph 36 of Schedule 4 requires that where under any enactment—the Enterprise Act or sectoral legislation—the chair of the CMA is required to constitute a group to carry out an inquiry. He must appoint members of the CMA’s panel to an inquiry group in accordance with that enactment and Part 3 of Schedule 4. I hope that that goes some way to reassuring noble Lords.
Finally, I should like to address an issue raised by the noble Lord, Lord Stevenson, about the funding of trading standards departments; this matter was brought up earlier. I covered in our previous debate the issue of where the funding will be. The noble Lord, Lord Whitty, asked specifically about trading standards funding. Perhaps I may add that in 2011-12, we allocated a total of £10.6 million for national and cross-border enforcement in England, Wales and Scotland. However, looking ahead to 2012-13, we have allocated £12.1 million. This is in recognition of the additional responsibilities that trading standards will take on as functions are transitioned from the OFT. This funding is subject to budgets being agreed and the effects which any emerging central pressures may have on the proposed levels of funding. I hope that this goes a little way to answering the comments of the noble Lord, Lord Whitty.
Lord Stevenson of Balmacara
I want to ensure that the record is correct. The previous figure of £10.6 million has now been superseded by £12.1 million. I think that was the sense of what the Minister said. I notice that he has not given us the comparable figures raised by the noble Baroness, Lady Oppenheim-Barnes. What exactly is the Citizen Advice component of that? It would be helpful, if he does not have them, if he could write to us and make sure that we have the figures because several have been floated. It would be nice to have them on the record.
Viscount Younger of Leckie
I note what the noble Lord said, and I will return to him in writing. I commend this clause to the Committee.