Better Regulation

Lord Whitty Excerpts

Thursday 7th December 2017 Lords Chamber

[Lord Whitty (Lab)]

My Lords, I heartily thank the noble Baroness for introducing the debate with her usual clarity—not that I agree with everything that she says. I agree with a fair part of it, but there are some aspects with which I do not.

As she said, five months ago, we had a debate on regulation in the name of my noble friend Lady Andrews. That was almost directly in the wake of Grenfell Tower, which, as she said, was a lethal cocktail of failure of regulation, regulators and enforcers to fulfil what is generally regarded as the first duty of the state: to protect its people. In that context, I gave a fairly fundamentalist speech to your Lordships about the attack on regulation, which was often under the guise of better regulation. I declared myself then to be a defender of the nanny state, and I remain unashamedly so. In these slightly more relaxed times, perhaps I should explain that I was in favour of a nanny state that was strict, fair and child-friendly, rather than the opposite. Nevertheless, I stand by my words. I can do no other.

Yet I recognise the need both for constant vigilance about the nature, quality and quantity of regulation, and for the real and positive better regulation agenda. I understand that to be the noble Baroness’s agenda. We need regulation that is accessible, not overly complex, clearly focused on outcome, intelligible and proportionate. Noble Lords will notice that I use the term “proportionate” rather than “balanced”, as in the noble Baroness’s Motion. They are not the same thing. “Proportionate” means not excessively costly or restrictive, relative to the prime objective of the regulation. “Balanced” implies that there is a trade-off between the objective and other objectives—particularly economic costs. That is not the objective of regulation. For example, if a substance or process can be lethal then we need to stop endangering human—or in some cases, animal or plant—life. That is the focus and objective of regulatory intervention in the first place. We should do so based on risk and in the most efficient and cost-effective way, but not by compromising the prime objective. Therefore, it is a question not of balance, but of proportion and adopting the most cost-effective and best available technology to meet the objective. Later today, there is a debate on the natural environment in which I will make a few remarks about pesticides. I will leave those remarks for noble Lords who can stand two interventions by me on the same day.

In a wider context, I am concerned about the Government’s approach to transposing a whole corpus of EU law into British law. The European Union (Withdrawal) Bill will be before your Lordships in the new year—quite how early is not yet entirely clear. It is time to put up a few markers. I fear the combination of the unprecedented need to rewrite and change the status of such a wide swathe of law and the political tendency influencing the Government—I was going to say within the Government—and of those who seek to use a post-Brexit scenario to move to a UK economy based on minimal regulation, perhaps under the guise of better regulation. They denounce the nanny Euro-state and put our physical security, fair treatment at work and in society, and the future of our landscape and biodiversity at risk, in order to cut regulatory costs. They insist on light-touch regulation or thin self-regulation and reduce the powers of regulators and cut their resources—allegedly so that the UK can compete in a ruthless world market. That is not my vision of post-Brexit Britain, but it is one that has an uncomfortable resonance in some circles not far from the centre of power—for the people more comfortable with regulatory alignment between the UK and Texas than between Armagh and Dundalk.

Already over the last decade, under successive Governments of all hues, we have seen examples of cuts in the powers and independence of, for example, the Health and Safety Executive and the Environment Agency. More recently we have seen a serious diminution in the resources at local level for trading standards, as the noble Baroness said. Under the guise of better regulation, we have also seen what I regard as the quite absurd mechanistic formula of one in, three out, supposedly to reduce the burden on business, but in fact introducing another completely nonsensical trade-off.

In the Brexit Bill we see the necessary literal transfer of the wording of directives and regulations, but without, as it currently stands, the guiding principles of European regulation that exist in the treaties or, in some cases, in the preambles of directives and regulations. We are withdrawing from the treaties and English lawyers do not like the concept of preambles, but we miss some very important principles by not translating them into English and Scottish law, for example on fundamental rights, sustainability and the precautionary principle, which, as the Bill stands, are not being transferred, although the detailed regulations are. Nor is it clear from the Bill how the regulations, which hitherto have largely relied on European-level enforcement, are to be enforced on the British economy and public institutions post Brexit. I hope your Lordships will have the opportunity to get that right when we receive the Bill.

However, let me be a bit more positive about the agenda that the noble Baroness has set out. Indeed, over her lifetime she and the noble Lord, Lord Curry, who is about to speak, have spent a long time looking at the positive side of better regulation—a painstaking process of updating, simplifying and reducing overlap; challenging half-baked cases for new regulations, of which there are far too many; cutting complexity; and, yes, avoiding unnecessary cost, particularly the administrative cost on small businesses. That is not so much the cost of compliance as it is the overhead burden of administration.

To help the process, successive Governments have established a precise, independent and effective method of checking and doing the necessary weeding, certification and assessing of proposals from departments for new or revised regulations. It has not been comprehensive, but where government departments have allowed it to operate it has been successful and has helped to ensure that new regulations have been more cost effective, accessible and workable. My noble friend Lady Andrews has already referred to the unfortunate rumours we have heard that part of that apparatus is being chopped off at the knees and that the role of the Better Regulation Executive and in particular the Regulatory Policy Committee is likely to be reduced—presumably, to put it benignly, in order not to jam up the process of transferral of European regulations through the Brexit process. I repeat my noble friend’s anxiety, because these processes have gained the confidence not only of those who are pressing for regulations but of those who would normally be very apprehensive about them, in particular small businesses. We are in danger of this process losing that confidence.

I worry that we are entering a period where people see the post-Brexit fate of this country as an offshore, low-regulation, low-tax, low-enforcement economy and society. By contrast, if your Lordships are interested, I have a whole list of areas where we should have better, more substantial regulation. On the environment, it should be on soil protection, air and water quality, and pesticides and fertilisers. In housing it should be on the private rented sector in particular and on building regulations. In the legal services, we should have a rather more independent system of regulation not wedded to the professional bodies.

So I, too, have an agenda which may appear to go in the opposite direction to that of the noble Baroness, but I hope that any new regulations in that area meet many of the principles that she has expounded today. I hope that the better regulation process hereafter, in particular through the tedious and complicated process of transferring European regulations into our own laws, meets genuine better regulation objectives and is not, in effect, putting our society at greater risk.