Environment Bill

Debate between Viscount Trenchard and Baroness Neville-Rolfe

Committee stage
Monday 28th June 2021 Lords Chamber

[Baroness Neville-Rolfe (Con)]

My Lords, I support the Government’s approach on this. Requiring a policy statement on environmental principles is the right approach. Obviously, government must follow the principles, but to make this explicit in the way proposed in the lead amendment would provide scope for mischief-makers and single-issue enthusiasts doggedly to pursue matters in the courts and elsewhere, to the detriment of efficiency and the overall public interest.

The Bill does not and cannot go into the necessary detail, so it seems to me that Amendment 73 would create sweeping requirements and huge uncertainty. For example, how could you prove that environmental protection was integrated into the making of all policies? How could you prove that the polluter pays principle was respected—and in every public body, as now suggested? I am afraid that this is virtue signalling, and it is unenforceable. We have too much repetitive legislation moving in the direction of vague promises and, therefore, storing up decades of trouble for perhaps a favourable headline today. On a Bill so important for the future of our country, I feel that it is time to call a halt.

I have another concern, which is the reference to the precautionary principle in Clause 16. As I think we will hear in due course from my noble friend Lord Trenchard, the Taskforce on Innovation, Growth and Regulatory Reform, set up by the Prime Minister on 2 February, is set to recommend that this principle should not be carried over from EU law. What is my noble friend the Minister’s response to this? Can he kindly explain why the precautionary principle needs to be included in the list of environmental principles?

The basic difficulty of the precautionary principle is obvious. It provides no mechanism for determining how precautionary we need to be. It can always be argued that, however precautionary it is proposed we should be, we should be even more so. Should the chance of death from a new medicine be less than one in a million, or one in a billion? We have no means of deciding. Human progress has also been characterised by innovation, from the wheel and wheat yields to the internet. The precautionary principle could put the latest innovations at risk and, I fear, ensure that they are not invented here in Britain. The list in Clause 16(5) seems more than adequate for environmental protection without this extra principle.

[Viscount Trenchard (Con)]

My Lords, it is a great pleasure to follow my noble friend Lady Neville-Rolfe, and I agree with everything that she said.

The noble Baronesses, Lady Jones of Moulsecoomb and Lady Boycott, seek in Amendment 73 that, in preparing his policy statement on environmental principles, the Secretary of State

“must adhere to the environmental principles.”

Clause 16(2) already commits him to explain how the principles should be interpreted and proportionately applied. I therefore rather doubt that this amendment is necessary. The principles already carry great authority, as they are included within the nine environmental principles contained in the withdrawal Act. Four of these were included in the Lisbon treaty and are the same principles—with the addition of the integration principle—that are the subject of the Government’s consultation launched on 10 March and included in the Bill.

It is disappointing that, even though the Prime Minister has welcomed the report of the Taskforce on Innovation, Growth and Regulatory Reform, published on 16 June, this landmark Bill is being introduced on the assumption that our environmental regulatory regime will basically stay the same as it has been under the EU. The task force, under the chairmanship of my right honourable friend Iain Duncan Smith, recognises that our departure from the EU provides a one-off opportunity to set a bold, new regulatory framework and proposes the adoption of a proportionality principle to replace the EU’s precautionary principle which, as the report points out, has led to innovations being

“stifled due to an excessive caution”.

It continues by saying that, freed from the precautionary principle, the UK should

“actively support research into and commercial adoption by UK farmers … of gene edited crops, particularly those which help the transition away from agrochemicals to naturally occurring biological resilience.”

It is disappointing that the precautionary principle has found its way into the Bill and that the Government have proposed it as one of the five principles on which future environmental policy is based. It is of some limited comfort that it has been downgraded from its number one position in the Lisbon treaty to the fifth of five in the draft policy statement on which the Government are consulting. Interestingly, Clause 16 of the Bill places it third out of five.

Last Wednesday evening, I tabled Amendment 75A, to replace the “precautionary principle” with the “proportionality principle” in Clause 16(5)(c). It was accepted on Thursday morning, but only for the fourth Marshalled List, which is of course pointless because it will be by-passed by the time that list is finalised tomorrow.

The noble Baroness, Lady Jones of Moulsecoomb, in her Amendment 75, seeks to increase the number of environmental principles to which, following her Amendment 73, not only the Secretary of State but all public bodies and authorities are compelled to adhere. The counter-innovative precautionary principle makes it into her list at number three out of no fewer than 12, some of which are very broadly drawn. Her amendment would have the reverse effect from the objective of the Government to simplify and clarify our very bureaucratic regulatory rulebook.

The noble Baroness, Lady Parminter, in Amendment 76, would require all public authorities to have regard to the policy statement on environmental policies. I am not sure that this amendment is necessary but, if it were adopted, it would certainly provide another good reason why the environmental principles should be simple and clear.

I am unable to support Amendment 77A, in the name of my noble friend Lady McIntosh of Pickering, which would I think put the Crown in a very difficult position. The precise definition of what is in compliance with the principles as drafted and what is not is very subjective.

I am also unable to accept Amendment 78, in the name of the noble Baroness, Lady Parminter, because the exception for the Armed Forces is very important. There may be other exceptions regarding resource allocation that the Government may reasonably need to rely on.

I look forward to hearing my noble friend the Minister’s response on the amendments regarding the devolved authorities and their powers. I just say, however, that I regret that this United Kingdom Parliament cannot legislate for the whole country on such high-level matters as environmental principles. Politicians in the four home nations will constantly try to adopt slight differences in policy to show their power and for their own political purposes. I have listened to the noble and learned Lord, Lord Hope of Craighead, on this matter, but I very much hope that my noble friend, through the UKIM Act and otherwise, will find a sensible way through to a common position. I certainly look forward to hearing his rationale for Amendments 80, 298 and 299, which I am inclined to support.

Financial Services Bill

Debate between Viscount Trenchard and Baroness Neville-Rolfe

Committee stage
Monday 8th March 2021 Grand Committee

[Baroness Neville-Rolfe (Con)]

My Lords, it is always a great pleasure to follow my noble friend Lady McIntosh of Pickering, who is sitting today in front of a superb backdrop of the Houses of Parliament—in my opinion, one of the best views in Europe. I await my noble friend the Deputy Leader’s comments with great interest.

I have great respect for my noble friend Lord Blackwell and for all he has achieved. However, I have some doubts about this proposal, not least the amendment’s apparent focus on bigger operators. For me, the second-class treatment of small operators in the financial services sector as a result of regulation by two regulators is the bigger issue. It is there that the pressure on investment funds and on capital, the prioritisation of IT resources and the lack of management capacity—described so well by my noble friend Lord Blackwell—is at its most apparent. Smaller firms also suffer from the overlap and overload mentioned by my very experienced and expert noble friend Lady Noakes. I should say that I speak as a non-executive director of Secure Trust Bank, which is a smaller bank.

I was pleased to see the Chancellor focus on smaller businesses in last week’s Budget—for the first time, I felt—although I am not sure how much that will help in the financial services context.

In conclusion, is this amendment necessary, or can we tackle the issues rightly raised by my noble friend in another way?

[Viscount Trenchard (Con) [V]]

My Lords, my noble friend Lord Blackwell’s amendment is an interesting idea and deserves serious consideration. It requires the establishment of a new joint co-ordination committee, comprising delegates of both regulators under the chairmanship of the Governor of the Bank of England. As long as we retain a “twin peaks” regulatory structure, it is clearly right that both regulators carry out their duties in a co-ordinated manner, ensuring that their activities are consistent and proportionate in meeting their respective general duties and objectives.

At the time of the introduction of the “twin peaks” system, we were told that it was necessary because there was a conflict between the interests of the consumer and those of the Government in maintaining financial stability. However, the FCA is responsible for both consumer protection and the prudential regulation of all regulated companies except very large ones that are considered systemically important. Might not the best way to be sure that the regulators’ actions are consistent and proportionate be to merge them into a single regulator—the FSA—but leave the Bank responsible for macroprudential regulation?

As I failed to add my name to the speakers’ list for the group of amendments beginning with Amendment 2, debated on 22 February, I was able to speak only briefly after the Minister. My noble friend’s amendment deals with much the same ground, which gives me an opportunity, with the Committee’s leave, to make some of the points that I had wanted to make on the first day.

My noble friend’s amendment seeks to ensure consistent priorities between the two regulators. This is hard to do if the objectives confer conflicting priorities on the two regulators. Indeed, it can be argued that being dual regulated at all is time-consuming, expensive and unattractive. However, I strongly believe that we must move quickly to maximise the attractiveness of London’s markets in order to be assured that the City, including our wider financial services industry, will remain one of the two truly leading global financial centres, with all that that means for our prosperity as a nation.

In 1999, I was privileged to serve on the Joint Committee on Financial Services and Markets under the chairmanship of the noble Lord, Lord Burns, during my first incarnation in your Lordships’ House. At that time, we considered arguments that the FSA should be given a competition objective as a fifth objective. This was supported by the BBA and the ABI, but the Government argued, and the committee ultimately decided, to put competition and competitiveness among the principles rather than the statutory objectives. Two arguments that led us so to decide were that ensuring competition was the primary task of the OFT, not the FSA, and that making competitiveness of UK financial services an objective could damage the FSA’s relations with overseas regulators. Our report at that time noted that some members of the committee would have preferred competition and competitiveness to feature among the FSA’s statutory objectives.

Much water has flowed under the bridge since 1999. Following the financial crisis of 2008, the FSA was split into two regulators, and we adopted the “twin peaks” model that had first been introduced by Australia. On 22 February, my noble friend Lord Howe said that discussions about the balance of the regulator’s objectives

“are not arguments for today. The Government’s future regulatory framework review is considering how the UK’s financial services regulatory framework must adapt to reflect our future outside of the EU. That has to be the right place to consider issues such as the regulators’ objectives”.—[Official Report, 22/2/21; col. GC 142.]

The Minister’s response was disappointing. Does he not agree that our departure from the EU and freedom to adopt an entirely different, principles-based, outcomes-oriented regulatory model suggests that the Government should look seriously at this question as soon as possible?

Some encouraging proposals are included in the phase 2 framework consultation, such as the introduction of “activity-specific regulatory principles”, described in section 2.38. However, it seems that the Government do not plan wholesale changes. They conclude in section 2.46 that these regulatory principles could bring about

“enhanced regulator focus on … competitiveness, without needing to change the regulators’ overarching objectives”.

Such an approach is dangerously complacent. Can the Minister confirm that the Government agree with Andrew Bailey that it would be unrealistic and dangerous to stick to EU banking rules in the future? Surely, in financial services, where we enjoy the advantages of scale and can influence the emergence of global consensus around principles-based regulations that support innovation, we should move quickly to establish the right regulatory framework to do that.

Co-ordination between our two regulators has served us fairly well to date, but it is likely that the regulators will continue to face difficulties inherent in a multi-agency regulatory structure where the performance of one regulator is often dependent on that of the other. There is also a challenge in establishing the borders of financial regulation for allocating functions between the FCA and the PRA. In particular, the increased focus on systemic stability and macroprudential regulations has resulted in overlap between the two regulators. The FCA has responsibility for the prudential regulation of more than 24,000 firms in the UK, whereas the PRA is responsible only for the prudential regulation of some 1,500 systemically important banks and investment firms. Further, the “twin peaks” system is inherently anti-competitive for dual-regulated banks and investment companies, which have to report a large amount of monthly data in two different formats to two different regulators.

The PRA’s secondary competition objective is, by definition, subordinate to its other two objectives. In effect, it is simply a principle to which the PRA should have regard. Many countries have financial regulators that incorporate some kind of competition objective among their statutory objectives, and I do not think that there is any evidence that this has damaged their relationships with either the PRA or the FCA.

Furthermore, in his recent report on competition and markets, John Penrose found that

“our independent competition and consumer regulation regime currently has a good reputation, but not a great one. International rankings put our major competition institutions behind USA, France, Germany, EU and Australia. We have stopped making progress on cutting the costs of red tape and, in recent years, have gone backwards”.

This is largely as a result of a constantly increasing number of sectors, including many in financial services, being caught by the tentacles of the very cumbersome, expensive and complicated system of regulation that has been increasingly pushed by the Commission in the interests of harmonisation.

We have prospered and succeeded as a global financial centre not because of our EU regulatory framework but in spite of it. We may have devised much of the financial regulation ourselves and may even have gold-plated some of it, but we did not choose to work within the codified structures on which European law is based. Besides, our regulators are not that different from anyone else’s: they like to make rules, and gold-plating has been the only way that they could do that in recent years.

As Barnabas Reynolds explains well in his recent paper, published by Politeia and entitled Restoring UK Law: Freeing the UK’s Global Financial Market, common law is

“pivotal to the success of a global financial centre … A key element of London's attractiveness to investors is its legal framework, which underpins a flourishing commercial environment with the rule of law”.

I worry that the Government do not yet recognise that we have to replace the entire directives-based, cumbersome, EU-derived financial services rulebook and go back to something more like how we used to regulate: based on common law principles and outcomes. There is huge resistance to change among trade associations and larger financial services groups because the present system helps the strong incumbent against the innovator and the challenger—and is, in fact, a form of protectionism.

I look forward to hearing what my noble friend the Minister intends to do to move in the direction in which we need to go. I believe that my noble friend’s amendment may provide a first step on that journey.

Agriculture Bill

Debate between Viscount Trenchard and Baroness Neville-Rolfe

Committee stage & Committee: 3rd sitting (Hansard) & Committee: 3rd sitting (Hansard): House of Lords
Tuesday 14th July 2020 Lords Chamber

[Viscount Trenchard (Con)]

My Lords, I repeat the declaration of my interests that I made last Tuesday.

Amendments 35 and 36 seek to add to the list of purposes for which financial assistance may be given. Amendment 36 is already covered by existing purposes, as is Amendment 35, up to a point. This amendment, moved by my noble friend Lady McIntosh, also seeks to establish food security as a purpose. It is hard to see how these amendments would have much of an effect on the proportion of our food that we import—or, indeed, the proportion of our food produce that we export. British farm produce, including arable, dairy and livestock, is produced to very high international standards and, I believe, can hold its own in both domestic and overseas markets.

I cannot see that Amendment 46 in the name of the noble Baroness, Lady Jones, has any place in an Agriculture Bill that seeks to reduce farmers’ dependence on the state. It would threaten to increase the cost and reduce the choice of meals provided by public bodies by introducing distortions to the market, reflecting particular views on environmental or animal welfare standards that go further than required by law.

In the same way, I would resist Amendment 47 in the name of the noble Baroness, Lady Bennett, because I do not believe that the Secretary of State should be involved in trying to persuade people to change their diet to a vegetarian one. I very much agree with the remarks of the noble Earl, Lord Devon, with regard to her amendment. I have nothing against vegetarians—indeed, I have a daughter-in-law who does not eat meat—but it should be a matter of personal taste.

My noble friend Lord Northbrook, who is most knowledgeable in this area, has eloquently spoken in support of his Amendment 60, which seeks to ensure a sufficient level of food security. I do not think my noble friend is suggesting we need go back to a time when foreign food was virtually unknown to most people in this country. Of course we need to maximise our domestic food production, but it is also important that our new trading relationships continue to offer British consumers more choice at reasonable prices.

My noble friend also wishes to require the Secretary of State to support the production of food in England through his Amendment 69. On this, I prefer his drafting and the effect of the change he wishes to make. I also prefer his wording to that of my noble friend Lady McIntosh in Amendment 70, although her amendment is also an improvement on the current somewhat ambiguous wording.

I am afraid that I do not understand the purpose of Amendment 71, in the name of the noble Earl, Lord Devon, as I do not want the Secretary of State to become a sort of food policeman. I do not understand what the noble Earl means by suggesting that his amendment

“avoids the Secretary of State having regard to the production of unhealthy food.”

I am not sure that public health concerns, as mentioned in Amendment 75 in the name of the noble Baroness, Lady Boycott, should be in an agriculture Bill, however desirable the improvement of public health obviously is.

Amendment 92 in the name of the noble Baroness, Lady Jones of Whitchurch, defines “environmentally sustainable way”. I do not think that it needs to be specifically defined and I question whether avoiding the “depletion of natural resources”, desirable though that is, is clearly contained within the meaning of the phrase.

[Baroness Neville-Rolfe (Con) [V]]

My Lords, it is a great pleasure to follow my long-standing and noble friend Lord Trenchard. I agree with the general thrust of his comments. After a long day on two important Bills, I will confine myself to two points.

First, the changing weather pattern, the risk of another pandemic and, more immediately, the possibility of an exit from the single market without an FTA all point to the need for a sensible, long-term focus on food security. I welcome my noble friend Lord Northbrook’s Amendment 60—an enabling amendment and not a requirement—and the part on food security in the lead amendment, Amendment 35, proposed by my noble friend Lady McIntosh of Pickering. This plays to Clause 17 of the Bill and its proposal for a five-yearly report on food security, which I very much welcome.

Secondly, like the noble Lord, Lord Trees, I will talk about antibiotics. I support the provision on reducing farm antibiotics in Amendment 75 in the name of the noble Baroness, Lady Boycott. The impact of antibiotic resistance is one of the most serious issues facing the human race. It could make common operations extremely dangerous around the world, endangering people of all ages and in all countries—and with no prospect of a vaccine, so potentially worse than Covid-19.

At Red Tractor—I restate my interests here—we have worked hard with the Responsible Use of Medicines in Agriculture Alliance to tackle this on farms through proper measurement and collection of data, assured standards and annual veterinary inspections. The former CMO, Dame Sally Davies, has commended us for the substantial decline in antibiotic use. For example, in the pig sector use of antibiotics has fallen by 60% over four years. However, there is more to do, and we are working with farmers, processors and retailers to do just that. The power proposed by the noble Baroness, Lady Boycott, could help us to intensify the work, with some government support. This should be if and only if the need arises, and after proper costing and risk assessment—to hark back to my amendment to Clause 1.

The noble Lord, Lord Whitty, said that he had been advised that the scope of the Bill did not cover health. I would like confirmation that the role of farmers in AMR is within its ambit when the Minister replies to this important group.