Deregulation Bill

Baroness Thornton Excerpts

Monday 7th July 2014 Lords Chamber

[Baroness Thornton (Lab)]

My Lords, this is even more of a pot pourri of a Bill than the previous regulatory Bill in which I participated in your Lordships’ House. However, there are some continuing themes concerning equalities, a lack of thought about people who need to be considered because of their vulnerabilities, and the fact that regulation is often the way in which public bodies and businesses ensure that protection and fairness.

I will be speaking about three matters. Clauses 83 to 86 concern regulators having regard to the desirability of promoting economic growth. Clause 2 concerns tribunals’ power to make wider recommendations in discrimination cases—I think we have been here before. I will be looking at Clauses 10 to 12, as other noble Lords have, concerning the safety of vulnerable groups in the taxi licensing regime; I will not stray into the detail of licensing. Finally, I wish to speak about clauses that are not yet in the Bill but which I hope the Government might bring forward in their own amendments, which would assist the growth and development of co-operative schools.

I will speak about co-operative schools first. Given that the Bill is supposed to be about removing barriers and creating a level playing field for enterprises, and that this Government are to be commended for their support for co-operatives and mutuals, I suggest that this matter is absolutely at the heart of that support. I am aware that the Government have been holding discussions about amendments on this matter and I hope that we might see a positive outcome.

The matter concerns adding two additional clauses to the Bill. The first would remove a clause from the Education and Inspections Act 2006 which is a barrier to enabling nursery schools to become full members of trusts—or, indeed, academies. This would help to provide a vehicle for parental and family engagement in early years. The second would amend the School Organisation (Requirements as to Foundations) (England) Regulations 2007, to ensure that schools are able to establish themselves as industrial and provident societies, should it be desirable, and bringing co-operative schools in line with other types of co-operative organisations.

Despite an all-party commitment to co-operatives and mutuals in the public sector, co-operative schools have had to work around existing legislation because no provision is made in the relevant Education Acts for schools to be established as industrial and provident societies as currently defined in the 1965 Act. My proposed new clause seeks to amend this and ensure that any future legislation provides a level playing field and a more understandable legal framework. I hope the Minister will agree that these new clauses would be a good addition to his Bill.

Clauses 83 provides that while exercising their regulatory function, regulators must,

“have regard to the desirability of promoting economic growth”,

and must,

“in particular, consider the importance for the promotion of economic growth”,

of ensuring that any regulatory action they take is necessary and proportionate. At Second Reading, Oliver Letwin, the Minister for Government Policy, described this as,

“probably the single most important clause in the Bill”.—[Official Report, Commons, 3/2/14; col. 37.]

We need to pay it particular attention, I suggest. Clause 84 would enable a Minister to specify in a statutory instrument which regulatory functions would be subject to this duty; in some cases it might not apply to all the regulator’s functions. Clause 85 would give power for a Minister to issue guidance on how,

“regulatory functions may be exercised so as to promote economic growth”,

and how regulators subject to the duty could demonstrate that they were complying with it. Regulators subject to the economic growth duty would have a duty to regard any guidance. We saw the draft guidance an hour or so before the debate started, and I will return to that in a moment.

I understand that the background to these provisions is the post-implementation review of the Regulators’ Compliance Code, and the independent report of the noble Lord, Lord Heseltine, No Stone Unturned in Pursuit of Growth, which recommended that the Government should impose such an obligation on regulators,

“to take proper account of the economic consequences of their actions”.

The Government ran a consultation on this in 2013, which maintained that a growth duty would,

“enable regulators to respond more comprehensively to the challenge of stripping back burdens to the minimum necessary and proactively supporting growth”.

The Government stated that,

“the duty needs to be imposed via primary legislation to provide the legal foundation needed”.

On these Benches, we share the concerns that have been expressed by the Joint Committee chaired by my noble friend Lord Rooker, the Joint Committee on Human Rights and the Equality and Human Rights Commission, which have consistently expressed concerns about the implications of applying the economic growth duty to the EHRC. The Joint Committee believed that the duty in Clause 85 to have regard to ministerial guidance,

“raises serious questions about the EHRC’s independence”,

because of the implications of the proposed growth duty for the UK’s compliance with the United Nations’ Paris principles if the duty applies to national human rights institutions such as the EHRC. They are supposed to be independent organisations which decide which human rights and equalities issues to address. The Joint Committee on Human Rights said:

“Applying the economic growth duty to the EHRC poses a significant risk to the EHRC’s independence”,

and that this should not be pursued in the way that the Government are doing.

The chair of the EHRC, the noble Baroness, Lady O’Neill of Bengarve, was asked whether applying the growth duty to the EHRC might undermine the Paris principles on the independence of the commission. She said:

“We have tended to agree with this Committee that, prima facie, it would indeed threaten the A-status”,

of the EHRC as an international equality and human rights body. She continued:

“Therefore, it would be proposed that we come under the duty with respect to very specific functions. The debate between us and government at this stage is over how specific it would have to be and whether it is worth the candle when you get to that degree of specificity”.

I think she is probably correct.

I looked at the draft guidance that we received before the debate to see if I could find some comfort from it. Actually, I think it created more smoke than elucidation. What we have to do in Committee—as I intend to—is consider what might happen were this duty to be applied under particular circumstances. So we need to look at, for example, maternity leave where companies have been found wanting and the cost of putting that right, and whether that could be balanced against the economic growth duty.

I will be seeking, as I think other noble Lords will, to look at the proposal to remove the power of employment tribunals under the Equality Act to make wider recommendations in discrimination cases. This is an important power. It is not one that we should throw away. Most companies, when they lose, apply the tribunal’s recommendations to all their employees, but not all do. Surely those employees deserve the same protection as others, so we will be seeking to remove that from the Bill. We will also be asking the Government what the evidence is that this needs to be done because we do not think that the evidence is there any more than it was the first time the Government tried to do this.

Finally, on taxi licensing, we oppose the Government’s proposal to reform taxi minicab law because it will put passengers at risk. My honourable friends in the Commons opposed this when it was inserted late in the Committee stage. We believe that these targets to cut red tape are rushed and risky, poorly drafted and badly consulted on. Where they have been consulted on, safety organisations, the police and industry bodies are warning that the Government’s proposed reforms could have very severe safety implications. These include the Suzy Lamplugh Trust, which campaigns for better personal safety and has raised concerns that enabling anyone to drive a licensed minicab will provide greater opportunities for those who are intent on preying on women.