Regulatory Impact Assessments (Legislative Scrutiny)

Bob Stewart Excerpts

Wednesday 2nd September 2020 Commons Chamber

[Sir Christopher Chope]

The hon. Gentleman has given a brilliant summary of my Adjournment thesis. He is saying that this should not be a tick-box exercise but that clear evidence should be presented that can then lead to proper debate and facilitate scrutiny, and that is what this is all about. I hope the Government are still wedded to that, because their better regulation unit has had consultations and is, I think, still taking the line that we need to have proper regulatory impact assessments. The purpose of this debate is to try to get some more assurance from the Government that they are going to apply these principles not just to covid-19 but to other regulatory measures that are, at the moment, being brought in with far too insufficient scrutiny.

Tomorrow it will be six months since the Department of Health and Social Care policy paper on coronavirus was published. This action plan, as it became, on which the Coronavirus Act 2020 was based, envisaged four phases: contain, delay, research and mitigate. The delay phase was to

“slow the spread in this country, if it does take hold, lowering the peak impact and pushing it away from the winter season”.

Because of the emergency timetable, the legislation had the sketchiest of regulatory impact assessments, without any cost-benefit analysis. But who would have thought that none of the regulations being made under that primary legislation would be properly evaluated before implementation? I certainly hoped that that would happen, but it has not.

The basic steps in the RIA process should involve consultation and an assessment of the nature and extent of the problems to be addressed. There should be a clear statement of the policy objectives and goals of the regulatory proposal, which should include the enforcement regime and strategy for ensuring compliance. Alternative courses of action should be identified, including any non-regulatory approaches considered as potential solutions to the identified problem. There should also be a clear outline of the benefits and costs expected from the proposal and identified alternatives. The conclusion should not only identify the preferred solution but explain how it is superior to the other alternatives considered. Finally, there should be a monitoring and evaluation framework set out describing how performance will be measured.

Although the processes I have set out could not be embarked on in the immediate emergency of introducing lockdown, they should surely form an inherent part of the process of easing lockdown, and ensuring consistent and timely relaxations of the regulations. It is the failure to do this that has resulted in sudden and contradictory changes to the regulations.

This has also led to unacceptable mission creep, which increasingly embodies a gradual shift in objectives. Hon. and right hon. Members will remember that the original objective was to enable the NHS to provide the best care to all the victims of covid-19 who needed it. That clear mission has now widened into a mission to suppress the spread of covid-19 as an end in itself, regardless of the cost. The irony is that, in allowing the original objective to be blurred, the important subsidiary objective of preventing the virus peaking again in the winter is being put in jeopardy.

The easing of lockdown has, sadly, become a veritable shambles. While the number of deaths from covid-19 has mercifully plummeted from its April peak, there has not been a corresponding relaxation of the emergency regulations. I shall refer later to the OECD principles of best practice for regulatory policy, but one of the key principles is:

“Proposed solutions should be appropriate to the risk posed, and costs identified and minimised.”

In the statement he made yesterday to the House, the Secretary of State for Health said that there are now

“60 patients in mechanical ventilator beds with coronavirus”.—[Official Report, 1 September 2020; Vol. 679, c. 23.]

This compares with 3,300 at the peak of the epidemic, and he then said that the latest quoted number for reported deaths is two in one day. Today, The Sun newspaper has calculated from these figures that the odds of catching covid-19 in England are about 44 in 1 million per day. Economist Tim Harford, who presents what I think is one, if not the only, good programme on the BBC—the statistics programme, “More or Less”—has said:

“Covid-19 currently presents a background risk of a one in a million chance of death or lasting harm, every day.”

While age, gender, geography, behaviour and other aspects affect the risk, it is now far lower than the risk of death or serious injury in a motor accident. On average, five people continue to be killed each day on our roads, yet I have not yet heard from the Government any proposals to ban people from driving because of the risks associated with so doing.

One sure way of ensuring consistency would be to impose the discipline of a regulatory impact assessment on each and every continuing restriction, so that the justification for loss of personal liberty could be evaluated against the alleged benefits. It is not too late for this to start, and I hope that the Minister, in responding to this debate, will provide an assurance that the forthcoming six-month review of the legislation will include a full regulatory impact assessment and an evaluation of the performance of the emergency regulations introduced.

The public would then be able to see the evidence about whether the decisions taken were correct. For example, was closing schools and setting back the education of the covid regeneration a proportionate and necessary measure? Was the postponement of 107,000 weddings across the United Kingdom justified? Could any of the 4,452 weddings which should have taken place last Saturday have been permitted? Why can people sit safely side by side with strangers on an aircraft, but not at a wedding breakfast or in a church, a theatre or a concert hall—or even in this Chamber?

Why was the World Health Organisation advice, which was originally that there should be 1 metre social distancing, not applied from the outset? We introduced a 2-metre or 6-foot rule, but that has now been modified with the 1 metre-plus rule, but at the same time the additional safeguards required for the 1 metre-plus situation are being applied to the 2-metre situation, which is creating all sorts of problems, conflicts and uncertainties for our constituents.

Is it protecting the NHS to create a situation where, as was revealed in The Times on 27 August, 15.3 million people are now on the hidden waiting list for treatment? Is it reasonable that we should try to prevent two deaths a day and keep 15.3 million people on waiting lists for treatment, with all the dire consequences that flow from that? Madam Deputy Speaker, I do not know whether you were listening to the Secretary of State for Health when he made his statement yesterday, but in my view his responses on the issue of NHS waiting lists were the weakest and least convincing parts of what he had to say.

Is the continuing economic cost of lockdown now disproportionate to the benefits? Well, let us have an exercise and see. Let us see the data presented, so that we can have a proper debate about it. I raised the importance of regulatory impact assessments in public policy making with the Leader of the House at business questions on 2 July. It was his response on that occasion which caused me to apply for this Adjournment debate, which I am delighted that we are having this evening. I said that we would be able to achieve much more consistency in Government advice with regulatory impact assessments. The Leader of the House, however, argued that

“if we spend too long doing all this, by the time we have done it we have moved on to the next stage of the lockdown.”

He accused me of “calling for bureaucratic folderol”, which would inhibit moving

“at a pace to ensure that things happen in a timely manner”.—[Official Report, 2 July 2020; Vol. 678, c. 534.]

Would that they were. But I must correct the Leader of the House, because, far from being the worthless trifles described in the expression “folderol”, regulatory impact assessments are fundamental to ensuring that we make the right decisions as legislators.

It is incredible that, instead of lockdown continuing to be relaxed, new restrictions on freedom, such as mandatory face coverings, have been introduced. The consequence is that I detect a growing atmosphere of gloom and foreboding as we see winter approaching: no vaccine availability for many months; the economy in a worse state than most of our competitors; and the prospect of the resurgence of the pandemic coinciding with the flu season. I do not like the expression “waves” because it makes it seem as though we are talking about something equivalent to the Atlantic rollers so much enjoyed by our former Prime Minister and colleague, David Cameron. We are not talking about waves. We are talking about the potential resurgence of the pandemic—not everywhere, but in particular hotspots.

This scenario demands a rational evaluation of conflicting risks to the economy and public health, together with a cost-benefit analysis, and now is the time for the Government to reinstate the intellectual rigour of the regulatory impact assessment process. Sooner or later, the incredible economic cost of the Government’s failure to remove lockdown restrictions in a timely and effective manner will become apparent. If that coincides with the Government asking their natural supporters to pay the price for their failure through higher taxes, the political consequences will indeed be dire. It is for that reason that I commend to the Government what the OECD says about regulatory impact analysis. It describes it as an

“important element of an evidence-based approach to policy-making…that…can underpin the capacity of governments to ensure that regulations are efficient and effective in a changing and complex world.”

I will not read from the whole OECD regulatory impact assessment report on best practice principles for regulatory policy, but it extends to about 40 or 50 pages and is extremely well researched and documented. As I understand it—the Minister will correct me if I am wrong—these principles are supported by the Government; the trouble is that they do not seem to be being implemented by the Government and by Government Departments. I hope that in his response the Minister will tell us what he is doing to try and put that right.

The Government should revert to following their own “better regulation framework” established under the Small Business, Enterprise and Employment Act 2015, which requires that

“A RIA should be prepared for all significant regulatory provisions as a standard of good policy making and where an appropriate RIA is expected by parliament and other stakeholders.”

The interim guidance issued in March this year sets out a general threshold for independent scrutiny of regulatory impact assessments and post-implementation reviews, where the annual net direct cost to business is greater than £5 million. It calls on Government Departments to undertake proportionate cost-benefit analysis to inform decision making.

The trouble is that this is not being done, and I will give just one topical example, to which I referred in my brief comments in the previous debate. Under the Coronavirus Act 2020, there was specific primary legislation saying that residential tenancies should be protected from eviction until 20 September this year. On Friday last week—27 August—regulations were made extending that period from 20 September for another six months. The regulations came into force on 28 August, which was last Saturday, the very same day that they were laid before Parliament. Regulation 1(2) says:

“These Regulations come into force on the day after the day on which they are laid”.

Those regulations have caused a storm of protest from residential landlords in my constituency; they are apoplectic about the fact that they are not going to be able to recover possession of their premises. Notwithstanding the contractual agreements they have entered into with their tenants, they are not going to be able to recover their premises until 31 March 2021.

It says in the explanatory notes to the regulations that they amend schedule 29 of the 2020 Act. This is primary legislation being amended by subordinate legislation subject only to the negative resolution procedure, and so one might have expected that there would be a regulatory impact assessment or something which would indicate to us, on behalf of our constituents, that the Government have thought this whole process through, but that is not there, and instead there is a little note which says:

“A full impact assessment has not been produced for this instrument due to the temporary nature of the provision.”

[Bob Stewart (Beckenham) (Con)]

I thank my good friend for allowing me to intervene. In my constituency I have a huge backlash from residential landlords about this extension. I find it almost impossible to believe that the Department has not done an assessment of this, and I make the assumption—perhaps my hon. Friend or the Minister will correct me—that an assessment was done. I cannot believe that civil servants and decent Ministers would have made such a decision without actually looking at it, as this is a really bad thing for people who are trying to provide accommodation, because they see no good in this whatsoever; in fact it is extremely bad.

[Sir Christopher Chope]

I agree with my hon. Friend. One would have expected that an assessment was carried out—we will hear from the Minister in a minute whether there was—but what was so extraordinary is that it was only a week or two before the U-turn of last week that we were being assured by Ministers that there was no proposal to extend the application time for these regulations. I imagine that when Ministers were briefing that, they had not done any work suggesting that they wanted to extend the regulations, and then, at the last minute—perhaps as a result of the pressure group behaviours to which I referred—the Government just changed their mind. They had imposed this regulation at enormous cost, but we do not know what cost, because there is no estimate of that.

[Bob Stewart]

It makes us look like clowns.

[Sir Christopher Chope]

I hope that that is on the record—it makes us look like clowns. That is why I hope that we can persuade the Government to reform their ways. It is also extraordinary that the excuse should be put forward that this is a temporary arrangement and that is why there is no need for a regulatory impact assessment. That is not set out anywhere in any of the books on this, and it is a novel interpretation of what should be happening.

Switching away from the regulations directly related to coronavirus, I have received support for raising this issue from the Internet Association, which is the only trade association that exclusively represents leading global internet companies on matters of public policy. The organisation responded to the Government’s invitation when they went out to consultation in June inquiring about the reforming regulation initiative. It said, “Regulation in the digital sector has a wide range of potential impacts which extend beyond traditional economic impact analysis. As a matter of course, the Internet Association recommends that Government Departments and regulators undertake a wider impact assessment of their proposals covering not only the economic impact, but also issues such as technological feasibility and impacts on freedom of expression and privacy.” It goes on to say that “there have been a number of recent policy and regulatory initiatives in the digital sector where it has not been clear whether an impact assessment has been conducted and/or the impact assessment has not been published for external scrutiny.” It gives an example of the Department for Digital, Culture, Media and Sport/Home Office online harms White Paper. The Internet Association believes that wider regulatory impact assessments, as specified, should be required for major digital policy and regulatory initiatives. Therefore, this extends into that field also, as it does to all legislative and Government policy making—or it should do—and I hope that we will be able to get ourselves back on track.

The interim guidance to which I refer, which was published in March this year, referred to the Government considering how best the better regulation framework can be delivered

“more effectively over the course of this Parliament”.

Now is the time, surely, to take some action. As their first step, the Government should promise that the six-monthly review of the Coronavirus Act 2020 will be accompanied by a full post-implementation review and that a full cost-benefit analysis of those emergency regulations that it recommends should be kept in place. I hope that the Minister will announce that he is going to do that tonight and thereby help to restore public confidence in the Government’s decision making and the ability of Parliament to scrutinise it, because that is fundamental. I am grateful for the opportunity to put this point to the House.

--- Later in debate ---

[Paul Scully]

To answer my hon. Friend’s last point, I am not distancing myself; I literally was not involved in that decision. I do not want to offer a line of thought on something that I was not involved in, but I understand his point.

On weddings and the public debate, my hon. Friend has clearly not been following my Twitter feed—totally understandably—which is full of such debates about the wedding sector. We are trying to work with the sector to make sure it can open. My primary concern is about ensuring we get our economy open again with a warm but safe welcome to people. The Government’s first priority has always been to save and protect lives, but restoring livelihoods, protecting jobs and protecting businesses are right up there, for the reasons that my hon. Friend set out. If we do not get this kick-started now, the effect on the economy will be huge, so it is important that we work together to give people not just confidence but joy, so that when they come out to use services in their local high streets and city centres they enjoy the experience and come back time and time again.

A one-off hit to our economy is not good enough. We know it is not going to go back to how it was in February, and there are some permanent behaviour changes that seem to be kicking in. None the less, we need to work with the new normal, which means working with the virus, because we will be living with it. My hon. Friend talked about a second wave, or spike or whatever he wants to call it. If we learn to live with it, there may be a third and a fourth until we get a vaccine, but live with it we must. There will be a new reality of the permanent behaviour change.

Well-designed and effective regulation, which my hon. Friend wants to see in our legislation, and which we are championing, enables markets and business to flourish, grow and innovate. It can provide certainty for investors and protection for individuals and society. The use of impact assessments in informing regulatory design can help us to achieve those outcomes. Excessive or poorly designed regulation can impede innovation and create unnecessary barriers to trade, investment and economic efficiency. We have sought to limit that by ensuring that regulation changes in response to the pandemic are targeted and time-limited.

[Bob Stewart]

One of the biggest things that the Government have insisted on is facemasks, which we have mentioned already. I would be intrigued to know whether there is a regulatory impact assessment on why we all have to wear facemasks in public and various other places, because I have not seen it. If there is one that could be made public, perhaps it could be put in the House of Commons Library. There are growing numbers of people in my constituency of Beckenham who are rebelling against that idea.

[Paul Scully]

I thank my hon. Friend for his intervention. I get the train and the underground into London each and every day, and the adherence of people to wearing face masks is, on the whole, good. Tube use, I am glad to say, is increasing substantially. London city centre—the central activity zone in London—is incredibly quiet. That is affecting the west end in particular, and the City.

The west end represents 3% of the entire UK economy—just the west end—so although we need to make sure that the whole country is able to restore the confidence and joy that I was talking about, it would be remiss of me, as Minister for London as well, not to showcase those areas that make up a massive amount of our capital city as a strategic and world city, so that it is ready for international travellers when they have the confidence to travel.

The Government’s focus has been on improving design and proportionality in regulation. That is done through the Better Regulation Executive, which is responsible for embedding smarter, more cost-efficient and better regulation across Government, and which has recently introduced new guidance templates and training to improve the quality of impact assessments. As a result, impact assessments have clearer presentation of results, better planning for implementation and more quantification of costs and benefits.

The better regulation guidance represents the agreed Government policy on evidence and independent scrutiny, including when to seek independent scrutiny. It is clear that legislation should be accompanied by robust evidence and assessment of impact.

[Bob Stewart]

Forgive me. The Minister is a really good friend of mine, but he did not answer my question. I would really like to see the Government’s justification, in writing, as to why so many people have to wear face masks. Can we know what that justification is in this House?

[Paul Scully]

There has been a long debate about the use of face masks, both on transport and in retail. There are arguments either side—whether it gives a false sense of security or whether people touch their face when they put on or take off their mask. None the less, we have a better understanding of the transmission of the virus and the aerosol nature of its transmission. That is why the World Health Organisation has changed its advice from the beginning, when it said people do not need to have masks or face coverings, to, “Yes, you do.” Actually, we can learn from history. In the 19th century, cholera was assumed to be transmitted by air, but by greater understanding and by working through it—they did not need a regulatory impact assessment to figure it out— eventually people found that it was the water supply that was causing cholera, so they were able better to tackle that particular issue at that given time.

The Regulatory Policy Committee undertakes the verification role that provides independent oversight of the quality of the regulatory impact assessments, as well as providing the Government with external independent scrutiny of evidence and analysis supporting regulatory impact assessments of the proposals. The RPC also has a role in scrutinising the quality of post-implementation evaluations of legislation to help the Government develop the evidence base on how regulation has worked in practice.