Deregulation Bill

Caroline Lucas Excerpts

Monday 3rd February 2014 Commons Chamber

[Caroline Lucas (Brighton, Pavilion) (Green)]

I beg to move,

That this House declines to give a Second Reading to the Deregulation Bill because, whilst acknowledging that removing unnecessary burdens on small businesses is welcome, the Bill fails to recognise the social, economic and environmental benefits of effective regulation and contains a number of extremely damaging proposals including: the watering down of safety protections for employees that will leave workers at greater risk of injury, ill-health and abuse; the erosion of protection of journalistic sources and against police seizure of journalistic material, which threatens the basis of the free press; and the imposition of a growth duty on non-economic regulators such as Natural England and the Health and Safety Executive, which is irresponsible and risks undermining their core roles; further considers that this Bill is another illustration of a Government which is embarking on a deregulatory path without due consideration of warnings, including from businesses, that effective regulation is essential to create jobs and innovation and that ripping up vital green legislation risks locking the UK into polluting industrial processes for decades to come, jeopardising future competitiveness, damaging the UK’s attractiveness for green investment, and undermining new industries; and further believes that this Bill represents a race to the bottom and an obsession with GDP growth at any cost which is not in the public interest.

I tabled this reasoned amendment because I believe that the Bill should not be given a Second Reading. I listened to the Minister characterising those of us who have signed the amendment as somehow being of the far left. If that is the case, that category would have to include groups such as the UK Green Building Council, the Aldersgate Group and many other business groups right across the spectrum that have deep concerns about the Bill’s direction of travel.

I did not table this reasoned amendment without giving consideration to those parts of the Bill that are welcome and uncontroversial. Certainly, some parts of the Bill are completely fine. For example, it is cold homes week and many MPs and charities are working hard to highlight fuel poverty in cold homes. Scarves are a symbol of the campaign and people have been knitting away in the past few weeks to draw attention to the need to tackle fuel poverty. I am sure that nobody would object to the clauses in the Bill that would remove restrictions on the selling of knitting yarn. They will allow small and large businesses engaged in the selling of yarn better to meet their customers’ needs. Other provisions are similarly sensible, such as those that would facilitate the recording of public rights of way, and I give them my full support. Removing genuinely defunct legislation from the statute book also makes sense.

My worry is that the basis of the Bill is incredibly simplistic and crude: in the Government’s mind more regulation is bad and less regulation is good, without ever questioning the kind of regulation. Is it smart regulation? What is the purpose of the regulation? Will it actually generate more development? Will it incentivise industry? Will it provide industry with the level playing ground it often asks for? Instead of this nuanced approach, we have a complete knee-jerk reaction that says, “Regulation is bad, deregulation is good” and proceeds in a simple way.

I will make comments on three areas of the Bill. First, I want to cover some specific provisions—I will outline just a few. Secondly, I want to talk about the fundamentally flawed premise on which the Bill is based: it fails to recognise that some regulation can be good for business and job creation, as well as for consumers. Thirdly, I will say a few words about the new growth duty on non-economic regulators, which I fear will interfere with, and impinge on, their ability independently to carry out crucial roles, including: the Care Quality Commission protecting public health; Natural England protecting our environment; the Health and Safety Executive protecting employees and others from harm at work; or the Equality and Human Rights Commission challenging discrimination and protecting human rights. This growth duty is just the latest manifestation of an obsession with short-term GDP growth at any cost, and that is simply not in the public interest.

First, I will focus on just a few of the harmful provisions that I think Ministers are trying to ram through in the name of deregulation. The Bill narrows the application of the Health and Safety at Work etc. Act 1974, following the 2011 Löfstedt review. The Bill effectively exempts self-employed people from health and safety law where their activities do not put another person at risk. On the surface, one could ask what could be wrong with that. The problem is that the changes in the Bill are completely unnecessary, because the only time the 1974 Act can be used is when a person does put another person at risk. No self-employed person has ever been prosecuted or threatened with prosecution for risking just their own health. Right now, the law is straightforward and it works. The Bill will create not only confusion, but complacency.

Let us not forget that the fatality, injury and ill-health rate for the self-employed is already much higher than that for other sectors. Some of the more dangerous industries, such as agriculture and construction, have a high proportion of self-employed people working in them. There is an obvious risk that people who control the workplace where self-employed people work may think, wrongly, that they do not need to be as concerned about fulfilling their duty of care to the self-employed. The TUC has made this point clear, as have the majority of respondents to the HSE consultation, who rejected the very option we now have put before us. The health and safety professional body, the Institute of Occupational Safety and Health, warns:

“This is a very short-sighted and misleading move, it won’t actually help anyone; it won’t support business; but it will cause general confusion.”

As well as health and safety protections, it is also reasonable to ensure that employees do not face discrimination in the workplace, yet the Government are trying to take a massive backward step in the fight against discrimination, too, by removing the powers of employment tribunals to issue wider recommendations on gender, race or other forms of discrimination in the workplace.

[Yasmin Qureshi]

As the hon. Lady will be aware, employment tribunals made these recommendations only 19 times in 2012, and in fact employers often welcome them because they help to resolve many underlying issues that often lead to discrimination claims being made in the first place.

[Caroline Lucas]

That is a clear example of where the status quo is not causing a problem. The Government are looking for problems to solve where there are no problems, and instead are creating a whole lot more.

Affordable housing could be another casualty of this obsession with deregulation. Reducing the eligibility period for the right to buy could seriously undermine housing associations’ ability to provide affordable housing and make it more, not less, difficult for housing associations to do business, contrary to the Government’s own apparent aims. It would be interesting to hear what assessment the Minister has made of the impact on the Government’s ambition to deliver 165,000 affordable homes over the Parliament. Why did they not consult housing associations on the impact of the measure before bringing it forward?

On the environment, in May 2010 in the coalition agreement, the Government committed to encouraging community-owned renewable energy schemes, and that is being delivered with the launch of the Department of Energy and Climate Change’s community energy strategy. However, the reduction of energy and climate change duties, set out in clause 28, appears specifically to contradict that commitment and undermine the recent statements supporting community energy made by Ministers.

On public participation in decision making, the Bill weakens the Government’s overall consultation duties by removing specified statutory duties to consult. The majority of the consultation requirements to be removed by the Bill relate to the environment and greatly reduce the participation rights of affected people, including regulators such as Natural England. Consultation is a core element of democratic government and serves as one of the main ways the Government can be held to account for their actions. It also contributes to increasing public trust in government and is essential for developing policy and legislation, because it provides access to wider sources of information, opinions, and potential issues and solutions. The Government risk undermining their legitimacy and triggering a public outcry by removing statutory consultation requirements. The statement in schedule 15 that the Government consider these statutory requirements to consult as unnecessary is neither satisfactory nor sufficient to justify that removal.

More specifically, the UK is a signatory to the Aarhus convention, which binds the UK to provide the public with, among other things, a right to participate in decision making in any proposed activity that might have a significant effect on the environment and/or during the preparation of plans and programmes relating to the environment. The removal of the requirement to consult on the exercise of various powers relating to the environment directly conflicts with the requirements of the Aarhus convention, which stems from principle 10 of the Rio declaration, which opens with the declaration:

“Environmental issues are best handled with participation of all concerned citizens, at the relevant level.”

The Government should justify the removal of each of the consultation requirements and confirm how the UK’s public participation obligation, pursuant to the convention, will be discharged.

We have already heard quite a bit about clause 47. I was going to say that hidden in the Bill was a provision seeking to repeal some of the journalistic protections in the Police and Criminal Evidence Act 1984 that currently ensure proper and fair judicial scrutiny before police applications to obtain journalistic material are granted. I am grateful for the fact that the Minister is attempting to reassure his own Back Benchers on this issue, but it worries me that only at the last moment, when the Bill has got to this stage, is he proposing further consultation on this important part of the Bill. That strikes me as odd, as many organisations have been extremely vocal in raising this issue over several months. The Newspaper Society, The Guardian and many others have warned about the impact of closed material proceedings and so on.

I am grateful that, at the last minute, the Government are looking again at this matter and saying they will consult again, but that raises questions about how many other parts of the Bill will have unintended consequences.

[Mr Letwin]

The hon. Lady is making a serious speech; I hope I can correct just one misapprehension on her part. Although it is perfectly true that the Newspaper Society and others raised this issue, from memory it was on Wednesday or Thursday last week. They had not done so when the Joint Committee was scrutinising the Bill, nor did they do so when the Bill left the Joint Committee and we responded to it; they did so only last Wednesday or Thursday. That is why I have said that some further consultation would make sense, in case anyone else out there has views who has not come forward during the whole six months or so of exposure of the draft.

[Caroline Lucas]

I thank the Minister for that clarification. That is not as I understood it, but I am pleased to be corrected if that is the case. Certainly the lobby that I have been aware of—which is perhaps looking at broader issues than the question we are currently discussing—has been going on for a long time, but I thank the Minister for his clarification.

My second main objection to the Bill is that, in a sense, it just feels like the latest manifestation of a Government embarking on an evidence-free deregulatory path without due consideration of warnings, including from business. Those warnings say that effective regulation is essential to create jobs and innovation, and that ripping up vital green legislation risks locking the UK into polluting industrial processes for decades to come, jeopardising future competitiveness, damaging the UK’s attractiveness for green investment and undermining new industries. Let us take, for example, the UK Green Building Council, which works daily with more than 400 companies and organisations, from the largest to the smallest, across the built environment industry. In response to the Prime Minister’s comment last week about deregulation, Paul King, its chief executive, said:

“The Prime Minister’s boasts of ‘slashing 80,000 pages’ of environmental guidance is utterly reprehensible. It is the same poisonous political rhetoric from Number 10, devaluing environmental regulation in a slash and burn manner. These words are not only damaging and irresponsible, but misrepresent the wishes of so many modern businesses, both large and small.”

[Andrew Bridgen]

Apart from that one, rather spurious example, can the hon. Lady give the names of other business organisations that are demanding more regulation in the UK?

[Caroline Lucas]

I certainly can. I could talk about the Aldersgate Group as one or the Prince of Wales business trust as another. There are plenty of business organisations out there that make it clear that appropriate regulation is helpful to them. What they want is clarity, which is the very opposite of what they have had from this Government, under whom rules have been changed almost overnight. I am thinking, for example, of the feed-in tariff change, when suddenly the rules were changed retrospectively, more or less overnight, causing huge confusion and complication for many companies.

What those companies want is a level playing field, and clarity and certainty into the future. They are happy to have clear, sensible regulation that applies to all; what they do not want is a Government who simply come out with more and more rhetoric and introduce rules retrospectively or at the last moment. Many businesses in my constituency are tearing their hair out about not being able to plan for the future, because they do not know what the Government’s latest response will be to the UK Independence party or whoever else they are trying to close off.

[Andrew Bridgen]

I ran a business for 22 years, and what small businesses knew under the last Labour Government was that, on average, every working day we would get six more regulations affecting our businesses. Does the hon. Lady think that was very welcome?

[Caroline Lucas]

I am not a spokesperson for the Labour party, but if the hon. Gentleman wants to ask that question of those on the Labour Front Bench, he is very welcome to do so. What I am talking about is my knowledge of small businesses, with which I spend a lot of time in my constituency. What they would love to see is a reduction in VAT or an extension of the threshold, so that more small businesses are caught by the business rate relief. There are all kinds of things that they would like to see, but they are not necessarily telling me about a huge burden of regulation of the kind that the Government think they are trying to solve.

An example of the positive role of regulation is the 2016 zero-carbon target. This set a destination in advance and precipitated a huge amount of innovation from businesses figuring out how to get there—new jobs, new industries and new export markets for UK businesses. Customers are increasingly interested in energy efficiency, and a new home will probably save them £800 on their annual energy bills. Builders have responded to a clear stepwise trajectory towards zero-carbon homes, with uplifts in regulations in 2006 and 2010, and again this year, en route to 2016, from when all new homes are meant to be zero-carbon. The costs of building low-carbon, efficient homes have tumbled—by half in the last two years alone, according to forthcoming research. That example highlights the fact that Government regulation, not deregulation, can be incredibly successful in driving innovation, keeping energy bills down, creating jobs and cutting carbon emissions.

Environmental regulation to manage building in flood-prone areas will protect people from the nightmares that we have witnessed on our TV screens, if not in our own living rooms, over recent weeks. There are plenty of examples of disastrous deregulation, too. The US car industry lobbied and funded both Democrats and Republicans to reduce regulation. The result was that it drove itself to bankruptcy, because it was out-competed by overseas manufacturers that developed more efficient cars to meet tougher regulations elsewhere.

The Government seem to be ignoring business representatives speaking out in favour of strong regulation. I have mentioned the Aldersgate Group a couple of times. In 2011, it warned that the drive to cut regulations on business could threaten the economic recovery. In a report launched here in the House of Commons, it stated that Government initiatives such as the red tape challenge that threaten “to rip up” vital green legislation would lock in polluting industrial processes for decades to come, jeopardise future competitiveness, and damage the UK’s attractiveness to green investors. It questioned whether measures such as one in, one out rule made sense, and would address pressing environmental challenges such as climate change. That is just one example of a market failure that requires more, not less, regulation to safeguard the environment and drive development in new industries.

The Aldersgate Group also highlighted the negative impact of putting sensible environmental regulations at risk with a consequent loss of business confidence. Peter Young, the group’s chairman, said:

“It is a myth that all businesses want less regulation. Effective green laws create a level playing field which drives efficiency, early action and the innovation in UK companies that will be the engine for future growth and jobs.

A crude deregulation drive risks damaging competitiveness and severely threatens the Prime Minister’s commitment to a green industrial revolution. The regulatory framework should encourage a rapid shift to a sustainable economy rather than being held back by vested interests or the lowest common denominator.

The Government’s ‘war on red tape' must not become a crusade that threatens regulatory outcomes such as protecting the environment. Even the threat of deregulation on the Climate Change Act and renewable energy support is massively eroding investment and making growth more difficult.”

There you have it, Madam Deputy Speaker. That is not just the Green party speaking; some of the captains of some of the biggest industries in the country are saying, very clearly, that the idea that all businesses hate all regulation is a myth and a travesty.

[Richard Fuller]

What does the hon. Lady think is the impact of deregulation on the interests of small business, as opposed to large business? She has talked about large businesses, but does she not think that deregulation particularly helps small businesses?

[Caroline Lucas]

I certainly think that some deregulation can help small businesses, and I also think that small businesses find it harder to deal with. What I object to is the fact that we are talking in vast generalisations. Let us instead talk about specific regulations. By and large—apart from, for instance, the clause about knitting yarn—the Bill contains none of the measures that small businesses in my constituency are crying out for. As I have said, what they would love to see are changes in the whole economic environment, such as the introduction of a higher threshold before business rate relief comes in. That would make a huge difference to them.

Let me now say something about the growth duty. I fear that it will interfere with, and impinge on, the ability of organisations to play crucial roles. The idea that growth must come before everything is a mantra and an ideological obsession, and it seems to me that an obsession with short-term GDP growth at any cost is simply not in the public interest. The Government’s justification for the growth duty has been inconsistent and incoherent. Regulators are already subject to a statutory duty to regulate proportionately, to be transparent and accountable, and to target activities only when that is necessary. That legislation is already there.

Ministers give assurances that the independence and effectiveness of organisations in carrying out their duties will not be undermined. A Government consultation paper states:

“Supporting growth and stripping back burdens are not sufficiently prioritised.”

However, it also states that

“the regulators would need to be able to demonstrate that they have considered the economic impact of their actions when making decisions”,

and that

“the duty is intended to be complementary to, and not override… existing duties.”

I do not understand why the new growth duty is necessary. As the consultation paper makes clear, regulations already exist, and we already know that the bodies concerned must take into account the impact of their proposals on the wider economy.

It seems to me that what we have here is yet another knee-jerk reaction. Growth must come before everything else—protecting workers’ rights, public health, equality, fair treatment, and the environment—and that, in my view, is a very negative approach.

--- Later in debate ---

[The Minister without Portfolio (Mr Kenneth Clarke)]

A small and select group of specialist people have taken part in this debate, but it has been a very worthwhile one and while it has got very heated and agitated at times, I keep being reminded of how closely we have all been forced together, and the hon. Member for Hartlepool (Mr Wright) therefore finished on a very welcome note. The fact is that, so far as I noticed in every contribution from the moment the debate started, we all rather accept the need for deregulation. Everybody agreed on the other hand that there is a case for sensible regulation in the modern world. Indeed, it is highly desirable, but it is essential from time to time for Governments and Parliament to ensure that what is being done is proportionate, sensible, justifiable and does not impose unnecessary burdens on individuals and branches of government, and on business and small business in particular. We have gone round and round in circles and some Members have got wildly excited about particular regulations, but the fact is we come back to agreement on that point, and I get the impression that no one is going to press any objection this evening to the vote.

[Caroline Lucas]

Will the right hon. and learned Gentleman give way?

[Mr Clarke]

The amendment is of course on the Order Paper, so I give way to the hon. Lady.

[Caroline Lucas]

I have been advised that it will be helpful to the House to let the right hon. and learned Gentleman know that I do not intend to press the amendment tonight.

[Mr Clarke]

I am very grateful to hear it because by its very nature a deregulatory Bill gives rise to many points that can be raised in Committee.

The hon. Member for Wansbeck (Ian Lavery) raised a lot of detailed points, and said that they should be considered in Committee. He has already served on the pre-legislative scrutiny Committee. It is inevitable, when the British cover such a wide variety of things in regulation, that we sometimes have to have an item-by-item vote.

I take it from the tone of the debate today that the general direction of policy set out by the Government has fairly widespread approval. I have endured the experience of opposition, albeit briefly, in my time, and I occasionally had the burden of being sent along to a debate of this kind and trying to find something to argue about. I think that that was the problem facing the two very able Front-Bench speakers representing the Opposition today.

A strange argument broke out at one point today about whether what we were doing was totally insubstantial, worthless and of no point to the outside world, or whether it was completely horrendous and, as the Green amendment, which is no longer being pressed, says,

“ripping up vital green legislation”.

It was suggested that our blood should run cold at the idea of what we were doing to everyone from those climbing mountains to those running small businesses.

The claim was also made that the last Government had somehow achieved £3 billion of savings through their strident deregulatory measures. I am not here to debate the record of the last Government, but that is quite the most startling exposition of what they achieved that I have ever heard. I do not recommend that any Labour spokesman should try to persuade an audience of any of the small businessmen I have ever met that that was what they were doing.

The Bill represents the most determined effort of any Government I have known to pursue the deregulatory aims to which most Governments have paid lip service for the past 20 years. We were all into deregulation in the early 1990s; then the Labour Government talked about “better regulation”. I believe that this Government can claim that the substance of what we are producing greatly exceeds anything that has been done before.

Some of the figures that have been quoted about the impact of the Bill disguise the fact that it is only one part of the red tape challenge that is being led by my right hon. Friend the Minister for Government Policy. The Bill runs alongside and is part of that challenge, and it contains the elements that require primary legislation. My right hon. Friend has mentioned the 3,000 regulations that need to be repealed or improved.

The Bill has to be big enough and long enough to deal with so many detailed areas, and it will supplement and add to that to produce a deregulatory effect for businesses—particularly small businesses—as well as individual citizens, local authorities and branches of government, all of which have better things to do than to waste money on statutory duties the reason for which no one knows, or to produce reports that nobody reads or to have obligations for things that nobody is asking them to give advice on. For example, school governors have to publish advice on discipline. Our reforms will not undermine school discipline; my right hon. Friend the Secretary of State for Education has talked about the need for school discipline. Most governors do not even know they are under such an obligation, but unfortunately some do produce a statement of policy, which is not required. That regulation will now be repealed.

The key part of the Bill is the one that relates to business. I agree with my hon. Friend the Member for Stroud (Neil Carmichael) on this. I think we will need a Bill of this kind every 10 years or so. In modern times, as a result of single-issue lobby groups and newspaper campaigns, Government Departments engage in ever-more legislative and regulatory activity, sometimes for the sake of being seen to be doing something or, in the case of the lobby groups, being seen to be demanding something new. That has an adverse effect not only on the statute book and the regulatory publications but on the administration of good government and the running of any successful business. The Bill is therefore a welcome, and drastic, attempt to change the culture and go back in the direction of common sense and proper regulation that involves a true public interest and to ensure that environmental standards and the safety of workers are maintained.

The hon. Member for Newcastle upon Tyne Central (Chi Onwurah), echoed by the hon. Member for Hartlepool, got on to matters that were of concern to her. Although such things can be discussed in Committee, I have to say that an attempt was being made to make a difference of principle that was not there. For example, we had the issue of employment rights and of the tribunals dealing with claims by employees against their employer. Let me make it absolutely clear that the Bill is not remotely trying to roll back the law on unfair dismissal or to reduce the protections against discrimination in the work place.

The hon. Member for Bassetlaw (John Mann) tried to identify the party political origin of every measure in the Bill. As it happens, it was a Conservative Government who set up employment tribunals, introduced employment rights and started the whole process that we now have. The intention was to provide a sensible, accessible and low cost way of resolving disputes and awarding compensation where some breach of employment rights had taken place. Over the years, the system has become legalistic. It has become almost habitual for anybody who loses their job to bring a claim, because there is very little risk to them and a great deal of encouragement to have a go. None of that is being tackled too directly by the Bill.

Addressing the power and cost of tribunals is much overdue. The principal fundamentals of employment rights are utterly beyond dispute nowadays. For the hon. Member for Newcastle upon Tyne Central to claim that this Bill is a serious threat to the real principles underlying employment rights and achieves no important benefits shows that she has not met enough employers. When we talk to small employers about the problems of running a competitive business, most will rapidly start raising the problem and cost of claims before employment tribunals. The changes we propose could be criticised for being too modest, but they are certainly heading in the right direction. They should not invite a knee-jerk reaction from the Labour party, or anybody else, that nothing should be done to deregulate in that area and to remove unnecessary cost.

Similarly, on health and safety, absolutely nobody is suggesting, in this Bill or anywhere else, that we lower standards in this country when it comes to protecting the health and safety of the work force, or anybody else. We are not short of regulation in that area. Most of it will remain intact, but what is proposed here seems to be perfectly sensible. The biggest single change is to take away the burdens of health and safety legislation from self-employed people who are not in an occupation that can pose a threat to other people, as will be specified. It is absurd. Let us take a self-employed person, not one of those self-employed contractors in the business of the hon. Member for Bassetlaw, but someone writing a novel in his cottage in the countryside in Dorset. He is a self-employed person. Is Labour going to argue passionately in Committee that he should be subject to health and safety at work legislation, which he is at the moment? Of course he is not likely to be sued unless he throws a book at somebody in a moment of bad temper, but even that is probably not a breach of the health and safety at work legislation. He is subject to inspection. He may have to pay regard to the guidance. I have taken an extreme example of what should be a harmless occupation—if he is a reasonable novelist.

There is a range of other self-employed people who may have to take professional advice on what impact the Health and Safety at Work etc. Act 1974 has on their particular activities. We are proposing to clarify that health and safety legislation applies to those people who are engaged in activities that could pose a risk to people other than themselves. Clarity will come when we produce information—as soon as we can in the course of the Committee, as my right hon. Friend the Minister for Government Policy has said—on the specified sectors of the economy and specified occupations. A statutory burden will be lifted from a wide range of self-employed people who have been covered by it by accident.