Regulatory Authorities (Level of Charges) Bill

Chi Onwurah Excerpts

Friday 13th May 2011 Commons Chamber

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

I commend the hon. Member for Christchurch (Mr Chope) not only for his customary skill in securing such an optimal slot for his private Member’s Bill, but for his interest in this very important area. Not enough Members are sufficiently excited by regulation, but when growth is flatlining and businesses continue to struggle with the effects of a challenging economy, it is important that we discuss the role of regulators and particularly their impact on businesses.

As somebody who formerly worked for the telecoms regulator, Ofcom, which the hon. Gentleman was good enough to praise, I am familiar with the effect that regulation has on businesses of all sizes. I understand his deep frustration with the Government’s broken promises on regulation. Regulation protects consumers and employees’ rights; it ensures that our industries play their part in moving towards a green, sustainable future; and it keeps citizens safe. It has no doubt saved many lives. It is therefore important that it is effective and enforceable, but challenges arise when ill-thought-through regulation has unforeseen consequences or is interpreted bureaucratically and inflexibly.

[Stephen McPartland]

Police forces have recently suggested that inflexible health and safety regulations have prevented them from doing their job and from going to help people in dangerous situations. Does the hon. Lady agree with them?

[Chi Onwurah]

I thank the hon. Gentleman for that intervention. We can all agree that the work of the police needs to be supported by effective regulation and by ensuring that our police have the rights needed to pursue their necessary duties in the best way possible.

Regulation can certainly represent an unacceptable burden on businesses, particularly small and medium enterprises, which may not have the legal advice to interpret regulation accurately or the resources to implement it fully. Like many hon. Members, I am a passionate advocate of effective measures to free businesses from red tape, but I do not believe that the answer is to impose arbitrary restrictions on authorities that could hinder their enforcement capabilities. I am afraid that I am not entirely convinced by the Bill. It would introduce restrictions on a wide range of different regulators, and it would therefore need considerable examination in detail in Committee.

When in power, Labour sought to reduce regulation, by introducing the Better Regulation Commission and the ongoing better regulation programme, and made a number of legislative changes to reduce the costs of regulation. I am sure that the hon. Gentleman would not be promoting the Bill if the Government had managed to keep their headline-grabbing promises on reducing regulation. As the director general of the Institute of Directors is quoted as saying in yesterday’s Financial Times, the Government’s rhetoric on red tape and planning has yet to be matched by action.

[Mr Chope]

I am disappointed that the hon. Lady is not supporting my Bill. She compares this Government with the previous Government, but what does she say about the fact that, under the previous Government, some fees and charges, particularly those of the then Passport Agency, shot up by four times the rate of inflation?

[Chi Onwurah]

I am expressing considerable doubts about the Bill, but I have not said whether or not we will support it—it is too early to say.

It is regrettable that charges have risen in regulatory authorities, not only for passports but in a number of other areas that hon. Members have mentioned. It is the duty of those to whom the regulators are accountable to ensure that those charges provide value for money for our citizens. I am not convinced that an arbitrary imposition of centralised regulation can effect the right kind of change in regulators’ behaviour.

Answers to parliamentary questions asked by my hon. Friend the Member for Ochil and South Perthshire (Gordon Banks) revealed that, by February this year, this Government had introduced 424 new regulations while removing just 172. That is hardly one-in, one-out. It was reported at the time that the Secretary of State for Business, Innovation and Skills read the riot act to Cabinet colleagues about their lack of progress, while neglecting to mention that his own Department, which is responsible for regulation, had in 10 months of government removed precisely no significant regulations, while introducing 53 new ones. So I understand why the hon. Member for Christchurch expresses frustration.

The Opposition believe that it is essential to take a fresh look at existing regulation, how it is implemented and particularly how it is translated from European directives. However, I am concerned that this arbitrary blanket ban is, like too much of the Government’s current legislative programme, lacking in detail in many key areas. For example, some regulators’ charges are a percentage of their stakeholders’ turnover. Will the Bill limit the absolute amount or the percentage?

Regulators may at times be able to reduce charges. Would not the Bill create a perverse disincentive to reducing charges, given that regulators would know they have to come to Parliament to increase them? For example, in 2006 Ofcom raised the application fees for radio licences while reducing the ongoing fees in order to meet the important criterion of reflecting cost. Under the Bill it would not have been able to do that.

At the heart of the Bill there appears to be a principle of centralisation. Regulators operate in a wide range of industries and areas. Is it appropriate that one regulation should apply to all? In response to the question, “Who regulates the regulators?” the hon. Member for Christchurch answered, “This Bill,” but in most cases, regulators are answerable to Select Committees and Departments of Government, which are answerable to the people. Does not the Bill imply that these Select Committees and Departments are failing in their duty? Do not the many criticisms expressed by hon. Members who have spoken imply that the issue should be addressed directly, rather than obscured by a blanket ban?

We understand the hon. Gentleman’s deep frustration with the Government’s false promises on regulatory reform and we strongly support reductions in and improvements to regulation, but we fear that the Bill could have significant negative consequences for regulators and for industry. We need smart regulation, not blanket bans.