Deregulation Bill

Earl of Lindsay Excerpts

Wednesday 11th February 2015 Lords Chamber

[Baroness Andrews (Lab)]

I rise to support my noble friend’s amendment and congratulate him not only on the way he exposed the ambiguities in the Bill but on how he introduced the argument on protection and balance. That is an argument I want to pursue. The amendments that we have just debated have totally exposed the fact that the language of the Bill is a morass of ambiguity. I am thinking of terms such as “have regard to” or “not automatically”, and the suggestion that it should be up to the regulators to interpret the Bill as will suit their best purposes.

In this amendment, we are giving the Government an opportunity to do what they say that they want to do: to have a clear intention of purpose with regard to regulation; to put in the Bill exactly what they mean by their expectations of regulators; to show that they understand what regulators do, can do and should do; and to put clarity into the Bill that leaves no one in any doubt about the limits to what they can do.

I want to talk about balance and growth in another context—in relation to the built environment and the protections that surround our environment. That is a parallel argument to the one that my noble friend made. One danger of the ambiguity is that it introduces an additional requirement for growth, although the Government say that it is complementary. Will that additional requirement sit alongside or above the existing growth duties that regulators have to implement and which they are bound by law to do? With the National Planning Policy Framework, the Government very wisely embraced the advice of statutory bodies such as English Heritage, which retained the essential point about planning law—that it is a balance between development and protection of landscapes and precious spaces, the ancient and characterful environment with which we all live.

The need for appropriate development in the right place and time is not in dispute, but it is balanced with the need to protect and sustain what this country is uniquely known for. We already have a presumption of growth in the National Planning Policy Framework; in short, we have a duty to promote growth. But that is balanced by a requirement to protect our precious landscapes and the heritage of our built environment. The balance has worked well, and it was very gratifying that, after a lot of discussion, when the National Planning Policy Framework was introduced, it repeated and reflected those traditional, tested balances that had been in the previous planning law. The statutory agencies know how to do that, in the full knowledge that there must be scope for development and a response to housing pressures and the need for infrastructure, but there is also a prior duty to protect what they are there to protect.

All this amendment does—I urge the Government to think about this, because they will get themselves out of a real problem if they do—is to make clear beyond doubt that the duty to promote growth must be consistent with the proper exercise of existing regulatory functions. Everything that I have heard the Government say, in their letters, suggests that it is what they want. So what is the difficulty about putting a clear, unambiguous, crisp statement in the Bill? It is vital that we have that assurance, because it will tell all the practitioners and the country as a whole that the Bill does not change or challenge that balance, and it does not override the scope of the functions of protection. It does not create an unnecessary diversionary distraction in the shape of another growth duty.

If the amendment is not accepted, that will send the opposite signal. It will send a signal to the developers, for example, that there is an imperative of growth, which is undefined—we have perhaps lost the argument that sustainable growth should have been specified; that would have been infinitely more acceptable and sensible—and that that imperative can be taken to override the other protective functions.

I think that there will be a chilling effect on regulators, because if it is up to them to try to interpret what is meant by a duty to “have regard to” something in the exercise of their proper functions, they will always be looking over their shoulder. They will always know that there will be a challenge from people who think there is a higher imperative— in many cases, an inappropriate economic imperative.

The local and national authorities will suffer from the same fear—that they are getting it wrong. They will be faced with a further layer of confusion. We all know that what the planning system needs above everything else is certainty. This provision will introduce another layer of uncertainty, and will have perverse consequences. It will cause further delays while people argue about whether the regulator has had proper regard to something. For that reason, it would hand greater scope and power to developers. My great fear is that the balance, which the noble Lord spoke about in relation to health and safety, will also be compromised or lost in relation to the protection of the environment.

We have had a very successful planning system to date, which has been supported by all Governments. The regulatory bodies are extremely experienced, well intentioned and well practised in their duties. Without the simple and incontrovertible logic of the amendment, which spells out what the Government themselves want to achieve, we will introduce more confusion and delay. So I hope that the Minister will listen seriously to the arguments for it.

[The Earl of Lindsay (Con)]

My Lords, in speaking to the amendment moved by the noble Lord, Lord Tunnicliffe, I should note my current involvement with the Better Regulation Strategy Group, the independent body that advises the present Government on better regulation. I should also note, as it is relevant to my perspective on the amendment, my former involvement in the two predecessor bodies that advised the previous Government—the Better Regulation Commission, of which I was vice-chairman, and the Risk and Regulation Advisory Council.

Based on my experience of those three independent bodies advising government on better regulation, I question the need for Amendment 44A. If the proposed duty as set out in the Bill were to override regulators’ powers of protection, compromise their decision-making or supersede their existing regulatory duties—or if there were any ambiguity about those three important assessments—I would wholly understand the need for the amendment. But in my judgment that is not the case.

The proposed growth duty will not override or cut across regulators’ powers of protection. It is simply an additional factor for regulators to take into account when they are making their decisions. It will not compromise their decision-making and, as I understand it, it will not supersede regulators’ existing duties. It will not remove the responsibility of businesses to comply with what the law or regulations require of them. The duty will therefore not compromise the independence of regulators. They will continue to have decision-making autonomy, exactly as they do now. Regulators will therefore remain free to decide how best to incorporate the duty into the decision- making involved in performing their primary statutory functions.

I have been looking at the published draft guidance that the Government issued in January, and I believe that it makes very clear many of the points that I have just mentioned. I understand that the guidance is continuing to be developed in discussion with the regulators so that it can be finalised before the policy comes into force. That guidance makes it clear that the proposed duty does not encourage regulators to reduce protections or to ignore non-compliance.

For the benefit of noble Lords who have not seen the published draft guidance, Non-economic Regulators: Duty to Have Regard to Growth, I draw their attention to the beginning of chapter 2, on page 5, which sets out the purpose of the duty. The very first sentence reads:

“Regulators exist primarily to protect people or achieve other social or environmental outcomes”.

That is an important headline sentence, which reminds us of the principal duty that regulators must subscribe to. The second paragraph on that page says:

“The duty requires that economic growth is a factor”—

not the factor, but a factor—

“to be taken into account alongside regulators’ other statutory duties … The duty does not set out how economic growth ranks against existing duties as this is a judgment only a regulator can and should make … The duty does not oblige the regulator to place a particular weight on growth”.

Those are only a few extracts from one page of the draft guidance, but they set out a clear proposition in terms of the importance of maintaining the balance between regulators having regard, as appropriate, to growth and their maintaining protections. As I see it, the proposed duty will complement existing duties and will not override or cut across regulators’ powers of protection, nor their responsibilities for ensuring protection. It will be for a regulator to weigh up the desirability of economic growth against each of the other factors it must consider, and tailor its approach accordingly.

In some circumstances those factors will sit well together; in others the regulator will need to decide how much weight to afford to each factor for the best outcome. On the basis of the wisdom that was developed through the Better Regulation Commission, the Risk and Regulation Advisory Council and so on, I believe that the regulator’s expertise means that it is best placed to decide what weight it is appropriate to afford growth in the relevant circumstances.

I therefore disagree with the insistence of the noble Lord, Lord Tunnicliffe, that only Parliament can rank those factors. In a good regulatory regime there should be discretion for the regulators to make judgments between parallel factors, because they can take account of the exact circumstances in which they are regulating. Therefore, although the growth duty clause as drafted requires that growth be put on the same footing as other duties—in other words, it enables regulators to have regard to growth—it also ensures that essential protections are maintained.

We should not lose sight of the importance of the new growth duty and the benefits that will flow from it. Regulators spend some £2 billion each year on regulatory activities, and still to this day more than half of businesses see regulation as a barrier to their success. The duty is required to clarify the fact that growth is an important factor for regulators to take into account, and it will ensure that regulation is delivered in a way that best supports growth. It will also ensure that the protection intended to be given by regulations is still delivered. On those grounds, although I understand the motives behind the amendment, I genuinely believe that it is unnecessary, and that the balance will be not only maintained but enhanced by the Bill as drafted.

[Lord Wallace of Saltaire]

My Lords, we have heard three excellent and very sober speeches on the amendment, for which I thank noble Lords. There is only a small difference between the noble Lord, Lord Tunnicliffe, and myself, on behalf of the Government. We are talking about balance—the balance among a range of factors that we wish regulators to consider.