Enterprise and Regulatory Reform Bill

Lord Curry of Kirkharle Excerpts

Monday 14th January 2013 Grand Committee

[Lord Deben]

My Lords, I support the tenor of these amendments and wish to say how strongly I support this part of the Bill. I have no direct interest in it because the companies with which I am associated do not tend to go across the county border in quite the way in which it might affect them. However, if I do have an interest I will declare it.

The issue I want to raise is that this has been a very successful extension of a system that was in operation even before the previous Government. Other examples included how the supermarkets were able to have a lead council that would help them to get the basis upon which they would apply elsewhere, so this has been a growing piece of work. I was pleased to hear the noble Lord put forward his support for this system because it really makes a difference and is not a way of avoiding anything. It is merely a way of ensuring that there is a continuity and consistency in the implementation of law. It also enables companies that want to do the right thing to do it and then not find that they are asked to do something different somewhere else in the country. I think all of us, right across the board, have found embarrassing situations in which in one place you are asked to do the opposite of what you have been asked to do next door in a particular kitchen or over a particular kind of presentation.

This is an extremely important change, which was amplified by the previous Government and is being amplified here. I, too, would like to hear from the Minister whether this is the beginning of a continuous process and whether it will be much deeper than it is in the Bill. Can we hope that more and more areas will be covered, not in a way that reduces the efficacy of regulation but one which increases its efficiency? It is not that I want people to get away with anything; I just want people to know where they are, wherever they are. This amendment points to that and I hope that the Minister will be able to help us see this as a continuing and growing trend in government regulation.

[Lord Curry of Kirkharle]

My Lords, I declare an interest in that I chair the Better Regulation Executive, which was very much part of recommending these changes. I am delighted that the noble Lord, Lord McKenzie, recognises the value of the scheme and I pay tribute to the previous Government for having introduced it because it is a valuable tool and has reduced significantly the burden on businesses that have participated in it. My concern about the proposed amendment is the definition of “to a material extent”. It will create a lot of debate and potential confusion around how one defines “material extent”. The trade associations that have been consulted and would be keen to participate in this scheme have members who all have a common interest. I see this as providing a real opportunity to take a significant regulatory burden away from businesses that are members of a trade association and would wish to participate in such a scheme, so I have a problem with Amendment 28ZDA.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie)]

My Lords, before I turn to these amendments I would just like to thank the noble Lord, Lord Stevenson, for his very kind and extensive words of welcome at the previous Sitting of Committee. I look forward to a continuing and fruitful dialogue with the noble Lord. As he said himself, we sing in the Parliament choir together, although I hazard a guess that his tunefulness is somewhat superior to my own. I look forward to working closely with him and other noble Lords over the coming weeks on this Bill. I also confirm that I intend to propose meetings on the various matters where it was suggested this would be helpful at earlier stages of the Committee.

Turning to this group of amendments, I thank the noble Lords, Lord McKenzie and Lord Stevenson, for their amendments to Clause 59 concerning eligibility for the primary authority scheme, which I shall respond to in turn. This scheme was of course introduced by the previous Government, as the noble Lord, Lord McKenzie, mentioned, and has been much welcomed.

Clause 59 broadens the criteria for businesses to be eligible for the primary authority scheme. It will mean in practice that many small businesses that operate in only one local authority area will be able to join, together with similar businesses which share an approach to compliance. I hope that I can answer the question from the noble Lord, Lord McKenzie, about what that means.

The Government see a shared approach to compliance as one that a business consistently follows in order to fulfil its regulatory obligations. Such an approach should result from guidance or procedures issued from a single point, such as a head office or a trade association. This will mean that franchises of the same brand or members of the same trade association, for example, could qualify. They will be able to enjoy the valuable assurance that a primary authority partnership can bring.

The new eligibility criteria have been intentionally drafted broadly. This is to ensure that as many small businesses as possible can benefit from reduced regulatory burdens. A business will be able to join the scheme only if the Secretary of State is satisfied that the business meets the eligibility criteria, and statutory guidance will provide more detail about the matters likely to be taken into account in assessing eligibility under the new criteria.

It is intended that further detail as to the circumstances likely to constitute a shared approach to compliance will be included in statutory guidance. Adding further detail to the drafting of the clause could inadvertently restrict participation in the scheme for the very businesses that this clause is attempting to help.

Of course, having a broad definition of a shared approach to compliance in the legislation means that a wide variety of groups of businesses could qualify for the scheme and the nature of the resulting partnership will rightly need to vary. For example, where a trade association acts purely to distribute information to its members, the primary authority partnership will be very different from one which involves a trade association that provides a fully audited accreditation scheme for its members.

This type of detail will also be given in the statutory guidance and the statutory mechanism for scrutiny of proposed new partnerships by the Secretary of State provides assurance that shared approaches to compliance will be handled appropriately.

Amendment 28ZDB seeks to impose a statutory requirement for consultation before the Secretary of State issues statutory guidance on shared approach to compliance. Guidance for businesses and local authorities will be very important to provide detail of how the extended scheme will work in practice. The views of all interested parties will be vital in making the scheme work as well as it possibly can. For this reason, a commitment was given during Committee debates in the other place that,

“any guidance published as a result of the clause will be developed in consultation with stakeholders, including businesses, local authorities, trade associations and business groups”.—[Official Report, Commons, Enterprise and Regulatory Reform Bill Committee, 12/7/12; col. 606.]

I should like to pick up on a number of the comments raised. My noble friend Lord Deben asked about continuing the process. The Government are committed to the primary authority scheme. It is a key tool in reducing red tape and ending the tick-box culture of regulation.

The noble Lord, Lord McKenzie of Luton, asked at the beginning of the debate whether there were any extensions to primary authorities in the pipeline. I can confirm that the Government are consulting on extending primary authorities to include several new regulations, including those on sunbeds, if I read the noble Lord correctly. He also asked about statutory guidance and consultation. The Secretary of State already issues statutory guidance in relation to the primary authority scheme, and Clause 59(5) provides that the Secretary of State can also issue guidance on the matters likely to be taken into account in assessing whether a business meets the new “shared” approach to compliance test. In Committee in the House of Commons, a commitment was made to develop guidance in consultation with stakeholders, including local authorities. I can confirm that the existing statutory guidance will be updated to include further content relating to these proposals. This will be in place, in time for the proposed extension of eligibility becoming effective.

In summary, I hope that noble Lords will not press their amendments, because I hope that I have provided sufficient reassurance that these matters will be dealt with by guidance, taking into account the views of interested parties.

--- Later in debate ---

[Lord McKenzie of Luton]

My Lords, I look forward to the Minister’s response. I am bound to say to the noble Baroness, with whom I normally agree wholeheartedly, that I remain unconvinced of the case that has been made. There is an easement for local authorities that want to go down a different route to that provided for in the Bill. As the Minister said in response to my previous amendment, local authorities are free to react to emergency situations or local complaints should they arise. The inspection plans apply only to routine and proactive inspections. I wait to hear the Minister’s response, but this is not a proposition with which we can align ourselves.

[Lord Curry of Kirkharle]

My Lords, I will also try to reassure the noble Baroness, Lady Greengross. Under the new governance arrangements that exist for the primary authority scheme with the Better Regulation Delivery Office, there is significant representation from local government on that governance body. I therefore hope that she will be reassured that there will be considerable discussion between the Better Regulation Delivery Office and local government on how the scheme will be implemented.

[Viscount Younger of Leckie]

My Lords, Clause 60 strengthens primary authority inspection plans. Its effect is to make it binding for local authorities to act in accordance with a plan which is in force. Strengthening inspection plans in this way is a crucial measure for the Government’s aim of,

“ending the culture of ‘tick-box’ regulation”.

Under the current provisions, primary authorities and businesses can work together to establish an inspection plan. Several businesses have done so, and report more informed and better targeted enforcement as a result. As things stand, local authorities must have regard only to plans, and are not bound by them. We have been told by primary authorities that plans and requests for feedback are not being followed in many cases. This means that the full benefits of inspection plans are not being realised, and many businesses are put off developing them because they do not have confidence that they will be followed.

With this clause, it is our intention to remedy this problem and to improve inspection plans. We are giving them the teeth that they need to deliver as much benefit for businesses as possible. This will ensure that businesses and primary authorities have certainty that inspections will be carried out in accordance with the plans in which they have invested. It will also mean that essential, timely feedback is received to keep the business informed of its key risks. Inspection plans are a crucial tool in enabling businesses to earn recognition for their compliance procedures and to reduce the burden of regulation. They also allow firms to focus on the key risks to their business and optimise their procedures, saving valuable time and wasted effort and allowing them to provide a better service to their customers.