Enterprise and Regulatory Reform Bill

Lord Razzall Excerpts

Wednesday 14th November 2012 Lords Chamber

[Lord Razzall]

My Lords, because this is a Bill that emanates from a department with a Liberal Democrat Secretary of State, noble Lords would not expect me to agree with the noble Lord’s remarks, and certainly not their tone. It is clear that the Bill must be looked at in the context of government economic policy since the creation of the coalition Government in 2010, which my party signed up to—first, coming primarily from the Treasury, a credible fiscal policy with the aim of restoring the economy to be an improvement on where the previous Government left it; and secondly, coming from the Minister’s department, a growth agenda attempting to improve demand and increase business investment.

Inevitably, this is a mixed bag of a Bill, although it is not the ragbag or hotchpotch referred to by the Opposition, both in another place and here. Although generally we on these Benches support it, I think that a review of the Bill in your Lordships’ House must look at each measure against the question whether a particular measure improves demand and/or increases business investment.

Like the noble Lord, Lord Stevenson, as we go through Committee stage I shall be joined by a number of colleagues, although not quite as many as him. I shall be joined by my noble friends Lord Teverson, Lady Brinton, Lord Clement-Jones, Lord Lester and Lady Bonham-Carter. In Committee, my colleagues and I will exercise our constitutional responsibility—many noble Lords regard it as their constitutional obligation—to review the Bill and amend it as we see fit. My colleagues will elaborate on many of these amendments as we go through Second Reading, but I would like to summarise a number of questions on which we want to be satisfied.

Let us take the UK Green Investment Bank, which was hugely welcomed from these Benches. The Liberal Democrats have been advocating an institution like this for a number of years, and I welcome the fact that this is in the Bill. I think I am right in saying that there was no obligation to put it in legislation, as the bank could have been established without any legislative framework, but it is important to have it on the statute book. I am slightly disappointed, as I expect the Secretary of State is, that the Treasury has authorised an initial investment of only £3 billion, but at least that is a start. I shall not attempt to muzzle the concerns of my noble friend Lord Teverson, but I am concerned that we need a proper explanation from the Minister about the policy regarding borrowing. The noble Lord, Lord Stevenson, touched on that. I am not sure that the current statement that there has to be a net reduction in borrowing before that can happen is sufficiently adequate with regard to something as important as this. At some stage of this Bill, the Minister needs to reassure us on that. I know it is Treasury policy, not his; nevertheless, I am sure that he will be able to come up with something that can satisfy us. As this part of the Bill passes through your Lordships’ House, the second area on which we need to be clear concerns exactly where we are on transparency and accountability.

On the unemployment proposals, to which the noble Lord referred, I think he was slightly churlish in not referring to the confirmation given by the Secretary of State in another place that the heavily criticised proposals by Mr Beecroft regarding no-fault dismissal will not be proceeded with. That is a significant development, which has been put into Hansard in another place. I do not wish to second guess what my noble friend Lady Brinton will say, but there are four issues where it is clear to me that your Lordships need to be satisfied. First, we need to be satisfied that the fears expressed by Citizens Advice and the TUC are groundless, that the new provisions will wrap up employees in legally challengeable unintended consequences. Secondly, there is a significant shift to put more obligations on ACAS in these proposals, and I think we need some undertakings that ACAS will be properly funded. Thirdly, we need assurances that, whatever the consultation on the cap on unfair dismissal payments comes up with, there will be no cap attempted on compensation for racial or sexual discrimination, or sexual oppression by an employer. Fourthly, there is the issue that is still out there about whether there should be an improvement in the enforcement of tribunal decisions, which is not touched on in the Bill. It would be useful to have a statement from the Minister about where the Government are on that issue.

The changes to competition law and the creation of the Competition and Markets Authority will be dealt with by me in Committee. Noble Lords will be aware that KPMG said that the UK’s competition structure was unique in its technical competence, its independence from political process, its transparency, access to decision makers, accountability and robustness. There is also significant evidence that, although we may have the best regime in the world, we also have the slowest. I support the creation of the new authority, but we must make absolutely certain that the five characteristics that KPMG listed are enshrined in its development. We must be satisfied that the proposals streamline and improve the efficiency of the competition regime.

The noble Lord touched on the issue of directors’ remuneration. It is a huge achievement of the Secretary of State to have arrived at balanced proposals that both the TUC and CBI, across the political divide, seem to accept. It is worth putting the issues into context. Many of the largest UK companies listed in the FTSE 100 have the majority of their employees and shareholders resident outside the United Kingdom. The noble Lord spoke of a policy applying to them that would go further, but it would be quite difficult to enforce.

I come finally to the two most difficult issues for our Benches. The first is the Equality Act amendment, which will be dealt with by my noble friend Lord Lester, who will be recognised by the House as the UK’s, if not the world’s, great expert on this topic. I understand that my noble friend cannot support Clauses 57 or 58, so I suggest that we watch him light the blue touch paper and stand back.

The final issue concerns copyright proposals. I often think that on this issue we have an irresistible force meeting an immovable object. Virtually everybody under 30 believes that everything should be free, but the creative industries want to ensure that proper value is given to their products and services. I am glad that I will not have to find the right balance on this. On these Benches it will be left to the noble Lord, Lord Clement-Jones. As the noble Lord, Lord Stevenson, indicated, we have seen significant lobbying on the issue.

In conclusion, noble Lords ought to recognise that we cannot create growth by legislation. All we can do is pass legislation that provides a modest degree of help. This Bill does that and I welcome it.