Enterprise Bill [HL] Debate

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Lord Stevenson of Balmacara

Main Page: Lord Stevenson of Balmacara (Labour - Life peer)

Enterprise Bill [HL]

Lord Stevenson of Balmacara Excerpts
Wednesday 28th October 2015

(9 years, 1 month ago)

Grand Committee
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Lord Stoneham of Droxford Portrait Lord Stoneham of Droxford
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I need to declare my interest as chair of Housing & Care 21. We built 1,000 homes last year. We have built far fewer this year but are very engaged in this intricate industry.

All the points have been made but I just wanted to say that this industry is very cyclical. The other feature of it is that it is dependent on a mass of subcontracts, so it is very complex. If we are going to do a review, now is a good time. We are at the beginning of the cyclical upturn and there is a concern to get work done. The whole capacity of the industry needs looking at because a lot of it was wiped out in the recession. Anything we can do to improve the capacity of the industry and make it more resilient is good. As sure as fate, whatever happens, there will be another recession and some of these problems will re-emerge. My whole experience of the industry is that it just goes suddenly dead. It is the most scary industry because people stop buying homes and it goes right through the chain, and then of course it is the small guy who loses out because he has no capacity to get his money back—he is down and dusted—and a huge part of the capacity of the industry goes with it every time. These measures are needed to build confidence in the industry, to build capacity and to allow it at the end of the day to produce more homes at less risk.

Lord Stevenson of Balmacara Portrait Lord Stevenson of Balmacara (Lab)
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My Lords, I should declare an interest as my wife is a partner in a firm of solicitors and her expertise is in construction contracts. She does not talk to me about it so I do not know anything at all, but I still thought I should declare it.

This is the third time around the track on this particular topic. The quality of debate has not dipped; indeed, the interesting thing is that more people are now joining in. An emerging theme is now being drawn out, and I think it is a good one. For me, there are two points which have not been picked up, and I would like to reinforce them. First, as the noble Lord, Lord Stoneham, was saying, construction is an interesting sector and a very important one for the economy, so we must be very careful about it. The ONS produces figures on the progress of our recovery which always feature an element of construction. It is important at a local level and an everyday level but also in a macroeconomic way, and we should give regard to that.

The second thing is that there is a way that this could be sorted out by the sector itself, and it has not been. The contractual arrangements could be reformed, and the JCT, which has been mentioned, has indeed begun to think through some of these things. There are available options for people who want to make contracts that take advantage of them. But the interesting thing is that that has not happened. Something is going on here and that simple point has been made in some of the briefing we have received. There is “grand theft auto” of the working capital. The unfairness is that while this is a resource that should be of benefit to the contractors who are owed it at the end of whatever contractual period they have signed up for, it is withheld from them. The consequence of course is that it does not feature in their ability to raise finance for ongoing projects later on.

That is an important issue, which makes this practice very pernicious in the way it is applied. The original idea was that you held back the cash in case the constructor did not come back to do any remedial works that might be required. But as my noble friend Lord O’Neill said, this is a story from the past because contracting has got its act together now and is much better. Also, the contractual arrangements are better, so I do not think that it is as much of a danger as it was. My last project, which was a small one, was interesting. When you analysed the retentions money, it explained why senior members of the company kept popping up on our doorstep. The retention represented the directors’ bonus for completing a good project. They were aware of what was going on and they were very keen that we did not retain any money, and we did not. It is a fact that it is woven into the way in which these people operate, and it will be difficult to get out of.

Our amendments suggest that we already know enough about this for the Government to act. The consensus in the Room is that we should think about a review and then act promptly, but certainly set a more ambitious timetable of 2020 rather than 2025. In proposing our amendment, we simply add to the pressure that must now be felt by the department and I hope very much that when we come to hear the Minister, she will be able to respond to that.

Baroness Neville-Rolfe Portrait Baroness Neville-Rolfe
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My Lords, I am extremely grateful to the noble Lord, Lord Aberdare, for his Amendment 39 and for Amendment 46. The common ground is that they both call for a review of this practice. I am grateful to the noble Lord, Lord O’Neill, for his comments both in the Chamber and in the private conversation we had one evening on our way home together.

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Moved by
44: After Clause 12, insert the following new Clause—
“Duty to report outstanding interest payments on unpaid invoices
(1) A company with outstanding liabilities relating to overdue payments at the end of an accounting period must record these in their statutory accounts.
(2) Where any of the outstanding liabilities include interest on overdue payments, the company must disclose these amounts by way of a note to the accounts, which should also record comparable outstanding liabilities, if any, for the preceding six financial years.
(3) Where companies fail to disclose this information during the course of an audit, their auditors are required to report that failure to the Small Business Commissioner, and may comment on the issue of their audit report.”
Lord Stevenson of Balmacara Portrait Lord Stevenson of Balmacara
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My Lords, we seem to have reached the point at the end of the first part of the Bill where many of us feel a little discouraged. The powers in the Bill for the Small Business Commissioner are not going to match the aspirations that have been trotted out on a number of occasions across the first 43 amendments that we have looked at. The only concession or move in any direction is the one we have just had, for which we are very grateful. We do not want the Minister to change her mind on that. However, I feel that on Report we may want to test the water again on the question of whether some stiffening of the approach, attitude and powers of the Small Business Commissioner could be configured into the Bill.

However, the growing awareness that the Minister was not for moving and that the department had drawn a line in the sand and would not be able to cross it prompted a wider thought about what we could do in other areas. Amendment 44 seeks—probably in rather infelicitous language which needs to be tidied up—to do something which at heart is quite straightforward and simple, and perhaps not contentious. If noble Lords think about the way in which individual statutory accounts are drawn up, they will find in the profit and loss accounts of most companies a record of the liabilities which are owed and the debtors who owe money to the company. Part of those making up the accounts in the liabilities area are payments which need to be made by the company to its suppliers. It is probably the case that these will appear as a single lump sum and will not be differentiated. It might be a smart move and aid transparency if it were possible to require companies that had outstanding liabilities at balance sheet date to be required to disclose by note situations where their invoices had been accompanied by any overdue fees or costs that occurred as a result of the invoices being overdue.

We have had some work done on this. We calculate that in a year, when you look at the statutory accounts registered at Companies House—obviously they are delayed, so we are talking about a nine-month gap to look back on, which is quite a lot of time—an approximate figure is around £15 billion outstanding at balance sheet date. The noble Lord, Lord Cope, who was also an accountant as I was, is looking a bit stern about that, but as far as I understand it, that is the figure. I make no judgment on it; it is simply the way that business operates, which is that it takes time to make payments.

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Baroness Neville-Rolfe Portrait Baroness Neville-Rolfe
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My Lords, there might be merit in further discussion on the finer points of this. The point I wanted to make is that it is important to also look at what we are planning in terms of payment transparency; perhaps we could discuss that outside the Room before Report.

Lord Stevenson of Balmacara Portrait Lord Stevenson of Balmacara
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I thank the noble Lord, Lord Deben, for intervening in this debate. For his information, the figures I quoted, which were large, were in fact for the whole economy, not just construction: although construction is big, it is not that big. They came from a company called Satago, which provides a service for automated chasing of customers for payment and aims to reduce outstanding invoices. Therefore those figures are reputable and based on trade practice, so not necessarily far out.

I thank the Minister for her helpful intervention. It is true that there is a lot of similarity between what we are saying in this amendment and the proposals under the Prompt Payment Code. Am I right in saying that the code will remain a voluntary obligation on companies, not a statutory one?

Baroness Neville-Rolfe Portrait Baroness Neville-Rolfe
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Just to clarify, the payment regulations we are bringing in are statutory requirements to share information on payments. The noble Lord is right that the Prompt Payment Code is voluntary. There are various different points, but the key thing is to look at them in the round, which we can do when we discuss them to make sure that we are capturing things that we feel are necessary.

Lord Stevenson of Balmacara Portrait Lord Stevenson of Balmacara
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I was not trying to be antagonistic at all on this—I was simply trying to clarify this point. The Prompt Payment Code has a slightly bad smell about it. The regulations that the Government are bringing forward will presumably be consulted upon, and then in the House we will reach out to a lot of the points that I was making in my submission. I absolutely agree with that, and it is good. However, the noble Baroness can see where we are heading. In a sense it is only a proportion of the companies, albeit the big ones; and it is an additional regulation, when we were suggesting that you can do it within an existing provision. However, the Minister is also right to point out that relying on statutory audit with the delays that come with that and the registration difficulties means that is all a bit late. I accept that.

The Minister’s suggestion of a chat about this is a good idea—let us see if we can work something out. We are not trying to push this particularly hard: it was an idea that came to us, which is already very close to where the Minister is, and I think we can probably leave it. With that in mind, I beg leave to withdraw the amendment.

Amendment 44 withdrawn.
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Moved by
48A: Clause 13, page 10, line 32, at end insert—
“( ) In subsection (2), after “means” insert “—
(a) all regulatory provisions made under section 2(2) of the European Communities Act 1972,(b) regulatory provisions which are subject to the affirmative resolution procedure in both Houses of Parliament, and(c) ”.”
Lord Stevenson of Balmacara Portrait Lord Stevenson of Balmacara
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We now move to the next stage in the Bill—regulatory measures—which is progress of sorts. We had hoped to be there on Monday night, but we are moving forward, so it will go very fast now. It is a great pity that the noble Earl, Lord Lindsay, is not able to be with us today, because I know that this is an area he speaks on, but we have expertise in the Room and I am sure that we will be able to hear from it later on. I am glad that there is a bigger club than just a few of us who are interested in regulation.

Regulations are very important. Some people call them the rules of engagement that define quite a lot of modern life. They range from things such as whether it is possible to adjust the volume of ice cream van musical jingles to the question of how you value complex financial instruments, so they are everywhere. They are pervasive and important. A lot of complete guff—if that is a parliamentary term—is talked about them. No Government will introduce a new regulation believing it is going to make life worse for their citizens, and yet the public perception of regulations is of a relentless, negative story, with faceless bureaucrats—poor chaps—imposing rules in an inflexible and often absurd manner.

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The Secretary of State is required to report his decisions on the content of the business impact target by May, but in fact I am sure he will do it rather earlier than that. We will listen to the arguments noble Lords have made, but in the mean time we should not reduce the flexibility which the SBE Act gives to the Government of the day to meet the challenges of the day. I hope that, with that explanation, the noble Lord will feel able to withdraw the amendment. I have not sought to respond on the details of the £200 million to £300 million over the last five years, but again, I am very happy to have a discussion on that outside the Room.
Lord Stevenson of Balmacara Portrait Lord Stevenson of Balmacara
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I thank noble Lords for their contributions. On the point raised by the noble Earl, Lord Kinnoull, I was not saying that people did not care about where the regulations came from in terms of whether they came from Europe or from Britain—I probably did say it but I did not mean it—but that what they cared about was being regulated. More regulation is usually bad for them. I absolutely accept the point that many of them are setting up on an unlevel playing field. I agree with the Minister that every effort should be made to try to stop that; it seems patently unfair and anti-competitive.

However, I do not think I got a response to the point that I was trying to make as gently as possible, which is that it seems a little odd that the Government can choose the game they are playing, can set the goalposts at the distance apart that they wish and then score as many goals as possible and claim a victory, when in fact there is another game going on elsewhere where people are being beaten up by what in their view is excessive regulation, often gold-plated, and we do not seem to get transparency. I hope that what I said will be thought about and perhaps we can come back to it.

Baroness Neville-Rolfe Portrait Baroness Neville-Rolfe
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There is an excellent report by the Regulatory Policy Committee with which the noble Lord may be familiar. That report gives all the information on the EU figures as well. In the last report EU financial systemic risk measures were a very large element, £1.6 billion in that particular time period. I think we were saying that the target that we have chosen to set and have put in legislation should reflect what we can control. The noble Lord is right that we should be transparent, and we have sought to be transparent through the work of the RPC, which can hold us to account.

Lord Stevenson of Balmacara Portrait Lord Stevenson of Balmacara
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My Lords, that is the point: £1.6 billion is excluded from the Government’s target because it relates to an area that they choose not to report on. It is up to the RPC to give us the full picture, and it is good that it does. I am saying as gently as possible that I think transparency might be the buzzword of the day, but it is not going to get us there if the Government do not accept that it would be better in the long run if the full burdens of regulation were calculated in a certain way. We will come on later to amendments about how we might do that. If they set out their targets in terms of that full load and then reported on them, I think we would be better off. That is for another day, though, so I beg leave to withdraw the amendment.

Amendment 48A withdrawn.
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Moved by
48C: Clause 13, page 10, line 40, after “State” insert “, but those regulations cannot specify the Equality and Human Rights Commission”
Lord Stevenson of Balmacara Portrait Lord Stevenson of Balmacara
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My Lords, I am having a busy day. Again, this is a rewind in glorious technicolour, because we spent a lot of time on this over the last two years of the last Parliament. It is back again for reasons that I do not understand; I hope that the Minister will listen again to the arguments we have made, because I will end up by quoting from her the exact case that I wish to make—indeed, I might shorten my speech if I simply cut to that chase. I would have done, except that just before this meeting of the Committee the Minister published by Written Statement a list of all the bodies that are likely to come into scope of the provisions of the Bill. That was somewhat worrying to read, because I understood that the proposals in the Bill were to require bodies called “regulators”—there is a very large list of those—to undertake new responsibilities with regard to growth and reporting. The growth part came in earlier legislation and the reporting is largely brought in here. However, the number of regulators is being extended.

We are making the point that in a business-focused Bill it seems strange to us to receive representations from bodies affected by this which do not carry out business activity. An example here is obviously the Equality and Human Rights Commission. My noble friend Lady Hayter will raise other ones, including the Charity Commission, for which there can be no question of whether they are providing business regulation or an impact on business. Indeed, in the case of the Equality and Human Rights Commission it is quite the reverse.

Clause 13 extends the BIT requirements to all national statutory regulators so that they must assess the financial cost to business of changes to designated statutory regulatory functions and then secure validation of that assessment from an independent body and report annually on this aspect of their work. The stated purpose in the Bill is to ensure that regulators improve the understanding and transparency of the effect of their regulatory activities on business and to broaden the responsibility beyond government to achieve the target of reducing the associated regulatory burdens on businesses—which is said to be £10 billion, but we beg to differ on that point.

If you have a regulator who is not involved in advising businesses how they should operate and is not providing advice and everything else, I do not understand why it is included in the list. There is no question that we support the aim of the Bill; in fact, the impact on the main statutory regulations is good and something we can support. However, we have a problem with the unintended consequences of trying to include everybody listed in the lists that were published.

The two main concerns that have been raised with us is that as the commission does not set standards in the sense that other regulators do, feeling that that is a job for the legislature and the judiciary, it has no power to go in and inspect businesses, nor does it have to charge fees or recover costs from them, so it is to some extent by its own definition excluded from the activities they are trying to be involved with. However, the more important point is that the imposition of this requirement on the commission would jeopardise its high standing as a United Nations-accredited “A” status body, which depends under the UN Paris principles on being independent from government interference, direction or control. By passing a law of this nature the commission believes strongly—and I think that this argument was accepted by the Government last time round—that it would not be able to be regarded as independent from government interference, direction or control by definition. The last time we brought this up, the Minister, in responding during the passage of the Small Business, Enterprise and Employment Act at Third Reading, said:

“The Government have always maintained that the EHRC is a very special case and should not be subject to the duty to appoint a champion. We considered that an exemption in secondary legislation would be sufficient, but noble Lords were concerned about this and the potential implication for the EHRC’s “A” status as a national human rights institution. The Government believe that there is only a very small risk here, but we have listened to noble Lords and agreed to eliminate the risk altogether with this amendment, which I know from the debate will be welcomed across the House”.—[Official Report, 17/3/15; col. 1007.]

I would be grateful if the Minister could explain what is different this time round. I beg to move.

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Baroness Neville-Rolfe Portrait Baroness Neville-Rolfe
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My noble friend, as always, makes a good point. We will certainly look at what is already happening. I suppose the idea is that if you can, ex-post, gather the information together and see what progress you are making in terms of reducing burdens, that could be helpful in itself. If in fact the figure already exists, which may be the implication of what my noble friend was saying, the task is not that difficult. I am grateful for that intervention.

Briefly, the actual retrospective effect of the provisions of the Bill does not have the consequences that noble Lords are concerned about. The provisions can have no impact on the status or effect of the regulatory policy changes made by regulators prior to the Bill being passed. The limit element of retrospection is appropriate and justified because it is about measuring delivery against the Government’s targets. The targets are set for the life of a Parliament, so if there were no limited retrospection, one would not be able to count any reductions in red tape that took place between the beginning of the Parliament and the writing of the report by the regulators concerned. We were trying in the drafting to tackle that gap.

I have also arranged a meeting with the noble Baroness, Lady O’Neill, who is chair of the EHRC, in early November and I will report back to the House on the outcome of that meeting on Report. I hope that what I have said on this important issue helps to reassure noble Lords that the proposed amendments are not required. In any event, I hope that the noble Lord will feel able to withdraw his amendment.

Lord Stevenson of Balmacara Portrait Lord Stevenson of Balmacara
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I thank the Minister for that full and comprehensive response, but I am afraid the answer to her question is that, no, it does not reassure us. I accept the assurances that she has given that the growth duty and the small business champion role do not apply to the EHRC. They are welcome and we would want that.

I hope that the Minister bears in mind that while on the one hand we would love to see her go down in history as the Minister who abolished retentions, we do not want to see her go down as the one who scuppered the country’s grade A-listed champion of human rights. I am sure she will realise that if it gets to that point, we will have to have a serious conversation. I take the points about retrospection. The intention was—if one might call it this—gold-plating on the part of the EHRC to make sure that it could not be caught at some future date, so her reassurance is helpful on that. But the fact still remains that if the EHRC feels that its international status is jeopardised by this, I do not think that the Government have much wiggle room on this matter. I hope that we return to that point on Report. However, let us continue to talk about that until then. I am sure that the contribution from the chair of the commission will be helpful. In the mean time, I beg leave to withdraw the amendment.

Amendment 48C withdrawn.
Moved by
48D: Clause 13, page 11, line 20, at end insert—
“( ) Section 21 of the Small Business, Enterprise and Employment Act 2015 is amended as follows.
“( ) For subsection (3)(b) substitute—
“(b) the independent body, as provided for by section 25, must publish a methodology to be used for assessing the economic impact mentioned in subsection (1)(a).””
Lord Stevenson of Balmacara Portrait Lord Stevenson of Balmacara
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My Lords, this group of amendments focuses on strengthening the work and role of the Regulatory Policy Committee. As the Minister has already said, it is good to find an independent body able to look widely across the regulatory field and make recommendations without fear or favour, and we value its work. However, it is a little hampered by the fact that it is not currently able to report except in terms of where the Government set their objectives. I have already criticised that and we should put that aside for the moment and say, well, those are the objectives. But we should also reflect, if we can, on where we might go on that.

The point has been made, better than I could possibly make it, in a quotation that I would like to read:

“if you have the privilege of being in government, you should try and think about the long term and not just today. And in the long term, I think the country would be better off if we thought about wellbeing and quality of life as well as economic growth”.

That was the Prime Minister. That sentiment is picked up by work that has been done in a number of think tanks, notably the Legatum Institute. The noble Lord, Lord O’Donnell, has picked up the idea of thinking more widely about where Governments should be aiming in what they do about the impact of their legislative and regulatory programmes.

There are two minor points in this group that I also want to pick up. First, as I understand it, the Treasury has now changed its view about how impact assessments are owned and operated through Whitehall by asking for a business-critical model to be introduced for many impact statements, where there is a senior responsible owner quoted as a named individual of sufficient seniority to take responsibility for the model throughout its lifecycle and to sign it off as fit for purpose prior to use. Is that now common practice across Whitehall or is this a work in progress? If the latter, will the out-turn be something that we can look forward to in terms of improving the quality of impact statements? I think the reason for this is the west coast main line franchise fracas. I need not say much more about that, since it was quite clear that there was not sufficient seniority in the department to take responsibility for what went wrong there.

My point here is that if we are seeing changes in some of the infrastructure activity in preparing for legislation and regulation, this would be an opportunity to have that on the table so that we could make judgments about it. I beg to move.

Baroness Neville-Rolfe Portrait Baroness Neville-Rolfe
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My Lords, I thank noble Lords for their amendments. I am grateful to the noble Lord, Lord Stevenson, for quoting the Prime Minister—perhaps a signal of the constructive and harmonious nature of our debates in this Committee in the Moses Room. Amendment 48D would remove the responsibility for choosing and publishing the methodology for assessing economic impact under the business impact target from the Secretary of State, as I understand it, to the independent verification body.

We see the target, scope and methodology as a single package. They need to work together and be set together. It is unrealistic to expect that the Government should set a target having no idea about how the impacts will be measured against it—that sort of delegates responsibility. So there is a fundamental problem there. The purpose behind setting targets of this nature is to deliver the right incentive, change behaviour within government and improve the way we regulate to achieve the better regulation vision that has been expostulated today.

To my mind, it is right that this remains a matter for Ministers. We have to be accountable to Parliament and to the people at elections. Amending the role of the verification body would place an unusual amount of power in one unelected body and remove the flexibility for future Administrations to determine the methodology appropriate for assessing business impact in their particular circumstances. Of course we are consulting the Regulatory Policy Committee about the methodology for this Parliament, and we will continue to work with it to resolve questions of interpretation that inevitably arise.

Amendment 48EA seeks to stipulate that the target must comprise both a number of regulations and the monetary value. It is right for the Government of the day to decide methodology, and of course we have indicated our broad direction with our manifesto commitment of £10 billion of deregulatory savings. The change would limit options for future Administrations. I myself think that the number of regulations is less important than their economic value, but we could debate that. The point is that we would like to leave this broad and have discretion for the Government of the day.

Amendment 48E relates to the annual report on the Government’s performance against the target and would require the Secretary of State to publish additional information in respect of regulatory provisions which do not fall within scope. Transparency about such measures is important, and I can give some reassurances. Measures which do not score for the business impact target still receive proportionate appraisal and independent scrutiny under administrative requirements which will continue in this Parliament. That means that significant measures are required to have an impact assessment, even where they are excluded, as I think we discussed in respect of the EU financial measures.

Other than for regulatory measures with very small impacts, the relevant impact assessment is subject to independent scrutiny by the RPC. Impact assessments must be published at the final stage alongside the legislation to which they relate. This transparency is incredibly important. I have already said that I think the RPC is the biggest reform of administrative procedure in Whitehall since I last worked in government, and I am very pleased to see the teeth that it has. It seems to me to be proportionate and to avoid duplication. This approach does not detract from established principles. I am glad to see the noble Lord, Lord Curry, here, because he has been very involved in making sure that this regulatory system works correctly and that it is independent.

There are some technical issues with the drafting of Amendment 48EB. The RPC does not have a separate legal existence, but I can address the intent behind the amendment. The RPC is an enduring cornerstone of the regulatory framework, and the Government focused the verification functions on those that it was absolutely necessary to set out in statute. If there are further comments on the detail of this, I will be very happy to discuss them, but I will just respond to the question asked by the noble Lord, Lord Stevenson, about the senior responsible owner of impact assessments. As he says, he has great intelligence networks. The Treasury is looking to strengthen government project management, including business cases. We are not sure that this will affect impact assessments as such, but I am certainly happy to update him on what is involved here. As he implies, it is potentially another important administrative innovation.

These amendments are to some extent probing but are also about trying to constrain the operation of the system. As I have said, some degree of operational flexibility is needed for the Government of the day. When we put proposals forward in the last Parliament, we put them forward with that in mind, and I would be reluctant to go down a different road.

Lord Stevenson of Balmacara Portrait Lord Stevenson of Balmacara
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I thank the noble Baroness for that very full response. These were of course probing amendments, but she might like to note for future reference that we struggled hard with the clerks to expand the range of things that we wanted to talk about. It was a fight of great intensity, which we lost on two areas that I thought we would be able to include. We could not put into Amendment 48EA a third point which would require the evaluation of the impact of all regulatory measures on well-being, because they said that that was not about enterprise, for some reason, and did not fall into the long title of the Bill. We also wanted to probe the question of whether or not the RPC would be able to follow up its idea that impact assessments should not just be generated sui generis within a department but should be exposed to external review as well, which would have given another cornerstone to the way in which impacts are measured and assessed and would help the law-making process. But these are much bigger and broader issues and cover more of a constitutional than a legislative area. They are matters to be discussed when we have that drink. With that, I beg leave to withdraw the amendment.

Amendment 48D withdrawn.
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Moved by
48G: Clause 14, page 11, line 42, at end insert—
“( ) of the measures adopted by the relevant regulator to simplify the regulatory making process in a manner which is comprehensible to small businesses, where regulations have an impact on small businesses, and( ) of measures taken to promote awareness of regulations which affect small businesses;”
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Lord Stevenson of Balmacara Portrait Lord Stevenson of Balmacara
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My Lords, I do not think that these amendments will take up too much time. In moving Amendment 48G I shall speak also to Amendments 48H and 49A. This deals with another of our good ideas which are dreamt up late at night. We thought that a focus on productivity seems to be lacking in this Bill. Enterprise is there in spades, but productivity does not appear, although it is the cause célèbre of our time. We ought to have something about it, and I wonder whether it would be possible to have the Bill team look at the question of whether obligations can be placed on the regulators to look at this dimension when considering how they will extend their programme of work as well as report on it. We also felt that this was something that the Small Business Commissioner might want to look at, although given the response we have had so far on extending the remit of the commissioner, I do not expect to get very far with this one. But it is a good idea and I would be grateful if the noble Baroness could consider it. I beg to move.

Earl of Kinnoull Portrait The Earl of Kinnoull
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My Lords, I rise to speak to my Amendment 49ZA. Earlier today we heard a lot of the arguments expressed eloquently by the noble Lord, Lord Mendelsohn, in the first group of amendments concerning the importance of anonymity in certain circumstances, and those arguments apply here. The danger is that people, whether warranted or not, fear that they would be punished by a regulator if they make a complaint. I will say a couple of things in addition.

First, in commercial life I have always been interested to see the complaints that have come in, mercifully not too many at Hiscox because I am delighted to know that the Minister is a customer. But they have enabled us to make our business better by understanding what was going wrong, and so as a regulator I would say that you want to see as many complaints as possible and that an anonymity mechanism is in your interests. Secondly, in my speech at Second Reading I talked about the attitude of regulators. I have dealt with a heck of a lot of regulators in many different countries during my business career. Taking a leap, the most amusing one was definitely when Hiscox ended up owning a sugar refinery in Brazil, or a controlling interest in it. I was on its board for three years, and the regulator concerned was the rabbi who had to give us the kosher certificate for our sugar before we could sell to Coca-Cola or to Sara Lee, the cake company.

The best regulators are definitely people with a collaborative and helpful approach, and the worst ones represent a great bind on business. I think that the naming and shaming mechanism, which this would drive as well, because the regulators will have to write an annual report, of having consistent comment about poor attitude would be one way in which my concerns about trying to improve the attitude of all regulators in Britain—we all know some who have a bad attitude—could be addressed and the situation improved. There may be other opportunities in the Bill for it to be improved, and I would like to talk about that outside this Room. But driving good attitude is something which is in the interests of small businesses and more generally.

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Lord Curry of Kirkharle Portrait Lord Curry of Kirkharle (CB)
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My Lords, I just add one comment on this, prompted by the comments of the noble Earl, Lord Kinnoull. The prevailing culture with the regulator is very important. I value the Minister’s comments on that. Part of my role has been to try to encourage a better relationship between the regulator and the business community—namely for it to regard the businesses as clients it needs to work with to deliver an outcome. I believe that we made some progress in that respect. As noble Lords know, in the small business Bill we had the small business champion. I hope that businesses will feel they have a recourse to approach the small business champion if they are dissatisfied with the regulator.

Lord Stevenson of Balmacara Portrait Lord Stevenson of Balmacara
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My Lords, I think that this session has been one of conciliation and support. I do not think there is any sense of a divide between us, and that last contribution helps to say that this is a cultural issue but it is also important, and if we can do more to help as we go forward then we would like to do so. I hope that the idea we had of trying to use the new structures to create even more impact is taken on, although I reflect that the fact that so many new ideas are bouncing around suggests that there might perhaps have been some advantage in taking more time over the Bill and taking more advice from others before it came forward. Still, we are where we are. There may be time to build on some of those issues, and I look forward to reading Hansard carefully and to seeing what happens as we move on to Report. With that, I beg leave to withdraw the amendment.

Amendment 48G withdrawn.