Regulatory Impact Assessments (Legislative Scrutiny)

Paul Scully Excerpts

Wednesday 2nd September 2020 Commons Chamber

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)]

I am grateful to my hon. Friend the Member for Christchurch (Sir Christopher Chope) for bringing this important issue to the House. Parliamentary debate and the exchange of views reflect the importance of parliamentary scrutiny.

When a policy decision is made, it is informed by an assessment of the potential impacts of a range of different policy options. The evidence and analysis informing these decisions will inform consultation and engagement with stakeholders, and for legislative proposals, it is usually presented to Parliament in a regulatory impact assessment alongside the legislation. In the UK, regulatory impact assessments present the outcomes of evidence-based processes and procedures that assess the economic, social and environmental effects of public policy on businesses and wider society. Their use has contributed to better policy making and reduced the cost to business, which is so important.

Our commitment to conducting such impact assessments remains strong. The analysis that goes into impact assessments ensures that Government consider the need for and likely impact of new regulations to support legislative change. They ensure that we consider how regulation will affect the operation of markets and best enable businesses to innovate, and, in line with the subject of this debate, they inform parliamentary decision making.

Where Government intervention requires a legislative or policy change to be made, Departments are expected to analyse and assess the impact of the change on the different groups affected. That is generally published in the form of a regulatory impact assessment. However, attempts to conduct regulatory impact assessments for public policy making, particularly in the current climate of the coronavirus pandemic, could be problematic. That is because responding to emergencies requires legislation to be introduced at a much greater pace than during normal times.

The Coronavirus Bill, introduced in March this year, provided powers needed to respond to the coronavirus pandemic. The powers enabled the Government to introduce temporary emergency legislation to respond to the pandemic. To allow the Government to deliver at the required pace, formal regulatory impact assessments are not required for better regulation purposes for the temporary measures put in place in response to the pandemic. Further flexibility in the approach to impact assessments is appropriate where permanent measures need to be enforced urgently.

My hon. Friend mentioned some specific examples where we have assessed the impact in a different way. He is right to talk about the importance of regulatory impact assessments. Some of the guidelines that he mentioned fall within my area. The specific residential landlord and tenant issue that he mentioned falls to my colleagues in the Ministry of Housing, Communities and Local Government, but in terms of the commercial Landlord and Tenant Act 1954 changes, we found from listening and speaking to businesses over a period that some companies that were struggling to pay their rent were being wound up by some landlords, so we acted.

This is on the basis of detailed, long-standing conversation and engagement with businesses on both sides of the debate. In my short time as a Minister, I have had around 500 meetings with, I estimate, 3,000 to 4,000 businesses, so I think I have a reasonable handle on retail, hospitality, weddings and the beauticians who do eyebrows and beard trimming that my hon. Friend mentioned. It is a source of great regret that we are unable to allow wedding celebrations of more than 30 people to occur at the moment. I have seen at first hand and heard from people in the wedding sector, which is an enormous contributor to the UK economy, how badly they are suffering as a result.

[Edward Timpson (Eddisbury) (Con)]

I know that my hon. Friend has been working hard with a range of different sectors, including the wedding industry. Will he reassure the House that work is ongoing to try to find a way for wedding venues to reopen more fully, beyond the current 30-person limit, so that they can see a future ahead of them?

[Paul Scully]

I am glad that my hon. Friend made that point. He has been working tirelessly with his local wedding venues in Eddisbury to try to get a road map. We continue to work and engage on that issue to make sure that the sector, which is a really important contributor to the UK economy, can reopen, and that people whose special day is being put off, and in some cases ruined, can come together.

[Dr Julian Lewis (New Forest East) (Ind)]

I fully accept that in certain Departments, including the Minister’s own, Ministers are trying conscientiously to weigh up the different factors, come to sensible decisions and stick to them, but will he take the message back to the Government that the inability of Government at a very high level to choose policies that seem capable of withstanding gusts of public opinion or media opinion, which is something else, is undermining confidence in the process, at least in part of Government, because if a decision has to be changed in the way that my hon. Friend the Member for Christchurch (Sir Christopher Chope) described in his rather splendid opening speech, that suggests that a certain degree of rigour is absent.

[Paul Scully]

I think that rather than gusts of public pressure, the Government have been working in what is, in effect, as close to real-time decision making as we are ever going to get, and it is based on health advice and the business response. My right hon. Friend talked about the press and the media; I direct him to the example with which my hon. Friend the Member for Christchurch started—male eyebrow trimming and beard trimming—because that was never actually in the guidance. The guidance, which I worked on, was such that male beard trimming could work out, apart from detailing at the front if there was close, face-to-face, near contact. That was exactly the same as female eyebrow trimming, so there was no sense that men could go and get their eyebrows trimmed and women could not. The rhetoric in the media that men were getting a better deal than females, which understandably upset beauticians, just was not the actuality—it was not what was happening—but unfortunately, as we know, it is sometimes difficult to work with the media to stop a good story.

We must continue to engage. We do want to get back to the formality of regulatory impact assessments but, as I say, we need to engage at pace, so we will continue to listen to businesses. Sometimes, the consultations on the guidance we have been working on have lasted literally 12 hours on a Sunday. That guidance has come to me, to the unions and to businesses and we have all been acting within the same time constraints. We have not been hiding things away from businesses and those people who are most affected by this situation.

[Jim Shannon]

I must say that I am impressed by the number of people and businesses the Minister has met; that is an indication of the knowledge that he has gauged from them. May I make a quick suggestion on weddings? It is possible, in a bigger venue, to have people self-distanced and to have more than 30 people. It is also possible at weddings to have clusters of families who live closely together: there could be tables of 10 people —genuinely—which could increase the numbers who can go to weddings. To go back to the issue of regulatory impact assessments, if that was done, more people could attend weddings.

[Paul Scully]

As I say, weddings have been a big source of concern for me and others and, understandably, that argument has been put to me. The huge difference between weddings and, say, restaurants—an example that has often been cited—is that the wedding parties tend to know each other, whereas in a restaurant people have little interest in speaking to those at the table next door. Clearly, if someone’s grandmother or extended family are sitting at the next table, as the wedding and the evening develops, social distance suddenly starts to fall by the wayside.

I totally get the fact that wedding organisers know everybody who is there, so they can register and have test and trace working effectively, but it is a concern to the scientists. We are trying to balance the economy from the economic point of view, the human behaviour point of view and the science point of view, which is a difficult mix to deal with. Because we are working at pace, the regulatory impact assessments, which are the source of this debate, are not always easy to compile. For the reasons that the Leader of the House gave—I understand the concern of my hon. Friend the Member for Christchurch about the way that was worded—when compiling a formal regulatory impact assessment while working at pace, it is not always possible to go through that procedure.

We are reminding Departments of the importance of ensuring that appropriate resources are invested in gathering and analysing evidence about the regulatory impacts of the affected policies, and to publish it, where appropriate, throughout the period, if not at that particular time.

[Sir Christopher Chope]

May I present a challenge to the Minister? Will he publish for our benefit a regulatory impact assessment on the issue of not allowing larger weddings? That would bring into the open all the issues with which he is familiar but which have not yet been exposed to public debate and scrutiny. Is that not what it is all about? This has now been going on for six months, and people want to know where the future lies for the small organisations involved in weddings. Will he offer to do that for us, notwithstanding the fact that his Department is very busy? That would be really helpful.

While I have the Floor, let me also say that I am concerned that the Minister seemed to distance himself from what is happening to individual landlords. Although they may not be incorporated, they are small businesses.

[Paul Scully]

To answer my hon. Friend’s last point, I am not distancing myself; I literally was not involved in that decision. I do not want to offer a line of thought on something that I was not involved in, but I understand his point.

On weddings and the public debate, my hon. Friend has clearly not been following my Twitter feed—totally understandably—which is full of such debates about the wedding sector. We are trying to work with the sector to make sure it can open. My primary concern is about ensuring we get our economy open again with a warm but safe welcome to people. The Government’s first priority has always been to save and protect lives, but restoring livelihoods, protecting jobs and protecting businesses are right up there, for the reasons that my hon. Friend set out. If we do not get this kick-started now, the effect on the economy will be huge, so it is important that we work together to give people not just confidence but joy, so that when they come out to use services in their local high streets and city centres they enjoy the experience and come back time and time again.

A one-off hit to our economy is not good enough. We know it is not going to go back to how it was in February, and there are some permanent behaviour changes that seem to be kicking in. None the less, we need to work with the new normal, which means working with the virus, because we will be living with it. My hon. Friend talked about a second wave, or spike or whatever he wants to call it. If we learn to live with it, there may be a third and a fourth until we get a vaccine, but live with it we must. There will be a new reality of the permanent behaviour change.

Well-designed and effective regulation, which my hon. Friend wants to see in our legislation, and which we are championing, enables markets and business to flourish, grow and innovate. It can provide certainty for investors and protection for individuals and society. The use of impact assessments in informing regulatory design can help us to achieve those outcomes. Excessive or poorly designed regulation can impede innovation and create unnecessary barriers to trade, investment and economic efficiency. We have sought to limit that by ensuring that regulation changes in response to the pandemic are targeted and time-limited.

[Bob Stewart]

One of the biggest things that the Government have insisted on is facemasks, which we have mentioned already. I would be intrigued to know whether there is a regulatory impact assessment on why we all have to wear facemasks in public and various other places, because I have not seen it. If there is one that could be made public, perhaps it could be put in the House of Commons Library. There are growing numbers of people in my constituency of Beckenham who are rebelling against that idea.

[Paul Scully]

I thank my hon. Friend for his intervention. I get the train and the underground into London each and every day, and the adherence of people to wearing face masks is, on the whole, good. Tube use, I am glad to say, is increasing substantially. London city centre—the central activity zone in London—is incredibly quiet. That is affecting the west end in particular, and the City.

The west end represents 3% of the entire UK economy—just the west end—so although we need to make sure that the whole country is able to restore the confidence and joy that I was talking about, it would be remiss of me, as Minister for London as well, not to showcase those areas that make up a massive amount of our capital city as a strategic and world city, so that it is ready for international travellers when they have the confidence to travel.

The Government’s focus has been on improving design and proportionality in regulation. That is done through the Better Regulation Executive, which is responsible for embedding smarter, more cost-efficient and better regulation across Government, and which has recently introduced new guidance templates and training to improve the quality of impact assessments. As a result, impact assessments have clearer presentation of results, better planning for implementation and more quantification of costs and benefits.

The better regulation guidance represents the agreed Government policy on evidence and independent scrutiny, including when to seek independent scrutiny. It is clear that legislation should be accompanied by robust evidence and assessment of impact.

[Bob Stewart]

Forgive me. The Minister is a really good friend of mine, but he did not answer my question. I would really like to see the Government’s justification, in writing, as to why so many people have to wear face masks. Can we know what that justification is in this House?

[Paul Scully]

There has been a long debate about the use of face masks, both on transport and in retail. There are arguments either side—whether it gives a false sense of security or whether people touch their face when they put on or take off their mask. None the less, we have a better understanding of the transmission of the virus and the aerosol nature of its transmission. That is why the World Health Organisation has changed its advice from the beginning, when it said people do not need to have masks or face coverings, to, “Yes, you do.” Actually, we can learn from history. In the 19th century, cholera was assumed to be transmitted by air, but by greater understanding and by working through it—they did not need a regulatory impact assessment to figure it out— eventually people found that it was the water supply that was causing cholera, so they were able better to tackle that particular issue at that given time.

The Regulatory Policy Committee undertakes the verification role that provides independent oversight of the quality of the regulatory impact assessments, as well as providing the Government with external independent scrutiny of evidence and analysis supporting regulatory impact assessments of the proposals. The RPC also has a role in scrutinising the quality of post-implementation evaluations of legislation to help the Government develop the evidence base on how regulation has worked in practice.

[Sir Christopher Chope]

Is this body to which the Minister is referring going to look at the issue of face masks, or face coverings? In answer to my hon. Friend the Member for Beckenham (Bob Stewart) he has said that there are arguments on both sides of this. In those circumstances, why are the Government taking one side and criminalising behaviour instead of trusting people to reach their own decisions on the information provided by the Government?

[Paul Scully]

I am sure the necessary people will have heard my hon. Friend’s call for that to be examined, but on the use of face masks, it is the same as self-isolation as a result of the test and trace system: the number of people who are having to self-isolate at any one time means that millions of us can go about our relatively normal lives by going to retail, hospitality or our places of work, which we were not able to do for so many months.

Those changes are evolving. I, like my hon. Friend, do not take any infringement of our civil liberties lightly, but this is a situation—I am not going to use the word “unprecedented” even though I just have; it has been used an unprecedented number of times—that we have never had to face before. No Government have ever had to face such a situation, so we are learning as we go along. We will not always get it right, but we have to make sure we are using the best engagement, listening to both sides of the argument, and working through as the science evolves and as we see what is in front of us in terms of human behaviour.

My hon. Friend the Member for Christchurch talked about the OECD, whose latest report acknowledged that better regulation is an area of strength in the UK. It notes that the UK has been a leader in regulatory policy in general, with the early adoption of the better regulation agenda. Our ambitious agenda is reflected in the results of the OECD’s monitoring of regulatory management tools, as displayed in the “OECD Regulatory Policy Outlook 2018”, with the UK displaying the highest composite indicator score for stakeholder engagement for primary laws. Our score for secondary legislation is also significantly above the OECD average. We also had the highest composite indicator score for regulatory impact assessments across the OECD. That includes strong formal regulatory impact assessment requirements in areas such as establishing a process to identify how the achievement of the regulation’s goals will be evaluated; assessing a broad range of environmental and social impacts; and undertaking risk assessments as part of regulatory proposals. So we should be justifiably proud of our world-leading reputation in this area.

These assessments are valuable documents, and the Government should be applauded for encouraging their production and the transparent scrutiny of them, but, as with some individual impact assessments themselves, there is always room for improvement. As with the principles underpinning better regulation, we are always looking for ways to learn and improve our approach.

[Sir Christopher Chope]

Obviously, we are fortunate in having a bit of extra time this evening, which is great. Will the OECD be asked to opine on the effectiveness of the Government’s regulatory response to the coronavirus epidemic? For example, will the OECD be able to comment on the distinction, which my hon. Friend has made, between rules on face coverings, for which there are lots of exemptions, and rules about isolation and quarantine, for which there are no exemptions. I am afraid that there is an anomaly there.

[Paul Scully]

I am afraid I do not have the OECD on speed dial, but I am sure that my hon. Friend will be able to ask it to look into all these things. I am glad that we have extra time, because there is nothing I like more than to discuss regulatory impact assessments—I am afraid that Hansard does not detect sarcasm. Although I make light, it is good that we have parliamentary scrutiny of an important topic to cover.

As I say, there is a further cultural shift in Whitehall to make on such impact assessments across the board. We do have a responsibility to monitor the extent to which the laws we have passed are implemented as intended and have the expected impact. My hon. Friend is justified in raising this important issue, so that we can consider, learn and move forward together. The planning for monitoring and evaluating regulatory changes could be more effective. There is a risk that laws are passed that result in unexpected consequences or inappropriately stifle innovation. I have seen that at first hand as we have been changing and tweaking various support measures for businesses; we have had to change them so that they are supporting businesses as intended, rather than with an unintended consequence. Better planning for monitoring and evaluating will help to ensure that there is sufficient information to assess the actual state of a law’s implementation and its effects.

In conclusion, regulatory impact assessments, in themselves, have evolved into an important and valuable component of the UK’s better regulation system. The transparent publication of impact assessments has added accountability to the analytical dimensions to policy development, which has increased the amount of evidence presented alongside policy proposals, and the existence of the independent scrutiny has increased both the transparency of the process and the accountability of government. I thank my hon. Friend for raising this important issue.

Question put and agreed to.