Deregulation Bill — House of Lords, 2015-02-11
Topic: Mixed Topics
James Lindesay-Bethune (Conservative, Centre-right): 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 I have been looking at the published draft guidance that the Government issued in January, and I believe that it makes very clear many of the points that I have just mentioned.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to reduce protections or to ignore non-compliance For the benefit of noble Lords who have not seen the published draft guidance, Non-economic Regulators: Duty to Have Regard to Growth, I draw their attention to the beginning of chapter 2, on page 5, which sets out the purpose of the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.