Better Regulation — House of Lords, 2017-12-07
Topic: Government Operations
Elizabeth Andrews (Labour, Centre-left): I am grateful to the noble Baroness for creating another opportunity to discuss this very important matter. I agree with much of what she said. We have never been at a more important time in carrying out our role to regulate properly, proportionately, wisely and transparently. I am going to pursue a rather different tack this morning Even under normal circumstances, the minimum that we should be able to expect from the Government in their approach to regulation is not merely that it is proportionate, providing the right level of safeguarding and reducing the sort of risks that need to be reduced, but that it is transparent enough for everyone to have confidence in and robust enough to invite and withstand scrutiny. I hope that the Minister agrees. My questions to the Minister today—there are quite a lot—will test whether these assumptions still hold in the light of what the Government plan to do to reduce the scope and functions of the only independent verification body which advises the Government about regulation: the Regulatory Policy Committee, created in 2009. In July I led a debate on regulation, which followed many of the same lines as the noble Baroness. This afternoon it is different. At the end of the debate, the Minister responded to me, in an unsatisfactory way, that the system of regulation was under review. Naively, I thought that that might mean a review which could lead to some improvement. There is common and cross-party agreement that we need to improve the system—to strip out what is redundant, ambiguous and obstructive—and to standardise practice without losing quality. That was the line taken by the Public Accounts Committee recently, when it said that the Government should adopt a more proportionate and efficient better-regulation system What has happened in fact, and which is deeply alarming to noble Lords across this House and to industry, is the opposite. Possibly under cover of the challenges of Brexit, possibly driven by it, the Government are planning to reduce the powers of the one independent body which is set up precisely to ensure that regulatory changes planned—whether to create or annul regulations —have the impacts claimed for them. We are talking only about business impact statements here—the very basic currency which has governed the accelerated approach to deregulation in recent years. These changes are planned and are under the radar. Apart from a letter to the chair of the PAC delivered last week, none of them has been publicly revealed, let alone discussed or consulted upon, not even with business interests. Each of them reduces a different part in the process of careful scrutiny and each has massive implications for small businesses—and very much for this House and the way it conducts scrutiny The three changes are, first, that the Government plan, as the noble Baroness, Lady Neville-Rolfe, said, to impose a de minimis bar of £5 million on what the RPC will look at in the future. This will have the following effect. Between 2015 and 2017, the RPC looked at 700 measures. Had this new regime been in place over the past year, it would have looked at only 18 measures, and it would be for government departments to self-certify those measures as to which side of the de minimis they fall on. This will reduce the work of the RPC by 90%. Had these measures been in place in recent years, the RPC would not have been able to review important regulations relating to fracking, night-flight restrictions, gender pay-gap reporting, pesticides and water quality, to name just a few. That is only one sort of impact The Federation of Small Businesses has been in touch with me as well. It says: "There are rumours that government are introducing a higher de minimis threshold for scrutiny of impact statements" How right it is. In its briefing, it asks me to ask the Minister to provide clarity on this and when he will consult on it. Can the Minister ensure that in the wind-up he answers this question? The federation says: "Our members cite the cumulative burden of regulation as a key problem, and so we are concerned that this change will allow more regulation to slip through the net unscrutinised, adding to the burden rather than reducing it" Exactly. Changes which look minor in themselves, which affect every hairdresser in the country, may well not add up to £5 million so will not be scrutinised—but they affect every hairdresser. That is what the FSB wants information about The second change is related to that. The Government have changed the terms on which measures of any size can be examined. With the introduction of de minimis, the RPC was concerned—rightly—that controversial measures could slip through, so it was working with the BRE to introduce powers of call-in to pick up controversial measures that would have a perverse consequence, whatever that might be. This, I understand, has now been abandoned as an idea. There will be no provision to call in any controversial measures that fall below the minimum. In a letter that I have seen, sent by the Minister to Cabinet colleagues, this is simply described as being, "to enable the BRE to work with Departments to avoid unnecessary parliamentary handling risks" Thirdly, the Government have decided to abandon the mandatory first stage of consultation, which was developed by the RPC to spot and iron out mistakes, to the advantage of business and societal groups. This would provide greater departmental autonomy, with only one final cliff edge of confrontation. This proposition had been put forward before but was rejected by the then Cabinet Office Minister, Oliver Letwin. Business is very unhappy These are my questions for the noble Lord. Can he explain why the Government are reducing the power of the RPC to a minimal, possibly unsustainable, level at a point when its regulatory function needs to be at its most alert? Can he confirm that these changes are not under consideration but are well past that stage and that, unlike what he said to me in an Answer last week, they have been put into effect without public consideration, debate or review? Can he explain why this has not been brought to the attention of Parliament, let alone our scrutiny committees that deal with secondary legislation? Can he explain why he has not consulted business? Can he tell me what the job description of the new chair of the RPC, announced yesterday, in place of the gentleman who has been doing the job for many years, Michael Gibbons, will consist of? Does Mr Browne understand that, if these changes go ahead, there will be virtually no job to do I have already put one question to the Minister from the FSB, and here are two more. When will the Government consult on a new business impact target, which is required within a year of a new Parliament? We are now half way through it. When can we expect confirmation of the appointment of the independent validation body? Those are all questions well within the scope of the Minister, and I expect a reply at the end of the debate Finally, exactly what role and process do the Government now envisage for the RPC in relation to the Brexit process—not just in terms of the transposition of EU regulations but in terms of the generation of new regulations as a result of the negotiations or beyond? Are we to understand that this scrap of a body that will be left is to be charged with this crucial part of our future, or will more changes, of which we have not been informed, be sprung on us? When I heard about these changes, I found it very hard to believe that even this Government would make them without informing their eyes in business—the people who have to implement them—and this House I have mentioned Brexit and the chilling effect it is having across government. It is also a potential means of evasion and excuse and of doing things that might go unnoticed. We must be exceptionally alert to this. The RPC has been entirely dignified and silent about its treatment. This is no way to treat good public servants whose only concern is for good public policy. We ought to be able to look for a regulatory system which is robust but is also concerned with the social—not just business—impacts, and which is statutorily based and protected, and championed by a leading Minister This is not a personal agenda; these are issues of enormous interest across the House and outside, and I look forward very much to the Minister’s response.