Regulatory Enforcement and Sanctions Bill [HL]

My Lords, the length of time that the Minister took to introduce the Bill indicates the importance that the Government afford to its topic. How to get right the balance between protection of the public, to which the Minister and the noble Baroness, Lady Wilcox, referred, and the reduction in what I could describe as the industry of bureaucratic regulation is a problem that has bedevilled all Governments since the Second World War—this Government no less than their predecessor. I have no doubt that when the issues of lost CDs and illegal donations are long forgotten, the noble Lord, Lord Jones, will still be dealing with the issues touched on by the Bill. From these Benches, as a party, we have long campaigned for significant reduction in regulation of business—you might say that opposition parties always do. In our past two election manifestos, when I was in charge of those elections, we listed a series of regulations that we wished to abolish. We have regarded this as an issue dear to our hearts. However, we share the fear of the noble Baroness, Lady Wilcox, that the Bill will represent a missed opportunity in its effect on the dead hand of regulation. Rather like her, I wonder how many regulations in three or four years’ time will have been affected or reduced either by the implementation of the Hampton principles, which we dealt with in orders last week, or by this Bill. I understand the Government’s problem. I do not know whether any noble Lords listened to the ““Today”” programme earlier this week when the issue of rotten meat in Essex came up. Indeed, it seemed to be the major item on the programme that day and, from the way in which the story was portrayed, it appeared that the rotten meat would cause the entire population of Essex to be dead by now. I do not know whether any noble Lords are not in their place because they ate that meat. If he heard the programme, the Minister will remember that when the unfortunate regulator, from whichever regulatory body it was, was asked why he had not done anything about the rotten meat in Essex, he kept repeating that under the Hampton principles there should be no random inspections without evidence. That did not provide any defence to the inquisitor-general’s deputy on the ““Today”” programme and the public were left with the impression that the burghers of Essex were completely in danger from the burgers and from the absence of regulation. When that sort of broadcast takes place, it is clearly a nightmare for any Minister to have to deal with on one hand the implementation of these principles, and on the other the reduction of regulation, so I sympathise with the Minister in his task. Having been generally critical of the principle behind the Bill, I want to add my congratulations to the Government on what they have done in one or two areas. First—I have made this point before from these Benches when the Minister’s department was more sensibly called the Department of Trade and Industry—the method of legislation followed by the department on previous significant Bills and this one is to be commended. His department appears to have learnt the lesson that you do not legislate without consulting widely with stakeholders and people who are interested. Of course, one problem that he now has—it is always a problem with consultation—is that, when those who are consulted disagree, they then strongly lobby the opposition parties and the Government. I notice the Minister nodding. Often, when he was running the CBI and was consulted by the Government, if they did not do what he wanted, he did not stop complaining. He is now having to deal with that here. Nevertheless, I hope that does not mean that the department will not follow that process; clearly it is sensible to consult as many people as possible before legislation is brought in, and it provides a much better informed debate when teasing out the issues with which the stakeholders disagree. Secondly, it is very easy for opposition parties to criticise the Government for failing to deal with this issue, because it will always be with us. I look forward very much to the remarks of the noble Lord, Lord Haskins, who battled very strongly within government to do something about overregulation with what I think in his day was called the Better Regulation Task Force, or some body of that nature. I am sure that noble Lords very much look forward to his contribution to this debate. Thirdly—I know that the noble Lord, Lord Bach, will smile at this—I congratulate the Government on conceding an argument that has been made from these Benches for some time on the implementation of regulations. We have long argued that every regulation should have an impact assessment before being introduced, and it appears that that will now be the Government’s normal practice. It is certainly going to be the normal practice of the Minster’s department; whether it will be elsewhere is outside his control. We have also argued from these Benches that every regulation should have a sunset clause on the face of the relevant Bill. The Government are not quite there. They seem to be moving towards the solution that certainly every regulation should state on its face when the Government will reassess it, so they are moving towards the principle of a sunset clause, which I suspect structurally will do something about the reduction in regulation. Apart from the overall concern about the impact of the Bill, which I share with the noble Baroness, Lady Wilcox, we have a number of specific concerns. My noble friend Lady Hamwee will deal with Parts 1 and 2, but a number of concerns have been raised by the business community with regard to Parts 3 and 4. I cannot avoid joining the noble Baroness, Lady Wilcox, in teasing the Minister about the number of reservations produced by his previous organisation. It is often forgotten, when talking about regulation, that it is not only large businesses that are affected. We should remember that quite often the impact of regulation is most felt by small businesses that do not have the resources necessarily to employ people to deal with regulatory issues. Our first concern, which I dare to suggest is also a CBI concern, is that the aim of the Bill is to instil the principles of better regulation into every part of the UK regulatory environment. Obviously a coherent and consistent approach to enforcement decisions will encourage compliance by business in a positive way. The intention, as we understand it, is that regulators must demonstrate their ability to conform to the Hampton principles of better regulation, and only then should additional powers be awarded to regulators. As the CBI points out: "““There is a lack of clarity … over how sanctions will be awarded to regulators, and how they will operate in practice. The Bill leaves far too much important detail to be determined by secondary legislation and regulator’s guidance””." It continues: "““The Government’s response to the … consultation details the process of awarding the additional sanctions to regulators. However this important mechanism to ensure that regulators are Hampton compliant is left off the face of the Bill””." We believe that to be wrong and would like to table amendments to restore it to the face of the Bill. Secondly, as the noble Baroness, Lady Wilcox, touched on, we share some of the concerns of the British Retail Consortium regarding the process of the imposition of penalties, which we think raises civil liberties issues—particularly, ignoring, "““the right of a business to make representations as an innocent party—and to cross question its accusers””." The consortium continues: "““Under the Bill, there are different procedures for a fixed monetary penalty and a variable monetary penalty … but in both cases the effect is similar. The business on which it is proposed to impose a penalty can only make written submissions to the … regulator that intends to impose the penalty””." I know that under the documents circulated today, it is intended that that should be a different individual; nevertheless, the regulatory authority becomes the policeman, judge and jury. We shall table amendments to improve on that. Our third concern is stop notices, which clearly bring in significant sanctions for a business and lead to loss of revenue. Under the Bill—I think Clauses 44 to 47—once the business has rectified the problem it has to wait up to 14 days to be granted a certificate to operate again. We think that 14 days is an unacceptable delay. Fourthly, on a wider and more general point, we are concerned about the fixed monetary penalties. The whole object is to catch rogue traders, not penalise small businesses which for one reason or another innocently fail to comply. We are concerned that the fixed monetary penalties will simply be regarded rather like the parking fine—as a toll charge that people, or at least the other Opposition, pay when they want to go shopping in Harrods—rather than a penalty that will lead to better behaviour. The Minister will think that I am being overharsh in my comments on the Bill; I have the shelter that I have not perhaps been quite as harsh as the noble Baroness, Lady Wilcox. Of course, the proof of the pudding will be in the eating. Will the impact of regulation be reduced by this Bill? I doubt it, but we shall see. In any event, the noble Lord, Lord Jones of Birmingham, is not the first or last Minister to be caught between the rock of our risk-averse society and the hard place of the clamour of business for less regulation.