Regulatory Enforcement and Sanctions Bill [HL]

My Lords, when I began my reading for this Bill I noticed what a pile of paper there was in the Printed Paper Office. I am all for wide consultation, but how many trees died in the cause of this Bill? I also wondered how one could oppose in principle a Bill that made provision for the, "““co-ordination of regulatory enforcement by local authorities””," and, "““for the reduction and removal of regulatory burdens””." However, it all sounded strangely familiar. I had in mind that phrase that I think was coined by a football club manager—a sense of déjà vu all over again. Then I remembered where I had heard it all before—in the Moses Room last Tuesday when we discussed and indeed approved, along with the noble Lord, Lord Bach, who I am delighted to see on the Front Bench, the Legislative and Regulatory Reform (Regulatory Functions) Order. This is drawn up under the Regulatory Reform Act and establishes a regulator’s compliance code—Hampton principles and all. Indeed, my sense of déjà vu was reinforced because large chunks of what the noble Lord, Lord Bach, said last Tuesday were completely interchangeable with what the Minister has been telling us this afternoon. Even the structure of the document is the same. The code covers a long list of authorities, bodies and statutes, UK and European regulations and so does the Bill. The Explanatory Note to the order could easily come from the Bill. It requires regulators to carry out their duties, "““in a way which is transparent, accountable, proportionate and consistent””." These are not just pious words, because the measure imposes a duty on any person exercising a regulatory function to have regard to the code. It does the same where regulators are to exercise the, "““function of setting standards or giving general guidance””." So my first question to the Minister is: apart from creating another layer of bureaucracy in Part 1 with a Local Better Regulation Office, and some civil sanctions in Part 3—which are either inaccessible, according to the noble Baroness, Lady Young of Old Scone, or inappropriate, according to the noble Viscount, Lord Colville of Culross—what is this Bill actually achieving, apart from duplicating what we already have? As a past Member of Parliament for Walsall, I regret only one thing about the noble Viscount’s remarks; namely, that it was Walsall where people were dying from eating pizza, but never mind. The Minister has failed to understand the range of sanctions that exist. Why do we need more sanctions? Local authorities have sanctions. Last year the Government imposed—much to the Minister’s regret when in his previous incarnation—specific duties on directors of companies. Nobody has mentioned the enormous damage that occurs to one’s reputation from failure to comply with proper procedures. The Minister will know all too well that in business life the solution to a problem can quickly become part of the problem itself. I would like the Minister to explain why this Bill is necessary. Is it not just increasing the regulatory burden rather than reducing it? My second point concerns costs. Paragraph 169 of the Explanatory Notes states: "““An impact assessment related to the provisions in the Bill has been completed. The Impact Assessment concludes that the Bill will have significant net benefits for business””." Surprise, surprise. I accept that the regulatory impact assessment is drawn up in a much more professional way than has been the case hitherto, although the basis on which the assumptions are made can be argued about. However, when you look through it, you find that it is not to do with the Bill but with the code spoken to by the noble Lord, Lord Bach. That is where the benefits come from. Most of the regulatory impact assessment costs come from the Bill; the benefits come from the measure which the noble Lord, Lord Bach, so successfully took through the Moses Room last week. When it comes to trying to attribute benefits to this Bill, the Minister is on a wing and a prayer. The costs will be certain and will last for ever, and the benefits may or may not happen. I would like the Minister to explain why the code for regulators will not achieve the objectives without additional bureaucracy. My third point concerns follow-up, and here I follow my noble friend Lord Sainsbury of Preston Candover and the noble Lord, Lord Razzall. There is no sunset clause, so we need a guarantee of scrutiny. The Merits of Statutory Instruments Committee said: "““We welcome the Code as a clear written expression of the ‘better regulation agenda’ in the context of regulatory activity, but it will be important that the Government monitor what it in practice achieves, not least in the face of competing legislative requirements””." What applies to the code applies doubly to this legislation. I hope that the Minister will be able to reassure us about that when he winds up. My fourth and final point concerns extent. I was very encouraged by paragraph 12 of the Explanatory Notes, which states: "““The Bill extends to England and Wales, Scotland and Northern Ireland””." But when I turned over the page, I noted at paragraph 17: "““LBRO’s functions under Part 1 of the Bill do not apply in Scotland. Parts 2 to 4 apply in Scotland but only in respect of reserved matters””," and paragraph 19 has the same proviso in respect of Northern Ireland. The noble Lord, Lord Bach, knows the point that I shall now make—that on page 47 of the Bill, Schedule 5, headed ““Designated regulators”” includes the Charity Commission for England and Wales. In his opening remarks the Minister referred to charities as being an area that needed to benefit from the Bill. Charity law is a devolved matter. In Scotland it is operated under Scottish regulations by the Office of the Scottish Charity Regulator. The Scottish Parliament is passing regulations, which are now being enforced by OSCR, and it is doing so without any co-ordination with the Charity Commission for England and Wales in London. So a national charity, operating UK-wide, will have to have regard to both sets of regulations. It will have to work to the most onerous if it does not wish to fall foul of the regulations in one country or the other. The Minister can talk about reduction and removal of the regulatory burden, but it will not happen in respect of companies or organisations that operate across the countries of the United Kingdom and do so in respect of devolved competence matters unless and until this Bill applies in Scotland—and according to Clause 54 it will not do so. Next year there will be a Northern Ireland charities Act, so there will be an issue when that comes up. The Welsh Assembly is pressing for more powers in respect of charities based in Wales. I happen to know a bit about charities, having taken the then Charities Bill through this House, but I will wager the Minister a decent sum of money that if we went through this list of regulatory authorities we would have lots of examples of where the issue of devolved powers was set against what he is seeking to achieve in the Bill. Unless we can find a way to tackle this, it will essentially drive a coach and horses through a large element of what the Government have set out to achieve. Would it not have been better to start by achieving co-ordination with the devolved jurisdictions rather than all this LBRO guff, more sanctions and so on? Minimising the regulatory burden cannot be just an English concern. It must be a concern of all the countries in the United Kingdom. The Government have failed to take that issue forward properly. When one reads the purposes of the Bill one is reassured, but, as one digs in, the doubts become greater. For example, it will not apply in Scotland or Northern Ireland. Why are further powers needed with regard to additionality? Doubts about the bureaucracy that will be created, the relevance of the RIA, the absence of any promised follow-up and sanctions lead to the suspicion that the Government may add to the problem of the regulatory burden rather than solving it.