Regulatory Enforcement and Sanctions Bill [HL]

My Lords, I am a member of the Merits of Statutory Instruments Committee and the Delegated Powers Committee. The latter has not yet considered this Bill, so any views that I express on secondary legislation and the use of directions in the Bill are my own. I will follow my noble friend Lord Hodgson by asking the fundamental question: why do we need this Bill and why do we need it now? The Minister, the noble Lord, Lord Jones of Birmingham, told us of his aspirations. I listened to his introduction and thought about how the Bill might work, but I came away thinking that there was a difference between impressions and reality. Obviously I had read the Bill wrong, as his description seemed to be strongly impressionistic. There was nothing about the secondary legislation, or very little; there was just a passing reference to the power of the LBRO to issue directions, but no comment either on their standing or on whether Parliament would have any chance of considering them. That led me to think about my noble friend Lord Cope of Berkeley’s defence of small businesses and about the regulation story, which always seems to start in the same way. It starts with burdens and a plea for less regulation; it then slides from less regulation—which was the subject of an important report in 2005—into better regulation. The word ““better”” is subjective; what is better to some people is worse to others. A lot of effort was put in, particularly in 2005; we are told at the front of the Explanatory Notes to the Bill that Hampton and Macrory are the gurus who guide the Government. However, in Parts 1 and 2 we see the translation of the LBRO, which was formed as a company in May of this year, into a statutory corporation. I wondered whether that move by the Government could have been implied by either Hampton or Macrory, or both. Their themes were very much on the lines of co-operation, persuasion, data sharing between local authorities, data sharing between regulators and a targeted approach. They thought that any overarching body should be advisory, not executive. Indeed, the consultation appeared, as my noble friend Lady Wilcox said, to have been about an advisory and guidance body, not an executive agency or a statutory corporation. I think that Hampton and Macrory were looking for continuous improvement based on the present situation, which is not nearly as dire as the Government make it out to be. Improvement is going on, but, as many speakers have said, what is not going on is less regulation and there is no hope of there being less regulation. Having decided that they did not think that the Hampton-Macrory approach was adequate, the Government went, as always, for centralisation and control. The regime proposed in the Bill is centralised and controlling—a top-down regime. The Local Better Regulation Office will have wide powers. Initially, it can use them to give guidance to local authorities, but, as the Minister hinted—at least, it was almost a hint—if the LBRO thinks that the guidance is either not quite adequate or that local authorities are not listening to it carefully enough, it can turn the guidance into directions. Local authorities must comply with directions. Here is an unelected body telling elected bodies that they must comply. By then, however, the game is not the same, because under Clause 15 the Secretary of State has the right to give ““general and specific directions””. Such directions are not subject to any parliamentary procedure, which leaves the Secretary of State able to change the rules of the game at any time he or she wishes. In effect, the LBRO is an executive arm of the department. It is not independent, as is proposed in the Bill, because of the directions clause. If the board of a non-departmental public body or a public corporation knows that at any time the Minister can change the rules of the game, that means that productive discussions do not take place between officials and members of the management of that body, because they can be made to do whatever the Secretary of State wants them to do. The best example of this to date is the relationship between the DCMS and the lottery funds and particularly between the DCMS and the Big Lottery Fund. This structure whereby the Secretary of State has control and has only one body to which he has to give guidance and directions is of course convenient. It means that the Secretary of State does not have to talk to all the local authorities. That job is delegated to a single executive body. However, this creates a triangle because, as the Bill acknowledges in its reference to regulators in Parts 1 and 2, there is absolutely no doubt that the interests of the regulators are significantly affected, as well as the interests of the local authorities. Two’s company and three’s a crowd; it is certain that this system will not work very well and that it will create confusion. So, for today, to stay with Parts 1 and 2, it seems to me that the Local Better Regulation Office has powers that are too wide; it is dominated by the Secretary of State and it will cause confusion. Many other provisions in the Bill also affect the constitutional boundaries that we are used to looking at. In this case, that is about giving more power to the Executive and therefore, by extension and particularly through the use of directions, less power to the legislature and certainly less power to bodies that are the subject of Acts of Parliament and have been set up to exercise their responsibilities without undue interference and with independence. There are many other matters in the Bill and I look forward to the Committee stage.