Regulatory Enforcement and Sanctions Bill [HL]

My Lords, I thank the Minister for introducing the Bill in such comprehensive detail, as I thank all noble Lords who have so ably and vigorously contributed to the debate we have just heard. Her Majesty’s Government have frequently referred to the Bill during the consultation process, in their fashionable metaphor, as a ““toolkit””. We are no doubt meant to see it as a series of spanners, screwdrivers and hammers for dismantling and reducing the burden of regulation. But, to my mind, it is a funny sort of toolkit, for it is without many tools: no spanners, no screwdrivers and only a few hammers. Even the noble Lord, Lord Borrie, while welcoming the toolkit, said that he was not sure what it meant. The Bill may grandly pretend in its preamble to make provision, among other things, for, "““the reduction and removal of regulatory burdens””," but the Local Better Regulation Office, the primary authority partnerships and the compliance code are all complex additions to the existing system of regulatory enforcement. As this debate has suggested, especially through the contributions of my noble friends Lord Sainsbury of Preston Candover, Lord Cope of Berkeley, Lord Hodgson and Lord Eccles, they are as likely to add burdens to the regulatory system as remove them. As my noble friend Lady Wilcox has already commented, the Regulatory Enforcement and Sanctions Bill introduces much that is new: new bodies and new civil sanctions. Yet there is so little in the Bill that we come away from reading it with very little real information. We have no more idea, as my noble friend said, who will sit on the board of the Local Better Regulation Office, or, as the noble Lord, Lord Haskins, said, of its powers, than we do of how stringent the monetary penalties on regulatory offenders will be, or, as the noble Viscount, Lord Colville of Culross, said, exactly how the civil sanctions will work. As the noble Lord, Lord Razzall, said, the Government have offered us a Bill whose effects will become truly visible to us only through secondary legislation, which may not in every case even require Parliament’s specific approval. Notwithstanding the comforting words of the Minister in opening the debate, last year Her Majesty’s Government passed into law an astonishing 55 Acts and 3,500 statutory instruments. My noble friends Lord Sainsbury and Lord Cope expressed their frustration with that. I am pleased that the House is so carefully considering the Bill, because what can seem innocuous to the point of being vacant can be transformed into a nightmare at the hands of over-zealous regulators and drafters of secondary legislation. We on these Benches support, in general, the implementation of regulation by risk-based assessment. However, such an approach needs to be handled carefully, for there inevitably needs, at some level, to be a basic and unchanging law applicable to and understood by all. As the Bill itself is dependent on its interpretation, so is the enforcement heavily dependent on the regulators. It is for this reason that the Bill should include a requirement that no order to grant the powers under Sections 63 and 64 should be made unless there is independent verification that the relevant authority is observing this approach in principle and practice. We will look for amendment to achieve this. The Bill names one of its ostensible aims as ““accountability””. We are committed to ensuring that this is given effect. The Bill also suggests, as I read it, that if a monetary penalty is imposed on a business, that business can make written submissions only to the very regulator that intends to impose the penalty. That regulator thus becomes, as the noble Lord, Lord Razzall, said, policeman, judge, and jury. There is no chance to question the evidence or enter a plea and have the case heard by an independent person. If the regulator confirms the penalty, while an appeal is possible, it is an appeal by a person already convicted, so it is on the basis of the need to prove innocence, rather than of the accepted British custom of the need for the enforcer to prove guilt. That person or business is also deprived of its right to go to court to secure justice, the decision on whether to pursue this route being entirely in the hands of the enforcer. As the noble Lord, Lord Razzall, argued, this legal anomaly has a deeply prejudicial effect on small businesses. If accused of misconduct, they, unable or unwilling to pay the sizable costs of defending themselves in court, will find themselves being forced pay the imposed fine with no real option of contesting it. Is the Minister really content to let such a discriminatory appeals system be introduced into the regulatory arena? My noble friend Lord Cope also focused his remarks on the effects of the Bill on small businesses and he expressed his grave concerns, with which I strongly agree, about the effect of over-regulation on them. The noble Lord, Lord Haskins, echoed those concerns. It goes wider, of course, than business. Today, Britain is regulation crazy. The noble Lord, Lord Razzall, had his teeth into rotten meat. In similar tone, the Sunday Telegraph last weekend reported the absurd but tragically representative story of a Britain bound in red tape. Hampshire teachers were to be barred from driving school minibuses unless they held a ““passenger vehicle licence””, described by the county education officer as a ““huge and expensive undertaking””. But, in barring teachers from driving minibuses, the overworked county education officer had failed to appreciate that the relevant EU directives specifically exempt teachers from the passenger vehicle licence requirement. How can we expect the poor man to know every single regulation and directive if every year we pass into law more than 3,000 statutory instruments? This is one of many examples of how tangled has become the web of well intentioned regulation brought in during this Government's tenure, some of it—but by no means all—originating from the European Union but then gold-plated—the noble Viscount, Lord Colville of Culross, spoke of this—which confuses and complicates the lives of those unfortunate enough to have to live and work within it. My noble friend Lady Wilcox pointed out that these include not only businesses but also consumers and, as my example shows, teachers, schoolchildren and just about everyone else. My noble friend Lord Hodgson pointed out some serious concerns about the Bill in respect of confusion regarding devolved powers. These will need to be dealt with. That tangled web is the nub of the problem of our regulation, which is why so many of your Lordships were so interested to see the noble Lord, Lord Jones of Birmingham, that well known scourge of over-regulation, taking the Bill through the House—although he will have heard the scepticism towards some of his grander claims for the Bill and the strength of feeling, and not just from your Lordships today. We look to him to bring a new rigour to the subject, and the Bill in particular. I have some sympathy for him; he must be feeling rather battered, with hatchets being exercised vigorously from the Cross Benches, the Liberal Democrat Benches, these Benches and even an element of damning with faint praise from his own. The Minister will also be aware that this House should be listened to—my noble friend Lady Wilcox referred to this. Indeed, the House pointed out so much that was wrong in the Regulatory Reform Act 2001, of which the Government took little notice only for them to admit that it had failed. They then introduced what became the Legislative and Regulatory Reform Act 2006 to replace it. So, as my noble friend Lord Sainsbury said, those hatchets need to be exercised. In summary, the Bill claims fine intentions. It follows our long call to reduce the burden of enforcement and to acquire consistency in regulation. But I fear that it may in practice achieve the very opposite of its claimed aims—transparency, accountability, proportionality and consistency—and instead produce confusion. It could also, as the noble Baroness, Lady Young of Old Scone, and others have said, mean more bureaucracy and, as my noble Lord Hodgson said, cost. I can but hope that sensible amendments make it workable.