Regulatory Enforcement and Sanctions Bill [HL]

My Lords, I am grateful for a good and interesting debate. I have thoroughly enjoyed it. I intend to summarise the contents of the past few hours and if I miss a point or a question that was asked of me, I ask noble Lords to write, and I will come back. Yes, we have too much regulation and yes, there are occasions of disproportionate regulation. The noble Lord, Lord De Mauley, referred to one or two of them. I just observe that the one that everybody refers to when they talk about a sledgehammer to crack a nut is the Dangerous Dogs Act, which happened on another Government’s watch. I can assure the noble Baroness, Lady Wilcox, that the Bill will make a difference. It will have the power, and I welcome the scrutiny that she has promised on every freewheeling day in the next few months. The noble Baroness mentioned the Digby coffee shop chain; in Grimsby, they talk of nothing else. I am amazed that she chose a seaside town such as Grimsby, not a seaside town such as Plymouth, from where she comes. However, would it not be great if, after the implementation of the Bill, Plymouth, Grimsby or Kensington and Chelsea developed a reputation as local authorities that are good at working with businesses, charities and public sector organisations and are good at implementing better regulation? There will be important exemptions by order to the requirement to contact primary authorities. Those exemptions will be applied—they can be applied for and then applied—so that we do not get the Grimsby/Kensington and Chelsea problem. The noble Baroness talked about cost recovery for the exercise of the primary authority. The British Retail Consortium welcomed that, but only if it is paying for quality. That is quite understandable. I am amazed that the noble Baroness should expect the costs incurred by a local authority—there is no profit involved, merely cost recovery—to be borne by it, which would probably lead to hikes in council tax, rather than be reimbursed by the business that is benefiting from the fact that this is being worked out in such a way. She asked how many regulations would go because of the Bill. The Bill is not about that aspect of the Government’s better regulation and, as many of my noble friends have mentioned, deregulation programme, but better enforcement itself will lead to fewer regulations in the long term and less cost in the short term. However, I welcome the offer of help from all parts of this House to make this work. The noble Lord, Lord Razzall, at least had the decency to say that this was never going to be easy, but it is easy to carp. At least the Government are doing something about an issue that has blighted so many operational aspects of our society for so long. Everybody goes on about business, but charities also suffer, and have noble Lords tried running a hospital, school or prison lately? Government is about having consultations and then making a decision in the light of them. That does not make everybody happy, but implementation is the key, and that is what we should be judged on. There is a duty on the Minister to conduct a review of any order three years after its implementation, which is a start, and a regulator will not be judge and jury because there will be an appeal to an independent tribunal. The noble Lord mentioned that my former colleagues in the CBI have come out against many aspects of the Bill, but I remind him that the CBI was wrong about the minimum wage way before I arrived, and it is wrong about the Bill way after I have gone. The noble Viscount, Lord Colville, referred to a pizza parlour in Dudley, which is presumably near Culross. Whether the primary authority is Dudley or Walsall is important, and we have to ensure that the regulatory environment is clear, transparent, well understood and very speedy in implantation. However, no amount of regulation will ever stop every rogue pizza parlour doing something wrong. The key is what happens when that happens. In that, to concentrate on the 0.1 per cent of businesses that might get it wrong and bring all legislation to bear in the light of that 0.1 per cent, thus removing the opportunity to make life so much easier for 99.9 per cent of businesses, charities and public sector organisations, is not what government is about. I assure the noble Lord, Lord Cope, that small business is at the heart of what we are trying to achieve. He referred to the British Chamber of Commerce’s assessment of the costs of regulation. It said that it is £55 million, but that includes the amount that people had to pay to comply with the minimum wage. It is not just the red-tape costs. The role of regulation in British society is different from what has to be paid to get there. The British Chamber of Commerce did not make that distinction. My noble friend Lord Borrie heard the mention of Dudley and Walsall with interest because when I was just starting out in the law in Birmingham, he was dean of the Faculty of Law at the University of Birmingham. I am delighted that he referred to the wider, better toolkit that is available, and I have to remind the noble Baroness, Lady Wilcox, that consumers will benefit from the wider, better toolkit, not necessarily businesses. The noble Lord, Lord Sainsbury, pointed to the absence of sunset clauses in this legislation. It is not intended that there will be sunset clauses, but Part 1 allows for the dissolution of the LBRO when its objective has been achieved. Automatic dissolution is as near to sunset as you will get. Part 3 contains a review clause that compels the regulator three years after implementation to review the way that sanctions are being used and allows for the suspension of some of them in many cases. The noble Lord, Lord Haskins, talked about the LBRO being another quango, but it is different from a quango in one way because I have never known a quango at its inception allow for its dissolution when its objective has been achieved. The noble Baroness, Lady Young, said that she was attempting to conduct a hatchet job. I find that very sad because to come to a bona fide attempt to improve the regulatory environment with that type of prejudice will get us nowhere. But I guess that regulators will always do that in their stout defence of the status quo and, as somebody said many years ago, ““She would say that, wouldn’t she?””. The noble Baroness also mentioned that this is ““very, very silly law””. Businesses up and down the land, every day and every way, have to deal with the very, very silly laws of unintended consequences of environmental regulation that were never changed because the regulator can hide behind the very walls that the Bill aims to knock down despite predictable bleatings. I welcome the input from my noble friend Lord Berkeley. He can be assured that small businesses will definitely benefit from better, predictable enforcement. In relation to the last part of the Bill, I read with interest the recent report of the Select Committee on Regulators on the UK’s economic regulators and its recommendations relating to the impact of their work on business, in particular how any unnecessary burdens arising from their crucial role might be kept to a minimum. We might have a particularly useful debate on how this part can most effectively give voice to what has come out of that report. The noble Lord, Lord Hodgson, can be assured that nothing in the Bill affects duplication with the compliance code. There is no duplication; this is not another layer. Indeed, if anything, it is bottom up, not top down. That is why it is different; that is why I am so personally interested in it. It is responding to what business wants. We consulted with all the organisations—the IoD, the FSB, the BRC, the EEF and the CBI—and did what they wanted from the bottom up. We have talked to regulators. We have talked to local authorities. We have even listened to central government officials as well. The Bill creates a degree of independence and a degree of transparency, and brings experts into the field. My noble friend Lady Turner raised some very serious issues concerning liability for breach of health and safety legislation. I hope that the Bill will make that field a little clearer and easier to understand for those who justifiably find it difficult. I remind her and my noble friend Lord Rosser that although I hope that the Bill brings a better balance between consumers, regulators, business and other organisations in the public sector, it does not remove exposure to criminal prosecution. That remains—and importantly so. I say to the noble Baroness, Lady Hamwee, and the noble Viscount, Lord Eccles: therein lies the rub. How do you achieve a balance between the maintenance of local, democratic connection and at the same time provide, in a society and commercial world that must be globally competitive or die, a degree of predictability—a level playing field across the land? I assure the noble Viscount that the LBRO fulfils Hampton’s clear recommendation for the creation of an executive consumer and trading standards agency. The body is smaller than he envisaged, but it has a rather wider scope, so we very much picked up that recommendation. In my opening speech, I mentioned that the draft of the Bill, published in May, was accompanied by the first of the new impact assessments, trying to set an example that we trust will be followed everywhere. In our department, we will try to bring as much pressure to bear on all other departments to do the same. In concluding this debate, I think that noble Lords may be interested to hear of the benefits that we set out in that first impact assessment. We anticipate benefits to business of up to £100 million a year, net benefits to regulators and central government of £50 million a year, and the net benefit to local authorities of up to £5 million a year. That is a real gain to our society, whichever way you look at it. I commend the Bill to the House. On Question, Bill read a second time, and committed to a Grand Committee.