Regulatory Enforcement and Sanctions Bill [HL]

moved Amendment No. 180: 180: Clause 68, page 31, line 16, leave out ““secure”” and insert ““keep the carrying out of that function under review with a view to securing”” The noble Lord said: We have come to Part 4, which is a late addition to the Bill after formal consultation was closed in August last year. Clause 68 imposes a potential duty on one or more regulators to secure that it does not impose any ““unnecessary”” burdens. But this duty on a regulator only comes into effect when a ministerial order is made under Clause 69 to bring Clause 68 into effect in relation to any particular regulator that the order specifies. My noble friend Lady Vadera, to whom I am pleased to add my welcome today, and my noble friend Lord Bach know that various economic regulators—Ofcom, Ofwat, the Office of Rail Regulation and the Office of Fair Trading—have been active behind the scenes in securing the kind of changes to the Bill sought by my amendments. They are principally concerned that any new obligation imposed by this clause should not adversely affect their statutory duties under existing legislation. I hope the Front Benches opposite have received copies of what Clause 68 would look like if all of my 11 amendments were accepted, otherwise it is rather difficult to follow the particular amendments on their own. The objectives of my amendments are threefold: first, to impose a clear obligation on regulators to keep under review their regulatory functions to ensure that burdens are not imposed which are unnecessary; secondly, to achieve legislative consistency in the statutory obligations imposed on the various regulators and, in particular, consistency between this Bill and Section 6 of the Communications Act 2003 that set up Ofcom; and, thirdly, to clarify the meaning of ““unnecessary”” burdens. With regard to my first and second objectives, and especially that of consistency with existing legislation, the opening words of Section 6 of the Communications Act 2003 are: "““OFCOM must keep the carrying out of their functions under review with a view to securing that regulation by OFCOM does not involve … the imposition of burdens which are unnecessary; or … the maintenance of burdens which have become unnecessary””." The guidance notes to the Bill before us state on page 50 that: ““The duty””—in this clause— "““is modelled on Section 6 of the Communications Act 2003””," and, "““places a similar duty on OFCOM””." I do not think it is very closely modelled on Section 6 of the Communications Act at all. I submit that Amendment No. 180 and the other amendments are much more closely modelled on it and therefore more in accord with the intentions of the Bill as stated by Her Majesty’s Government in their guidance, and closer than Clause 68 as it stands. Under the current Clause 68, it is not clear whether a review by the regulator is actually required or is sufficient, or is merely one of several possible actions by the regulator. The regulators will be left in some uncertainty on the basis of the present clause. Lack of clarity is particularly inappropriate for the competition functions of the Office of Fair Trading and the other regulators because it might leave open the possibility of legal challenge in respect, for example, of the allegedly burdensome way—unnecessarily burdensome, it might be argued—in which investigations for the purposes of competition law are being conducted. Hampton was keen on legislative simplification. It is not helpful if businessmen have to familiarise themselves with a variety of legislative provisions, all supposedly dealing with the same problem. Ofcom, in the four or five years that it has been in existence, interprets Section 6 of the Communications Act as requiring it to be constantly aware of the need to minimise regulatory burdens. That has influenced the culture of the organisation: from time to time Ofcom publishes details of progress in reducing regulatory burdens and plans to make further progress as set out in its December 2007 simplification plan. I know, because it is in the guide to the Bill, that the Government are keen on simplifications plans from regulators. They are expressly praised by Her Majesty’s Government on page 49 of the guidance. On the third objective of my amendments, clarifying what is meant by so-called ““unnecessary”” burdens, I ask the Committee to take note of Amendment No. 185: "““In determining whether a burden is necessary or unnecessary for the purposes of complying … the person exercising the relevant function shall, when exercising that function, have regard to those matters to which they are required to have regard under or pursuant to any other enactment””." Finally, while Clause 68(2) makes it clear that the duty does not require the removal of a burden where its removal would be ““impracticable or disproportionate””, there is a need to cover similarly the imposition of new burdens. One of the economic regulators, Ofgem, occasionally has to approve changes to gas and electricity industry codes. They are pretty complex agreements which govern, for example, terms of connection with gas and electricity networks. Ofgem has no powers to alter or modify proposals that come from industry or from consumer representation; it must accept or reject them, and must judge them as a whole in the public interest. Under the current Clause 68, it is not clear that Ofgem can do that if the proposals involve imposing regulatory burdens of a new kind. Ofgem needs clarity to continue to do its work. At the moment, the clause could do with my Amendments Nos. 182 to 184 to ensure clarity about what is meant by ““unnecessary”” burdens and what the existing statutory requirements are, as well as those that the Bill seeks to impose. I beg to move.