Regulatory Enforcement and Sanctions Bill [HL]

I shall speak briefly to my Amendment No. 191 and to the other amendments in the group. I support what my noble friend Lord Borrie and other noble Lords have said about Part 4, which clearly compromises the independence of economic regulators. I spoke about this at Second Reading, and I received a letter from my noble friend Lord Jones of Birmingham on 18 December—I hope all noble Lords received a copy—that tried to answer some of the points I made. My noble friend cannot say which regulators will be included in this part because they are to be specified by statutory instrument and he has not said when, how, and what are the criteria for choosing them, which is quite serious. My noble friend Lord Jones stated that: "““It is not our intention that Part 4 should be used to frustrate the work of the regulator””," but as another noble Lord said earlier, we are in the territory of the law of unintended consequences here. It may not be the intention, but it is quite possible that it will happen. My noble friend goes on to say: "““It is, of course, not possible to preclude vexatious complaints by a business””." It is not, but if we did not have these two clauses, they would not arise. I get very worried about that. I am also really worried about the big companies that are regulated, not the small ones that other noble Lords talked about earlier. The big ones have unlimited resources to put in complaints and frustrate the work of regulators, which is quite serious. That would undermine the competitiveness of UK business. I have had many discussions with the Office of Rail Regulation and, as the noble Lord, Lord Bradshaw, says, it, along with the other economic regulators listed in my amendment, believes that the clause duplicates the duties that they have already. One of the existing duties on the ORR is to impose on operators of railway services the minimum restrictions consistent with the performance of their functions. Surely this is clear evidence of duplication. If it is in the original legislation—the Railways Act 1993— why duplicate it? We shall get into a terrible knot here. Clause 69 allows the Government to interfere. I take very seriously the independence of economic regulators because they are the bedrock of getting private sector investment into the industries they regulate. We saw in the London Olympics Bill, although it did not matter too much there, and we can see in the Crossrail Bill, that the Government are trying two different approaches—one through legislation and one through an option agreement—to restrict the independence of the rail regulators to benefit the Government’s own finances. This is extremely serious. If these clauses remain, all regulatory decisions could be subject to re-opening if the Government are not satisfied with the result. That power completely takes away the independence of the regulators. As I have said, the Bill is intended to implement the Hampton agenda. Phillip Hampton was careful to avoid compromising the independence of the economic regulators and that is why, as I understand it, he did not include these clauses in his recommendations. I hope that my noble friend will look again at these clauses. If the Government will not remove them both, perhaps the amendments proposed by my noble friend Lord Borrie, who is much more expert at this than I am, or mine, could be looked at again for the Report stage.