Better Regulation

Lord Haskel Excerpts

Thursday 7th December 2017 Lords Chamber

[Lord Haskel (Lab)]

When President Jack Kennedy said that you do politics with the people not to the people, I always thought that what he had in mind was regulation. I agree with the noble Baroness, Lady Neville-Rolfe, when she said that regulation has to be well thought through, well explained and balanced and has to do the job. I add that neither should regulations be an excuse for skeleton Bills or for getting primary legislation through by stealth and hoping that nobody will notice.

After David Cameron’s Government promised an outright ban on fracking in national parks, many considered that they reversed that promise by smuggling a statutory instrument through Parliament. It is regulation that maintains the public good, sets standards, deals with market failure and encourages good business behaviour, and it is often executed through secondary legislation because it is quick. It is the bureaucracy, the cost and working with regulations that are the source of constant dispute and debate between business and the Government, as many noble Lords have explained.

The noble Lord, Lord Stoneham, gave examples from his experience. I suppose that I ought to own up that I benefited from regulation. My company made technical textiles; we developed fabrics that satisfied the very stringent safety standards required in civil aircraft, hotels and public places. Satisfying these regulations helped us to become a supplier to major aircraft manufacturers and hotel chains. Building such a niche is an important element in growing a business—and, yes, I benefited.

Frequently, in an effort to reduce regulation, there is a policy of one in and two or even three out—three out is probably a step too far, as the noble Lord, Lord Curry, said. Many of us feel that this numbers game and the constant pressure to reduce regulation has led to a reduction in standards. As the excellent Library brief said, the Grenfell Tower tragedy is probably an example of this. As a result, regulation is coming under much more scrutiny. Over the years, there have been efforts to minimise regulation, reduce the cost and quantify its effect but, on virtually every occasion, exclusions and the ill-defined scope and poor research have thrown doubt on the numbers. Noble Lords will remember the Red Tape Challenge and the Better Regulation Task Force. All these efforts eventually became discredited—the national minimum wage, for example, was excluded from a business impact target. We certainly need to improve the system, as my noble friend Lady Andrews said.

This is why the success or failure of regulation very much depends on parliamentary scrutiny. Central to this work is your Lordships’ Secondary Legislation Scrutiny Committee and Delegated Powers Committee. I declare an interest as a member of the Secondary Legislation Scrutiny Committee. We expect a government department to offer well-considered and easily understandable explanations to justify any statutory instrument and its likely impact, whether economic, social or environmental. The public should have an opportunity to respond. This is why your Lordships’ committee has maintained pressure on the Government to do exactly that.

The noble Baroness, Lady Neville-Rolfe, called for a champion. It was partly as a result of the pressure of this House that each department now has a Minister with special responsibility for secondary legislation, with a senior responsible owner—a senior civil servant—accountable for both process and quality. The Parliamentary Business and Legislation Committee in the Cabinet Office now overviews all secondary legislation across government. Only last month, we were told that Stephen Barclay MP is now acting as the secondary legislation champion at the Treasury, and we were given assurances that there is now a focus on better management within all departments.

I agree with the noble Baroness, Lady Altmann, that the Government’s administrative convenience must not take priority over the interests of the potential respondents to regulation, because poorly prepared regulation can hold back growth and productivity. Perhaps the record occurred in February 2013, when the Department of Health laid regulations to govern the use of tendering in the procurement of NHS services. Your Lordships’ committee received 2,000 submissions, most of which indicated a belief that the regulations did not match up to ministerial undertakings. Quite rightly, the committee reported the SI on the grounds that it might imperfectly achieve its policy objective and, of course, it was eventually changed.

Other noble Lords have spoken about the European Union (Withdrawal) Bill, and the problems which arise from incorporating EU regulations into UK law. Clause 7 of that Bill allows Ministers to use secondary legislation to help achieve this. The number of secondary instruments to be scrutinised will easily double or possibly treble. Last year, your Lordships’ Secondary Legislation Scrutiny Committee scrutinised 1,200 SIs. In addition, there will be new regulations for trading with the rest of the world when we are outside the EU. Indeed, ending the flood of regulations from Europe was central to the Brexit campaign. However, it looks as if we are going to have a lot more work as a result of that. Much of the domestication of the acquis will be done through statutory instruments. I repeat that the procedure of explanatory memorandum impact assessments and costs will have to be carefully worked out on each one so that Parliament and the public can judge whether the resulting SI is equivalent to the effect of the EU derived legislation or has to be changed. I add that your Lordships’ committee would not be able to carry out this work effectively without the support of its experienced and hard-working staff.

Several noble Lords have referred to the current concern of the Secondary Legislation Scrutiny Committee—namely, that two weeks ago, the Minister wrote to the Public Accounts Committee in another place, saying that where the impact is less than £5 million his department’s analysis will be more proportionate. Presumably he is trying to reduce the government workload. I will not repeat the questions put by the noble Baroness, Lady Andrews and others, but quite rightly the committee has written to the Minister, saying that, irrespective of this threshold, standards have to be maintained. They have to be maintained because this is our major check on the Government. I hope that the Government will give us an assurance that these standards will be maintained; otherwise, the Government—any Government—can look forward to more pressure from your Lordships, because regulation has to be done with the people, not to the people.

--- Later in debate ---

[Lord Henley]

I do not know how the noble Baroness received it, but she will be aware that it was an internal letter from me to colleagues within government. As far as I am concerned, that amounts to a leaked document.

[Lord Haskel]

I can shed a little light on the subject. The letter was from the Minister to the Public Accounts Committee in another place.

[Lord Henley]

I think the noble Lord is referring to another letter. The postal service has been quite busy. I will come to the comments of the Public Accounts Committee in due course. I am referring to what amounts to a leaked document.

Manufacturing: Digital Technology

Lord Haskel Excerpts

Thursday 2nd November 2017 Lords Chamber

Asked by

[Lord Haskel]

To ask Her Majesty’s Government what is their response to the Made Smarter Review on the benefits of applying digital technology to the manufacturing industry, published on 30 October.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, Her Majesty’s Government welcome the Made Smarter report and thank Juergen Maier and the industry team for their work in outlining the huge potential that digitalisation offers to United Kingdom manufacturing. We look forward to working closely with industry to ensure that the United Kingdom can capitalise on the massive benefits of digital technology, which this report makes so clear, and realise its potential to be a global leader in the industrial digital technology revolution.

[Lord Haskel (Lab)]

My Lords, I am pleased that the Government welcome the report, as I do. As the report says, digitalisation can deliver a much-needed boost to our productivity. However, the report also points out that it is a disruptive technology for jobs and businesses. In implementing the report, what arrangements will the Government make for those who are displaced? Will there be a safety net? What procedures will the Government implement to ensure that people are not damaged by this?

[Lord Henley]

As the noble Lord will be aware, the report is quite big—246 pages. It was published on Monday. I arrived in the department on Monday, so I cannot claim to have read it from cover to cover at this point. No doubt he will criticise me for that, but I will start on it over the weekend. We recognise that this technology presents great challenges, including for raising productivity. The noble Lord is right to talk about the challenges of the fact that, in creating new, higher-paid and higher-skilled jobs, it creates a threat to other jobs—something we went through in the first Industrial Revolution when the spinning jenny and other things came in. It also creates opportunities for new jobs, which is what we want. I think he will accept that at this stage, with a 246-page report having been published only on Monday, it is a bit early for the Government to make any pronouncements on it.

Industrial Strategy

Lord Haskel Excerpts

Wednesday 28th June 2017 Lords Chamber

Asked by

[Lord Haskel]

To ask Her Majesty’s Government when they will introduce their industrial strategy.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Prior of Brampton) (Con)]

My Lords, our industrial strategy Green Paper was launched on 23 January. Following extensive consultation, we intend to publish a White Paper in the autumn.

[Lord Haskel (Lab)]

I thank the Minister for that Answer. At least we have taken a first step away from austerity. Perhaps I may ask him the question everybody else out there would like to have answered: will he confirm that the funding laid out in the Autumn Statement 2016 will be made available in full, plus the substantial increase in grant funding to be awarded through UKRI, which was also promised in the Autumn Statement, so that money for innovation will not be spread too thinly?

[Lord Prior of Brampton]

I am very happy to give that assurance. As the noble Lord will know, UKRI will receive an additional £4.9 billion over the period to 2021. Much of that resource will go through UK Innovate into a number of productivity schemes. I hope that will be, as he says, a creative alternative to austerity.

Queen’s Speech

Lord Haskel Excerpts

Monday 26th June 2017 Lords Chamber

[Lord Haskel (Lab)]

My Lords, the gracious Speech and many noble Lords have spoken of a new, modern, industrial strategy. I welcome this, because we need one. How can the Minister speak of strong fundamentals when after eight years of unprecedented fiscal stimulus from the Bank of England and eight years of austerity, we are still nowhere near balancing our books? Real incomes have fallen, our standard of living has fallen, and productivity has been virtually static. It is a fantasy that we can go on like this. In these circumstances, the industrial strategy should reflect our values of fairness as much as they reflect our ambitions to grow and prosper—a strategy that unites us. Even the Prime Minister has indicated a nudge in this direction.

So, how do we do it? The obvious place to start is the industrial strategy Green Paper issued in January. A lot of work has gone into responding to this and it really has the possibility of being a creative alternative to austerity. Consultation has been wide and it involved many parts of industry. Indeed, it involved a number of people from your Lordships’ House. Not least is the suggestion that the strategy should set tough targets for productivity and create a regulator to monitor and stimulate progress—a kind of productivity OBR. For instance, much is made of the matched funding available in the innovation fund. But that will be of value only to the incumbents who have the money to do the matching. Will the Government leave the funding to organisations such as Innovate UK to make judgments and not just reward those who can afford it?

In many fields, artificial intelligence is already superior to our own. Business will profit from recognising that fact, and encouraging this has to be part of our industrial strategy. Equally, part of the strategy must be to show how artificial intelligence can benefit us all, rather than just being a threat. As part of the strategy I would like to see a campaign similar to the public understanding of science campaign, which we carried out when science was perceived as a threat. Indeed, that campaign may have been initiated in your Lordships’ House. There have been many enthusiastic submissions, and none of them should be wasted.

The strategy must include a review of patient capital. Extensive research shows that our present systems of big bonuses make executives less willing to invest because they do not want to do anything that would cause a short-term hit to profits. We know that this perverse incentive is one reason why productivity is low. Will the industrial strategy take steps to limit this?

Business has been very good at evaluating the impact of politics on its businesses. Indeed, many of us have tried to help in this—but the message coming through loud and clear is that this works both ways. Businesses should carefully consider the effect of what they do on politics, such as directors paying each other enormous salaries, companies using great ingenuity to pay less tax, and staff being often more exploited than nurtured. Then there are the customers faced with complications to their disadvantage. What steps will the Government take in their industrial strategy to discourage that behaviour, because all that it does is lead to a loss of trust?

The Labour manifesto recognises the reality that growing demands put on the state need more tax revenue. So why not, as part of our industrial strategy, broaden the tax base with heavier taxes on activities which damage the environment or with VAT on financial services? There is a strong case for taxing expensive homes—why stop at band H? What about taxing the gains on people’s main homes when they are sold? If nothing else, it would help to stabilise the runaway housing market, which many have said needs to be dealt with.

We also need to make a better case for the role of the state as industrial stabilisers, and as regulators, especially after the Grenfell fire, and not just pursue deregulation for its own sake, as an end in itself. My point is that a new modern industrial strategy must decide to meet both economic and social objectives. We have been through a lot in recent months. A business and social industrial strategy will help to unite and support us after these difficulties by demonstrating our determination to put jobs and the economy on an equal footing with a fairer society.

Sharing Economy

Lord Haskel Excerpts

Monday 17th October 2016 Lords Chamber

[Baroness Neville-Rolfe]

My noble friend is right: some innovative demonstration work is going on in Scotland and we are awaiting a report from Mr Hendry on a possible tidal lagoon in Swansea—and elsewhere.

[Lord Haskel (Lab)]

As the Minister knows, much of the investment and work in the sharing economy is intangible. What progress are the Government making on measuring that work, as recommended in the Bean report?

Employment: Remuneration

Lord Haskel Excerpts

Thursday 8th September 2016 Lords Chamber

[Baroness Neville-Rolfe]

The noble Earl knows that I share his passion for innovation and R&D. I believe we need a governance framework that ensures a good sense of strategy and long-term planning, and that helps to encourage innovation and R&D.

[Lord Haskel (Lab)]

Some companies publish a ratio between the top salaries and the bottom salaries. As part of the Government’s consultation, are they going to seek some kind of standard—some kind of ideal ratio—for this sort of thing?

[Baroness Neville-Rolfe]

As the noble Lord will know, the devil is in the detail in these matters. Certainly however, requiring the publication of the ratio between the CEO’s pay and the relevant average is something we will be looking at. That is coming in in the United States in 2017, as he will know. We need to learn from that experience and, as I have said, try through our consultation to come to the right changes in this important area.