Enterprise and Regulatory Reform Bill

Debate between Lord Young of Norwood Green and Lord Borrie

Monday 10th December 2012 Grand Committee

[Lord Young of Norwood Green]

My Lords, Amendment 23D aims to improve transparency around whistleblowing cases that have been settled privately where it is in the public interest that this information should be in the public domain. I should like to put on the record from the outset that I would not wish to see this introduced without further protections against blacklisting of whistleblowers.

Since the cross-party initiative that brought the Public Interest Disclosure Act into force there has been considerable ongoing debate and discussion around its operation and effect. This has not always been informed by reference to analysis of cases, in part because they have not been readily accessible.

Claims made to the employment tribunal, including those made under the Public Interest Disclosure Act, are not made public, unlike in civil courts. At present, three-quarters of PIDA claims settle in private, with no information in the public domain about the underlying wrongdoing. The lack of openness is exacerbated by the widespread concern that many employers seek to gag employees from making protected disclosures. It is frequently reported in the public sector that independent reports into concerns raised by a whistleblower are kept from the public eye.

In 2008, my noble friend Lord Borrie tabled an amendment on this but the Government’s reasons for rejecting it were twofold: first, a fear of ambulance-chasing lawyers contacting the parties; and, secondly, untested allegations being in the public domain. As a compromise, the Government brought in a system of regulator referral, where claimants can elect to send their claim forms to a person prescribed under PIDA—for example, systems regulators such as the FSA or the CQC. This is inconsistent with the principle of open justice and is not ideal as it puts pressure on whistleblowers to withhold consent, or some individuals will use their consent as a bargaining chip in settlement negotiations. Where consent is withheld, the underlying concern will be hidden from public view.

There is no uniform way for regulators to deal with such concerns and some regulators do not even know of this provision. It is strange that a law which is all about promoting transparency and accountability in the workplace should have its use shrouded in secrecy. Given the proportion of PIDA claims which are settled, it is entirely probable that a public concern may lie unaddressed, buried in a claim and shielded from view.

The amendment should be coupled with the blacklisting provisions, thereby limiting negative consequences for individual workers. It is important that there should be open justice in whistleblowing claims and that it should be brought into line with the Civil Procedure Rules. I beg to move.

[Lord Borrie]

I hope the Government are positive about this amendment. Secret justice is inherently evil unless there is some very strong argument the other way such as public security. When this is not the case, the Government will have a very difficult job convincing us that things are all right as they are.

[Lord Marland]

I have a nasty feeling that I am going to disappoint the noble Lord, Lord Borrie, who of course speaks with a wealth of experience. I have observed tribunals over time, and what I have seen is that when names are published and the press get hold of it, they often put an imbalance into the equation. I believe that giving advance warning of the case means prejudice may build up against either side. This can often be seen in press reports on tribunal cases and I think that is unfair. Of the tribunals I have observed—although not been involved in—that have been reported in the press, there have been many times where I would say at the end of the day the press have taken one side or the other and not given a balanced view—and that is what becomes of a public airing.

No one is saying for a moment that this process should not be transparent but people are saying that there should be fairness. This applies to both parties. We accept the transparency issue but I am afraid that, on this basis and from the experience that we have had, and my experience in particular, I do not think it is fair on either party. As such, it is not an amendment that particularly finds favour despite the fact that we seem to have agreed on most things today and will doubtless continue to do so. In the spirit of Yuletide, I hope the noble Lord will agree—I am looking at his face now because he is playing poker—to withdraw his amendment.

Local Better Regulation Office (Dissolution and Transfer of Functions, Etc.) Order 2012

Debate between Lord Young of Norwood Green and Lord Borrie

Monday 16th January 2012 Grand Committee

[Lord Young of Norwood Green]

I thank the Minister for her comprehensive statement. In the beginning she said that there would be greater transparency and accountability. I noticed the assertion but I am not sure that I necessarily saw the evidence of that. This is an interesting NDPB and the impact assessment or the review showed that it was one that was highly regarded, which I think is important. When the Minister talks about greater transparency and accountability in a body that is being absorbed into BIS, I think we are entitled to some validation of that statement.

The Minister also said that the primary authority scheme will continue. However, paragraph 8.5 of the Explanatory Memorandum states:

“In line with the conclusions of the BIS led (public bodies) review of LBRO, the power to direct local authorities, and the power to enforce service improvement will be stopped. However, the power to issue guidance to local authorities will be retained, as will the requirement that local authorities must have regard to that guidance”.

Therefore, while I hesitate to use the word “disingenuous”, I think that the Minister did not give quite the whole story when she said that the primary authority scheme will continue. The primary authority scheme will not continue in its present form; it will be modified. Instead of there being a power to enforce, there will simply be guidance issued to local authorities. Given that that aspect of the operation of the LBRO was highly regarded, that is a not unimportant issue that requires some clarification.

Before moving on to the comments of the Federation of Small Businesses, I want to make one other comment. What assurances can the Government give that the better regulation delivery office will retain the independence and technical expertise that the LBRO had? Can the Minister assure us that the office’s important work will continue with the same vigour within BIS? It needs to be strengthened rather than weakened.

Interestingly, the Federation of Small Businesses has articulated concerns about the abolition of the LBRO, which it says plays a “vital” role in tackling regulatory burdens:

“LBRO must not be scrapped but overhauled if small firms are to truly see a reduction in regulation”.

The Federation of Small Businesses has also said:

“Raising the standard of inspections and making the process of inspection a positive experience is the cheapest and fastest route to improving the overall perception of the regulatory burden. The FSB believes the Local Better Regulation Office (LBRO) has a pivotal role to play in this process”.

I think that the Government have quite a way to go to convince everybody that the better regulation delivery office will be as good as the Minister has asserted.

There has also been a bit of an argument about the representative steering group. The Explanatory Memorandum states:

“Responses on the question of the proposed membership were evenly split, 50-50. The basic proposition to establish the group was supported, half the respondents agreed with the proposed membership, but others wanted to see the balance changed”.

The role of the representative steering group will be important. Given the assurances on transparency and accountability, I would welcome an assurance that the notes of the meetings of the representative steering group will be published.

I eagerly await the Minister’s response to some of those questions.

[Lord Borrie]

My Lords, I wonder whether I might intervene at this point. I am very disappointed with the order and its accompanying Explanatory Memorandum. It is very useful to have the Explanatory Memorandum, but an examination of it reveals—as my noble friend Lord Young has shown—that it makes a number of points that stress almost the opposite of the objectives and successes that the Minister has claimed for this order. For example, the Minister talked about the greater transparency, accountability and strength that will be provided. However, I am not sure that there will be greater transparency when the body is transferred inside a government department, where its work and effort will no longer be as clear as that of an NDPB. The savings that are claimed are said to be modest, which is not a very great strength for the change, while the response rate for the consultation on the order is also said to be low.

Postal Services Bill

Debate between Lord Young of Norwood Green and Lord Borrie

Wednesday 4th May 2011 Lords Chamber

[Lord Young of Norwood Green]

My Lords, I support the amendment in the name of my noble friend Lord Lea of Crondall. It provides for the disposal of shares to take place in tranches or batches, rather than all at once. The Government have not set a clear timetable for the sale, and they have not explained whether there will be a general sale of shares to the public, an IPO, a restricted sale to certain categories of buyer, or a trade sale by auction to a single buyer, such as a private equity firm or postal competitor, which may raise competition issues. The Government have not explained whether they would sell the whole company at once, with all the risks of selling cheaply, or whether they would be prepared to sell in tranches.

There is a huge amount of evidence, of which we have heard some details from my noble friend Lord Lea, that when privatisations have taken place, the value for which the businesses were sold was too low. That has been most clearly demonstrated when a general sale of shares has taken place and the shares traded. It is easy to see what price they traded at and how that compared with the original sale price. If there is a big gap and the original sale price is much lower, it indicates that shares should have been sold at a higher price. The taxpayer has lost out and someone has made a successful profit as a result.

A number of examples were given by my noble friend Lord Lea. I should also mention other sales. The sale of Associated British Ports was 35 times oversubscribed and the share price rose by 23 per cent on the first day of trading. Amersham International sold for £71 million and the share price rose 32 per cent on the first day of trading. As early as 16 May 1984, the Public Accounts Committee, in its 17th report, expressed concern at stock in public corporations being sold, in the words of the committee,

“at an immediate substantial premium creating windfall gains for the investor at public expense”.

That is what we should be concerned about. The report recommended considering sales in tranches, as was normal practice in the sale of large quantities of government bonds. Selling by tranches worked in a number of cases. For example, in the case of National Power, the share price rose by 22 per cent a day after the first tranche sale but only 4 per cent after the second tranche was sold. There was a similar situation during the sale of Powergen, whose shares rose by only 3 per cent in the second-tranche offer.

The amendment proposes that shares representing no more than 30 per cent of the value of the business can be transferred in the first year after the Act comes into force. I hope that the Minister can give us a reasonable assurance that serious consideration will be given to the danger of a sale that does not take place in tranches, and that the Government will be prepared to address this issue. I look forward to her response.

[Lord Borrie]

My Lords, I apologise for not rising quickly enough for my noble friend on the Front Bench to notice that I wished to speak. I do so now because my noble friend Lord Lea of Crondall made a practical, reasonable and strong case for his amendment. We are not at this stage of the Bill discussing or arguing about whether there should be a sale of Royal Mail. We are discussing the practicalities of such as sale. We were all around in some way or another during the 1980s and 1990s, and there is no doubt that when industries were privatised, they were often sold off under value. That has been well recognised after the event, if it was not adequately recognised as being likely before the event.

The practical purposes of the amendment are to ensure that we have an initial public offering, an IPO, of the shares, and that they will be offered in tranches. My noble friend is not rigidly proposing any particular dates or percentages, but in any amendment he tables he must put forward something that is reasonably clear. If an improvement can be made on that, there is no doubt that he would be willing to accept it. However, he wants, and we all should want, a practical procedure for ensuring that the public does not get an undervalue. There is to be a sale. Let the public have a good return on that sale, and that is what the amendment is all about.

Public Bodies Bill [HL]

Debate between Lord Young of Norwood Green and Lord Borrie

Tuesday 21st December 2010 Lords Chamber

[Lord Borrie]

My Lords, the Competition Service, to which the amendment applies, is a very small cog in the wheel of competition policy, which this Government, the previous Government and most Governments over many years have regarded as a vital part of policy for the British economy. Competition is good for the economy. I question the Government's reasoning for listing the Competition Service among the bodies that should be abolished under Schedule 1.

It was created under the Enterprise Act 2002 as an executive non-departmental public body to fund and provide support services for the Competition Appeal Tribunal, the top body in court terms, which hears appeals on matters relating to competition. The Competition Service’s work is dedicated entirely to the Competition Appeal Tribunal. I do not know whether it has been officially announced, and the Minister will no doubt tell me if I am wrong, but I understand that the Government have in mind that in future the Competition Appeal Tribunal, which will no longer have this dedicated service of the Competition Service to assist it, will be supported and serviced by the general Tribunals Service, which was not in existence in 2007, and therefore the Government could not then make it available for the Competition Appeal Tribunal.

The function of the Competition Appeal Tribunal, as I have indicated, is as an appeal body from the Competition Commission, and it is obvious to everyone concerned that its independent judicial role must be backed up by an independent administrative service. That is so at present. The Competition Appeal Tribunal gets an independent service and, as I understand it, is very satisfied with the service it receives from this body that the Government wish to abolish. There is no question of this public body, the Competition Service—I revert to the discussion on the previous matter—being a dead parrot, having no function. It has an important and useful administrative function.

It should be said that the Competition Appeal Tribunal has a UK-wide jurisdiction. It covers not just England and Wales, but Scotland too. It hears appeals and judicial reviews on competition matters and other related regulated matters, and it has a High Court judge as president, so it is a high-powered, much-respected body. My understanding is that when competition judges from different parts of the world meet together, this body we have in Britain is regarded as a very efficient and effective judicial body. The small—the Minister will, no doubt, indicate how much it costs and so on—Competition Service, which supports the Competition Appeal Tribunal, is virtually part of it. In effect, the Competition Appeal Tribunal administers itself, so if it is abolished, it would be in a much weaker position and would have to go to the more general body, the Tribunals Service, where people would have to be specially trained for the relatively rare cases it received on matters of competition. It would be very different if the Competition Appeal Tribunal was dependent on the large, general Tribunal Services for its support. I think that should be a matter of concern. Any savings from the abolition of the Competition Service seem to me to be most unlikely. It may, indeed, cost more because of the training required for the staff of the general Tribunals Service in order to cope with competition cases.

Moreover—and this is a matter on which I should be grateful for an answer—I understand that the Competition Appeal Tribunal and the Competition Service have UK-wide jurisdiction. I think I said that a little earlier, but what I want to say now is that the Tribunals Service, to which the Government seem to intend this body should go for administrative support, has jurisdiction in England and Wales only, and it is being considered by the Government for merger with the Courts Service, which makes a certain amount of sense. The Courts Service covers England and Wales, and the Tribunals Service is largely England and Wales, but it would not be in this particular instance. I wonder whether it is intended that if the Competition Appeal Tribunal is dealing with, say, a Scottish case, it would be administered differently from when it is dealing with an English case. Certainly, there would be expense, trouble and difficulty in training if it were otherwise. I beg to move.

[Lord Young of Norwood Green]

My Lords, noble Lords will be relieved to hear that I do not propose detaining us for long, because my noble friend Lord Borrie has put the kernel of the case. I just want to make a couple of points. We are told that a working group is currently examining the case for abolishing this body. Early in 2011, it will report to the Secretary of State for Justice and the Secretary of State for Business with its recommendations. No final decisions will be taken before then. Apparently, the working group consists of BIS, TS, HMT and Competition Service officials. It is examining all the relevant aspects of a possible transfer and abolition, including financial, legal, judicial and policy. It aims to produce a report for Ministers that sets out the pros and cons of such an abolition and transfer. If that consultation is taking place, it seems to us rather strange that this should appear in Schedule 1. Would it not be preferable if we awaited the outcome of the consultation process? All the other points in relation to this have been made. Given the time, I await eagerly the Minister’s response.

Competition Act 1998 (Land Agreements Exclusion Revocation) Order 2010

Debate between Lord Young of Norwood Green and Lord Borrie

Wednesday 23rd June 2010 Lords Chamber

[Lord Young of Norwood Green]

My Lords, on this occasion I find myself concurring with that superb analysis from the noble Baroness. I suppose that it is not surprising, given my previous association with my honourable friend in the other place, who was responsible for introducing this instrument.

[Lord Borrie]

My Lords, I commend the Minister and my noble friend Lord Young for their support for this proposal. It was pointed up by one reference to which the Minister referred, the Competition Commission report in 2008 that dealt with grocery retailing. We all know that there has been quite a lot of scandal and abuse in that field, with some supermarkets leaning on small farmers and other people in a way that has damaged competition and the interests of consumers. Exclusivity arrangements in a particular area can prevent the entry of competitors, and it is fortunate that this ruling today—if we approve the new order—will be dealt with effectively.

I draw attention to paragraph 9.1 of the Explanatory Note, which says:

“Following the Order’s revocation, there may be increased demand for OFT advice to parties about the compatibility of land agreements with competition law”.

The Minister has explained that the OFT is going to produce revised guidelines and that time is to be given so that the order does not become immediately effective and those who have not done their homework will still have time to do it. I am all in favour of that, but I would like an assurance from the Minister that the OFT has got and will be allowed to have adequate resources, which will not be cut, to deal with what may be quite a lot of requests for advice. After all, one should remember that many parties to agreements that will now be unlawful because they are anti-competitive may be small parties. They will not have their own legal departments that they can lean upon and from which they can immediately get a response. They will have to go elsewhere, to a trade association or a private lawyer. I suggest that very often the obvious place to go to will be the OFT. Can the Minister assure me that they can do that particular job?