Watchdogs (Industry and Regulators Committee Report)

Viscount Chandos Excerpts

Monday 9th September 2024 Lords Chamber

[Viscount Chandos (Lab)]

My Lords, I congratulate my noble friend Lord Hollick on securing this debate and his outstanding introduction. This report, Who Watches the Watchdogs?, is the crowning glory of his term as the inaugural chair of the Industry and Regulators Committee, to whose establishment he did much to contribute. The standing of the committee, which is recognised by the Institute for Government, as I shall refer to later, owes much to his term as chair. Like the noble Lords, Lord Clement-Jones and Lord Cromwell, I was proud to be a member of the committee at the time of this inquiry, and continue to be a member under the excellent chairmanship of my noble friend Lady Taylor of Bolton.

Who among us has not felt frustration at the burden or impact of regulation, whether as consumers or in our business or professional lives? That, I suggest, is the result of bad regulation, not the principle of regulation, and the purpose of the committee’s inquiry was to identify ways in which regulation could be made consistently better. Further, like the noble Lord, Lord Clement-Jones, I believe that good regulation is a key determinant of the success of a dynamic social market economy. One of the most striking pieces of evidence that the committee heard was from Virginia Acha of the pharmaceutical group MSD. She argued that, if you look around the world, there is no country in which there is a thriving life sciences industry that does not have a strong pharmaceutical regulator.

What is true for life sciences is true for other industries and sectors, even or particularly those that are complex and/or fast changing. For that reason, I disagreed with the previous Conservative Government’s policy of delaying overarching regulation of AI and look forward to the Labour Government introducing legislation as soon as possible, drawing where appropriate, I hope, on the Private Member’s Bill introduced in the previous Parliament by the noble Lord, Lord Holmes of Richmond.

The most significant of the many good recommendations in the committee’s report is the establishment of an office for regulatory performance to improve Parliament’s ability to oversee regulators and hold them to account. As my noble friend Lord Hollick also noted, two months after the report was published, the Institute for Government published its own valuable report on the specific issue of the parliamentary scrutiny of regulators. It proposed a regulatory oversight support unit as its solution to the same challenges that the committee set out to address through the office for regulatory performance, as well as suggesting that the committee should seek to involve members of the House of Commons in its proceedings on a regular basis. This last suggestion feels to me to be way beyond my pay grade, although I would welcome it.

On the difference between the committee’s advocacy of the office for regulatory performance and the Institute for Government’s recommendation of a regulatory oversight support unit, I am torn between a loyalty towards the committee of which I am a member and feeling that the pride of co-authorship should not be allowed to get in the way of achieving, as soon as possible, a practicable and cost-effective solution. Can my noble friend the Minister say whether the Government will, alongside the proposed establishment of the office for regulatory performance, also explore, with both Houses of Parliament, the best way to strengthen Parliament’s scrutiny and holding to account of regulators, drawing on the work of both the Industry and Regulators Committee and the Institute for Government?

Subsidy Control Bill

Viscount Chandos Excerpts

2nd reading
Wednesday 19th January 2022 Lords Chamber

[Viscount Chandos (Lab)]

My Lords, I thank the Minister for his introduction to the Second Reading of this Bill. As he was the long-suffering Minister for Exiting the EU who helped to deliver the trade and co-operation agreement, it is particularly appropriate that he is now responsible for piloting through your Lordships’ House this Bill to introduce a replacement for the EU state aid rules, thereby meeting our obligations both under the TCA and towards the WTO.

It seems longer than thirteen months since the negotiations with the EU apparently hung in the balance over the question of the subsidy and the state aid regime that the UK would adopt after the final departure from the EU. Maybe that is because the Government’s shameless renouncing of a key part of the TCA, with respect to the Northern Ireland protocol, makes all the theatrics and rhetoric around reaching an agreement as insincere as the Prime Minister’s apologies. But there we were in December 2020, being asked by the party opposite—which had for decades, if not centuries, espoused the smallest possible role for the state and starved the economy of support and investment—to believe that it wanted to provide industry with financial support beyond anything that was possible under the EU state aid regime.

Whether or not there will be more rejoicing in heaven over one sinner who repents, we on these Benches welcome the acknowledgement—if the Government are sincere—of the important role the state has to play in the market economy. Can the Minister confirm that he supports an active role for government in industry and business? Does he believe that that is also the case for his ministerial colleagues, such as the authors of Britannia Unchained, who now apparently drive government policy in the vacuum left by this lame duck of an accidental Keynesian Prime Minister?

I believe that, the stronger that you believe in the principle of the state as an active player in the market, in a complex and nuanced way, the more important it is to have a clear and effective regulatory framework, within which the state has to operate. The track record of this Government in so many areas—public procurement of PPE inescapably springs to mind—makes it all the more important that absolute transparency and rigour of process is embedded in the legislation.

How well does the Bill measure up against these criteria? As my noble friend Lord Whitty and the noble Lord, Lord Forsyth, have already emphasised, it is hard to provide a definitive answer to that question in the absence of so much information. But, in the short time remaining, I will focus on a few points and questions that I hope the Minister can respond to.

Widespread concern has been expressed about the combination of the inadequacies in the database, and I am not sure that the word “editing”, used by the Minister, filled me with confidence. Neither does the short 28-day period available for interested parties to challenge, so long as they become aware of it.

As the noble Lord, Lord Lamont, has said, no enforcer is envisaged. It is of course supremely ironic that judicial review is being promoted as a key part of the enforcement. Can the Minister explain why the Government’s campaign against its use has been suspended in this case? How does he envisage it actually working?

Finally—perhaps this would have been more appropriate as the first question—how easily can public bodies, large and small, be confident of knowing when they are effectively granting a subsidy? Clause 2(2) lists a sample of subsidies:

“a direct transfer of funds … a contingent transfer of funds … the provision of goods or services”

and so on. But it makes no reference to investments of any sort. The noble Lord, Lord Lamont, has already raised the question of how the investment in OneWeb would fit into the new regime. Investments are undoubtedly the most complex instance of effective subsidy—how can you determine whether an investment is on commercial terms? I hope that the noble Lord can explain what the Government’s plans are for incorporating investments into this regime.