Better Regulation
Baroness Andrews Excerpts(6 years, 5 months ago)
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Baroness Andrews (Lab)
I am grateful to the noble Baroness for creating another opportunity to discuss this very important matter. I agree with much of what she said. We have never been at a more important time in carrying out our role to regulate properly, proportionately, wisely and transparently. I am going to pursue a rather different tack this morning.
Even under normal circumstances, the minimum that we should be able to expect from the Government in their approach to regulation is not merely that it is proportionate, providing the right level of safeguarding and reducing the sort of risks that need to be reduced, but that it is transparent enough for everyone to have confidence in and robust enough to invite and withstand scrutiny. I hope that the Minister agrees.
My questions to the Minister today—there are quite a lot—will test whether these assumptions still hold in the light of what the Government plan to do to reduce the scope and functions of the only independent verification body which advises the Government about regulation: the Regulatory Policy Committee, created in 2009. In July I led a debate on regulation, which followed many of the same lines as the noble Baroness. This afternoon it is different. At the end of the debate, the Minister responded to me, in an unsatisfactory way, that the system of regulation was under review. Naively, I thought that that might mean a review which could lead to some improvement. There is common and cross-party agreement that we need to improve the system—to strip out what is redundant, ambiguous and obstructive—and to standardise practice without losing quality. That was the line taken by the Public Accounts Committee recently, when it said that the Government should adopt a more proportionate and efficient better-regulation system.
What has happened in fact, and which is deeply alarming to noble Lords across this House and to industry, is the opposite. Possibly under cover of the challenges of Brexit, possibly driven by it, the Government are planning to reduce the powers of the one independent body which is set up precisely to ensure that regulatory changes planned—whether to create or annul regulations —have the impacts claimed for them. We are talking only about business impact statements here—the very basic currency which has governed the accelerated approach to deregulation in recent years. These changes are planned and are under the radar. Apart from a letter to the chair of the PAC delivered last week, none of them has been publicly revealed, let alone discussed or consulted upon, not even with business interests. Each of them reduces a different part in the process of careful scrutiny and each has massive implications for small businesses—and very much for this House and the way it conducts scrutiny.
The three changes are, first, that the Government plan, as the noble Baroness, Lady Neville-Rolfe, said, to impose a de minimis bar of £5 million on what the RPC will look at in the future. This will have the following effect. Between 2015 and 2017, the RPC looked at 700 measures. Had this new regime been in place over the past year, it would have looked at only 18 measures, and it would be for government departments to self-certify those measures as to which side of the de minimis they fall on. This will reduce the work of the RPC by 90%. Had these measures been in place in recent years, the RPC would not have been able to review important regulations relating to fracking, night-flight restrictions, gender pay-gap reporting, pesticides and water quality, to name just a few. That is only one sort of impact.
The Federation of Small Businesses has been in touch with me as well. It says:
“There are rumours that government are introducing a higher de minimis threshold for scrutiny of impact statements”.
How right it is. In its briefing, it asks me to ask the Minister to provide clarity on this and when he will consult on it. Can the Minister ensure that in the wind-up he answers this question? The federation says:
“Our members cite the cumulative burden of regulation as a key problem, and so we are concerned that this change will allow more regulation to slip through the net unscrutinised, adding to the burden rather than reducing it”.
Exactly. Changes which look minor in themselves, which affect every hairdresser in the country, may well not add up to £5 million so will not be scrutinised—but they affect every hairdresser. That is what the FSB wants information about.
The second change is related to that. The Government have changed the terms on which measures of any size can be examined. With the introduction of de minimis, the RPC was concerned—rightly—that controversial measures could slip through, so it was working with the BRE to introduce powers of call-in to pick up controversial measures that would have a perverse consequence, whatever that might be. This, I understand, has now been abandoned as an idea. There will be no provision to call in any controversial measures that fall below the minimum. In a letter that I have seen, sent by the Minister to Cabinet colleagues, this is simply described as being,
“to enable the BRE to work with Departments to avoid unnecessary parliamentary handling risks”.
Thirdly, the Government have decided to abandon the mandatory first stage of consultation, which was developed by the RPC to spot and iron out mistakes, to the advantage of business and societal groups. This would provide greater departmental autonomy, with only one final cliff edge of confrontation. This proposition had been put forward before but was rejected by the then Cabinet Office Minister, Oliver Letwin. Business is very unhappy.
These are my questions for the noble Lord. Can he explain why the Government are reducing the power of the RPC to a minimal, possibly unsustainable, level at a point when its regulatory function needs to be at its most alert? Can he confirm that these changes are not under consideration but are well past that stage and that, unlike what he said to me in an Answer last week, they have been put into effect without public consideration, debate or review? Can he explain why this has not been brought to the attention of Parliament, let alone our scrutiny committees that deal with secondary legislation? Can he explain why he has not consulted business? Can he tell me what the job description of the new chair of the RPC, announced yesterday, in place of the gentleman who has been doing the job for many years, Michael Gibbons, will consist of? Does Mr Browne understand that, if these changes go ahead, there will be virtually no job to do?
I have already put one question to the Minister from the FSB, and here are two more. When will the Government consult on a new business impact target, which is required within a year of a new Parliament? We are now half way through it. When can we expect confirmation of the appointment of the independent validation body? Those are all questions well within the scope of the Minister, and I expect a reply at the end of the debate.
Finally, exactly what role and process do the Government now envisage for the RPC in relation to the Brexit process—not just in terms of the transposition of EU regulations but in terms of the generation of new regulations as a result of the negotiations or beyond? Are we to understand that this scrap of a body that will be left is to be charged with this crucial part of our future, or will more changes, of which we have not been informed, be sprung on us? When I heard about these changes, I found it very hard to believe that even this Government would make them without informing their eyes in business—the people who have to implement them—and this House.
I have mentioned Brexit and the chilling effect it is having across government. It is also a potential means of evasion and excuse and of doing things that might go unnoticed. We must be exceptionally alert to this. The RPC has been entirely dignified and silent about its treatment. This is no way to treat good public servants whose only concern is for good public policy. We ought to be able to look for a regulatory system which is robust but is also concerned with the social—not just business—impacts, and which is statutorily based and protected, and championed by a leading Minister.
This is not a personal agenda; these are issues of enormous interest across the House and outside, and I look forward very much to the Minister’s response.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)
My Lords, I join the noble Lord, Lord Mendelsohn, and other noble Lords in offering my congratulations to my noble friend on securing this debate. As others have made clear, she brings much experience to this field, having served as a civil servant on the better regulation unit with our noble friend Lord Heseltine, in the private sector and as a Minister. I welcome this opportunity to discuss a topic that continues to be a high priority for the Government. It is one in which my noble friend has a long interest.
I am new to this subject but I am grateful for the accreditation that I got from the noble Baroness, Lady Donaghy, who described me as “a gentle soul”—at least I think those were the words she used. She tells me she said “a gentle creature; “soul” is probably too generous a word. As a gentle creature, I hope that I can at least bring the appropriate steel to these matters where necessary. I stress that I am new to the better regulation portfolio. I have yet to meet Anthony Browne, the incoming chair of the Regulatory Policy Committee, but I hope to do so shortly—possibly next week, depending on his and my diary commitments. However, I certainly pay tribute to the outgoing chair, Michael Gibbons, who has done an excellent job for the committee since its inception in 2009. He has completed two stints, serving for eight years, and I and the rest of the Government pay tribute to him for that.
I also completely understand that regulatory reform has become a much more sensitive and emotive issue in the light of the Grenfell tragedy. In due course we will certainly want to reflect on the current inquiries, but at this stage I do not want to say anything that might pre-empt or second-guess what might come out of them. We obviously await the outcome with concern and interest, but at this stage the Government are looking anew at regulation and considering in this Parliament what the better regulation framework should look like.
I also make it clear that our regulatory reform agenda does not come at the cost of people’s safety, and nor would it ever do so. Our aim is to deliver smart, proportionate and balanced regulation, while ensuring that essential protections are retained. The noble Lord, Lord Whitty, preferred the word “proportionate”; my noble friend used the word “balanced”. I agree that words are important but I believe that both “balanced” and “proportionate” can be used. It is important to make it clear that we want to have the appropriate regulation while ensuring, as I said, that essential protections are retained. Regulation should also be proportionate to achieve the outcome required and at an appropriate cost to the business that bears it; this provides an environment that supports the generation of growth, competitiveness and jobs, as my noble friend alluded to.
It is also appropriate that we make it clear that we will decide in due course, in this Parliament, how the better regulation system will operate. The noble Lord, Lord Haskel, referred to the work of the Secondary Legislation Scrutiny Committee, an important committee that does very useful work in this field. My first experience of any committee was the Joint Committee on Statutory Instruments. I think the noble Lord has also served on it and, as he will remember, it had no role in looking at the merits of secondary legislation; it could look only at its vires and so on. In that sense, it sometimes felt like an outer Siberia of committees. The Secondary Legislation Scrutiny Committee has a more effective role in this area. We would certainly want to make sure that not just that committee, but Parliament as a whole, has a proper role to play. However, I think the Government can provide the appropriate assurance that this will not be achieved through reducing necessary public protection.
As we consider how the better regulation system will operate, we will continue to discuss these matters. We have discussed them before and will continue to do so with others in due course. I give an assurance to the noble Baroness, Lady Andrews, that we have discussed such changes with various business groups, despite what she said. Officials have met the key business groups over the last two months. Only last week I attended a meeting with the FSB, the CBI, the EEF and the IoD, and I understand that the de minimis rule was mentioned following recent conversations. I seek to reassure business that any changes that we allow will also allow closer scrutiny of the most important measures.
Baroness Andrews
The Minister has answered my question in part, but does that mean he will reconsider establishing a call-in process? Business is most concerned that these measures will fall under the barrier of £5 million and will not be looked at.
Lord Henley
Final decisions have not been made; the noble Baroness will have to be patient in these matters. She referred to a letter from me to colleagues in government, but obviously we will not comment on leaked documents.
Baroness Andrews
My Lords, the letter came to me in good faith by mistake. It was not a leaked document.
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.
Deregulation: Public Services and Health and Safety
Baroness Andrews Excerpts(6 years, 10 months ago)
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Baroness Andrews
That this House takes note of the impact of deregulation on, and the role of regulatory enforcement in delivering, public services and health and safety.
Baroness Andrews (Lab)
My Lords, I am grateful to have the opportunity to introduce this debate and particularly grateful to all noble Lords joining me in what is an extremely important matter. At the heart of this debate is a fundamental question: what sort of a state do we aspire to live in? This question is inescapable in the light of the appalling and preventable tragedy at Grenfell Tower and the issues it raises around the quality and safety of public services. Of course, our thoughts are ever with those people whose lives will never be the same again.
Following from this, the question we really need to ask ourselves is what sort of country we want to live in and whether it is one in which the universal principle of government that every citizen should have the basic right to safety and security has been replaced by a political ideology where the minimum will do. If the minimum puts the poorest and most vulnerable at the greatest risk, perhaps this is what the Prime Minister meant when she said, in response to Grenfell Tower, that the state is not working.
It is absurd to say that the state is not working, as if it is something beyond the control of government. The state has not failed; the fact is that the state is being wilfully dismantled and disabled by an ideology that explicitly pursues a leaner and meaner state. This has been marked not just by an increasing frenzy ramped up over seven years by successive Ministers to get rid of as many regulations as fast as possible, but by a climate of hostility that invites compromises over safeguards and standards, and opts for guidance rather than enforcement. Crucially, this fatal obsession with deregulation in all forms across Whitehall has been pursued with no regard for consequences, other than the benefits to business. Even then, the outcomes are far from transparent or consistent.
So it is no wonder that there is such visceral anger about the catastrophe of Grenfell Tower. There will eventually be answers to why the regulations that were supposed to protect residents signally failed to do so. What also needs an answer is why the review of the Building Regulations 2010 was delayed and why the 2013 review of the 2005 regulatory reform order was not converted into recommendations. This debate cannot pursue that or the contextual factors that contributed to the risks of living in Grenfell Tower. One such of course is the conspicuous refusal of successive Governments to prioritise housing for the poor as opposed to the rich and the refusal to respect the dignity and the voice of social housing tenants. When you put that together with 40% cuts on average in local authority budgets, there is no doubt that the poor will suffer the most.
I hope today’s debate will open up further opportunities to uncover the impact of the culture in which regulation has been routinely derided as red tape and where Ministers are incentivised to reduce the so-called burdens on business as far and as fast as possible. It is worth reflecting on the term “red tape”. It has in fact kept greed and exploitation in check since the beginnings of the Industrial Revolution and continues to do so. Red tape has meant that over many years in this country children no longer work all the hours God sends. It means that our food and drinking water do not kill us, that our landscapes and green spaces are protected, and that our transport systems, homes and workplaces are as safe as they can be.
On 21 June, in an open letter to the Prime Minister, 70 leading health and safety agencies and practitioners said unequivocally that enough was enough. They stated that,
“for many years, Ministers and others with influence over them have called for regulations, including in health and safety, to be axed as a matter of principle … This mind-set has meant that, even when it was recommended and accepted that mandatory fitting of sprinklers would make homes or schools safer, this was rejected in favour of non-regulatory action. In practice, this approach favours inaction”.
As they emphasised, much of what is seen as most burdensome is due to poor understanding and implementation or an exaggerated fear of liability.
Those independent, authoritative national safety organisations now demand a change in direction and culture from this Government. No one defends keeping redundant or unenforceable regulations. Over many years—and the Labour Government were much involved in it—much has been pruned and improved in the pursuit of better regulation and it is being done daily by the Health and Safety Executive. But here is the change: since 2010, we have had Conservative-led Governments who have departed from a legitimate search for better regulation to a position where deregulation is an ideological and political choice—where, indeed, it has turned into a battle cry.
Having already pledged to,
“kill off the health and safety culture for good”,
David Cameron in 2012 went on to describe it as an albatross around the neck of business. I wonder how that sounds to the families of the 13,000 people who die each year from exposure to chemicals or dust.
Since 2010, the Cabinet Office has charged Ministers across Whitehall with finding first one, then two and now three regulations to ditch for every new one made, on the grounds that red tape stifles growth and reduces profits. The Department for Communities and Local Government, the department responsible for building regulations, has proved only too eager to assist. One of Grant Shapps’ first actions as Housing Minister in 2010, which now has a tragic resonance, was to abolish the National Tenant Voice, the first body set up—just previously—deliberately to represent social housing tenants. He also diverted the independent Tenants Services Authority, the first regulatory agency to champion tenants’ rights, into the Homes and Communities Agency. This move not only made it less visible; it also had the effect of constraining the co-regulation opportunities and consumer elements of its work.
That work of representing tenants’ interests has been taken forward by the national tenant organisations. My first question to the Minister is: will he meet the NTOs to discuss how to go forward in empowering tenants in the light of Grenfell Tower? There are landlords who are hostile to their involvement.
Mr Pickles at CLG also set to work to deregulate as much of development control as possible, thus making it much easier for housebuilders, for example—who have never had the incentive to build in the interests of society—to develop less carefully but more profitably. The provision for “viability” in the National Planning Policy Framework has also let developers off the hook of social housing and social benefit if they can claim that it reduces their profit margins.
Mr Pickles’ successor, Sajid Javid, boasted during the election of May 2015 that the Conservative manifesto promised a further £10 billion of cuts in red tape over the following Parliament. That £10 billion, he said, would be easier to slash than the previous £10 billion. He was particularly pleased that deregulation had achieved,
“less bureaucracy for house builders and developers”,
while,
“thousands of regular businesses no longer face health and safety inspections”.
How right he was, because, in April 2016, a TUC survey found that half of all workplaces had never been visited by a safety inspector.
The Red Tape Challenge ran until April 2013. On 27 January 2014, David Cameron announced that it had identified 3,000 pieces of regulation to be improved or removed, with 800 abolished or simplified. May I ask the Minister for an up-to-date figure on how many regulations have now been scrapped and with what savings, and how are the £10 billion in savings calculated? How much has been saved since 2015? I appreciate that the Minister may not have those figures with him; I would like him to write and I would like a copy placed in the Library. Some of the regulations that have been scrapped are particularly worth noting. For example, new homes no longer have to be zero-carbon rated. That is a problem, not least because it is at the forefront of new technologies. Self-employed people no longer have workplace protections.
It is rare that one gets a glimpse into the workings of Whitehall, but this comment by someone who served as a special adviser to BIS for four years is instructive as to the processes:
“In 4 years … Steve Hilton and his Red Tape Challenge provided more moments of exquisite satirical lunacy than any other. I will never forget listening … to Steve and A Certain Cabinet Minister debate whether to lift the ban on inflammable nighties … At one point Steve suggested scrapping entirely the Consumer Protection Act”.
Bizarre thought though that is, my immediate reaction on reading it was one of simple anger that while this nonsense was being driven by No. 10, no such urgency was being given to updating the fire regulations.
However sophisticated the regulatory system, the loss of expertise, skills and resources for enforcement renders it ineffective. Evidence shows, for example, that since 2010, one-third of environmental health officers have gone, so food outlets are checked less frequently and air-quality stations are closed. The heaviest cuts fall in the poorest areas. Professor Steve Tombs of the Centre for Crime and Justice Studies has shown that health and safety, food protection and pollution control staff in Liverpool have been cut from 39 to 16, with corresponding reductions in the other Merseyside authorities. There has been a steady fall in the number of enforcement notices issued by the HSE and local authorities. I know that other noble Lords will have other examples. Most significantly, the relationship between the HSE and industry itself has changed. The HSE has been directly disabled by a cut of 46%. It is no longer allowed to conduct proactive inspections. At the same time, the commercialisation of its activities, through the introduction of fee for intervention, means that the HSE is less likely to be consulted over health and safety.
Professor Tombs suggests that there is a long-term downward trend in every form of enforcement. If that is the case, I suspect that there will be a long-term downward trend in health and safety in the workplace, reversing the steady progress that has been made over 40 years. Housing and planning has been particularly hard hit. The planning system is now much weaker than it was, because of the expansion of permitted development and changes to the prior approval process. This means that a high-rise office block can be converted to housing without the requirements for any space for children’s play or social facilities. The Parker Morris space standards are long gone and there is now the prospect that these dwellings will indeed become the slums of the future. There has also been a loss of oversight in terms of building regulations. Nick Forbes, the leader of Newcastle, has described it thus:
“Buildings can go up and councils have no right to know what they are made of, if the developer chooses to have a private sector firm sign off on regulations”.
This debate is even more timely than I thought it would be, because of the publication of the European repeal Bill today. Stripping out the European regulatory frameworks is a compelling prospect for Brexiteers. Priti Patel, Secretary of State for International Development, told the Institute of Directors:
“If we could just halve the burdens of the EU social and employment legislation we could deliver a £4.3 billion boost to our economy”.
One example she offered was cutting working time protection for self-employed lorry drivers. In this House we will be in the paradoxical situation of both defending the current standards of safety and effectiveness in areas such as medicine or information technology and, at the same time, trying to prevent Government overriding Parliament by the use of excessive, inappropriate secondary legislation. I only hope that we will have the resources and arrangements that will allow us to do that to the best of our ability.
In conclusion, it is almost 200 years since the first expert inspectors were created to stop coal mines, factories and food killing people. The state has changed a lot—it has had to—from one which sprang to action only after a national disaster, in the nightwatchman state of the Victorians, to one which has tried, over a century, to anticipate and prevent new harms as they emerge in an increasingly sophisticated economy. We should be proud of that, not least since it has been good for growth, good for business, good for public health and good for society.
In view of these social and economic benefits, it is alarming that this retreat from regulation over the past seven years has been conducted without any public reference to the impact on anything other than business. So my third question to the Minister is: will he now take the lead in commissioning a comprehensive social and economic review of the impact of the Red Tape Challenge and all that has followed from this so that the claims and assertions of the benefits of the deregulatory regime can be tested and the costs and charges can be revealed? Will he also agree to meet the health and safety bodies which have written to the PM to discuss their deep concerns? Their letter concludes:
“You have it in your power to remove immediately a “risk to people at work and outside of the workplace—unwise deregulation—which threatens public and worker safety.
We, leaders in health and safety in the UK call on you to scrap the Government’s approach to health and safety deregulation and to think again”.
Only the Government have the power to ensure that the state remains proactive, responsible and accountable in its care for the entire community, especially the most vulnerable. Grenfell Tower should indeed be a turning point, and I hope the Government will rise to that responsibility. I beg to move.
Baroness Andrews (Lab)
My Lords, I am very grateful to everyone who has taken part. I said that I thought that this would be the start of a wider debate on the state of the nation and the nature of attitudes towards regulation, and so it has turned out. I note that in concluding, the Minister said that he hopes that Grenfell Tower will indeed change the culture around regulation, and I hope that that is the case. It is up to the Government, essentially, whether that happens.
I thank all noble Lords for their incredibly thoughtful and informative contributions. I say to the noble Lord, Lord Patten, that there was wide consensus around the House that the attempt to introduce effective, proportionate regulation started with the Labour Government, but there was also a sense around the House that there has been a step change to a more aggressive culture. The Prime Minister has learned of the absurdity and perversity of the process and outcomes of some of the ways in which the one in, three out rule has been interpreted. I was particularly grateful for the contribution of the noble Lord, Lord Stunell, his frank and thoughtful account of his time as a Minister, and his proposition on building inspection responsibility.
I asked the Minister four questions; none of them has been answered. I understand why two of them were not. They were about the review of regulation, although he gave some illustrations of outcomes. I should be very grateful if he would answer them as best he can, especially the invitations to the organisations that I mentioned.
Lord Prior of Brampton
I am sure that I can address those questions. On the meeting with the two groups of people that the noble Baroness suggested, I would be very happy to do that, but I think it would be best if they met my noble friend Lord Bourne from the DCLG, rather than me.
Baroness Andrews
I understand and am grateful for that.
In conclusion, Brexit raises huge problems, some of which have been identified today, in terms of transposition and enforcement. I go back to where the noble Lord, Lord Best, started: when we have effective regulation, high standards and high ambitions for the quality of public services—what we provide by way of housing and everything else—we are actually doing a service to the economy as well as to the community. That should be our ambition; that should be what we want government to do; that should be what we want the state to do.
I am very grateful to all noble Lords who have taken part, some at considerable personal expense, and I hope that this will open up a debate which we will continue, particularly as we face the prospect of Brexit. I beg to move.