Better Regulation

Lord Curry of Kirkharle Excerpts

Thursday 7th December 2017 Lords Chamber

[Lord Curry of Kirkharle (CB)]

My Lords, I welcome this debate and am grateful to the noble Baroness, Lady Neville-Rolfe. I must begin by declaring my interests. I farm in Northumberland and, as the noble Lord, Lord Whitty, said, I chaired the Better Regulation Executive from 2010 to the end of 2015. In that time, I was responsible for the adoption of the one-in, one-out and one-in, two-out processes, as well as the Red Tape Challenge and focus on enforcement programmes. Collectively, these initiatives led to a reduction in regulatory costs for business of around £2 billion per year, as confirmed by the Regulatory Policy Committee—a significant development for the business community at that time. When I took the chair in 2010, 62% of businesses regarded regulation as an obstacle to progress. Five years later, this figure had dropped to 51%. The programme was successful and brought greater discipline to government departments and their legislative ambitions. It definitely stemmed the flow of new regulations. I supported then, and still do now, the principle of establishing a business impact target introduced in the Small Business, Enterprise and Employment Act 2015, which we debated at length in this House. However, this needs to be realistic, and the cranking-up of the challenge from one in, two out to one in, three out in 2016 was a step too far.

The noble Baroness, Lady Neville-Rolfe, referred to the tragic Grenfell Tower disaster. The building where our own apartment is, a 10-minute walk from here, apparently has 40% coverage with the same offending panels and in construction may have contravened building regulations. It was rebuilt in 2003, long before the one-in, two-out policy was introduced in 2011. I question whether there is still a systemic issue within the construction industry.

I am absolutely clear that the programme we put in place did not put lives at risk or undermine confidence in our regulatory systems. In fact, as was stated by the noble Lord, Lord Whitty, it is perfectly possible to remove regulatory burdens that benefit employers, businesses, employees and citizens by adopting smarter processes and better-targeted inspections. Enforcement can actually be enhanced.

Today’s debate focuses on the need for regulation to be balanced or proportionate, cost effective, easy to understand and properly enforced, and I support that objective. We need to protect UK citizens, their health and well-being, our environment and natural capital, while creating a favourable business environment. This will be even more important post Brexit. It is crucial that businesses continue to want to reside here in the United Kingdom, to build capacity here and to contribute to our economy after March 2019.

According to the World Bank, the UK is currently the seventh most favourable country in the world in terms of ease of doing business—this is an important benchmark for us—and we want to ensure that we continue to be at the forefront of global business, positioning ourselves as the best place in Europe. This must be in terms of the ease of establishing a business as well as the ease of growing a business.

As the EU withdrawal bill is going through the Commons and heading in our direction, it puts us, as the Prime Minister has said, in an unprecedented position. We have no choice initially but to translate EU legislation into domestic law, but we should take the opportunity to simplify, consolidate and reduce the volume of guidance notes wherever possible to suit our circumstances here in the United Kingdom. However, we must also recognise that we will not be able to access important markets unless we have appropriate regulation in place. Having concurrent regulation with the European Union will help to pave the way for our future trading relationship. The wishful thinking of some Brexiteers that we can demolish regulation at a stroke when we leave the European Union and still trade on the global stage is naive. We need to strike a balance. It will be important to have at least equivalent standards with other countries and the EU if we want to maintain our business relationships. In fact, we need to present ourselves as having high standards of compliance and make a virtue of our regulatory standards. Our own British public expect us to have meaningful and appropriate regulatory standards in place.

Given my particular interest in the agricultural sector, which I am delighted has been mentioned twice already, I could not speak on this topic without referring to the impact on agriculture. I fully agree with comments about the red tractor scheme; these voluntary schemes provide valuable evidence of the status of farm businesses and allow for a policy of earned recognition to be applied to inspection regimes. There is no question that this issue of regulation and bureaucracy is one of the reasons that many people voted to leave the European Union, particularly the farming community. The assumption is that about 40% voted to leave.

In the design of our post-EU agricultural policy, we need to make sure that we reduce the complexity and bureaucracy which has been a feature of the common agricultural policy. We have a chance to create simpler, less onerous structures and we need to take that opportunity. We must resist the temptation to surrender to complex admin systems. The Defra Secretary of State, Michael Gove, has stated that he will establish a new environmental regulator to replace the accountability currently residing with the European Commission to hold government to account. I support this requirement but in doing so government must review the regulatory landscape, in parallel with this decision, and seriously question whether we need three environmental regulators. How confusing would that be?

Finally, I will comment on the structure in place to manage and administer the Government’s regulatory policy. The Better Regulation Executive has a hugely important role but it does not have executive powers, so the title is slightly misleading. The Regulatory Policy Committee also has a crucial function, as was highlighted by the noble Baroness, Lady Andrews, and the noble Lord, Lord Whitty, in auditing economic impact assessments. It is essential in monitoring the business impact target but does not have influence on policy and is not truly independent. Both bodies are subject to the whims of Ministers. The responsibility within government is split between BEIS and the Cabinet Office, while the BRE has not had an independent chair since I stood down in 2015. This structure does not provide sufficient independent challenge. It provides less than in the past, it is potentially confusing and there is overlap. It should be reviewed as a matter of urgency, particularly in light of the huge workload as a result of the withdrawal Bill. As has been mentioned earlier, EU regulation has been exempted from the current scrutiny by the RPC. This will not be the case when we leave the European Union.

When I chaired the BRE, I firmly believed that tax administration should have been included in the target and subjected to the same RPC scrutiny. I still believe that and firmly agree with the Federation of Small Businesses. My view is that we need an even more effective structure to monitor regulation going forward than we have today, not a lesser one.

Deregulation: Public Services and Health and Safety

Lord Curry of Kirkharle Excerpts

Thursday 13th July 2017 Lords Chamber

[Lord Curry of Kirkharle (CB)]

I apologise to the House for not having put my name down and missing the opportunity to contribute to this debate. However, I would like to make two comments. First, as the noble Baroness, Lady Young, stated, I chaired the Better Regulation—

[Viscount Younger of Leckie (Con)]

There was an agreement that the noble Lord might wish to make an intervention at some point during the closing speech, but not at the very beginning. If he wishes to, he will be able to do so, but it should be short and during the closing speech.

--- Later in debate ---

[Lord Prior of Brampton]

I do not think that there is any doubt about that on all sides of the House; even people who were supportive of Brexit will accept that Europe has brought us some good things. One of the criticisms has often been that we have gold-plated things that have come out of Europe and made them stronger.

On the subject of Europe, as it happens, I just received a “Dear Colleague” letter from David Davis, and it is worth reading just one paragraph. He says that the repeal Bill,

“ensures, as far as possible, that the same rules and laws will apply on the day after exit as on the day before. For business, workers and consumers across the UK this means that they can have confidence that they will not be subject to unexpected changes on the day we leave the EU … This Bill is not a vehicle for policy changes”.

It is worth making sure that that is on the record.

Turning back to regulation, it needs to be kept under constant review. Products change, technology changes, and, more than anything, people’s expectations change. The noble Lords, Lord Whitty and Lord Hunt, went back 30 or 40 years, and all Governments, rightly, while not obsessed with the need to review regulation constantly, have taken it seriously. A fault of regulation is that although it can drive up quality, it can also level down to minimum standards. That is one of the reasons why it has to be constantly reviewed, because what was acceptable 30 or 40 years ago may not be acceptable today. That is one of the reasons why regulation needs constant revision.

What has been the recent history of keeping our rulebooks and regulation up to date? Over the past 20 years, all Governments of all parties have been working consistently on getting the delicate balance right between the costs and benefits of regulation, developing a number of tools and institutions to make our rulebooks the right ones to have. The tone that has surrounded the debate about regulation has not been a happy one. Regulations and those who enforce them have been subject to caricature and ridicule. The culture that has surrounded regulation has not been very constructive.

In 1997 the Labour Government set up the Better Regulation Task Force. I think it is worth stressing the word “better”—it was better, not lesser, and that has been a consistent theme for the past 20 years. The Better Regulation Task Force identified the basic tests of whether any regulation is fit for purpose, which were set out by the noble Baroness, Lady Crawley: proportionality, accountability, consistency, transparency and targeting. The only word I would add is “intelligent”. There are times when regulations have ticked the box but entirely missed the point. Regulations need to be enforced intelligently. Sometimes more is less.

March 2005 saw the creation of the Better Regulation Executive and the publication of the Hampton report, which led to the introduction of the Regulators’ Code in 2008, which asks regulators to perform their duties in a business-friendly way, by planning regulation and inspections in a way that causes least disruption to the economy. At the same time the Government adopted a target to reduce the administrative burdens of legislation, such as form-filling, by 25%. The rule that has attracted the most criticism today is the coalition Government’s one-in, one-out rule, which later became one in, two out. I should say that in taking two out, they did not have to come from the same area: if you introduced one regulation on safety, you did not have to take out two relating to safety. The coalition also introduced the Red Tape Challenge initiative to tackle the stock of regulation by asking the public to help identify outdated, unnecessary or overly complex legislation.

I argue that these initiatives have delivered some real improvements in how people, business and public bodies are regulated. This includes the removal of some outdated and rather bizarre rules, such as the requirement for childminders who feed children in their care to register as a food business, or the ban on teenagers buying Christmas crackers. But it has also seen the removal of a huge amount of unnecessary form-filling, as well as simplification; for example, 37 million vehicles no longer need a paper tax disc, and small firms do not have to do full audits on their accounts, saving them some £300 million a year.

Of course, in the light of the awful tragedy at Grenfell, we are looking at regulation anew.

[Lord Curry of Kirkharle]

My Lords, I thank the Minister for giving way. He has reached the point in his speech that is relevant to the comments I want to make. As the noble Baroness, Lady Young, indicated, I chaired the Better Regulation Executive during the coalition period from 2010 to 2015, so was responsible for the one-in, one-out and one-in, two-out process, and the Red Tape Challenge programme. It is important to bear in mind that in 2010 business attitudes in Britain were very negative about regulation. We regularly carried out surveys and in 2010 62% of businesses regarded regulation as a barrier to progress and expansion. By the end of that period, that had dropped to 42%. We did that, as the Minister indicated, without putting lives at risk. It forced departments to really review their stock of regulation and to consider regulation that had become outdated and irrelevant. As a cleansing exercise it was a very effective process. I have to say that I was never responsible for one in, three out, which I believe is a step too far, and even one in, two out can be administered for only a short period to allow departments to really look at their stock and, having done that, to move on. The change in business attitudes to regulation in Britain is really important as we face Brexit. We want Britain to be an economy where businesses want to be located, grow and expand, and we need to encourage that thinking.

[Lord Prior of Brampton]

I thank the noble Lord for that intervention. It is worth noting that over this period, in which a significant number of regulations were taken off the statute book, public safety has improved significantly; for example, the number of fatal injuries in the workplace has halved over the past two decades. Deregulation and public safety are not necessarily contradictory. Throughout this time successive Governments have continued to bring in new regulations when they are necessary, including the licensing of security staff, the mandatory wearing of seatbelts and banning smoking from workplaces. Whenever there has been a public safety or public health issue, the Government have not been slow to bring in new regulations.

How regulation is delivered is just as important as having the right protections in place. My department works with regulators and businesses to support good regulatory delivery so that regulation works in practice. That is one reason why the number of businesses that object to regulations has dropped from 62% to 42%. Good regulatory delivery is not about less enforcement, nor necessarily about a light touch. It is about having competent regulators, being outcome-focused and having regulatory activities that rely on a robust assessment of risk. Those are the principles that underpin good regulatory delivery. It is not about officious box-ticking.

There has been a strong focus in government, in this and previous Administrations, on improving how regulators deliver the protections they are responsible for. Regulators must have regard to the Regulators’ Code, introduced in 2008 and updated in 2014. It is a principles-based framework for how regulators should engage with those they regulate. It requires regulators to consider risk and to be transparent about their activities and expectations. It applies to nearly all regulators across the UK, including fire and rescue services, trading standards and national regulators such as the Health and Safety Executive. Regulators know the industries they work with and the outcomes that they need to deliver, whether that is the safety of premises or the labelling of foods. Through robust risk assessment they can identify and target the highest risks more effectively and make the most difference.

I think the crux of today’s debate is whether the pendulum has swung too far in one direction or whether we have got it about right. That is a matter of judgment. Of course, the awful tragedy at Grenfell will make us rethink some of these issues. I hope it will change the culture that surrounds the way we look at regulation. It is worth repeating the words of my right honourable friend Damian Green, when he said yesterday in the House of Commons:

“The Department for Communities and Local Government and the Cabinet Office are working together across the piece and on the wider building safety programme, about which I know hon. Members on both sides of the House are concerned … DCLG has formed an expert advisory panel made up of a range of building and fire safety experts to advise the Government on any immediate action required to ensure that buildings are safe”.—[Official Report, Commons, 12/7/17; cols. 316-17.]


The panel will certainly take into account the words of the noble Lords, Lord Tunnicliffe and Lord Stunell, who both made very interesting observations about how we can improve safety regulations in buildings.

This debate will carry on into the future. I feel that the balance we have achieved over the past 20 years has been about right. It is now time to think afresh about how we approach regulation and certainly time to stop demonising those people who are involved in the enforcement of regulations.

Queen’s Speech

Lord Curry of Kirkharle Excerpts

Monday 26th June 2017 Lords Chamber

[Lord Curry of Kirkharle (CB)]

My Lords, I very much welcome the opportunity to contribute on the subject of agriculture as part of the debate. I declare my interests: I am a partner in a farming business in Northumberland and a trustee of Clinton Devon Estates, both of which are in receipt of the basic payment scheme and engaged in environmental stewardship. My other interests are listed in the register and include being chair of the National Land Based College.

There is no question that Brexit is the most important issue to face the agricultural sector since 1947. The agriculture Bill will be the most important since the 1947 Act. As has been said, it is an exciting time and an opportunity to shape our own destiny to create a set of policies that benefits agriculture and horticulture, our customers and our consumers; that contributes to our economy and our balance of payments; and that deliver environmental benefits, as mentioned by the noble Baroness, Lady Parminter. It will also help us to contribute to our climate change obligations. We also have an opportunity to recognise the important contribution that agriculture can make to the nation’s health. We must take the opportunity to design a holistic policy that embraces all these issues. I look forward to the debates on the content of the Bill.

I should like to emphasise three areas of concern. First, I want to stress again the importance of agriculture in the Brexit negotiations and endorse the comments of the noble Lord, Lord Plumb, on this subject. There continues to be a deep concern that agriculture is way down the ranking in the Government’s priorities. I should add that the fisheries sector shares the same concern. The common agriculture policy—the “expensive failure”, as described by the Minister in his opening comments—has had a dominating influence on agriculture ever since we joined the Common Market, so these negotiations are crucial.

In addition, we are part of Britain’s largest industry sector by a mile—it is even more important than the Minister described. The food industry is built on the foundation of the farming sector: agriculture provides the raw materials for our food processing and manufacturing sectors and much of the food service sector. Together they are far larger than the automobile, aerospace or exciting high-tech sectors that get much attention. Yet the agrifood industry is barely recognised in the Government’s hugely important industrial strategy. Why is that? In education and skills, farming and food science subjects are not even recognised as STEM subjects. Why is that? This industry is increasingly a high-tech, innovative and professional industry. There is a need for government to acknowledge the importance of this, both in the negotiations and in the design of domestic policy. This is true also of the trade negotiations.

The Minister suggested, as many do, that abolishing the CAP will lead to cheaper food. I remind the House that consumers in Britain enjoy cheaper food today, in relative terms, than at any time in recent history. Food being even cheaper could have a serious detrimental impact on farmers’ incomes. We do not want to be sacrificed in the trade negotiations to reach speedy and favourable agreements for other sectors of industry. I fully endorse the comments made by the noble Lord, Lord Plumb, and the noble Lord, Lord Colgrain, in his excellent maiden speech on this subject.

Secondly, I am deeply concerned about the relationship between the devolved Governments within the United Kingdom. I assume the Bill will address that issue. It is essential that we replace the structure currently provided by the CAP with our own UK structure that sets out a framework within which all four parts of the UK will function and, I hope, flourish. There will be a massive void when we leave the European Union. The House of Lords report from EU Sub-Committee D on Brexit and agriculture refers to this very real concern. Of course Brexit is, on the one hand, an opportunity to allow the devolved parts of the UK to design policies appropriate to their own priorities and circumstances. However, if this does not take place within an agreed UK framework, the result could be chaotic, cause massive tensions, and will potentially disrupt trade. I am aware that this will be a difficult issue, particularly with the Scottish nationalist Government, but it must be grasped and it is urgent.

There is much more I could say, but I shall finish on our competitiveness. The UK agricultural sector faces exactly the same challenge as our wider industry. Our competitiveness has declined relative to our main global competitors over the past couple of decades or so. This is a concern now but will be even more so in a post-Brexit world. We need to invest now—as a matter of urgency, in preparation for the challenge—in skills to project ourselves as an attractive and exciting sector with career prospects, and continue to invest in science, knowledge transfer and new tools and technology to raise our game. The sector is ready to respond, with new initiatives in place to help address this challenge, but so far has had little encouragement from the Government. We have a great science base in Britain, with world-recognised institutions. However, our recent record of transferring knowledge to give us a competitive edge has been poor. This cannot go on, because we are likely to face even greater global competition. We need government support for this. I hope the Minister will take note of these concerns and, as I said, I look forward to the emergence of the Bill.