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Legislative and Regulatory Reform Bill

My Lords, the purpose of this amendment appears to be to introduce a legislative barrier to gold-plating European Community obligations when they are transposed into domestic law through secondary legislation. As the Government have stated throughout the debate on this Bill, we take the issue of gold-plating and the over-implementation of European Community obligations extremely seriously, and we are taking action to deal with the concerns of business on that. The review that the noble and learned Lord, Lord Davidson of Glen Clova, is conducting for the Government, for instance, is specifically aimed at identifying examples where it is clear that Community obligations have been over-implemented. Where necessary, the review will consider ways of reducing the regulatory burdens imposed on business by the existing stock of legislation implementing Community obligations. I presume that the noble Lord has seen a copy of the interim report of the review, which gives an update on progress. The hope is that the report will now be concluded quite quickly. It has always been the Government’s policy to implement European Community obligations so as to achieve the objectives of the obligation without over-implementation. The Cabinet Office guidance on the transposition of European directives makes it explicitly clear that only in certain exceptional circumstances and where it is justified by a robust cost/benefit analysis and extensive consultation with stakeholders should departments consider implementation that goes beyond the minimum required by a European directive. The guidance also makes it clear that all decisions to implement beyond the minimum required by a European directive must be made public. The effect of the amendment would be to preclude any discretion on the part of any Government in the transposition of EC obligations into domestic law by statutory instrument. Is the intention of the noble Lord, Lord Kingsland, really to further limit the discretion of any UK Government to implement Community obligations in a way that best suits the particular circumstances of the UK? I cannot believe that that is his aim. The interim report of the noble and learned Lord, Lord Davidson, provides a number of specific examples where the noble Lord’s proposed amendment would have precluded the Government from acting in the UK’s best interests. The evidence demonstrates that, by implementing European Community obligations in a way that goes beyond the minimum required by a European directive, the Government can ensure that directives are implemented in line with domestic legislation, meet the UK’s higher standards and reflect the specific requirements of the UK. For example, when transposing the temporary work at height directive, the Government extended the scope so that it applied to the self-employed in domestic legislation—something I hope that we all support. By extending the scope of this directive, the Government ensured that it maintained the UK’s higher standards, in line with the provisions of the Health and Safety at Work etc. Act 1974, which pre-dated the EC legislation by 17 years. This ensures equal protection for those who might be injured by people working at heights, regardless of whether the person is self-employed or an employee, and prevents unscrupulous contractors from escaping their health and safety duties by claiming that their employees are self-employed. Were this amendment on the statute books when the directive was transposed into domestic legislation, the Government would have had to accept the lower standards of health and safety set by the EC. This would also have caused unnecessary confusion and inconsistency between similar businesses. A further example is the 2003 prospectus directive. In this case, representatives of the financial services industry commented that this was an example where the Treasury and the Financial Services Authority had engaged with stakeholders early on and, on industry advice, had taken sensible decisions to maintain higher UK standards than the EC directive prescribed so as to provide higher consumer protection and financial stability. The UK financial markets are the leading markets in the EU and, therefore, changing their regulatory practices to tie in with rules appropriate to less advanced markets may have undermined the UK’s position. The amendment would present further problems when transposing Community obligations into domestic law. It would require that, in implementing a Community obligation, the Government do not impose or increase any burden that is, "““not necessary to implement the Community obligation or right””." However, it is often impossible to tell, or at least to agree, the bare minimum necessary to implement a Community obligation. The wording of EU directives is sometimes vague and the Government have to make a risk-based judgment about how the European Court of Justice might interpret the wording in question. This amendment would handicap the Government in their attempts to do that and would be likely to lead to numerous challenges in the UK courts by bodies asserting that the Government were going further than necessary. Ultimately, that would use up time and resources and place UK courts in the very difficult position of having to try to second-guess what the European Court of Justice might rule. I suggest that the provisions in the Bill are, in fact, better placed to respond effectively and pragmatically to the issues of gold-plating and over-implementation than the noble Lord’s amendment. That is because Clause 1 can be used to remove or reduce a burden, which could, in principle, include removing or reducing a burden resulting from implementation of an EC directive that goes beyond the minimum required. Furthermore, the provisions of Clause 20 make it possible to combine an order made under Section 2(2) of the European Communities Act 1972 with an order made under the Bill to remove or reduce burdens. That will enable a single order to implement Community law under Section 2(2) of the ECA and remove pre-existing domestic statutory provisions that have been superseded by Community law using the power in Clause 1. That will help to reduce occurrences of double-banking. Given the undesirable restrictions that this amendment would impose, I urge the noble Lord to withdraw it.