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Regulatory Enforcement and Sanctions Bill [HL]

moved Amendment No. 98: 98: Clause 70, page 33, line 15, at end insert ““keep that function under review and”” The noble Baroness said: My Lords, in moving Amendment No. 98 I wish to speak also to government Amendments Nos. 99, 100, 102, 103 and 104. The noble Lord, Lord Razzall, was particularly keen that we should address the points raised by my noble friend Lord Borrie in Committee. We are very grateful to my noble friend for the clarity that he brought to this part of the Bill. The government amendments reflect his insight. I hope that in the light of what I say, the noble Lord, Lord Razzall, and the noble Baroness, Lady Wilcox, will feel able to support the inclusion of Part 4 in the Bill. Government Amendment No. 98 adds to the duty not to impose or maintain unnecessary burdens a requirement that any regulator to whom the duty applies must also keep its functions under review. It is intended that the review of regulatory functions to which this duty has been applied should be carried out within a reasonable timeframe following application of the duty and in sufficient detail to identify unnecessary burdens. Amendments Nos. 99 and 100 make clear that it is the regulator that decides which of its burdens are unnecessary as a result of that review. I turn to Amendments Nos. 102, 103 and 104. My noble friends Lord Berkeley and Lord Borrie expressed in Committee concern that the mechanism by which the duty is applied—a ministerial order made under powers conferred in Clause 71—may be perceived to be an interference with regulators’ independence. That was never our intention, but the concern was shared by a number of regulators. As a result of discussions with those regulators, the Gas and Electricity Markets Authority, the Office of Fair Trading, the Office of Rail Regulation, the Postal Services Commission and the Water Services Regulatory Authority have all asked to have the duty in Clause 70 applied to them immediately via the Bill. This will avoid any potential perception of ministerial interference by this duty in the future. Amendment No. 102 answers that request and applies a duty to them. The economic regulators to whom we are applying the duty have significant regulatory powers in respect of a large part of the UK economy. Not including the OFT, we are dealing with a regulated sector worth more than £38 billion per year to the UK economy. Administrative burdens alone, for example imposed by the OFT and Ofgem, amount to more than £64 million. Ofcom, which regulates the telecoms and communications sector, is subject to a duty that is similar to the duty in Part 4. It has reported in its simplification plan a reduction of burdens on business of around £3.5 million in 2007. If we could replicate even a small proportion of that in other parts of the economy through the removal of unnecessary burdens, the Bill will have proved its worth. The amendment will also implement a recommendation made in the recent Select Committee report on economic regulators by statutorily requiring those regulators to remove regulatory burdens wherever possible. The amendment tabled by the noble Lord, Lord Razzall, and the noble Baroness, Lady Wilcox, would remove this part of the Bill altogether. That would remove a key tool for securing the removal of regulatory burdens for a significant proportion of the economy and would frustrate the implementation of the House of Lords Select Committee’s clear recommendation. We previously assured noble Lords that we did not intend for the duty to be applied to the competition functions of the regulators in a way that would give scope to undermine or second guess their decisions. In fact, we have gone rather further. To address the concerns of my noble friend Lord Borrie, we have excluded any functions that are carried out under competition law. Other than the regulators detailed in Amendment No. 102, the duty will not be applied to any other regulators, including local authorities, via the Bill. The duty will be applied only where and when appropriate by order, and the orders will be agreed by Parliament. I beg to move.