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Economy: Regulators (Regulators Committee Report)

My Lords, I thank the noble Lord, Lord McIntosh of Haringey, for bringing to this House, if reluctantly, the report of the ad hoc Select Committee on Regulators on UK Economic Regulators. He obviously did not enjoy it; he was obviously embarrassed by doing it. The noble Lord is the first to say that the evidence was taken as far back as June last year; that, by the time the committee had produced its work, all hell had broken loose; and that what it had written was rather dull and dreary. I think he is wrong. The noble Lord will look back on this episode in his life as worth while and far-reaching. He said that it is the first time he has had anything to do with a Select Committee. I have been on several Select Committees and, over time, you begin to realise just how much can be done. I served on the Science and Technology Select Committee. I remember the small piece of work we did on aircraft travel, health and deep vein thrombosis. We have revisited that work, and it is quite amazing now what the airlines are doing about it. It cost the country very little because it was done by a little Select Committee of this place. I do not want the noble Lord to give up hope on this or to think that this is the last time he is ever going to do it. The main conclusions of the report, which we can take away, and that the Government have thought on—and will, I hope, think on even more—may seem to the noble Lord, Lord McIntosh, to be rather broad-brush. Under the statutory remit of the regulators, the committee has recommended further standardisation of the remits and made all sorts of good recommendations about working methods, value for money, regulators committing to evaluating the impact of their work, regulators’ use of impact assessments and—very importantly—the relationship between the regulators and the regulated. This is a particularly good recommendation. The report concludes that industry needs reassurance that the time it invests in consultation is time well spent and is meaningful in the decision-making process. A 12-week consultation period to allow industry a reasonable amount of time to respond is recommended, because these are very big issues to work with. It is an excellent suggestion by the committee to build the confidence of the industry in a body that it often sees as a hindrance, rather than a help, to the good order of the industry, to its customers and its consumers. On the protection of consumer, citizen and public interest, the committee recommends that the interests of citizens and the general public are for the Government and Parliament to define and promote. That is a good statement and one that should be made. It goes on to describe the consumer interest as the regulator’s duty. The most important thing that has come out of this is that the consumer interest should be able to stand aside. The noble Lord, Lord Borrie, and I know this well. We saw these things set up years ago and were worried about the fact that they were captured within some of the regulatory frameworks. Yes, they should be able to have their own representation outside: this is an excellent suggestion. As the noble Lord, Lord Borrie, pointed out, that does not mean that there would be no voice on the governing body of the regulatory body. On co-operation between regulators, I do not like the sound of that. I like the idea of competition between regulators. The committee recommends that a joint regulators group should be formalised. No, no, no: that sounds expensive, bureaucratic and a bit of a closed shop. I do not like the sound of the cartel of regulators, but it was interesting to read it and interesting to see it. When I think about it, we have looked at some real blue skies thinking here, and I think that there has been a necessary and fundamental shift. The noble Lord, Lord McIntosh, will look back on this work and be extremely proud of it, as he is not today. I read paragraphs 1.29 and 1.31 and reflected that some 10 years ago, when I was chairing the National Consumer Council—an enormous privilege—we did a piece of work called ““Who guards the guards?””. We were worried at that time about who looked after the ombudsmen. What were they doing floating around out there? One or two of them had never been used. We discovered afterwards that the funeral ombudsman had never actually been telephoned. Therefore, with my noble friends Lord Norton and Lord MacGregor, I am keen that a Joint Committee of both Houses of Parliament should regulate the regulators and hold them to account. That is a wonderful suggestion. It is the right suggestion and I hope very much that the Minister will give it a long hard thought. We would all agree that the dreadful performance of the Financial Services Authority should have been exposed long ago. Sadly, the days have long gone since there was ““a regulator”” to hold to account. The noble Lord, Lord Borrie, is a shining example of a man who would stand up and take the blame for absolutely everything that happened when he was in charge. He was a lead voice and I sense that the commission that replaced him is not vigorous enough. It is not alert enough and it is not well led. It is glaringly obvious that its members are running themselves like a committee. There is no healthy tension and no real scrutiny. Nobody is guarding those guards and many people in this country have been made wretched by the disgraceful conduct of Northern Rock and the systematic failure of the Financial Services Authority in its duty as a regulator. The good reputations of all regulatory authorities have over recent times been gradually eroded and the public and industry view of them now is one of mistrust, with such comments as ““a cosy billet””, ““out of this world””, ““process driven”” and ““neither efficient, economic nor effective””. The FSA is a glaring example of that. This has been a timely and good piece of work by the best brains in your Lordships' House. Sadly, Lord Garden, who served on the committee, has been lost to us, but by great good fortune, the wisdom, experience and energy of the noble Lord, Lord McIntosh, was kidnapped. The noble Lord has been a fine Minister in this House and his brush with cancer was a worrying time for us all, but here he is today to present this report and, I hope, to carry on to do other Select Committee work. I ask the Minister to reflect on what she has heard today. I have a whole heap of questions which I was given to ask—lots of snidey little questions and all sorts of stuff that as a good Conservative I should be saying. I have lists and lists of them, but the most important thing that we have heard today is that we want that scrutiny committee of both Houses. We must get that off the ground. This is a marvellous report and I am delighted to have been able to speak to it.