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Regulatory Enforcement and Sanctions Bill [Lords]

I am grateful to the Minister for his opening remarks, which I should like to reciprocate by thanking him for the courteous and patient way in which he approached our discussions in Committee. It is in vogue in the Government to compare oneself with a fictitious literary character; on that note, I suggest that the Minister has performed with the patience and courtesy of Mr. Bennet from ““Pride and Prejudice”” to his rather awkward and occasionally annoying offspring. I shall save the Minister the blushes that would be involved in suggesting which particular member of his family he might wish to compare me to. I should also like to thank my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) and my hon. Friends the Members for St. Albans (Anne Main) and for Mid-Bedfordshire (Mrs. Dorries), who were of great support to me in Committee. I particularly thank my hon. Friend the Member for Billericay (Mr. Baron) for his patient guidance and help. As the Minister said, this Bill is not the Government’s first attempt to tackle regulation. In both 2001 and 2005, attempts were made to turn the regulatory tide. Sadly, neither made any real impression on the volume or complexity of the law, and meanwhile the burden on business has grown. It is important to remember that context when we consider the aims and outcomes of the Bill and the deliberations that we have had to date. I shall not attempt to rehearse the arguments debated on Second Reading—nor would you allow me to, Mr. Deputy Speaker, and rightly so. Let me just say that we Conservatives endorse the principles of risk-based regulation, but we believe that this measure is too narrow and, all too often, far too complex. As our economy faces a serious downturn, we need to be bolder in freeing enterprise from needless red tape. Deliberation on the Bill began, of course, in the other place, and right from the start it was clear that there were serious deficiencies. For example, a new super-local-regulator was to be established, but there was to have been little effective oversight. I am pleased to say that my noble Friends tabled substantial amendments that would improve the scrutiny and operation of the local better regulation office. The insertion of provisions for a formal three-year review in clause 17, and for consultation in clauses 9 and 10, are all the direct result of that scrutiny. Equally, the original Bill permitted regulators the ability not only to issue civil fines—we debated that on Report—but to keep the money from those fines. There was a danger that that new source of revenue could encourage regulators to become the worst sort of target-led traffic wardens—fine first, and ask questions later. As the Minister said when we debated the matter in Committee, the danger of that would have been its undermining of the risk-based approach to regulation that lies at the heart of the legislation’s original aims. Thankfully, that danger has been averted; instead, the moneys will be deposited into the general consolidated fund, thus removing any incentive for regulators to use fines inappropriately. I have no doubt that that sensible compromise will be even more welcome in a rather cash-strapped Treasury. Looking back, I estimate that there have been at least a dozen important amendments to the Bill during its passage through Parliament. I hope that the Government Whips will note that all this took place without the need for heavy-handed so-called programme motions. Scrutiny is often more effective when not held on a short leash. However, the Bill is far from perfect. I remain sceptical about the capability of the LBRO to change single-handedly the performance of the worst local regulators. Change management, as the Minister will know, is about the leadership and culture of an organisation, but the Bill fails to address either. The precedent in clause 7—the power for an unaccountable body to turn guidelines into directions—is one that we thoroughly debated at various stages of the Bill’s passage. Conservative Members remain concerned, and we would expect the whole matter to be included explicitly in the three-year review that the Government conceded earlier. There are real dangers surrounding this precedent. It is the first time, as far as I am aware, that an unaccountable body that is not directly accountable to this House has the ability to turn its guidelines into directions. Despite the Minister’s assurances, I suspect that it will not be long before we find before the House similar measures and requests from other quangos for pretty similar powers. Part 2 establishes primary authorities for multi-site businesses. That could be good news for larger firms such as Tesco, but it has the potential, as my hon. Friend the Member for Wellingborough (Mr. Bone) said in his comments on Report, to leave small single-site firms behind. In Committee, the Minister gave me clear assurances that small businesses will not be disadvantaged. I intend to hold him to his word, and to that end I will contact small business organisations to ask them to help me to monitor this whole process among their members. I am sure that the Minister will agree that it is vital that small businesses trade on a fair and level playing field. Equally, I remain concerned about the potential for confusion among consumers about how complaints and enforcement action will be handled. Indeed, we heard strong evidence in Committee about the potential for bureaucracy, not least from Hertfordshire county council, which fears that it could need another 12 officers. That is just one local authority of nearly 500, so hon. Members will realise the potential cost to council tax payers, or, if the money is recouped by business, as the Minister suggested earlier, the unwelcome costs to businesses that they may not have anticipated in full. Then there is the power to charge businesses. During our discussions on the first day in Committee, I asked the Minister who would determine those charges and who would judge whether they were reasonable. I am pleased to say that yesterday I received the Minister’s reply by letter, which I think has been copied to all members of the Committee.