Draft Legislative and Regulatory Reform (Regulatory Functions) (Amendment) Order 2010

The Committee consisted of the following Members:

Chair: Mr Peter Bone 

† Afriyie, Adam (Windsor) (Con) 

† Benyon, Richard (Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs)  

† Bridgen, Andrew (North West Leicestershire) (Con) 

† Crouch, Tracey (Chatham and Aylesford) (Con) 

† Cunningham, Alex (Stockton North) (Lab) 

† Field, Mr Frank (Birkenhead) (Lab) 

† Goodwill, Mr Robert (Scarborough and Whitby) (Con) 

† Havard, Mr Dai (Merthyr Tydfil and Rhymney) (Lab) 

† Kawczynski, Daniel (Shrewsbury and Atcham) (Con) 

† McFadden, Mr Pat (Wolverhampton South East) (Lab) 

Moon, Mrs Madeleine (Bridgend) (Lab) 

† Murray, Sheryll (South East Cornwall) (Con) 

† Newton, Sarah (Truro and Falmouth) (Con) 

Paisley, Ian (North Antrim) (DUP) 

† Pound, Stephen (Ealing North) (Lab) 

† Reid, Mr Alan (Argyll and Bute) (LD) 

† Rogerson, Dan (North Cornwall) (LD) 

† Soulsby, Sir Peter (Leicester South) (Lab) 

Sarah Davies, Committee Clerk

† attended the Committee

Third Delegated Legislation Committee 

Tuesday 16 November 2010  

[Mr Peter Bone in the Chair] 

Draft Legislative and Regulatory Reform (Regulatory Functions) (Amendment) Order 2010

10.30 am 

The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon):  I beg to move, 

That the Committee has considered the draft Legislative and Regulatory Reform (Regulatory Functions) (Amendment) Order 2010. 

It is a great pleasure, Mr Bone, to serve under your chairmanship. May I take this opportunity to welcome the hon. Member for Leicester South to his position? This is the first opportunity we have had to debate together formally, and it will be a great pleasure to work with him—I hope it will be a case of “with”—on nearly everything that I deal with. 

I am pleased to present the statutory instrument to the Committee. As Members will know, better regulation across Government and its network of delivery bodies is an important tenet of the coalition’s drive for responsible and accountable policy and delivery. The statutory instrument seeks formally to ensure that the Marine Management Organisation adheres to a common standard of better regulation by adding it to the list of bodies subject to the Legislative and Regulatory Reform Act 2006. 

The principles of better regulation stipulate that regulatory activities should be transparent, accountable, proportionate, consistent and targeted. I am sure that the Committee will agree that those principles should underpin the effective working of our public bodies. The MMO has been following these principles since vesting on 1 April this year. The framework document setting out the MMO’s remit and corporate governance responsibilities, as agreed by the MMO and its sponsors, states: 

“As a Government Regulator the MMO must have regard to the five principles of good regulation…The MMO will have a risk-based, proportionate, targeted and flexible approach to regulatory inspection and enforcement.” 

Although the MMO is already complying, it is nevertheless important formally to recognise the MMO’s commitment to these regulatory principles. 

Members will know that the MMO is the Government’s key delivery body for marine policy, bringing together the management of a number of marine activities, including fishing, nature conservation, planning, licensing and enforcement. Delivering functions on behalf of a range of Departments, the MMO is jointly sponsored by the Department for Communities and Local Government, the Department of Energy and Climate Change, the Ministry of Defence, and the Department for Environment, Food and Rural Affairs. 

The length and breadth of the responsibilities that rest at the door of the MMO is huge. From planning to fishing, and from aggregate extraction to pollution control,

its influence is felt not only locally, but nationally and internationally. That is exactly what we envisaged when the Marine and Coastal Access Act 2009 passed through Parliament. People from across the political spectrum worked together to put that important piece of legislation on to the statute book. I worked on it when in opposition, and now that I am in government, I want to ensure that it is enacted correctly. It is right that the MMO should adhere to the common standards of better regulation, and the order recognises its efforts to do so. I hope that the Committee will join me in supporting the order. 

10.33 am 

Sir Peter Soulsby (Leicester South) (Lab):  May I say what a pleasure it is, Mr Bone, to serve under your chairmanship? I thank the Minister for his welcome, and I look forward to working with him when I can, and to providing robust opposition when I must. We will doubtless be seeing much more of each other in the weeks and months ahead. 

As the Minister said, the Marine Management Organisation is barely seven months old. Following the election, many feared that it was likely to be strangled in its infancy as part of the dismantling and disempowering of independent advisory bodies. We are pleased that it has been spared, although it is looking rather sickly and the prognosis is not good as it ought to be. 

The Minister reminded us that the MMO was established under the Marine and Coastal Access Act 2009. It is tasked with promoting clean, healthy, safe, productive and biologically diverse oceans and seas. However, it is intended to be more than the sum of its parts. Those parts include parts of the Marine and Fisheries Agency, the Department of Energy and Climate Change, and the Department for Transport that came together to form it. It is intended to give emphasis to sustainable development, and to provide a focus and a fundamental shift in planning, regulating and licensing activity in the marine environment. 

Under the MMO, key marine decision-making powers and delivery mechanisms have been brought together for the first time and co-ordinated in a single body with sustainability at its heart. The Minister has set out the aspects of the principles of good regulation that the measure will require the MMO to adhere to. It is entirely appropriate that it should be expected to meet the regulators’ compliance code as regards economic progress, risk assessment, advice and guidance, inspections, information requirements, compliance with enforcement actions, and accountability. 

As the Minister has said, the MMO will be expected to apply those principles across a wide range of responsibilities, and that is what I wish to express concern about. The MMO has responsibility for implementing the new marine planning system and the new marine licensing regime. It also has responsibility for managing the UK fishing fleet and its capacity, and the UK fisheries quotas, and it has a responsibility to work with Natural England and the Joint Nature Conservation Committee in establishing a network of marine protected areas, which have been described as the national parks of our seas. Those are a wide range of responsibilities. When it was established, the MMO was deliberately set up as a very lean organisation. As a result of that, it is vulnerable to spending cuts. There is real concern about

its ability to fulfil the duties that were set out in legislation and the responsibilities that will be imposed by the measure, because the MMO needs expertise in oil and gas, in economics, in fisheries and in so much more. Many who had high hopes for the MMO now fear for its effectiveness. 

To exacerbate the budgetary problems, the MMO’s two top people—the chair and chief executive—recently left within the space of two weeks. First, it was reported that Steven Gant had left the post of chief executive to “pursue other interests”. Now, it has been announced that MMO chairman and former Royal Navy officer Chris Parry is to step down. Mr Parry has said that he wants to 

“commit more time to my business…career.” 

Since his appointment in July last year, Mr Parry has been the driving force in successfully setting up the MMO, ensuring its launch on time in April and establishing it as an exemplary public body. Close observers are very worried. The National Federation of Fishermen’s Organisations, for example, has expressed concern about the “turbulence” within the MMO associated with these abrupt departures. 

Before we are asked to take forward the measure, may I ask the Minister for some assurances on the future of the MMO? Can he assure us that the departure of the chair and the chief executive in no way relates to disagreements about the MMO’s future direction, or to concern about the adequacy of MMO funding and its ability to effectively carry out the tasks that it has been given, and will be given under the measure? Can he tell us when it is intended that a new chair and chief executive will be in place? Finally, will he commission an independent assessment of the effect of the expenditure reductions on the MMO’s ability to carry out the functions that it has been given, and its ability to be both an effective regulator and a champion of the marine environment, as so many hoped and expected it would be? The Marine and Coastal Access Act 2009 was widely welcomed in the House and by the many people who care about the health, well-being and productivity of our oceans. The cuts to the MMO appear to put that sustainable future in great peril. 

10.39 am 

Sarah Newton (Truro and Falmouth) (Con):  It is a great pleasure to serve under your chairmanship, Mr Bone. I welcome this measure and the regulatory reform that it will bring to the Marine Management Organisation. The fact that the MMO will have to abide by the Department for Business, Enterprise and Regulatory Reform statutory code of practice for regulators means that there is the possibility of improving the decision-making processes of the bodies that have recently come together under the umbrella of the MMO. I particularly support the Hampton principles on which the code is based, especially the principle that 

“regulators should recognise that a key element of their activity will be to allow, or even encourage, economic progress and only to intervene when there is a clear case for protection.” 

It is essential that the right balance is struck between marine environmental protection regulation and economic progress. Striking that balance will be vital for the future prosperity of my constituency and, indeed, west Cornwall. To illustrate properly the fact that the way in

which we regulate our marine environment is important not just to my constituency, but to communities all around our shores, I shall describe a current problem of regulation in my constituency. 

I represent the port of Falmouth, an area of outstanding natural beauty and the third largest natural harbour in the world. The port has played an important role throughout history as a safe haven for ships coming across the Atlantic—as the first port in the United Kingdom. Within the harbour limits is the Fal and Helford estuaries special area of conservation, which is protected by EU habitat directives. The SAC provides a valuable habitat for our native oysters. Falmouth has the last remaining oyster fishing fleet under sail in Europe. We understand the value of our natural environment; we show great respect to our environment. Cornish water bill customers pay the highest bills in the whole UK to ensure that sea water quality meets the highest standards in the EU. 

The Environment Agency works constructively in partnership with local businesses to help protect and improve water quality. That is no small achievement, given the mining heritage of the area. People come from around the world to Wheal Jane to see how post-industrial pollution— 

The Chair:  Order. I was unusually generous to the shadow Minister; he wandered, but was quite clever in bringing his speech back to the five principles. We are considering a tight instrument, so will the hon. Lady address her remarks to the principles of the statutory instrument? 

Sarah Newton:  Thank you, Mr Bone. I understand your request, but given the complexities of balancing environmental protection with economic development in an area such as mine, I need to provide the Committee with evidence to show what the issues are and how they relate to effective regulation. I shall try to go into slightly less detail. 

The port is vibrant. It has many marine industries. In particular, it has a ship repair business, where Royal Fleet Auxiliary Service ships are maintained. A wide range of businesses support marine renewables, as well as oil bunkering and the shipping of recyclables. The businesses in the docks are, at present, the largest private sector employers in Cornwall, with more than 1,600 full-time employees generating nearly £50 million in the local economy. The harbour commissioners have developed a master plan for the future of the port, and that plan has shown that for the port to expand and flourish, it needs to be dredged. It has been dredged for a long period, and the dredging is needed to maintain existing businesses in the port and expand others. That could create an additional 4,000 jobs to support the wider economy of Cornwall. 

In support of the master plan, numerous approvals will be required. The harbour commissioners, along with Cornwall council and businesses in the port, have spent large quantities of time and money working with the most highly regarded, independent environmental and legal experts to make the appropriate assessments. Widespread consultation has been undertaken. Natural England, which looks with a single lens at the issue, has an objection. 

The Chair:  Order. I am sure that the hon. Lady will bring her speech back to the five principles dealt with by the statutory instrument, but I am beginning to think that we are wandering into an Adjournment debate. 

Sarah Newton:  I will try to summarise where I am going with my speech. 

Natural England’s objection is about the protection of the SAC. The estimate of the damage to the SAC is that less than 2% of the maerl that makes up the SAC will be damaged, and it will recover within 15 years. We feel that that does not compromise the SAC overall, and that Natural England, with its worries about how the EU may respond to any damage caused by the dredging, might be over-zealous in its interpretation of EU directives. 

I hope that when this statutory instrument comes into force tomorrow, all the principles of effective regulation are used in determining such decisions, the right balance between environmental protection and economic growth is struck, and the dredging of the port can go ahead, so that the future viability of Falmouth is ensured. We want to ensure that our maerl beds thrive and prosper, but we also want to ensure that the people of Falmouth and, indeed, Cornwall thrive and prosper. The right decision in Falmouth will give people not only in Cornwall, but in communities all around our shores, hope that their way of life, and their contribution to the UK economy and to the protection of the environment, are understood and supported by Ministers. I hope that this Government, who have made the sustainable development of the UK economy their key goal, will achieve that balance. 

10.46 am 

Sheryll Murray (South East Cornwall) (Con):  I will try to stick to the five principles of good regulation. 

Daniel Kawczynski (Shrewsbury and Atcham) (Con):  As our colleague did. 

Sheryll Murray:  As my hon. Friend the Member for Truro and Falmouth did. In my constituency, we have had a long-standing campaign about the disposal of dredged material that has been licensed under the Food and Environmental Protection Act 1985. Residents, as well as the tourists who visit the beautiful beaches in Whitsand bay, think that regulation has not been transparent, accountable, proportionate, consistent or targeted. May I thank the Minister for realising that, and the MMO for conducting an inquiry, which is ongoing? The statutory instrument will ensure that, at the end of that inquiry, people in my constituency can rest assured that the principles will be adhered to. I look forward to receiving an update from the MMO on how the inquiry is progressing. For that reason, I will support the statutory instrument. 

10.47 am 

Richard Benyon:  I am grateful to hon. Members for their contributions, which I will seek to respond to in as open and as clear a way as I can. I thank the hon. Member for Leicester East— 

Sir Peter Soulsby:  South. 

Richard Benyon:  South; I do apologise. That was a default position. 

I can reassure the hon. Gentleman on his concerns about the MMO. If he has not already had the opportunity to do so, I urge him to go to Gateshead. If I can facilitate his going there or to any of the regional offices, he will have my full support. He will see an organisation full of really motivated people. Some of those who came from a predecessor organisation have moved a long way to be there, and many new people have been recruited. When I was in opposition, I had concerns about this new organisation and about how it would bed down. Having gone there, however, one can have nothing but praise for the motivation of the staff, and their determination to make it a success. 

I am on the record as saying that I want the MMO to be seen as the exemplar of what an arm’s length body should be. It should be independent, well resourced and able to carry out its job across the wide range of areas of regulation that we require it to deal with. It should also be seen as a champion of our seas. I want people from abroad to see how we manage our seas, and how we are rolling out the marine conservation zones that the hon. Gentleman mentioned effectively and in consultation with all the interested parties, in a balanced and even-handed way. The fact that I have received complaints from some green non-governmental organisations saying that we are too much in favour of socio-economic activities, and from fisheries and other socio-economic activities saying that we are too much in favour of green NGOs, makes me think that we might be getting it about right, but it is too early to say. 

I understand that the hon. Gentleman raises serious points of concern. If they are points of perception, I hope that I can give him some reality. The chair of the MMO, Chris Parry, has done a superb job setting up the organisation and driving it. I regret his decision to leave, but I respect it. I want to put on record my thanks to him for leading that organisation before it appointed Steven Gant as chief executive. I reassure the hon. Gentleman that the organisation is well led. The current chair retires at the end of this month, so he is still there. We have put in place a good interim chair and a good interim chief executive, who will lead the organisation until we appoint a new chairman, as we will do by Easter. I will closely monitor the process of choosing the chair, and I want to ensure that he or she will lead the organisation effectively. There is also a deputy chair, whom we did not have before. She is an effective person who is guiding the interim chief executive. I assure the hon. Gentleman that, although it may look a little messy, the MMO is a steady ship and is proceeding well. 

I have had only two letters from people raising the concerns that the hon. Gentleman mentioned. One was from an organisation representing a large number of stakeholders. I assure the hon. Gentleman, as I assured them, that the organisation is properly led and is carrying out its functions. He is right: the MMO takes on more responsibility for licensing and planning in April. We will ensure that it does that properly. 

The hon. Gentleman also mentioned the organisation’s funding. Like other non-departmental public bodies, the MMO is expected to make a contribution to my Department’s overall commitment to reduce spending in-year. As with other DEFRA arm’s length bodies, the MMO was asked to make 5% cuts to feed into departmental

cuts of 5.5% this year. I cannot give him any details about where exactly the funding of the MMO will be in relation to the spending review, but I can assure him that the cuts will not be as high as in other areas of the Department, because we recognise that it is a new organisation and that new organisations need time to bed down. If and when he visits it, he will see that it is carrying out its functions, and is confident that it can carry out its future functions, within the budget constraints that we are discussing with it. I hope that I can give him further assurances as we proceed. 

My hon. Friend the Member for Truro and Falmouth made an important point about how the MMO carries out its functions with regard to dredging and its impact on sustaining a major industrial activity and a major employer in her constituency. Nobody is more aware than I am of the importance of development activities that can secure jobs in future. The MMO has to be independent of Ministers in its function of assessing whether developments can go ahead. That is not to say that we cannot provide strict, clear guidelines. If there is a misinterpretation in any application, and the balance is got wrong, in terms of socio-economic activities and the importance of development, and if we are over-cautious in response to the legislation and the framework under which such decisions are made, we can look at that. However, it is important that the MMO carries out its independent assessment. Once a decision is made, my hon. Friend and I can have conversations, and she can talk with the MMO. 

If the decision goes against Falmouth Harbour Board, the Falmouth Docks & Engineering Company and the Falmouth harbour commissioners, we can have a discussion about how we take the matter forward. I understand the

imperative of ensuring that ports such as Falmouth continue to be a source of major economic activity for that part of the country and a driver of regeneration in that area. I will do all that I can to support my hon. Friend in that. 

My hon. Friend the Member for South East Cornwall, like my hon. Friend the Member for Truro and Falmouth, has been a resolute and determined campaigner for her constituents. In her case, the issue is the dumping of dredge sediment off Rame Head and its impact on the tourist industry, particularly around the HMS Scylla dive site—the first dive reef created in this country. I have seen it for myself, through her good offices. The MMO is carrying out an investigation. As with all its investigations, that investigation will call on scientific research on the impact of the dumping of those dredged materials. I hope that she will soon hear the result of that investigation. If she requires an update at any stage on how that is proceeding and the likely time scale—I get the impression that she would like that—we will write to her and let her know about that. I know that it is a matter of great concern for many people in her constituency. 

I hope that I have satisfied hon. Members that this statutory instrument is important because it ties up the loose threads that were left by the Marine and Coastal Access Act 2009, in terms of the MMO’s role and the framework under which it carries out its functions. I am grateful for the words of support, and I hope that the Committee will approve this instrument today. 

Question put and agreed to. 

10.57 am 

Committee rose.