Government Amendment No. 98 adds to the duty not to impose or maintain unnecessary burdens a requirement that any regulator to which 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 which 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.
Lord Razzall: My Lords, I am not sure whether I will be popular or unpopular if I take this debate through 10.40 pm; or with whom I will be popular. I cannot guarantee to speak for as long as various other noble Lords, but I will try my best.
I very much welcome the remarks made by the noble Baroness. As she will be aware, we tabled amendments that would effectively have deleted Part 4. We did so for two reasons: first, for the reason of substance, which has been very much dealt with by the noble Baroness; and, secondly, we were concerned by the procedure that had been followed regarding Part 4. It is not often that I get confused between substance and procedure, but in this case it is a particular pity that the noble Lord, Lord Neill of Bladen, is no longer in his place, because he rather admonished me on why he had not got involved in the pre-legislative scrutiny. It is important, and I have congratulated the Minister’s department over the years on the way in which it has developed pre-legislative scrutiny and consultation on quite important Bills. The problem with Part 4 is that, although there was extensive consultation and scrutiny regarding the Macrory proposals and the Bill, Part 4 was very much tacked on at the end without any appropriate consultation.
It is very much to the credit of the noble Lord, Lord Borrie, that the Government have been—not forced, because I am sure that the noble Lord, Lord Borrie, does not force anyone to do anything—persuaded to table the amendments. I am grateful for that. If there is a lesson to be drawn from the Government’s point of view, I hope it will be that important provisions should not be tacked on at the end of a Bill when proper pre-legislative scrutiny has not taken place.
If I go on for one more minute, I will certainly be the most popular man outside this Chamber. In the circumstances, I do not propose to move Amendments Nos. 101 and 105, which stand in my name.
Baroness Young of Old Scone: My Lords, perhaps I should let the noble Lord off the hook by saying that I intend to speak after him, so he does not need to keep going.
Lord Borrie: My Lords, I shall get in as well; I hope that I am not competing with the noble Baroness. I want to thank the Minister and the noble Lord, Lord Razzall, for the kind remarks that they made about my amendment in Grand Committee. Clearly the Government—the Minister and officials, no doubt—have done a great deal of work, no doubt in consultation with several regulators, which are hardly likely to have all said exactly the same thing. She seems to have come up with a most suitable range of amendments to deal with a problem, and I need add nothing further.
Baroness Young of Old Scone: My Lords, before there is an unalloyed vote of praise for the Minister, I should briefly sound a discordant note. I thought that Amendments Nos. 101 and 105 were rather fine, because they would have kicked Part 4 out of the Bill. It was a late arrival, was ill consulted on, and is probably one of the most unnecessary pieces of legislation I have ever had the privilege to speak on. I predict that it will never be used; the Minister knows my views. The proposition is a sort of punishment step for regulators. The reality is that if a regulator ever got to the point where a parliamentary order would have to be approved to make it necessary for it to report on removing unnecessary burdens, not only would the chairman and the chief exec have been sacked by then, but probably most of the board as well. It is a very unnecessary part of the Bill but it is here, so we must acquiesce to some extent. By way of a small sop at this time of night, I say that government Amendments Nos. 98 to 100 are an improvement—a good darn in a bad sock.
Baroness Vadera: My Lords, I am grateful to noble Lords for their comments and to the noble Baroness; we have had extensive discussions with her. I am aware of her views and that they are not shared across the piece.
On Question, amendment agreed to.
Baroness Vadera moved Amendments Nos. 99 and 100:
On Question, amendments agreed to.
[Amendment No. 101 not moved.]
Clause 71 [Functions to which section 70 applies]:
Baroness Vadera moved Amendments Nos. 102 to 104:
Clause 71, page 34, line 19, leave out from “may” to end of line 21 and insert “only specify under this section a regulatory function if or to the extent that it relates to a Welsh ministerial matter.”
On Question, amendments agreed to.
[Amendment No. 105 not moved.]
Clause 73 [Extent]:
[Amendment No. 106 not moved.]
Clause 74 [Commencement]:
[Amendment No. 107 not moved.]