Lord Hodgson of Astley Abbotts:

Moved by Lord Hodgson of Astley Abbotts

134ZA: Clause 20, page 22, line 8, leave out “does not apply in relation to any power to make regulations under this Act” and insert “has effect in relation to any power to make regulations under this Act as if in subsection (2)(a) of that section, after “section 30)”, there were inserted “which must require that a report setting out the conclusions of the review is published within the period of three years beginning with the day on which the regulatory provision comes into force””Member’s explanatory statementThis amendment would remove the disapplication under the Bill of section 28 of the Small Business, Enterprise and Employment Act 2015 (duty to review regulatory provisions in secondary legislation) to the powers to make regulations under the Bill, and add a requirement to publish a review within three years, following the concerns expressed by the Secondary Legislation Scrutiny Committee in paragraphs 65 and 66 of its 28th Report ‘Losing Control?: The Implications for Parliament of the Retained EU Law (Revocation and Reform) Bill.’

My Lords, I will move Amendment 134ZA and speak to Amendment 134B.

We have had pretty extensive debates over the past four days in Committee about how we need to improve the parliamentary involvement of both Houses on this framework, skeleton Bill. These two amendments shift the Committee’s attention to the existing scrutiny procedures which, while generally regarded as inadequate, do at least provide some level of scrutiny, and therefore hold the Government to account. However, even with these existing procedures, the Government are, as I shall explain, behaving increasingly casually and often ignoring existing statutory obligations.

Amendment 134B concerns impact assessments, which are required to be produced at the same time as the relevant regulation is published. Amendment 134ZA is concerned with post-implementation reviews. Together, they implement two of the recommendations made in the Secondary Legislation Scrutiny Committee’s report, Losing Control?: The Implications for Parliament of the Retained EU Law (Revocation and Reform) Bill.

I will deal first with Amendment 134B, concerning impact assessments. This requires an impact assessment to be laid simultaneously—an important word—with the laying of each regulation. Impact assessments were introduced by the Small Business, Enterprise and Employment Act 2015—I think my noble friend Lady Neville-Rolfe was the Minister at the time. The impact assessments are to be produced whenever the impact of a particular regulation exceeds £5 million.

A good impact assessment should inform policy development and evolve with it. This enables both Houses of Parliament to see and evaluate the various methods for dealing with a particular policy issue that the Government have thought about and then explains why a particular selection was made to give the policy effect. No less important, publishing an impact assessment in a timely manner gives people outside Parliament who will be particularly affected by a proposal a chance to make their views known. This narrows the gap between the governors and the governed, which some people feel has grown in recent years. As people often say, law that has been consulted on is often better law and is nearly always better-accepted law, because people feel that they have a chance to make their views known.

I will give two examples of the sorts of issues that are affected by how the Government have been rather casual about impact assessments. The Misuse of Drugs (Amendment) (Revocation) (England, Wales and Scotland) Regulations 2022 may sound a dull title, but in this the Home Office was going to revoke the ability to license a chemical because it could also be used as a drug. The Home Office believed that there were only 65 firms that used it and would be affected by it. When they produced the impact assessment, they found that there were about 7,500. Therefore, the effect of the impact assessment was to make sure that those 7,500 firms were not deleteriously affected.

My noble friend the Minister will no doubt say that this shows that the system is working—to which I would reply that it is effective when the impact assessment is provided. Too often, impact assessments are produced too late to be effective or, in some cases, not produced at all. Let me give an example of each, briefly: first, on an impact assessment being too late to be effective.

The Committee will recall that a big decision was made about whether we should require care home staff to be compulsorily vaccinated. There was considerable concern about how many members of staff would resign as a result, either because they had religious beliefs against vaccination or because they were young women concerned about the impact on their fertility. When the regulation was published, no impact assessment was provided at all, so the SLSC asked the Minister to give evidence and explain why. The regulation having been published in late June, he came to see the committee in July and, after what I like to think was a fairly thorough grilling, he agreed and undertook to bring forward an impact assessment. He did, but he brought it forward in November. By then, everybody had been vaccinated or had not been, and the reason for producing the impact assessment was completely vitiated.

As an example of the latter—no impact assessment at all—a Minister from the Department for Transport told the SLSC, during an evidence session on the draft Motor Vehicles (Driving Licences) (Amendment) Regulations:

“It did not cause delay because the regulations went through without the impact assessment.”

In the committee’s report, titled Losing Impact: Why the Government’s Impact Assessment System is Failing Parliament and the Public, there are 20 or 30 examples. I have given just a couple to show the extent and prevalence of the problem.

Each department has a Minister responsible for making sure that SIs and their attached impact assessments are produced properly and to time. Each of those Ministers reports to a Minister at the centre. Until two or three weeks ago, my noble friend Lord Callanan was that luckless Minister trying to corral this herd of cats. He gave evidence to the committee and he said that he was keen to prioritise, and I do not doubt that at all, and that

“because we have no statutory means of enforcing the writ of impact assessments, we are relying on peer pressure to encourage and cajole departments to do it”.

I hope that my noble friends Lord Callanan and Lady Neville-Rolfe—she is going to reply—are pleased to see Amendment 134B riding to their rescue by inserting the words “at the same time” into the clause. It says that

“under this Act … laid before Parliament, the instrument, or draft instrument, must be accompanied at the same time by a regulatory impact assessment”; in other words, no impact assessment, no regulation. By any measure, the level of parliamentary scrutiny of the outcome of the Bill is low. If the Government avoid producing IAs at the right moment, promptly, it will be another nail in the coffin of scrutiny. That was my amendment on impact assessments.

My Amendment 134ZA concerns post-implementation reviews—PIRs. I have long since lost count of the number of times I have sat in committees or in the Chamber and heard Members of your Lordships’ House say that post-legislative scrutiny is a really important way of holding the Government to account. It measures performance against promises; it provides a Bill’s institutional memory, as to what worked and what did not; and it enables those outside Parliament to understand the effect, deleterious or otherwise, of any particular regulation. In essence, PIRs are post-legislative scrutiny for regulations.

Sections 28 to 32 of the Small Business, Enterprise and Employment Act, to which I have already referred, require that any regulatory provision that passes the impact assessment test—the £5 million threshold—should be reviewed five years after commencement and every five years thereafter. Despite this being a statutory provision, it is something that we are very far from being able to rely on. We took evidence from Christopher Carr of the Better Regulation Executive. He suggested that between only 25% and 40% of regulations that required PIRs were getting them. In fairness to my noble friend, he wrote to say that he thought the figure was 72%, so I put that on the record.

However, with Clause 20(5) the Government are writing off the PIR system. It has gone. I strongly believe that this is a mistake. PIRs, properly conducted and publicised, play a very important role in monitoring, and so improving, government performance. If they play an important role in general, they do a great deal more in the particular circumstances of this Bill, because all parties, even the Government, recognise that we are entering terra incognita—unknown territory—with the provisions of the Bill. It is impossible to foretell how these decisions, inevitably taken quickly under the pressure of the 31 December deadline, will work out in practice. It must surely be sensible for the Government and Parliament to have in place a formal process to review the real-life results. This amendment simply restores the requirement for there to be a PIR, undertaken and published for each regulation, three years after the regulation comes into force.

To conclude, an age ago—actually a week ago, but it feels like an age ago—in my remarks on Amendment 32, I said that during my three years as chairman of the SLSC

“I have seen the sands of power and influence trickling through Parliament’s fingers”,—[Official Report, 2/3/23; col. 433.] weakening Parliament’s relative power against the Executive, the Government. This is yet another example of mission creep on behalf of the Government. It is wrong in principle and in practice, and I hope the Government think again. I beg to move.

My Lords, I thank the noble Lord, Lord Hodgson, for his very comprehensive review of two important amendments. It is a shame that we have got to the last sands of the Bill here. I am not going to add to what he has said, particularly on Amendment 134B, but I have a question that formed when I read the Bill in the first place: why is Clause 20(5) in the Bill; in other words, why did the Government actively choose to disapply this process? What made them think that they want to do this?

If I were a conspiracy theorist, I would say, with all the assurances that we have had that most things would stay the same and therefore not require the treatment that the noble Lord just described, this would not be an onerous task. However, if there was wide-scale revocation of regulations—including those that go beyond tagging the ears of fighting bulls, reindeer and all the others we are told about—that have an effect in the United Kingdom today, and if there is reformation, another word for change, a great deal of reviews would be required for those regulations to continue. Why was it decided to include Clause 20(5) in the legislation as drafted?

My Lords, it is always a great pleasure to support the noble Lord, Lord Hodgson. It has been a frequent occurrence on my part because of his excellent work on the committee that he chaired; there have been some excellent reports that I think have done a great service to this House. I am not going to repeat the points he has made; he has done an excellent introduction. I just want to seek clarification from the Minister in relation to his response to the committee.

I agree with the noble Lord, Lord Hodgson, that this is a requirement that should be undertaken. But the noble Lord, Lord Callanan, confirmed that instruments laid under the REUL Bill which make “significant policy changes” will be covered by an impact assessment. Is that a qualification of when impact assessments will be provided? Who is saying what a “significant impact” is? Surely the purpose of the impact assessment is to assess whether there is a significant impact, so somebody is making a judgment beforehand. I think that is something that we really need to challenge the Minister on. I hope that tonight he will be able to make a very clear commitment that statutory instruments will be accompanied by an impact assessment. I think it is quite clear that is what Parliament intended, and certainly what I think the noble Lord, Lord Hodgson, intended.

I also agree with him in terms of PIRs. Certainly, I have been on committees where he has made this point before. What we tend to have now under these skeleton Bills—I think that the noble Lord, Lord Lisvane, made this point—is legislation, then a debate on policy. Well, if it is going to be that way round, these PIRs are even more important and fundamental, particularly as we have heard in this debate. So we certainly support them, and I hope the Minister will be able to answer the question I have put to him.

I thank all three speakers. I first thank my noble friend Lord Hodgson; I know he takes this subject extremely seriously, as do I. It was a pleasure, albeit a gruelling experience, to give evidence to his committee. He knows my personal commitment on impact assessments is substantial; I do believe that they are important. As he said, I did have responsibility for it before the machinery of government changes, and I did my best working with the Regulatory Policy Committee to impress on other government departments the importance of producing impact assessments for some quite major pieces of legislation. Some Secretaries of State have chosen not to. My noble friend Lady Neville-Rolfe, talking from a sedentary position here, has just said, “I hope you produced one for the Procurement Bill”.

So, let me address the points that my noble friend has made on Amendments 134ZA and 134B. I hope to explain to my noble friend why we are taking the actions that we are. Starting with Amendment 134ZA, my noble friend’s amendment seeks to reintroduce a duty to insert review provisions in secondary legislation by removing the Bill’s proposed exemption to Section 28 of the Small Business, Enterprise and Employment Act 2015—which, as my noble friend said, was produced by my noble friend Lady Neville-Rolfe. It is amazing how these things come around.

It is correct that the Government should commit to review any new regulatory provisions that may arise from the use of powers in this Bill, including by secondary legislation. However, if we were to reintroduce Section 28, there are concerns that at a future date there will be a huge surge in the volume of reviews requiring assessment in a fairly limited window of time, which would put tremendous pressure on the Civil Service and independent resources. The amendment also calls for a requirement for a review within 3 years. This is in fact more frequent than the current review process of five years. It is my submission that, for some policies, a review at this point would be based on too small a data sample to make a meaningful judgment.

Finally, many of the relevant instruments are in an existing review cycle that is due to be undertaken within the next three years. I hope my noble friend will accept that forcing a further regulatory review would create duplicate or conflicting review cycles. Therefore, for new regulatory provisions introduced under this Bill, we are proposing a bespoke approach to our REUL analysis. Where applicable, such as when retained EU law is being amended significantly via a statutory instrument, departments may be subject to additional independent scrutiny. If the expected economic impact of REUL changes is of £5 million or more, departments will be expected to submit the impact assessment for independent scrutiny by the Regulatory Policy Committee, as in general happens now.

Where measures are being sunset, departments will undertake proportionate analytical appraisal. Each department will be expected to produce an aggregate analysis of REUL that it is choosing to sunset. This aggregate analysis will be published by departments. Each department’s aggregate analysis will be divided into groupings, such as “inoperable” or “defunct”. No doubt the noble Lord, Lord Fox, will study my noble friend Lord Benyon’s famous examples with great interest for the impact on the fighting bulls of the West Country.

Should the total impact of any grouping exceed the de minimis threshold of plus or minus £5 million, which is the limit used, then the department should submit an impact assessment to the RPC for independent scrutiny. This approach balances efficiency by requiring reviews only where necessary, alongside delivering an ambitious programme of REUL reforms which we hope will deliver real economic benefit for UK businesses and citizens.

My noble friend’s other amendment, Amendment 134B, seeks to introduce a duty for departments to conduct a regulatory impact assessment when they lay a statutory instrument or a draft of a statutory instrument containing regulations via the powers in this Bill. To address the question raised by the noble Lord, Lord Fox, properly assessing the impact of government policy is an important principle of good governance, and this Government will continue to be committed to the appraisal of any regulatory changes relating to retained EU law. The nature of the appraisal will depend on the type of changes that departments make and the expected significance of the impacts.

Where applicable, such as when retained EU law is a regulatory provision and is being amended significantly via a statutory instrument, departments will be expected to put their measures through the Government’s systems for regulatory scrutiny, which is the better regulation framework. Where measures are being revoked, departments will be expected to undertake proportionate analytical appraisal. We are currently exploring the appropriate steps we can take to appraise the resulting impacts. Furthermore, the Government have, as the Committee knows, published an impact assessment relating to the Bill as a whole. The noble Baroness, Lady Chapman, referred to it extensively. In addition, an internal exercise is under way between departments and the Ministry of Justice to appraise potential impacts on the justice system from the Bill.

However, given that proper and proportionate cost-benefit analysis will be undertaken by departments in relation to amendments to retained EU law, and efforts are under way to understand potential impacts of sunsetting, I hope my noble friend will agree that there is no need to include in the Bill the amendment that he has proposed. I hope I have been able to reassure him and that he will feel able to withdraw his amendment.

I am grateful to the Minister, to the Opposition Front Bench for its support, and to the noble Lord, Lord Fox, for his inquiries. Clearly, my interviewing of my noble friend at the committee was not gruelling enough in the light of the answers he has given me, but never mind. I accept the three to five years issue.

Then I get quite excited, because I hear about a bespoke approach. That sounds quite good, but then we hear “proportionate” and “only where necessary”. So we will set up something that we all would agree is great—even my successor as chairman of the SLSC, my noble friend Lord Hunt—but then we have so many escape clauses. Although I would not say that it is not worth the paper it is written on, I would say words to that effect. However, it is late. I will read carefully what my noble friend the Minister said, reflect on it, and then decide what further action needs to be taken. I beg leave to withdraw the amendment.

Amendment 134ZA withdrawn.

Amendments 134A and 134B not moved.

Clause 20 agreed.

Schedule 3: Regulations: restrictions on powers of devolved authorities

Amendment 135 not moved.

Schedule 3 agreed.

Schedule 4: Regulations: procedure

Amendments 136 and 137 not moved.