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That stance in no way diminishes the Government’s support for evidence-based medicine or for scientific research into new pharmaceutical products that benefit patients. We have done much as a Government to support science and research, and will continue to do so. Homeopathic products are,

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however, in a different category. Provided that such products are safe, properly manufactured and clearly labelled without making false claims, which they will be under the new national rules scheme, patients should not be denied access to them for the conditions to which they relate.

A number of noble Lords, including my noble friend Lord Turnberg, raised the issue of NICE. The Government have no plans to refer homeopathic remedies to NICE at present. I gently draw noble Lords’ attention to the fact that NICE has quite a few things on its plate at the moment, including many potentially life-saving drugs. However, there is nothing to stop the use of the yellow card scheme, authorised under the new national rules scheme, to be applied in respect of adverse effects to homeopathic products, as is the case with conventional medicines.

I believe that this is an area where we have to regulate in the way that we have done but, in our view, we must not deny people the right to use these medicines when they are safe, manufactured to an appropriate quality and properly labelled. These are good regulations that should be on the statute book.

Lord Taverne: My Lords, it would be inappropriate to reply to the various issues raised in this debate, but I must make a few very brief points. The intention of this Prayer is not to ban the sale or diffusion of homeopathic products but to stop regulation that allows claims of efficacy which do not have scientific proof and which encourage people to believe that homeopathy works in a way that cannot be proved. That could have, and has had, serious effects in some cases.

I am extremely disappointed by the Minister's reply because he has not denied—indeed, he could not deny—that these regulations turn their back on the entire history of the regulation of medical products in which such products have been scientifically proved. Nor did he answer the question about the interests of the homeopathic industry—indeed, he denied that the regulations had anything to do with that.

Perhaps I may read the appropriate sentence from the Explanatory Memorandum attached to these regulations:

If that does not mean that the purpose of the regulations is to assist the homeopathic industry, I do not know what it means.

I should also like the Minister to look again at the whole role of the MHRA, which has now abandoned its purpose of guaranteeing the safety and, in particular, the efficacy of its products.

I am afraid that the noble Lord’s reply will not reassure the numerous—in fact, almost comprehensive—list of medical bodies that have expressed extreme concern at the MHRA’s change of tack. His reply was feeble, and I am sorry to say that the reply from my own Front Bench was equally feeble. If they are to be taken seriously, perhaps sometimes they should apply a little intellectual rigour.

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I understand that it is not customary to have a vote on a Prayer of this kind. We shall continue, as I am sure will many others, to press for these regulations to be withdrawn. I hope that the Government will give further thought to them, but I beg leave to withdraw the Motion.

Motion, by leave, withdrawn.

Legislative and Regulatory Reform Bill

3.13 pm

Consideration of amendments on Report resumed on Clause 3.

[Amendment No. 17 not moved.]

Baroness Wilcox moved Amendment No. 18:

(a) restricting the jurisdiction of any economic regulator includes diminishing, removing or transferring to another person any function conferred on or exercisable by an economic regulator; (b) undermining the independence of any economic regulator includes imposing on an economic regulator an obligation to comply with the wishes of- (i) a Minister of the Crown; (ii) a person who owes such an obligation to a Minister of the Crown; or (iii) a person who is controlled by a Minister of the Crown. (a) the Gas and Electricity Markets Authority; (b) the Office of Communications; (c) the Office of Rail Regulation; (d) the Postal Services Commission; (e) the Water Services Regulation Authority; (f) the Office of Fair Trading; (g) the Civil Aviation Authority.”

The noble Baroness said: My Lords, I thank my noble friend Lord Norton of Louth, as this is a slightly modified version of the amendment that he tabled in Committee to great acclaim. I am also very grateful for the support given by the noble and learned Lord, Lord Lloyd of Berwick, to my previous amendment on this issue.

The economic regulators have been given statutory powers and duties for the benefit of us all. Their effective regulation of the networks and infrastructures that provide us with electricity, water and transport is critical for our safety and the reliability of crucial services. It is essential that industry continues to invest in the services in order to maintain and improve their quality. This investment will be put at risk if there is the slightest danger of political interference. At previous stages of the Bill, I reminded this House of the Government's behaviour

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towards the Rail Regulator during the winding up of Railtrack. We need no reminder that in the past economic regulators have been, and may well be in the future, the target of pressure from politicians.

In Committee, the Minister attempted to reassure us by promising consultation, yet we have all seen countless orders forced through both this House and another place in the face of enormous opposition from consultations and committees. Equally frequently, the Government have ignored advice and warnings from parliamentary committees. I am afraid that I do not share the Minister’s faith that future Ministers will consistently adhere to his undertaking not to pursue controversial orders and not to undermine the independence of the regulators, welcome as these undertakings are.

I was contacted by a member of the Government’s Better Regulation Commission who was worried that my amendment would allow the economic regulators to impose bad regulation on already overburdened businesses. I have written to the member of the commission to reassure him that the amendment would not let economic regulators off following good regulatory practice. Instead, it would ensure that major changes to the regulators were given the full scrutiny that matters of such financial significance to every man and woman in this country deserve.

We have seen the Government twist and turn to avoid taking the blame for the mountain of red tape burying business in this country today. It is time that they stopped arrogating more and more powers to themselves, while doing nothing with the powers that they already have. They should clean up their departments and break their addiction to government interference. I beg to move.

Lord Norton of Louth: My Lords, in supporting this amendment, I wish to reiterate two points that I made in Committee. It is important to stress the independence of the economic regulators and the fact that that independence is not achieved at the expense of accountability.

Regulators have to explain and justify their actions. In the Constitution Committee’s report, The Regulatory State: Ensuring its Accountability, the point was made that regulators are subject to what was termed “360 degrees of accountability”. They are answerable to a range of bodies, including Parliament. They are bound by statute and can be challenged if they exceed their powers. Stipulating the independence of regulators does not affect the powers of Ministers to determine policy.

The importance of maintaining the independence of regulators has been variously stressed, including by the Government. In Committee, I quoted from the evidence submitted to the Constitution Committee by the Department of Trade and Industry. The department said that,

There is thus a compelling case for protecting the independence of regulators—and to be seen to be so doing. That was the case that I advanced in

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Committee, and my amendment is designed to ring-fence that independence.

I listened with care to the Minister’s response in Committee. His reasons for opposing the amendment were twofold. One was that the provisions of the Bill did not create a new position. Regulatory reform orders under the 2001 Act could be used to change the functions of the economic regulators and the provisions of the Act, he argued, had not led to any uncertainty. The second point was that the provisions allowed for flexibility subject to parliamentary scrutiny.

The first point I do not find compelling. I was a critic of the 2001 Act, and the fact of carrying over existing provisions is no commendation. It has not led to market uncertainty because the powers have not been used in a manner that is contentious. My fears about the provision are more apparent if I rephrase that and say that the powers have not yet been used in a manner that is contentious. If the order-making power were to be employed to try to limit the independence of regulators, it may be blocked by Parliament, but the damage would already have been done. If tried once, the potential is always there, and markets thereafter may be far more wary. The point that has been variously stressed, not least by my noble friend Lord Onslow, and which the Government appear to have difficulty in accepting, is that a Government cannot bind their successors.

The other point developed by the Minister is essentially one of convenience. He cited an example affecting the FSA. I counsel against generalising from an N of one, which seems to have happened an awful lot in discussing this Bill. I am not sure that we should concede the general point of enabling primary legislation to be amended by secondary legislation because there is one example of that proving useful. The potential for creating even one case of misuse should concern us.

The Minister’s argument, which is at the heart of what I find worrying about the Bill, is that because circumstances change, there may be a case for changing the functions of the regulator and this could conveniently be done by secondary legislation. In other words, it is an admission that we did not get the legislation right the first time round. Had we done so, there would have been appropriate provision in the Act for amending regulatory functions. We need to think through what this may entail for the Government’s approach to primary legislation in future.

I revert to the point that I made earlier. I believe that it is important to protect the independence of regulators and to be seen to be doing so. That combined with my somewhat purist view of primary legislation means that I am very happy to support my noble friend’s amendment.

Lord Berkeley: My Lords, I have added my name to the amendment because I believe, as the two previous speakers have said, that the question of independent regulation is fundamental not only to regulating monopolies but to attracting private finance.

I shall speak mainly about the railways, because that is what I know most about, and I declare an interest as chairman of the Rail Freight Group. In that sector, £1.5 billion of private investment has been

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made since privatisation. This industry likes regulators; it does not feel that they are a constraint. It likes them because regulators give certainty and confidence. Independent regulation is fundamental not only to attracting investment, but to avoiding, as others have said, the interference and shocks which would have a disastrous effect on business confidence. Even while this Bill is going through your Lordships’ House, the Government have introduced a Bill to build a railway called Crossrail—many noble Lords will know about it—which does exactly what the Legislative and Regulatory Reform Bill seeks to do, but for one particular project.

Clauses 22 to 44 of the Crossrail Bill allow the Government to direct the Office of Rail Regulation to do as it wants—to trample over the rights, obligations and business prospects of other operators and users of the railway on the surface. I am sure that your Lordships will consider that Bill in due course if it gets through the other place. Even while Ministers are saying that this is all covered, the Government are already trying to constrain the independence of a regulator. Having more or less failed to do so on one type of timetabling with Crossrail in the summer, they have now come back and said that all the timetabling work—and therefore how much investment there is and how many trains can run—will be decided by the rail regulator in accordance with industry processes. Everybody will say that that is fine, until you go back to Clauses 22 to 44 and find that, if the Government do not like the regulator’s answers, he can be directed to give different ones.

That is unacceptable. The Government should say, “Yes, there was a problem”, possibly when Railtrack when into liquidation. People said, “Ah, the regulator is going to milk the Treasury dry”. I do not believe that. Since then, however, Parliament has passed the Railways Act 2005, which puts a little constraint on the independence of the regulator by saying that the Office of Rail Regulation must have regard to the funds available to the Secretary of State for the railways. That seems perfectly fair, but still emphasises the independence of the Office of Rail Regulation in deciding how those funds should be spent.

I could give a lot of quotations from the passage of that Bill through your Lordships’ House in which Ministers emphasised the importance of independent rail regulation. If any noble Lord wants those, I can see them afterwards. I do not need to quote them now, but Ministers emphasised the importance of independent rail regulation at least three times at various stages.

We do not need this particular section of the Bill for the railways. It would be very worrying if it is passed as it is. I therefore support the amendment, which is designed to stop the Government interfering in the work of independent regulators when the legislation is already there.

Lord Lloyd of Berwick: My Lords, I would have been happy to add my name to this amendment, but I am afraid that I was too late to do so. It seems a well drafted amendment, achieving what is needed in simple language that we can all understand.

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I take it that we are all agreed that the independence of economic regulators must be secured and protected. They cannot do their job properly if they are liable to be leant on, especially by the Government. As I understand it, the Government accept that position. In his reply in Committee, the Minister said that the Government would be willing to give an undertaking that the independence of the regulators would not be undermined. That being so, I am at a loss to understand how they can object to this amendment.

I have reread the reasons given by the Minister with great care, and can find only two in addition to those detected by the noble Lord, Lord Norton of Louth. The first that I hit on—at col. 1343 of Hansard on 19 July—was that the amendment would impose “an unnecessary restriction” on the regulators themselves. I find it difficult to envisage any regulator who wanted to undermine his own independence. The second reason was that the amendment would provide no additional protection, because the regulator could always be sacked for incompetence or misconduct. I find it impossible to follow that reasoning and I hope that the Minister will explain it in due course. In the mean time, I hope that the House will support this excellent and necessary amendment.

Baroness Howarth of Breckland: My Lords, I simply want to ask a question about this amendment and raise some issues. It seems inappropriate that an amendment such as this should be limited to economic regulators. The same principles apply to other regulators across the board. If this amendment were accepted for economic regulators, some of us in other fields might come forward at Third Reading with further suggestions.

I declare an interest as a regulator, being on the board of the Food Standards Agency and the deputy chair of the Meat Hygiene Service. The Food Standards Agency welcomes the structures introduced by the Government to develop better regulation. Even so, we were extremely concerned about the Bill in its earlier form. We accept assurances, which we hope that the Minister will reiterate, that the powers in the Bill will not be used to substantially amend or abolish the powers of any regulator without proper parliamentary scrutiny and consultation. I have heard the Minister say that on a number of occasions, having sat through the debate this morning.

It is not only the economic regulators that wish to retain their independence. The Food Standards Agency is held in high regard and respect by the public and there is greater confidence in food standards. That position was reached through the FSA’s transparency and focus on consumers. The FSA has a statutory foundation and statutory powers. I do not need to remind the House of the lack of confidence in food following the BSE crisis and the work that has been undertaken to take us to the position that we are in now.

In no way should the Bill favour economic regulators. If it is going to provide for independence, it should look across the board at regulators that have highly successful records, which are monitored in

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tables of success. We look for a level regulatory playing field. If the Minister can assure us about that in his reply, we may not come forward with further proposals, but if this amendment is accepted, we will be back at Third Reading.

3.30 pm

Lord Bradshaw: My Lords, I shall speak about the railways. The situation that pertained at the time of the collapse of Railtrack is not the best guide. That was a time when we had very individual regulators who were not subject to regulatory boards. Since regulatory boards have been put in place, there is much less likelihood of a falling out between the Government and the regulators. However, it would be an advantage if, when the Government wish to make changes, they sought the agreement of the regulator or his board; if they do not receive that agreement, they should seek fresh primary legislation so that the matter can come before Parliament not as an order, but in a form in which it can be debated thoroughly.

Baroness Young of Old Scone: My Lords, I agree with the points made by the noble Baroness, Lady Harris. I do not support this amendment because the list is too short and it would probably be impossible to write a long enough one to satisfy me. The major statutory regulators, for whom independence is important, also deserve some protection from major interference with their roles and purposes—indeed, with their very existence—by secondary legislation. The Minister judged that my previous intervention on this issue—in Amendment No. 9—was not at the right point. I hope that this is the right point and that he will give me the assurance that I sought then that order-making powers are not intended to erode the independence, the role or the existence of major regulators that were established by primary legislation.

Lord Goodhart: My Lords, I listened to the arguments on this with great care and it is obviously a difficult issue. However, on balance, I am persuaded by those who support this amendment, and if it is pressed to a vote, I intend to support it in order for the Government to have an opportunity to reconsider this issue.

Lord McKenzie of Luton: My Lords, this is the second amendment on economic regulators tabled by the noble Baroness, Lady Wilcox, and, as she acknowledged, it bears a close resemblance to the amendment on economic regulators tabled by the noble Lord, Lord Norton of Louth, and my noble friend Lord Berkeley. Despite the refinement of the noble Baroness’s amendment, the Government remain of the opinion that an amendment on the independence of economic regulators is unnecessary. I set out the reasons for that in Committee, but I am happy to reiterate them for the benefit of noble Lords. We have reflected on that debate to see whether we can provide further assurance to noble Lords.

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