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Baroness Byford: My Lords, I raised the point that people out there have the expectation that access is now. What are the Government doing to convey the fact that it will be rolled out and that it is not possible over all the country at the moment because it is causing difficulty between landowners and those who want to go walking?
Lord Whitty: Difficulties between landowners and people who want to go walking are not entirely new. I recall that some of the confrontations that were referred to would have occurred without the CROW Act.
Nevertheless, it is important that the information gets down the line and it is part of our engagement with local authorities, national parks and local access fora to ensure that more and better information is made available.
The noble Earl, Lord Courtown, emphasised the need for retaining skills in rural areas. We have just completed a review of the skills needed in rural areas, and that will be published shortly. He should keep his eye open for that. It is an important dimension of our activities.
I am reaching the end of my time and there are clearly a significant number of questions which have yet to be addressed, many of which I will need to write to noble Lords on. The rural White Paper strategy—and its further refreshment, as we have referred to it—presents a clear way in which the Government will support rural enterprise, address the social, environmental and economic problems of rural areas, and do so in a way that is sensitive to each particular locality, and is not entirely dictated nationally.
There is a slight disconnection between those who say that they welcome the proposals of the noble Lord, Lord Haskins, in devolving issues, but at the same time argue that there should be no inconsistency. We do not want too much inconsistency, but there are different solutions for different parts of the country, different landscapes, different communities and different patterns of work.
It is important that all aspects of government recognise that, including the planning systems, the RDAs and all the schemes for rural delivery that come under Defra. It is also important—and here I take issue with some noble Lords—that all three pillars of sustainable development are respected. The noble Baroness, Lady Miller of Chilthorne Domer, graphically demonstrated that she was a milkmaid in her youth. Equal emphasis is needed on all three.
We have a system where we clearly need money and revenue to go into rural areas, but we need the environment to be maintained in order to retain the
attractiveness of those areas and the quality of life within them. We also need social cohesion and social inclusiveness, otherwise the economic enterprises will not flourish.All three elements of sustainable development are there in our policy for rural areas, and the way in which we are trying to deliver them follows through the careful and clear recommendations of my noble friend Lord Haskins. Fuller details of those will be revealed as we go on, but the general direction is clear both from his report and the Government's commitment to the principles set out within it.
My thanks again to the noble Earl and to all who participated in the debate.
5.58 p.m.
Earl Peel: My Lords, I thank everyone for taking part in the debate. As is always the case when we discuss these matters in your Lordships' House, there is a wide range of interests and opinions. We have covered as many subjects as I would have expected. My noble friend Lord Shrewsbury surprised me by mentioning aggregates, but why not? It is a perfectly legitimate topic, and his points were extremely well made.
The noble Baroness, Lady Thornton, accused me of raking through the coals of divisions between rural and urban areas. The issue is not of my making. If I go down to "The Blue Lion", the local pub in East Witton, I find that the issues that I have raised are being talked about every day by country people. They are deeply concerned by some of the legislative procedures that have been introduced by the Government which affect their everyday lives. I am not making it up. The points that I raised were to illustrate that if we are to have a successful union between government and rural people—and that is the way forward—then those who legislate must understand the minds, workings and traditions of those who live and work in the country. That is the point that I was trying to make.
We have discussed a great range of subjects. The one that has blossomed to the fore is housing. Seven or eight noble Lords have mentioned that. I was grateful that the Minister acknowledged this. I think that he said that the Government would look at ways to develop in more imaginative ways. That will be required. It is not just a simple question of finance; we must find new land available for housing, as my noble friend Lord King said. That is perhaps the key.
The other point that evolved from the debate was the question of regional regeneration. Quite a number of noble Lords mentioned specific cases. I have noticed quite often when reading rural documents and listening to debates that many initiatives come forward from both the public and private sectors but the two never seem to get together. We must try to unite those good ideas so that we do not waste time and resources and have a more effective means of developing the notion of regeneration, which is the whole secret of the countryside.
I am grateful to the Minister for his response. I am also grateful to what I may call the Minister of the Back Benches who sat through the entire debate. His role in the rural debate is as important as that of the Minister, from what I can see, so I am extremely grateful to him for listening to our remarks.
The Minister started by talking about significant achievements, but then he stopped, so we did not hear what they were. I shall leave that up to noble Lords' imagination. He at least acknowledged that there were weaknesses, for which I am grateful. On agriculture, he said that there were big winners and big losers. I suggest to the noble Lord that the route that his right honourable friend the Secretary of State has pursued will result in marginal winners but very big losers, particularly in the beef and dairy sectors. It speaks volumes that the Minister's noble friend behind him made the criticisms that he did about the route that the right honourable lady has taken.
I have said enough. I share the optimism of my noble friend Lord King for the future. I believe that the rural community will rise to this tremendous challenge. New businesses will develop, and I firmly believe that farming will remain the bedrock of the rural community. We must make certain that it does, as I could not begin to contemplate the very notion of not having farmers managing the land, bearing out the experience that has come through from generation to generation. I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.
Regulation
6.2 p.m.
Lord Vinson rose to call attention to the unintended consequences of regulation; and to move for Papers.
The noble Lord said: My Lords, none of us here today is against sensible regulation. The object of this debate is in no way to prevent regulation but to try to make certain that we can create a regulatory framework that is, above all, proportional to the mischief that it attempts to correct, and is applied intelligently and realistically. Should it have consequences that were not intended or anticipated at the time at which the regulation was introduced, at least it is rectifiable so that overall it does as it was intended to do—more good than harm.
In that aim I am sure that we would be supported by those many inspectors and officers whose task it is to interpret and execute often ill-drafted and ill-considered laws that they know in their heart of hearts are inappropriate. They, too, want better regulation.
Throughout this debate I expect that we will hear many horror stories of where regulation appears to have gone wrong and where European Union legislation, in particular, appears to have been gold-plated as it is interpreted into English law.
It is perhaps not widely understood, but the whole basis of continental law is very different from our own. Broadly, under British common law everything is allowed except that which is disallowed. Here the law is enforced mandatorily. Under European law, broadly
nothing is allowed except that which is allowed, so in order to make a law workable—because it virtually covers everything—it must be interpreted flexibly. It is often framed in a way that is broadly indicative; so much so that our lawyers find that unsatisfactory and hence tighten the meaning when drafting it into English law. It is thus so much harder for our law enforcers to exercise a sense of proportionality than it is for their continental equivalents.That point could be met if, when drafting laws, we state that their interpretation should likewise be exercised proportionately and realistically. The problem is that through successive EU treaties, and the associated treaty of human rights, an ever-tightening network of restrictions and regulations has been constructed that inhibits common sense and adds unnecessary costs.
A timely example is the review of the Working Time Directive. I see no clamour from the workforce for more than the existing voluntary arrangements where most people can choose to work what overtime they wish in a free country. The unintended consequences of a mandatory short week would not be to keep people in jobs but rather to deny them. It is essential that we keep the opt-out and do not narrow its definition.
Overtime in all businesses is the essential mechanism that helps to bring supply and demand together. Existing staff can work overtime to meet peaks in demand. If that demand continues then at that point the firm reduces overtime and takes on new staff. Without overtime it loses custom. The unintended consequence of a mandatory shortened week would be a rise in unemployment, particularly in youth unemployment, exactly as has happened in France. Earlier this month the problem was recognised by the Dutch Deputy Prime Minster, who said that Europe's economic growth can be raised only,
- "by lifting the myriad of [regulatory] barriers",
- "that the enterprise sector is tied down by red tape".
It is for that reason that regulatory impact assessments (RIAs) are so vital. However, many of them carry little conviction because the department attempting to carry them out in a hurry turns to the easiest source—very often, the regulatory authority that is to apply them. That is like asking a barber if you need a haircut. If the impact assessments are to fulfil their purpose, time must be taken to consult, in particular, smaller firms and businesses, where the real impact will be felt.
In another place Mr Archie Norman MP is introducing the Regulatory Impact Assessment Audits Bill, the very sensible purpose of which is to try to make certain that RIAs have been correctly done by an impartial body. As often as not, they are regarded as a chore by the department concerned, produced grudgingly and, to quote the Social Market Foundation report,
- "crafted with as little information as possible".
In the first place we introduce too many laws. Over the past few years there have been 27,000 items of legislation covering 97,000 pages of instruction. It is never wrong to be reminded that Dean Swift, in his allegory Gulliver's Travels, was attempting to tackle the same problem. He said of Gulliver:
- "No one silken thread held him down, but a thousand made him immobile".
The economic cost to this country is enormous. The British Chamber of Commerce has estimated that £20 billion worth of extra regulatory costs were placed on organisations over the past five years. But the problem is not just one of making more appropriate regulation but also of unscrambling existing regulation where it has become inappropriate. In particular, it is difficult to unscramble safety legislation; one can be so easily accused of not caring whether somebody is killed or injured.
In our safety-ridden society we are advised that decisions are best based on the precautionary principle. In effect, that enables any authority to abandon the concept of risk assessment and balanced judgment based on proportionality. Precaution is so much easier to justify than proportion. The avoidance of risk does not have to be justified, because who can be brave enough to challenge publicly the concept of putting safety above all else? Thus the precautionary principle stifles rational scientific debate regarding the nature of risk and is often nothing more than the cloak for intellectual cowardice.
A classic example is aircraft lifebelts. I have checked and found that not once in the past 25 years had lifejackets been fitted prior to an accident on a passenger aircraft. Even if they had been, I doubt whether they would have had much practical good, because a jumbo jet hitting the water at any speed would disintegrate and sink rapidly. There is an inherent risk in aircraft—thank God they have a fantastic safety record. The demonstration fitting of lifejackets does nothing, except perhaps to comfort passengers or to cause them concern. Nobody has yet had the courage to suggest that that useless safety charade should be discontinued.
At the other end of the over-regulatory scale, Sir John Stevens was prosecuted when one of his constables was injured while chasing a criminal across a roof. Our police chief was forced to waste weeks of his time defending a case that the judge subsequently said should never have been brought. The unintended consequence of this action was that the real criminal problems of this country did not get the attention that they deserved. More damagingly, our own Health and Safety Executive was seen to be publicly encouraging the culture of blame. The whole episode was an appalling waste of public money and the then chairman of the Health and Safety Executive should have resigned.
It should be possible to check the excessive zeal and lack of common sense of some of our regulatory authorities. As the Romans used to say, "Who will
judge the judges?" Would it be possible to extend the powers and resources given to the Audit Commission so that it had time to audit regulatory effectiveness and to hold such bodies to account?The Better Regulation Task Force does valiant work, but it is like matching David against Goliath. It certainly needs more clout and a wider remit in all departments, particularly over pre-legislative scrutiny and RIAs. Its power would be substantially reinforced if there was a Standing Committee on deregulation, probably composed of Members of both Houses. I would welcome the Minister's views on this. I am not suggesting that the Government are not conscious of the problem. At least employment regulations are now co-ordinated to appear on two days a year. This should be made to apply everywhere, but more importantly, the Government should attempt to stem the flood of regulation in the first place.
We live in an increasingly safety-conscious age, a litigious age. Sadly, many lawyers who used to run their practices with an ethos of what is good for society—pro bono publico—now do so wholly to exploit the system under the maxim, "Where there's blame, there's a claim". An increasing number of lawyers, like leeches, bleed the rest of us white. I often wonder, too, whether some of our judiciary understand that it is not just an insurance company who pays, but ultimately their fellow citizens. Many people feel that somehow society must reverse this ethos of blame.
The examples of over-regulation, litigation and its consequences are unlimited. We all know how the well intentioned regulation on canoe sporting clubs, as a consequence of the Lyme Regis tragedy, has closed down most of the amateur canoe clubs in this country that gave such wonderful outings and fun to so many school kids. Only this week in my local town the cub scout group is closing. It had been run for 20 years by the most delightful vicar and his wife, who now say that they simply cannot afford the cost of registering with the Criminal Records Bureau and the 21 sessions of retraining to be able to carry on. Sadly, they can find no one else who wishes to take on the responsibility, compliance costs and hassle.
Likewise, only this week the second biggest teaching union, the NASUWT, advised its 200,000 members not to take children on school trips:
- "It is highly regrettable NASUWT has been forced to advise members against taking school trips. When something goes wrong, the leader bears legal responsibility—an accident is no longer treated as an accident. It leads to lengthy enquiries by the police, the local education authority and the Health and Safety Executive".
I shall not attempt to blame obesity solely on safety precautions, but if one makes school playing fields and sports activities subject to too much safety regulation, those who might have been team leaders and instructors and who would have happily given their time free, now walk away from an over-litigious task. Over-regulated sport equals no sport. In an effort to
prevent minor tragedies, we undermine major benefits. We must make it perfectly normal for laws to be readjusted in the light of circumstances, or to be abolished where necessary. If we could make the implementation of sunset clauses a wholly natural process, it would begin to chip away at the tide of overdone safety and other regulations that are unnecessarily damaging our society.However, the problem is wider than that. It is damaging the whole concept of personal self-reliance. If we are encouraged to believe that it is never our fault and always somebody else's, that we are not responsible for our own actions, that it is the fault of the society in which we live and not we ourselves, that it is the seller's fault and not ours, we undermine the whole basis of our historic laws. If we substitute caveat vendor—let the seller beware—for caveat emptor—let the buyer beware—we reverse the whole concept of blame by denying responsibility for our own actions.
If all matters are defined in detail in legislation, people will spend their time and effort working out whether what they are proposing to do falls within, or can be made to fall within, the law. Surely, we want a society where people should be asking themselves whether what they are proposing to do is something which in principle they ought to do or ought not to do. Apart from the economic consequences of excessive regulation, the greatest unintended consequence is that the denial of personal responsibility becomes embedded in our culture. The road to national decline is paved with well intentioned regulations. I hope that this debate will help to reverse that trend. I beg to move for Papers.
6.16 p.m.
Lord MacLaurin of Knebworth: My Lords, I am grateful to my noble friend Lord Vinson for introducing this debate. I speak as chairman of the Vodafone group. It would be hard to think of a better example of innovation and enterprise in the United Kingdom over the past two decades than the mobile phone industry.
There are now 51.5 million mobile subscribers in the United Kingdom enjoying a wide array of mobile services that nobody could have imagined five years ago—that is 87 per cent of the people in this country. There may not be many Members of your Lordships' House experiencing the joys of customised ring tones, but millions of people do. The industry stands on the verge of another technological revolution as the next generation of services—the third generation—is rolled out.
The UK mobile companies are world leaders in the industry, and most of this was achieved without specific regulation. The Government initially had to award radio spectrum to the operators, but then largely left them to get on with it. They did that most successfully on any measure, from the number of customers to the value created for the British economy. Of course, the market economy must be built on the foundations of a solid legal and regulatory framework. I want to focus on the trend towards
regulations that are specific to a particular sector or industry, as opposed to the basic rules governing the function of the economy.We need to be much clearer about what circumstances justify this kind of specific regulatory intervention and how the impact of those interventions is assessed. We are now seeing more regulatory attention focused on mobiles. Perhaps it is the very success of the mobile industry that has attracted this attention. I will talk about some of our specific experiences and make a few observations arising from them about the real motives for regulation.
The industry faced one of its biggest challenges when the Government decided to auction the last batch of radio spectrum, which resulted—to the surprise of many, including I suspect the Chancellor himself—in the industry paying over £20 billion to the Exchequer. It is hard to see how this intervention assisted the industry or its customers. It has taken several years to recover from the financial consequences. The Government's stated intention in designing the auction was to ensure that spectrum was allocated more efficiently than in the past, but it is reasonable to ask whether it was not simply a slightly more sophisticated form of windfall tax on past profits.
While people in the industry could be expected to have a better idea than civil servants about how profitable their business would be over the long term, no one could escape the innate uncertainty about a new technology or indeed about the future of the economy. The auction moved all these general risks on to the mobile phone operators.
Additional regulation has often been called for by competitors of the mobile operators rather than by their customers. Although regulators invariably claim to act on behalf of and in the interests of consumers, complaints from customers are often not the driving force. What is more, the immediate effect of additional regulation is often to protect particular competitors in the market. In particular, it favours those who may be better armed with advocates and lobbyists than with commercial acumen. As the Director-General of Fair Trading noted in a recent lecture, a competitive market will often protect consumers more effectively than additional regulation. That is especially true in an industry such as mobile. When the technology and consumer demands shift rapidly, it is all but impossible for regulators to keep up with the pace of change.
Arguments in favour of further regulation typically focus on potential benefits that are short-term and narrowly defined. It might be easier to quantify them in that way, but it leaves out of the reckoning the accumulated long-term costs, perhaps spread widely over all consumers. They will often be large—87 per cent of people in this country are mobile users—but they may be difficult to quantify. Without taking them into account, there cannot be a proper cost-benefit analysis of any regulatory proposal. The need has been recognised recently by the Dutch, Irish, Luxembourg and UK Governments for better impact assessments of regulatory proposals at the European level. We must apply the same lesson at home.
If we are not careful, we will eventually drown enterprise and innovation in a sea of piecemeal regulation. We need to continue to work hard to ensure that regulators take the long-term view and take account of the interests of all consumers. From that perspective, detailed intervention in a particular sector will not look like the obvious answer to every problem.
What should regulation accomplish? We should be very clear. It is right to be concerned about fairness and affordability, but such issues are properly addressed by elected representatives, rather than by unelected regulators. Otherwise, there is a real danger that regulators could become unduly politicised. We rightly have a system of transfers and reliefs that are intended to ensure that the most disadvantaged members of our society have access to the basic requirements of participation in a civilised society. For the most part, we do that without a detailed set of regulations for every individual industry. So I hope that Ofcom and the other industry regulators take a more pragmatic approach to regulation.
The test for the specialist regulators should be: "What would be the result, if I were to apply the measures that I am proposing for my narrow area to the rest of the United Kingdom economy?". After all, most parts of the economy do not merit a specialised regulator. Most industries safely fall under the ambit of the Office of Fair Trading and the Competition Commission. Regulators who focus on one narrow area need to remember that competition is never perfect in any industry, but that it is often better than the alternative of detailed regulatory scrutiny. Of course, the authorities need to take action against monopolies. Indeed, the UK pioneered incentive regulation of the former state monopolies. The Enterprise Act 2002 has made the competition regime in the United Kingdom one of the most stringent in the world. That will boost enterprise and innovation, but we threaten our economy if we do not check the creep of regulation to markets that are, in fact, formidably successful and competitive.
The growth in regulation has been considerable. The combined operating costs of Ofwat, Ofgem and Oftel were £42.6 million in 1996–97. Those costs were up by a further 65 per cent by 2002–03. We must scrutinise regulatory budgets, but I have some sympathy with the views of the noble Lord, Lord Currie of Marylebone, the chairman of Ofcom, when he says that good regulation does not come cheap. That is an important point: the focus should be on the quality of regulation, not just the cost.
The judiciary should have an increasingly important role to play. For too long in this country, regulators have been subject to review only on procedural aspects of the case under judicial review procedures. The regulators are invariably well advised. The new Communications Act, considered in this House last year, at least introduces appeal rights on the merits and substance of the matter at issue. These will be complex and difficult cases, requiring expertise in finance and economics as well as the law. It is important that the
courts or the Competition Commission, as the case may be, engage fully in such matters and are fully aware of the broader consequences.
Some regulation is absolutely essential to a properly functioning market economy, but we must be wary of the assumption that regulators can be relied upon to improve on the market in terms of social and economic outcomes. We need to check the creep of intervention in specific sectors and ensure that the potential costs of regulation are weighed against the benefits. Enterprise has served this country very well. We must continue to provide it with the freedom that will allow it to thrive.
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