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Regulatory Enforcement and Sanctions Bill [Lords]

As usual, my hon. Friend is absolutely right. I do not think the Government could possibly deny that their estimate of the costs and numbers will be wrong. I would like to know of any Government estimate of costs and numbers that has ever been right when they are setting up a new department. The hon. Member for Solihull referred to this new department earlier as a super-quango. The Government control it, it is funded by the taxpayer, and it will impose its views on 27 regulators and local authorities and tell them how to regulate what they are regulating. The first thing that shows this to be total nonsense is the fact that local authorities know how to regulate in their areas. Their locally elected councillors will be thrown out by their electorate if they do not do their job properly, but there are no such safeguards for this centralised quango or this ““Yes Ministry””. We cannot get rid of them in the same way as we can get rid of local councillors. What will happen is that decisions will be forced on a local government area by a prime authority, which will not be the local authority area affected, and the councillors will get the blame for it. They will be thrown out, but it will really be the Government’s fault. The Bill significantly increases Whitehall’s control of regulation and local government. That is the Bill’s intention. The Minister was, in Jim Hacker style, not quite courageous enough to admit that it amounts to centralisation, but he used a rather similar word. In fact, nobody could really argue that the Bill was not about centralisation. It is a striking example of the Prime Minister’s obsessive macro and micro-management of the country. He wants to be able to go into every nook and cranny. What my local authority in Wellingborough wants to enforce may be different from what an authority in Brecon and Radnorshire or Glasgow wants to do. I rejoice in that. I rejoice in the localism of my local authority knowing how to regulate locally. I do not want everything to be standard. I do not want Tesco to build everywhere because they have found some prime authority that will allow it to do that. What worries me most about this super-regulation and this new department of administrative affairs is the cost. I have with me a document that was not freely available with the explanatory notes, but was very helpfully provided by my research assistant, Mr. Richard Britton. This impact assessment lists all the costs and alleged savings. It has a Minister’s signature on it, so we must assume that it has gone through the Government and been approved. There are many figures about savings. It states:"““The evidence regarding the cost of administering existing partnerships is not consistent; much relates to experiences with the small number of firms with the largest national presence.””" I am not sure exactly what that is supposed to mean. A large firm will have a large national presence, but a small firm will not by virtue of the fact that it is a small firm. What of the costs relating to local authorities, which are perhaps the most affected by the changes? They will lose control; their decision making will be removed. If we follow the chain back through the prime authority and through the regulator, we get back to Whitehall overruling local government affairs. Somehow or other, this was supposed to save money. On page 21, the impact assessment states that the total local authority costs are £13.6 million, while the benefits are said to be £14.2 million, with a net annual benefit of £0.5 million. I do not think that the arithmetic quite works there, but that is what it says. It then adds in very small print that there is a one-off cost of £1.9 million, so this is not revenue-neutral to local government. Even if we believe the Alice in Wonderland figures produced by the Government, this is going to cost local government money. Time and again, councillors tell me that the Government take away their powers and force them to do things without funding them for doing so. That is exactly what we have before us today. The Government have helpfully given us a figure for the overall cost. I am not sure how they arrived at it, but it is an extraordinary amount: £42 million. That sounds an awfully large cost to me, with a risk of little or no return. Most of the benefits are artificial. The Government talk of savings in lawyers’ fees for businesses, but that is merely an aspiration, while the costs are plain to see. Let us consider the National Audit Office. For every £1 that the NAO spends, it saves £8. If we are to believe the Mickey Mouse figures in the impact assessment, the return on the Bill might be just over what is spent. If the Government were really keen on reducing regulation and cutting costs, they could get rid of certain elements. They could get rid of regional government at a stroke, saving £230 million a year for businesses. Local authorities would welcome that as well, because the costs of consulting regional government would also go. If the Government really want to help local authorities out, why not abolish the Standards Board for England? That could be done overnight. No one would miss the board, and its abolition would save £12 million. That is a great deal more than the half a million a year that the Government reckon they will save each year, if the one-off cost is ignored. This is a centralising measure that could only please someone like Jim Hacker. We are creating a huge department, which will expand. The Government say that the cost in the first year will be £73 million. If we add a quarter to cover their miscalculation, the figure becomes £100 million. The office will start out with 25 staff. That figure sounds as if it was plucked out of the sky. We will see an ever-growing super-quango which will impose more and more regulations on regulators, and the regulators will impose more and more fines on businesses. The Government have doubled the number of sanctions that regulators can use against businesses, which will not improve anything for business or for regulators. There is a wonderful and damning statement in the impact assessment. Paragraph 152 on page 50 states:"““Since the publication in 2005 of the Hampton Review, which looked at the scope for reducing the administrative burdens caused by regulators’ inspection and enforcement activities, the Government has been introducing new tools to deliver the better regulation agenda.””" In practice, that is absolute rubbish. I know from my experience of running companies that what they want the Government to do is butt out and not to be involved. Business men say, ““Leave us to do our own thing. We know how to run businesses; we know how to employ people; we know how to invest profits. What we don’t want is an enormous number of forms and teams of regulators coming in to check what we’re doing.”” This super-regulatory office will increase the number of staff. If there are 27 regulators and each takes on another 100 people to go around investigating and imposing the sanctions that the Government tell them they must now impose rather than going to court, that represents a huge amount of lost income for business. The Minister may not see where the loss of income arises, but I know from experience that before a VAT inspection, one spend hours and hours getting everything right. If the VAT inspector turns up—I remember an occasion when he did not bother to do so because it was raining heavily, and we had done all the work for him—he goes through all the paperwork and if he then says, ““You’ve done something wrong””, it can be sorted out with him. Occasionally, there is an argument of substance. In one instance, a company—I was not involved; it was a different company—felt very strongly that it was not prepared to accept the regulator’s guidance and took the case to court. It won the case and there was no damage done to its reputation. Under this procedure, companies will be fined, their reputation will be damaged and it will be reported on the front page of the Evening Telegraph, or the equivalent local paper. The Government admit in this document that half the fixed penalty notices will be lost, which suggests that they think the regulators will hand them out willy-nilly. The damage done to business, in the loss of time when the regulators visit and in the actual costs imposed, will be extraordinary. I wish to draw the House’s attention to the stunning example in the impact assessment, to which the Minister did not refer. I know it is not the done thing to show a graph in the House, but I shall try to describe this wonderful graph. It has a red line and a green line. The red line is supposed to be the savings and the green line is the cost. These are the Government’s own figures, and one can clearly see that for more than two years the green line is above the—