Legislative and Regulatory Reform Bill

Having sat through what we have sat through this afternoon, I quite appreciate what the hon. Gentleman is saying. Making regulatory functions more consistent with those principles is in line with the recommendations in Philip Hampton’s 2005 report that regulators should conduct their business in ways that are risk-based. The Hampton report proposed that the principle of risk assessment should be entrenched in regulators so that the burden of enforcement falls on the highest risk businesses and least on those with the best record of compliance. Although the Hampton report found that there is much good practice in UK regulation, the proposed order-making power in new clause 20 could be used to effect real further improvement. For example, the report found that fewer than half of the regulators in the Hampton review used risk assessment to reduce enforcement activity on high performing businesses. By being able to make provision modifying the way in which regulatory functions are exercised, the Government could begin to propose improvements that would ensure that more inspection is proportionate to risk and consistent. That would have a real effect on those regulated, because the burden of inspection would be reduced on the vast majority of the regulated and would be focused on the cases in which there was a real problem. New clause 20 would allow a Minister by order to modify the way in which a regulatory function is exercised, to secure that regulatory functions are carried out in accordance with the five principles.