Provision of Services Regulations 2009

My Lords, I thank the Minister for introducing these regulations. I note from the Explanatory Memorandum that they set out rules relating to the provision of services and implement the services directive. If the directive works as we all hope it will, and if it is properly implemented across Europe, it should bring benefits to British businesses, which would be very welcome. The objective of the services directive is to open up the single market by removing and reforming costly and time-consuming national standards and approval procedures. The Conservatives have been at the forefront of pushing for this in the EU Parliament. It will mean that service providers will be able to operate in all member states without prior authorisation or the need to set up a local subsidiary. However, I would not be fulfilling my task in opposition if I did not focus on areas of doubt, especially about where the regulations part company with the directive. I apologise to noble Lords because I have quite a number of questions, some of them rather technical. Before I go further, I should declare an interest: I am a chartered accountant and from time to time I provide management consultancy advice. I believe that those who provide such a service are covered by the regulations. Having listened to the debate in your Lordships' House on Friday on the report of the European Union Committee, EU Consumer Rights Directive: Getting it Right, I was struck that it had certain threads in common with this debate. The noble Lord, Lord Whitty, said that, ""if you try to buy insurance in Spain because you believe it is cheaper you are bunged back"—" those were his technical words— ""into the British website"." He went on to say: ""Some business practices are a greater inhibition to cross-border trade than the regulatory framework".—[Official Report, 23/10/09; col. 933.]" As the Minister explained, financial services are not included in the regulations. However, I raise the issue to make a broader point about cultural practices on which he may like to comment. The British Chambers of Commerce has communicated with me, as I am sure it has with other noble Lords, and one of its key concerns is about the pace and quality of implementation of the directive across the rest of the EU. This would not be the first time that the UK had entered zealously into the spirit of an EU directive only to find that it had not been followed with such alacrity in other EU nations. What are the Government doing to ensure that we do not, once again, welcome foreign competition in but find our own businesses not so welcomed elsewhere? I have learnt that in most EU states the web-based points of single contact will work only in the national language. If true, it does not sound very encouraging. What work are the Government doing with other member states to develop the single points of contact so that they operate as they should? Paragraph 3 .2 of the Explanatory Memorandum states: ""It is our view that imposing obligations on all service providers (and not just those set out in the Services Directive) … is a proper exercise of the power"." The Minister will correct me if I am wrong but it appears that while here in the UK all suppliers, including those from outside the EU and EEA, are covered because the regulations extend beyond the requirements of the directive, in other countries suppliers from outside the EU and the EEA are not covered. Can the Minister confirm that this means that the directive does not create a level playing field elsewhere in the EU? If that is right, what representations have the UK Government made to the Commission to try to get this anomaly changed? I notice from paragraph 3.5 of the Explanatory Memorandum that the drafter has ""extended the provisions in Part 3 to cover a provider of UK origin supplying services to a recipient of UK origin"." Can the Minister confirm that domestic providers supplying services to recipients in their own countries—for example, in France, Italy, Spain or Poland—are not required by the directive to be covered? That is the implication. If that is so, is this not a somewhat blatant example of gold-plating? I read at the top of page 4 of the department’s Guidance for Business on the Provision of Services Regulations, published this month that, among other things, the services directive requires each EEA state to, ""set up a point of single contact"—" the web-based point of single contact to which I referred earlier— ""enabling service providers to apply and pay for authorisations (to offer or provide services) online"." I remind your Lordships that this directive applies fairly and squarely to a number of already perfectly adequately regulated providers of services. I hope that the Minister can convince me that this wording "and pay for" is not simply creating another opportunity for yet another stealth tax on business, which this Government can seize upon with their usual keenness. I have a number of technical questions taken in order from the regulations. Regulation 2 refers to specific sectors and/or instruments where the rules do not apply. Regulation 6 refers to the relationship with other Community instruments. Concerns have been expressed to me that the test set out in the paragraph, which states: ""A requirement imposed by Parts 2, 5 or 6 of these Regulations on a competent authority or provider of a service does not apply, if or to the extent that, the competent authority or provider cannot comply both with that requirement and with a requirement to which this paragraph applies"," is a different test from that in Article 3 of the services directive. Article 3 states: ""If the provisions of this Directive conflict with the provision of another Community act governing specific aspects of access to or exercise of a service activity in specific sectors, or for specific professions, the provision of the other Community act shall prevail and shall apply to those specific sectors or professions"." Can the Minister explain why the regulations do not more exactly reflect the directive? In the definition of "regulated profession" under Article 4(11), the directive states that, ""regulated profession means a professional activity or a group of professional activities as referred to in Article 3(1)(a) of the Professional Qualifications Directive 2005/35/EC"." The definition in the regulations restates this definition more or less, save for a change. The directive 2005/36/ED defines "regulated profession" as, ""a professional activity, or group of professional activities, access to which, the pursuit of which, or one of the modes of pursuit of which is subject, directly or indirectly, by virtue of legislative, regulatory or administrative provisions to the possession of specific professional qualifications; in particular, the use of a professional title limited by legislative, regulatory or administrative provisions to holders of a given professional qualification shall constitute a ""mode of pursuit. Where the first sentence of this definition does not apply, a profession referred to in paragraph 2 shall be treated as a regulated profession"." However, the draft regulations express it as follows: ""‘regulated profession’ means a professional activity or group of activities""(a) access to which, the pursuit of which or one of the modes of pursuit of which is subject (directly or indirectly) by virtue of legislative, regulatory or administrative provisions to the possession of specified qualifications, or""(b) the pursuit of which is by persons using a professional title which is limited by legislative, regulatory or administrative provisions to holders of a given professional qualification"." Once again, can the Minister explain—perhaps not today but in writing afterwards—why the regulations do not more accurately reflect the directive? On paragraph 2(2) of Regulation 12, can the Minister explain why the words "frivolous or totally without merit" were not inserted after the word "vexatious" to bring the regulation into line with, among other things, the terms of the Illegal Services Act 2007? In Regulation 32, there is no definition of "electronic procedures", so does this include e-mail confirmation, or is it restricted to web-based solutions? In paragraph 2(b) of Regulation 34, there is a reference to "professional secrecy". Such language is not generally legally recognised in the United Kingdom. Can the Minister confirm that this means the equivalent of an obligation of confidentiality or legal professional privilege? In relation to Part 7 and the obligations for information to be provided by competent authorities, what is the role of the devolved Administrations? The obligation under Regulations 36 and 38 relate only to the Secretary of State. The interpretation provision does not, for example, make reference to "Scottish Ministers". Should it? In Regulation 38, the Secretary of State and the Commissioners for Revenue and Customs must jointly provide a facility which will become the point of single contact. What role is there for Scottish Ministers in relation to this? The Merits of Statutory Instruments Committee has specifically raised the matter of pedlars, and my noble friend Lord Lucas will in a moment ask for the Minister’s assurances on that question, which is important. That committee also reported that, ""given the broad scope of these Regulations, it will be vital to their success that the Government ensures that all affected service providers are aware of the new requirements. The Government may therefore wish to enhance their efforts in this regard"." I would be grateful to hear the Minister’s response to that point.