Yesterday the Minister for Europe told the Commons that the EU is going our way. He believes that EU Ministers generally now understand that too much law and regulation is holding back enterprise and job creation across the continent. He looks forward to a rosy future, where the advantages of a common market outweigh the disadvantages of all that EU regulation, as the EU awakens from its lawmaking nightmares and grows up believing in freedom.
I disagreed with him. Even if more ministers do now think as he says, they have not told their officials, or if they have told their officials, the officials have no intention of implementing their views. The EU is in regulatory and lawmaking overdrive. The pace and volume of financial servioe and banking regulation is ferocious. The new work on economic governance and surveillance is intrusive. The criminal justice bandwaggon rolls on.
I had a bad day yesterday. In the morning I was required for one of many Statutory Instrument Committees. Most detailed UK law now takes the form of a Statutory Instrument. The Act of Parliament which we spend a lot of time over is usually lacking detail. The detail, the things that really bite, comes in the SIs which follow. These only get a maximum of 90 minutes debate. There can be a single vote on a take it or leave it basis. There is no opportunity to amend or improve.
Yesterday 18 MPs were invited to approve 67 pages of regulation called “The Investment Bank Special Administration Regulations 2011” and three pages of “The Investment Bank (Amendment of definition) Order 2011”. Most MPs like new regulations, so there was no question of the Opposition opposing these. One backbench Conservative member, Adfam Afriyie, asked good questions about why suppliers to bankrupt Investment banks under these new regulations would be required to carry on supplying if the Adminsitrator told them to. The Opposition asked a few intelliegent questions. After 37 minutes another 70 pages of regulation was safely on the Statute book.
Was I happy with it? No I wasn’t. Why didn’t I take them through the regulation with a fine tootth comb? Because there was no point. The SI could not be amended, and was clearly going to pass. When I have done so in the past nothing has been changed or improved.
These particular regulations are not that harmful, as I doubt they will ever be used. There is no immediate prospect of an Investment bank needing Administration. The Minister told us that the EU was currently crawling all over this field. Doutbless in a year or two we will need to approve a new SI which matches the EU’s requirements in this area. In the meantime, this Regulation was made out to give the FSA cosniderable duties in the event of a financially challenged Investment Bank. That too will have to change soon when the FSA is abolished and the Bank of England is left as sole regulator in this area. The Bank may have second thoughts as it gets into its stride.
This SI like many of the modern breed confers very wide ranging powers. A bank can be put into special adminsitration for the old fashioned reason that it is “unable to pay its debts”. I t can also now be put into administration because it is “fair” to do so, or because it is “expedient in the public interest to do so”.
Parliament needs a new way of handling this rash of law. Some of us are pressing for SIs to be subject to amendment and proper debate. Until they are, regulating is just too easy. Too many EU politicians are in love with it. You will rarely read about any of this voluminous lawmaking in the papers or hear anyone criticise it on the BBC. Individual regulations have many parents and few critics. In many cases regulations fail to enforce their stated purpose, and in the worst cases do the opposite of what they wish to achieve.