Clause 1 - Purpose
Legislative and Regulatory Reform Bill
11:00 am
Oliver Heald (Shadow Secretary of State for Constitutional Affairs & Shadow Chancellor of the Duchy of Lancaster (Assisted By Shadow Solicitor General), Constitutional Affairs; North East Hertfordshire, Conservative)
That is a very fair point. The point made during the consultation exercise was that there are burdens on Departments that could be lifted in a worthwhile way, but if the hon. Gentleman said to me, “Look, we could make common cause on this if we don’t give the Government the benefit of this chance to remove burdens on Departments,” then I would certainly be prepared to talk. As the Bill progresses, perhaps on Report, we might be able to reach agreement on that.
I think that the hon. Gentleman would agree that there will be great advantages if we can focus on removing burdens and making the Bill genuinely deregulatory. During the review process after the 2001 Act and the consultation that took place on that Bill, the Government consulted on continuing with a deregulatory, burdens-removing prong to the legislation. It is extraordinary that they should have consulted on that basis and then produced in the Bill a wide-ranging order-making power that could be used to change any law in any way. I think that we might be able to make common cause on that point.
Amendment No. 20 sets out our principle that Ministers may possess and use powers to make orders for specified purposes in a way that curtails the right of debate that the House traditionally has, but only if the orders are deregulatory. The first time that we gave such order-making powers, in the mid-1990s, it was specifically on the basis of deregulation. In 2001, such powers were again given on the basis that they would be used for better regulation. It was always limited; the House gave up its power to scrutinise a Bill in the normal way only on the basis that it would be possible to help business and improve British competitiveness as a result.
Now the Government are taking liberties in a very real sense, because they are saying, “Instead of this having to do anything to do with deregulation, we will just be able to change any law we like in any way we like, unless it is what we describe as ‘highly controversial’.” When we ask the Minister what is highly controversial, he refers to the most serious matters that one could imagine: terrorism and Parliament itself. He is leaving a massive area open to orders under the Bill—not just palimony or the sort of point that I made about tenants’ rights, but literally anything below the very high threshold that he has set. He must give us some safeguards and pull that threshold down a bit if he wants the Bill to become law.
The extraordinary thing is that although the Bill says nothing about deregulation, all the ministerial spin is along those lines. When the Bill was mooted in the Loyal Address following the general election in May last year, all the talk was about cutting regulation. The Financial Times reported that the Government planned to
“slash the estimated £100 bn cost of regulation on business”
with the Bill. But when it was published it contained nothing about deregulation, which they have abandoned in favour of very wide powers. Amendment No. 20 is a desirable change that would limit the power under part 1 to the removal or reduction of a burden, re-enacting a provision that imposes a burden in a proportionate way, creating a new burden proportionate to the resulting benefit or removing inconsistencies and anomalies—a similar approach to that in the 2001 Act.
The difference is, however, that new clause 4 seeks to work in conjunction with amendment No. 20 to impose a specific deregulatory focus that is a bit wider than the one allowed for by the 2001 Act. My new clause draws a relatively wide definition, which includes
“a restriction, requirement or condition ... or any sanction”.
It would also allow Ministers to say that, in particular cases, they believe that a measure would remove an inconvenience or something that imposes a cost.
I believe that it is right to widen the definition in that way. If the Minister wants to say to me, “Look, it has been widened a bit too far”, or, “We would like a different form of wording for what a burden should be”, we would be happy to discuss that. The Bill should be about removing burdens, not just any change to the law that the Government want. We have tried to make our new definition of “burden” as wide and flexible as possible. I believe that those proposals are sensible amendments to an important aspect of the Bill.
New clause 1, which stands in my name, aims to inject a shot of transparency into the Bill. It follows on from the second recommendation of the Regulatory Reform Committee’s report on the Bill:
“We reaffirm the recommendation of our predecessor Committee that Departments should be assessed on their progress in removing unnecessary regulations and controls and not simply on their progress in simplifying measures. We recommend accordingly.”
We all agree on transparency. To allow the greatest possible visibility for a process encourages good government and sound decision making. To allow provisions to be made behind closed doors in Whitehall would have potentially the opposite effect. Deregulation and better regulation are important matters, and the Government have set them out in agendas of great importance. We think that we need to shine the light of scrutiny into the dark recesses of ministerial decision making.
The new clause would require an annual report to Parliament that would set out what each Department has done to remove, simplify and impose burdens, and the impact of each of those orders. At the moment, we have regulatory impact assessments before orders are made, and the Government always make great claims that they are going to transform regulation in particular areas with particular orders. Great claims are made, but nothing is ever done to audit those claims. One has a suspicion that things do not change as much as one might have hoped when reading the regulatory impact assessment. The provision in new clause 1 means that there would be an annual report that would set out the actual impact of those so-called deregulatory changes.
The Regulatory Reform Committee suggested that one of the key reasons why regulatory reform orders, which were introduced in 2001, have been far from successful is a lack of political will in Whitehall. I was struck by what the Minister said when he gave evidence to the Procedure Committee. He made the point that often a Minister or civil servant who is a deregulator does not get promoted—often it is the opposite—and that to lead a Bill team and to make law is seen as more prestigious than to remove law.
New clause 1 will allow for an annual report, in which Departments can take credit for their deregulatory achievements and show the impact of their changes. We are hoping that that will bring a little change of culture—in fact a major change of culture—because that is what is needed. Creating new regulations and legislation should not always be preferable to tidying up existing laws and scrapping obsolete or disproportionate burdens. I hope that the new clause might help to bring about such a culture change.
New clause 5 tries to help small business by requiring the impact on it to be taken into particular account:
“An order made under section 1 must, where its application extends to small businesses, make specific provision to reduce the regulatory impact on small businesses where appropriate.”
A plethora of exemptions are made for small business in different provisions—everything from square footage to the number of employees. However, it would be helpful if Government took a more structured approach to helping small business, and new clause 5 provides a mechanism whereby Ministers must consider the interests of small business every time that they want to make an order under part 1. The new clause aims to ensure that small business, which is the key driver of our economy, can continue to thrive and further boost the economy in a light-touch regulatory environment, rather than always being considered in exactly the same way as large business.
The other amendment in the group was tabled by my hon. Friend the Member for Christchurch, and I shall leave him to explain what he proposes; I have alluded to it already, and we greatly support it.