Clause 1 - Purpose
Legislative and Regulatory Reform Bill
4:00 pm
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)
The point made by the hon. Member for Somerton and Frome (Mr. Heath) is exactly right. I was about to quote a couple of remarks from the Institute of Directors and the Institute of Chartered Accountants in England and Wales. The Better Regulation Task Force report, “Helping Small Firms Cope with Regulation—Exemptions and other Approaches” made it clear that small firm exemptions are a useful tool.
The Institute of Directors published its own report on the issue. The nub of its argument was as follows:
“The burden of regulations often has a disproportionate impact on SMEs because they lack both the resources and the staff to deal with them ... Exemptions ... should be determined on a case by case basis. Small businesses have flourished in the USA partly as a consequence of this approach.”
In a briefing to the Committee, the Institute of Chartered Accountants said that the relative proportion of the burden on the smallest businesses is too large. As the hon. Member for Somerton and Frome rightly said, that burden is increasing rather than diminishing.
I hope that new clause 5, or something like it, will emerge from the Minister at some stage. I was glad to have the support of all parts of the Committee for the argument that it is sensible to look at small businesses in a more structured way. If the Minister believes that, as he seems to, it is hard not to agree to an amendment or new clause, even if he does not like the wording of this new clause, which would make that a feature.
New clause 1 is an attempt to introduce an element of retrospective audit of regulatory impact assessments in respect of regulatory reform orders. That has been suggested by the Association of Chartered Certified Accountants, which in fact goes further and says that there should be
“compulsory retrospective audits of Regulatory Impact Assessments”
to look at their accuracy and effect. We believe that that should be supported.
My hon. Friend the Member for Christchurch (Mr. Chope) made the point that new clause 1 might provide too soon an assessment of the impact. I will consider that point further. However, I hope that he will accept that I was trying to do something that is good business practice, which is to have the retrospective audit of the impact assessments and the impact of the regulations.
I was encouraged by the intervention on that point by the hon. Member for Edmonton (Mr. Love). He said that he hopes for a later reference by the Minister to that matter, and to deregulation more generally, on Report. I hope that the Minister will engage with the Committee’s deregulatory spirit. I also notice that the Minister himself recognised that it was important that there should be later analysis of the impact of regulation. If he believes in that, why not include it in the Bill? I do not seek a separate Division on new clause 1 at this stage, but I hope that the Minister may return to the subject later, as he considers it important.