I beg to move, That the Bill be now read a Second time.
In opening this debate, I would like to set out the context for the Bill. That context is the importance of the Government's better regulation agenda in maintaining our economic prosperity and continuing to improve our public services. I should then like to make the case for this alternative legislative process to deliver our better regulation objectives, before setting out the Bill's provisions in more detail.
I should like to start by thanking all those who have helped with the development of these proposals, including the business community and members of our public services. I am particularly grateful to the Regulatory Reform Committee and the Delegated Powers and Regulatory Reform Committee in another place. They have made a significant contribution to the Bill's development, having provided very useful insight into the operation of the Regulatory Reform Act 2001 and how its defects might be addressed.
I also welcome the Regulatory Reform Committee's recently published first special report of Session 2005–06, which expresses general support for, and shows a constructive approach to, the issues raised by the Bill. We have not been able to respond to those conclusions given the short time scale, but I wish to say at this early stage of our proceedings that the recommendations deserve serious consideration as they are sensible and constructive, and we expect to draw extensively on the experience of the Committee and its members during the Bill's passage.
The Government have outlined a radical approach to better regulation and the Bill is central to delivering it. The Bill will provide a more proportionate way of delivering better regulation reforms to legislation. It will help to promote a real change in the culture of regulation and inspection and enable the implementation of valuable and non-contentious Law Commission proposals.
The introduction of the Bill is a reflection of our continuing commitment to maintain one of the best regulatory performances of any major economy.
As the Minister knows, I am a strong supporter of the idea of deregulation. Which measures would he want to simplify, amend or remove under the wide-ranging powers that he is seeking to give himself? Why does he not simply bring those forward as substantive proposals in their own right?
As always, it is a delight to give way to the right hon. Gentleman. I am just disappointed that I no longer face him at Cabinet Office questions every month, as he is performing another important role as one of the 90 Opposition Front-Bench spokespeople. It is interesting that the repositioning of the Liberal Conservative party seems to be about giving everyone a position in the party. I will, as I make some progress, come to the specific question that he has asked. Of course, out of courtesy, I will give way again at that point should he still be in his place.
I think I just heard the Minister say that the purpose of the Bill is to bring forward non-contentious Law Commission matters. Does he recognise, therefore, that some Law Commission matters will be contentious? I remember being consulted as a legal academic on whether burglars should be allowed to sue householders, whether people in fights should be allowed to sue one another, and other such questions. Those strike me as more than technical questions. They are substantive political questions.
I welcome the one Liberal—an actual Liberal, rather than a Liberal Conservative—Back Bencher who has come along today for what is supposedly a constitutional, ground-breaking debate. The proposals before us will not allow the introduction of contentious Law Commission proposals. I will make some remarks about that later in my speech and as the debate progresses, but there is a number of non-contentious Law Commission proposals. On average, they have waited about seven and a half years to be implemented. It cannot be right to allow them to gather dust on shelves. Therefore, the legislation will enable such proposals to make progress through Parliament.
As I was saying, in the March 2005 Budget, my right hon. Friend the Chancellor of the Exchequer set out a radical programme of regulatory reform that included the Government's acceptance in full of the recommendations in Philip Hampton's report, "Reducing administrative burdens: effective inspection and enforcement" and in the Better Regulation Task Force's report, "Less is More: Reducing Burdens, Improving Outcomes". A key recommendation was to address the shortcomings of the Regulatory Reform Act 2001.
The UK is currently one of the best places in the world to do business. Independent surveys have shown that the UK economy is subject to one of the lowest levels of administrative burden of any major industrialised country. The World Bank survey published in September 2005 rated the UK as having the most straightforward employment law in the EU. The survey also ranked the UK second in the EU and ninth in the world for the best business conditions. However, there is no room to be complacent about our economic position. The global economy presents us with huge challenges, not least from the emerging major economies of India and China. We cannot risk our competitiveness by hindering British business with over-burdensome regulation and inspection. If we deliver on our better regulation objectives, the benefits will be considerable. The Better Regulation Task Force estimated that we could boost British national income in the long term by as much as 1 per cent. per year.
The better regulation agenda is about not just preserving our economic prosperity, but minimising the burden on the public and voluntary sectors. Unnecessary bureaucracy and burdensome inspection can hold back our public servants and voluntary workers, and divert them from their primary purpose: to continue to focus on the needs of the citizen. Better targeted regulation can and should improve the lives of our citizens as well as make life easier for UK business.
The hon. Gentleman will know that the British Chambers of Commerce produces its burdens on business barometer each year. The most recent one is for 2005 and it shows that things are getting a lot worse: a £40 billion extra burden has been imposed on business since the Government came in. When is the improvement that he was talking about going to start?
The British Chambers of Commerce, the Institute of Directors and all sorts of other important national organisations that represent business strongly support the Bill. I know that the hon. Gentleman has heard this point before but hopefully he will never get sick of hearing it: the Labour Government make no apology for introducing important, progressive regulations such as the national minimum wage, opposed by the Conservative party, and the climate change levy, opposed still, I think, by the Conservative party—
The right hon. Gentleman nods. I am not sure what was announced this morning or last evening by his new leader but, at the moment, we assume that the Conservative party still opposes the climate change levy. It opposes all sorts of family-friendly and supportive policies to enable parents to have the opportunity to work if they so wish. We make no apology for introducing those important pieces of legislation and regulation. I welcome, as part of the repositioning of the Conservative party, any attempt by it to achieve consensus on those issues.
My hon. Friend has been going down the track of better regulation, no burdens on business and so on. May I invite him to take a step back? I may be misreading the import of the Bill, but clause 1(1) gives a Minister power, by order, albeit on the negative resolution, to reform legislation, or to implement recommendations of one of the Law Commissions in the UK. There is also the power in the Bill for a Minister, by order, also on the negative resolution, I believe, to change the common law of this country. That seems, if I am reading the Bill correctly, far more sweeping than powers to deal with the number of weeks' notice one has to give under some statutory instrument. Can he step back and deal with that broader constitutional picture?
I thank my hon. Friend, who as usual makes an important point. I will address the specific matter that he has asked about later in my contribution.
As I mentioned, the better regulation agenda is about not just preserving our economic prosperity, but minimising the burden on the public and voluntary sectors. I want, however, to be clear that that is not simply a deregulatory agenda. As I said, the Government make no apology for introducing well designed regulation where it can help to enhance opportunity, improve standards in public services, reduce poverty, promote competition and protect our environment.
I will make some progress first. Of course, I will give way as a matter of courtesy to the hon. Gentlemen on the Conservative Benches—and they are all gentlemen—if they so wish.
Applying better regulation principles to new regulatory proposals is crucial, but the Government must also address the stock of existing regulation if we are to ease the regulatory burden. If regulation is unnecessary, over-complicated, difficult to comply with or poorly targeted, we must do something about it. Two key aspects of the Government's better regulation programme are aimed at tackling the existing stock of regulation: the project to reduce administrative burdens and forthcoming departmental simplification plans.
The administrative burdens project will reduce the cost and burden to business of administering regulation by focusing regulatory resources on areas of greatest risk. Reducing the burden of complying with regulation for the vast majority of compliant business should result in one third fewer inspections and 25 per cent. less form-filling. The UK will be one of the first countries in the world to measure the total administrative burden on business and set ambitious targets for their reduction. In addition, all Departments will have published simplification plans by the time of this year's pre-Budget report. As well as containing proposals to meet targets for the reduction in admin burdens, those plans will include wider simplification measures to deregulate, consolidate and rationalise regulation. The Department for Environment, Food and Rural Affairs, the Department of Trade and Industry and the Health and Safety Executive have been first to produce their simplification plans, which are now available for consultation.
The Minister mentioned DEFRA. In relation to the comments of Rob Marris about laws that could conceivably be amended or revoked by a Minister, my constituents have raised concerns about the statutes that affect the Forest of Dean, including the Dean Forest (Mines) Act 1838 and a number of common law powers. They are worried that were the Bill passed in its current form, it would give Ministers sweeping powers to make substantial changes to the law governing my constituency. Will he refer to that in his wind-up? I will write to him on the matter at a later date.
I thank the hon. Gentleman for his question, and I know that he has tabled a written question on the matter. If I am not being too unkind to him, I would welcome the opportunity to discuss the matter with him, but the most appropriate means of doing so might be for him to volunteer for the Standing Committee. That would be a real commitment to his constituents at the level of interest that he continues to show on the matters that he has raised.
From the initiatives, a wide range of proposals will emerge for the removal, simplification or consolidation of existing regulations.
Let me make some progress first.
The central issue is to find the most appropriate and effective means of implementing the proposals. The current arrangements are not fit for purpose. Without the Bill, many of the proposals on which Departments are working will remain just that—proposals. Time on the Floor of the House is rightly precious, and should be reserved for the big issues of the day. Legislative changes to bring about better regulation outcomes, however, are often minor and technical in nature. Not surprisingly, Departments, which must compete for limited space in the legislative programme, find it difficult to justify Bills for such measures. When better regulation reforms are forced to compete for precious parliamentary time, this and future Governments will struggle, just as previous Governments have, to ease the burden on business and our public services.
For that reason, there was widespread support for the Regulatory Reform Act 2001. Its principles and aims were right—scarce parliamentary Bill time should not prevent Departments from bringing forward regulatory reform proposals and should not deny Parliament the opportunities to play its proper role in regulatory reform. There is also widespread agreement, however, that the way in which the Act was framed has proved inadequate for purpose.
I acknowledge that the proposed regulatory reform power in this Bill will make important changes to the way in which we pass some legislation. It is important to remember, however, that Parliament accepted the need for an alternative legislative route when it passed the 2001 Act. The order-making power in this Bill simply aims to put right the inadequacies of the 2001 Act. The Bill will not undermine the legislative rights of the House or its role in scrutinising Government proposals; on the contrary, the Government would like to see the House playing a much fuller role in pursuing the better regulation agenda and scrutinising more Government proposals to improve our regulatory landscape.
My hon. Friend is absolutely right that we should not undermine good legislation passed by the House. Does he agree, however, that legislation should be driven not only by finance but by the implications for the people we are deemed to protect under it?
My hon. Friend is absolutely right. In his four or five years in the House, he has made a significant impact on the way in which important and vulnerable workers are protected. He is right that we must not only weigh up the financial cost but the benefits, real or perceived, when identifying new regulations or seeking to remove regulations. I know that he has paid close attention to such matters, and I know from our conversations over the past few days that he continues to do so. I believe that the Regulatory Reform Committee and its equivalent in another place provide the most effective forum in which to do that. I am determined that the proper role of Parliament should be preserved, and I have insisted that the formal preconditions on orders are retained or adapted to remove the narrow and technical concept of burdens. Indeed, those safeguards now apply comprehensively to capture all of the impacts imposed by orders. There is also a new safeguard—no order will be made where there is a better alternative to legislation.
I want to examine in more detail the inadequacies of the 2001 Act and how the new Bill will remedy those. It was always our intention to review the groundbreaking powers in the 2001 Act and to assess how well they work. Both Houses asked for that undertaking during the passage of the Act. The review, conducted with Departments and drawing on parliamentary Committee reports, was published in July last year, and highlighted some positive aspects to the RRO powers, pointing out that some worthwhile regulatory reforms had been delivered.
However, the review also identified some serious flaws in the existing RRO power. First, the concept of legal burdens, on which the regulatory reform power is based, is narrow and technically complicated. Departments have found it difficult to make many of their proposals fit those narrow requirements, no matter how beneficial the proposals would be from a better regulation perspective. For instance, the current power can remove a statutory requirement, but it cannot make a statutory requirement easier to comply with. The current power must also be related to an activity, which meant that proposals to improve personal insolvency administration orders could not be taken forward.
Secondly, technical restrictions such as the two-year rule, which prevents a regulation from being reformed until it has been in effect for two years, have blocked useful reform. The need for reform of a regulation often becomes apparent a lot sooner, and it makes no sense to hold back reform in that way.
Thirdly, the technical nature of the Act has meant that the work involved in preparing orders is not proportionate to the effect of the orders; nor is that analysis focused on the merits of the proposal as it should be. That has been both a deterrent to using the powers and a significant factor in the length of time that Departments have taken to prepare and present proposals to Parliament. It can often take longer to pass an RRO than a whole Bill. Clearly, that is disproportionate for proposals that are often minor and uncontroversial. For example, the RRO reforming business tenancies, a relatively straightforward reform, took more than two and a half years to complete.
The review left the Government in no doubt that the RRO power needed to be reformed. It led to proposals that were put out to consultation last year. That consultation drew a wide range of responses from the business community and representative groups, and demonstrated strong support for our proposals.
The narrow definition did not allow us to implement specific regulatory reform orders, because of the narrow way in which a legal burden was defined and the way in which a proposal or regulatory reform order, if it only affected a Department, could not be progressed with. There have been specific examples, which I will bring to the hon. Gentleman's attention in writing if he wishes, in which the Government wished to make common-sense, non-contentious simplification proposals, but because of the tight legal definition in the 2001 Act, we were not able to make the type of progress that we would all have wished to see.
The Minister kindly said that he would give way again in pursuit of my original question, and I think that this is the right moment. Can he tell the House how much cost has been removed under the existing legislation, and how much extra he thinks will be possible if he is granted the new powers, with one or two examples so that we can understand why he wants those powers?
In total, I think that 27 RROs were delivered under the 2001 Act. At the time of the Second and Third Reading of the 2001 Act, it was anticipated across the House that there would be many more substantial reforms as a consequence of it. The right hon. Gentleman asks a reasonable question, and there is a reasonable answer. More than 200,000 businesses across the UK have been contacted in the admin burdens project on which the Government are working. They have identified a stock of administrative burdens, which the Bill will be able to reduce and simplify. The last Government and, indeed, the present Government would probably not have been able to find time to legislate in that way before, and businesses and others welcome the new measures.
Many of the non-contentious aspects of the simplification proposals—plans for their implementation must be produced by every Department before this year's pre-Budget report—will find a path through Parliament as a consequence of the Bill. An avenue may also be found for the mergers envisaged in the Hampton report and the penalties review that Professor Macrory is undertaking on the Government's behalf. I believe that 29 of the Law Commission's proposals have not yet been implemented, and that the Government consider about 16 of them to be non-contentious, at least in part.
I hope that I have given a full answer to the entirely fair question asked by the right hon. Gentleman.
As I have said, the Bill removes technical limitations such as the legal burdens concept, and makes the RRO power simpler to use. That power is expected to deliver a better regulation outcome than the removal or imposition of a legal burden. The order-making power will also be able to confer legislative functions, or sub-delegation. It can confer a new power on a Minister to lay statutory instruments subject to the negative or affirmative resolution procedure. That is an important restriction, which will ensure proper parliamentary scrutiny of the exercise of that function by Ministers. In addition, a Minister proposing to make an order conferring legislative functions on a Minister will have to lay an explanatory document before Parliament giving reasons for the power to legislate and the procedural safeguards attached to it. Where possible, Ministers will be expected to lay regulations in draft to illustrate exactly how such functions will be used.
While the proposed new power is much more straightforward and more able to deliver better regulation outcomes, the preconditions in the Bill are stronger than those in the 2001 Act. They have a wider application, applying to all types of provision made by order, not just to those affecting burdens. A Minister wishing to make an order under the new power must ensure that those stringent safeguards are observed.
The Bill specifies five conditions. A Minister must be satisfied that they have been met before embarking on the order-making process. I think that this deals with the point raised by my hon. Friend Rob Marris. There must be no non-legislative alternatives to the order; the effect of the proposal must be proportionate to its policy objectives; the proposal must strike a fair balance between the public interest in its implementation and the interests of any individuals who would be adversely affected by it; the order must not remove any necessary protections; and the order must not prevent any person from continuing to exercise any right or freedom which that person might reasonably expect to continue to exercise.
An additional condition applies when an order is intended to restate legislation or codify the common law. A Minister must be satisfied that the order will make the law more accessible or more easily understood.
Is there not a problem here? All the alleged restrictions are worded so subjectively that none of them, even the ones containing words such as "reasonable", will turn out to be justiciable. Will the Minister consider changing them so that individuals will at least have the right to go to court if the powers are abused?
The Government will be happy to be reasonable and listen to sensible suggestions during the Bill's passage, but the conditions are not "alleged"; they are in the Bill. The Bill contains more preconditions than the 2001 Act. I believe that only two out of five conditions apply fully in the Act. All six conditions in the Bill apply fully to all aspects of the order.
I am delighted that the hon. Gentleman is still with us and trust that he will be present for the end of the debate. I know of his interest in the issue. If he has any specific suggestions, I shall be happy to enter into dialogue or correspondence with him, and I look forward to seeing him, along with Mr. Harper, on the Standing Committee.
There are additional restrictions on the order-making power, which are essential to ensuring that it is used appropriately. An order cannot create or increase criminal penalties beyond a specified limit; it cannot create new powers for forcible entry, search or seizure; it cannot compel the giving of evidence; and it cannot impose or increase taxation. Once a Minister is satisfied that the Bill's conditions have been met, he or she will have to submit the order proposals to an exacting process of scrutiny. An effective statutory consultation on the proposals must then be carried out according to the criteria in the Bill before the order-making process can begin.
The Minister is now dealing with a crucial point. Whatever Ministers say about the conditions, at some point Members will have to decide—or will want to decide—whether what is being proposed should be dealt with by primary legislation or by order. What mechanism will allow the House to determine whether that distinction is being observed?
My hon. Friend is right, as he often is. I know how closely he follows the procedures of parliamentary protocol.
Not only will there be that statutory consultation; the House, or the relevant Select Committees empowered by the House, must be certain that every suggestion can appropriately be dealt with by the order-making power. The Regulatory Reform Committee, to which I gave evidence towards the end of last year, produced an excellent report this week. It contains 17 recommendations. As I said, we are prepared to listen in a reasonable way to those important recommendations and I gave a commitment to the Procedure Committee when I appeared before it earlier this week that we would respond to them before the Bill's Committee stage.
As a member of the Procedure Committee, I discussed the recommendations with the Minister earlier in the week. One of them would give the relevant Committee the right to veto the procedure employed, as opposed to the ability conferred by the Bill to change the procedure to super-affirmative, affirmative or negative. What does the Minister think after seeing the report that was published on Monday? Is he minded to amend the Bill?
I know that it is voguish to change policies and positions in a couple of hours, but I am not tempted to follow the fashion. I have nothing to add to what I thought was a good exchange of views at the Procedure Committee hearing, but we will stick to the commitment that I gave to respond specifically to the Regulatory Reform Committee's 17 recommendations.
My hon. Friend is right to say that, on the face of it, the Bill does not contain the right of veto, but of course, nor did the 2001 Act, as he knows. Such a veto is one of the Regulatory Reform Committee's 17 recommendations and we are looking at it very closely indeed. As I have said to him in conversation, and to the Procedure Committee and the Regulatory Reform Committee, we are open to a process of consultation and discussion, and to seeing where we can offer further reassurances.
Does the Minister remember that, when he gave evidence before the Procedure Committee—I was there—he said that there was a veto, and that he would examine the Bill to see exactly where it was located. Of course, this is a complex issue, in that there is an interaction between the Bill, current legislation and the Standing Orders of the House. But as he knows, under
In effect, there is an operational right of veto under the terms of the 2001 Act, and ministerial assurances have been given in respect of not overriding the Commons Regulatory Reform Committee or the Lords Delegated Powers and Regulatory Reform Committee. The Government have not sought at any point in the past five years to overrule any specific suggestions made by either Committee, so there is an operational veto, built on ministerial assurances given when the 2001 Act was implemented, and those assurances have been retained and adhered to. As I pointed out to various Members, we are seeking ways of offering further assurances as part of this process.
Perhaps I have misunderstood the protections offered by the Bill, but I ask my hon. Friend to clarify the following point. Clause 3(2) lists the five protections to which he referred and clause 6 deals with criminal penalties. If we put the two together, it appears that a Minister could decide to increase the penalty for using a hand-held mobile phone while driving, for example, to 18 months' imprisonment. Such an increase would appear to be consistent with all five protections, and it meets the test under clause 6 because the period in question is less than two years. Many Members would regard increasing the current penalty for using a hand-held mobile phone while driving from three points on one's driving licence to 18 months' imprisonment as rather more than a regulatory reform, but, unless I have misunderstood the Bill, it gives a Minister the power to do that, albeit subject to the negative resolution procedure. Could that be done?
I should at this point remind the House that, within the past five years, the Government acknowledged and accepted the recommendation of the Commons Regulatory Reform Committee and the Lords Delegated Powers and Regulatory Reform Committee concerning a veto on the registration of births and deaths RRO. Given that I have given way so many times, I shall ditch the rest of my formal speech. Doing so may prove helpful, and it constitutes simplification of a different type.
I point out to my hon. Friend the Member for Wolverhampton, South-West that, in addition to the six conditions included in the Bill, it is envisaged that a Minister would have to undertake statutory public consultation during a 12-week period. That will help to identify stakeholder and public opinion on any of the relevant issues raised. The Minister would have to table an explanatory memorandum, and the Government would have to respond to the consultation. A recommendation would then be made to the Committees that are charged by this House with analysing the specifics of such an order, and they would make their own recommendations. Those Committees have great experience of taking such decisions and of making recommendations on a case-by-case basis.
There are a number of procedural safeguards: statutory public consultation and ministerial assessment of it, the laying of the draft order and the assessment of the Select Committees themselves. Moreover, the Government have given a commitment not to override the protections guaranteed by those Committees. Such a veto exists, therefore, and the Government have also said that they will not introduce anything highly controversial, so there are various safeguards at each and every stage.
On my hon. Friend's specific example, the Commons Regulatory Reform Committee and the Lords Delegated Powers and Regulatory Reform Committee would make an assessment based on public consultation, and on their own instincts and attitudes toward whether such a change would be highly controversial and ought not to be made. The relevant Select Committee would then operate a power of veto and the Government would be told to think again and seek an alternative legislative vehicle, if they were still minded to proceed with the suggestion.
I have to agree with the remark made by Rob Marris from a sedentary position. The fact remains that the Bill will empower a Minister to increase the penalty for a criminal offence without the benefit of primary legislation. Are there any circumstances in which the Minister believes that that falls within the broad definition of regulatory reform, rather than within the proper duty of this House to scrutinise primary legislation?
On criminal penalties, the Bill gives a commitment not to go beyond a fine exceeding level 5. In addition, the Regulatory Reform Committee will assess such issues. Frankly, the Government have a genuinely more ambitious better regulation agenda than we have ever seen before—an agenda that includes simplification proposals, administrative burden proposals and, of course, the introduction of this Bill. We are absolutely determined to ensure that we maintain our economic competitiveness and that we support our businesses and public services through better regulation, so, yes, we are seeking to go in a much more ambitious direction, but important safeguards will be put in place that are much stronger than the 2001 Act.
I shall now return to an element of my text before I sit down. I apologise to the House for that. I may wander off it again if the House wishes. I am giving a clear undertaking today that orders will not be used to implement highly controversial reforms, that they will not be forced through in the face of opposition from the Committees of this House and that the Committees' views on what is appropriate for delivery by order will be final. Under the super-affirmative procedure, which, as I have said, Parliament has a right to require, these Committees will be able to recommend amendments to orders, and the Minister will be able to lay a revised draft order reflecting those recommendations. The safeguards contained in the 2001 Act have been maintained or enhanced. Key procedural safeguards have been retained and I have given clear undertakings on the appropriate use of these powers.
The Regulatory Reform Committee and its equivalent in another place will be central to the policing of the preconditions and safeguards on the face of the Bill and to the scrutiny of proposals in general. Committees in both Houses will have the right to recommend amendments to draft orders or to veto them completely. Parliament's role remains paramount, but the tool will be flexible enough to deliver the will of all sides of the House to ease the burdens on businesses and our public services, where appropriate.
I turn now to some other specific aspects of the Bill. The 2001 Act was also intended to provide a means for the implementation of Law Commission recommendations. I am sure that hon. Members will agree that the Law Commission has a long history of valuable work in updating, modernising and codifying many areas of our law. Its work is well respected and its recommendations are often non-contentious and attract widespread support. However, as with regulatory reform proposals, the lack of parliamentary time on the Floor of both Houses means that its recommendations are rarely implemented. It makes no sense to leave them languishing when we could be effecting real and helpful change to our laws.
The 2001 Act did not help enough with the problem, as the technical restrictions of the RRO power made it difficult to implement Law Commission recommendations. The new order-making power in the Bill will address the problem and make it much easier to implement such recommendations, such as the 2001 recommendation on the rights of third parties against insurers. This desirable reform will make it easier for people who are physically injured or economically damaged to recover money from insurers where the perpetrator is insolvent. This sensible reform would not be possible under the current RRO power.
Some of the restrictions in the new order-making power will not apply to the implementation of Law Commission recommendations, but the same preconditions and rigorous scrutiny process will apply.
I turn to the issue of Europe, albeit with some apprehension. [Interruption.] Opposition Members are not as excited as they usually are by the use of the word, so I hope that I can make some progress.
The Bill also contains provisions to reduce the burden imposed by, and increase the transparency of, EU regulations incorporated into domestic law. These technical provisions are intended to improve the transposition of Community law into domestic legislation.
I am a little worried to hear the right hon. Gentleman say that. Perhaps I should go off script again and disagree with what is written here. Nevertheless, I welcome his sedentary endorsement for what I have said and am about to say.
The provisions will make it easier for Departments to transpose regulations and update EU regulatory regimes, as well as making it easier for organisations and individuals to understand the changes that they effect and how they relate to previously implemented EU regulations.
The Government have said that the CBI is broadly in favour of the Bill, but what has been the reaction of small business? I had a good number of small business clients before I entered the House in 1997. The Federation of Small Businesses says that what amounts to a "rule of five" exists—that small businesses face administrative burdens five times as great, proportionately, as those faced by larger businesses, that 5 per cent. of their budgets are spent on compliance and, most importantly, that every five weeks in the past five years one new requirement affecting small businesses has reached the statute book. Is the Minister confident that the Bill will deliver a means to reduce the regulatory burden in an effective way?
In an unusually helpful contribution, my hon. Friend identifies an important issue. We are, of course, in close consultation with the FSB and other business organisations. Indeed, the FSB's policy chairman has written to the press strongly endorsing the approach taken by the Bill.
Although it is relatively straightforward to introduce a Bill, the important thing is what that Bill does. The Government have an ambitious agenda for better regulation, as I emphasised in my meetings with small business people when I travelled around the country last year as part of the wider consultation. They made it clear that one of the biggest problems faced by single-person businesses was the difficulty involved in moving to employing one or two additional people. We are looking for ways to simplify that.
I have taken a number of interventions, and time is against us, so I shall bring my remarks on Europe to a close. I particularly look forward to support for these measures from those who consistently ask for an easing of the burdens of EU legislation and for the introduction of practical measures to do something about that problem.
The Bill abides by the regulatory principles of transparency, accountability, proportionality and consistency. Regulatory activity must be targeted only at cases where action is needed. The Bill also enables those principles to be developed further by conferring a power to issue and revise a code of practice in relation to the exercise of regulatory functions. The Bill makes important changes to the way in which we pass some of our legislation. When the House passed the 2001 Act, it agreed that an alternative means of passing legislation to improve the UK's regulatory performance was essential. What this Bill provides is a more proportionate way of delivering those improvements without undermining the role of Parliament. On the contrary, it is clear that it will enhance the role played by Parliament on better regulation issues. I hope that my comments have offered the House a useful starting point for debate and emphasise that we are determined to deliver on our ambitious better regulation programme. The current Act does not deliver on those objectives and the Bill will make a major contribution to maintaining our competitiveness, safeguarding our economic prosperity, reducing the burdens on our public services and improving the lives of our citizens. I commend the Bill to the House.
The central point that the Minister makes is that the House will still have the opportunity to debate in the traditional way any measures of importance or controversy. This Bill is an early test of that because the Regulatory Reform Committee has said that the first part of the Bill is of constitutional significance. The Chairman of the Procedure Committee has written to the Leader of the House asking that part 1 of the Bill be considered on the Floor of the House, which is the normal arrangement for issues of constitutional significance. The Leader of the House said earlier that he was considering the issue, and I hope that the Minister will consider withdrawing the programme motion—we may take his willingness to do so as a test of what he says. It should be the principle that any issue of constitutional importance is dealt with on the Floor of the House.
I shall make this point now so that I do not need to do so later. I agree entirely with the hon. Gentleman. Part 1 of the Bill is clearly a constitutional issue that should be dealt with on the Floor of the House. The Government should withdraw the committal motion and move a new one next week, after discussions through the usual channels.
I am grateful to the hon. Gentleman. It is worth mentioning that Lord Holme, who is the Chairman of the Lords' Constitution Committee, has also described part 1 of the Bill as being of first class constitutional importance. There is time in hand, because the Minister has kindly agreed to look at the Regulatory Reform Committee's proposals and respond before the Committee stage, so we are not as short of time as we might be.
The House supports deregulation and the Opposition are determined that there should be not only a reduction in the stock of regulation, but that we should regulate less, year on year. However, the worry is that this Bill does not refer to deregulation at all. It is a sad reflection on the Government that burdens on business are rising. I have already referred to the burdens barometer produced by the British Chambers of Commerce, which has increased by £40 billion since 1997. That puts in context the Chancellor's target of cutting regulation by £10 billion, because that is only a quarter of the increased burden on business.
Meanwhile, the World Economic Forum shows that the United Kingdom is becoming less competitive. In 1997, the UK was the fourth most competitive country in the world. It has now fallen to 13th. The World Economic Forum specifically cites regulation and bureaucracy as two of the main obstacles to business in the Britain.
My understanding of the £40 billion sum is that a large proportion of it—some £26 billion—consists of the minimum wage. If that is the case, is the hon. Gentleman saying that the Conservatives have changed their mind again about the minimum wage? I thought that they now supported it.
It is the "Burdens Barometer" produced by the British Chambers of Commerce. David Taylor was telling us how keen he is to represent the interests of small businesses, so perhaps he would find it a useful read. It shows, for example, that in just the past two years, the burden has gone up by £9 billion. That, of course, does not refer to the minimum wage at all, but if Rob Marris wants to read it, I am happy to pass it across the Dispatch Box, if the Minister will allow it to be passed on.
Can my hon. Friend confirm that the British Chambers of Commerce said that its estimate of £38.9 billion specifically excludes the cost of the minimum wage?
This is all very interesting and we hear it regularly, but is not the problem precisely that, alongside the burdens barometer, we must always put the protection barometer? Getting the balance between those two things right is the real challenge. We should consider the arguments that we have had recently about protecting pupils in schools against being taught by paedophiles and a whole revisiting of the associated protections regime. One moment we are anxious about burdens; the next moment we are anxious about protection—but the key thing is to get the balance right between the two.
I could not agree more. In fact, later in my speech I will talk about the one in, one out principle that Sir David Arculus considered when he was in charge of the Better Regulation Task Force—now renamed the Better Regulation Commission—when trying to balance new regulation against the removal of outdated regulation. I accept that protection is also important.
Other measures, such as the International Institute for Management Development's "World Competitiveness Yearbook", show that the UK has fallen from ninth to 22nd since 1997. The London School of Economics recently warned about
"concerns that tougher competition could be undermined by increasing regulation".
The CBI has said:
"Many businesses believe regulation is damaging the UK's attraction as a place to invest . . . the burden has grown and expect it to increase further."
The Library has shown that there are 3,887 regulations a year on average under this Government—15 every working day. That is a 50 per cent. increase on what happened under the last Conservative Government.
Against the background of failure that was evident in 2000, Lord Falconer introduced the Regulatory Reform Bill, which was described as a major measure for deregulation. He said:
"The Bill will provide a major tool to tackle unnecessary over-lapping, over-complex and over-burdensome legislation."—[Hansard, House of Lords, 21 December 2000; Vol. 620, c. 850.]
"Do the Government intend the measure to be used to introduce orders that have a net deregulatory effect—yes or no?"
"The Bill makes it clear that each regulatory reform order must contain a deregulatory element."—[Hansard, 19 March 2001; Vol. 365, c. 118.]
The Bill was described as "a valuable tool", "an excellent tool" and "a major tool", but the sad history records that only 27 regulatory reform orders have been made, although everyone expected more than 60.
Of course, a review was promised. It talks about whether it should be possible to amend or appeal primary legislation to do one of three things: remove, reduce, re-enact or impose burdens; simplify legislation; and implement uncontroversial Law Commission recommendations. We wanted that power to be as flexible as possible, so it went out to consultation. Not surprisingly, business groups in particular supported the consultation and the idea of that flexibility, but something strange then occurred. The Government changed tack and removed all reference to removing burdens on business. What we have now is constitutionally novel. The Bill extends the scope of powers available to Ministers while relaxing the constraints of parliamentary scrutiny. Ministers will be able to amend, repeal or pass primary legislation without going through the normal parliamentary procedures. There is no requirement that such measures should have a deregulatory effect, so the danger is that we shall have legislation, regulation and parliamentary corner-cutting with no deregulation at all.
Like the Minister, the Government talk much about deregulation and better regulation. They have their Better Regulation Commission, with its new chairman, and their simplification process, whereby every Department has to find simpler legislation. Expensive consultants have calculated the costs to many businesses of every burden or cost of regulation. Now, we have the Bill, but the sad truth is that so far, despite the talk, there has been no deregulation.
All the talk of one in, one out—the idea that every time a regulation is passed another should be repealed—is a vain hope. The Minister will have seen the latest list from the Department of Trade and Industry showing the regulations coming in on
"We are pleased to see all the policy activity, but are still waiting to see tangible action on the ground."
Is my hon. Friend aware of the Company Law Reform Bill, currently in another place, which includes provisions for fast-track reforms? If the Government want to speed things up and reduce burdens, might not that measure be the place to start, as it overlaps with the Bill?
The Government are taking several overlapping measures, all of which remove power from the House and give it to Ministers. There is a process in the Government of Wales Bill to take power from the House and give it to Wales on a case-by-case basis. There are similar procedures in the Company Law Reform Bill and other measures. My hon. Friend Mr. Djanogly, who will wind up the debate, has detailed knowledge of the Company Law Reform Bill and will have something to say about it.
In Committee, we shall make a range of suggestions to toughen up regulatory impact assessments so that they concentrate on whether regulation is cost-effective and necessary as a last resort. We shall try to include a special assessment of whether small business should be exempt from regulation, instead of the current patchwork, whereby only some small businesses are exempt and there is no clear theme. The Government will have to consider whether small business should be exempt on every occasion, which relates to the point made by the hon. Member for North-West Leicestershire about the disproportionate burden on small businesses.
We want to ensure that regulatory impact assessments are audited at a later date to determine their accuracy. The Better Regulation Commission or the Regulatory Reform Committee might have a role in that. We shall propose sunset clauses, proper post-legislative scrutiny and perhaps an enhanced role for the Law Commission to consider outdated legislation. We shall try to focus the Bill much more on deregulation than regulation.
Part 1 is of concern due to the breadth of the power taken by the Government to replace, amend or introduce legislation, including any Law Commission Bill. The Minister will be aware of criticisms made by various Committees, and that the Law Commission is considering measures to introduce palimony—giving people who have lived together equal rights with those who divorce. It is also considering how to deal with tenants' rights and the termination of tenancies and with criminal law reform, including reform of the law of murder and the question of provocation in domestic violence.
I might well agree with the Law Commission about such matters, but they are the sort of issues that hon. Members will want to discuss on the Floor of the House in the normal way because there are strong feelings about them in the House. However, where in the Bill is there anything to reassure us that that will happen? The Minister told the Procedure Committee on Tuesday that the Government would not use the procedure for highly controversial matters and that there was a sort of veto for the two Select Committees. However, I worry about dealing with the matter on the basis of such assurances because I can find no such veto in the Bill.
Mr. Beith, who cannot be here today, once wrote an article called "Prayers Unanswered" about the change that was made in 1954 to the way in which regulations were considered. The old tradition that every set of regulations was debated on the Floor of the House was changed and statutory instruments were then taken upstairs. The right hon. Gentleman wrote:
"Until 1954, all prayers could be debated. Any Member could put a prayer down for debate on any sitting day except Friday, and unless a closure was carried there was no time limit at all. In 1954 a rule was established that debates were to end at 11.30 . . . Nonetheless, the Committee which recommended the 1954 rule clearly intended that all prayers would still be debated on the floor of the House and the Leader of the House at the time, Captain Crookshank, insisted that 'if honourable Gentlemen put down prayers, time will be found for prayers.'"
Of course, the rest is history. I believe that now only a tiny number of prayers are ever debated.
The Minister has said that we will continue to have full parliamentary debate for terrorism measures and the Parliament Acts, but he must accept that they are of the highest importance among the measures that we expect to debate on the Floor. The House would wish to debate many matters that were controversial, but not in that highest category. I will want the Minister's assurances to be included in the Bill so that they bind his successors.
The House should also be worried about clause 9, which contemplates conferring functions on the Welsh Assembly without full debate. The Minister needs to explain how the power would operate in conjunction with the Government of Wales Bill. Is it really envisaged that powers will be gradually devolved by the back door using the order-making power in the Bill? Few hon. Members would think that appropriate for something as important as devolution?
Clause 8 deals with Scottish matters. Does it mean that Sewel motion legislative proposals—changes that are within the remit of the Scottish Parliament, but made by the House—will be dealt with by order? If so, has the Scottish Parliament been consulted? What assurances can the Minister give us that we will have the right to debate important matters? Where in the Bill are those assurances?
The Regulatory Reform Committee and its equivalent Committee in the other place have the important role of deciding how regulatory reform orders should be dealt with procedurally. Why does that role not include the ability to refer such an order for full parliamentary scrutiny as though it were a Bill? There might be cases in which a Minister's decision about the nature and importance of a measure does not reflect the opinion of the House itself. In such circumstances, surely it would be useful if we were able to transfer into full Bill mode.
Part 2 of the Bill includes provisions that are based on the Philip Hampton proposals. We welcome his commitment to entrenching the principle of risk assessment throughout the regulatory system and ensuring that administrative burdens are reduced. We also welcome his concentration on substantially reducing the need for form-filling and the requirement to follow good principles of enforcement. Will the Minister confirm that that is what the codes of practice will be about?
Part 3 seems to introduce simpler provisions for bringing European law into force in the United Kingdom. However, there is reference in clause 26 to "rules" and "schemes" being used to implement provisions, instead of provisions simply being implemented "by regulations". What does the Minister have in mind? We should be interested to hear his reply. I do not know whether my hon. Friend Mr. Cash is here—[Hon. Members: "He is not."]—but I know that he was hoping to ask that very question.
The Bill should be about deregulation and building a culture of light-touch regulation. We should ensure that Whitehall treats such matters as seriously as it does the passing of new legislation and regulations. I was struck by what the Minister told the Procedure Committee. He conceded that in the present culture it is more exciting and one is more likely to be promoted if one is in charge of or on a Bill team than if one is a successful deregulator—or, in his terms, a better regulator. How to change that culture is at the heart of the problem.
It is easy to see how a Government who were not all that keen on deregulation could decide to regulate in fields such as social rights—particularly employment rights—and that the regulatory reform order would be a convenient way of doing that. As the hon. Member for Wolverhampton, South-West said, the subjective tests in clause 3 are not adequate to protect against that sort of action. The Minister may well agree with the social rights in the EU charter of fundamental rights and want to introduce new legislation on employment rights. Is he able to give us any assurance that he would not use regulatory reform orders to do that sort of thing? Just as it would be simple for a Government who had a strong view on the social rights in the EU charter to introduce those rights through the back door by using such an order, a Government who took a different view could do the opposite. That is precisely what worries the TUC, whose head of equality and employment rights, Sarah Veale, said a couple of days ago:
"The current government has undertaken not to use RROs for measures that are 'large and controversial', but this will not apply to future governments. Future governments will not be detained long by safeguards that are tested by standards that are matters of judgment and not objective".
The experience of the introduction of Standing Committee hearings in the 1950s shows what can happen: a procedure is introduced, assurances are given and no one thinks that it will end a particular way of doing things, but over time the protections fall away as Ministers enjoy the convenience of the new arrangements. Both those who worry about the way in which the EU operates and those whose views are the opposite can see how the RRO procedure might be abused. In those circumstances, would it not be right to insert stronger safeguards into part 1?
I understood the Minister to have given two undertakings: first, that the procedure would not be used for controversial legislation; and secondly, that the Select Committees would in effect have, to use his word, a veto. Would the hon. Gentleman be satisfied if those undertakings were—it would be difficult—put into the Bill?
Whether the veto is put into the Bill or introduced by changing the Standing Orders, which might be a better way, it should be a cast-iron measure. I am not happy about the definition of "controversial" or "highly controversial". Originally, the word used was "controversial". The Minister cranked up the language to "highly controversial", and when he was asked for examples, those he gave were of the highest level of importance—ultra-controversial. Our concern is that we do not really know what we are talking about.
I think that the traditional way of passing a Bill, although it is a laborious procedure, has some advantages. If, during the passage of Bill, one listens to debate and accepts that things need to be changed, one can do that. A super-affirmative procedure would be much more rigid than the procedure used for Bills. I should therefore like to retain the existing arrangements.
Matters that may not appear controversial to the Government and Conservative and Liberal Democrat spokesmen may be extremely controversial for Back-Bench Members. Those Back Benchers may not serve on the relevant Committee, so they lack the opportunity to express a strong point of view on behalf of their constituents about a matter that they regard as highly controversial. We need to bear in mind the views of Back-Bench Members as well as those of Front-Bench spokesmen.
I entirely agree. That applies to important issues, where conscience is often part of the equation, and could include the question of whether the rights that people have on the breakdown of a long-standing relationship should be the same as those that they have on the breakdown of a marriage. The Law Commission is looking at that issue, and it could easily fall within the ambit of clause 1.
We do not need more assurances—we need action in the Bill. We accept that the Bill could provide genuine benefits for business, but it requires amendment. Ministerial assurances, too, would be helpful, and we would like the main assurances to be incorporated into the Bill or into Standing Orders. It is particularly important that the fast-track procedure is not available for controversial measures. Things do not necessarily appear highly controversial. As Mr. Heath said, Ministers may not think that something is controversial, but many hon. Members may think that it is. It should be possible for Committees to act effectively and second-guess Ministers on such issues. The Bill is a novel constitutional measure, so when it is enacted we will suggest that it should be subject to renewal or a sunset clause, perhaps after five years, which is an appropriate period in which to test it. However, we would not want to give such measures carte blanche at this stage.
I hope that it is not the case that we could override the sunset clause by an order under part 1, but if it is, we will need to look at that. One thing is for sure, however, namely, that there is a great deal of work to do in Committee.
The Liaison Committee, like Mr. Heald, accepts that there is much that is of value in the Bill, and we support that. However, it is not the intent of the Bill that worries us, but its potential impact. I agree entirely with the Regulatory Reform Committee that it is of high constitutional significance. We live in new parliamentary times and every day brings another timetabled Bill. A Bill is not properly formed if it does not have a timetable motion attached, and every Bill is subject to the guillotine procedure. In other words, we have inadequately scrutinised legislation that may result in injustice for people who are at the receiving end. We have inadequately monitored legislation and, under the Bill, Ministers will have the ability to amend primary legislation with a truncated order-making procedure. Inadequate primary legislation will therefore be subject to an inadequate procedure. That fact alone means that the Bill deserves special consideration.
I was rather concerned by the Under-Secretary's response to pre-legislative scrutiny in the minutes of the Regulatory Reform Committee. I well remember our days in the Public Accounts Committee, when we happily harried accounting officers and individuals guilty of financial misdemeanour, and I know that he is in favour of the parliamentary scrutiny performed by that Committee. I was therefore surprised by his response in the minutes to the concept of parliamentary scrutiny. He said that it had been offered last time but had not produced what the Government wanted, so there would be no pre-legislative scrutiny this time. That is a mild paraphrase, but it conveys the impact of what was said. I worry about how Ministers might interpret the powers, once they have them.
The Regulatory Reform Committee asked that its remit should be widened. I hope that we can get a firm commitment from the Minister that that will be done. As was said by the Opposition spokesman, the new legislation does not even have to show that it will reduce burdens. The only burdens that are guaranteed to be reduced are the parliamentary burdens on Ministers, because they will choose the type of scrutiny that a measure gets. They can choose the negative procedure, and there is nothing that anyone can do about it. So the Bill is burden-relieving, but not quite in the way that most of us anticipated.
As has been pointed out, the safeguards in the Bill are less than are in the existing Act and, worryingly, less than those outlined in the consultative process. The Bill is remarkably devoid of safeguards and guarantees. I welcome assurances, but in parliamentary terms, there is no assurance as good as an assurance written into a Bill.
The wise words of the Father of the House ought to have struck home, even if the words of Mr. Heald and my own do not. We need careful scrutiny of part 1, and that should be on the Floor of the House to enable all Members to participate if they so wish.
I have already apologised to the Minister, to the hon. Member for North-East Hertfordshire and to the Chair, and I now apologise to the House for the fact that I will, unfortunately and exceptionally, have to miss the later speeches in this debate. I hope that hon. Members will recognise that that is not the way I usually do business in the House, and I regret that I will not be able to observe the normal courtesies of the House.
I commend the Minister for introducing the Bill in his usual way. I am almost beginning to forget that there ever was a Chancellor of the Duchy of Lancaster and to wonder what the Chancellor of the Duchy of Lancaster did, but we shall no doubt see a successor eventually, or perhaps not. Who knows? In any case, a Bill that declares itself to be a vehicle for regulatory reform is transparently a good thing. It is the parliamentary equivalent of motherhood and apple pie to say that we all want to reduce the burdens of regulation. However, successive Governments fail to do that and there have been incremental increases in the burden.
Any Bill, the prospectus of which is to reduce the regulatory burden, should be welcomed, but—and it is a big but—as the poet had it,
"timeo Danaos et dona ferentis"—
I fear a Greek bearing gifts or, to put it in modern form, if it sounds too good to be true, it probably is too good to be true. The Bill is a classic case of that.
We look for consolidation of regulation, and for reduction or extinction of regulation. That is an extraordinarily important part of the process. We are very good at creating regulation, but not at looking back to see whether it is still relevant to the purposes for which it was first introduced, or whether it is simply a relic that has become a burden without benefit. If the Bill were entirely about that, I would welcome it.
Parts of the Bill are useful—for example, I want to see an accelerated method for bringing Law Commission proposals into law. The proposals on translating European law into British law are not exceptional, apart from the fact that they have not been coupled to the fundamental reform of how we do the job in this House. If anything is desperately needed, it is a better way of examining European regulation and considering how it will apply, whether it has been added to and the effect that it will have on British businesses and British individuals.
Does the hon. Gentleman agree that we need scrutiny before draft regulations are agreed in Brussels? Some years ago, I was Minister with responsibility for the single market, and I always brought matters to the House before undertaking negotiations, which often helps Ministers, because if the House is hostile to a regulation, it strengthens their hand. It is no use scrutinising a European regulation after it is a done deal.
I could not agree more. Most European legislatures conduct such matters much better than us. We need not only prior scrutiny, but a transparent process in Europe to enable us to know what Ministers are doing on our behalf, which is another deficiency.
The intent of the legislation on regulatory functions is welcome. However, hon. Members have made it clear that part 1 is unacceptable and that it must be amended before we can accept it. Even if one takes at face value the assurances from the Minister and from the Government as a whole and believes that they will be carried through, we are still legislating for a massive shift of power to the Executive and away from the legislature. The Executive may change in the future, so we, as parliamentarians, must ensure that we put in safeguards.
The Government recognise that the Regulatory Reform Act 2001 has not worked as well as it should have done. It has some benefits, but the mechanism is cumbersome and capable of improvement. All hon. Members want to see a reduction in the administrative burden on businesses. Businesses have welcomed the introduction of the Bill, although it would have been odd if they had not done so. As Mr. Redwood has said, the weaknesses in the current legislation include not only the translation of regulation into law, but the initiation of the regulatory process. The evaluation of such legislation has also raised some issues.
David Taylor has made the key point that regulation has a wholly disproportionate effect on small businesses and micro-businesses. Hon. Members will have received information from the Institute of Chartered Accountants in England and Wales, which has estimated that 73 per cent. of the total £7 billion cost of regulation on business falls on the smallest businesses. A long time ago, I managed a small business on the high street—my practice—but even in those days, I noticed that the cost of regulation was rising. Small businesses do not have human resources departments to deal with regulation. They have a proprietor—the person who ends up as the dogsbody having to do everything, with a wholly disproportionate burden laid upon them. I hope that we will particularly recognise the position of small businesses.
That worries me in another way. I do not want to create a facility for deregulation which solely favours those who have the big battalions behind them. The trigger for reform will often be those who have the resources to mount the campaign—or, even worse, the ear of a suitable Cabinet Minister—and can create the circumstances for deregulation which favours the concerns of the largest businesses at the expense of those who work in the same market but do not have the same resources. We must be extremely cautious about that.
I am not sure that the Law Commission is the right vehicle. I have enormous respect for it, but this is not a role for which it would be best suited. However, audit bodies of various kinds could provide an extremely useful function. I would very much like to see such retrospective evaluation.
Having been involved in countless Home Office Bills over recent years, I am conscious of the fact that we have often had to amend Bills before they have even come into effect—even the criminal justice Bill of whatever year that was going to be the end of crime as we know it. We need to get a grip on the cumulative effect of legislation, and the House needs to have the right advice to be able to do its job of post-legislative scrutiny much more effectively than it does now.
I am aware of it. However, I also know that the hon. Gentleman's Committee has been talking about this for a very long time. It is a shame that the message has not got through to the Government, or to the plurality of Members.
The Minister remarked on the number of people who have welcomed the Bill. I would say that they are welcoming a Bill, but not necessarily this Bill, given the extraordinary powers that part 1 gives to Ministers. I do not expect some of our business interlocutors to have carefully scrutinised the powers of parliamentary scrutiny in part 1, as that is not their business. It is our business, however, and we should be alarmed by what we read. It is of course capable of improvement, but we must be very careful. Such provisions are often described as Henry VIII clauses. Poor old Henry VIII, alone among autocratic monarchs, seems to get the blame for most things. Nevertheless, we should worry about the autocracy involved in this case.
Clause 1 refers to the broad purpose of "reforming legislation". What does "reforming" mean? The only requirement is that one must have legislation to reform; one cannot make new law, but one can reform it. That undefined term appears right at the start of the Bill.
Our current Prime Minister has yet to abolish the monastic tradition and he has fewer wives. However, it is an interesting comparison. We no longer have the Lord Chancellor who liked to compare himself to Wolsey, but let us not pursue the analogy further.
Conditions are dotted around the Bill. Clause 12(3) provides a list of conditions but they do not apply to clause 1. There is therefore a disconnection that we need to tackle.
Clause 2 covers the law. Rob Marris was right to say that it grants a power to amend common law, even if the Law Commission has made no such proposal. I am sorry, but we cannot give a Minister such a power—it is not acceptable for a Minister to have that power without the House's agreement.
I also agree with the important point about increasing the penalty for criminal offences. I asked the Under-Secretary in what circumstances he envisaged the provision being appropriate. He did not reply but simply said that the power was limited to scale 5. Why should it exist at all? When would it be appropriate for a Minister to increase the penalty for criminal offences without primary legislation and recourse to the House? It is an inappropriate power.
As my hon. Friend David Howarth said, clause 3 provides for a subjective test, and that is wrong because whatever slight protection the law affords is thus immediately eliminated. If a Minister determines subjectively what it is reasonable for him to do, we have a circular process that makes it difficult to show that the action was unreasonable and that a Minister was deluded in believing that he should take upon himself powers that properly belong to the House. I accept that it is almost impossible to challenge at law the legislative process. However, even the initial stages should at least allow the possibility of justiciability. My hon. Friend made a powerful point, which I hope he has the opportunity to pursue later.
Many references have been made to the conditions but they are substantially weaker than those in the Regulatory Reform Act 2001, even leaving aside the codicils and applicable references. The consultation paper said that the safeguards had worked well and remained essential. If that is the case, why does the Bill water them down?
We will have to rely on
The hon. Member for North-East Hertfordshire mentioned the Government of Wales Bill. I hope that he does not suggest its recommittal. One can have too much of a good thing. However, it is clearly a matter that we can consider.
There are other causes of concern, for example, the possibility of legislation that is secondary to secondary legislation. We cannot allow that. Clause 2(2) provides for "any person" to have the power rather than a Minister. Am I alone in believing that the power is not capable of delegation and that it is a matter for a Minister of the Crown, who is answerable to the House rather than "any person"?
There is also the veto and the Regulatory Reform Committee's proposals. The Under-Secretary said that he was looking at the matter closely. From the transcript of the Committee's proceedings, it appears that he looked closely to find the bit that he thought was already covered but was not. So I hope that he will table amendments on this matter in Committee. He can be certain, however, that if he does not, others will, because we need to make this clear.
The Bill has the potential to be extremely important in constitutional terms. That is why the hon. Member for North-East Hertfordshire and I—and, I think, by implication, the Father of the House—have suggested that it should be discussed on the Floor of the House. I hope that the Minister will be able to bring us a message from his Whips that they do not intend to move the programme motion this evening, that the Government will allow wiser counsel to prevail, and that they will bring the Bill back to the House next week.
I have taken a dim view of part 1. Does this mean that I will advise my right hon. and hon. Friends to vote against the Bill's Second Reading? No, because we need a Bill that does the things that this Bill claims to intend to do. I also believe that this Bill is capable of redemption, but if substantial changes are not made to part 1, either in Committee or on Report, there is no way that I could advise my right hon. and hon. Friends to support the Bill on Third Reading. Moreover, I am absolutely confident that it would be amended beyond recognition in another place if it remained in its present state. The Minister has given every indication that he is prepared to listen to the points that have been raised in this debate, so I hope that he will listen to our considerable concerns about part 1 and react appropriately.
The Under-Secretary of State for the Cabinet Office, my hon. Friend Mr. Murphy teased me a little during our earlier exchanges about the extent of my interest in matters of parliamentary procedure. I shall now get my retaliation in. When I was discussing these matters with him the other day, I noticed that the pockets of his suit were still stitched up, just as they were when he took delivery of it a long time ago. He assured me that this was not because he was a Scotsman. He said that it was a measure of simplification, and part of his attack on the bloated, the bulging and the unnecessary, and that it was therefore entirely in the spirit of the Bill. I offer that to the House simply as an initial observation.
The Bill is about legislation, and it reminds us that we are a legislative sausage machine here. Governments come along, they give us stuff, and they stuff it into the machine. We process it—more or less—and it comes out the other end. It is then possible to claim that Parliament has decided on something or other. As we are just talking among ourselves this afternoon, however, I think that we can probably tell the story more truthfully. This Government and all Governments legislate too much. We legislate badly, we scrutinise legislation inadequately, and we do not revisit it when we have passed it—we simply go on to the next bit. We all suffer because of that.
I say that because I do not want us to be starry-eyed about our normal way of doing legislative business here. Even though we may be worried about other procedures that are being suggested to us, we should not suggest that the alternative to what is being proceeded with is some splendid mechanism of detailed scrutiny. We may like to tell the outside world, and we may like to see it written in the constitutional textbooks, that we engage in dispassionate, line by line scrutiny of legislative proposals here, but we know that that is not the case.
We should thank our lucky stars that most of the public never get inside Standing Committees. They never see the way in which legislation is routinely processed here: members of the Government side are required merely to be there and to say as little as possible in order to get the business through, and the Opposition, as far as they can, play a game of delay. Measures are taken through on whipped votes. We often vote for things that we do not think are very good. That is how we do it in all parties, at all times. Therefore we should not believe, in discussing alternative procedures, that the way that we deal with legislation here routinely is particularly admirable.
I accept that we often do not do as good a job as we should, but does not the hon. Gentleman think that he is going slightly over the top? I remember some very good Standing Committee discussions about particular provisions of particular Bills. We have had some good examples recently of excellent debates on the religious hatred provisions. Obviously, the outcome was not to everyone's taste but it was a high-quality debate.
Occasionally, that is so. I do not want to digress but my first experience here was to sit on a Committee considering a private Member's Bill. We had a splendid Standing Committee sitting. People took good points from across the Committee and came to sensible agreements. The Bill came back to the Floor of the House and was killed off by the Government of the day, as though the Committee never took place. I thought naively that Bills were going to be discussed in the way in which that private Member's Bill was discussed in that Committee. Of course, it was nothing of the kind.
I think everyone recognises that we have to scrutinise legislation much better. That is why we have been anxious to develop, for example, draft scrutiny of Bills. The Government are to be commended for developing that further but they are also to be slightly chastised, as the number of draft Bills is beginning to fall off again. That was a major innovation in our achieving better scrutiny of Bills.
Does not the hon. Gentleman agree that the difference between what is proposed and what currently happens with a Bill is significant? Any Government Back Bencher who gets on to a Committee by accident, or any Opposition Back Bencher or Front-Bench spokesman, can table an amendment or new clause that may light a flame and get people talking about it. It may then produce exactly the debate that we want. That would be impossible if the measures before us today were enacted.
I accept that that can and sometimes does happen; I would dispute that that is routinely what happens. There are, in some respects, better ways of doing it. They have been captured to a degree by the way in which regulatory reform orders work, so I am not averse to exploring that procedure further.
The fantasy that I sometimes have is of a Government coming to the House with a Queen's Speech that says, "This year, my Government will introduce no new Bills. We are simply going to make sure that the existing legislation works well, that our administrative systems are working efficiently and that we do not return to new legislation until we are sure that our existing legislation is of a certain standard." Of course, that is a fantasy that will never be realised either from this Government or any other, but it is a discipline. There is something about the machine that simply has to drive ever onwards. The virility test for Ministers and for Departments is how much they can get in the legislative programme this year, not whether what they got in last year is working well and doing the things that they said it was going to do. At some point, we shall have to get hold of that huge issue, which goes against the culture of every Government and of the whole Government machine.
As someone who, perhaps by mistake, got on to the Regulatory Reform Committee, I have made an interesting observation that many of the regulatory reform orders increase the power of Government. Perhaps that is because they come from civil servants, who, like turkeys, do not vote for Christmas.
I am interested in that observation. I have not served on that Committee, but I am told by some who have that it has offered a way of scrutinising some of these orders that is quite different from the process that I caricatured, moving far more towards the sort of procedure that can be captured by a Special Standing Committee. We must move in all those kinds of directions, away from just treating pieces of legislation in terms of the normal party dogfight, and towards getting some intelligent scrutiny. We do that much better through Special Standing Committees. We do it better when we consider Bills in draft. We can also do it better, as I understand it, through the regulatory order scrutiny procedure. We should be cautious about setting our face against these developments, which have a lot to be said for them.
Having said all that, what is proposed in the Bill—as various Members have said—is unquestionably a major constitutional issue. As has been said, that is the case for considering it in the way in which we normally consider such measures. I know that the Government will think about that.
The whole area of deregulation and better regulation has a history. I enjoyed being reminded of the background to the deregulation measures of the Major Government. I was reminded of John Major's speech to the Conservative party conference in October 1992—[Interruption.] Indeed, some hon. Members were there. John Major anointed Michael Heseltine no less, then the President—as he liked to be called—of the Board of Trade, to take responsibility for attacking regulation and leading the deregulation agenda. He said to the conference:
"Who better for hacking back the jungle? Come on, Michael. Out with your club. On with your loin cloth. Swing into action!"
That was very good.
Within a short space of time of being given the job, however, Michael Heseltine discovered that it was not so straightforward. By that time, he had moved on to become the Government's general troubleshooter, and, my goodness, there was a lot of trouble at that time to shoot. He came before the Public Service Committee on
"This is the dilemma of deregulation, that it is never simple, very rarely are you able just to say, 'Get rid of this', because you are dealing with health, safety, environment, vital aspects of a civilised society. Sometimes you can modify, but once you get into modification you get into complexity".
That was why I inserted into our exchanges with Mr. Heald earlier the point that, in a sense, every burden carries a protection with it. That was Michael Heseltine's conclusion, which is why the process is trickier than we sometimes think.
The Government have been right to move from that narrow focus on deregulation to a better focus on better regulation—as the Organisation for Economic Co-operation and Development says, from red tape to smart tape—which gets the notion of the balance right. We should remind ourselves that sometimes we do get things right. The OECD country report on regulation in Britain stated in 2002:
"With twenty years of continuous effort behind it, the United Kingdom is one of the most experienced OECD countries in regulatory reform . . . A constant up-grading of instruments has occurred simultaneously with the establishment of an array of regulatory policies, institutions, and tools, many of them innovative and unprecedented. This has formed a set of broadly efficient, transparent and accountable regulatory systems of high quality."
Across parties over the past 15 years or so, we have developed a robust and sophisticated approach to the whole issue of regulation. The Bill, however, represents a radical departure. The Government have decided on the most radical of the options that they discussed: they are taking power to reform any legislation. That is an extraordinary development, which requires the most careful discussion and scrutiny.
We must retain the value of some of the scrutiny mechanisms that we have developed in existing regulatory reform orders, and build in safeguards. My approach is fairly straightforward: yes, there is a case for new powers, but they must be matched by new safeguards. That is the only way in which to make the proposals acceptable.
The three main safeguards are these. First, there must be some limit on the use of the powers. It cannot be right to allow Ministers to reform any legislation in any way that they choose. The Regulatory Reform Committee has suggested that there should be a list of off-limits subjects. Another approach would be to allow change that was compatible with and proportionate to the original legislation. Ministers would then be able to use their powers to simplify legislation and bring it up to date, but they would not be able to transform the law in a way that was entirely different from Parliament's original intention. That would preserve a clear distinction between proposals requiring primary legislation and proposals that could be dealt with through secondary legislation.
Secondly, an effective veto is needed. If the Government are to be given more flexibility, it is no longer satisfactory for the veto to rest on an undertaking alone. The Government's own consultation document claims:
"Parliament will always and should always remain the guardian of what is appropriate to be delivered by RRO."
It also makes it clear that there can be no straightforward principles such as size or even complexity. If that is the case, Parliament must be able to exercise its guardianship order by order, not simply by approving the procedure in the Bill.
Thirdly, any proposals to change primary legislation must be properly scrutinised. The Regulatory Reform Committee has called for a minimum scrutiny of 60 days. It is interesting to note that parliamentary scrutiny currently accounts for only a small part of the time taken to process regulatory reform orders. An interesting table in the Regulatory Reform Committee's report shows that on average, the parliamentary scrutiny stage takes only 16 per cent. of the total time taken from initial consultation to approval, so that is not where the delay is occurring. That does not mean, however, that scrutiny should not be proportionate. The Committee itself has suggested that if it is felt that certain proposals need no amendment, it could be possible to do without the second stage of the scrutiny process.
For me—and, I suspect, a good number of others—if the principle is to be followed that the advancement of ministerial powers must all the time be matched by advancement in safeguards on the use of those powers, the House should expect the three safeguards that I have outlined to be included in the Bill, in order to provide that security. While I welcome the thrust of the Government's aims, the danger is that ministerial powers could be extended in ways that Parliament did not want or intend, and perhaps was not even aware of.
It is a pleasure to follow Dr. Wright. I have been waiting to hear a speech in support of the Government's proposal, and he rightly drew attention to the challenges associated with regulation. That struck a chord with my own experience. In 1992, I was a member of Mr. Heseltine's deregulation taskforce and I also served on the Health and Safety Commission, which was tasked with trying to reduce the burden of regulation. In that era and the current one, Governments have always talked of proportionality and the introduction of regulation based on risk assessment. Sadly, however, the trend has continued toward more prescriptive regulation. We will discuss on Monday the latest stage of the Identity Cards Bill, which is an example of prescriptive regulation rather than regulation based on risk assessment.
"we are concerned by the potential of the Bill's proposals, if enacted, markedly to alter the respective and long-established roles of Ministers and Parliament in the legislative process."
So he regards this as a serious constitutional issue, which indeed it is. That is why I hope that the Government will withdraw motion 2 on the Order Paper. My right hon. Friend Mr. Knight, who is Chairman of the Procedure Committee, very much wanted to join in this afternoon's debate but has had to travel north to visit a relative in hospital. It was he who wrote on the Procedure Committee's behalf to the Leader of the House, who today said that he was considering my right hon. Friend's letter. Well, the time for considering it will be much greater if he withdraws motion 2, rather than trying to force it through this evening.
I recently had the privilege of being reappointed to the Procedure Committee after a gap of some 20 years. When I first served on it, during the Parliament elected in 1983, its membership included Sir Robin Maxwell-Hyslop and the right hon. Enoch Powell. Enoch Powell would be proud of the contribution being made on these very important constitutional issues by the current Member of Parliament for his former constituency, Rob Marris.
It was Enoch Powell who once succinctly described to me the importance of the procedures of the House—and that was not just because we were both members of the Procedure Committee. He said that in the absence of a written constitution, the procedures of Parliament and of the Commons in particular are, effectively, our constitution: our protection of the people and their liberties against the Executive. That is why today's debate and this Bill are of such importance.
The Minister said that the Bill had stringent safeguards that were more extensive than those in the 2001 Act, but
The Minister gave evidence to the Procedure Committee on Tuesday and said that the 2001 Act defined "burden" too narrowly, because it had to be a legal burden that was being eased rather than an administrative one. I have no problem with extending the definition of burden, but the more logical solution would be to widen the definition rather than remove completely any requirement that burdens should be reduced, if the special procedure is to be used.
The House was very careful to ensure that the protections in the 2001 Act were extensive. On Tuesday, the Procedure Committee asked the Minister whether they would remain, and the Minister replied that "every single protection" in the 2001 Act would. In answer to question 6, he said that, ultimately, the Select Committee could
"kick the whole thing out and say, 'We do not believe that this fits the right of Parliament and protections of Parliament to legislate in a sensible way.'"
The Minister ascribed to the Regulatory Reform Committee the right of veto, saying that it was a real protection for Parliament. In answer to question 9, he said that the Committee had the ultimate power to say that an order should not go ahead at all. In answer to question 12, he said that
"indeed, they could just say, 'We don't think this is suitable at all for this committee' and we are back to the drawing board to seek an alternative way of implementing the order."
The Minister gave the Committee's Chairman an absolute undertaking that it would have an absolute veto if it felt the subject matter was too sensitive and politically controversial.
When the Minister winds up the debate, I hope he will confirm that those assurances given to the Committee will be included on the face of the Bill; nothing short of that will do. The Government have suggested that they might bring forward the appropriate amendments: until they do, I and many other hon. Members will wonder what possible reason there could be for not including such provisions on the face of the Bill. The existing procedures have not been tested in the circumstances that would apply when the Government disagreed with the Regulatory Reform Committee. None of that Committee's recommendations have resulted in a debate on the Floor of the House, with the Government forcing through a measure using the procedures available under the 2001 Act.
It was implicit in the Minister's evidence to the Procedure Committee that he considered that the Government's powers to force a measure through against the will of the Committee would never be used by a responsible and reasonable Government. We have the opportunity to ensure that that is the case. If that happens, I shall not be as sceptical as I admit to being at present.
In its present form, the Bill is in danger of being the sort of subtle sleight of hand of which a member of the Magic Circle would be proud. It is calculated to give much more power to the Government and the Executive, at the expense of Parliament. One reading of the Bill leads one to the conclusion that its primary purpose is not to remove burdens from business or people, but to remove the burden of having to legislate from the Government.
The Bill is the ultimate guillotine for debate and discussion. What a bore it must be for Ministers to have to bring Bills before Parliament if they want to change the law, even the common law. It would be so much easier if they did not have to publish a Bill, wait a couple of weeks for Second Reading, and then sit for the best part of a day in the Chamber listening to Members going on about it. Then they have to go up to Committee and answer points made on amendments, and even respond to new clauses that the Government might find embarrassing or annoying. It would be so much easier if the Government could just do away with all that and put their legislative proposals through this new, streamlined procedure. A strong Government would always be prepared, in extremis, to use the powers available. This is our chance to ensure that we do not give such draconian powers to this or any subsequent Government. That is why the Bill will have to be amended to reflect the concerns that have been expressed by two Select Committees and many right hon. and hon. Members.
No Member is a greater enthusiast for deregulation and lifting burdens from business than I am. If the Bill were solely designed to facilitate genuine deregulation and remove burdens, I would be among its strongest supporters. However, I remain to be convinced that that is its primary purpose.
We are used to Government rhetoric and we do not need to rehearse the 45 minutes saga or the weapons of mass destruction when we have before us examples of where the Government have said one thing and done another on this specific subject of deregulation. In its 1997 election manifesto specifically for business, published in April 1997, the Labour party promised:
"We will not impose burdensome regulations on business because we understand that successful businesses must keep costs down."
In the 2001 election, having imposed many more burdens on business in the interim, Labour promised in its business manifesto:
"We will deregulate where desirable and regulate where necessary, with as light a touch as possible."
In 2005, the promise was repeated in the full manifesto:
"We will only regulate where necessary and will set exacting targets for reducing the costs of administering regulations."
However, as my hon. Friend Mr. Heald said, the Government have increased the number of regulations, the burden of regulation and the cost to business and enterprise. The hon. Member for Cannock Chase questioned whether the £38.9 billion figure included the cost of the minimum wage. I have looked at the briefing from the BCC and it specifically excludes the cost of the minimum wage. If that was included, it would push the figure up to an even more astronomic level.
We know, from the Library, that in the six years from 1998 to 2003 there were 23,322 regulations, an average of 3,887 a year or 14.85 every working day. Matters were bad enough under the Conservative Government, but this Government have increased the number of regulations by 50 per cent. since the Conservative record was set.
When the Government say that they will not use the powers that they are taking in this Bill—they say, "Trust us, we're really on your side"—I think that it is incumbent on us on behalf of our constituents to look more closely at their record of delivering what they say they will do. They have manifestly failed to deliver in the area of deregulation and lifting burdens on business.
The only way that we can guarantee that the Government deliver what they say they intend is to get the Bill amended in the way that many right hon. and hon. Members and I have suggested. I hope that my scepticism will not be borne out and that, by the time that we debate the Bill on Third Reading, it will incorporate those much-needed amendments, and I live in hope.
First, I offer the House an explanation for the absence from the debate of the Chairman of the Select Committee on Regulatory Reform. My hon. Friend Andrew Miller is attending the funeral of an old friend and former leader of the local council. His contribution will be missed.
I broadly support the general thrust of the Bill, but like a number of other hon. Members, I will seek clarification from the Minister in several key areas. I suspect that, before he makes the offer, I ought to volunteer to serve on the Standing Committee, although I feel that a number of genuine concerns should be dealt with by a Committee of the whole House.
I shall focus the bulk of my remarks on part 1, which falls within the remit of the Regulatory Reform Committee, of which I am a member, and on which we have issued a special report to hon. Members. Many contributions have been based on that report. As we have heard, part 1 will allow Ministers to amend, repeal and replace primary and secondary legislation. Of course, that could include legislation that was enacted very recently.
What is the Bill trying to achieve? Clearly, Ministers are seeking to convince the House that the Bill is intended primarily to reduce burdens placed on business and other organisations. It is also intended to assist in speeding up the process by which changes are made to existing legislation. Again, I have no doubt that Ministers have that entirely laudable aim in mind, but, reading between the lines, this uncontroversial Bill could be very significant constitutionally.
The Bill is the end result of a fairly lengthy process, including a detailed review of the operation of the Regulatory Reform Act 2001. The review was completed in July 2005 and the process was informed throughout by Departments, as well as by the recommendations of the Better Regulation Task Force. The review flagged up some of the problems that appeared to be inhibiting the production of regulatory reform orders, as well as areas where it was felt the scope should be extended to enable the better delivery of non-controversial proposals.
Such things would include recommendations from the Law Commission, including changes to common law—again, something that is controversial. My hon. Friend Rob Marris raised that issue very well earlier today. The structural reform of regulatory bodies could be considered, as well as the implementation of the Hampton proposals to merge private sector regulators. That is not mentioned directly in the Bill, but it would be possible because the law reform powers could embrace such change.
One of the Committee's concerns when looking at the detail of the review was that it failed to identify the main causes of the delays in introducing regulatory reform orders. The evidence that the Committee considered, to which hon. Members have referred, made it plain that Departments are slow in bringing such proposals to Parliament, as well as in making the orders once Parliament has responded and made recommendations. For example, our Committee reported no changes on the Regulatory Reform (Execution of Deeds and Documents ) Order 2004, but it still took three and a half months before the order was made. The consultation-to-order-made process on the Regulatory Reform (Sugar Beet Research and Education) Order 2003 lasted 1,924 days, of which only 113 days were for parliamentary scrutiny. Clearly, Departments could and should be doing better.
Mr. Heald, who led for the Opposition, touched on an interesting point that related to the culture of taking a Bill through Parliament and how important that can be for civil servants and Ministers. It is clearly a lot sexier—if I can use that word in the House—than deregulating by order. I suspect that that will come up again in the Committee.
With regulation and deregulation, it is important to maintain the delicate balance of protecting standards and ensuring fairness and safety at work, while allowing organisations room to breathe, and we clearly do not always get it right. Similarly, we have to ensure that the Bill achieves the right balance between extending the power of Ministers and the desire to streamline and speed up decisions designed to lift burdens from businesses and other organisations, while ensuring that there is adequate scrutiny and protection to avoid abuse.
When the Under-Secretary appeared before the Regulatory Reform Committee, he made it clear that the Bill would deal only with uncontroversial measures. There is no doubt that some of the Law Commission recommendations should be straightforward to implement. My problem is with the definition of "uncontroversial", as the meaning of the word is not clear in the Bill. As Members on both sides of the House have pointed out, in the wrong hands, the legislation could be used to implement decisions that had not been thoroughly reviewed by the House.
The Bill gives Ministers power to bring forward primary legislation by ministerial order, which does not involve the process that we all understand—Second Reading, Committee and Report in both Houses. We need to understand, feel comfortable with and confident of the mechanisms for distinguishing controversial and uncontroversial proposals. How will the measure deal with the grey areas that will undoubtedly arise? Will there be an assumption that if something falls into that category it must be controversial? We need clarification of that element of the Bill.
Like the Regulatory Reform Act 2001, the Bill contains safeguards, but as colleagues on the Opposition Benches have argued today, its protection may be less robust than that offered by the 2001 Act. I should welcome reassurance from the Minister on that point.
Unlike the 2001 Act, the scope of the Bill will not be limited by a requirement that the Minister identify the burdens to be reduced or removed. Indeed, the word "burden", like the word "uncontroversial", is not mentioned in the Bill. I agree with the Minister that the concept of a burden as defined in the 2001 Act is narrow; in effect, it means a legal burden, including a restriction or a requirement. As my hon. Friend said in his opening remarks, in the past that definition has been difficult to apply, which is one reason why the implementation of regulatory reform orders has sometimes been slow or impossible.
The Bill offers Ministers a fast-track procedure, which is welcome in many ways. The reduction of red tape, as well as the ability to get rid of redundant regulation quickly, has support on both sides of the House. Labour Members and the Organisation for Economic Co-operation and Development have pointed out that the Government have one of the best records in the world on deregulation, making the UK one of the easiest places in which to establish a business.
Business is keen to see the proposed changes. The majority of submissions received by the Regulatory Reform Committee supported proposals to speed up change, enable lighter risk inspections and streamline the business inspectorate. The British Chambers of Commerce also supported that view, so I was surprised that evidence of their concerns about regulation was touted. Four of the measures in the document cited by the hon. Member for North-East Hertfordshire added up to 55 per cent. of his calculation: the Working Time Regulations 1998, the Vehicle Excise Duty (Reduced Pollution) Regulations 1998, the Control of Asbestos at Work Regulations 2002 and the Disability Discrimination (Providers of Services) (Adjustment of Premises) Regulations 2001. I should be interested to learn which of those the Opposition want to abolish to save money, time or effort.
I support the aim of the Bill, which is to challenge Departments to consider measures to reduce the overall burden on business. I want Departments to record in their annual report the progress they have made, not only with figures to show what they have achieved, but explanations of how they made those achievements and how long they took, rather than bland statements such as, "We are making good progress in this area", which are, unfortunately, all too common in Government annual reports.
Almost all the responses to the consultation and to the Committee expressed the view that lighter inspection was appropriate, as long as it was intelligence-risk-based. Business certainly welcomes that, due to its perceived impact on productivity. Concerns have been voiced that we must be confident that a lighter touch does not lead to corner-cutting. Trade unions have expressed the view that there would be health and safety implications for some employees, so I should welcome reassurance from the Minister on that point.
Business will be relieved to learn that the Bill proposes the streamlining of business inspectorates. The significant reduction in their number from 29 to seven should enable inspectors to co-ordinate their work better and prevent repetitive visits, which are onerous on those being inspected. There will be a comparable reduction in the number of public service inspectorates from 11 to four.
Although the Committee and I wholeheartedly support most of the proposals in the Bill, there is a need to put in place additional safeguards. We need a shift back towards paying heed to the views of Parliament. The way forward would be to identify in the Bill legislation that would be off limits for the new fast-track process. We need several no-go areas beyond those that the Minister described as being of the highest importance. It should be possible to put in place a veto so that during the preliminary period of procedural consideration, it would be possible for either House of Parliament by resolution, or the appropriate Committee in either House that was charged with reporting on the order by recommendation, not only to vary the Minister's recommendation for procedure on a given draft order, but to determine that the part 1 procedure should not apply at all. If such a determination were made, no further draft order to the same effect, albeit perhaps tweaked a little, should be laid within two years of the determination date. If we were to adopt such a procedure, we would need to examine the role and powers of the responsible Committee following a consideration of the Standing Orders. Has the Minister had any discussions with the Leader of the House about the implications of such a change?
The Regulatory Reform Committee also thought that serious consideration should be given in the House and Committee to the need to reinforce parliamentary procedures. Three proposals were put forward in the special report, but I shall not go through them now because they are comprehensively covered in the report. All I ask is that hon. Members consider them carefully and give their views to the Minister and members of the Standing Committee. It is the view of the Regulatory Reform Committee that none of the proposals would alter the Bill or extend the scrutiny period beyond that which the Cabinet Office states that it needs. I have no doubt that the hon. Members who are selected to serve on the Standing Committee—if the Bill is not considered by a Committee of the whole House—will want to consider carefully the Bill alongside the thoughts expressed in the Regulatory Reform Committee's special report. I look forward to not only the Minister's closing remarks, but his response to the report before the Bill is considered in Committee.
The Under-Secretary showed great courtesy to the House. I got the impression that he, like many hon. Members, has deep reservations about two aspects of our proceedings. I thought that he acknowledged that the Bill had considerable constitutional implications and he might well share the view that it should be considered on the Floor of the House so that the implications of part 1 can be properly exposed. I got the impression, as did the Select Committee, that he believed that the House should have the right of veto on any measure going through the accelerated procedure if it, or its Committees, thought that the matter was of considerable significance or controversy and thus should be dealt with in a more lengthy and suitable manner.
The fact that an Under-Secretary is handling the Bill, rather than a Cabinet Minister, is sad. The Government, through speeches made by the Prime Minister and other means, have said that they regard deregulation as central to their mission. The Under-Secretary himself opened his speech by telling us that the setting for the legislation was the pressing need for deregulation because too much bureaucracy and regulation was eroding the competitiveness and success of British commerce and industry. Is it thus not curious that we do not have someone of Cabinet seniority handling a central measure that is part of the Government's economic and wider social strategy? Although I pay full compliments to the Under-Secretary for handling our proceedings as he is, is it not worrying that no one with Cabinet rank and clout is available to solve such difficult problems? It is much easier for a senior Cabinet Minister to go to the Chief Whip or business managers and say, "There's trouble in the House. What we're trying to do is a bit extreme. I must have time on the Floor of the House to deal with these sensitive matters." It is much easier for a Cabinet Minister in a debate such as this one to say, "Of course the House must have a veto on these procedures for controversial and difficult issues, and I am happy to make that compromise today." The Under-Secretary has done his best with gestures and kind words, but he does not have that authority or power because the Prime Minister has not backed him and given him the job of Chancellor of the Duchy of Lancaster. We need a Chancellor of the Duchy of Lancaster to deal with the issues and sort them out. Today, we have before us an unfortunate set of examples of the sort of issues whose treatment requires that degree of seniority.
I shall not rehearse all the arguments that have been elegantly and well rehearsed by right hon. and hon. Members on both sides of the House about the so-called Henry VIII clauses in the Bill. I will, however, agree with those who say that Henry VIII is getting a very unfair press. I think that calling them Stalin clauses would sum them up better, but then I regard Henry VIII as one of England's first and leading Eurosceptics. After all, he brought back from Rome amazing powers to govern affairs in this country and proceeded in an entirely democratic way, with everything done through major legislation in the House of Commons, properly debated in the style of the day, and very good I am sure the debate was. I hold no brief for what he did to his wives and I do not hope to emulate him in that respect, but—
I accept your reproof in good spirit, Madam Deputy Speaker. Yes, I will.
The issue I wish to raise is not the powers in the Bill, although we need to reach a conclusion on that, but whether the Bill—as suitably amended, perhaps—will tackle the Government's underlying problem. Will it help the Government to deregulate—will it help them to deal with the many clogs in the arteries of business and commerce that the Prime Minister himself has identified? Many months have passed since the Prime Minister made a brilliant speech on deregulation, full of admirable sentiments and analysis—a speech that I would have been proud to have made. The Prime Minister has a big advantage over me in that he is the Prime Minister and he can do more than make speeches; he can actually implement measures. He can make change happen in the Government that he leads—when he is leading it, that is. Since that speech was made, however, we have seen nothing to back up the fine words.
The Prime Minister has told us that, for every new regulation introduced, one would be removed—a crude device that would allow the Government to introduce a big and expensive regulation while removing a cheap and ineffective one, but it would be better than nothing. What has happened since the Prime Minister opined? About 4,000 new regulations have been introduced and almost none has been struck off. It is not working. Since the Prime Minister made his speech in support of better and more sensitive regulation, we have seen no such development—there has been no abolition of quangos, no reduction in the intrusiveness of the regulators and no measures have been brought to the House for repeal.
The wide powers in the Regulatory Reform Act 2001 that we were told would be used to achieve that aim have not been so used. A mere 27 measures have been subjected to them and even the Under-Secretary was hard pressed to remember any of them or to claim that anything good had happened as a result. People outside are not saying, "Oh, I'm so grateful for the 2001 Act—my life has been transformed and great swathes of regulation that I used to have to slave under have been removed." Nothing memorable has happened.
The Under-Secretary made a promising start to his speech. He honestly stated that he had inherited the 2001 Act, which clearly has not been working well—we might be less flattering and say that it has not worked at all—and his analysis suggested that the 2001 Act lacked sufficient teeth, so he was introducing today a Bill with more teeth. The House pointed out two problems with his argument: first, the Bill does not actually state that the powers will be used for deregulation—they could be used for extra regulation—and, secondly, there are some democratic affronts in the proposals. His defence was interesting. He said that there were more protections in the Bill than there were in the 2001 Act. If that is the case, how can the Under-Secretary claim that the Bill will solve the problem of the 2001 Act which, he established, lacked teeth, was too democratic, too cautiously worded and did not allow Ministers to operate without parliamentary control and oversight? We should repeat the big question for the Treasury Bench in the hope that the Under-Secretary can provide an answer. If these new large powers are given to Ministers how will they be used in the next couple of years, and what is their programme? What do Ministers want to strike off the statute book, and what do they wish to amend or refine, using the powers that could not be done under the 2001 Act or by introducing straightforward primary legislation in the House?
The Under-Secretary was wrong to suggest that I bind my Front-Bench spokesmen and speak for them. As chairman of the policy review, I am not a member of the Front-Bench team and I am not governed by collective responsibility, but I believe that I speak for my right hon. and hon. Friends when I say that, if the Under-Secretary has a good list of things that he would like to repeal, we would be happy to expedite their passage through the House using the usual procedures. If he wished to introduce a deregulation Bill or a repeals Bill—I can see that my hon. Friends are excited by that prospect, for which we have been waiting for eight years—I am sure that we would expedite the passage of such measures. It would be possible with the agreement of the usual channels to introduce a Bill that would not need very much scrutiny at all because we would be happy with the measures that it contained. Such a Bill could then proceed using the correct procedures.
Whenever I make the case for deregulation, Labour Back Benchers and sometimes Ministers intervene to ask what specifically I would do, hoping that that is the knockout question. They know that when I was shadow Secretary of State for deregulation in the previous shadow Cabinet, I drew up a list of 53 items that we wish to deregulate, in primary legislation where necessary, including some very significant items indeed. I have sent them on several occasions to ministerial and regulatory offices—they never seem to remember them—and whenever I am asked what exactly I would deregulate, those proposals remain on the table. The list will not be the same at the next general election, as my right hon. and hon. Friends in the Front-Bench team will compile a list suitable for the circumstances of 2009 or 2010. It will probably be much longer, as many more things will have been put on to the statute book in the meantime by the Government that we will consider unnecessary or undesirable.
It is useful, however, to consider whether one or two things could be achieved by using proposals in the Bill or by using more direct means. First, only in the United Kingdom have we managed money-laundering regulations in such a cack-handed and clumsy way that people who want to deposit a couple of hundred pounds in a building society or a bank have to take their gas bill, their passport, their driving licence, and testimonials from their neighbours to prove that the money was not obtained illicitly. I cannot for the life of me understand how taking a gas bill to the bank proves that one's money was not obtained illicitly, but apparently it provides protection. I cannot understand how possession of a gas bill proves conclusively that someone lives at an address all the time or that they are an upright member of the community. I think that that should be established in different ways, and it would be better established by the appropriate authorities when there are grounds to suspect someone. That is a better method than making my constituents take all those ridiculous bits of paper to the bank. Often the bank manager or clerk knows exactly who the applicant is, but they still have to go through the rigmarole of asking for those bits of paper. Could that not be sorted out?
Why do we regulate venture capital at all? If we want a flourishing and dynamic economy, the venture capital industry is quite capable of carrying out its affairs business to business without any regulatory intervention. We should deregulate venture capital and take it out of the net.
Why do we need to regulate business to business transactions in financial services? We have a great City of London, but people tell me now that it is getting too regulated and quite a lot of the best innovation in the City of London now is available for markets outside Britain but not for the British marketplace, for the simple reason that there is too much regulatory hassle to go through to get the new idea agreed, and further elaborate restrictions on sale, offer and advertisement. Would it not be possible for Ministers to decide that we do not need to regulate business to business, professional to professional transactions in financial services, and exempt them from all the current regulatory hassle?
Why do we need regulation on data protection? This was not on the original list of 63 items that the official Opposition sponsored, but we have a clumsy system of data protection. It is one of the bigger burdens mentioned in the list referred to by my hon. Friend Mr. Heald in his opening remarks—over £5.5 billion of compliance, and I do not see that it necessarily offers the protection that the Government have in mind.
When one looks at the impact of regulation, one often finds that it does not protect the data against abuse by criminals and potential criminals and it does not necessarily inform the public, but it represents a very large burden indeed. How many times have hon. Members tried to use data protection and freedom of information to find out legitimate things from the Government only to find that, under existing legislation, there are ways to block that legitimate inquiry and stifle one's appetite for information? Data protection certainly needs a haircut, even if the Government do not want to go as far as reducing it entirely. It seems a disproportionately expensive and complex machine for a rather limited goal.
If we look at EU regulations, we see marvellous examples of the legislative pen working overtime. It is one of the great pities of both the Brussels government machine and of the British government machine that they are so inefficient at doing all the things a Government ought to be doing, apart from legislating, where they seem to be highly productive and capable of churning out large amounts of regulation and law.
Built into the EU system is the idea of the presidency. The new country assuming the presidency of the Community for six months is always told by astute officials in Brussels that its presidency will be judged by how much new regulation it manages to get on the statute book. Each one is given a suitable challenge, sometimes pandering to its inclinations, so the British presidency would be told that some measure was market-opening and a French presidency would be told that a measure was market-closing, and they would be encouraged to go about the business of trying to get it through. Sometimes the Commission has an even better sense of humour, as in the case of the last British presidency, where it set them ridiculous things to do, like giving away the British rebate, and—surprise, surprise—the British Government fell for it. One could not make it up.
The idea of the presidency is used to make sure there is more regulation than we need. The British Government are always telling us they are leaders in Europe, so why can they not find a way of saying to colleague members of the European Union that maybe we have enough European law now, or that if we want a little more European law, perhaps we should take some off first, to make room for it?
Is my right hon. Friend aware that the Joint Committee on Statutory Instruments recently reviewed European legislation and found that many European directives were so badly drafted that, if it had been domestic legislation, it would have been rejected and sent back to the Department? The Government must impose penalties as required by EU legislation, but the instruments are often so badly drafted that business does not know whether it has complied.
My hon. Friend has put his finger on an important problem. I remember when I was a Minister cursed with the task of transposing such directives into national law. On one occasion, I was so frustrated by what I thought was the over-regulatory nature of our draft—it was something like a 100-page draft to implement a 10-page directive—that I said, "Let's just implement the directive as it stands, because it is clearly less onerous than the civil service draft we have come up with. I then received extremely strong and pompous legal advice—I suppose that I am not meant to reveal this, so I shall call it non-legal advice—the burden of which was that it was wrong to make the directive the law in Britain, because it was so badly drafted that we could face infraction proceedings. It was apparently seen to be the task of British civil servants to try to make good law out of bad and to ensure that it fitted into our British legal codes.
Does my right hon. Friend agree that one problem is that, once European law is implemented in a member state, there is not a proper process for reporting back to Europe—the Commission and the Council of Ministers—that the regulation does not work on the ground, that it is appallingly badly thought through and that it needs reform? Does he have any thoughts on how the process might become more two way?
That is where British leadership could come in. We should try to persuade like-minded member states and in due course the Commission that the European Union needs a way of death for bad legislation, just as surely as it has an effective way of birth for new legislation. It would be better if we paused for reflection and had a year with no new legislation in the EU, other than perhaps amendments to existing EU regulations where they are not working. A period of reflection would create more space and allow the removal of some of the unnecessary burdens.
The Under-Secretary began the debate by saying that the problem is not hugely serious, because Britain is still high up the competitiveness league. As my hon. Friend the Member for North-East Hertfordshire pointed out, we have slipped from fourth to 13th in less than a decade since this Government came to power. Ministers should be very worried about that—in some rankings, we are down at No. 22. I do not want my country to settle for being 13th or 22nd, because if one is 13th or 22nd, one does not even get on the list of locations when people decide where to put a new car plant or steelworks. There is a lot of chunky, footloose investment around the world, of which Britain used to get more than its fair share because it was more competitive than other countries. Over the coming months and years, Britain's share will fade, because we have slipped too far down the competitiveness league. The subject of today's debate—too many clumsily enforced regulations—is one reason why we have slipped down the competitiveness league, and we need legislation to tackle that important issue.
The Bill is silent on tax regulations. We need a method of reforming our tax codes and reducing the burden of some of our taxes, which would contribute to restoring competitiveness. The famous IR35 was an attack on self-employed people, particularly in the computer industry, and it did a lot of damage: some people gave up, while others were driven offshore. Why have the Government not done something about that decision, which should be reversed? If the Bill is not amended, it cannot be used to achieve that result, because it does not involve tax.
Why have the Government not done something about the deferment of national insurance? If my constituents have more than one employment and if their situation has not changed, they must go through an elaborate administrative ritual every year of tabling information in order to get so-called deferment, whereas in practice they do not have to pay any extra national insurance if their main employment involves paying the full amount under the law as it stands. Why do they have to go through that complicated administrative ritual? That is a little example, and there are hundreds more throughout our tax codes.
The Conservative party would like to see substantial deregulation of local government, because there has been too much centralisation and too many burdens have been placed on it. We would love to see the fair value and comprehensive performance assessment regimes scrapped in their entirety. We have taken outside advice on the matter, which has told us that that would save £1 billion. That money could either be returned to council tax payers at a time when they are not getting good value for money and are paying too much or—this would be a choice for elected councillors—it could be ploughed into front-line services to strengthen any areas in which they are deficient. The Government could use the Bill as a vehicle to change the rules affecting local government.
Regulations bear down much more heavily on small businesses than on large businesses—naturally, because large businesses can afford the extra cost of compliance workers and specialists who can lobby Government to try to move regulation in the direction that they wish, and then to employ specialists to avoid the worst of the impact of the regulation when it is in place. Small businesses do not have that luxury. In a small business employing five or 10 people, the one or two people at the top do not have time to lobby Governments to try to move things in their direction; they scarcely have time to implement regulations fully and often have to spend a lot of money on expensive outside consultants to tell them what they mean and what they have to do to get up to speed. We heard the estimate—it was a good guess—that regulations effectively cost a small business five times as much as a big business because of the impact on its fragile cost structures and stretched management resources.
We should institute a review of all the small business exemptions with a view to levelling them up so that more businesses can be taken out of the scope of many of these regulations. We will then have more small businesses and more jobs, with all the associated benefits.
The issues before the House are straightforward. I get the feeling that there is agreement across the parties, and on the Treasury Bench, that we need to deregulate because there are too many unnecessary regulations, and that while some may be desirable, the costs are not proportionate to the beneficial consequences. I would add that many regulations achieve precisely the opposite of what they set out to achieve. If we had a system of review, as many Members would like, more of that would become obvious, and the case for removing or amending the harmful regulations would, in turn, be more obvious.
We would welcome a Bill that made it easier to cut the burdens and to repeal regulations that are having unfortunate consequences. This Bill, however, allows the Government to re-regulate without reference to the House in a way that is the opposite of deregulation. Given that Ministers have failed to provide clear examples of how they are going to use these powers, I fear that they will find among Labour Members, as well as elsewhere, that it is difficult to make the case for the Bill as it stands.
I have given a few ideas out of my list of 63—I will not bore the House with the whole list, but Ministers have it—of regulations that could be stripped out to the benefit of this country's economy, leading to the creation of more jobs, an improvement of our competitive position, and a lightening of the burden on many individuals who are frustrated by heavy-handed and excessive regulation.
Will Ministers listen and come up with a practical programme? Will they understand that grandstanding with these rather crude bits of legislation is not the same as running a deregulation programme? Can we soon have a Cabinet Minister who means business and cuts through the jungle?
I am honoured to follow my right hon. Friend Mr. Redwood, who has spoken about deregulation in some depth. The Bill has two significances—the regulatory significance and the parliamentary constitutional significance. Dr. Wright said he hoped for a Queen's Speech that contained no regulation. If he had looked at last year's speech, he would see something far from that—it committed the Government to promoting efficiency, productivity and value for money, but also said that legislation would be introduced to streamline regulatory structures. That phrase should concern us all.
When I made my maiden speech in this House, I mentioned the need for a bonfire of regulations, so it was with unbridled joy that I found myself put on to the Select Committee on Regulatory Reform, assuming it to be a Committee where we would discuss, among other things, deregulation. At my first meeting in July, Members can imagine my disappointment when I was told by the Chairman that we were allowed only to look at anything enacted by the Regulatory Reform Act 2001 and that deregulation was not part of our remit. My initial hopes were immediately dashed.
We must be pretty cautious about the confidence that we can have in this Bill. Can we have more confidence in the Bill than in the Regulatory Reform Act 2001, which clearly failed to stem the tide of regulation that has become a Government hallmark? The Bill's intention may be laudable, but it must be accompanied by a step change in the Administration's culture and attitude. We need a determined effort to shake off the Government's tendency to interfere, regulate and inspect every element of business activity. I acknowledge the need for protection, but it must be balanced by the need for deregulation.
The Government set up a Better Regulation Task Force, a Better Regulation Executive and a Better Regulation Commission. They have as gargantuan an appetite for creating quangos as for creating regulation, but do they have an appetite for deregulation? The Bill may or may not be a step in the right direction, but does it take that radical step away from the regulation culture and provide for the deregulation that British business needs?
Concerns about part 1 have already been expressed and I want to mention briefly my exchanges with the Under-Secretary in the Regulatory Reform Committee. Part 1 contains enabling powers for Ministers, by order, to reform legislation or implement the Law Commission's recommendations. No one would argue with the Bill's stated ambition to improve the current regulatory reform order system or to deliver non-controversial proposals for simplification. It is implicit that simplification might lead to substantive changes.
When the Under-Secretary gave evidence to the Select Committee, he used the example of data sharing between Departments. Although not specified, there is an implication of additional powers to amend primary legislation, not deregulation. In the past, Acts have included gateway provisions so that information and data sharing could be done in a way approved by Parliament. Why, therefore, should we should extend the regulatory reform orders procedure in the circumstances that we are considering? The answer lies in the point that Alison Seabeck made—it revolves around the definition of "controversial".
When the Under-Secretary gave evidence to the Select Committee, he mentioned safeguards. Does the Bill include anything that allows us to distinguish between common sense and controversial? In the Select Committee, he discussed not only "controversial" but "highly controversial" as well as "common sense". I made the point that one man's definition of controversial or even highly controversial is another man's definition of common sense. I want to ensure that the distinction is capable of assessment, tightly drawn and in the Bill.
Clause 2 states that orders can amend, replace or repeal any legislation. The explanatory notes state:
"'Replace' means that legislation may be repealed by an order made under clause 1 and may be replaced by free-standing provision in the order."
That is clear, if somewhat worrying. However, in evidence to the Select Committee, the Under-Secretary said something different. He stated:
"This Bill would intend to create a relatively quick method of simplifying, restating or correcting errors."
"Restate" and "replace" are not the same. "Restate" implies powers to clarify legislation; it does not necessarily mean altering the substance. The explanatory notes imply one thing, but the evidence given elsewhere suggests that the Under-Secretary intended another.
We all understand the Government's wish to correct errors and omissions, but there is a worry that the Bill may lead to more poor quality legislation without proper scrutiny. There seems to be little in the Bill to protect us from that. Clause 2 will widen that scope and go a long way towards giving Ministers the general power to repeal and amend primary legislation. Like many other hon. Members, I want the Minister to reassure us that there will be a distinction between restatement and replacement, and that the tests that set out the confines of his ministerial power will in the Bill and will have substantial effect.
I questioned the Minister in some depth in the Select Committee about the effects of clauses 13, 14, 15 and 16, and particularly about whether the 60-days provision was really necessary. He said that the Government had consulted with business and that 60 days might not be proportionate for considering all regulatory reform orders—RROs. I take his point, but I hope that he takes the point made at that time that the reason for the 60-day examination period was to give the House the chance to undertake proper parliamentary scrutiny of the orders. Not all the proposed procedures will allow that length of parliamentary scrutiny or, indeed, enough scrutiny at all. Many of the delays involved with RROs have nothing to do with the Committee or the parliamentary scrutiny stages. They are often caused by Departments being unable to go through the consultation stage with stakeholders beforehand or to marshal the information that is needed to go into the legislation. Indeed, the bulk of the delay is a result of those factors, rather than of the parliamentary scrutiny.
The Minister spoke earlier about the Hampton report. Part 1 of the Bill will allow the Government to push forward some of the recommendations in that report—including the subsuming of the 31 national regulators into about seven—where that is not already being done under separate legislation. I have some concerns about that. The reduction from 31 to seven will consolidate the bodies involved, but it might not necessarily involve deregulating or getting rid of regulation. I would like reassurance that that reduction will bring about a major sense of deregulation. Super-regulators are no better than small regulators—they can still mean more regulation and they certainly do not guarantee a light touch. The great danger is that they are less responsive and more unwieldy, and they certainly do not listen to the needs of an industry or a sector.
I hope that my hon. Friend will consider the case of the Financial Services Authority, which brought into it a number of different regulators. Far from offering a light touch and more efficiency, it grew into a massive empire that has caused many more problems for the vital financial services of this country.
My hon. Friend's intervention is rather timely. As some hon. Members will know, the financial services were my trade before I came to the House. There were two amusing things about the Financial Services Authority: it instituted a huge amount of extra legislation across the City, including money laundering legislation, and it failed to produce any protection for people making the biggest transaction of their lives, namely, taking out a mortgage. It instigated huge amounts of regulation of, and interference in, the business-to-business sector, but none at all to protect people undertaking their biggest financial transaction.
Part 1 of the Bill gives me major concern, so I hope that the Minister will tell us what safeguards he intends to incorporate into it. More importantly, I hope that he will use the Bill—after it has been heavily amended—to deregulate rather than to regulate.
I want to speak about part 1 and confine my remarks to the constitutional aspects of the Bill. This seems to me to be extraordinary legislation. It proposes changes to the legislative process that in any other country in Europe, and perhaps in the world, would require a constitutional amendment. That is one of the reasons that part 1 has to be taken on the Floor of the House.
Obviously, I welcome, as we all do, the Minister's assurances that his test of whether something is controversial or highly controversial, and the mechanism of the Committee veto, will offer extra safeguards, but the problems are clear with those two safeguards. There is at the moment no definition of "controversy" in the Bill and the Committee majority mechanism does not deal with the controversy point. It is possible for a matter to be highly controversial with only a minority of members. A Committee could easily decide in favour of taking the order through the procedure introduced by the Bill, even though the matter was highly controversial in other parts of the House. My hon. Friend Mr. Heath mentioned the fact that matters could be controversial for Back Benchers but not necessarily for the Front Benchers of the main parties. Therefore, as Alison Seabeck said, there needs to be some extra safeguards, including subject matter safeguards.
May I suggest one other possible mechanism: the mechanism of call-in, whereby a certain number of Members—any Members, perhaps 50 or 70—could call in a decision so that it could not go through the procedure laid down in the Bill, but had to go through full legislative scrutiny?I make that suggestion for another reason. One aspect of the Bill that seems quite disturbing is that it allows not just the addition of new crimes, with up to two years imprisonment or a level 5 fine, but it allows the Government to use the procedure to undertake structural change. Often, legislation does not regulate or add crimes, but sets up bodies and gives them powers. Among those bodies are, of course, local authorities. It strikes me that under the Bill as presently drafted, structural and functional reform of local government could be achieved without proper legislative scrutiny. Therefore, simply through using that mechanism, the balance of the constitution itself between local and central Government could be changed.
The Government will say, "Would that not be controversial?" That comes back to the point about the weakness of that test. Even the structure of the courts could be changed because they are no longer a matter of common law; they are a matter of statute. Any creature of statute, which technically includes any company, could be changed by these provisions.
Not common law companies, but almost any other body could be.
The Minister has dealt with questions about changes to the Terrorism Bill, bringing back the 90 days detention without trial and the rights of defendants being changed. He says that, obviously, those are highly controversial, and they are, but the questions remain not just about fundamental rights, but about the structure of the constitution itself, which the Bill appears to allow to be changed.
My view and that of, I think, many hon. Members is that one makes constitutional change not on the basis of the powers that one would want for oneself, but on the basis of the powers that one would want one's political opponents, indeed one's political enemies, to have. I am sure that on that basis the Bill should not proceed. The safeguards are very weak. Those in clause 3 are weak legally because they are expressed in a subjective way—it is a matter of the Minister being satisfied as to whether the various conditions have been fulfilled. In the view of many constitutional experts, that is not enough.
I mentioned in an intervention that many Law Commission matters are controversial and political, not just technical. I agree with the Minister, however, that it is a shame that a large number of Law Commission Bills and sensible and rational reform proposals still lie on the shelf. Perhaps the reason for that is that the Government have been overactive in bringing forward their own Bills. More importantly, recent Parliaments have not had many fifth years. Traditionally, Law Commission Bills were used to fill the fifth year of a Parliament when the Government had run out of things to pass laws about. I agree, however, that a better system is necessary to pass Law Commission Bills, but it is not necessary to combine that with a proposal in part 1 of the Bill that is a constitutional danger.
Many other Members have mentioned the fundamental objections, but I have one more point on the question of deliberation and discussion. My reaction against the Bill was mainly prompted by thinking about what the Government really believe about the value of discussion. The Bill achieves a reduction in discussion from that for full primary legislation to one of the procedures used for secondary legislation. As a new Member, it struck me that our function is more than just voting. One of our functions is to deliberate and discuss, and to influence the Government's thinking.
Dr. Wright was sceptical as to whether the way in which we do that now is the best way. That does not mean, however, that what we do now is lacking in value. I think that it has great value. I think that discussion is a fundamental part of democracy. The Government think so, too—I have sat through Report stages of Bills in which the Government have brought forward a great number of amendments, many of which refer back to discussion on Second Reading or in Committee. I have even witnessed my hon. Friend the Member for Somerton and Frome have an amendment accepted at Report stage of the Criminal Defence Service Bill. Therefore, discussion does matter, and it does work.
The procedure proposed in the Bill is one under which amendment is impossible. The proposals can be changed by the Government, but there is no procedure to amend a statutory instrument in the course of its discussion by Parliament. It therefore misses out on all the creative advantages of discussion—the Government do not always have all the answers or all the possible points of view; like we all do, they have a limited capacity to imagine what problems there might be.
As someone who, I think, holds the all-comers record, with 45 Back-Bench amendments accepted to a Government Bill on one occasion, let me remind the hon. Gentleman that the Minister said in his opening remarks that draft regulations would be put before the House. The hon. Gentleman is right that, unfortunately, statutory instruments are not amendable under our current procedures, but draft regulations could be discussed. Would he like to see, as I would, a provision for draft regulations to be put before the House in advance of being included in the Bill?
Indeed, that would be an improvement. Of course, the disadvantage with draft regulations is that to amend them, we must start again. Under certain scenarios, following the procedure under the Bill would be slower than passing primary legislation. Nevertheless, the hon. Gentleman is correct that such a procedure would be an improvement.
The Minister, in his opening remarks, said that one of the safeguards would be that there would be a lot of "consultation with stakeholders"—to use that horrible phrase. I do not think that that is enough. The difference between consultation and discussion and deliberation in the Chamber is that consultation does not include any element of challenge, of "back and forth". Consultation means that someone receives information without having to talk back to those who are being consulted, and is not normally challenged by them. That is the main advantage of discussion—it is creative and produces new proposals. There is a more fundamental advantage, however. Discussion and deliberation in public is part of democracy itself. The more public discussion there is, the more the Government are held to account.
The Government need reasons for their proposals that they can discuss in public—reasons that go beyond their own narrow interest. Rather than giving reasons that apply only to members of the governing party, they must give reasons in the House that are intended to persuade, and to attract support across the political spectrum. In fact, that is precisely what the Minister tried to do this afternoon. It was a very good example of how discussion in Parliament is in itself an important part of the democratic process. The embarrassment that Ministers sometimes feel when they do not have good reasons for their proposals—reasons that they can explain to others—is a constraint that favours the democratic ideal. Academics sometimes call the process the "civilising force of hypocrisy".
Part 1 of the Bill is entirely unsatisfactory. Like many other Members, I hope that radical amendments will be tabled in Committee and on Report. I should like at least to feel that there is some vestigial sense of the separation of powers—that there is a difference between Parliament and Ministers. I have winced on a couple of occasions when Secretaries of State at the Dispatch Box have answered questions by saying, in effect, "I will legislate". No, they will not legislate; we will legislate. I hope that that will remain the case in future, and that on Third Reading those of us who object to the Bill in its current form will be able to support it.
Who could possibly oppose a Bill that is intended to reduce unnecessary regulation? Who could possibly oppose a Bill that is intended to cut red tape for business, the public sector and voluntary organisations? In my constituency, I see the impact of over-regulation on small businesses and charities all the time. When we look at Britain as a whole, it is possible to see the damage that over-regulation does to us as a country and an economy.
As others have pointed out, we have slipped down the international league of competitiveness, from fourth place in 1997 to 13th in 2005. Superficially the Bill makes a great deal of sense, but behind the headlines it is not all that it seems. If it did what it says on the tin, I would support it wholeheartedly, but it does not, so I will not.
Part 1 enables Ministers to reform legislation or implement recommendations of the Law Commission by order. Law would, in effect, be made without reference to democratically elected parliamentarians. There would be a further extension of the power of a remote Executive and unaccountable national regulators. Merging regulators does not lead to less regulation. It was Max Weber who said as early as the 19th century that bureaucracy has an inherent tendency to expand. Bureaucracy tries to assume new powers, and to aggrandise itself. A merging of regulators could simply create new super-regulators, hungry for yet more power and more prone to regulate. I am concerned that part 1 will be a further step away from proper parliamentary scrutiny. It appears to empower the Executive, but in reality it will empower senior civil servants and those bureaucrats and regulators already beyond meaningful parliamentary accountability.
In the past 30 years, we have seen a steady erosion of representative parliamentary government. Behind the fac"ade of a functioning parliamentary democracy is an increasingly post-representative system of government. In almost every sphere—financial service regulation, food standards, environmental protection—it is remote quangos, not parliamentarians, that increasingly call the shots. Remote elites make the decisions; local people take the rap; no one is accountable; no one gets sacked: this is how we are governed today. I fear that this Bill is not so much anti-regulation as anti-democratic.
Speaking as someone who could be characterised as slightly sceptical about the European project, part 3 of the Bill leaves me somewhat suspicious. Not for the first time, measures are being introduced in the name of streamlining, but I fear that they may turn out to be a power-grab. European law is currently introduced into this country through regulation. This Bill could enable Brussels diktats to be brought in through schemes and rules. What does that mean? Yesterday in this House, one Member spoke about the European Union achieving the so-called Lisbon agenda. Remember that? It was about deregulating in order to make Europe competitive. Reference was made at the time to making Europe the most competitive economy in the world. That may seem absurd now. Easing EU institutions' ability to make our laws for us will only exacerbate the Euro-sclerosis afflicting that tired old continent. Easing such ability will only tie us closer to those worn-out EU economies; it will only place us more firmly in Europe's economic sarcophagus.
I welcome the Regulatory Reform Committee's acknowledgement that, far from being about deregulation and tidying up, this Bill
"has the potential to be the most constitutionally significant Bill that has been brought before Parliament for some years."
I welcome the recognition that the driving force behind it is the Cabinet Office and, perhaps, senior civil servants. It could become a bureaucrats' charter: it could allow them to avoid the messy and unpredictable business of having their measures scrutinised by the people's elected representatives. Yes, Minister, this Bill could be Sir Humphrey's dream come true. The Minister would be able to amend, repeal and replace primary and secondary legislation without reference to this House.
It was Walter Bagehot who said in the 19th century that the Crown had ceased to be part of what he called the efficient part of the constitution and had become the dignified part. By that, he meant that it had the trappings of power, but not the reality. My fear is that although this democratically elected Parliament has the trappings of power here in our ornate Chamber, real power is increasingly moving elsewhere. This Bill will only exacerbate that process.
This has been a very interesting debate and the value and weight of the contributions, from all parts of the House, has been significant. I hope that, as a result, the Minister has had a taste of where Members are coming from on this Bill. The ability to deliver more regulatory reforms quickly and efficiently should be good news for business. Given that more than 3,800 new regulations are created every year, British business needs some good news. According to the Cabinet Office, since 2001 27 regulatory reform orders have been made. As my hon. Friend Mr. Heald and my right hon. Friend Mr. Redwood said, this does not seem a particularly large number of RROs given their impact, nor given the thousands of regulations that have been created since then. Indeed, the Government anticipated that 60 RROs would be made when the original Bill was going through Parliament in 2001.
The Conservative party has argued consistently and strenuously for serious deregulatory policies, and we agree with the concerns expressed by the director general of the CBI, who said that British business had a £30-billion millstone around its neck. The burden of regulation was a subject expanded on strongly by my hon. Friends the Members for Christchurch (Mr. Chope) and for Harwich (Mr. Carswell). Mr. Heath, and even some Labour Back-Benchers, such as David Taylor, also recognised the size of the problem.
Productivity underpins strong economic performance and sustained increases in living standards. According to the Federation of Small Businesses, the people who run small businesses are forced to spend 200 per cent. longer on managing regulation—or up to 10 hours extra a week—under Labour.
We over-regulate at our peril. Dr. Wright took that further, and said that too much legislation can, by itself, lead to bad law and weak scrutiny of law.
Was my hon. Friend stunned, as I was, by the Minister's proposition that we could have 1 per cent. per annum more growth if we took deregulation seriously? That would amount to more than £10 billion extra being added to our national income, out of which an extra £4 billion could be devoted to public services. Would that not be good news?
The Hampton review found that there are some 63 national regulators, which perform at least 600,000 inspections and send 2.5 million forms to businesses each year. We over-regulate when we do not understand or trust business. The Conservative party believes that businesses and markets have responsibilities to staff, customers and to wider society. However, we also believe that we must trust business and business people enough to allow them to flourish and provide the growth and prosperity that our society depends on to protect and enhance our way of life.
I caution the hon. Gentleman about trusting business. By 2010, 10,000 people each year will die from asbestos-related diseases because some idiots—a lot of them members of the Conservative party—trusted business about the use of asbestos.
The intellectual paucity of that remark is such that I shall not even respond to it.
After much talk on deregulation, the Government must deliver, and companies must see that delivery and start to feel tangible benefits for their businesses and the economy. In his opening remarks, the Minister said that the Bill aims to deliver better regulation, but my right hon. Friend the Member for Wokingham was right to ask how it could do so when it contains nothing that relates directly to deregulation.
We remain concerned that the Bill does not do enough to reduce regulation or create the light-touch deregulatory culture in Whitehall that is so needed. In addition, we are worried about the constitutional problems that it raises. That concern was shared by many hon. Members, including Mr. Alan Williams and the hon. Members for Cannock Chase, for Plymouth, Devonport (Alison Seabeck), for Somerton and Frome and for Cambridge (David Howarth), as well as my hon. Friends the Members for Harwich and for Christchurch, and my right hon. Friend the Member for Wokingham. Indeed, the hon. Member for Cambridge went further and said that the importance of the constitutional issue was such that it should be reviewed and debated on the Floor of the House. We agree, and hope that the Government will make a positive response to that point.
Part 1 of the Bill supersedes the RRO provisions in the Regulatory Reform Act 2001, and gives the Government wide powers to reform legislation and implement recommendations from the Law Commissioners. According to the Regulatory Reform Committee's report published on
We should be aware of the recommendations of the Committee. In particular, it noted that as a matter of urgency the Cabinet Office should retrospectively assess the estimates, costs and benefits that have previously been submitted to the House for each regulatory reform order, with a view to establishing whether the estimated savings have been realised. Several hon. Members also noted that the breadth of powers granted could be used in areas that are politically sensitive, not least in relation to the use of criminal penalties. That is an issue that will have to be addressed carefully in Committee. The hon. Member for Somerton and Frome said that part 1 is unacceptable as it stands, and we agree.
Part 2 introduces statutory principles of good regulation which are to be used to inform a code of practice to which specified regulations must have regard. Although we welcome that, we have explained today the need to go much further to create the sort of light touch regulation business needs and to address the concerns that my hon. Friend the Member for Wimbledon expressed about super-regulators.
Part 3 relates to legislation emanating from the EU. We have said that we support the idea of making it easier for UK institutions to deal with EU legislation, but—as my right hon. Friend the Member for Wokingham and my hon. Friend the Member for Harwich asked—how will that actually work? As my hon. Friend the Member for North-East Hertfordshire asked, what are the rules and schemes for EU law referred to in the Bill? We need to know.
The Bill has a striking resemblance to parts of other Bills before this House and the other place. Those need to be looked at in context to highlight the growing constitutional trend away from primary legislation. The Company Law Reform Bill and the Government of Wales Bill both include a similar means of introducing orders through forms of delegated legislation. Part 31 of the Company Law Reform Bill is described in its explanatory notes as
"a new power to reform company law by means of a special form of secondary legislation."
It constitutes a significant change to legislation and was described by Lord Freeman on Second Reading in the other place as "a parliamentary outrage". He then quoted the recommendation of the Delegated Powers and Regulatory Reform Committee to strike out part 31. While those observations are in the context of the Company Law Reform Bill, they tackle many of the same questions of delegated legislation that arise in the Bill before us.
The procedure proposed in part 31 of the Company Law Reform Bill is similar, but not identical to that proposed for regulatory reform orders. The document to be laid before Parliament, for example, is broadly the equivalent of the statement that is to be laid under regulatory reform orders. Although there are procedural differences, part 31 orders are comparable to clause 16 super-affirmative resolution procedure regulatory reform orders. Is the Department for Trade and Industry not talking to the Cabinet Office? For instance, the Delegated Powers and Regulatory Reform Committee concluded that the existing regulatory reform order procedure is not suitable for large and controversial measures, such as those that may be the subject of part 31 orders. Will the Minister explain when it will be acceptable to use one or the other order? It is bizarre that the Government should introduce three similar but varying super-statutory instrument regimes at the same time. That could cause confusion and conflicting procedures. How does the Minister reconcile that? I would be grateful if he could write to me explaining the rationale behind that very important issue.
Despite the undeniable crossover between the three sets of orders that come from such legislation, we need significantly to increase accountability in any event, as the right hon. Member for Swansea, West said, so that the Bill can be used to control a huge increase in Executive power. That could include limiting the orders to deregulation matters and then to genuinely minor and uncontroversial matters, with veto provisions either in the Bill or perhaps in Standing Orders—we have yet to debate that—while recognising the complexities that were noted by my hon. Friend the Member for Wimbledon. It could also include increasing the period allowed for parliamentary consideration, or reducing the subjective ministerial aspect of decision making.
As the hon. Member for Cannock Chase said, those powers could include determining whether an order or primary legislation is appropriate in the first place, or whether to use a mandatory majority or unanimous votes in the relevant Select Committees of either or both Houses, as my hon. Friend Mr. Gauke suggested. They could include inserting retrospective scrutiny, as mentioned by the hon. Member for Somerton and Frome. To answer the questions on delivery, quite rightly posed by my right hon. Friend the Member for Wokingham, they could even include creating a body similar to the proposed company law and reporting commission to review law and conduct independent consultation and propose changes likely to be implemented by order. So there will be much to consider in Committee.
Although we acknowledge the Minister's hope to reduce unnecessary red tape and burdens on business, the public sector and voluntary organisations, we want assurances from the Government that that will happen with the Bill. Proper protections are needed in determining whether regulations are necessary in the circumstances, and we remain concerned about the breadth of the order-making powers that the Bill confers. It is vital to review how the Bill will work in practice, which is why we shall request that a sunset clause be inserted. The Bill is of major constitutional significance in changing the way that legislation is processed, taking the onus away from Parliament and directing it to Ministers and Whitehall, so it will be fully reviewed by us in Committee and reconsidered as a whole during its later stages.
With the leave of the House, Mr. Deputy Speaker, I shall respond to the debate and in doing so, it is quite proper to mention that we have had thoughtful contributions from a very large number of hon. Members, including my hon. Friend Alison Seabeck, Mr. Heath, my right hon. Friend Mr. Williams, my hon. Friend Dr. Wright, the hon. Members for Christchurch (Mr. Chope), for North-East Hertfordshire (Mr. Heald) and for Wimbledon (Stephen Hammond), Mr. Redwood, and the hon. Members for Cambridge (David Howarth), for Harwich (Mr. Carswell) and, of course, for Huntingdon (Mr. Djanogly).
In an interesting debate, we have heard about a captain from 1954, about a major, about Tarzan and repeatedly about Henry VIII, and we have heard from a Vulcan. I obviously apologise to the right hon. Member for Wokingham for referring to him as a Front Bencher, but I am surprised that the new Tory leader could not find a place in his Front-Bench team of 84 for him to serve. Understandably, we heard apologies on behalf of my hon. Friend Andrew Miller, the Chairman of the Select Committee on Regulatory Reform, who has had to attend the funeral of Mr. Fred Venables—a local community activist and citizen. Of course, the hon. Member for Somerton and Frome, who speaks for the Liberals, had to catch a train.
The hon. Member for Huntingdon said that business needs some good news. Of course, he is right. Of course, we cannot be complacent, but business has already had a lot of good news. The UK is the No. 1 destination for inward investment in the EU. Employment in the UK is 2.1 million higher than in 1997. The UK's gross domestic product has grown for more than 50 successive quarters. We have the lowest corporation tax, and small businesses are zero rated. Of course, that is a far cry from the 10 per cent. interest rate for four years and the 15 per cent. interest rate for a year, 3 million unemployed and 1,000 businesses going bust every year.
I hope that the hon. Gentleman will forgive me if I do not. I gave way for more than 20 minutes earlier, and I think that the House has almost heard enough from me this afternoon.
We have an ambitious agenda, because we cannot be complacent. We must continue to seek ways to boost UK competitiveness and free business and public services from unnecessary bureaucracy, and the simplification plans, the administrative burden reduction project and the Bill will go a long way towards doing so.
There are important protections in the Bill. I mentioned the six preconditions—more than in the 2001 Act—which are entirely right, because, as my hon. Friend the Member for Cannock Chase pointed out, there should be additional, more meaningful protection if we want to take more powers. The scrutiny process will be more exacting and there will be statutory consultation. A Minister will recommend the procedure, but it will be for the Committees of the House and another place to recommend alternative procedures or to exercise their right of veto.
We would expect delivery of the administrative burdens project. We have contacted and interviewed more than 200,000 businesses and voluntary organisations to determine how we can reduce their administrative burden. We would expect to have bolstered UK competitiveness and to have implemented simplification plans from all 21 Departments. That is how the Bill should be judged in the long term, if it receives a fair wind in this and the other place and is delivered to the statute book.
An additional protection when laying a draft order is that the Minister must submit an explanatory memorandum and the Regulatory Reform Committee and the Delegated Powers and Regulatory Reform Committee in the other place will make a case-by-case analysis of every proposed order.
I give the House clear undertakings, which I shall repeat in Committee, that the orders will not be used to implement highly controversial reforms. They will not be forced through in the face of opposition from the Committees, and the views of the Committees on what is appropriate for delivery by order will be final. Under the super-affirmative procedure, which, as I have said, Parliament has a right to require, the Committees will be able to recommend amendments to orders and the Minister will be able to lay a revised draft order reflecting those recommendations.
We anticipate discussion of that issue in the Standing Committee, on which my hon. Friend may be inclined to serve.
Business, the public and the voluntary sector rightly say loudly that we shall be judged by our actions in this place. Tonight, we shall be judged on our support for the Second Reading of a Bill that meets the more ambitious better regulation agenda, extends more power to Parliament to scrutinise and veto Government proposals and will enhance UK competitiveness and further support British business.
I commend the Bill to the House.
Question put and agreed to.
Bill accordingly read a Second time.