New Clause 1 - Annual report

Regulatory Reform Bill – in a Public Bill Committee at 11:00 am on 29 March 2001.

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`The Secretary of State for the Cabinet Office shall produce an Annual Report to Parliament every year setting out the operation of this Act and any other relevant regulatory or deregulatory matters during the previous year and describing the government's programme for the use of this Act for the forthcoming year.'.—[Mr Page.]

Brought up, and read the First time.

Photo of Mr Richard Page Mr Richard Page Conservative, South West Hertfordshire

I beg to move, That the clause be read a Second time.

Photo of Frank Cook Frank Cook Labour, Stockton North

With this it will be convenient to take the following: New clause 2—Expiry of this Act—

`(1) This Act will expire five years after the day on which it is passed unless in the fifth year the Secretary of State for the Cabinet Office by order made by statutory instrument provides for all of the provisions of this Act to continue in force for a further period of five years.

(2) No order shall be made under subsection (1) above unless a draft of the order, which shall be accompanied by a review of the operation of the Act over the previous five years, has been laid before and approved by a Resolution of each House of Parliament.

(3) Every further successive period of five years after the day on which it is passed this Act will expire unless a further order equivalent to that described in subsection (1) above, subject to subsection (2), is made.'.

New clause 3—Annual report

`.—A Minister of the Crown shall lay before both Houses of Parliament every 12 months from enactment of this Act a report on the operation of this Act, including a report on the operation of orders made under the Act, and any need for their amendment.'.

New clause 4—Review of orders—

`.—(1) Every order made under section 1 will include a provision for the Minister to present a report on the operation of the order in the fifth year after it has come into effect and for the order to cease to be in effect if there is a resolution to that effect by either House of Parliament within ninety days of that report being laid.

(2) In reckoning the period of ninety days referred to in subsection (1) above, no account shall be taken of any time during which Parliament is dissolved or prorogued or during which either House is adjourned for more than four days.

(3) The report described in subsection (1) above should include a review of the effectiveness of the order and of each of the matters set out in Section 6(2) above in comparison to the statements laid before Parliament when the order was first made.'.

Photo of Mr Richard Page Mr Richard Page Conservative, South West Hertfordshire

New clause 1—I am looking at the hon. Member for Weston-super-Mare as I say this—has many similarities with new clause 3, with which we have a great deal of sympathy. However, I must delicately put it to the hon. Gentleman that our new clause is more finely honed and polished than his own, and I am sure that members of the Committee will take that into account.

The new clause has two simple purposes. First, it would ensure that Parliament receives an annual report on the operation of the legislation and on other regulatory or deregulatory matters. Secondly, it would give Parliament advance notice of the measures that the Government intend to introduce under the legislation in the next 12 months. Ministers in both Houses have been explicit about their regulatory and deregulatory aims, laying most stress on the latter. Conservative Members say amen to that. We want to see deregulation introduced in an effective and continuous fashion. However, what kind of organisation relies on a three-year assessment? No business relies on looking to see how it is doing every three years—in fact, I know of many companies that rely on a monthly assessment. In suggesting an annual report, we are merely falling in line with accepted standard practice throughout the commercial world.

With regard to our own deregulation Bill—which was vehemently opposed by the Labour party in opposition—I freely admit that we made a serious mistake in providing that it could deal only with pre-1994 legislation. That meant that the Committee could fish only in that pond of regulation and could not go further forward. The date should have moved forward annually. That is another reason why we should ensure that we flag up problems that have been experienced and successes that have been recorded. The Government were pleased to indicate in appendix C to the explanatory notes that they are contemplating 51 potential regulatory reform orders. If hon. Members can be tempted with that type of information before the Bill reaches the statute book, why should the Government be coy about their future intentions?

Ministers have made considerable use of the opportunities offered by the Bill. They include preliminary consultation with interested parties and outside bodies, such as the Law Commission, the Scottish Law Commission and the National Assembly for Wales. Draft orders will be laid before Parliament so the effect of prospective proposals and burdens may be judged. Future benefits, costs and savings will be assessed along with changes to a Minister's original proposal. Obviously, there will be parliamentary scrutiny of such proposals by either House or their Committees. The regulatory impact unit in the Cabinet Office, which will be aided and abetted by the Small Business Service and the Better Regulation Task Force, will back up that process, and the Minister for the Cabinet Office lovingly described its work on 19 March when she moved the Bill on Second Reading.

The amendment raises a straightforward issue. The Government have told the House that they are happy to have the advance assessment of proposed reform orders scrutinised, which is fine. However, the actual record should be examined annually so that the two Houses and the country can see how orders work in practice and take a view on their effectiveness and/or their failings. We hope that there are no failings whatsoever, but one must be realistic. There will be weaknesses, the swift eradication of which would surely be in everyone's best interests, rather than waiting for three years.

New clause 1 is the logical corollary to clauses 5, 6 and 8. It would ensure that both Houses were aware of the Bill's impact on orders. Members here and in another place would be able to form their own view on whether the burden of regulation was falling or growing and whether changes must be undertaken. It would also allow outside organisations to compare their experience of regulation with Ministers' claims. Small and medium-sized businesses have a better idea of where the shoe pinches than the bureaucrats in Whitehall and town halls. We should give them a chance to make their views known and to comment as soon as possible. I am sure that the two Deregulation Committees would welcome an assessment, and although I understand that everything will proceed swimmingly in the first flush of deregulation, the Act, as it would then be, and the two Committees are in for a long haul. They should, therefore, have regular assessments to ensure that everything is being kept up to snuff.

Photo of Andrew Lansley Andrew Lansley Shadow Minister for the Cabinet Office and Policy Renewal

I am grateful for the opportunity to rise and support my hon. Friend. I should like to discuss new clauses 2 and 4, which are grouped with new clause 1.

New clause 2 is a matter of principle on our part. We want, wherever possible, to introduce into legislation that may have a regulatory effect a presumption in favour of what is in effect a sunset clause, which would cause the Act, as it would then be, to expire after a certain period unless it had been used for the purposes for which it was intended. New clause 2 allows for such a procedure after five years. If the Act had not had the intended beneficial effects, or if it had been used for a substantially re-regulatory or burdensome purpose, it would be our view that it must be dropped and new legislation drafted to achieve that purpose.

New clause 4 has a similar purpose, although it is not a sunset clause in the strictest sense because it would not cause each regulatory reform order introduced to expire after a certain period. We accept that that would be unduly burdensome for the House. If the orders were substantially deregulatory in effect, we would be creating a procedure that would tend to increase regulations automatically, unless we passed resolutions to the contrary. New clause 4 has a different structure, which asks for a report to be presented on the operation of orders. That would give rise to a procedure that would allow the disapplication of such orders, if the House so resolved it.

The British Chambers of Commerce, at which I note leaders of the three main political parties were present over the past few days, has published its business manifesto. It is relevant that under the section of the manifesto entitled, ``The Best Regulatory Environment'', the following prescription is included:

``The next government should make the criteria for sunsetting regulations explicit, and use sunsetting as a norm in all new regulations.''

The purpose of new clause 4 is to allow for that effect. If the impact of regulatory reform orders was regulatory rather than deregulatory, or in any way did not have the intended effect, we hope that the House would resolve against them and disapply them.

We have already discussed regulatory impact assessments and it is important to recognise that they are not a science, but an art—an art that the Government sometimes subjectively pursue. Such assessments under the Regulation of Investigatory Powers Act 2000 set out compliance costs of up to £20 million for part I and up to £20 million for part III. The total compliance cost of that Act could be £40 million. An independent report on the economic impact of the 2000 Act, prepared for the British Chambers of Commerce in June 2000, made it clear that direct costs—not including opportunity costs—would be £640 million over five years. The estimated overall cost was more than £1 billion a year by 2002. The report examined the competitiveness implications and, astonishingly, found that by 2005 Britain could be losing £11 billion worth of business a year. It, therefore, regarded the opportunity costs as enormous. The regulatory impact assessment offered by the Home Office with the Bill and the economic impact which is assessed independently are different in orders of magnitude and are ample illustration of how the implications of the Act will have to be re-examined. We are committed to such an examination after the election. If the implications of the Act are wholly different from the basis on which it was enacted, we would review it and hope that there was a procedure to disapply it. That is the aim of new clause 4.

Photo of Mr Brian Cotter Mr Brian Cotter Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson 11:15, 29 March 2001

I rise to speak to new clauses 1 and 3. I accept that the hon. Member for South-West Hertfordshire has introduced quite a good new clause. I would give it nine out of 10. He would get 10 out of 10 for getting to the point; he did pretty well. I do not want him to go away feeling full of himself, but he waxes very well and, on this occasion, briefly and to the point. However, he did not cover every issue. I support new clauses 1 and 3.

The hon. Gentleman suffers from one major disadvantage, as do his hon. Friends: a lack of representation of Conservative members on the Deregulation Committee. He will not know that we discussed reports and expressed the wish to have annual reports instead of three-year reports, as proposed by the Government.

I hope that the Minister will take on board my next comment. We hope that the new Deregulation Committee to be set up in the new Parliament will carry forward our suggestion for an annual report and do what the Government should be doing. If the new Committee agrees to that, I hope that the Government will listen to what is being said.

On the other two new clauses, there is merit in the argument of the hon. Member for South Cambridgeshire. We support sunset clauses in principle and I hope that the Minister will respond to his comments.

Photo of Graham Stringer Graham Stringer Parliamentary Secretary (Cabinet Office)

I want to repeat what my noble and learned Friend Lord Falconer said in the other place: the Government are committed to a review of the working of the Deregulation and Contracting Out Act 1994 and its constitutional implications after three years. That is a reasonable period. The procedures have been used under the 1994 Act, but the power in the Bill is wider. It will become clear whether the Government's commitment and our expectations, as well as those of the Committee, are borne out in procedural terms and whether there are constitutional implications. Three years is an appropriate period to obtain a perspective. One year is too short because the provisions may still be bedding down.

On the general issue of sunsetting, the Government's position is clear. We shall consider whether regulations should be sunsetted case by case. There is a balance to be drawn because sunsetting will create uncertainty in an Act of Parliament. Business may feel uncertainty when the provisions come up for review, and the Departments and business will feel uncertain about whether there will be any use for the Bill when it is enacted in nine months.

When considering any regulation, it is right to consider sunsetting. The Football (Offences and Disorder) Bill was a good example. New and unusual powers were provided and it was agreed that they should be reviewed and sunsetted after a specific period. However, the arguments, which the Government accepted, must be balanced against uncertainty. Business wants certainty and stability and to know what will happen, which is why we are not keen on blanket sunset provisions throughout the legislative framework, or in the Bill.

The other issues raised include how the regulatory reform orders will be reviewed, as opposed to the process and constitutional issues. We debated that earlier. We believe that the structure of a panel for regulatory accountability chaired by my right hon. Friend the Minister of State for the Cabinet Office.

Photo of Frank Cook Frank Cook Labour, Stockton North

Order. If I feel sure that our business can be concluded, I am empowered by Standing Orders to extend the sitting by 15 minutes. I have been given that confidence, so our sitting will be extended to 11.40 am, but woe betide any hon. Member who gives me reason to regret that confidence.

Photo of Graham Stringer Graham Stringer Parliamentary Secretary (Cabinet Office)

That is helpful, Mr. Cook. I was about to sit down.

On Tuesday, we discussed the processes and procedures that the Government had put in place. The Minister for the Cabinet Officer chairs the panel for regulatory accountability and each Department has a Minister responsible for regulatory reform. We believe that that is a better process than that envisaged in the new clauses. The Government are committed to reviewing legislation and future programmes. I ask the hon. Member for South-West Hertfordshire to withdraw the new clause.

Photo of Mr Richard Page Mr Richard Page Conservative, South West Hertfordshire

I thank the Minister for his response, but it hurts me to say that he has muddled a review and a report. It is right that processes should be reviewed, but an annual report keeps matters up to speed. I understand what Lord Falconer said about a three-year review. That is fine because we do not expect the whole process to be churned up and changed after a year, but it would be helpful to see how matters progress year by year. I shall not press the new clause to a vote, but I shall return to the matter on Report.

On the sunset clauses, I have been empowered by my hon. Friend the Member for South Cambridgeshire--he has given me a metaphorical tick in the box--to say that we welcome the Minister's agreement to consider the sunset clauses on a case-by-case basis. That is better than in the past. However, I am concerned that there is no presumption by the Government that that should be automatic. We are discussing the enthusiasm to introduce sunset clauses rather than introducing them in specific circumstances. There is a fundamental difference of approach between the Opposition and the Government on sunset clauses and we shall return to the matter on Report.

Photo of Mr Brian Cotter Mr Brian Cotter Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson

I still want to make a point on new clause 3. I hope that the Government will listen to the new Committee that will be formed--

Photo of Graham Stringer Graham Stringer Parliamentary Secretary (Cabinet Office)

I apologise to the hon. Gentleman for not dealing with that point. Of course, the Government take seriously the comments of the Deregulation Committee and will respond accordingly.

Photo of Mr Richard Page Mr Richard Page Conservative, South West Hertfordshire

I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

Question proposed, That the Chairman do report the Bill, as amended, to the House.

Photo of Graham Stringer Graham Stringer Parliamentary Secretary (Cabinet Office) 11:30, 29 March 2001

May I take this opportunity, on behalf of my hon. Friends, and I am sure, Opposition Members, to thank you, Mr. Cook, for the tolerant way in which you have chaired the Committee's proceedings. Our debates have sometimes been arcane, difficult and complicated. I never thought that I would spend half an hour of my life debating whether it was necessary to include the word ``necessary'' in a Bill. During the day and a half that we have been in Committee, our exchanges have been good- humoured, thoughtful and intelligent. I suspect that there has been less difference between members on both sides of the Committee than some may have thought when we started.

Photo of Andrew Lansley Andrew Lansley Shadow Minister for the Cabinet Office and Policy Renewal

I echo the Minister's thanks to you, Mr. Cook, for the good-humoured fashion in which you have presided over our proceedings. Our debates have been good-humoured and constructive. The flash of steel at the beginning probably helped in that context.

As the Minister said, not much divides us. The point of principle that was raised on Second Reading, which we brought briefly into the Committee's proceedings, continues to divide us. However, in the context of the principle to which the House agreed on Second Reading, we tried as best we could to be constructive in trying to improve the Bill. I do not share the Minister's view that the Bill is perfect. We have illustrated that one could ask many questions and make many judgments that led one to arrive at a different conclusion. We may come to those on Report.

We have had a constructive, positive and interesting debate, and I hope that it will be recognised as such outside the House. All members of the Committee can thank you for that, Mr. Cook, as well as congratulating ourselves a little on the speed with which we have concluded our proceedings.

Photo of Mr Brian Cotter Mr Brian Cotter Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson

I, too, thank you, Mr. Cook, for your excellent and outstanding chairmanship, under which the Committee proceeded constructively. I do not say that on the basis of your potential chairmanship of future Committees—it is genuinely meant.

I thank the Clerk's Department and the other officials for all the work that they have put in, which we appreciate.

Photo of Frank Cook Frank Cook Labour, Stockton North

I simply register my gratitude for the co-operation displayed by all members of the Committee. I hope that there is no validity in the view expressed by one of our number, who described some of our exchanges in the manner in which people from Spain describe their national sport: un punto aqu—, un punto alla, y en medio muchasimo toro—which, as we all know, means a point here, a point there, and in between an awful lot of bull.

Question put and agreed to.

Bill, as amended, to be reported.

Committee rose at twenty-seven minutes to Twelve o'clock.