Clause 1 - Purpose

Legislative and Regulatory Reform Bill – in a Public Bill Committee at 11:00 am on 28 February 2006.

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Photo of Oliver Heald Oliver Heald Shadow Secretary of State (Justice), Shadow Secretary of State 11:00, 28 February 2006

I beg to move amendment No. 20, in clause 1, page 1, line 7, after ‘legislation’, insert

‘for

(i)the removal or reduction of any burden,

(ii)the re-enacting of provision having the effect of imposing any burden, in cases where the burden is proportionate to the benefit which is expected to result from the re-enactment,

(iii)the making of new provision having the effect of imposing a burden which—

(a)affects any person in the carrying on of the activity, but

(b)is proportionate to the benefit which is expected to result from its creation, and

(iv)the removal of inconsistencies and anomalies.’.

Photo of Nicholas Winterton Nicholas Winterton Conservative, Macclesfield

With this it will be convenient to discuss the following:

Amendment No. 29, in clause 1, page 1, line 9, leave out ‘with or’.

New clause 1—Annual report to Parliament about section 1 orders—

‘A Minister of the Crown shall annually lay a report before Parliament detailing, for each government department that made an order under section 1 in that year—

(a)what burdens have been removed,

(b)what burdens have been simplified,

(c)what burdens have been imposed, and

(d)what has been the impact of each order.’.

New clause 4—Definition of ‘burden’—

‘In this Act “burden” includes—

(a)a restriction, requirement or condition (including one requiring the payment of fees or preventing the incurring of expenditure) or any sanction (whether criminal or otherwise) for failure to observe a restriction or to comply with a requirement or condition,

(b)any limit on the statutory powers of any person (including a limit preventing the charging of fees or the incurring of expenditure), and

(c)any matter which in the opinion of a Minister of the Crown causes inconvenience or imposes cost.’.

New clause 5—Small business—

‘(1)An order made under section 1 must, where its application extends to small businesses, make specific provision to reduce the regulatory impact on small businesses where appropriate.

(2)In this section, the meaning of “small business” is the same as in section 249 of the Companies Act 1985.’.

Photo of Oliver Heald Oliver Heald Shadow Secretary of State (Justice), Shadow Secretary of State

I agree with the hon. Member for Cambridge about providing adequate safeguards; it is right to look at the purpose of reforms of the law. This first group of amendments, tabled by my hon. Friends the Members for Christchurch and for Forest of Dean and me, is about focusing the order-making power on deregulation, and, for Law Commission Bills, restricting the power to Bills that have been drafted in a particular form, and not allowing the Government to expand them into other areas.

It may help if I explain that new clause 2 and new schedule 1 deal with the second limb, restricting the Government’s order-making power by subject matter. We may reach that point this afternoon. The procedural way of tackling it—a veto to stop inappropriate measures being taken through the order-making power—is dealt with in new clause 3. On the overall question of whether such order-making   powers should be allowed to continue for ever, we suggest in new clause 6 a sunset provision that would limit it to five years. Amendment No. 33 to clause 2, which we may reach later today and which was tabled by my hon. Friend the Member for Christchurch, would not allow sub-delegation.

There is a measure of agreement between the official Opposition and the Liberal Democrats about the way in which we should be looking at these particular issues. I note that some starred amendments focus on the same basic structure.

I start with amendment No. 20 and new clause 4. Amendment No. 20 is designed to focus the order-making power on the removal or reduction of burdens, and the other references to burdens in the Regulatory Reform Act 2001. If the amendment were to be accepted, subsection (1) would read as follows:

“A Minister of the Crown may by order make provision for either or both of the following purposes—

(a) reforming legislation for

(i) the removal and reduction of any burden, followed by other provisions in the amendment, which are taken from the 2001 Act. To put it in common parlance, it would focus on reforms of the law that have a deregulatory effect.

New clause 4 defines burden more widely than the 2001 Act, because the consultation exercise that took place after the review of that Act made it clear that its definition of burden was too restrictive. We have gone with that logic. Yes, we should remove burdens but we should also widen the ambit of the word to include the inconvenience and the administrative costs that can be imposed on businesses as a result of regulation. New clause 4 and amendment No. 20 go together.

Photo of David Howarth David Howarth Shadow Minister, Office of the Deputy Prime Minister

The hon. Gentleman is proposing an amendment similar to one that I would propose, except that it seems to offer one extraordinary olive branch to the Government: the restriction in the 2001 Act to do with burdens on Ministers of the Crown does not seem to be present. Will he address that point?

Photo of Oliver Heald Oliver Heald Shadow Secretary of State (Justice), Shadow Secretary of State

That is a very fair point. The point made during the consultation exercise was that there are burdens on Departments that could be lifted in a worthwhile way, but if the hon. Gentleman said to me, “Look, we could make common cause on this if we don’t give the Government the benefit of this chance to remove burdens on Departments,” then I would certainly be prepared to talk. As the Bill progresses, perhaps on Report, we might be able to reach agreement on that.

I think that the hon. Gentleman would agree that there will be great advantages if we can focus on removing burdens and making the Bill genuinely deregulatory. During the review process after the 2001 Act and the consultation that took place on that Bill, the Government consulted on continuing with a deregulatory, burdens-removing prong to the legislation. It is extraordinary that they should have consulted on that basis and then produced in the Bill a wide-ranging order-making power that could be used to change any law in any way. I think that we might be able to make common cause on that point.

Amendment No. 20 sets out our principle that Ministers may possess and use powers to make orders for specified purposes in a way that curtails the right of debate that the House traditionally has, but only if the orders are deregulatory. The first time that we gave such order-making powers, in the mid-1990s, it was specifically on the basis of deregulation. In 2001, such powers were again given on the basis that they would be used for better regulation. It was always limited; the House gave up its power to scrutinise a Bill in the normal way only on the basis that it would be possible to help business and improve British competitiveness as a result.

Now the Government are taking liberties in a very real sense, because they are saying, “Instead of this having to do anything to do with deregulation, we will just be able to change any law we like in any way we like, unless it is what we describe as ‘highly controversial’.” When we ask the Minister what is highly controversial, he refers to the most serious matters that one could imagine: terrorism and Parliament itself. He is leaving a massive area open to orders under the Bill—not just palimony or the sort of point that I made about tenants’ rights, but literally anything below the very high threshold that he has set. He must give us some safeguards and pull that threshold down a bit if he wants the Bill to become law.

The extraordinary thing is that although the Bill says nothing about deregulation, all the ministerial spin is along those lines. When the Bill was mooted in the Loyal Address following the general election in May last year, all the talk was about cutting regulation. The Financial Times reported that the Government planned to

“slash the estimated £100 bn cost of regulation on business” with the Bill. But when it was published it contained nothing about deregulation, which they have abandoned in favour of very wide powers. Amendment No. 20 is a desirable change that would limit the power under part 1 to the removal or reduction of a burden, re-enacting a provision that imposes a burden in a proportionate way, creating a new burden proportionate to the resulting benefit or removing inconsistencies and anomalies—a similar approach to that in the 2001 Act.

The difference is, however, that new clause 4 seeks to work in conjunction with amendment No. 20 to impose a specific deregulatory focus that is a bit wider than the one allowed for by the 2001 Act. My new clause draws a relatively wide definition, which includes

“a restriction, requirement or condition ... or any sanction”.

It would also allow Ministers to say that, in particular cases, they believe that a measure would remove an inconvenience or something that imposes a cost.

I believe that it is right to widen the definition in that way. If the Minister wants to say to me, “Look, it has been widened a bit too far”, or, “We would like a different form of wording for what a burden should be”, we would be happy to discuss that. The Bill should be about removing burdens, not just any change to the   law that the Government want. We have tried to make our new definition of “burden” as wide and flexible as possible. I believe that those proposals are sensible amendments to an important aspect of the Bill.

New clause 1, which stands in my name, aims to inject a shot of transparency into the Bill. It follows on from the second recommendation of the Regulatory Reform Committee’s report on the Bill:

“We reaffirm the recommendation of our predecessor Committee that Departments should be assessed on their progress in removing unnecessary regulations and controls and not simply on their progress in simplifying measures. We recommend accordingly.”

We all agree on transparency. To allow the greatest possible visibility for a process encourages good government and sound decision making. To allow provisions to be made behind closed doors in Whitehall would have potentially the opposite effect. Deregulation and better regulation are important matters, and the Government have set them out in agendas of great importance. We think that we need to shine the light of scrutiny into the dark recesses of ministerial decision making.

The new clause would require an annual report to Parliament that would set out what each Department has done to remove, simplify and impose burdens, and the impact of each of those orders. At the moment, we have regulatory impact assessments before orders are made, and the Government always make great claims that they are going to transform regulation in particular areas with particular orders. Great claims are made, but nothing is ever done to audit those claims. One has a suspicion that things do not change as much as one might have hoped when reading the regulatory impact assessment. The provision in new clause 1 means that there would be an annual report that would set out the actual impact of those so-called deregulatory changes.

The Regulatory Reform Committee suggested that one of the key reasons why regulatory reform orders, which were introduced in 2001, have been far from successful is a lack of political will in Whitehall. I was struck by what the Minister said when he gave evidence to the Procedure Committee. He made the point that often a Minister or civil servant who is a deregulator does not get promoted—often it is the opposite—and that to lead a Bill team and to make law is seen as more prestigious than to remove law.

New clause 1 will allow for an annual report, in which Departments can take credit for their deregulatory achievements and show the impact of their changes. We are hoping that that will bring a little change of culture—in fact a major change of culture—because that is what is needed. Creating new regulations and legislation should not always be preferable to tidying up existing laws and scrapping obsolete or disproportionate burdens. I hope that the new clause might help to bring about such a culture change.

New clause 5 tries to help small business by requiring the impact on it to be taken into particular account:

“An order made under section 1 must, where its application extends to small businesses, make specific provision to reduce the regulatory impact on small businesses where appropriate.”

A plethora of exemptions are made for small business in different provisions—everything from square footage to the number of employees. However, it would be helpful if Government took a more structured approach to helping small business, and new clause 5 provides a mechanism whereby Ministers must consider the interests of small business every time that they want to make an order under part 1. The new clause aims to ensure that small business, which is the key driver of our economy, can continue to thrive and further boost the economy in a light-touch regulatory environment, rather than always being considered in exactly the same way as large business.

The other amendment in the group was tabled by my hon. Friend the Member for Christchurch, and I shall leave him to explain what he proposes; I have alluded to it already, and we greatly support it.

Photo of Alison Seabeck Alison Seabeck Labour, Plymouth, Devonport 11:15, 28 February 2006

I apologise for standing late and for raising an issue that relates to clause 4, but I am new to the Committee and my brain is working slowly.

The list of burdens does not mention health and safety-related issues and the potential impact on employers or employees. I should welcome comments on why that appears to have been omitted, or whether the hon. Gentleman’s list is so loose that it could include health and safety, perversely, as a perceived burden.

Photo of Oliver Heald Oliver Heald Shadow Secretary of State (Justice), Shadow Secretary of State

The definition of “burden” is very wide, so if a requirement for protection in health and safety legislation is being implemented in a particularly bureaucratic or heavy-handed way, the definition could cover it. The hon. Lady should not think that there is anything sinister in the new clause’s definition, however, because proposed subsections (a) and (b) are exactly the same as in the Regulatory Reform Act 2001. The Government have agreed to those requirements.

Proposed subsection (c) adds

“any matter which in the opinion of a Minister of the Crown causes inconvenience or imposes cost.”

That is designed to deal with cases where the administrative burden on business is not a duty but the simple fact of the regulation’s existence. That was pointed out by business during consultation and accepted by the Government as a particular problem. The new clause widens the definition, but the hon. Lady need not worry. It is exactly the same format as the previous legislation, with the addition of the ability to tackle administrative burdens.

Photo of David Howarth David Howarth Shadow Minister, Office of the Deputy Prime Minister

Perhaps the hon. Gentleman might consider giving the hon. Lady the answer that his new clause is a restriction on the powers in the Bill. The drafting of the Bill at the moment would allow the Government to remove by order the whole of this country’s health and safety legislation.

Photo of Oliver Heald Oliver Heald Shadow Secretary of State (Justice), Shadow Secretary of State

The hon. Gentleman is exactly right. That is the concern that the TUC expressed in the quotation I gave earlier from Sarah Veale, who is in charge of such matters. It is clever to have achieved a Bill that is equally alarming to the TUC and to employers, once they understand the detail of it.

As the hon. Gentleman and the hon. Member for Plymouth, Devonport (Alison Seabeck) recognise, all the health and safety legislation in the country could be removed just like that, but at the same time, all sorts of new rights and duties on business could be introduced in the same way. The EU charter of fundamental rights includes a whole raft of social rights that are not in force at the moment in this country and which could be introduced through the back door using the proposed procedure. That could be done at a stroke.

The hon. Gentleman is absolutely right. I am trying to restrict the ambit of what the Government could do under the Bill so that they would be limited to removing burdens on business. My hon. Friend the Member for Christchurch has a proposal which would tighten up on what could happen regarding the Law Commission.

Photo of Nicholas Winterton Nicholas Winterton Conservative, Macclesfield

May I say that I should like to call those who are directly involved with an amendment—particularly a lead amendment—before other Members intervene?

Photo of Christopher Chope Christopher Chope Conservative, Christchurch

Thank you, Sir Nicholas, and I shall follow that by referring to amendment No. 29 in my name.

Like so many of the other amendments that the Committee is considering, amendment No. 29 is designed to rein back the power that is given to the Government under the Bill. In essence, it would enable Law Commission recommendations to be implemented in full, but not in part or with amendments. I have tabled another amendment that would remove the whole issue of allowing the Law Commission to make amendments to legislation, but amendment No. 29 is intended to make restrictions in the particular respect that I have mentioned.

If a piece of legislation is introduced, it should be open to everybody to consider whether it provides the right answer, whether it is adequate, and whether there should be recommendations, additions, deletions or modifications. The Bill says that if the Law Commission makes a recommendation, the Government will be able to implement it using the accelerated procedure. The recommendation might include a change in the common law from the way it has been for time immemorial, or any number of things.

The Government say that they do not believe the Law Commission to be Solomon embodied in a group of people largely appointed by the Executive. They say that the Law Commission may be right or wrong, and they want the power to second-guess its recommendations. If the Government have that power, why should everyone else not have it?

Photo of David Heath David Heath Shadow Leader of the House of Commons, Shadow Spokesperson (Cabinet Office)

A thought occurred to me while I was listening to the hon. Gentleman. We may need a definition of what comprises a recommendation from the Law Commission, because the Law Commission makes interim recommendations and then normally, in its final recommendation, it proposes a draft Bill. There is no such definition in the current proposals, and therefore the word recommendation could be interpreted in one or more ways.

Photo of Christopher Chope Christopher Chope Conservative, Christchurch

The hon. Gentleman is right. The explanatory notes say only that

“the power enables a Minister to implement a set of recommendations, in full or in part, and for the provision made by the order to depart from the recommendations.”

The hon. Gentleman makes the same point as we do. It is a power too far for the Government. One way of restricting that power slightly, as the amendment seeks to do, would be to say that if there is a non-controversial Law Commission recommendation and it is to be implemented in full, it can be made subject to the accelerated procedure. If, however, it is not accepted in full, by definition there must, in the Government’s eyes, be a defect. If there is a defect, how can we be sure that it is not something that is controversial or that needs discussion in a wider forum? If the Government have the power to amend Law Commission recommendations and then bring forward the ensuing legislation under the accelerated procedure, why cannot other interest groups or, to use that ghastly expression, other stakeholders? For this purpose that means everyone else who is a citizen of the United Kingdom. It is a short point that does not need to be laboured, but the Minister conceded during his discussions with the two Select Committees, to which I referred, that the powers being taken were unnecessarily wide. Accepting the amendment would demonstrate his willingness to listen to these concerns.

Amendment No. 20, in the name of my hon. Friend the Member for North-East Hertfordshire, goes to the heart of the issue before us. If the legislation is confined to legislation that would remove or reduce burdens there will not be much concern. But it is very concerning that despite having repeated the reference to burdens in the consultation document that led up to the Bill, that has now been quietly dropped. I do not think that it is an exaggeration to say that the British people are getting rather alarmed about this. I shall quote briefly from a letter from a constituent, who happens to be a justice of the peace and whose identity I will therefore not disclose for fear of reprisals. The letter reads:

“If this is allowed does this mean we become a republic, via the back door? I do not think that this Government should be allowed to do this without public debate. This government has said in their speeches that they will not use these powers, if that is so why put them in? Does this sound a bit like Germany in the 1930’s?

To write to you or anyone else is something I have never done before, so I hope you will understand just how strongly I feel about this, and I hope that you are inundated with letters on this subject.”

My constituent was taking up a point that was raised in one of our leading newspapers about the implications of the Bill. She had been reading, as I had, the editorial in the Daily Mail of 23 February, which states:

“For nearly nine years New Labour has behaved with autocratic arrogance, treated Parliament with contempt, politicised the civil service and emasculated the Second Chamber.

It chills the blood that this legislation gives them power to change laws at the stroke of a pen.

The Commons must have an absolute right of veto over any ministerial diktat—and that should be explicit in the Bill.”

I certainly support those sentiments. One of the reasons why people are getting so worked up is that the Bill excludes all reference to the precondition that the Bill should be used to remove burdens. Amendment No. 20 seeks to address that and I hope that we can hear quite soon from the Minister about it. His response will probably set the tone for the whole of our proceedings. If he says that he accepts that there is a lot of substance in that amendment we may be able to make some progress.

The sentiments expressed in new clause 1 are excellent, but it is rather narrow. The wording seems to envisage that once a Government Department has brought forward a measure under the provisions of this Bill, it would have to report only for that year; it would not have to report year after year on previous measures. The impact of deregulatory measures is often hard to assess in the first year. We need to satisfy those watching what we do here, so that they can see that measures implemented in the past are still delivering the deregulatory impact many years later.

If my hon. Friend the Member for North-East Hertfordshire looks at the detail of his new clause, he will see that the Government could interpret it as a reason for reporting of matters only for the year in which a Department implemented a piece of legislation. However, that is a small criticism compared with the substantial progress that is reflected in that provision.

Knowing that many others want to join the debate, I shall confine my remarks to that subject. In a sense, this debate will set the scene, and I hope that the Minister will respond in good spirit and in line with the way in which he responded to the Procedure Committee. If he can deliver, we will probably be more minded to accept that Government undertakings are worth something.

At the moment, the Bill depends on Government undertakings. As I said earlier, the Government undertaking that they would respond to the Select Committee in good time for our consideration was not met. If small undertakings like that are not met, how can we accept the very big undertakings that the Minister will need to give? We need some specific safeguards in the Bill, and amendment No. 20 goes some way towards achieving that.

Photo of David Howarth David Howarth Shadow Minister, Office of the Deputy Prime Minister 11:30, 28 February 2006

As I understand it, we are considering four separate matters. There is the matter of reinstating large parts of the definition of “burden”   used in the 2001 Act. We are discussing the “with or” question in amendment No. 29, which concerns the Law Commission. We are talking about the annual report on the lifting of burdens. Finally, we are talking about the special consideration that should be given to small business. I welcome all those amendments, although I have some small criticisms, but I particularly agree with amendment No. 29, to which I added my name.

Amendment No. 20 attempts to restrict the purposes for which the Bill can be used. We hope later to suggest other ways of doing that. For example, amendment No. 55 to clause 18 would amend the definition of reforming legislation. In the debate on the programme motion, I said that there are other ways of inserting safeguards—for example, restricting the scope of the Bill and changing procedures. However, attempts to change the purposes for which the Bill can be used are not incompatible with those other methods. Indeed, all methods might be necessary given what the hon. Member for Christchurch said about the need for safeguards to be included in the Bill rather than being given in ministerial promises.

The Government’s complaints about the way in which the 2001 Act works are, first, that the definition of “burden” referred solely to activities—a restricted and restrictive way of referring to the problem—and, secondly, that lifting burdens did not apply to lifting burdens from Ministers of the Crown or Government Departments. The hon. Member for North-East Hertfordshire will correct me if I am wrong, but I understand that amendment No. 20 attempts to deal with both problems without creating a universal power to undermine and change all legislation.

First, the amendment does not repeat that part of the definition of burden in the 2001 Act that refers to carrying on an activity. The amendment specifically omits those words. Secondly, the amendment does not repeat the restriction to be found in section (6)(b) of the 2001 Act about Ministers of the Crown and Government Departments. As I said in an intervention, I would keep the restriction on lifting burdens on Ministers, although I might take a different view of lifting burdens on Departments. I make that distinction because I fear that Ministers might treat burdens on Ministers of the Crown as including the need to bring primary legislation before the House and to go through the proper stages of bringing forward a Bill. That problem would not apply to burdens on a Government Department.

That small point aside, amendment No. 20 strikes me as an improvement to the Bill. It also deals with the separate problem that the Government raised in the consultation on the 2001 Act, which was that the Act did not include within the notion of burden a regulation or law that causes inconvenience or cost. That everyday notion of a burden was not there. I understand that the purpose of new clause 4(c) is to deal with that problem, so that the definition of a burden includes

“any matter which in the opinion of a Minister of the Crown causes inconvenience or imposes cost.”

That is a way of dealing with the specific problem raised by the Government in the consultation. The rest of new clause 4 simply reproduces the provisions of the 2001 Act.

I had a similar idea, which is on the Order Paper as a starred amendment. I prefer my version for two reasons: it is drafted objectively rather than subjectively and does not refer to the opinion of a Minister of the Crown, and it makes it clear that non-monetary costs should count, such as the time and effort involved in dealing with a regulation. I suppose that that could come within the notion of “inconvenience” in new clause 4.

Photo of Oliver Heald Oliver Heald Shadow Secretary of State (Justice), Shadow Secretary of State

I think that the hon. Gentleman would agree that I have made every possible concession to Ministers, in order to lure them into doing what they said they would do in the consultation before they changed their minds for some reason and went with this.

Photo of David Howarth David Howarth Shadow Minister, Office of the Deputy Prime Minister

Absolutely. The strategy of the amendment and the new clause—to take the Government at their word and deal with their objections to the 2001 Act—seems entirely right. The amendment goes a little too far in that direction for my taste, but I appreciate what is being tried. I hope that the Minister will accept the intention behind the amendments and new clauses, and that he will explain to the Committee why the Bill goes much further than the Government’s objections to the 2001 Act. Despite a slight difference of opinion over how it should be drafted, new clause 4 is an improvement to the Bill and should be supported.

Amendment No. 29, in the name of the hon. Member for Christchurch, would leave out the words “with or” in the phrase “with or without changes” in reference to using the procedure for passing Law Commission recommendations. I am rather more enthusiastic about this amendment; in fact I have added my name to it. It would remove a Minister’s power to change the law just because the Law Commission happens to have issued a report about that area of law.

I fully agree that there needs to be a better way of bringing Law Commission proposals through Parliament. The Standing Orders currently provide simply for a Second Reading Committee as a way of changing the ordinary procedure. I accept that there are many very good Law Commission proposals lying on the shelf for lack of parliamentary time. We might argue about how such proposals can be brought before Parliament while avoiding the possibility of politically controversial proposals being nodded through. As the hon. Members for Christchurch and for North-East Hertfordshire mentioned, Law Commission proposals come in different categories. Some are perfectly uncontroversial and are simply technical changes to tidy up the law, but others are very controversial indeed.

As I think I mentioned on Second Reading, when I was a legal academic I was consulted by the Law Commission on the law concerning burglars and the   extent to which they could sue their victims if they were injured during the course of a burglary. That strikes me as one those highly controversial and political issues that should not be nodded through Parliament with a statutory instrument.

The amendment does not stop that particular problem troubling us, but it does do something important. There is an important difference between what the Law Commission does and does not recommend, but the Bill draws no distinction between those two obviously different matters. As drafted, the Bill’s procedure could be used to force into Law Commission reports, with changes, any matter that the Government might want or need, which could then be proposed as an order.

I shall give a recent example of what might happen as a result. The Law Commission issued a report on evidence of bad character in criminal proceedings. The Government’s subsequent Bill on that matter, which became the Criminal Justice Act 2003, did the opposite to what the Law Commission recommended, which was a rationalisation of the law, but with no expectation that more bad character evidence would be available to juries. Instead, the Government introduced section 98 to the Criminal Justice Act, which vastly expanded the availability of such evidence. Along the way, they also abolished all the common law rules related to such evidence.

At the time, the Government had to do that by primary legislation, and it was a matter of some controversy. Under the current Bill, they could introduce such a measure by statutory instrument—it would be a Law Commission report, with changes. At least I imagine that that is the case. Defining what counts as a change, as opposed to an entirely different proposal, is a problem, and nothing in the Bill restricts what the Government can do to the scope of the original Law Commission report. Will the Minister clarify the situation?

The Law Commission, for example, issued a report on company security interests—its most recent report and draft Bill. Under the Bill before us, what sort of changes to that report could the Government make to introduce an order? Would it only be changes that might count as being within the scope of the draft Bill written by the Law Commission? If that is the case, the Government should move an amendment to say so. One of the problems with that is that the notion of the “scope of a Bill” is a parliamentary not a legal notion. That would have the effect of shifting into the outside legal world, a notion that until now has been confined to these precincts. Or is it the Government’s intention to allow any changes to the general topic of the report? That would mean for the company security interests Law Commission report, that any matter relating to company law could be inserted into the order as a change to that report. Or is the definition even wider than that so that any change would be allowed, including matters not covered by the Law Commission’s report at all?

To illustrate that point I have another example from the Law Commission’s recent work. The second most recent report is on forfeiture and the law of succession,   and principally on what happens in cases in which a wrongdoer, sometimes a murderer, stands to gain from an inheritance from the victim. Should that wrongdoer be excluded from inheritance? If so, should the wrongdoer’s heirs—for example, the murderer’s children—also be excluded? Could the Government use the procedure in the Bill based on the Law Commission’s report to change entirely the law of succession so that we could adopt, for example, the civil law attitude to succession, whereby testators have much less freedom and the law lays down more specifically what each relative should receive?

An even more extreme possibility is this: as the Law Commission’s report discusses the circumstances in which the property of dead people passes to the state, what would prevent the Government from including as a change, in the terms of the Bill, a rule that would pass all property to the state on the death of any person? The Minister might think that that would count as increasing a tax under clause 5, but I do not think that it would. It would simply be a confiscation. The Bill as drafted would allow that to happen by statutory instrument.

The Government might argue that any restriction on what they can do—

Photo of Mark Harper Mark Harper Shadow Minister (Defence) 11:45, 28 February 2006

One other point that the hon. Gentleman has not covered—he may be coming to it—is that presumably, nothing in the Bill as it is drafted would prevent the Government from doing something diametrically opposite to what the Law Commission recommended. Although it may have recommended specifically that something should not happen, the Government could make a change to do that very thing. That would drive a coach and horses through the principle of using the Law Commission in the first place.

Photo of David Howarth David Howarth Shadow Minister, Office of the Deputy Prime Minister

Yes, that is right. They could, plausibly, change the Law Commission’s recommendation—they could insert the word “not” or take it out. That would be a change.

Photo of Oliver Heald Oliver Heald Shadow Secretary of State (Justice), Shadow Secretary of State

Is it not right that even a change not diametrically opposed could be very controversial? For example, the Law Commission is doing a piece of work on cohabitation at the moment. It is reviewing the law governing opposite and same-sex cohabiting couples in clearly defined relationships, considering potential financial hardships suffered by cohabitants or their children on the termination of their relationship by separation or death. If the Law Commission recommends, for example, that some rights should accrue to couples who have lived together for 20 years, the Government could simply say that that applied to all cohabitants with no time restriction at all. One could end up in a situation where a measure that was sensible enough in a restricted way could affect people who had lived together for just a few weeks.

Photo of David Howarth David Howarth Shadow Minister, Office of the Deputy Prime Minister

Yes, indeed. To take possibly the most extreme example, in response to the person who wrote to the hon. Member for Christchurch: if the Law Commission issued a report on Crown proceedings or the royal prerogative, the Government could presumably, by way of changing that report, abolish the monarchy by statutory instrument. [Laughter.] Perhaps the Government do not think that that is controversial.

Photo of David Howarth David Howarth Shadow Minister, Office of the Deputy Prime Minister

That is right. The Government will presumably say that removing the words “with or” from the Bill will leave it inflexible. For example, what if they simply wanted to change the wording of a draft Bill in a minor way? Surely they should be allowed to do that. Perhaps that is what the Bill should say, but—

Photo of David Heath David Heath Shadow Leader of the House of Commons, Shadow Spokesperson (Cabinet Office)

We return to the point of definition and of what comprises a Law Commission recommendation. Are we dealing with the draft Bill that the Law Commission produces, or are we dealing with the recommendations that precede the draft Bill? If the Government wish to use that procedure, I expect them to adhere completely to the recommendations, although they may wish to make drafting amendments to the final Bill. However, that is not clear in the Bill. I recall the last instance when I had contact with Law Commission recommendations—in the area of culpable homicide. In that case it would have been quite possible to take some recommendations and leave out others, and entirely change the tenor of the Law Commission’s recommendations without changing a single word within those parts of the recommendations that were enacted.

Photo of David Howarth David Howarth Shadow Minister, Office of the Deputy Prime Minister

My hon. Friend raises an important point. The Bill is entirely unclear as to what a Law Commission recommendation is—whether it is one of the bold-type recommendations in the text of a Law Commission report, or the draft Bill itself. The Government need to decide which it is, and depending on their decision there are other amendments that could be tabled to clarify to what extent a change should be acceptable.

Another way of dealing with the same point concerning minor changes is, presumably, to ask the Law Commission to change its report and issue a new one. The whole point of giving Law Commission Bills a fair wind is that they are the result of expert advice, which is presumably why they are treated slightly differently under Standing Orders. If the Government cannot persuade the experts that the wording of the draft Bill is incorrect, that change is either bad or has nothing to do with the expertise of the Law Commission, and is a matter of politics. In either case, such a Law Commission Bill should not benefit from the accelerated procedure in the Bill that we are dealing with here.

Let me now turn briefly to new clauses 1 and 5. New clause 1 creates a duty whereby the Government must report annually to Parliament on the burdens that they   have removed or simplified and on the burdens that they have imposed, and on what the impact of each order has been.

New clause 1 contains a number of ironies. The main one is that the clause itself creates a legislative or regulatory burden for the Government of precisely the sort that the Bill would be allowed to remove by way of the truncated procedure. So we need some further amendments to save this new clause from its context, and there is also the point about the Minister of the Crown exemption which needs to be further considered.

The second irony in new clause 1 is that subsection (d) asks, in effect, for post-legislative scrutiny. That closely follows a line of argument now being actively pursued by the Law Commission, and the new clause is therefore interestingly self-referential. Nevertheless, in my view it is a useful addition to the Bill. It adds to the openness and transparency that are required in the use of the power, and I am glad to see the official Opposition being converted to this sort of mechanism, although I remind them that when I proposed a similar mechanism in the Council Tax (New Valuation Lists for England) Bill, in Committee, they voted against it. Luckily, that Bill is in the House of Lords, and when it comes back they may change their minds.

Finally, I come to new clause 5. Today we are talking mainly about constitutional aspects of the Bill, but the new clause brings us back to the economic aspect of the proposals. It is very important that the special position of small businesses be recognised. Regulations that seem, on their face, equally applicable to all businesses, can impact more severely on small businesses. The new clause rightly draws the attention of Ministers to that point and I hope that the Committee will agree to its incorporation.

Photo of Mark Harper Mark Harper Shadow Minister (Defence)

My hon. Friend the Member for Christchurch drew attention to the tremendous amount of public concern about the Bill at national level. At my own local level I had many phone calls and even delegations of constituents about it. That is why I was delighted to be able to accept the Minister’s generous invitation for me to serve on the Committee—and I am sure that he is pleased that I could.

Amendment No. 20 and new clause 4 go to the heart of the matter. One reason for there being so much regulation is that Ministers have over the years increasingly been able to make regulations by order, without having to use primary legislation. If the problem is that Ministers can make regulations without appropriate scrutiny by the House, the solution is not to give Ministers even more power to do so. It would be much more sensible to restrict the power of Ministers to make orders on all sorts of matters; we would have much less legislation as a result, which would solve some of the problems. I welcome amendment No. 20 because it limits the scope of the Bill specifically to those things that reduce burdens.

The other thing that occurs to me—the hon. Member for Cambridge touched on it—is that “reforming” needs to be defined. Indeed, the hon. Gentleman has tabled an amendment to that effect. The word is a new Labour word that carries all sorts of positive, warm connotations. It is intended to sound as if all reform is marvellous, but it can be used for all manner of things and can cover up all sorts of eventualities, many of which people would consider negative and bad, and not at all reforming. It is an unsuitable word. It should alert us to the Government’s intentions. It is sensible that the scope of that word should be limited.

It is also worth looking at new clause 1. My hon. Friends spoke about impact assessments. One thing that has struck me since becoming a Member is that although the House always considers what might happen once legislation is passed, far too little time is spent considering its impact. Although I welcome the new clause, it would be better to force Ministers to consider how legislation is working every year, and not only for one year, because what may be perfectly acceptable now might become a burden as a result of changes in the economy or in the nature of business. The new clause is hugely welcome and will help in its own small way to change the culture of government. Ministers will have to consider the effect of legislation rather than focusing on the constant culture of newness.

New clause 5 focuses on small business, which is important, and I support it. Having worked for both for a large and a small business, I know that legislation and regulations that restrict what businesses can do bear much more heavily on small businesses. The owner-manager is effectively the only person able to deal with employment regulation and a gamut of other legislative burdens. A business with five people—an owner-manager and four employees—does not have a personnel department or a department looking after health and safety. It is all has to be done by one individual. Having talked to many such people, I know that that job is often done at 11 o’clock at night, once the day’s work has been done.

Every incremental burden on small businesses reduces the time for the owner-manager to do the essential economic activity. Although there is a cost for larger businesses, it can be assumed much more easily within a specialist department. New clause 5 is helpful. Forcing Ministers to think about small business every time they change the regulatory burden would be a helpful counterweight to the fact that they can easily spend most of their time talking to business leaders and those running large companies. The new clause may help change that culture and remind Ministers that small businesses, much more than larger ones, are the engine of economic and employment growth.

Finally, on amendment No. 29, the hon. Member for Cambridge referred to the Law Commission having come up with many sensible recommendations for uncontroversial changes which, because of a lack of parliamentary time, ended up sitting on shelves never having been passed. That goes to the heart of the   big culture problem in government. My hon. Friend the Member for North-East Hertfordshire referred to it: government is all about passing more laws and more legislation, and never about looking at those that have already been introduced. We did that when we were in power, and this Government do it even more.

The amendment would help change that culture. Good government is less government and fewer but better and more carefully considered laws. When laws are shown not to be working, proposed changes from the Law Commission and others must be enacted, not left on a shelf. I welcome at least the title of the findings of the Better Regulation Task Force—if that is not an oxymoron. In its report, it used that subject, saying that when reducing burdens and improving outcomes, less is more.

Photo of Oliver Heald Oliver Heald Shadow Secretary of State (Justice), Shadow Secretary of State 12:00, 28 February 2006

Does my hon. Friend accept that our party has been in favour of post-legislative scrutiny and sunset and renewal clauses for some years? For example, when I was shadow Leader of the House, I made a speech to the Hansard Society about such matters, and they were in our manifesto.

Photo of Mark Harper Mark Harper Shadow Minister (Defence)

I thank my hon. Friend for that well made point. It is an area in which the House could do a much better job. Amendment No. 29 and the other clauses and amendments that we have tabled would go some way towards doing that. I urge the Minister to take them seriously.

Photo of Jim Murphy Jim Murphy Parliamentary Under-Secretary (Cabinet Office)

I have enjoyed the debate thus far. I was delighted when, after a little delay, we got on to the eight sessions of the Committee that the Opposition asked for through the usual channels. It is important to put that on record in respect of the assertion of the hon. Member for Christchurch.

Several general points have been made about safeguards, and there have been all sorts of suggestions about what the Bill could or could not be used for. Some are genuinely felt, some are for debating purposes and some are lifted directly from The Mail on Sunday. In respect of the powers in the Bill, I put on record again the safeguards that I previously mentioned at the relevant Select Committee sittings. There are six safeguards, which is more than there were in the 2001 Act, and they are all applied more comprehensively than in that Act.

To overcome some of the concerns that hon. Members have expressed genuinely, there is the idea in the Bill of strong parliamentary scrutiny, a strong and absolute commitment to statutory public consultation from those interested parties, a ministerial commitment not to seek to do anything that is highly controversial, to which the hon. Member for North-East Hertfordshire alluded earlier, and a commitment not to progress with proposals, whether Law Commission proposals or others, in the face of opposition from the relevant Select Committee in either the Commons or another place. We are seeking ways to enhance what is already in the 2001 Act.

Notwithstanding all those important safeguards, and those that build on the 2001 Act, as I said at the outset, the Bill addresses the weaknesses in the Act. It will lift unnecessary and outdated regulations and administrative burdens on business, the voluntary sector and public services, so that we have the first-class public services in which we all believe. We have different perspectives on how to get there—there is a very strong difference between us—but we all aspire to world-class public services, and the Bill will help to deliver them. It will also maintain the UK’s competitiveness in a global economy and in the face of the challenges from emerging economies that we all know about and wrestle with. We have had more than 50 quarters of economic growth in the UK, and the Bill will help to maintain that. That is the context of the Bill and our motivation for introducing it, having learned the lessons of the 2001 Act.

Let me turn to the specific points raised by Opposition Members—they were all hon. Gentlemen. On new clause 1, of course I support the notion that the Government should constantly look to see how well reforms are working. I have mentioned repeatedly in evidence to the Select Committees that it is a weakness across the body of government, as it has been across different Governments throughout time, that there is analysis of predicted outcomes and impacts but not enough effort goes into assessing actual impacts. That is about leadership and the culture across government. It is also partly about—I say this gently—the culture of the House of Commons, in which we have set-piece debates and set-piece battles. We have those, we have the vote and we move on.

We face a collective challenge to ensure that attention remains focused on orders and legislation, and so on, after the event, so that we can genuinely analyse across government and in the Commons whether the predicted delivery of simplification or other impacts has happened. In the Cabinet Office, we are seeking ways in which that can be done. We need a much greater focus on post-legislative impacts to see whether predicted savings and impacts were delivered, and that work continues.

Having said that, it would not be useful to add the new clause to the Bill, and there are indeed many good reasons for resisting it. As I have said, all Departments should keep their legislation under review. That is why the Government set up the panel for regulatory accountability and why there are regulatory reform Ministers in each of the main regulatory Departments. The Better Regulation Commission focuses on them all. Departments are reviewing their regulations and drafting simplification plans, which include measures to reduce administrative burdens on business. Those will be published in time for the 2006 pre-Budget report. The Better Regulation Commission will review the simplification plans that Departments and some independent regulators are preparing. Its review will occur while the plans are in final draft form and before they go for clearance by the panel for regulatory accountability. That body is chaired by my right hon. Friend the Prime Minister.

Photo of Christopher Chope Christopher Chope Conservative, Christchurch

The Minister said that he does not believe that this safeguard should be placed in the Bill. Does he believe that any additional safeguards should be placed in the Bill?

Photo of Jim Murphy Jim Murphy Parliamentary Under-Secretary (Cabinet Office)

You would rightly chastise me, Sir Nicholas, if I wandered on to any safeguards that might come up under other clauses or parts of the Bill, but I have indicated to the hon. Gentleman and others that the Government are minded to offer specific reassurances to the Committee or on Report. Sadly for the hon. Gentleman, that does not come up in this debate, but I have previously gone on record—on Second Reading—specifically about further reassurances that can be provided to the House. However, in the provision of those reassurances, there is no intention whatever to reinvent the 2001 Act or to confine the powers of the Bill to being a pale imitation of that Act. The 2001 Act simply could not deliver, did not deliver and will not deliver our better regulation agenda, which is much more ambitious than the ideas of any previous Government.

Photo of David Howarth David Howarth Shadow Minister, Office of the Deputy Prime Minister

How does the Minister respond to the point that amendment No. 20 responds specifically to the points that the Government made about the inadequacies of the 2001 Act, and does so without granting to Ministers the extraordinary powers under clause 1?

Photo of Jim Murphy Jim Murphy Parliamentary Under-Secretary (Cabinet Office) 12:15, 28 February 2006

I shall come to some of the points about burdens later. However, during the consultation there were suggestions from the Law Commission, the Better Regulation Task Force and our own policy work that the way in which the 2001 Act identified burdens was not fit for purpose. This wider definition is the appropriate way to deliver our better regulation agenda. That came specifically out of the consultation.

I return to the comments about new clause 1. Government Departments already have to report annually. Departments are required to revise annually the plans that I mentioned and, as part of that, they will include details of any simplifications delivered, including in respect of orders made the previous year.

Photo of Oliver Heald Oliver Heald Shadow Secretary of State (Justice), Shadow Secretary of State

Does the Minister understand our concern that all too often, great claims are made that a particular order will have a particular impact, but there is no real audit of whether it was successful? It would be good for Whitehall and the Government if there were such an audit.

If a regulatory impact assessment says that there will be some great improvement and it turns out that there is not, should that not be reported? Equally, if an improvement turns out better than expected, the Government could take the plaudits. The suspicion is that great claims are made but nothing is achieved.

Photo of Jim Murphy Jim Murphy Parliamentary Under-Secretary (Cabinet Office)

The hon. Gentleman is right in part, but I am not sure that he listened fully to what I said in direct response to the hon. Member for Forest of Dean, who I am delighted to see on the Committee; I am delighted that he took up my prompt to serve on it.

I have already said—today, on Second Reading, I believe, and certainly in evidence to the relevant Select Committees—that Whitehall, the Government, all Governments of all political parties and politicians generally need to focus on the actual impacts of proposals, and that there should be a greater degree of retrospective analysis of impacts genuinely delivered. I do not seek to make a political point; what I have said has been the case with the previous Government, with this Government and within Government Departments.

I suggest gently—again, this is not a political point—that it is also the case for the Opposition. On Opposition days in the Chamber, for example, they could focus on the actual impact of an order; that would help the general culture across Whitehall and that of all politicians of all parties in respect of looking retrospectively at the benefits delivered by an order.

I agree with the general point made by the hon. Member for North-East Hertfordshire, but on the understanding that the issue has affected Governments throughout the ages.

Photo of Andrew Love Andrew Love Labour, Edmonton

As a member of the Regulatory Reform Committee in the previous Parliament, I can say that we discussed the culture of Whitehall on a number of occasions. Although I would not wish to press this amendment, there is a general point about how we change the culture to ensure that deregulation is as big or a bigger priority than currently. I hope that the Minister will take that on board and be able on Report to satisfy Parliament that it is being given some priority in this Bill.

Photo of Jim Murphy Jim Murphy Parliamentary Under-Secretary (Cabinet Office)

My hon. Friend has experience, having served on the Regulatory Reform Committee. I am delighted to see him in his place today, although I am not sure that he is. Nevertheless, it is good that he continues to maintain that interest.

The amendment is not necessary because Departments are already required to report annually on simplification plans and the orders delivered the previous year. Departments are also obliged to report on their better regulation work as part of their annual reports, as they have done for the past two years. Having that in the annual reports is about ensuring that it is not simply a distinct piece of work unconnected to the wider work of the Department. If it is to be a core part of Departments’ annual reports, that embeds the work and the culture of better regulation in the Departments.

We would also expect departmental Select Committees to report on these annual reports as appropriate. That is an important piece of work for the relevant Select Committees. The Regulatory Reform Committee, which has a new expanded remit, will take interest in both the reports and the departmental simplification plans. While I agree that we should always be open to reviewing orders, as I have said on a number of occasions in Select Committee and today, it would be unnecessarily prescriptive and, indeed, pointless in some instances to put this provision in the Bill. The work is already happening and is beginning to deliver. As hon. Members will be aware, one of the   Bill’s main aims is to provide a power to remove unnecessary burdens. Therefore, to include one would be contrary to the spirit and the purpose of this Bill, as I am sure Opposition Members would agree.

New clause 4 and amendment No. 20 were again tabled by the hon. Member for North-East Hertfordshire. Their purpose, taken together, is to narrow significantly the breadth of the power in clause 1 to a power to amend burdensome legislation and to implement Law Commission recommendations. I appreciate that it is important that the power should only be used appropriately, but I do not think that these proposals will create an effective tool to deliver better regulation. In particular, I doubt that the power that the proposals would produce would be able to deliver mergers of regulators, as proposed by Philip Hampton, or the delivery of the simplification measures, which are not limited simply to the reduction of burdens.

Respondents to the consultation supported the delivery of simplification and mergers through the powers in the Bill. New clause 4 and amendment No. 20 would create an order-making power that moves back in the direction of the 2001 Act, although, I accept, not exactly so.

These proposals would recreate some of the technical restrictions that limited the 2001 Act powers. For instance, the two-year rule, which prevented orders from reforming legislation created or substantially amended within the last two years, and the inability to remove burdens which only affect Ministers and Departments, would no longer exist.

Photo of David Howarth David Howarth Shadow Minister, Office of the Deputy Prime Minister

I was puzzled by the Minister’s reference to simplification measures. Surely such a measure would come under new clause 4(c) as a

“matter which in the opinion of a Minister of the Crown causes inconvenience or imposes cost.”.

Presumably, an area of law that is too complicated causes inconvenience.

Photo of Jim Murphy Jim Murphy Parliamentary Under-Secretary (Cabinet Office)

Of course, we will debate that when we reach the appropriate point. The general sense is that the simplification proposals to which I am alluding are the ones being prepared now by Departments in time for the pre-Budget report 2006. That is the context in which I mentioned simplification proposals. We can discuss the specifics when we get to new clause 4.

The 2001 Act general restriction to the reforming of legislation that imposes burdens affecting persons in the carrying on of an activity would be lifted, but new burdens could be created only where they affect someone in the carrying on of an activity. That means that new burdens could not be created affecting persons in a passive capacity or when they are carrying out one-off actions.

Both the Regulatory Reform Committee and the Delegated Powers and Regulatory Reform Committee in another place have indicated that they consider that the reference to activity does not fulfil any useful purpose. It is unclear what the extended definition of   burdens in new clause 4, which incorporates “inconvenience” or the imposition of cost, would amount to.

Amendment No. 20 and new clause 4 maintain some of the most problematic aspects of the 2001 Act, as detailed in the “Review of the Regulatory Reform Act 2001”. The concept of burdens in the 2001 Act is technical and difficult to analyse and apply. The Delegated Powers and Regulatory Reform Committee in another place, in relation to the draft Regulatory Reform (Prison Officers) (Industrial Action) Order 2004, stated:

“The complexity of this debate is evidence of a difficulty we have observed on previous occasions in applying the 2001 Act tests and, in particular, determining what may constitute a new or re-enacted burden.”

Amendment No. 20 and new clause 4 would create a narrow, technically defined power that is, again, complex to use. Departments would have to carry out a large amount of analysis to ascertain whether each provision within an order was removing, reducing, re-enacting or creating a new burden. For small proposals, that analysis involves a disproportionate amount of effort.

Photo of Christopher Chope Christopher Chope Conservative, Christchurch

The Minister keeps referring back to the 2001 legislation, but may I refer him back to his own consultation document of July 2005 in which the issue of burdens was specifically included as being a desirable safeguard? Why have the Government now removed that from the Bill?

Photo of Jim Murphy Jim Murphy Parliamentary Under-Secretary (Cabinet Office)

I believe that I dealt with that point when I responded to the hon. Member for Cambridge. During the consultation the comment was made by the Law Commission and others that the description in the 2001 Act and the way in which the consultation was framed was not ambitious enough and would not deliver the better regulation agenda. Again that was because of the technical definition of burden.

Photo of David Howarth David Howarth Shadow Minister, Office of the Deputy Prime Minister

It comes back to the point about new clause 4(c) and the complications that the Minister alleges face Government Departments. The various branches of the definition of burden are in practice in the alternative. So a Department has to find only one of the branches that applies. Surely if new clause 4(c) applies—it has been drafted here in subjective terms:

“any matter which in the opinion of a Minister of the Crown causes inconvenience or imposes cost”— that authorisation would be there. That does not seem too complicated for most civil servants of my acquaintance.

Photo of Jim Murphy Jim Murphy Parliamentary Under-Secretary (Cabinet Office)

I will address that point in just a moment.

The Government have committed themselves to one of the most radical regulatory reform packages anywhere in the world. It is time for the Government to deliver on the better regulation agenda and that is what the Bill sets out to do. We do not intend to recreate a technical definition of burdens, which does not deliver on that agenda and which, as my hon. Friend the Member for Edmonton (Mr. Love) pointed out, does not enable the delivery of a changing culture   across Whitehall, across local government and across the body politic. The ambitious agenda is again curtailed by a tightly drawn definition of burden. We think that the definition of burden in the Bill at present allows us to deliver on that agenda.

Photo of Oliver Heald Oliver Heald Shadow Secretary of State (Justice), Shadow Secretary of State

I just wonder whether the Minister has appreciated the full glory of my drafting. The reference in amendment No. 20 to imposing a burden on an activity comes in paragraph (iii). It restricts it quite carefully to situations where a new law is being made. In my definition of burdens in new clause 4, I am quite consciously allowing the Minister to decide, in a totally subjective way, whether he believes that there is some inconvenience or imposition of cost which requires an order to be made. I am giving him a very wide canvas, but the only restriction on what he can do is that it has to be a change with a deregulatory effect.

All the old problems on which he consulted are swept away by this careful drafting. The reference to “activity” which proved such a difficulty is restricted. The problems of what a burden meant are swept away by allowing the Minister to define it, provided that it is some inconvenience or cost. Is he really saying, as he seems to be, that he wants the power to change any law even if it has no deregulatory effect and even if it does not remove burdens of any sort? He just wants to be able to be like a district commissioner in the old colonial days and be a law unto himself. If so, why?

Photo of Jim Murphy Jim Murphy Parliamentary Under-Secretary (Cabinet Office)

The hon. Gentleman is unusually modest in his description of how he has crafted his amendments. The way in which they are drafted would not allow us to deliver on many of the simplification proposals, which are not simply about administrative burdens.—[Interruption.] It is often about bringing together and phasing out outdated and unnecessary regulations, and delivering on the merger powers proposed in Philip Hampton’s report. The way in which the hon. Gentleman has framed his amendment, while it may be—

Photo of Jim Murphy Jim Murphy Parliamentary Under-Secretary (Cabinet Office) 12:30, 28 February 2006

Pretty good, he says. It is too narrow for the Government to be tempted to support it. It will not enable us to deliver on the Hampton mergers of regulators.

Photo of Mark Harper Mark Harper Shadow Minister (Defence)

The Minister has referred a number of times to the Hampton proposals to merge regulators. It strikes me that those mergers may be necessary at some point, but that it will not perpetually be necessary to merge regulators frequently. Constantly changing the regulatory background would itself be a considerable burden. His point seems narrow, and not a good reason not to accept my hon. Friend’s glorious amendments.

Photo of Jim Murphy Jim Murphy Parliamentary Under-Secretary (Cabinet Office)

I am sorry to disagree with the hon. Member for Forest of Dean. The ability to bring about those mergers will not in all likelihood be a recurrent annual requirement, but it is nevertheless a substantial, non-controversial piece of work that the   Bill can enable. We all know that the powers in the Bill are largely enabling powers, and would enable the non-controversial mergers of some regulators and the implementation of simplification proposals provided by Departments.

As I said, the issue is not just one of burdens. It is about the wider phasing out of unnecessary regulations that are no longer appropriate and the simplification of other regulations. As I am sure the hon. Member for North-East Hertfordshire accepts, that would not always be about an administrative burden or the technical definitions that he has drawn up in his gloriously worded amendment.

Photo of Oliver Heald Oliver Heald Shadow Secretary of State (Justice), Shadow Secretary of State

But when the hon. Gentleman produced the document “A Bill for Better Regulation: Consultation Document,” it proposed that there should be a power to

“remove, reduce, re-enact or impose burdens (as now)”,

and added to that the power to simplify legislation, as the hon. Gentleman mentioned, and implement uncontroversial Law Commission recommendations. Does he have available to him a draft of clause 1 along the lines of his consultation document if he wanted to deploy it at a later stage?

Photo of Jim Murphy Jim Murphy Parliamentary Under-Secretary (Cabinet Office)

No, I do not, because I do not feel that there is a need to do that. The broadening of the power came partly through the consultation process, as is entirely appropriate. Part of the reason for having a consultation is to see whether we have got the issue about right. The sense gained through the consultation was that the power should be broadened.

Amendment No. 29 would prevent orders from reforming the common law in ways other than those recommended by the Law Commission. As the Committee will know, the Law Commission publishes reports laid before Parliament that make recommendations and are usually accompanied by draft legislation intended to implement those recommendations. Clause 1(1) provides that orders can reform legislation or implement Law Commission recommendations, and that provisions of those two types can be combined in one order. Clause 2(3) provides that orders can reform the common law, but only when implementing Law Commission recommendations.

The combination of clauses 1 and 2 means that the intended impact of the amendment appears mainly to apply to Law Commission recommendations reforming the common law. Any changes to a Law Commission recommendation that relate to reforming legislation and satisfy the various safeguards to which orders are subject could, with one exception, be delivered in an order under clause 1(1)(a). That exception is Law Commission recommendations that impose penalties or create new powers of forcible entry above the usual limits under clauses 6 and 7.

The provision in clause 1(1)(b) that Law Commission recommendations can be implemented “with or without changes” makes it clear that it is possible to use the power to modify Law Commission recommendations when, for example, there has been a delay between the recommendations being published   and the order being delivered, and when the law has changed during that time. In such a case, it would no longer be possible to implement the recommendations without changes because they would be out of date in certain respects. It is important to be able to implement the recommendations with any changes that are necessary to reflect changes made in the law.

Photo of David Howarth David Howarth Shadow Minister, Office of the Deputy Prime Minister

In that case, will the Minister explain why the Government should not simply go back to the Law Commission and ask how it would deal with the change in law in the interim period? Why are the Government suddenly experts in common law?

Photo of Jim Murphy Jim Murphy Parliamentary Under-Secretary (Cabinet Office)

As the process evolves, that may be one of the things that will happen as part of the enabling power. As the hon. Gentleman knows, the Law Commission is expected to carry out public consultation before it produces any recommendations. It is not that we disagree with the Law Commission, or wish to do the opposite to what it wants; I know that the hon. Gentleman was making a debating point, rather than a substantial point in respect of the Bill. If there is a delay between the Law Commission making a recommendation and the Government implementing it, it is not unreasonable to expect the law to have moved on in the interim. The changes to the Bill that we are talking about would enable that to happen; they are not about introducing the word “not”, or about the abolition of the monarchy or any of the hon. Gentleman’s other debating points.

Photo of David Howarth David Howarth Shadow Minister, Office of the Deputy Prime Minister

I accept that some of our examples were extreme, but one was not—indeed, it was entirely on point—and that was the instance of “bad character” evidence in criminal proceedings. That example was on a common law matter, and in that case the Government implemented not the Law Commission’s proposal but an entirely different proposal. Would that count as a change, under the terms of the Bill?

Photo of Jim Murphy Jim Murphy Parliamentary Under-Secretary (Cabinet Office)

Without talking specifically about that recommendation—the hon. Gentleman can draw his own conclusion about it—we are talking about changes due to the passage of time, not due to disputes over the content of a Law Commission recommendation. If the Government were seeking to introduce a Law Commission recommendation that had been amended substantively, this Bill would not be the way to do it. We are talking about implementing non-controversial Law Commission recommendations— that takes up the point made by the hon. Member for North-East Hertfordshire—to which there has been amendment not on policy, but based on the fact that law has evolved in the interim.

It would not be appropriate for the type of Law Commission recommendation mentioned by the hon. Member for Cambridge, or the Government’s response to it, to be delivered through the Bill. I hope that that reassures him somewhat.

Photo of Christopher Chope Christopher Chope Conservative, Christchurch

The Minister has just said that the measure is about implementing non-controversial recommendations from the Law Commission. In that case, would he accept an amendment—or put forward one in the Government’s name—to insert the phrase “non-controversial” between “implementing” and “recommendations” in clause 1(1)(b)?

Photo of Jim Murphy Jim Murphy Parliamentary Under-Secretary (Cabinet Office)

I omitted to address the point that the hon. Gentleman made earlier on behalf of his constituent, who is a JP. The hon. Gentleman read out his constituent’s comments about 1930s Germany, but I am not suggesting that he agreed with them. However, it was a delicious irony that the hon. Gentleman went on to quote from a newspaper that advocated at least some of the policies of 1930s Germany; but that is a debating point, rather than a point in respect of the Bill.

On the idea of inserting “non-controversial”, it might be helpful if I say that the Law Commission annual report of 2004-05 identified that in respect of 16 of the 29 unimplemented Law Commission reports, the Government accepted the recommendations in whole or in part, and that there has on average been a wait of seven and a half years before such recommendations have been implemented. It is clear that that is not a suitable way to progress. We need an alternative way to implement non-controversial Law Commission recommendations; that point would apply to a Government of any party.

Photo of Alison Seabeck Alison Seabeck Labour, Plymouth, Devonport

Returning to amendment No. 29, the Minister has argued that, because of the time lag between Law Commission reports coming out and being taken forward, the legislation will have changed. As he has just mentioned, a number of such reports have been in train for about seven years. In respect of those current reports that are still waiting to be brought forward, can the Minister quantify precisely the number of law changes relating to them that have taken place in the intervening period, and therefore explain why “with or” needs to be left in the Bill? I am sorry, but I may not have expressed that question very clearly.

Photo of Jim Murphy Jim Murphy Parliamentary Under-Secretary (Cabinet Office)

I get the point that my hon. Friend makes. I mentioned that it is my understanding that there are 29 Law Commission reports that the Government have not acted on, 16 of which we agree with in whole or in part. It has always been difficult to secure parliamentary slots in a tight agenda for the implementation of non-controversial Law Commission reports. That is why the average time that they spend on the shelf is seven and a half years.

In respect of quantifying how often “with or without changes” would be brought into effect, that would depend on several things. The first of them is the Bill; without it, we could not bring that into effect. Secondly, that would depend on which of the 16 Law Commission reports we then sought to implement, and which we sought to implement in full and which in part. It would also depend on how much the law of the land has moved on in the intervening period. That is not a specific answer to my hon. Friend’s question, but   it identifies the challenges that we face in seeking to implement non-controversial Law Commission recommendations.

Photo of Christopher Chope Christopher Chope Conservative, Christchurch

Since the Minister has manifestly failed to answer my last question on whether he would accept the introduction of “non-controversial” into clause 1(1)(b), perhaps he can respond to the following suggestion. In the light of his rather fanciful objection to amendment No. 29, would he accept as an alternative that the Bill should provide that there should be no change to a Law Commission proposal unless there have been changes to the law since the date of that proposal?

Photo of Jim Murphy Jim Murphy Parliamentary Under-Secretary (Cabinet Office)

I am sorry for not having given a one-word answer to the hon. Gentleman’s earlier question; the one-word answer to it is no. I hope that that is helpful. On his additional point, if he wishes to table such an amendment, the Government would consider its specific proposals. This is not a matter of dogmatism; we just want to get the balance right, and to ensure that non-controversial Law Commission recommendations can be implemented in a much more effective way than they currently are.

Photo of Christopher Chope Christopher Chope Conservative, Christchurch

I had hoped that the Minister would be an active participant in the Committee. Having raised one objection to the amendment, I would have hoped that, if it was the only objection to the amendment, he would then have tried to reach a compromise. However, all he seems to be saying is that it is incumbent on us to keep putting forward suggestions that he will then knock down. Why does he not engage more constructively in these proceedings?

Photo of Jim Murphy Jim Murphy Parliamentary Under-Secretary (Cabinet Office) 12:45, 28 February 2006

I am happy to engage constructively with the issue; I have done so for a number of months. It is not for me to say whether the point that the hon. Gentleman made is unfair or uncharitable; it is his debating style to make such claims and assertions. It is for him to judge whether that is the most effective way to get things done in the House and in Standing Committees. It is not my job to table his amendment for him or to write it, but if he has the specifics, I look forward to reading, discussing and debating the matter on Report if that is appropriate.

However, as we are still in our first of eight sittings, I am keen to engage on the specifics of the amendments and new clauses. I have shown that in my evidence to various Select Committees and during discussion on Second Reading. His allegation is unfounded, but that does not prevent him from making it. I am sure that he will make it at every one of the eight sittings on the Bill.

Photo of David Howarth David Howarth Shadow Minister, Office of the Deputy Prime Minister

There is a way to discuss in Committee the sort of amendment that the hon. Member for Christchurch suggests. When we debate clause 18, which deals with definition and interpretation, we could insert a restrictive, specific definition of “changes”, according to which “changes” would mean only changes reasonably related to developments in the common law since the time of the   Law Commission’s recommendation. In that way, we could discuss the matter in Committee and not have to wait until Report.

Photo of Jim Murphy Jim Murphy Parliamentary Under-Secretary (Cabinet Office)

I look forward to seeing the hon. Gentleman table such an amendment so we can have that conversation, and I look forward to seeing him table it on time.

I assure the Committee that clause 1(1)(b) does not mean that orders could make radical changes to Law Commission recommendations reforming the common law. If a Minister radically changed a Law Commission recommendation relating to the common law, then the reform in the order would not be implementing the Law Commission recommendation. Rather than implementing the recommendation, even with changes, the Minister would be attempting to do something else entirely and so could not use the power in clause 1(1)(b). Subsection 1(1)(b) gives sufficient flexibility for changes to Law Commission recommendations without enabling Ministers to reform the law by purporting to implement Law Commission recommendations but in fact doing something entirely different.

Photo of Oliver Heald Oliver Heald Shadow Secretary of State (Justice), Shadow Secretary of State

I see the point that the Minister is making. If it were a totally different proposal dealing with the subject broadly, he might be right. But what about the point that I made? One of the things that the Law Commission is considering at the moment is the question of the occupation rights of partners who live together. It may well propose that partners who have lived together for a very long time should acquire the same sort of rights as married couples or registered civil partners, but what happens if the Law Commission suggests 20 years and the Minister says six months will do? It would be the same subject and the same recommendation—property rights for cohabitants—but it would be a very different proposal in the minds of some people: those who wanted to see marriage as a building block in society, for example. How does he reconcile that effect on such cases, which are more marginal?

Photo of Jim Murphy Jim Murphy Parliamentary Under-Secretary (Cabinet Office)

I do not think that that case is marginal at all. That would be a substantial change to a Law Commission recommendation and would not be appropriate for the Bill. That is not marginal at all. It is pretty clear-cut to me.

We are talking about changes that are necessary because of changes in common law during the interim between the Law Commission’s recommendation and the Government of the day’s implementation of that recommendation. It is not about materially altering it or changing the policy; it is about making changes that take account of changes to the law through time rather than simply thanking the Law Commission for the recommendation and choosing to build on it or alter it as a matter of policy. That would be entirely different. It is not even a matter of ministerial commitment, which I give today and which the Government are giving, that that is not the purpose of the provision.

I do not understand why the safeguards have not yet been talked about in great detail. The relevant Select Committee of the House of Commons, charged by the   House of Commons, would have the power to reject any recommendation. Even if the Law Commission made a recommendation and the Government sought minor technical changes to bring it up to date to reflect changes in the law in the interim period, the relevant Select Committee in the House of Commons and the House of Lords would be able to reject the proposal. That would be an additional safeguard.

In all cases, the overriding requirement is that the provision in the order implements a Law Commission recommendation, and that will usually be quite clear. The inclusion of the words “with or without changes” signals that certain limited changes to the recommendation are permitted, for the reasons that I have given. The 2001 Act contained a number of technical restrictions, which created arbitrary limits on what could be delivered by order. It is important that the order-making powers created by the Bill are flexible enough effectively to deliver regulatory reform and beneficial Law Commission recommendations.

I shall now discuss new clause 5, although I will try to finish before we break at what the hon. Member for Christchurch, during our discussion of the programme motion, called that indigestible time. One of the main policy objectives at the heart of the Bill is that orders made under the power in clause 1 will help to reduce regulatory burdens, including those on small businesses. The new clause, which was proposed by the hon. Member for North-East Hertfordshire, is unnecessary, and I will set out the reasons why.

All regulatory proposals must be accompanied by a regulatory impact assessment, and major proposals will be scrutinised by and require the approval of the panel for regulatory accountability. I should point out that the chair of the Small Business Council, Julie Kenny, is invited to attend the panel’s meetings. That ensures that small businesses have a voice on the panel and that the regulatory proposals that are scrutinised take full account of the impact on small businesses.

The Government are already reducing regulatory burdens on small businesses, and I shall mention just a few examples. One integral part of the current RIA process is the assessment of the impact on small businesses. That is why Departments have to complete the small firms impact test before the RIA can get ministerial agreement. That requires policy officials to investigate what impact the proposals would have specifically on small businesses.

The key stages of a small firms impact test include an initial sounding of small businesses or representative bodies to verify the likely impact and identify solutions before formal public consultation. Where the impact appears significant or complex, there is a more detailed exploration of the issues and solutions with representative bodies and small and medium-sized enterprises so that the issues can be scoped and spelled out fully in the consultation documents.

Other key stages include assessing and reflecting the representations made by small firms during the consultation in the final RIA, including making any necessary changes to ensure that the policy is well   adapted to the needs of SMEs. It is difficult to assess the impact of RIAs and the impact test, because they are evolving documents, but if initial findings suggest a significant potential impact on small businesses, we would of course seek to act. To give one example, Her Majesty’s Revenue and Customs identified that the reporting requirements for employment-related securities were imposing significant costs on new small businesses. The RIA allowed a policy re-evaluation, with the result that at least 90 per cent. of new companies are now out of scope, saving £60 million per annum.

The other ways in which the Government are supporting small businesses include exempting nearly 900,000 companies from audit requirements. In addition, we are introducing one-page regulation updates, and there are the 12-week statutory consultation proposals. We are also attracted, of course, to the concept and implementation of common commencement dates for regulations and legislation so that small businesses, in particular, have an expectation and a knowledge of when changes in regulation are brought about.

As I mentioned, Departments and regulators are developing simplification plans, which will set out how Departments will meet targets to reduce administrative burdens, as well as wider simplification measures to deregulate, consolidate and rationalise regulation and reduce the regulatory burden on businesses, charities and the voluntary and public sectors. There are many additional points that I could make about the Government’s support for small businesses.

The requirement in the Bill for consultation on any proposed order will also allow those affected by any proposals to have an opportunity to put their case to the Government. The Government will take those views into account before a draft order and explanatory document are laid before Parliament. The explanatory document must give details of the consultation, representations received and any changes made as a result of those representations.

As has been mentioned, small businesses are the backbone of our economy. They make an enormous contribution: 58 per cent. of the UK’s private sector work force is made up of small businesses, and small business accounts for more than half of the UK’s turnover. The Bill has widespread support, including support from the Federation of Small Businesses and the Small Business Council. For those reasons and others, I urge hon. Members not to press their amendments. However, if they do so, the Government will of course resist them.

I hope that I have dealt with the specifics and set out in this, our first sitting, by identifying clearly the important safeguards in the Bill, in order to overcome some of the genuine concerns and the debating-point concerns that hon. Members opposite have raised. There is a statutory public consultation and more safeguards in the Bill than the 2001 Act. The relevant Select Committees charged by the House of Commons will be able to reject any proposal, on any order, at any   time, should it so wish. With those comments, I encourage my colleagues to reject the Opposition’s amendments if they are forced to a Division.

Photo of Oliver Heald Oliver Heald Shadow Secretary of State (Justice), Shadow Secretary of State

We have had an excellent debate. To start with small businesses, where the Minister ended, a plethora of exemptions seems to apply to them. To give an idea of the mixture of thresholds that are used for small business exemptions, I shall run through a few: five employees or fewer; 10 employees or fewer; 15 employees or fewer; 21 employees or fewer; 50 employees or fewer; small firms with a turnover of less than £45,000; a small business whose premises have a rateable value of less than £8,000; a turnover of less than £58,000; a turnover of less than £5.6 million; and premises smaller than 280 sq m. There is also a range of regulations with exemptions for businesses in the numerous categories that I have outlined.

When we consider the sort of simplifications that the Minister discussed and what the regulatory regime should be for business, there is a strong case for having a moment when the Minister has to think whether the regulation is appropriate for small business. There is   wide support for that in the business community, even among large businesses and organisations. For example, the Institute of Directors believes that on balance there is a case for applying small firm exemptions and that officials should be required to consider whether one should be included when drawing up regulations.

I therefore do not see what the Minister has to fear from agreeing to new clause 5. I believe that he accepts the logic of what I am saying, so why is it so hard to include that sensible provision, which he and I agree should be part of the process of deciding simplifications and regulations? The case for small firm exemptions is that they recognise that the burden of regulation on SMEs can often be disproportionate. The issue is about giving the choice to impose a regulatory burden on the economy at the top end of business, which may be appropriate, but deciding that it would not be appropriate for small business.

It being One o’clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till this day at Four o’clock.