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Brian Cotter: The hon. Member for Runnymede and Weybridge (Mr. Hammond) may be surprised to find that the tent to which he referred is bigger than he thought because the Liberal Democrats support new clause 1. We agree that there should be an annual assessment of the impact of the Bill, which makes several changes to employment law. Although employees will benefit from new employment rights such as flexible working provision, we must recognise that those new rights will have an impact on businesses, which will have to comply with new regulations.

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Small businesses in particular will be affected. Before Second Reading, I met representatives of the Federation of Small Businesses who expressed the hope—perhaps it is a forlorn one, but we must take it on board—that small businesses would not be forced to take on the burden of too many more regulations and that any new regulations

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that were introduced would be examined extremely carefully. That is why we Liberal Democrats strongly support the concept of examining regularly all sorts of regulations that affect business. In fact, we would support an annual horizontal impact assessment of all regulations. I cannot talk about that now as it would not be in order to do so in this debate, but it is something that should be done regularly.

Mr. Prisk: For my benefit, will the hon. Gentleman clarify what an annual horizontal assessment is?

Brian Cotter: It covers everything that confronts businesses—all sorts of regulations. However, I am not supposed to drift on to subjects that we are not debating; I chipped this one in quickly, but I had better move back to the clause. That regulations should be examined has long been a Liberal Democrat view—in fact, I think that my party was the first to make such a proposal.

Mr. Lloyd: Given that the purpose of the new clauses is to examine the costs arising from the Bill, will the hon. Gentleman estimate the cost to Government and other sources of the exercise he describes?

Brian Cotter: If the hon. Gentleman means the costs of the exercise of examining, I cannot estimate them. However, it is not unreasonable to suppose that they need not be excessive. We have regulatory impact assessments in respect of Bills, and even if the proposal in the new clause were to carry a cost, it would surely be repaid in terms of enabling us to see the legislation's impact and to address certain matters.

Mr. David Watts (St. Helens, North): My hon. Friend the Member for Manchester, Central (Mr. Lloyd) was trying to identify the rationale prevailing among the Conservatives and Liberal Democrats. You seem to be arguing against an increase in bureaucracy, but at the same time you—

Mr. Deputy Speaker: Order. I am arguing against nothing.

Brian Cotter: Indeed, Mr. Deputy Speaker. That was well out of order. We are saying simply that we have long argued in favour of an annual assessment of the impact on the business community of all regulations and Bills.

I do not support the logic of the arguments of the hon. Member for Runnymede and Weybridge in respect of costs. Will he explain what sort of costs he believes should be removed once the assessment is complete? There are many reasons to carry out an assessment—for example, to see how regulations are implemented, how much red tape is added and how many requirements fall on small businesses.

We accept that costs will be associated with good regulations such as those covering maternity and paternity leave, which we strongly support. I do not decry those regulations, which are acceptable. Indeed, they are necessary to improve the workplace. However, when the Government implemented European regulations on part-time working, provisions that were two or three pages long in some countries ended up being 40 or 50 pages long in this country.

Helen Jones (Warrington, North): I question the feasibility of what the hon. Gentleman is supporting. New

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clause 1 would require an assessment of the impact of the legislation on employees of different descriptions. How will we collect that information? How will that be done, unless every employee completes a form stating whether he or she has children or a disabled relative, for example?

Brian Cotter: I support the argument that there must be assessment. Would the hon. Lady say that we should not assess the cost to business? Certainly not. Should we not assess how much red tape is unnecessary? I give credit to hon. Members on both sides of the House, because we are all considering how to examine Bills to determine what can be done away with and how we might say, "In practice, we do not need this rule, or that piece of paper." I am concerned that that process should be regularly undertaken.

Whether we accept costs depends on the Bill. I accept costs that relate to social requirements, including maternity and paternity leave, but there is laxity in the way in which Bills are introduced. Many regulations can be introduced after a Bill is enacted, for example.

Judy Mallaber: Taking up the intervention of my hon. Friend the Member for Warrington, North (Helen Jones) on the distribution of costs and benefits between employees of different descriptions, can the hon. Gentleman think of any way in which such assessments could be made without asking employers to be involved in collecting that information? Such involvement would clearly place another burden on them.

Brian Cotter: I have always supported the principle of examining Bills. Sampling procedures can be carried out to assess impacts. There are different ways of assessing different things. Specific details will turn on particular Bills and particular regulations. Are we calling into question impact assessments altogether? They must be carried out before a Bill is in place. One of my long-standing criticisms, along with my Liberal Democrat colleagues, is that such assessments have not been carried out adequately. We are arguing that the assessments should be undertaken adequately, regularly and on a continuing basis.

Mr. Hammond: Does the hon. Gentleman agree that it is alarming that Labour Members appear to be reluctant to accept an assessment of costs? It is a matter not of ruling out things because of costs, but of wanting to know what the costs are, so that we can behave rationally and understand what we are doing. It is appalling to think that we should work while blind.

Brian Cotter: I agree, although having said that there is a broad tent, I do not incorporate into that everything for which the hon. Gentleman stands, such as reluctance to introduce a minimum wage. However, I am not supposed to refer to that, so I had better press on.

I think that I have sufficiently addressed the issue. I ask the hon. Member for Runnymede and Weybridge to be more specific about the costs that concern him. What are the costs that he thinks could be cut? I accept the principle of assessing costs but I would like more detail, either now or later.

Mr. Hammond: I am grateful for the opportunity to intervene again. Contrary to what the hon. Gentleman said

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earlier, we want to assess the costs not only of the things that we think are bad, but of those that we think are good. We want to assess all costs and benefits and their incidence so that we can make informed decisions. I cannot tell him whether the Bill contains proposals involving costs that are too great for the benefits that they will deliver unless and until there is assessment, which will allow proper and rational decisions to be made.

Brian Cotter: I think that I shall leave it at that for fear of being drawn into any suggestion that Liberal Democrats do not support maternity and paternity leave and other welcome and worthwhile proposals. We must regularly examine the impact of regulations and Bills on business. I am sure that the Minister will find it difficult to argue against that. I look forward to what he and other colleagues have to say.

Rob Marris: I shall principally address new clause 3. The hon. Member for Runnymede and Weybridge (Mr. Hammond) talked about flexibility in the labour market which, of course, we need. He also mentioned manufacturing, which is particularly important to me as a Member representing a west midlands constituency. He talked about benefits to society being imposed on business by some of the Bill's provisions. New clause 3, which he tabled, deals with working out average costs and reimbursing them to employers; that is contrary to my view of the way in which small business operates and, I suspect, to his views. The cost for small businesses of complying with administrative requirements is often higher than it is for bigger businesses yet, in the new clause, the hon. Gentleman simply wants an average cost to be reimbursed.

The hon. Gentleman assumes—I do not—that there is a cost; many of the Bill's provisions will benefit business. Thanks to the Labour Government, employment has gone up a great deal, and there are scarcities in the labour market. That can benefit business, as it means that it will not lose part of its trained work force. Is the hon. Gentleman seriously suggesting that, as a consequence of the new clause, we go into negative accounting? If there is a demonstrable benefit from the Bill's provisions—my hon. Friend the Member for North Durham (Mr. Jones) adverted to it—should business reimburse the state for having introduced them? I suspect that the hon. Member for Runnymede and Weybridge does not believe that it should.

Training is increasingly offered by the state, which is not to say that many businesses do not do a lot of training. In most cases, the Government do not seek to charge business directly for undergoing that training. In such things, there are trade-offs in any society; the new clause is therefore misconceived.

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