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Mr. Redwood: I am grateful to the right hon. Gentleman for allowing me to answer his point. He says that I used the legislative pen, but I seem to remember using it to deregulate the telecoms industry, allowing a large number of new producers to come into the marketplace and creating an extremely successful industry. That was a deregulatory use of the legislative pen and it worked.

Mr. Hutton: I am not disputing that or the contribution that such an approach can make. It makes the case in many ways for the need to regulate sometimes. The candour that the right hon. Gentleman has just displayed is admirable, but it was missing from his earlier presentation to the House. He shakes his head, but we all have a chance to examine his contribution. We shall see what part of his speech made the case for regulation. That was not something that I heard him say.

The point applies particularly at the EU level. The telecommunications market has been opened up since 1998 because of European law making. I know that the right hon. Gentleman is rightly a strong supporter of the single market, and it has added huge amounts to European GDP and massive amounts to British GDP. Those reforms came about because the EU regulated, and not because it sat back and said, "No, we are not going to regulate." As my hon. Friend the Member for Normanton (Ed Balls) said, there is a balance to be struck in all these things. The balance was absent from the right hon. Gentleman's remarks.

I am afraid that I am going to have to say to the right hon. Gentleman and his hon. Friends that the House is entitled to treat his remarks tonight with a healthy dose of scepticism. His analysis is flawed, his facts are highly selective, and his prospectus would make matters worse not better. In short, he did not have a sensible strategy at all. Happy-clappy rhetoric on the theme of deregulation may be his stock in trade, and it works well for him among Conservative Members, but it does not add up to a row of beans.

Since 1997, the Government have focused their approach on better regulation, rather than simply on deregulation. Our view is that effective and targeted regulation can play a vital role in improving standards in public services, correcting market failures, promoting competition, ensuring fairness at work and providing protection for consumers and the environment.

Mr. Steen: I am grateful to the right hon. Gentleman for his tolerance of interventions from both Conservative and Labour Members. I am not making a party political point, because I just want to ask him his view. Does he agree that the problem with the House of Commons is that, every time we sit here, we pass more
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rules and regulations? They then have to be enforced and, once they are enforced, that has a cost in terms of civil servants and officials. That cost goes on to tax and, more often than not, on to the council tax. Does he agree that, because there is a House of Commons that passes laws, we are going to pass more rules and regulations that have to be enforced and then paid for by the consumer?

Mr. Hutton: We have to balance all the competing pressures. The hon. Gentleman, for whom I have a lot of respect, would I am sure be the first to recognise that there are areas where it is right for the House to pass law. He is not simply saying that we should hang up our boots and go home.

Rob Marris: He is.

Mr. Hutton: The hon. Gentleman clearly is not saying that, but he raises an important wider issue. It is true that there is no such thing as free regulation. If we are going to regulate and impose burdens or costs on business, administrative burdens on citizens or whatever the agenda is, it is essential that we do so in the light of the best possible information about the costs. We have options and choices to make, and citizens and businesses have too. I agree, in part, that we need to improve the way that we discuss in the House and outside with business, citizens' groups and others the options in front of us and the costs of taking particular measures. We have been trying to do that and, to be fair to the hon. Gentleman's Government, they were keen to try to develop that as well.

Mr. Hayes: Will the Minister give way?

Mr. Hutton: If the hon. Gentleman will forgive me, I must now get on. I am conscious that other people wish to speak and, sadly, I am only half way through my speech. I had better make progress.

It is for some of the reasons that I outlined some time ago that we are not going to apologise to the House or to the British people for introducing the first ever national minimum wage, which has raised the incomes of more than 1 million people in poverty. Nor are we going to say that it was the wrong thing to do to introduce new rights to paid holidays and improved maternity and paternity arrangements. Those are important social advances.

We are proud that regulation in the UK has helped to secure an excellent health and safety record, with workplace fatalities cut by about two thirds since the 1970s. More employment rights for parents, clearer health warnings on food and tobacco and a cleaner environment are all important and worthy objectives for us to pursue. The argument is not whether we should pursue them, but how.

When we decide to regulate, we should try to do so proportionately on the basis of evidence and only if the benefits of regulating clearly justify the inevitable costs to which the hon. Member for Totnes referred.

We are not concerned solely with improving new legislation, but with simplifying existing legislation. We are stripping away regulatory burdens on business whenever possible. For example, we have implemented
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more than 400 deregulatory measures in the Government's regulatory reform action plan, which was published in December 2003. Good examples of those are measures relating to reform of the fire safety laws, which will save businesses literally hundreds of millions of pounds over the next 10 years.

We have raised the audit threshold for small businesses, which has exempted nearly 900,000 companies from onerous audit requirements and thus saved them at least £94 million a year. We have provided the highest VAT thresholds in Europe and reduced administrative costs for 500,000 of the smallest companies in the UK as a result. We have also committed ourselves to reducing £1 billion of the regulatory burdens on business arising from Department of Trade and Industry regulations over the lifetime of the DTI's five-year programme. We have reduced the payroll burdens for 1.2 million businesses by paying working tax credit direct to individuals rather than via employers—[Interruption.] The hon. Member for Havant (Mr. Willetts) will get his chance later and I am sure that we all look forward to that.

We are providing better, clearer information for business on regulatory changes, including, for example, the introduction of new common commencement dates so that all employment law changes now start on two days of the year. Business asked us to do that and we responded positively.

I hope that I can reach out to the right hon. Member for Wokingham because I accept that the Government should be doing more. We have signalled our intention to do more by accepting the recommendations of the Arculus and Hampton reports, although he did not refer to them in his speech, and by setting out a clear programme for regulatory reform at the European Union level, which he accused us of failing to do.

Altogether that adds up to the most radical regulatory reform programme under way anywhere in the developed world. It has been welcomed by business leaders, who have expressed their support for the direction of travel that we have set out. The policies are designed to reduce the costs of compliance, to strip away unnecessary and outdated regulation and to simplify the existing body of legislation so that those who are required to observe such laws have a better understanding of what they need to do. They will also address a further concern that business has expressed to us because they will fundamentally change the way in which bodies that are charged with inspection and enforcement set about their work. We will move to a more risk-based approach on regulation and inspection, with fewer inspectorates co-ordinating their work more efficiently and effectively. Their work will be focused on companies with a poor track record of compliance, so companies with a good record will be left to get on and run their businesses.

The motion calls on the Government to introduce new legislation to give effect to those principles, so I am pleased to be able to remind the right hon. Gentleman that we will do precisely that during this Session. I look forward to him joining us in the Lobby when the Bill is introduced in the new year, but sadly I suspect that that might not happen.

Taken together, these radical reforms should ensure that each new major regulatory proposal will have to be accompanied by offsetting deregulatory proposals so
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that the relevant sectors do not experience excessive growth in the cumulative burden of the regulation affecting them. The administrative costs to business, which are important and need to be tackled, owing to the existing stock of regulations will be measured. That is the first step that we must take, although no Government have ever tried to do so, despite the right hon. Gentleman's warm words. Challenging targets must be set for the reduction of those costs. We will rationalise the structure of the independent regulatory bodies to make them more efficient and to spread best practice, such as risk-based inspection. We will reduce the number of regulators that interact with business from the present number of 31 to seven, which will include consolidating several existing regulators into a new consumer and trading standards body.

In Europe, we will continue to drive forward the better regulation agenda. Better regulation will be a key theme of the UK presidency. On Friday, my right hon. Friends the Secretary of State for Trade and Industry and the Chief Secretary to the Treasury and I met EU Commissioners to set out the UK's priorities for better regulation during our presidency. Over the next six months, we will work hard to ensure that impact assessments are used fully by the institutions—they are not at present—and that Commission impact assessments are given proper consideration by the Council. We want to make progress on substantial measures to simplify existing laws and the Commission will make new proposals on that later in the autumn. We want to ensure that there is effective consultation with stakeholders, especially businesses in the European Union. The Commission should take such consultation into account when drafting new legislative proposals.

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