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9 Feb 2006 : Column 1060
Mr. Murphy:
I am a little worried to hear the right hon. Gentleman say that. Perhaps I should go off script again and disagree with what is written here. Nevertheless, I welcome his sedentary endorsement for what I have said and am about to say.
The provisions will make it easier for Departments to transpose regulations and update EU regulatory regimes, as well as making it easier for organisations and individuals to understand the changes that they effect and how they relate to previously implemented EU regulations.
David Taylor (North-West Leicestershire) (Lab/ Co-op): The Government have said that the CBI is broadly in favour of the Bill, but what has been the reaction of small business? I had a good number of small business clients before I entered the House in 1997. The Federation of Small Businesses says that what amounts to a "rule of five" exists—that small businesses face administrative burdens five times as great, proportionately, as those faced by larger businesses, that 5 per cent. of their budgets are spent on compliance and, most importantly, that every five weeks in the past five years one new requirement affecting small businesses has reached the statute book. Is the Minister confident that the Bill will deliver a means to reduce the regulatory burden in an effective way?
Mr. Murphy: In an unusually helpful contribution, my hon. Friend identifies an important issue. We are, of course, in close consultation with the FSB and other business organisations. Indeed, the FSB's policy chairman has written to the press strongly endorsing the approach taken by the Bill.
Although it is relatively straightforward to introduce a Bill, the important thing is what that Bill does. The Government have an ambitious agenda for better regulation, as I emphasised in my meetings with small business people when I travelled around the country last year as part of the wider consultation. They made it clear that one of the biggest problems faced by single-person businesses was the difficulty involved in moving to employing one or two additional people. We are looking for ways to simplify that.
I have taken a number of interventions, and time is against us, so I shall bring my remarks on Europe to a close. I particularly look forward to support for these measures from those who consistently ask for an easing of the burdens of EU legislation and for the introduction of practical measures to do something about that problem.
The Bill abides by the regulatory principles of transparency, accountability, proportionality and consistency. Regulatory activity must be targeted only at cases where action is needed. The Bill also enables those principles to be developed further by conferring a power to issue and revise a code of practice in relation to the exercise of regulatory functions. The Bill makes important changes to the way in which we pass some of our legislation. When the House passed the 2001 Act, it agreed that an alternative means of passing legislation to improve the UK's regulatory performance was essential. What this Bill provides is a more proportionate way of delivering those improvements without undermining the role of Parliament. On the
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contrary, it is clear that it will enhance the role played by Parliament on better regulation issues. I hope that my comments have offered the House a useful starting point for debate and emphasise that we are determined to deliver on our ambitious better regulation programme. The current Act does not deliver on those objectives and the Bill will make a major contribution to maintaining our competitiveness, safeguarding our economic prosperity, reducing the burdens on our public services and improving the lives of our citizens. I commend the Bill to the House.
2.36 pm
Mr. Oliver Heald (North-East Hertfordshire) (Con): The central point that the Minister makes is that the House will still have the opportunity to debate in the traditional way any measures of importance or controversy. This Bill is an early test of that because the Regulatory Reform Committee has said that the first part of the Bill is of constitutional significance. The Chairman of the Procedure Committee has written to the Leader of the House asking that part 1 of the Bill be considered on the Floor of the House, which is the normal arrangement for issues of constitutional significance. The Leader of the House said earlier that he was considering the issue, and I hope that the Minister will consider withdrawing the programme motion—we may take his willingness to do so as a test of what he says. It should be the principle that any issue of constitutional importance is dealt with on the Floor of the House.
Mr. Heath : I shall make this point now so that I do not need to do so later. I agree entirely with the hon. Gentleman. Part 1 of the Bill is clearly a constitutional issue that should be dealt with on the Floor of the House. The Government should withdraw the committal motion and move a new one next week, after discussions through the usual channels.
Mr. Heald: I am grateful to the hon. Gentleman. It is worth mentioning that Lord Holme, who is the Chairman of the Lords' Constitution Committee, has also described part 1 of the Bill as being of first class constitutional importance. There is time in hand, because the Minister has kindly agreed to look at the Regulatory Reform Committee's proposals and respond before the Committee stage, so we are not as short of time as we might be.
The House supports deregulation and the Opposition are determined that there should be not only a reduction in the stock of regulation, but that we should regulate less, year on year. However, the worry is that this Bill does not refer to deregulation at all. It is a sad reflection on the Government that burdens on business are rising. I have already referred to the burdens barometer produced by the British Chambers of Commerce, which has increased by £40 billion since 1997. That puts in context the Chancellor's target of cutting regulation by £10 billion, because that is only a quarter of the increased burden on business.
Meanwhile, the World Economic Forum shows that the United Kingdom is becoming less competitive. In 1997, the UK was the fourth most competitive country
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in the world. It has now fallen to 13th. The World Economic Forum specifically cites regulation and bureaucracy as two of the main obstacles to business in the Britain.
Rob Marris : My understanding of the £40 billion sum is that a large proportion of it—some £26 billion—consists of the minimum wage. If that is the case, is the hon. Gentleman saying that the Conservatives have changed their mind again about the minimum wage? I thought that they now supported it.
Mr. Heald: I have a long list, so I do not really think that I should trespass on the good will of the House.
David Taylor: It is a flip-flop list.
Mr. Heald: It is the "Burdens Barometer" produced by the British Chambers of Commerce. The hon. Member for North-West Leicestershire (David Taylor) was telling us how keen he is to represent the interests of small businesses, so perhaps he would find it a useful read. It shows, for example, that in just the past two years, the burden has gone up by £9 billion. That, of course, does not refer to the minimum wage at all, but if the hon. Member for Wolverhampton, South-West (Rob Marris) wants to read it, I am happy to pass it across the Dispatch Box, if the Minister will allow it to be passed on.
Mr. Chope : Can my hon. Friend confirm that the British Chambers of Commerce said that its estimate of £38.9 billion specifically excludes the cost of the minimum wage?
Mr. Heald: That is my understanding, and the hon. Member for Wolverhampton, South-West can now read that with interest.
Dr. Tony Wright : This is all very interesting and we hear it regularly, but is not the problem precisely that, alongside the burdens barometer, we must always put the protection barometer? Getting the balance between those two things right is the real challenge. We should consider the arguments that we have had recently about protecting pupils in schools against being taught by paedophiles and a whole revisiting of the associated protections regime. One moment we are anxious about burdens; the next moment we are anxious about protection—but the key thing is to get the balance right between the two.
Mr. Heald: I could not agree more. In fact, later in my speech I will talk about the one in, one out principle that Sir David Arculus considered when he was in charge of the Better Regulation Task Force—now renamed the Better Regulation Commission—when trying to balance new regulation against the removal of outdated regulation. I accept that protection is also important.
Other measures, such as the International Institute for Management Development's "World Competitiveness Yearbook", show that the UK has fallen from ninth to 22nd since 1997. The London School of Economics recently warned about
"Many businesses believe regulation is damaging the UK's attraction as a place to invest . . . the burden has grown and expect it to increase further."
The Library has shown that there are 3,887 regulations a year on average under this Government—15 every working day. That is a 50 per cent. increase on what happened under the last Conservative Government.
Against the background of failure that was evident in 2000, Lord Falconer introduced the Regulatory Reform Bill, which was described as a major measure for deregulation. He said:
"The Bill will provide a major tool to tackle unnecessary over-lapping, over-complex and over-burdensome legislation."—[Official Report, House of Lords, 21 December 2000; Vol. 620, c. 850.]
In the House on 19 March 2001, the then Under-Secretary of State for the Cabinet Office, the hon. Member for Manchester, Blackley (Graham Stringer),
"Do the Government intend the measure to be used to introduce orders that have a net deregulatory effect—yes or no?"
"The Bill makes it clear that each regulatory reform order must contain a deregulatory element."—[Official Report, 19 March 2001; Vol. 365, c. 118.]
The Bill was described as "a valuable tool", "an excellent tool" and "a major tool", but the sad history records that only 27 regulatory reform orders have been made, although everyone expected more than 60.
Of course, a review was promised. It talks about whether it should be possible to amend or appeal primary legislation to do one of three things: remove, reduce, re-enact or impose burdens; simplify legislation; and implement uncontroversial Law Commission recommendations. We wanted that power to be as flexible as possible, so it went out to consultation. Not surprisingly, business groups in particular supported the consultation and the idea of that flexibility, but something strange then occurred. The Government changed tack and removed all reference to removing burdens on business. What we have now is constitutionally novel. The Bill extends the scope of powers available to Ministers while relaxing the constraints of parliamentary scrutiny. Ministers will be able to amend, repeal or pass primary legislation without going through the normal parliamentary procedures. There is no requirement that such measures should have a deregulatory effect, so the danger is that we shall have legislation, regulation and parliamentary corner-cutting with no deregulation at all.
Like the Minister, the Government talk much about deregulation and better regulation. They have their Better Regulation Commission, with its new chairman, and their simplification process, whereby every Department has to find simpler legislation. Expensive consultants have calculated the costs to many businesses of every burden or cost of regulation. Now, we have the Bill, but the sad truth is that so far, despite the talk, there has been no deregulation.
All the talk of one in, one out—the idea that every time a regulation is passed another should be repealed—is a vain hope. The Minister will have seen the latest list from the Department of Trade and Industry showing the regulations coming in on 6 April and 1 October—the
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regulation-making days. It runs to 30 pages, but there is not even the sniff of a list of regulations that will be scrapped. As the Institute of Directors said recently:
"We are pleased to see all the policy activity, but are still waiting to see tangible action on the ground."
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