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Mr. Redwood: Does the hon. Gentleman agree that we need scrutiny before draft regulations are agreed in Brussels? Some years ago, I was Minister with responsibility for the single market, and I always brought matters to the House before undertaking negotiations, which often helps Ministers, because if the House is hostile to a regulation, it strengthens their hand. It is no use scrutinising a European regulation after it is a done deal.

Mr. Heath: I could not agree more. Most European legislatures conduct such matters much better than us.
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We need not only prior scrutiny, but a transparent process in Europe to enable us to know what Ministers are doing on our behalf, which is another deficiency.

The intent of the legislation on regulatory functions is welcome. However, hon. Members have made it clear that part 1 is unacceptable and that it must be amended before we can accept it. Even if one takes at face value the assurances from the Minister and from the Government as a whole and believes that they will be carried through, we are still legislating for a massive shift of power to the Executive and away from the legislature. The Executive may change in the future, so we, as parliamentarians, must ensure that we put in safeguards.

The Government recognise that the Regulatory Reform Act 2001 has not worked as well as it should have done. It has some benefits, but the mechanism is cumbersome and capable of improvement. All hon. Members want to see a reduction in the administrative burden on businesses. Businesses have welcomed the introduction of the Bill, although it would have been odd if they had not done so. As the right hon. Member for Wokingham (Mr. Redwood) has said, the weaknesses in the current legislation include not only the translation of regulation into law, but the initiation of the regulatory process. The evaluation of such legislation has also raised some issues.

The hon. Member for North-West Leicestershire (David Taylor) has made the key point that regulation has a wholly disproportionate effect on small businesses and micro-businesses. Hon. Members will have received information from the Institute of Chartered Accountants in England and Wales, which has estimated that 73 per cent. of the total £7 billion cost of regulation on business falls on the smallest businesses. A long time ago, I managed a small business on the high street—my practice—but even in those days, I noticed that the cost of regulation was rising. Small businesses do not have human resources departments to deal with regulation. They have a proprietor—the person who ends up as the dogsbody having to do everything, with a wholly disproportionate burden laid upon them. I hope that we will particularly recognise the position of small businesses.

That worries me in another way. I do not want to create a facility for deregulation which solely favours those who have the big battalions behind them. The trigger for reform will often be those who have the resources to mount the campaign—or, even worse, the ear of a suitable Cabinet Minister—and can create the circumstances for deregulation which favours the concerns of the largest businesses at the expense of those who work in the same market but do not have the same resources. We must be extremely cautious about that.

Mr. Heald: Does the hon. Gentleman envisage the possibility of an enlarged role for the Law Commission in looking at some deregulatory laws at a certain distance from the time at which they are passed—say, five years?

Mr. Heath: I am not sure that the Law Commission is the right vehicle. I have enormous respect for it, but this is not a role for which it would be best suited. However,
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audit bodies of various kinds could provide an extremely useful function. I would very much like to see such retrospective evaluation.

Having been involved in countless Home Office Bills over recent years, I am conscious of the fact that we have often had to amend Bills before they have even come into effect—even the criminal justice Bill of whatever year that was going to be the end of crime as we know it. We need to get a grip on the cumulative effect of legislation, and the House needs to have the right advice to be able to do its job of post-legislative scrutiny much more effectively than it does now.

Dr. Tony Wright: The Law Commission has just completed a report on post-legislative scrutiny. The fact that people do not know about it is perhaps the most revealing thing of all.

Mr. Heath: I am aware of it. However, I also know that the hon. Gentleman's Committee has been talking about this for a very long time. It is a shame that the message has not got through to the Government, or to the plurality of Members.

The Minister remarked on the number of people who have welcomed the Bill. I would say that they are welcoming a Bill, but not necessarily this Bill, given the extraordinary powers that part 1 gives to Ministers. I do not expect some of our business interlocutors to have carefully scrutinised the powers of parliamentary scrutiny in part 1, as that is not their business. It is our business, however, and we should be alarmed by what we read. It is of course capable of improvement, but we must be very careful. Such provisions are often described as Henry VIII clauses. Poor old Henry VIII, alone among autocratic monarchs, seems to get the blame for most things. Nevertheless, we should worry about the autocracy involved in this case.

Clause 1 refers to the broad purpose of "reforming legislation". What does "reforming" mean? The only requirement is that one must have legislation to reform; one cannot make new law, but one can reform it. That undefined term appears right at the start of the Bill.

Mr. Heald: Does the hon. Gentleman accept that Henry VIII was relatively innocent when compared with our current Prime Minister? He appointed far fewer Lords and changed far fewer laws.

Mr. Heath: Our current Prime Minister has yet to abolish the monastic tradition and he has fewer wives. However, it is an interesting comparison. We no longer have the Lord Chancellor who liked to compare himself to Wolsey, but let us not pursue the analogy further.

Conditions are dotted around the Bill. Clause 12(3) provides a list of conditions but they do not apply to clause 1. There is therefore a disconnection that we need to tackle.

Clause 2 covers the law. The hon. Member for Wolverhampton, South-West (Rob Marris) was right to say that it grants a power to amend common law, even if the Law Commission has made no such proposal. I am sorry, but we cannot give a Minister such a power—it is not acceptable for a Minister to have that power without the House's agreement.
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I also agree with the important point about increasing the penalty for criminal offences. I asked the Under-Secretary in what circumstances he envisaged the provision being appropriate. He did not reply but simply said that the power was limited to scale 5. Why should it exist at all? When would it be appropriate for a Minister to increase the penalty for criminal offences without primary legislation and recourse to the House? It is an inappropriate power.

As my hon. Friend the Member for Cambridge (David Howarth) said, clause 3 provides for a subjective test, and that is wrong because whatever slight protection the law affords is thus immediately eliminated. If a Minister determines subjectively what it is reasonable for him to do, we have a circular process that makes it difficult to show that the action was unreasonable and that a Minister was deluded in believing that he should take upon himself powers that properly belong to the House. I accept that it is almost impossible to challenge at law the legislative process. However, even the initial stages should at least allow the possibility of justiciability. My hon. Friend made a powerful point, which I hope he has the opportunity to pursue later.

Many references have been made to the conditions but they are substantially weaker than those in the Regulatory Reform Act 2001, even leaving aside the codicils and applicable references. The consultation paper said that the safeguards had worked well and remained essential. If that is the case, why does the Bill water them down?

We will have to rely on Standing Order No. 141. Perhaps we need a more direct read-across from Standing Orders to the Bill because Standing Orders have one meaning, statute law has another and the two should be reconciled as much as possible.

The hon. Member for North-East Hertfordshire mentioned the Government of Wales Bill. I hope that he does not suggest its recommittal. One can have too much of a good thing. However, it is clearly a matter that we can consider.

There are other causes of concern, for example, the possibility of legislation that is secondary to secondary legislation. We cannot allow that. Clause 2(2) provides for "any person" to have the power rather than a Minister. Am I alone in believing that the power is not capable of delegation and that it is a matter for a Minister of the Crown, who is answerable to the House rather than "any person"?

There is also the veto and the Regulatory Reform Committee's proposals. The Under-Secretary said that he was looking at the matter closely. From the transcript of the Committee's proceedings, it appears that he looked closely to find the bit that he thought was already covered but was not. So I hope that he will table amendments on this matter in Committee. He can be certain, however, that if he does not, others will, because we need to make this clear.

The Bill has the potential to be extremely important in constitutional terms. That is why the hon. Member for North-East Hertfordshire and I—and, I think, by implication, the Father of the House—have suggested that it should be discussed on the Floor of the House. I hope that the Minister will be able to bring us a message from his Whips that they do not intend to move the
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programme motion this evening, that the Government will allow wiser counsel to prevail, and that they will bring the Bill back to the House next week.

I have taken a dim view of part 1. Does this mean that I will advise my right hon. and hon. Friends to vote against the Bill's Second Reading? No, because we need a Bill that does the things that this Bill claims to intend to do. I also believe that this Bill is capable of redemption, but if substantial changes are not made to part 1, either in Committee or on Report, there is no way that I could advise my right hon. and hon. Friends to support the Bill on Third Reading. Moreover, I am absolutely confident that it would be amended beyond recognition in another place if it remained in its present state. The Minister has given every indication that he is prepared to listen to the points that have been raised in this debate, so I hope that he will listen to our considerable concerns about part 1 and react appropriately.

3.26 pm

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