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15 May 2006 : Column 721
Mr. McFadden: Precisely because we wish to allow Departments and Ministers the flexibility to propose deregulatory measures in a wide-ranging way. We have responded to some of the fears and criticisms by making what the Bill is to be focused on clearer. The right hon. Gentleman’s suggestion would be too inflexible.
Rob Marris (Wolverhampton, South-West) (Lab): I welcome my hon. Friend to his post. He has made a considerable impact in Wolverhampton, and I am sure that he will do the same as a Minister.
I apologise because I have to leave the Chamber shortly to go to a meeting, but I suggest that my hon. Friend outline to the Opposition the background, which they do not seem to understand, to new clause 19 in terms of the safeguards that are built into the Bill. It is not a matter of a Minister simply putting some forward. My understanding is that if the Government amendments are successful, any proposal will have to go through two Select Committees. There may be a Government majority on those, but there is a Government majority in the House. That is the way in which the House works. Having voiced considerable concerns on Second Reading, I am now worried that there are so many safeguards that the Government have gone too far the other way. I urge him to keep an open mind and explain the safeguards.
Mr. McFadden: My hon. Friend and constituency neighbour makes a typically sensible point. I have referred several times to the safeguards in terms of a Minister making a proposal, his explanatory note for the proposal, the consultation required and, crucially, as he said, the consultation with the Select Committees and their power to reject a proposal.
Mark Fisher: Will my hon. Friend give way?
Mr. McFadden: I want to make some progress, if my hon. Friend will allow me.
The definition of burden relating to administrative inconvenience will allow the Government to deliver reductions in administrative burdens on business that are being identified through the comprehensive administrative burden reduction project taking place in government. The final results and Government targets to reduce administrative burdens will be published in departmental simplification plans in due course. Where appropriate, the order-making power will allow the Government to deliver real savings in time and money for businesses, charities and voluntary organisations by, for instance, reducing form-filling requirements and making it easier to comply with regulations. Those reductions in administrative burden will free up time and money so that businesses can improve productivity and promote innovation.
The definition of burden as “administrative inconvenience” will also allow the Government to amend rules that are now considered unnecessary but, because they are enshrined in statute, can still bind companies and impose an administrative inconvenience. For instance, the Department for Environment, Food and Rural Affairs has committed to taking forward a proposal, submitted via the better regulation portal on the internet, to amend the rules on selling game. I am sure that many Conservative Members will take an interest in that.
Under the Game Act 1831, anyone wishing to sell game from a shop must apply for a licence from the council and affix to the front of the shop a board stating so. Repealing those requirements will save businesses hundreds of thousands of pounds and relieve the administrative burden on them. That is a small measure, but it is the kind of thing that could relieve those affected of a substantial burden. As the rules are enshrined in primary legislation, only a Bill could repeal them. The order-making power in new clause 19 will provide a more proportionate measure for repeal.
I emphasise again that we also want to reduce administrative inconvenience for our public services and voluntary organisations. Reducing administrative inconvenience will, for example, allow teachers, who often raise this with all of us as MPs, to spend more time with pupils, and allow the NHS to concentrate more of its time on caring for patients.
As I said earlier, independent surveys have often found that the UK ranks highly in international comparisons of competitiveness, but in the face of global change no country can afford to be complacent. As Mr. John Cridland, the deputy director-general of the CBI stated in The Times in March, the Government must be able to deliver more and swifter deregulatory measures to ensure that the UK remains competitive.
Andrew Miller (Ellesmere Port and Neston) (Lab): Although my constituents will no doubt be interested in my hon. Friend’s example about game, may I take him a little closer to the real world in my constituency and ask him to confirm that administrative inconvenience cannot in any way be interpreted as something that would cover necessary protections? For example, record keeping under the Health and Safety at Work Act, etc. 1974 is unambiguously a necessary protection. Will he confirm that nobody could use the clause to interpret it as a burden?
Mr. McFadden: My hon. Friend, the Chairman of the Select Committee on Regulatory Reform, makes a very strong point and he is right to say that clause 3 talks of the provision not removing “any necessary protection” or
“any right or freedom which that person might reasonably expect to continue to exercise.”
Mark Fisher: While my hon. Friend is on the issue of barriers to productivity, will he return to the point made by the right hon. and learned Member for Rushcliffe (Mr. Clarke) about taxation and the climate change levy? Many companies see that levy as a barrier to productivity. In answering the right hon. and learned Gentleman, my hon. Friend referred to clause 5, which is about precluding taxation, but it precludes only the ability to impose or increase taxes. Why does it not include the ability to reduce or delete taxes? If it did so, it would meet the right hon. and learned Gentleman’s point and ensure that such provisions could not be abused.
Mr. McFadden: My hon. Friend will have his opinion of whether that would count as a deregulatory measure, but we have an annual Budget and Finance Bill which set out the taxation proposals, and that is how we deal with such matters in this House.
Mr. Heald: Surely the Minister could just pray in aid the Labour record; it never abolishes taxes.
Mr. McFadden: I shall move on, as it would be churlish to mention VAT on fuel and the other taxes introduced by the hon. Gentleman’s party.
An example of a measure to boost productivity is one that allows companies to patent a new technology that would encourage greater innovation in the economy. That is something in which the Department of Trade and Industry takes a great interest. We could remove obstacles to productivity by making it easier for someone to set up a company and by reducing bureaucracy and the number of forms that need to be filled in. The fourth limb of the definition of a burden involves a sanction, whether criminal or otherwise, and we wish to allow Ministers to propose by order to decriminalise offences or reduce or remove sanctions for regulatory offences. That has been carried over, as I said earlier, from the legal definition of “burden” in the Regulatory Reform Act 2001. The Government believe that it should be possible to decriminalise or reduce sanctions on people who have not complied with regulatory obligations in cases in which targeted sanctions are no longer considered appropriate.
4.15 pm
Mr. Christopher Chope (Christchurch) (Con): The hon. Gentleman is talking about burdens, but does he accept that the new clause would increase the overall burden? It might reduce the burden on 1,000 people while increasing the burden on 1 million.
Mr. McFadden: I do not believe that that is the case. Subsection (2) of the new clause states that the
“purpose is removing or reducing any burden, or the overall burdens, resulting directly or indirectly for any person from any legislation.”
The provision could not be used to increase the burden. However, the burden may increase for someone in the system, even if it is reduced overall.
Mr. Chope: In that case, will the Minister accept my amendment (b), which replaces “or” with “and”, thus ensuring that the new clause cannot be used to increase the overall burden?
Mr. McFadden: I hope that the hon. Gentleman will have an opportunity to speak to his amendment. However, new clause 19 emphasises the reduction in the overall burden and takes care of the issue.
Sir Robert Smith (West Aberdeenshire and Kincardine) (LD) rose—
Mr. McFadden: I should like to make some progress.
The definition of “burden” in new clause 19 provides the flexibility to supply the wide-ranging better regulation initiatives necessary to deliver the reform that businesses, the public sector and voluntary and charitable organisations want. The new clause focuses the order-making power in a different way from the 2001 Act, as it is output-focused and concentrates not on the way in which legislation should be reformed, but on the reasons for that reform. The order-making power in the 2001 Act concentrated more on the way in which legislation could be reformed. It removed legislative restrictions and so on but, after five years, that has proved limiting, and it has not provided the
breadth of better regulation initiatives necessary to deliver the Government’s better regulation agenda. It has not provided the scope of deregulation to which the main Opposition are committed, so useful regulatory reform orders could not be delivered. The change in emphasis will make it easier and quicker for Government Departments to introduce proposals to make a genuine difference to the regulatory and inspection burden.
James Brokenshire (Hornchurch) (Con): It is interesting to consider to whom the burden applies. There is a protection built into new clause 19, as the provision cannot apply only to a Government Minister or a Department. However, the caveat is limited by proposed subsection (4), which exempts Ministers and Departments that “exercise...a regulatory function”. Can the Minister tell me where “regulatory function” is defined, or can he provide me with an assurance that that provision will not be misused?
Mr. McFadden: The hon. Gentleman anticipates the next part of my contribution. If he bears with me, I hope to provide him with reassurance.
New clause 19 has been drafted to prevent the inappropriate removal of orders that fall only on Ministers or Government Departments. In earlier proceedings, the fear was expressed that the order-making power could be used by Ministers suddenly to stop providing public services. The new clause provides that burdens falling only on Ministers or Government Departments can be removed, but only in so far as they are burdens that affect the Minister or Department in the exercise of a regulatory function. We believe this answers the fears expressed on those core public service points, although we did not believe that those fears would ever be realised through the operation of the Act. The new clause ensures that it will not be possible to make an order that stops the provision of public services because they may be considered a burden on Government.
Mr. Garnier: To some extent, what the Minister has just said is reassuring. However, public services are increasingly being farmed out to the private sector or the quasi-private sector. They are being off-loaded by Ministers so that they need not have responsibility for them. Would the Minister’s comments bite on those extra-governmental organisations which provide a public service?
Mr. McFadden: The Department remains responsible for the regulatory function. I am interested to hear that the hon. and learned Gentleman seemed to imply some criticism of flexibility in the provision of public services, to which his party is also committed. The new safeguard is substantial and ensures that an order can remove a burden falling on Government only where the Government themselves act as regulator.
David Howarth: On the point raised by the hon. and learned Member for Harborough (Mr. Garnier), the central question is what is meant by Government Department. How far does that go? Does it include quangos, private sector providers and anyone who might count, for the purposes of the Human Rights Act, as a public body, which would include bodies such
as universities? The Minister should take the opportunity to explain to the House what is meant by the phrase.
Mr. McFadden: If the hon. Gentleman will allow me to continue, perhaps I shall do that.
The Government have a number of regulatory functions—for example, the company law regulatory functions within the Department of Trade and Industry, and the pesticides directorate, which has regulatory functions in the Department for Environment, Food and Rural Affairs. The Government believe that these regulators, too, should conduct their business in a manner that is risk-based. For that reason, it should be possible to use an order, if necessary, for better regulation purposes to change an aspect of these Government regulatory functions, so that all regulators conduct their business in a way that is risk-based. Orders should be able, for instance, to move these Government functions into those of an independent regulator if it were more efficient to do so.
Two consequential amendments should be mentioned in this context. Of the many amendments before us, I draw the attention of the House to amendments Nos. 38 and 39, which ensure that any Minister laying an order to be made under new clause 19 must include in the explanatory document laid before Parliament, as appropriate, an assessment of the extent to which it would remove or reduce burdens as defined in new clause 19. So we have on the one hand the more focused order-making power, and on the other hand an explanatory memorandum from Ministers relating precisely to that power.
Two further consequential amendments on which I shall touch briefly are amendments Nos. 60 and 62, which relate to the definition of regulatory functions. Amendment No. 62 inserts the definition of regulatory functions, which was previously part of clause 24, in clause 32 instead. That is because it is now relevant to both part 1 and part 2, because of new clauses 19 and 20.
New clause 19 provides that an order may not remove or reduce burdens which affect only a Minister or Government Department unless, as I said, that is in the exercise of a regulatory function. New clause 20 provides that a Minister may, by order, make provision which he considers would secure that regulatory functions are exercised so as to comply with the five better regulation principles. We shall discuss that new clause in more detail later in our proceedings.
The focusing of the power in new clause 19 on the removal or reduction of burdens and the additional safeguard that has been added mean that we are confident that the clause creates the output-focused rationale for a legislative vehicle to deliver regulatory reform effectively.
Sir Robert Smith: The Minister accepted amendment (b) in defining the scope of new clause 19. Without amendment (b), all overall burdens are not necessarily removed. Provisions can be restrictive in allowing just the removal of any burden. In the process of that door being opened by removal of any burden, that could overall provide more burdens on people.
Mr. McFadden: I can assure the hon. Gentleman that I have not accepted amendment (b). We may discuss that further.
John Bercow: I am grateful to the Minister for giving way. He has been incredibly generous and solicitous towards the House.
I am still concerned about the potential application of the new clause to the proper responsibilities of public services. Let me offer the Minister a scenario. The hon. Gentleman will be aware that there are responsibilities on, for example, national health service trusts under the terms of the Health and Social Care Act 2001, where they are considering changes in the provision of services to involve local people in and consult them on the proposed changes. Can the Minister assure me that nothing in the clause would ever allow such public agencies to argue for a removal or reduction of their public consultation responsibilities? On the face of it, the danger exists, at least under a less benign and progressive Minister than the hon. Gentleman, for precisely such an eventuality to occur.
Mr. McFadden: It is clear—it has been made clear in new clause 19—that only Ministers and Departments will be affected in terms of their exercise of a regulatory function. In these scenarios, which have been rehearsed throughout the passage of the Bill, it may always be possible to predict this and to predict that. If we go down that road, we will end up with a Bill that will be a beautiful parliamentary instrument in that it closes up every possible avenue to which the hon. Gentleman and others may draw attention. At the same time, it would not be an effective weapon in reducing deregulation.
That scenario has not been dreamed up by me. It is what has happened on two occasions when the House has tried to legislate on these matters. I ask hon. Members who raise these matters, which they have every right to do, to bear it in mind that business is watching our proceedings. Businesses, charities and the voluntary sector want an outcome at the end of this proposed legislation that will work. We must beware of continuing to amend, close off and hamper legislation so that it becomes, as I have said, a beautiful parliamentary instrument but not a useful deregulatory instrument.
I shall draw my remarks to a close by saying that new clause 19—
Mr. Greg Knight (East Yorkshire) (Con): Will the Minister give way?
Mr. McFadden: I will give way one more time, and that is to the Chairman of the Procedure Committee.
Mr. Knight: Will the Minister confirm that he has said nothing to alter the fact that new clause 19, even with the restrictions in proposed subsection (3), would prevent a future Government from perhaps looking at the burdens on those involved in pest control and deciding to use that vehicle to remove, for example, the ban on fox hunting?
Mr. McFadden: I do not know how many hours, weeks and months the House spent discussing fox hunting. If the right hon. Gentleman thinks that any Minister could propose a deregulation order that would sail through a Select Committee, he predicts a future House that I do not think will be in place. However, there is another point that has been raised in relation to the Bill, which relates to the extreme Government point, as we might wish to term it. What if these powers could be used by an extreme Government to destroy our freedoms? If we ever had an extreme Government in the United Kingdom, I do not think that at the top of our list of worries about what they might do would be regulatory reform orders.
They would be able to use primary legislation to pursue their ends—a point that I ask the House to bear in mind.
Pete Wishart (Perth and North Perthshire) (SNP): Will the Minister give way?
Mr. McFadden: No; I really do want to make progress.
New clause 19 and its associated amendments are a response to some of the fears and concerns that have been raised about the Bill. I hope that, in discussing them today, we have been able to assuage some of those fears. Those amendments give us a deregulatory power that is firmly focused on the better regulation aims that we want, and which the official Opposition say that they want, to achieve. They focus the Bill in such a way as to answer those fears and concerns, but they have not crossed the boundary that my hon. Friend the Member for Wolverhampton, South-West (Rob Marris) rightly warned us about crossing. I commend them to the House.
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