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4.30 pm
Mr. Heald: We are grateful to the Minister for setting out the effect of these significant new clauses and amendments. We particularly welcome new clause 19, which is a major climbdown; combined with the other new clauses and amendments, it is definitely a step in the right direction. But as will become clear during our debate—you would expect this of any good Oliver, Mr. Speaker—we want more. [Interruption.] The Minister scoffs, but I thought it worth making the point.
The House will be aware that these new clauses and amendments would not have been necessary had the Government been prepared at the outset to listen to the widespread concern about, and criticisms of, their original proposal. I pay tribute to the Select Committees and their Chairmen, which have played an important role in the campaign, but also to those outside Parliament such as the TUC, the Institute of Directors, the press and other media, and various blogsites. This is an important victory for Parliament and parliamentary scrutiny.
Time and again in recent years, we have had to deal with badly drafted and ill-thought through legislation, or legislation that simply does not have the effect that the Government intend or claim. That was certainly the case with this Bill, which in its original form was dubbed by some of its fiercest critics an attack on parliamentary scrutiny, and even the “abolition of Parliament” Bill. It is good that a major concession has
been made at this stage, rather than having to rely on their lordships in the other place to make all the running.
Of course, the Bill should have been about deregulation and reducing the burdens on British business, which have escalated under this Government. Perversely, it has turned out to be almost entirely constitutional in its impact. Deregulation was not mentioned at all, despite the fact that, as I pointed out on Second Reading, the British Chambers of Commerce estimates that the increase in regulatory burden has cost some £50 billion since 1997, that we are passing 15 regulations a day—50 per cent. up on the figure under the previous Government—and that during the same period, we have fallen from fourth to 13th in the league of the world’s most competitive countries, according to the World Economic Forum. According to the International Institute for Management Development’s “World Competitiveness Yearbook”, we have fallen from ninth to 22nd, but whatever measure one looks at, it is clear that, after nine years of Labour, Britain is less competitive and moving in the wrong direction. The burden of regulation is one of the most consistent complaints that Members in all parts of the House hear when talking to business men and women, whether at national or local level.
Like all the business organisations that responded to the Government’s consultation before the Bill was introduced, we were in favour of legislation that would make deregulation easier. I thank the BCC, the CBI, the IOD, the Forum of Private Business and the Federation of Small Businesses for all their help and support. They wanted proper safeguards to be included in the Bill, just like everyone else.
Mr. McFadden: I predicted that we would be trading surveys. Does the hon. Gentleman accept that the World Bank survey of September ’05 said that the United Kingdom was second in the European Union and ninth in the world as regards the country with the best business conditions?
Mr. Heald: The Minister says that he wants to trade surveys, but the problem is that our position is getting worse. All the surveys show that the trend is adverse—it is against Britain and against competitiveness, and that is what needs changing.
This really was a dreadful Bill, and we said from the outset that a range of changes needed to be made if it was to have any chance of making it on to the statute book. It needed to focus on deregulation, and it needed to have what I described as a veto. Luckily, Ministers are now prepared to consider that, although their proposals are still too restrictive. The Bill also needed to specify what kinds of laws cannot be dealt with using the order-making power. When first introduced, it said that a Minister could change any law in any way for any purpose. That was clearly unacceptable. Ministers are now moving to try to concentrate on deregulation and provide the veto. That is welcome. However, there remain some areas of concern that we will want to debate, not least the Law Commission proposals, where there seems to be very little to constrain what happens, and the veto, which seems to have been very tightly drawn.
When the concessions started to be made, I was quite amused by the way in which Ministers described what they were doing. The hon. Member for East Renfrewshire (Mr. Murphy), who struggled through this long campaign and must be relieved to have moved on, said:
“The time has come for those who claim to want to tackle bureaucracy to stand up and be counted, and let the Government of the day get on with the crucial task of cutting unnecessary red tape.”
The Minister, who is not in her place, said:
“I...stress the need now to get on with the task of removing barriers to productivity that will benefit hundreds of thousands of businesses, charities and public sector workers”.
One begins to ask oneself where they have been for the past nine years as the Government have piled on the bureaucracy and the red tape, and which party has consistently argued for proper deregulatory measures during that time.
Mr. Redwood: Does my hon. Friend agree that our proposal before the last election of having an annual deregulatory Bill to implement the necessary regulatory budgets Department by Department would be a much better way forward, because we would not only be able to debate all these matters in Parliament, but genuinely cut the burden?
Mr. Heald: Of course, my right hon. Friend has a proud record in this area. Let us not forget that it was the Conservatives who invented deregulation.
The Department for Trade and Industry has on its website a list of all the measures that are going to be taken on the two dates when regulations are laid. It amounts to about 40 pages of new regulations that are coming through. The Government spend a lot of time talking about the principle of one in, one out—for every new regulation, one will be scrapped—but does it ever happen? Does it heck. We see no list of regulations that are to be scrapped, just vague promises. It is time to change the culture in Whitehall to one that is about light regulation, deregulation and trying to take the burdens off the back of business.
New clause 19 may not be perfect, but it is a major step forward, and we certainly welcome that.
New clauses 1, 4 and 8 represent my attempt to focus the fast-track procedure solely on deregulation. The Government have gone far enough for me not to wish to press the new clauses. However, new clause 4 touches on a point made in amendment (b), tabled by my hon. Friend the Member for Christchurch (Mr. Chope). He was very active in Committee and was one of the original members of the deregulation taskforce, so he has strong credentials on deregulation. If he moves that amendment, I am likely to support him. My hon. Friend is seeking to establish that the net effect of an order made under new clause 19 should always be deregulatory. We believe that that is a sound principle, and that proposal is to be supported.
Amendment (a) to new clause 19 and amendment No. 74, tabled in the names of the hon. Members for Somerton and Frome (Mr. Heath) and for Cambridge (David Howarth), would require Ministers to be
reasonable in their considerations under new clause 19 and clause 3 respectively. I look forward to hearing the arguments for those amendments, which I suspect are implied in their wording. I certainly would not rule out supporting that approach. There is always a possibility of judicial review if a Minister acts in a totally unreasonable way, but the amendments could add a lesser sanction to the provisions that would provide a useful way of concentrating minds.
Mr. Winnick: I was quite critical of the Government’s original proposals, and I am very pleased that these changes—the hon. Gentleman calls them concessions—have now been made, as I said to my hon. Friend the Minister earlier. I have been listening carefully to the hon. Gentleman since he started speaking at the Dispatch Box. Is it the case that he does not agree—I will put it no more strongly than that—with his hon. Friends, whose various interventions on the Minister gave the impression that the Government would continue to have the powers that we do not want them to have, even theoretically? May I assume from what the hon. Gentleman is saying that he disagrees with his hon. Friends?
Mr. Heald: I would go so far as to say that the amendments tabled by the hon. Member for Cambridge and my hon. Friend the Member for Christchurch would improve the drafting of new clause 19, and I am therefore supportive of their efforts. However, I cannot argue with the fact that new clause 19 represents a major climbdown and a step in the right direction. I personally feel that it has saved parliamentary accountability in an important area. I am still unhappy with certain other areas of the Bill, however. For example, it confers far too wide a power in saying that the Law Commission may make a recommendation on any matter—even a highly controversial and important one—without any guarantee that it will be debated on the Floor of the House. I do not accept that. Similarly, the terms of the veto that have been offered are inadequate. However, new clause 19 is a step in the right direction. I hope that that explains my view to the hon. Gentleman.
I also welcome amendments Nos. 23 and 26, which will tighten the way in which the Law Commission’s recommendations are to be dealt with. I am still not satisfied with the overall arrangements for the Law Commission’s recommendations, but I welcome that tightening. We would certainly be prepared to look at the whole Law Commission issue with the Government. Previously, the House has always dealt with Law Commission recommendations using the Standing Orders of the House. Standing Orders Nos. 58 and 59 apply a fast track to consolidation measures, for example. I am not sure that that is not a better way of tackling Law Commission measures than what is proposed in the Bill. Unless we can find a way of allowing non-controversial Law Commission recommendations to pass, while ensuing that controversial ones are properly debated, I shall be unhappy with new clause 21. That is just a warning, however, because we have not reached that new clause yet.
New clause 9 is an important proposal, and I look forward to hearing the Government’s views on it when the Minister winds up the debate. We believe that it is necessary to consider the needs of small businesses separately when measures of deregulation are proposed.
There is already a plethora of examples of that happening, including exemptions in different categories involving businesses with fewer than five, 10 or 15 employees, and so on. Some exemptions apply when a business’s rateable value is below a certain point, or when its turnover is lower than a certain amount. There is also a range of regulations providing different kinds of exemptions for small businesses.
When considering the regulatory regime for business, there is a strong case for requiring the appropriate Minister to consider whether the proposed regulation will be appropriate for small businesses. There is wide support for that requirement in the business community, even among large businesses. For example, the Institute of Directors believes that, on balance, there is a case for applying small firm exemptions. In its report on the subject, it said:
“The burden of regulations often has a disproportionate impact on SMEs because they lack both the resources and the staff to deal with them...Exemptions...should be determined on a case by case basis. Small businesses have flourished in the USA partly as a consequence of this approach.”
What we are talking about is allowing Government the choice to impose a regulatory burden on big business, which might be appropriate, and to decide that it would not be appropriate for small business.
4.45 pm
Andrew Miller: The hon. Gentleman is making a series of interesting points. On this point, however, will he give the House a few examples of precisely what he means?
Mr. Heald: I would be happy to do that. As the hon. Gentleman knows, the Better Regulation Commission considered whether providing exemptions created disincentives to growth, but did not find much evidence of that. Its report, “Helping Small Firms Cope with Regulation”, on exemptions and other approaches, made it clear that small firm exemptions were a useful tool to ensure that there was not an over-burdensome regime for those companies. I mentioned the various categories and thresholds that apply, and there are small business exemptions in 50 or 60 areas. At the moment, however, there is not a legal requirement that there comes a time when the small business impact is considered, although the Cabinet Office talks about that. I believe that there would be no harm in a specific provision that deals with small business, and I suggested such a provision in Committee. Interestingly, the Institute of Chartered Accountants has said that it believes that the relative proportion of the burden of regulation on small business is too large, and that it hopes that Ministers will consider such an approach.
Andrew Miller: I want to clarify this point, as the Regulatory Reform Committee, of which I am Chairman, must look to the future when there might be a less benign Government. Is the hon. Gentleman saying, on behalf of the official Opposition, that he would not include in those remarks measures such as the minimum wage and the Health and Safety at Work, etc. Act 1974?
Mr. Heald: All that I am saying is that, at a time when regulations are being made or removed, the role of the small company needs to be considered. I am going no further than that. As the hon. Gentleman will
know, our policy is to accept the minimum wage. [Interruption.] Well, we accept the minimum wage, so he has not made a superb point.
New clause 17, tabled by my hon. Friend the Member for Stone (Mr. Cash), seeks to ensure that where a fast-track deregulation order is made in connection with a provision concerning our EU obligations, it would be legally binding and effective. It is hard to disagree that that should be the position, and I believe that it probably is the position, but I would be interested to hear the Minister’s views. The manner in which member states make their law is a matter for member states, and if Parliament decides to make law by order, that is for our Parliament rather than the EU.
The Government climbdown in new clause 19 is to be welcomed. There is a case for some amendment of it, about which we will hear in a moment, and we are open to considering that. I would like to hear the Minister’s response to new clause 9, which is designed to help small business. At this stage, we are minded to support my hon. Friend the Member for Stone on new clause 17, which clarifies the law as regards the EU.
Andrew Miller: I agree with the hon. Gentleman that new clause 19 represents progress—indeed, substantial progress. To send a note of caution to my hon. Friends in the Cabinet Office, let me say that I was mightily pleased to receive a letter dated 11 May promoting me to the Privy Council, which I thought was a real step in the right direction, and then I saw that my name was spelt wrong.
The Parliamentary Secretary, Cabinet Office (Edward Miliband): Long overdue!
Andrew Miller: I thank my hon. Friend.
My worry about the Bill is that there have been two steps forward and one step back. The new clause represents real progress, but this debate would have been unnecessary had the Government listened to my Committee’s advice in the first place. The Committee said that the matter should have been dealt with by means of pre-legislative scrutiny, and a number of Ministers have told me privately that they agree with that. The House produced a device for the purpose of looking to the future, and we could have used it sensibly. After all, the underlying principles of the Bill do not divide the House; what we are arguing about are the detailed mechanisms involved.
I consider new clause 19 to be a substantial step in the right direction, and I urge the House to accept the principles that it embodies, but a number of points should be considered carefully. The Minister will deal with most of my concerns when he explains where the line will be drawn in the limitation of orders, but we shall not be able to get to grips with some other aspects until we examine the Standing Orders and determine how the RROs should properly be dealt with. We need to establish whether they will be dealt with through the existing Legislative and Regulatory Reform Committee, through a hybrid of some kind, or through a vehicle yet to be devised. We need to keep an eye on the ball. We
also need to think ahead about how we will expect the House to empower the Committee or Committees involved to do the necessary work.
I agree with the thrust of the Minister’s remarks, but what he should glean from the debate and his extensive and interesting weekend reading is the fact that, while the Regulatory Reform Act 2001 has not proved as effective as it might have, the blame lies not with the House but with Government Departments. I do not blame Ministers. There is an inertia in the system, with which any Member who has been in the House any length of time will have had to deal. Certainly two or three Conservative Members who have been Ministers in important Departments will take the point. It is extremely difficult to achieve momentum, however determined a Government may be.
On page 13 of my Committee’s report, the First Special Report of Session 2005-06, we have published a chart. It is in microdot form, but there is a good deal of data that are worth examining. The worst example given is that of the Sugar Beet Research and Education Order 2003, which was dealt with by the predecessor Committee. I do not suppose that any Member present recalls what the order did—that does not constitute a challenge—but it spent 1,800 days floating around the Department for Environment, Food and Rural Affairs. That is extraordinary. I do not know the reason for that because no one ever explained it to the House, but therein lies the core problem that makes the Minister’s job that much more difficult.
We worked hard—I say “we”, because the Government generously consulted all four relevant Select Committees closely, and there has been dialogue with the Liaison Committee through the Father of the House, as well—to find a way through the difficult area of definition, and I hope that the methodology adopted proves to be right way. It is better than the alternatives that some of us floated, which included having omnibus lists of exclusions—I look at the hon. Member for Cambridge (David Howarth), who had the biggest omnibus of the lot. I think that the mechanism adopted is the better one, but we need to be extremely precise and to make sure that it is clearly understood that we are discussing not burdens on Ministers, but burdens on people outside this place—burdens that the Minister has the power to do something about, for it is he, the Minister, who will bring an order before our Committee.
Under existing legislation, we spent a tortuous afternoon dealing with the most recent Forestry Commission order. We had to debate what the Forestry Commission was, in constitutional terms. Before that debate, I was not aware that the commission is a non-ministerial Government Department. That raised the interesting technical question: if it is a non-ministerial Department, which Minister introduced the order? However, just as the House accepts the Paymaster General introducing orders on behalf of Her Majesty’s Revenue and Customs, we accept the structure that relates DEFRA Ministers to the Forestry Commission.
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