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When I advised a former Government with a very large majority and a strong sense of political direction on privatisation, we had a choice. We could have said, “Let’s take one piece of legislation to the House of Commons to give us an overall power to privatise anything we wish”, and then do it by order-making, industry by industry; or we could have done it by primary legislation, industry by industry. I advised—I think that the Cabinet was of the same view anyway—that it should be done industry by industry with separate pieces of legislation in each case. That meant far more effort and difficulty for the Ministers concerned, but it was the right and democratic thing to do. As those major nationalisations had been put in
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place by separate pieces of legislation, industry by industry, we thought that they should be undone industry by industry, with much more lengthy and bruising debates in the House of Commons. It is extraordinary that the Government can still think it right, despite the change of heart represented by new clause 19, to propose deregulatory measures that take the form of removing pieces of primary legislation that have been passed by this House without going through the reverse process that would be expected.

Why should not we have not only an annual Finance Bill but an annual deregulation Bill? Indeed, the House might discuss and vote on the proposition that there should be a combined finance and deregulation Bill every year. It would be wonderful if the Treasury learned the habit of deregulation and legislated for its tax revenues in a deregulatory way instead of the very regulatory way that it does under this Government year after year, with hundreds of pages of new and complex provisions for old taxes as well as new ones. We could then have deregulatory budgets, Department by Department, so that each year a Department would know that there was a piece of legislation that it could use to fulfil the requirement to cut the regulatory burden it was imposing.

Alternatively, the Government could achieve their deregulatory aims by ensuring that each major departmental piece of legislation had an additional deregulatory section. We hoped that that was what the Prime Minister had in mind when he told us, in respect of regulations, that it would be a case of one in, one out. We hoped that each piece of regulating legislation would therefore contain a complementary deregulatory section so that we could be assured that the overall burden was not going up. But the Government never do that. They do not take advantage of the many legislative vehicles trundling through this House of Commons year after year, usually covering each of the main Departments in turn, by including them in their deregulatory ambitions. Today, we are again left with a truncated and guillotined debate on big changes in constitutional practice.

Like my hon. Friend the Member for North-East Hertfordshire (Mr. Heald), I welcome new clause 19 compared with the original measure. I will not be churlish enough to vote against it, because it is moving in the right direction and I welcome it in preference to having nothing in its place. However, I urge the Government to think again about how serious they are about deregulation and whether there is a better way of achieving it than using the very considerable powers that the Bill will grant the Government if it goes through without further major amendment.

It is disturbing that we can have many long debates on deregulation without anything of a deregulatory nature being mentioned, apart from game licences, welcome though that is. Ministers still do not seem to understand that many colleagues on both sides of the House are very worried by this power for different reasons—not only those who fear that the Government may deregulate something that they think is good regulation, but those of us who are strongly in favour of far more deregulation than the Government have in mind but would like it to be done properly by the front door instead of improperly by the back door.


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My hon. Friend the Member for North-East Hertfordshire and I find ourselves placed in a dilemma that is not of our choosing. We will not vote against new clause 19, but nor do we welcome this legislation. We welcome its intent, but we do not believe that the Government are really serious about it. If they were, they would by now have had their long lists of items that they were going to deregulate. We are left with the paradox that we may have a Bill that does not deregulate very much, but leaves on the statute book some worrying powers for future Ministers.

Andrew Miller: I shall not be so churlish as to ask the right hon. Gentleman why he did not do this as a Minister. Recommendation 2 of the report by my Committee, the Regulatory Reform Committee, states:

Does he agree with that?

Mr. Redwood: I seem to remember that in the ’80s the Government undertook a lot of deregulation and liberalisation that greatly benefited whole sectors of industry such as telecoms, in which I was privileged to be involved as Minister.

Yes, I do agree with the recommendation by the hon. Gentleman’s Committee. I praise him for him for its work and for being one of the many voices that drew attention to the problems involved in the Bill.

Mr. Heald: I imagine that my right hon. Friend is aware that amendments that we tabled in Committee, and now new clause 2, would require a regular report on progress.

Mr. Redwood: I agree. Of course, it was a Conservative recommendation from before the last election that every Department should have a regulatory budget. Under Conservative control, those budgets would be reduced year after year across all Departments as a whole, and if one Department needed or wished to increase its regulatory burden, it would have to find other Departments that would take a proportionate cut so that the overall burden did not go up. One would need an annual deregulatory Bill to go through to implement that.

Mr. Shepherd: My right hon. Friend says that he will vote for new clause 19. Would it not be more cautious to say that that is dependent upon acceptance of the qualifying amendments (a), (b), (c) and (d), so that the vote is conditional? That is what I would urge on him and on my party.

Mr. Redwood: I, too, would like those amendments to be carried. However, I think that I said that it would be churlish to vote against new clause 19 and left open the position on how far we would get in amending it and whether we wanted to increase the Government’s possible majority.


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Finally, I turn to the amendments on the European issue tabled by my hon. Friend the Member for Stone (Mr. Cash). Nowadays, so much of our regulation comes from Brussels that we cannot exempt that from scrutiny and from our deregulatory urge. New clause 17 makes a good attempt to draw the House’s attention to that and to make Ministers understand that they cannot have a deregulation policy worth anything unless they are prepared to tackle quite a number of the regulatory burdens coming from Brussels. That would preferably be through renegotiation of those individual items, but it would be good to have a legislative back-up to make it crystal clear that if this House wishes to deregulate something, that should be law made here in the United Kingdom.

Mr. Cash: I am glad to follow my right hon. Friend the Member for Wokingham (Mr. Redwood) in his remarks. I, too, have reservations about the principal objective of this Bill, which is to have a fast-track procedure for dealing with matters that is very far-reaching even with the changes proposed in new clause 19, as my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke) and other hon. Members have said. The fact is that this is a very invasive Bill. No doubt we shall wait to see what happens on Third Reading, when all our other debates have been concluded.

In an earlier intervention, I said that there was a vast omission—indeed, a black hole—in the proposal before us, which has been dressed up and presented as a deregulatory measure to reduce the burdens on business. That raises some practical questions. I am delighted to say that some six weeks ago, 50 of my right hon. and hon. Friends put their names to my amendments, which would ensure that we got the clarification in our own law that would enable us, where necessary and after appropriate negotiations—it would be done in a responsible and prudential fashion—to insist that we should deregulate on our own terms at Westminster and make it law in this country, binding on the judiciary and overriding the requirements of section 2 of the European Communities Act 1972 in that regard. Having spoken to senior advisers in the House, I understand that this is the first time that an amendment of this significance has been selected for debate since 1972. There was an attempt, during the passage of the 1972 Act, to table an amendment that proposed that nothing in the Act should derogate from the sovereignty of the United Kingdom Parliament.

Some of us will recall the Single European Act that was passed in 1986. I tabled a similar amendment to that legislation. It was on the Order Paper, and my name remained in splendid isolation until I walked into the Lobby on the afternoon of the debate, where a certain very distinguished parliamentarian came up to me and said, in his inimitable fashion, “I think you will be interested to see that I have put my name to your amendment.” Of course, it was none other than the right hon. Enoch Powell. He perfectly understood the object of the exercise.

6 pm

Despite the best efforts of the European Scrutiny Committee and the European Standing Committees, the present volume of European legislation, and the
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fast-track procedures that are used to introduce that legislation into the House, are such that the accusations made by my right hon. and learned Friend the Member for Rushcliffe about the reduction—and, some would say, the redaction—of our legislation within the procedures set out in our Standing Orders could easily be explained in terms of the European legislation that we have to accept under section 2 of the European Communities Act. That legislation receives scrutiny, but if anyone ever attempts to do anything about it by voting against a particular provision in a European Standing Committee, the House immediately reverses the decision. Many people, including me, regard those procedures as a waste of parliamentary opportunity.

David Howarth: Does the hon. Gentleman think it wise that this country should breach the principle of the supremacy of Community law, which is what his amendment would appear to seek to achieve, by means of a statutory instrument and not of a Bill?

Mr. Cash: That would be a valid point, were it not for the fact that the only way in which it is possible to assert the legislative supremacy of this House is under, and by virtue of, primary legislation. The hon. Gentleman is a distinguished lawyer, and he probably anticipated my saying that. In my legal opinion, it would be impossible to seek to override section 2 of the European Communities Act merely by order. However, I can assure the hon. Gentleman that the mechanism that I have employed in my new clause has been before parliamentary counsel and cleared for this purpose. It says

and refers to any order repealing, amending or replacing other legislation that has been introduced under section 2 and is therefore binding on this Parliament only by virtue of the 1972 Act. We could not change that by order, but if the authority were given by primary legislation, using the words

that would attract the legislative supremacy of the primary legislation that the Bill before us would then provide. At that point, the provision would have effect with regard to the fast-track procedure, notwithstanding my concerns about the fast-track procedure in principle, which will no doubt be resolved on Third Reading.

David Howarth: The hon. Gentleman has made my point for me. The only procedure available under the Bill is the statutory instrument, which does not receive sufficient parliamentary scrutiny. That is why many of us have objected to the Bill over the past few months. The hon. Gentleman is seeking to use a regulatory reform order, which would not receive sufficient scrutiny, to violate the principle of Community law supremacy. That would be an extraordinary thing to do, diplomatically.

Mr. Cash: I am glad that the hon. Gentleman added the word “diplomatically” Ultimately, this is a matter not only of grave constitutional importance but of political significance. I would say it was more political
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than diplomatic, but it is a matter of great importance, for all the reasons that I shall outline.

Mr. Redwood: The ill-judged intervention by the hon. Member for Cambridge (David Howarth), who clearly does not understand the important point that my hon. Friend is making, shows that the Lib Dems are craven and slavish on European matters. They want our regulations to come from Brussels, and they do not want this House to be able to influence or change them.

Mr. Cash: I do not want to antagonise the Liberal Democrats too much. I am not in the business of laying traps for people, but the hon. Member for Somerton and Frome (Mr. Heath) said that he was minded to support my new clause, and I hope that he will stand good on that when we go into the Lobby.

Important questions arise that are not merely of an abstract nature. The House has a long history in this regard. Those who have studied constitutional law will remember Henry VIII and the Statute of Proclamations, the great Edward Coke, the achievement of the legislative supremacy of Parliament in 1688, following the final denouement of the Stuarts’ attempts to insist on the divine right of kings at the expense of the people of this country, and the assertion in the Bill of Rights in that year that decisions would be made by Parliament and not by the monarchy. Those issues are not dissimilar to the questions that arise in the context of the European Communities Act 1972.

Mr. Kenneth Clarke rose—

Mr. Cash: I thought that that might get a rise out of my right hon. and learned Friend.

Mr. Clarke: I am sure that my hon. Friend would not suggest that any of those great measures should be set aside by statutory instrument, subject to the veto of two Select Committees. He is helping the arguments of those who think that the Government have not gone far enough. The Government say that no politician would conceive of abolishing a tax or a criminal offence by statutory instrument, yet my hon. Friend is advocating the repudiation of our treaty obligations—and, effectively, our leaving the European Union—by a parliamentary process that would allow those of us who are pro-European merely the opportunity to object to a statutory instrument, or to get a Select Committee to block it.

Mr. Cash: I am delighted that my right hon. and learned Friend has now entered into the debate with gusto. I had hoped that I might be called to speak before him, so that he could have engaged in a series of interventions on me. I am afraid that the issues that he raises do not add up.

Since 1972, we have been subjected to a constant stream of legislation that has been brought in by prerogative. Let us take the Maastricht treaty as an example, or the treaties of Nice or Amsterdam. I do not need to weary the House with the vast amount of legislation of that kind that has gone through this
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House, actively encouraged by my right hon. and learned Friend. Much of it has been resisted by popular sentiment, even though not everyone has understood every jot and tittle of it. My right hon. and learned Friend himself said that he found it difficult, to use the words of new clause 19,

With regard to the population at large, the same applies to much of the European legislation, which is regularly visited on them by virtue of the extremely truncated, undemocratic and unaccountable methods employed through the European treaties and the mechanisms of the House. Ultimately, those lead to legislation going through effectively because we are told that the European Communities Act is inviolable, cannot be touched and is in concrete, that there is an acquis communautaire, that we should forget about any changes, and that the constant stream of European integration must therefore continue. Well, I have news for my right hon. and learned Friend—this is a moment when we say no.

Mr. Andrew Turner: Is not my hon. Friend being a little incautious in his advocacy of this altogether welcome new clause? The manner in which he is proposing it and dealing with interventions not only from my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke) but from the hon. Member for Cambridge (David Howarth) is widening the gulf between those who are in favour of the new clause and those who are against it, rather than bringing together those who have some concerns with those who are in favour of the new clause. When the hon. Member for Cambridge says that the supposed supremacy of European law is being set aside by a mere order, it is not an order that is doing that but this new clause. My hon. Friend was wrong to agree with the hon. Member for Cambridge on that.

Mr. Cash: With respect, my hon. Friend might consider that matter again. The mechanism to enable the constitutional procedure to have the effect that I desire is contained in the new clause. I think that the hon. Member for Cambridge (David Howarth) understood that. We need the backing of primary legislation, using the magic words,

and then referring to the fact that it shall be binding in legal proceedings in the United Kingdom. That provides the mechanism whereby the judiciary are under a duty to give effect to that latest Act of Parliament.

Before I move on to the question whether legislative supremacy is a principle to which we still adhere, I want to deal first with why, from a practical point of view, I regard it as extremely important that we understand how invasive the burdens have been in relation to the business community, industry, competitiveness and enterprise. Leaving aside the system that I have employed to achieve my results, that is my main point. For example, a short time ago, the British Chambers of Commerce produced figures showing the accumulated cost of burdens that arose in
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respect of a number of regulations. It did not, however, demonstrate that the top six—the most burdensome and most costly ones—were all of European origin, of which I could give several examples. The total cost, from the moment that the burdens were introduced to the moment that the figures were published, came to £25 billion. The regulations concerned included the working time regulations, the Data Protection Act 1998, the Employment Act 2002 and so on.

In addition, Sir David Arculus, the Government-appointed chairman of the Better Regulation Task Force, estimated the cost to business of over-burdensome regulations—I stand to be corrected, as the figure seems extraordinarily high, but it is the one that he gave, as far as I can recollect—as £100 billion. No wonder the Government are looking for a way to deal with the problem. We can break down the European element of that, but we should also consider the percentage of legislation passed through the truncated, unaccountable, unattractive and undemocratic procedures in the House, which impose those expensive regulations on British business. Those regulations are then in concrete, and we can do nothing about them, whatever their merits. Once such regulations have been passed by a qualified majority vote, the legislation is imposed on us, and other member states might have a vested interest in not making changes that may be required.

I take seriously the point made by my hon. Friend the Member for Isle of Wight (Mr. Turner). However, I do not want or intend to over-egg the pudding on this point. For me, this is essentially a practical question about the burdens on business and deregulation. It is not a foray into the abstractions of sovereignty; it is about the way in which the system works. It is a time check on reality. Are we going to allow this legislation to continue to invade our business community? The House should remember that I have always said that I am in favour of trade and political co-operation, and I voted for the Single European Act, notwithstanding my attempt to preserve the sovereignty of the United Kingdom, for that reason. I wrote an article in The Times for that purpose at the time. I foresaw that we might find ourselves saturated in unnecessary burdens and that we would need to relieve them in the interests of competition. It was therefore essential to have the mechanism to enable us to do that. Unfortunately, under the rules of the supremacy of Community law—the other law, in the parallel universe that exists in legislation—we are not allowed to have that mechanism, under the terms of the case law of the European Union. The hon. Member for Cambridge and I could go through all the case law, and I would agree with him that the position is clear under Community law.


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