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My right hon. and learned Friend the Member for Rushcliffe noticed the irony in what he called the minor miracle that turned what should have been a positive desire to reduce regulation into the messy Bill that is before us. He stated his position that new clause 19 is still too lax in its wording. I am sure that his arguments on the new clause will be carefully reviewed by colleagues, not least in another place. Many of his comments, not only in relation to veto rights, will be addressed later in our proceedings. We benefited from
his experience in his summary of how Government have been nibbling away, as he called it, at parliamentary freedoms over the past 50 years. His comments were strongly supported by the remarks of my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd), who also spoke up for amendment (a) and new clause 17, and gave a general call
Andrew Miller: Does the hon. Gentleman agree that the right hon. and learned Member for Rushcliffe (Mr. Clarke), who is not prone to over-exaggeration, slightly got things wrong? The hon. Gentleman will recall that the legislation enacted by his right hon. and learned Friend, in section 2(2) of the Value Added Tax Act 1994, means that a statutory instrument to change VAT could have effect only for a short period. That is notwithstanding all the restraints of the sixth directive. I think that the hon. Gentleman is slightly exaggerating the case.
My hon. Friend the Member for Aldridge-Brownhills made a general call for proper time to be given to the important changes that are proposed. I think that he was making a general point about legislation being rushed through the House. My right hon. Friend the Member for Wokingham (Mr. Redwood) loaned us the significant benefit of his large experience of deregulation. He questioned whether the provisions in the Bill were the best way to achieve the initial objective. He thought not, and I shall return to that key issue. I like the idea of having an annual deregulation Bill and the implied requirement to tutor civil servants in the merits of deregulation, that being key to the cultural change.
My right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) gave a good example of the dreadful droit de suite law as a showpiece of gold-plating of EU regulations and demonstrated the importance of keeping the 1972 legislation in the context of parliamentary sovereignty.
The hon. Member for Luton, North (Kelvin Hopkins) made a thoughtful speech. I liked his idea of short Bills. My hon. Friend the Member for Christchurch has closely followed consideration of the Bill, and was active in Committee. He put a good case for amendment (b). He argued that the reduction of the burden for one should not be justified by increasing burdens for others. On that, my hon. Friend has our support.
Will the Government amendments work? Will deregulation be improved as a result of the new formula that is proposed? The expectations of businesses are high. The Government have talked the talk. In May of last year, the Financial Times reported that the Bill would be an attempt to slash the estimated £100 billion of the cost of regulation on business. In January, the Minister then responsible was quoted as saying that the Bill is the
cornerstone in achieving essential and long-promised reductions in unnecessary red tape.
It is part of a plan to achieve one of the most radical regulatory reform agendas in the world. The then Ministers press release in January spoke of savings through reducing bureaucracy of £10 billion, equivalent to 1 per cent. of gross domestic product.
The fact remains that regulations on business have continued to soar. We know that, since 2001, only about 20 regulatory reform orders have been made, although the target was 60 by 2005. On average, with 3,887 new regulations a year, let us say that the Government get really ambitious and raise the target of scrapping regulations from 60 every four years to 60 a year, or even 100 a year. Is that not like putting in a barrier the size of a road hump to stop a tidal wave? Are 60 fewer regulations worth the destruction of parliamentary sovereignty? That is what we were considering in the early stages of the Bill. We came to the conclusion that the answer was no.
We appreciate that the Government have gone some way towards understanding the issues and addressing the concerns of the House, not least with the amendments. However, in the new atmosphere of realism, will the Minister please care in his remarks to reassess the impact that he thinks that the Bill will have on regulation?
Mr. McFadden: I feel that in some senses the ghost of St. Augustine has been with us in this debate. There have been many speeches from all quarters of the House about how much people want to see regulation cut, but not in the way that is proposed, and perhaps not yet. I think, as my hon. Friend the Member for Wolverhampton, South-West (Rob Marris) said, that that is perhaps a danger for us as we come to debate the amendments. However, I welcome the comments that have been made about new clause 19, especially by the Opposition Front-Bench spokespersons. I do not pretend that they embraced the clause with open arms but they at least recognised that the Government had attempted to respond to some of the fears and concerns that have been expressed about the Bill. The Government did not accept that those fears and concerns would necessarily have been realised.
I shall try to stay out of some of the private battles that we heard this afternoon between my hon. Friend the Member for Stoke-on-Trent, Central (Mark Fisher) and some Opposition Members. There were battles also between some Opposition Members about our membership of the European Union.
I turn to amendment (b) to the new clause, which concerns burdens and whether they can be reduced overall. New clause 19 permits the removing or reducing of a burden. Removing or reducing a burden from one person may possibly increase burdens on another, even if the overall effect is downward in terms of deregulation. The example has been used of perhaps increasing the burden on a million but reducing the burden on one. That is not likely. However we could increase the burden on one and reduce the burden on a million. That is what we mean by saying that the overall effect should be downward. It is the same as the 2001 legislation that would allow the introduction of more targeted or more proportionate burdens in the context of an overall downward trend. New clause 19 also permits the removal or reduction of overall burdens. It could permit the introduction of new burdens if it is done in the context of reducing the burdens overall. For that reason, we may not be able to say yes to the hon. Member for Christchurch (Mr. Chope).
Mr. McFadden: The Bill provides that under part 2 the purpose is to remove or reduce any burdenincluding the overall burdensthat result either directly or indirectly for any person under the legislation.
Sir Robert Smith: The clause includes the word or. The amendment seeks to replace that with and. With the or still in place we can remove any burden but we do not have to remove overall burdens. The overall burden can increase. As I have said, there is an or. The Minister can say that he is removing a burden even though there is an increase in overall burdens. There is still compliance as things stand.
I anticipate that there will be future examples where legislation covering an entire area could be rationalised to benefit those regulated. However, amendment (b) would narrow the order-making power so much that many of the reforms that were possible under the Regulatory Reform Act 2001 would no longer be possible.
I turn to the reasonableness test in amendment (a). The Minister is already under a public duty to reach a reasonable view. We discussed who could object to a reasonableness test, and although the views expressed are on one level true, the amendment would add nothing to the duty that the Minister is already under to act reasonably. Case law has established that if a Ministers decision is not reasonable, it can be struck down by the courts, so the existing subjective test is a real one.
David Howarth: The Minister seems to be confused. The point is that under the subjective test in the Bill as it stands, all that the judicial review will study is whether the Minister considered a particular thing to be the case. If the word reasonably is included, deciding whether the Minister acted reasonably in that context becomes a more objective test. The Minister has a dilemma: either the word reasonably makes no difference, in which case, he should accept it; or it makes a very big difference and on a ground that he does not want to accept, in which case, he should resist it on that ground.
A number of safeguards will ensure that orders that are beyond the scope of the Bill will not be delivered. Before an order is laid, the Minister will be required to consult widely with the relevant stakeholders. In addition, the Government have undertaken not to use the order-making powers in the Bill to create highly controversial measures, or to force through orders in opposition to the Committees. We will of course hear more about that issue tomorrow.
Mr. Heath: The Minister said that he would reflect on amendment (a), and I find it difficult to understand what he will be reflecting on. Butthis is the big
butthis is the only opportunity that this House has to express an opinion on it. He can reflect as long as he likes, but this House will not have the opportunity to express its opinion unless it does so tonight. So can he reflect a little more quickly, and perhaps accept it?
My hon. Friend the Member for Ellesmere Port and Neston (Andrew Miller) said that the inertia in the process since 2001 was not necessarily the fault of the Select Committees or of the degree of parliamentary scrutiny. He has a strong point; we have to look at the system in the round. There is an argument that Departments will be more reluctant to come forward with regulatory reform orders if they think that the process is so cumbersome that it will be difficult to use. So there is an argument about incentives and how the process works as a whole. But the Chairman of the Procedure Committee, who has been a voice of common sense throughout this process, and who has come up with positive and constructive proposals, made a strong point about there being not just a duty on this House to agree the proper scrutiny procedure, but a duty on Departments to pursue this agenda with vigour and enthusiasm.
Mr. Chope: Does the Minister therefore accept, on his own interpretation of new clause 19, that it may well result in this procedure being used in circumstances where overall burdens will be increased, rather than decreased?
We had a lengthy debate on new clause 17, mostly between Opposition Members. I tried to follow it, and I hope that I have understood the intention of the hon. Member for Stone (Mr. Cash) accurately. If I am right, the purpose of his new clause is that orders made under this procedure would not be binding on our Community obligations. He said, I think, to my hon. Friend the Member for Doncaster, North (Edward Miliband) that if his new clause were accepted, infraction procedures would occur and various consequences would follow.
Mr. Cash: I did not predicate my argument on the basis that there would be infraction proceedings; rather, I said that they could be a consequence. The stability and growth pact is an example of the rule of law in Europe being destroyed by the attitudes of individual member states. What I am saying is that, where there is an Act of Parliament that is express and unambiguous, even if it is inconsistent with the European Communities Act 1972, and where the words notwithstanding the 1972 Act are included in such
legislation, the legislative supremacy of this House requires the judiciary to give effect to that legislation. That is the simple point that I am making, and it is unchallengeable.
Mr. McFadden: It is unchallengeable in the hon. Gentlemans subjective judgment. The interesting point about new clause 17 is that it is supported by his Front-Bench colleagues, with all the inferences that will be drawn from that. The Conservative party has been re-packaged in recent months, but the point, which might be noticed beyond this debate, is that they are backing this new clause in the knowledge of what the consequences might be.
Mr. Heald: I made it clear that I should be very interested to hear the Ministers views on the new clause. Is he saying that it would change the law, or that it would simply clarify existing law? Is it not just a statement of existing law?
Mr. McFadden: It seeks to go further than our proposals on the European aspects of the Bill, which deal with gold-plating rather than trying to challenge our obligations as members of the European Union, which are a matter of fact.
Mr. Cash: As with the argumentson which at last the Prime Minister has given wayon the Human Rights Act 1998 in the context of the sovereignty of Parliament and the role of the judiciary, so, in different circumstances but on the same principle, the legislative supremacy of Parliament applies in the context of the European Community. Does the Minister agree with that or not?
I should like to turn to some of the other comments made towards the end of our debate. The hon. Member for Perth and North Perthshire (Pete Wishart) mentioned the Scotland Act 1998. The Bill would have the same relationship to that Act as to the Regulatory Reform Act 2001, in the sense that consequential provisions could be made, as set out in clause 8.
The right hon. and learned Member for Rushcliffe (Mr. Clarke) asked about tax. The answer is that orders could be used to reduce tax if that met the purpose of removing burdens and other provisions in the Bill. In reality, however, there is a Budget and a Finance Bill every year, and that is how we deal with tax measures in this House. I hope that that makes the matter clear.
Mr. McFadden: Here we come to the question of what regulatory reform orders are likely to be used for. My hon. Friend is rightthere is a Budget and a Finance Bill every year precisely for the purposes of making changes to taxation.
Several hon. Members asked for examples of what the Bill will allow us to do. One example is that of the
Charity Commission deregulation, which was undertaken to review the financial thresholds at which certain registration requirements are asked for. Others may include simplifying some transactions with Government, consolidating areas of overlapping legislation, Hampton mergers of regulatory bodies, and streamlining overlapping consent regimes. For instance, the Department of Health wishes to remove a consent regime introduced in the Health Act 1999 because it has proved ineffective, and the Office of the Deputy Prime Minister undertook to consider proposals for reviewing, repealing and modifying numerous consent regimes with a view to removing burdens on the NHS, local authorities and others.
Mr. Heathcoat-Amory: Since this regulatory reform Bill has itself undergone considerable regulatory reform so far, will it, if it becomes an Act, be a candidate for regulatory reform under its own provisions, so that it is another example of a future Act that needs to be reformed?
In the end, we have to make a judgment as to whether we want a deregulatory system that can do the job. New clause 19, with its associated amendments, was our response to fears that the Government were introducing too wide a power. Equally, there is a warning on the other side of the debate. If we legislate on the basis of every scenario in our wildest imaginings about what this legislation may be used for, we will end up with a repeat of the process that we have had twice before, which has achieved a consensus in Parliament but not the purpose that we wished.
I shall end by reflecting on what my hon. Friend the Member for Ellesmere Port and Neston, the Chairman of the Regulatory Reform Committee said. It has been suggested in the debate that the Bill is about relieving the burdens on Ministers. That is not the intention of the legislation. Those who feel the burdens are the people and bodies outside the House, including charities, businesses, and voluntary and public sector organisations. They have to deal with the regulation and legislation that we introduce. It is they who feel the effects, and it is to them that we have a duty to regulate in such a way that the power can be used effectively.
Mr. Heald: On a point of order, Mr. Deputy Speaker. During the debate, several hon. Members on both sides of the House have said that their view of new clause 19, on which we are about to vote, could be affected by knowing whether a Division was likely to be available on either amendment (a) or amendment (b). Are you in a position to give the House any guidance on whether such a Division might be possible?
Mr. Deputy Speaker (Sir Alan Haselhurst): I have listened carefully to the debate, and I understand the point that the hon. Gentleman is making. If amendment (a) were pressed to a vote, I would accede to a Division on it.
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