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I have many concerns about the Bill, and I hope to outline them in the next hour or two. I also hope that the House will divide at the end of the debate, because this is a serious matter. Amendments have been tabled but they were not accepted, so a Division would be most welcome and I shall certainly vote against the measure. There is no opportunity for the Minister to say
anything at the end of the debate, so I will vote against the measure if a Division is called.
Let us get back to the Bill. It aims to reduce the regulatory burden on business by setting up a super-regulator. I should like to refer to the very helpful impact assessment produced by the Department for Business, Enterprise and Regulatory Reform in May 2008. I believe it is the second versionobviously, the Government got it wrong the first timeand it is signed by a Minister. Unfortunately, the signature is a squiggle and we are not told who the Minister is. I wonder whether it is the Minister for Employment Relations and Postal Affairs
Mr. Bone: Aha! We are talking about the regulation of business, and one of the annoying things that happens is that businesses receive documents from the Government, from regulators and from local authorities, sometimes undated, always without the name of the sender, and signed with a squiggle. And that is exactly what we have got from the Government today, on the very provision that they are using to try to reduce regulation. I guess that this is because the Minister does not really want to be associated with a Bill that is actually indefensible.
The Bill will set up what the Government calllet me get this rightthe local better regulation office. My goodness me! Could they not have thought of a better title than that? Perhaps something like the department of administrative affairs, or, more accurately, the Yes Minister department would have been a much better title and people would have understood what we were trying to do in the House today. The Government are trying to reduce regulation, red tape and costs to business by setting up a super-regulatory department. We are going to create regulators and bureaucrats to regulate and administer other bureaucrats. This is straight out of Yes Minister.
The Government might say, Oh, this is only a small thing. Dont worry about it. However, the new office will have a staff of 25 and a budget of £4.5 million. That is fewer than one regulator for every regulator that the Government want to regulate; and £4.5 million a year for a staff of 25 works out at £180,000 per person. That sounds like a pretty good salary for those involved. Unfortunately, the Minister was unable to tell us what the chief executive of this new organisation was to be paid.
I am absolutely assured of one thing: if this new department goes aheadif this Yes Ministry is establishedthe first thing it will look at will not be better regulation but expanding its empire, taking on more people and costing more money. That is what Government Departments do.
Mr. Hollobone: My hon. Friend is absolutely right. The point was made earlier that, according to the Governments own estimate, the cost to local government would not be recovered for at least four or five years, even if this measure is brought in. Every time we set up a regulator, he or she has to produce a piece of paper and someone at the other end of the system has to receive that piece of paper. My hon. Friend is right to say that, rather than reducing the regulatory burden, the Bill will increase it.
Mr. Bone: As usual, my hon. Friend is absolutely right. I do not think the Government could possibly deny that their estimate of the costs and numbers will be wrong. I would like to know of any Government estimate of costs and numbers that has ever been right when they are setting up a new department.
The hon. Member for Solihull referred to this new department earlier as a super-quango. The Government control it, it is funded by the taxpayer, and it will impose its views on 27 regulators and local authorities and tell them how to regulate what they are regulating. The first thing that shows this to be total nonsense is the fact that local authorities know how to regulate in their areas. Their locally elected councillors will be thrown out by their electorate if they do not do their job properly, but there are no such safeguards for this centralised quango or this Yes Ministry. We cannot get rid of them in the same way as we can get rid of local councillors. What will happen is that decisions will be forced on a local government area by a prime authority, which will not be the local authority area affected, and the councillors will get the blame for it. They will be thrown out, but it will really be the Governments fault.
The Bill significantly increases Whitehalls control of regulation and local government. That is the Bills intention. The Minister was, in Jim Hacker style, not quite courageous enough to admit that it amounts to centralisation, but he used a rather similar word. In fact, nobody could really argue that the Bill was not about centralisation. It is a striking example of the Prime Ministers obsessive macro and micro-management of the country. He wants to be able to go into every nook and cranny.
What my local authority in Wellingborough wants to enforce may be different from what an authority in Brecon and Radnorshire or Glasgow wants to do. I rejoice in that. I rejoice in the localism of my local authority knowing how to regulate locally. I do not want everything to be standard. I do not want Tesco to build everywhere because they have found some primary authority that will allow it to do that.
What worries me most about this super-regulation and this new department of administrative affairs is the cost. I have with me a document that was not freely available with the explanatory notes, but was very helpfully provided by my research assistant, Mr. Richard Britton. This impact assessment lists all the costs and alleged savings. It has a Ministers signature on it, so we must assume that it has gone through the Government and been approved. There are many figures about savings. It states:
The evidence regarding the cost of administering existing partnerships is not consistent; much relates to experiences with the small number of firms with the largest national presence.
What of the costs relating to local authorities, which are perhaps the most affected by the changes? They will lose control; their decision making will be removed. If we follow the chain back through the prime authority and through the regulator, we get back to Whitehall overruling local government affairs. Somehow or other, this was supposed to save money. On page 21, the impact assessment states that the total local authority costs are £13.6 million, while the benefits are said to be
£14.2 million, with a net annual benefit of £0.5 million. I do not think that the arithmetic quite works there, but that is what it says. It then adds in very small print that there is a one-off cost of £1.9 million, so this is not revenue-neutral to local government. Even if we believe the Alice in Wonderland figures produced by the Government, this is going to cost local government money. Time and again, councillors tell me that the Government take away their powers and force them to do things without funding them for doing so. That is exactly what we have before us today.
The Government have helpfully given us a figure for the overall cost. I am not sure how they arrived at it, but it is an extraordinary amount: £42 million. That sounds an awfully large cost to me, with a risk of little or no return. Most of the benefits are artificial. The Government talk of savings in lawyers fees for businesses, but that is merely an aspiration, while the costs are plain to see.
Let us consider the National Audit Office. For every £1 that the NAO spends, it saves £8. If we are to believe the Mickey Mouse figures in the impact assessment, the return on the Bill might be just over what is spent. If the Government were really keen on reducing regulation and cutting costs, they could get rid of certain elements. They could get rid of regional government at a stroke, saving £230 million a year for businesses. Local authorities would welcome that as well, because the costs of consulting regional government would also go. If the Government really want to help local authorities out, why not abolish the Standards Board for England? That could be done overnight. No one would miss the board, and its abolition would save £12 million. That is a great deal more than the half a million a year that the Government reckon they will save each year, if the one-off cost is ignored.
This is a centralising measure that could only please someone like Jim Hacker. We are creating a huge department, which will expand. The Government say that the cost in the first year will be £73 million. If we add a quarter to cover their miscalculation, the figure becomes £100 million. The office will start out with 25 staff. That figure sounds as if it was plucked out of the sky. We will see an ever-growing super-quango which will impose more and more regulations on regulators, and the regulators will impose more and more fines on businesses. The Government have doubled the number of sanctions that regulators can use against businesses, which will not improve anything for business or for regulators.
Since the publication in 2005 of the Hampton Review, which looked at the scope for reducing the administrative burdens caused by regulators inspection and enforcement activities, the Government has been introducing new tools to deliver the better regulation agenda.
In practice, that is absolute rubbish. I know from my experience of running companies that what they want the Government to do is butt out and not to be involved. Businessmen say, Leave us to do our own thing. We know how to run businesses; we know how to employ people; we know how to invest profits. What we dont want is an enormous number of forms and teams of regulators coming in to check what were doing.
This super-regulatory office will increase the number of staff. If there are 27 regulators and each takes on another 100 people to go around investigating and
imposing the sanctions that the Government tell them they must now impose rather than going to court, that represents a huge amount of lost income for business. The Minister may not see where the loss of income arises, but I know from experience that before a VAT inspection, one spend hours and hours getting everything right. If the VAT inspector turns upI remember an occasion when he did not bother to do so because it was raining heavily, and we had done all the work for himhe goes through all the paperwork and if he then says, Youve done something wrong, it can be sorted out with him.
Occasionally, there is an argument of substance. In one instance, a companyI was not involved; it was a different companyfelt very strongly that it was not prepared to accept the regulators guidance and took the case to court. It won the case and there was no damage done to its reputation. Under this procedure, companies will be fined, their reputation will be damaged and it will be reported on the front page of the Evening Telegraph , or the equivalent local paper. The Government admit in this document that half the fixed penalty notices will be lost, which suggests that they think the regulators will hand them out willy-nilly. The damage done to business, in the loss of time when the regulators visit and in the actual costs imposed, will be extraordinary.
I wish to draw the Houses attention to the stunning example in the impact assessment, to which the Minister did not refer. I know it is not the done thing to show a graph in the House, but I shall try to describe this wonderful graph. It has a red line and a green line. The red line is supposed to be the savings and the green line is the cost. These are the Governments own figures, and one can clearly see that for more than two years the green line is above the
Mr. Bone: It was just such a clear example showing that, despite all the assurances we have heard from the Minister, this measure will, between now and the next general election, cost local authorities and businesses money. That is not what I say: it is here in the report.
At the next election, my right hon. Friend the Member for Witney (Mr. Cameron) will become Prime Minister and we will have to reform all these regulations. It is Yes Minister at its worst. The Government are drawing power to the centre and producing more and more bureaucrats. In an economic crisis, when the economy is crying out for leadership, what is the Governments big idea? It is to create a department for administrative affairs with more administrators administering other administrators, and it will cost £73 million. The Minister is the new Jim Hacker, and if the House divides on Third Reading, I shall oppose this Bill.
Andrew Rosindell (Romford) (Con): I speak this afternoon as the chairman of the British-Isle of Man all-party parliamentary group. I am proud to be closely associated with the Isle of Man. With the support of Members of both Houses of all political persuasions, we have a truly cross-party association that works to cherish, foster and strengthen the relationship between the Parliaments and peoples of the Isle of Man and the United Kingdom of Great Britain and Northern Ireland.
The Isle of Man is a truly unique place, set in the heart of the Irish sea, equidistant between the United Kingdom and Ireland, with England to the east, Scotland to the north, Wales to the south and Northern Ireland and the Irish Republic to the west. There is nowhere more central to the British Isles than the Isle of Man.
As a British Crown dependency, the Isle of Man has Her Majesty the Queen as its Head of State. In that role, Her Majesty also holds the title of Lord of Mann. She is represented on the island by a lieutenant-governor, currently Vice-Admiral Sir Paul Haddacks KCB. The Isle of Man is proud of its allegiance to the Crown and its close association with the UK. Indeed, the flag of the three legs of Mann will often fly alongside the Union Jack, demonstrating the Manx peoples loyalty to the Queen and their pride in having such a close association with Britain and all the British people on the other side of the water.
Quite rightly, the people of the Isle of Man are also fiercely determined to retain their rights and freedoms and have done so for longer than most nations in the world today. The Government of the Isle of Man is led by a Chief Minister, currently the hon. Tony Brown MHKMember of the House of Keyswho previously served as a Speaker of the House of Keys, a role now dutifully performed by the hon. Steve Rodan SHK.
The Isle of Man is a mature and responsible democracy with a distinct cultural and political identity. It is a self-governing Crown dependency that has its own Parliament and Government and makes its own laws. The Parliament, or Tynwald, comprises the House of Keys and the Legislative Council. It was founded more than 1,000 years ago by the islands Viking ancestors and is the oldest continuous Parliament in the world. It is characterised by strong public and political scrutiny in a system that is largely independent of political parties with an exceptional level of opportunity for citizens to interact with their elected representatives.
On Monday this week, 7 July 2008, the people of the Isle of Man celebrated their national day, Tynwald day, at St. Johns village in the west of the island where the annual ceremony of the Tynwald midsummer court was held. It is a legal requirement established by the islands 9th century rulers. The Tynwald ceremony is one of great pageantry and splendour and was attended this year by Her Royal Highness the Princess Royal accompanied by an honour guard from the Royal Air Force. The Royal Air Force college band provided the military music.
Tynwald court, together with the islands senior public office holders, assembles on Tynwald hilla four-tiered mound in the centre of St. Johns, reputed to be constructed from sods of earth from every parish of the island. The open-air sitting at Tynwald hill dates back more than 10 centuries and during the ceremony the Deemstersthe Isle of Mans high court judgespromulgate Acts of Tynwald by proclaiming to the people in English and Manx Gaelic the titles of new laws that have been passed during the year. It is also an opportunity for island residents to exercise their ancient right to present a petition for redress of grievance at the foot of Tynwald hill and for the swearing in of the islands four coroners.
In 2003, Her Majesty the Queen presided as Lord of Mann at the midsummer court of Tynwald. That was an occasion that I was immensely proud to attend at the personal invitation of the President of the Tynwald, the hon. Noel Quayle Cringle MLCMember of the Legislative Council. In 2005, I was again privileged to be invited to attend Tynwald day, but that time in my capacity as chairman of the all-party group.
Aside from the formal proceedings, Tynwald day is a public holiday in the Isle of Man and has long been an occasion for the Manx people to gather and meet friends and family at St. Johns. A traditional fair is held, along with a variety of family entertainment, including Celtic dancing and music, sideshows, a military band and a fireworks finale.
To promote and foster good relations and co-operation between the Isle of Man and the United Kingdom.
I am sure that the Minister will shortly confirm that Her Majestys Government share the same objective. The Isle of Man Government have successfully promoted economic competitiveness and international responsibility in supporting the interests of the islands people.
The island is a land of opportunity, where the Manx Government strive to create the right environment for the Manx people and businesses to reach their full potential. The Isle of Man is also a nation where people value their quality of life, the beautiful countryside, its suitability for family life and a safe environment. Its innovative and entrepreneurial spirit is encapsulated in the islands branding initiative, Freedom to Flourish.
The Isle of Man has a diverse and successful economy, currently in its 25th consecutive year of growth and expanding at an estimated rate of 8 per cent. The per capita national income is now 13 per cent. above that of the United Kingdom and more than 25 per cent. higher than the average of the 15 leading European nationsno mean feat for a small island, and one that our own Government could certainly learn from.
The successes of the islands economy have allowed continued and substantial investment in public services, including capital investment in recent years in a new acute care hospital, improving local schools and two new water treatment plants. Health and welfare services are based on the UK model, but with significant local enhancements.
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