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6.11 pm

Mr. Lansley: I am grateful for the opportunity to respond to the Minister on Third Reading. Even though he chided Conservative Members for making what he described as Second Reading speeches on new clause 1, I felt that the Minister wanted to revisit the Second Reading debate himself. However, we have had that debate. I am pleased to echo the Minister's view that there was a constructive attitude to the Committee proceedings throughout, although we secured no changes to the Bill in Committee, nor was it ever likely that we would secure any changes on Report. It was right for my colleagues to use their time to express their sense of concern about the pace and increases in regulation. It was perhaps their best opportunity to express their concern rather than to play the Government's game that it is now simply a matter of debating the legislation's technicalities and procedures.

The Government will no doubt have their Bill. We objected to it on the ground that it did not have a solely deregulatory purpose. None the less, I hope that it will be only a short time before we have the responsibility of using it. We have agreed that the legislation is not without merit. It is true that the Deregulation and Contracting Out Act 1994 did not necessarily give sufficient scope for reforming a scheme of regulation rather than regulations that related to one subject alone. It was certainly a limitation, even on a deregulatory purpose, for the 1994 Act to confine deregulation and contracting out orders to legislation passed prior to the point at which the Act came into force. So there is merit in the Bill for that reason.

We will be able to use this legislation for a positive deregulatory purpose. I freely admit that I do not exclude the possibility of occasionally changing a scheme of regulation in ways that impose burdens at the same time as reducing them elsewhere, thus rebalancing them. It is not inconceivable that from time to time one has to restructure legislation to impose burdens.

I remind the House that our objection to the Bill was that it did not seem to us right to use the exceptional, supra-affirmative procedure. That procedure was created by the previous Conservative Government, and opposed by the then Labour Opposition. It was designed for the very specific purpose of reducing the extent to which the Executive place burdens on private citizens. However, the Bill applies the supra-affirmative procedure to many purposes other than deregulation. Whatever the Minister may say, and regardless of the nature of amendments to be tabled in another place, the deregulatory purpose may be no more than a fig leaf to cover the Government's regulatory intent.

I do not want to intrude a harsh partisan point, but we believe--from our experience and from the experience of those dealing with business--that regulation has increased under this Government. A number of business organisations' representatives consider that increase to be excessive and believe it should it be rolled back.

I turn once more to Sir Martin Jacomb, who wrote in The Daily Telegraph earlier this week:

That is the essence: we know what the Government and the Minister clearly do not--that the business sector is finding that the increasing burden of regulation inevitably stifles enterprise. The Government have not established an underlying system to try to reduce that burden.

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It will be a Conservative responsibility to reduce the burden of regulation. The Bill is not enough. It should be used only by a Government in the context of a system for reducing regulation generally. We debated review clauses in the context of new clause 1, but such a mechanism should be only one element of an intention to introduce sunset clauses on all future regulations and legislation that have the effect of increasing burdens.

Mr. Ian Stewart: The hon. Gentleman said what the Bill should be used for. Does that mean that the Conservative party will not honour its commitment when the new Regulatory Reform Committee looks at the Vaccine Damage Payments Act 1979? The Government have promised that changes to that legislation will be made at one of the Committee's first meetings.

Mr. Lansley: I am surprised at that question, as the hon. Gentleman was an assiduous member of the Standing Committee. In our deliberations, I offered the reform of the 1979 Act as an example of something that we did not oppose. I said that we supported it. However, he will recall that my right hon. Friend the Member for Richmond, Yorks (Mr. Hague) has told the House that the Opposition believe that that proposal for reform of legislation should have been included in the Queen's Speech, and achieved by primary legislation.

It is not for me or the Minister to anticipate the contents of a Queen's Speech. An extension of the vaccine damage payments scheme might be achieved by means of a regulatory reform order or primary legislation. However, the House should not be under the misapprehension that we would not want to extend the scheme.

Regulatory reform orders should be used in the context of a deregulatory initiative across the board. Sunset clauses have a part to play, as does the reform of institutions established by the Government such as the panel for regulatory accountability, the better regulation taskforce, the regulatory impact unit, and so on. They are all very well, but do not deliver the objective sought by business.

Essentially, two things are needed. The first is a stronger agency--a deregulation commission with the power to block additional burdens imposed by legislation and to examine them under a special procedure before they are proceeded with. In that way, business could have a voice with influence in Government to limit legislation.

We also need an audit of the burden that regulation imposes on businesses. We need to establish a baseline in order to create regulatory budgets which will have the progressive effect of reducing the overall burden on business. Unless we do that, precisely the opposite tendency will apply. There is a tendency for Governments to increase the burden of regulation systematically over time, as is happening under the present Government. That is inevitable, not only because they do not have a system to reduce regulation, but because it is often their intention.

Each year, the Institute of Chartered Accountants carries out a survey of its business advisers, looking at the cost to businesses of complying with the legislation that came into effect in the preceding year. That is not the total cost of complying with legislation, but a measure of the in-year change in the burden of new legislation. In 1999 it estimated that the cost to micro-businesses, or businesses with up to five employees, was £1,700. It rose

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to £3,600 in the year to July 2000. For small businesses, which for this purpose were defined as businesses with up to 50 employees, the figure was £4,700 in 1999 and £8,000 in the year to July 2000. That illustrates that it is not simply that there is an excessive burden of legislation and regulation, but that the rate at which it is being imposed is still increasing and needs to be reversed.

Mr. Pike: Does the hon. Gentleman accept that in theory the new committee to be established by the Bill could conduct an inquiry into the way in which the Act was being used, and in a year's time, for example, could publish a report raising some of those points? Given the additional debates on Select Committee reports in Westminster Hall, the issue could be debated if the opportunities that the Government are anxious should be used are not seized as a result of the new Act.

Mr. Lansley: The hon. Gentleman makes an important point that I was going to touch on later--that it is important for the legislation to be reviewed. In response to an earlier debate, the Minister made it clear that it remains the Government's intention to conduct such a review and to report some three years hence in relation to the procedures, the order-making process and the constitutional and other procedural issues, but not in relation to the policy as the Government regard that as having been settled.

The hon. Member for Burnley (Mr. Pike) made the very fair point that the Regulatory Reform Committee, if it is to be so styled, could indeed undertake such a review. My hon. Friends and I would welcome that because, at the risk of repeating myself, we all tend towards legislation and regulations where, to put it in military parlance, we fire and forget. We need to see where the bullets hit and what damage they do. If they have the intended benefit or better, that is all well and good, and I am sure that the policy that lay behind any particular regulatory reform order will be seen to have been vindicated.

Without debating with the hon. Member for Milton Keynes, North-East (Mr. White) the estimates of what the compliance and other impacts of the Regulation of Investigatory Powers Act 2000 will be, it is also legitimate for people to take distinct and differing views of the impact of legislation that is passed through the House, so it is vital that we do not treat the policy as given and then move on. In that respect I hope that, even at this late stage, Ministers might revise their intention and make it clear that they will participate and help the new committee and the House to look not only at the policy, but at the effectiveness of the regulatory reform orders that are introduced, at their compliance with the structure of the document set out in clause 6, and at whether the orders have the effects that were intended.

On that point, I thank the Minister for writing to me, to the hon. Member for Burnley and to the Chairman of the Delegated Powers and Deregulation Committee in another place about the process of preliminary consultation. It will be much to the advantage of the Regulatory Reform Committee, the House and consultees if they are given direction as to the issues that will have to be addressed in the document specified in clause 6.

Notwithstanding the Minister's positive response, it is not the purpose of the preliminary consultation to apply the tests proposed in one or two of the regulatory reform

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order consultation papers. I do not dispute the importance of the fair balance and desirability tests under clause 3, but they are for Ministers and the House to apply--on advice from the Regulatory Reform Committee. The Minister noted that preliminary consultation should not attempt to make judgments or to reach conclusions before information has been acquired. It thus seems premature to make judgments as to desirability or fair balance before a document is laid before the House. Those matters do not belong in the preliminary consultation process.

Other matters, however, should be covered: the burdens that are to be affected; the reduction or removal of burdens; the imposition of burdens; whether necessary protection is removed; whether reasonable expectations are to be frustrated; and the savings and increases in costs. Indeed, if the Minister wants to take this path--although the measure does not require it--the question of specific impacts on particular persons or groups could be addressed. The Minister referred to the importance of considering the disproportionate impacts that sometimes affect small businesses. He rightly said that we should always consider the exemption of small businesses from legislation that may have disproportionate effects on them owing to their lack of internal resources for dealing with it. If the document and the preliminary consultation provided for under clause 6 could identify such impacts, it would be useful.

During Report stage, my hon. Friend the Member for Cotswold (Mr. Clifton-Brown) referred to risk assessment. In one of the consultation documents, the Home Office, too, expressed the issue in terms of risk assessment. It is important to do so; I have no criticism of that. Often, in the pursuit of spurious accuracy in compliance cost assessments, there is a tendency to fix a figure and ignore things that are more difficult to quantify or that are the subject of variable assumptions. At certain points in the consultation document, it is important to include risk assessment so as to assess the assumptions--to work out how sensitive the compliance costs are to the factors in the proposal and to the assumptions made as to how those factors will apply.

I do not want to delay the House, as colleagues may want to speak. If we have the opportunity to use the legislation, we shall set it firmly in the context that I have described. Although the Minister did not accept our amendments, I hope that the Government will stand by not only the undertakings that they have already given--not to introduce large or controversial measures; not to proceed with a regulatory reform--

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