Regulatory Reform Bill [Lords]

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Mr. Richard Page (South-West Hertfordshire): I endorse the amendment so ably moved by my hon. Friend the Member for South Cambridgeshire. It encapsulates the Bill; it is the raison d'etre of our proceedings because the Bill provides for a reduction in the total burden on all those affected by the changes. I would find it difficult to face a constituent who came to me, after the Committee and the various processes had done their work, saying that his burdens had increased. That would be totally unacceptable. It would also be hard to argue. Even though I would say, of course, that many other people had benefited, my constituent would be justified in being sceptical and upset that the House and the Committee had failed to give him adequate protection.

You would take me to task, Mr. Cook, if I were to re-enter the whole debate of proportionality. We had a fairly tortuous and, dare I say, convoluted sitting this morning, but it has a tenuous connection with the matters under discussion because it leads on from the question of proportionality. Lord Falconer tried to argue in the other place that a small number of people might be faced with increased burdens if Ministers sought to rebalance an entire regulatory regime. His advocacy met with considerable scepticism. No one can be sure what changes would occur to affect entire regulatory regimes. Just how small would the small number of people be? There is a moral weakness in the noble Lord's argument; I hope that the Minister accepts that and will look with favour on our amendment. This morning, the Minister rejected our amendment No. 2, which proposed the insertion of the word ``small''. It would be a tremendous step in the right direction if he were to accept this amendment. That is surely the right and proper thing to do.

Mr. Stringer: I am not sure whether we have a disagreement or a misunderstanding. I hope that it is a misunderstanding. It might be helpful if I begin by giving three definitions. There is genuine misunderstanding about the phrases ``deregulation'', ``regulatory form'' and ``better regulation''. As I have tried to explain at Cabinet Office questions, deregulation is the removal of regulations and better regulation is improving the quality of regulations and the process of generating them.

Mr. Page: Is not better regulation a reduction of burdens? Would not that consequence naturally follow?

Mr. Stringer: I tend to define it as a process of creating better regulations. They may well be less burdensome than they would otherwise be, but it means taking into account their impact and having a better regulatory process. Indeed, one might not regulate at all and opt for self-regulation, co-regulation or codes of practice. What we have before us now, however, is not only better regulation, but a Regulatory Reform Bill. The problems caused to business, commerce and industry by legislation and regulation often derive from overlapping regimes.

We spoke earlier about fire regulations as 120 pieces of primary legislation and a similar number of statutory instruments. That is a good example. The amendment would allow the regulatory regime for fire to be rebalanced to a deregulatory regime. The amendment states:

    ``there is a net reduction in the total burden on all those affected by the changes''.

If the fire regime were changed to a risk-based assessment, factories and offices with higher risks might, under the conditions and objectives of clause 1, have a greater burden placed on them. Establishments with fewer fire risks, though previously assessed at the same level—if it were possible to find a way through the 240 pieces of legislation—would face fewer burdens.

Simplification and better regulatory reform, which is different from straightforward deregulation, benefits everyone. That is why the definitions are important. The hon. Gentleman's points may be a definite disagreement or a misunderstanding about where the Bill is leading.

Mr. Lansley: Let me see if I understand the difficulty. The Minister mentioned fire safety legislation in the context of risk-based assessments that result from the new scheme of regulation. Is he confusing burdens, which are requirements, conditions and restrictions placed on the persons affected—principally businesses—with impacts? The impacts are quite outwith the question of burdens. The Minister may believe that beneficial effects will flow from the new scheme of regulation, but that is not the same as assessing whether the burdens, in terms of the direct impact of the legislation, will be reduced on a net basis. That is a deregulatory point, but it does not necessarily mean that the scheme cannot be pursued: it can, but it must have a less burdensome effect on the industry as a whole.

Mr. Stringer: I return to my point that any regulatory reform must have a deregulatory element. The hon. Gentleman's amendment states:

    ``there is a net reduction in the total burden on all those affected by the changes''.

If the regulatory regime applied to fire were rebalanced towards a risk-based regime, factories, offices and buildings at greater risk might have to be inspected more often. Higher fees might have to be paid and changes made to buildings to protect people. Overall, that could be a greater burden on businesses than before. Under the previous more even regime, other businesses might have faced a lower regulatory burden. I am not saying that it is simple to do the sum because we get into questions of apples and pears, but we will benefit from putting all the legislation in one place and making it easier to understand. I ask the hon. Gentleman to withdraw the amendment because it would require that

    ``there is a net reduction in the total burden on all those affected''.

If we changed the nature of that particular regime—I can give him other examples if he wants—some people would have a greater regulatory burden.

5.15 pm

Mr. Lansley: I now understand the Minister's point, and I apologise because I misunderstood him when I made my previous intervention. His point is simple: the amendment would require a reduction in the total burden on each person affected by the changes. The amendment is not intended to do that; it is a technical point and perhaps the Minister could tell us if we are wrong. We could always return to it on Report. The amendment's purpose is to reduce the overall burden of regulation. For example, the Minister mentioned fire safety legislation. If a risk-based assessment subjected people to greater burdens with more inspection and additional requirements, there should be a countervailing reduction in the burdens on those affected by the fire safety legislation as a consequence.

Mr. Stringer: I am certainly making that point about the hon. Gentleman's amendment. I do not agree that the net impact will necessarily be reduced. As I said on Second Reading, part of the regulatory reform order must have a deregulatory effect. However, because of the change in the balance of the regulatory regime, it might be impossible to do the sum to find out. We would have to compare the apples—the simplicity of having the legislation in one place—with the pears—the real costs. In my opening speech, I said that, in assessing each part of the regulatory reform order, any burden that is placed on people or businesses has to be proportionate to the benefits provided. That should be the test, not one of overall burden.

Mr. Lansley: The Minister is being patient with me, and I am grateful. Would it not be simpler for him to say that he could envisage circumstances in which the burdens imposed by a regulatory reform order might increase in total? Such circumstances would be justified by the benefits that flow from it; that is what the proportionality test, the fair balance test and even the desirability test are based on. The Minister's least impressive argument is that we are comparing apples with pears, or fruit with vegetables, because such a comparison is implied by all those tests.

Mr. Stringer:I am not prepared to say what the hon. Gentleman would like me to say. The Bill's objective is to improve regulatory regimes. Such improvements must have a deregulatory element to them—which was passed as an amendment in the other place—and would have to pass the test of proportionality and all the other tests. I will not pretend that I can do a sum here and now to guarantee that one way or another, because someone might come along in 12 months and say, ``You were wrong.'' I am not prepared to say what the hon. Gentleman wants me to, because it is impossible to say that unless one has been through the process of assessing the regulations. We are clear in our objectives: to help businesses, individuals and public sector bodies by reforming the regulatory regimes that often inhibit them, and to rebalance those regulatory regimes in a better way, using the tests in the Bill and including a deregulatory element. As much as the hon. Gentleman might want me to, I am afraid that I cannot go further than that. I agree with what he said about the amendment not being a helpful addition to the Bill.

Mr. Lansley: I am not sure that I said that. Amendments might or might not achieve the purpose for which they are intended, but I believe that this amendment would achieve its purpose. If I had sought to limit the order-making power such that the total burden on each person affected by the changes would be reduced, I would have written that. I wrote ``all those affected'', and I am not persuaded that the meaning of the amendment is anything other than what I intended.

The purpose is clear. As my exchange with the Minister demonstrated, we wish to insert additional limitations such that the order-making power—when one considers the burdens and leaves aside the benefits—would be deregulatory in its effect. That does not mean that the regulatory burdens cannot be rebalanced—I take the Minister's point that that could happen. Fire safety legislation, if a different form of assessment is used, is a reasonable example of where burdens could be rebalanced. We all know that rebalancing burdens is not the same as increasing them; it can increase or decrease them.

A further test is that burdens should be decreased. It was wrong for Lord Falconer to suggest in the other place that the ability to rebalance legislation was a necessary reason not to have a specific deregulatory effect. It is perfectly possible to do that. He was wrong to suggest that the quantification of burdens is so difficult that it would be a constraint upon achieving that. It is clear that on a number of the tests that have to be applied through the legislation, Ministers will have to balance quantified and unquantified burdens and benefits. When we discuss clause 6, we might examine the extent to which quantification can be derived. That is a subset of the issue.

Ministers should not only be of the opinion but be able to demonstrate subsequently that the orders have a deregulatory effect, taking into account the burdens. That is what we seek through the amendment and what the Minister is clearly unable to give us. On that basis, I encourage my hon. Friends, and Government Members if they are of a mind, to sustain the original purposes of the Deregulation and Contracting-Out Act 1994 and to support amendment No. 12.

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