Regulatory Reform Bill [Lords]

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Mr. Lansley: I have pressed the Minister on this subject as far as is decent. Even if it is Government policy to consult in the manner described, I hope that the Minister will ensure—in fact, the task might fall to us—that subsequent implementation is indeed undertaken in the manner suggested, so that those who are the subject of consultation can be sure of what is required of them. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Cotter: I beg to move amendment No. 33, in page 5, line 3, at end insert—

    `(1A)The consultation required by subsection (1) above will include details of whether any savings or increases in cost are estimated to result from the proposals and, if so,—

    (a) the reasons why savings or increases in cost should be expected, and

    (b) if it is practicable to make an estimate of the amount, that amount and how it is calculated.'.

As is clear from the amendment, it is somewhat disturbing that under the Bill the consultation need not include details on

    ``the reasons why savings or increases in cost should be expected'',

    ``an estimate of the amount . . . and how it is calculated''.

If the amendment were accepted, the Minister would have to disclose, where appropriate, any costs or savings likely to be incurred in the consultation process as a result of an order. Under the Bill as drafted, the Minister is obliged to do that only under clause 6—when the document is presented to Parliament.

I thought that, in keeping with the general direction of legislation and the European small business charter, the Government were saying that they wanted to do all that they could to ensure proper assessment of new regulations and Bills. That should apply equally to consultation on orders. It seems bizarre that the proposal for an order should be put out to consultation without the inclusion of such information. How can a business or organisation come to a reasoned conclusion about the impact that an order might have on them, when it is not aware of its possible financial impact?

The point is especially relevant to small businesses, which have been much discussed here, as in many other Committees. Small businesses have a high profile now, because people realise their importance to the country's economy. The cost of regulation often has a disproportionate impact on small businesses, especially micro-businesses. The devil might be in the cost details of an order that seems reasonable in principle, and therefore acceptable to the relevant organisations. If it were found to place significant financial burdens on organisations, an entirely different conclusion might be reached.

To be really effective, a cost analysis must be provided during the consultation process. Great emphasis is now placed on impact assessments when Bills come before Parliament. I hope that the same emphasis will be given to the consultation process for orders. The point is a key one for small businesses and organisations, and I shall be interested to hear the Minister's comments.

6.30 pm

Mr. Lansley: I am grateful for the opportunity to speak on amendment No. 33. It would achieve a small part of what amendment No. 18 set out to do—bring part of the reasoning behind a proposed order into the preliminary consultation process. I hope that the hon. Member for Weston-super-Mare will forgive me, but I find it slightly curious to think that one could be clear about the costs and savings if other information were not made available. Some of that information would be more qualitative; the better advanced it was, the better the quantitative information, and savings in cost, might be.

Nevertheless, the hon. Gentleman makes a good point, and I do not want to be uncharitable to him. Later, we are likely to debate regulatory impact assessments, which I know were debated in another place. They are not just about the narrow issue of the cost of adapting to regulations. We have moved to them from compliance cost assessments, and the distinction between the two is important. The purpose of a regulatory impact assessment is to understand all the effects of a regulatory change.

Mr. White: If what the hon. Gentleman says is true, why does his party oppose the use of regulatory impact assessments in the public sector? Conservative Members have said that they should be used only in business.

Mr. Lansley: Perhaps the hon. Gentleman will quote where that was said chapter and verse. If there is a difference, however, it is because of the point that I was about to make. Compliance cost assessments measure the direct cost of changes in regulations. In the public sector, such costs are often direct and can be quantified. That is often precisely the method that the public sector uses to quantify costs when they are expressed to the private sector. The larger changes in costs and impacts are the commercial consequences of changes in regulations that might create different comparative advantages between businesses in terms of prices, sales, overheads or whatever. Perhaps I can gather the information together for our debate on Thursday, but from memory, I believe that the regulatory impact assessment on the Regulation Investigatory Powers Act 2000 was specific as to some of the costs that would flow directly from those changes. The regulatory impacts properly should have reflected some of the commercial consequences, which were measured in tens of billions, rather than tens of millions, of pounds. That was the consequence of examining direct costs on businesses.

I shall not digress further so as not to prolong the debate, but the purpose of the amendment of the hon. Member for Weston-super-Mare might be to focus the minds of those who are the subject of consultation on some of the direct savings and increases in costs, which will then have precisely the kind of commercial consequences on a broader range of prices, sales, overheads, competitiveness and so on that will give rise to regulatory impacts. That ought to be borne in mind in the preparation of documents and be well understood by businesses before they consult on the parliamentary stages of the process. I shall not say that there is no value in amendment No. 33, because there is. I wish that it were amendment No. 18, but amendment No. 33 is good as far as it goes.

Mr. Stringer: I do not believe that the amendment adds anything to what is already in the Bill. The hon. Gentleman knows, because we have discussed it many times, that every regulatory reform order has to have with it a regulatory impact assessment. As the hon. Member for South Cambridgeshire said, the RIA is about rather more than costs and benefits. It is an analysis of the best way forward, as we improve the process. We have to assess the impact of any new regulations on different parts of the economy, as opposed to just on businesses.

That RIA will accompany RROs and will present more information than is asked for in the amendment. Therefore, the amendment would add nothing to the Bill. I agree with the comments made by the hon. Member for Weston-super-Mare about small businesses. We introduced the Bill to balance regulatory regimes, which may benefit small businesses. I ask the hon. Gentleman to withdraw the amendment.

Mr. Cotter: This has been a useful debate. It has highlighted the concerns of all businesses. There should be serious assessments in these matters. We have long rehearsed the importance of regulating impact assessments generally—I am sure that the hon. Member for South Cambridgeshire agrees. Even in the short time that I have been in Parliament, I have noted that some Bills do not adequately address that aspect. I know that the Prime Minister has privately expressed great concern about the effectiveness of RIAs.

Our debate has been part and parcel of the concern expressed about the impact of Bills and regulations. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Page: I beg to move amendment No. 21, in page 5, line 8, leave out

    `it appears to the Minister,'.

The Chairman: With this it will be convenient to take the following amendments: No. 22, in page 5, line 9, leave out `that'.

No. 23, in page 5, line 10, leave out `he' and insert `the Minister'.

Mr. Page: I freely admit that it would have been much easier to speak to these amendments if the Minister had been generous and kind enough to accept amendments Nos. 16 and 17. Perhaps to satisfy the hon. Member for Peterborough, the Minister may be willing to accept amendment No. 21 and to show the generosity of spirit which was referred to and for which we are desperately, if vainly, looking.

These amendments are consistent with what we have been arguing for throughout the debate. There must be a reduction in the power of the Executive. We should not forget that the Bill has been introduced because the Executive are responsible for extra regulations and the difficulties that have made businesses groan and shudder under the weight of such regulations.

The principles lying behind amendments Nos. 21, 22 and 23 are the same as those lying behind amendments Nos. 16, 17 and 20. Under our amendments, it will be easier, if not automatic, for people who were originally consulted to be approached again and asked for further views on any variant of the proposals and their effect.

I am sure that I will touch a chord with every member of the Committee when I say that we have all passed legislation in good faith. We may think that we have done the right thing, but be appalled when we go out into the real world and realise the raft of rules, regulations and burdens that have resulted from such legislation. I have certainly said to myself, ``I did not intend to lumber business with that amount of legislation.''

May I take the Minister back to the consultation process and ask him what will be the custom and practice of that process? The amendment would remove from the Bill the slightly arrogant phrase

    ``it appears to the Minister''.

When the consultation takes place, will people be consulted about the new ideas, rules and methods? Will they be consulted about cost estimates that will flow from the changes and proposals? Unless we give them some idea of the costs and burdens, not everyone will be in a position to carry out the regulatory impact assessments that we have been discussing. I recommend that the Minister should move towards setting up an independent unit for regulatory impact assessments. Too often, having created the baby, a Department can find no flaw in it, as there appears to be little cost involved in its implementation and operation.

I bring the Minister all the way back to the start of the consultation process. I should like to think that those who have given their views on the proposals will be automatically consulted if there are variants to those proposals. At what point will they be informed about costings, so that they can make logical and sensible decisions?

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