Regulatory Reform Bill [Lords]

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Mr. Lansley: I am grateful for the opportunity to rise and support my hon. Friend. I should like to discuss new clauses 2 and 4, which are grouped with new clause 1.

New clause 2 is a matter of principle on our part. We want, wherever possible, to introduce into legislation that may have a regulatory effect a presumption in favour of what is in effect a sunset clause, which would cause the Act, as it would then be, to expire after a certain period unless it had been used for the purposes for which it was intended. New clause 2 allows for such a procedure after five years. If the Act had not had the intended beneficial effects, or if it had been used for a substantially re-regulatory or burdensome purpose, it would be our view that it must be dropped and new legislation drafted to achieve that purpose.

New clause 4 has a similar purpose, although it is not a sunset clause in the strictest sense because it would not cause each regulatory reform order introduced to expire after a certain period. We accept that that would be unduly burdensome for the House. If the orders were substantially deregulatory in effect, we would be creating a procedure that would tend to increase regulations automatically, unless we passed resolutions to the contrary. New clause 4 has a different structure, which asks for a report to be presented on the operation of orders. That would give rise to a procedure that would allow the disapplication of such orders, if the House so resolved it.

11.15 am

The British Chambers of Commerce, at which I note leaders of the three main political parties were present over the past few days, has published its business manifesto. It is relevant that under the section of the manifesto entitled, ``The Best Regulatory Environment'', the following prescription is included:

    ``The next government should make the criteria for sunsetting regulations explicit, and use sunsetting as a norm in all new regulations.''

The purpose of new clause 4 is to allow for that effect. If the impact of regulatory reform orders was regulatory rather than deregulatory, or in any way did not have the intended effect, we hope that the House would resolve against them and disapply them.

We have already discussed regulatory impact assessments and it is important to recognise that they are not a science, but an art—an art that the Government sometimes subjectively pursue. Such assessments under the Regulation of Investigatory Powers Act 2000 set out compliance costs of up to £20 million for part I and up to £20 million for part III. The total compliance cost of that Act could be £40 million. An independent report on the economic impact of the 2000 Act, prepared for the British Chambers of Commerce in June 2000, made it clear that direct costs—not including opportunity costs—would be £640 million over five years. The estimated overall cost was more than £1 billion a year by 2002. The report examined the competitiveness implications and, astonishingly, found that by 2005 Britain could be losing £11 billion worth of business a year. It, therefore, regarded the opportunity costs as enormous. The regulatory impact assessment offered by the Home Office with the Bill and the economic impact which is assessed independently are different in orders of magnitude and are ample illustration of how the implications of the Act will have to be re-examined. We are committed to such an examination after the election. If the implications of the Act are wholly different from the basis on which it was enacted, we would review it and hope that there was a procedure to disapply it. That is the aim of new clause 4.

Mr. Cotter: I rise to speak to new clauses 1 and 3. I accept that the hon. Member for South-West Hertfordshire has introduced quite a good new clause. I would give it nine out of 10. He would get 10 out of 10 for getting to the point; he did pretty well. I do not want him to go away feeling full of himself, but he waxes very well and, on this occasion, briefly and to the point. However, he did not cover every issue. I support new clauses 1 and 3.

The hon. Gentleman suffers from one major disadvantage, as do his hon. Friends: a lack of representation of Conservative members on the Deregulation Committee. He will not know that we discussed reports and expressed the wish to have annual reports instead of three-year reports, as proposed by the Government.

I hope that the Minister will take on board my next comment. We hope that the new Deregulation Committee to be set up in the new Parliament will carry forward our suggestion for an annual report and do what the Government should be doing. If the new Committee agrees to that, I hope that the Government will listen to what is being said.

On the other two new clauses, there is merit in the argument of the hon. Member for South Cambridgeshire. We support sunset clauses in principle and I hope that the Minister will respond to his comments.

Mr. Stringer: I want to repeat what my noble and learned Friend Lord Falconer said in the other place: the Government are committed to a review of the working of the Deregulation and Contracting Out Act 1994 and its constitutional implications after three years. That is a reasonable period. The procedures have been used under the 1994 Act, but the power in the Bill is wider. It will become clear whether the Government's commitment and our expectations, as well as those of the Committee, are borne out in procedural terms and whether there are constitutional implications. Three years is an appropriate period to obtain a perspective. One year is too short because the provisions may still be bedding down.

On the general issue of sunsetting, the Government's position is clear. We shall consider whether regulations should be sunsetted case by case. There is a balance to be drawn because sunsetting will create uncertainty in an Act of Parliament. Business may feel uncertainty when the provisions come up for review, and the Departments and business will feel uncertain about whether there will be any use for the Bill when it is enacted in nine months.

When considering any regulation, it is right to consider sunsetting. The Football (Offences and Disorder) Bill was a good example. New and unusual powers were provided and it was agreed that they should be reviewed and sunsetted after a specific period. However, the arguments, which the Government accepted, must be balanced against uncertainty. Business wants certainty and stability and to know what will happen, which is why we are not keen on blanket sunset provisions throughout the legislative framework, or in the Bill.

The other issues raised include how the regulatory reform orders will be reviewed, as opposed to the process and constitutional issues. We debated that earlier. We believe that the structure of a panel for regulatory accountability chaired by my right hon. Friend the Minister of State for the Cabinet Office.

Mr. Lansley: She is the Minister for the Cabinet Office.

Mr. Stringer: Sorry, the Minister for the Cabinet Office.

The Chairman: Order. If I feel sure that our business can be concluded, I am empowered by Standing Orders to extend the sitting by 15 minutes. I have been given that confidence, so our sitting will be extended to 11.40 am, but woe betide any hon. Member who gives me reason to regret that confidence.

Mr. Stringer: That is helpful, Mr. Cook. I was about to sit down.

On Tuesday, we discussed the processes and procedures that the Government had put in place. The Minister for the Cabinet Officer chairs the panel for regulatory accountability and each Department has a Minister responsible for regulatory reform. We believe that that is a better process than that envisaged in the new clauses. The Government are committed to reviewing legislation and future programmes. I ask the hon. Member for South-West Hertfordshire to withdraw the new clause.

Mr. Page: I thank the Minister for his response, but it hurts me to say that he has muddled a review and a report. It is right that processes should be reviewed, but an annual report keeps matters up to speed. I understand what Lord Falconer said about a three-year review. That is fine because we do not expect the whole process to be churned up and changed after a year, but it would be helpful to see how matters progress year by year. I shall not press the new clause to a vote, but I shall return to the matter on Report.

On the sunset clauses, I have been empowered by my hon. Friend the Member for South Cambridgeshire--he has given me a metaphorical tick in the box--to say that we welcome the Minister's agreement to consider the sunset clauses on a case-by-case basis. That is better than in the past. However, I am concerned that there is no presumption by the Government that that should be automatic. We are discussing the enthusiasm to introduce sunset clauses rather than introducing them in specific circumstances. There is a fundamental difference of approach between the Opposition and the Government on sunset clauses and we shall return to the matter on Report.

Mr. Cotter: I still want to make a point on new clause 3. I hope that the Government will listen to the new Committee that will be formed--

Mr. Stringer: I apologise to the hon. Gentleman for not dealing with that point. Of course, the Government take seriously the comments of the Deregulation Committee and will respond accordingly.

Mr. Cotter: I thank the Minister for his encouraging response.

Mr. Page: I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

Question proposed, That the Chairman do report the Bill, as amended, to the House.

11.30 pm

Mr. Stringer: May I take this opportunity, on behalf of my hon. Friends, and I am sure, Opposition Members, to thank you, Mr. Cook, for the tolerant way in which you have chaired the Committee's proceedings. Our debates have sometimes been arcane, difficult and complicated. I never thought that I would spend half an hour of my life debating whether it was necessary to include the word ``necessary'' in a Bill. During the day and a half that we have been in Committee, our exchanges have been good- humoured, thoughtful and intelligent. I suspect that there has been less difference between members on both sides of the Committee than some may have thought when we started.

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