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Standing Committee A
The Committee consisted of the following Members:
Chairmen:
†Mr. Martin Caton, Sir Nicholas Winterton
Austin, Mr. Ian (Dudley, North) (Lab)
†Banks, Gordon (Ochil and South Perthshire) (Lab)
†Carswell, Mr. Douglas (Harwich) (Con)
†Chope, Mr. Christopher (Christchurch) (Con)
†Cooper, Rosie (West Lancashire) (Lab)
†Dhanda, Mr. Parmjit (Gloucester) (Lab)
†Harper, Mr. Mark (Forest of Dean) (Con)
†Heald, Mr. Oliver (North-East Hertfordshire) (Con)
†Heath, Mr. David (Somerton and Frome) (LD)
†Hillier, Meg (Hackney, South and Shoreditch) (Lab/Co-op)
†Hodgson, Mrs. Sharon (Gateshead, East and Washington, West) (Lab)
†Howarth, David (Cambridge) (LD)
†Keeley, Barbara (Worsley) (Lab)
†Love, Mr. Andrew (Edmonton) (Lab/Co-op)
†Murphy, Mr. Jim (Parliamentary Under-Secretary of State for the Cabinet Office)
†Seabeck, Alison (Plymouth, Devonport) (Lab)
†Watkinson, Angela (Upminster) (Con)
Frank Cranmer, Geoffrey Farrar, Committee Clerks
† attended the Committee
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Tuesday 28 February 2006
(Afternoon)
[Mr. Martin Caton in the Chair]
4 pm
Clause 1
Purpose
Amendment proposed [this day]: No. 20, in clause 1, page 1, line 7, after ‘legislation’, insert ‘for
(i) the removal or reduction of any burden,
(ii) the re-enacting of provision having the effect of imposing any burden, in cases where the burden is proportionate to the benefit which is expected to result from the re-enactment,
(iii) the making of new provision having the effect of imposing a burden which—
(a) affects any person in the carrying on of the activity, but
(b) is proportionate to the benefit which is expected to result from its creation, and
(iv) the removal of inconsistencies and anomalies.’.—[Mr. Heald.]
The Chairman: I remind the Committee that with this we are discussing the following:
No. 29, in clause 1, page 1, line 9, leave out ‘with or’.
New clause 1—Annual report to Parliament about section 1 orders—
‘A Minister of the Crown shall annually lay a report before Parliament detailing, for each government department that made an order under section 1 in that year—
(a) what burdens have been removed,
(b) what burdens have been simplified,
(c) what burdens have been imposed, and
(d) what has been the impact of each order.’.
New clause 4—Definition of ‘burden’—
‘In this Act “burden” includes—
(a) a restriction, requirement or condition (including one requiring the payment of fees or preventing the incurring of expenditure) or any sanction (whether criminal or otherwise) for failure to observe a restriction or to comply with a requirement or condition,
(b) any limit on the statutory powers of any person (including a limit preventing the charging of fees or the incurring of expenditure), and
(c) any matter which in the opinion of a Minister of the Crown causes inconvenience or imposes cost.’.
New clause 5—Small business—
‘(1) An order made under section 1 must, where its application extends to small businesses, make specific provision to reduce the regulatory impact on small businesses where appropriate.
(2) In this section, the meaning of “small business” is the same as in section 249 of the Companies Act 1985.’.
Mr. Oliver Heald (North-East Hertfordshire) (Con): I welcome you to the Chair, Mr Caton.
I was saying that exempting small firms from the impact of regulations is the lesser of two evils. The Better Regulation Task Force looked at whether providing exemptions created disincentives to growth, but found little evidence to support that. The
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argument against small business exemptions is that they can create unfair competition. I accept that to remove regulatory burdens from all businesses is preferable, but it is not necessary to ensure that all suffer to the same extent.
Small firm exemptions are a useful tool and new clause 5 asks Ministers to reduce the regulatory impact on small businesses where appropriate.
Mr. David Heath (Somerton and Frome) (LD): Was the hon. Gentleman as surprised as I was to hear the Minister talk this morning about all of the actions taken to relieve the regulatory burden on the smallest businesses? In fact, the Institute of Chartered Accountants tells us that the burden borne by microbusinesses has actually increased: 73 per cent. compared to 69 per cent. the previous year?
Mr. Heald: The point made by the hon. Member for Somerton and Frome (Mr. Heath) is exactly right. I was about to quote a couple of remarks from the Institute of Directors and the Institute of Chartered Accountants in England and Wales. The Better Regulation Task Force report, “Helping Small Firms Cope with Regulation—Exemptions and other Approaches” made it clear that small firm exemptions are a useful tool.
The Institute of Directors published its own report on the issue. The nub of its argument was as follows:
“The burden of regulations often has a disproportionate impact on SMEs because they lack both the resources and the staff to deal with them . . . Exemptions . . . should be determined on a case by case basis. Small businesses have flourished in the USA partly as a consequence of this approach.”
In a briefing to the Committee, the Institute of Chartered Accountants said that the relative proportion of the burden on the smallest businesses is too large. As the hon. Member for Somerton and Frome rightly said, that burden is increasing rather than diminishing.
I hope that new clause 5, or something like it, will emerge from the Minister at some stage. I was glad to have the support of all parts of the Committee for the argument that it is sensible to look at small businesses in a more structured way. If the Minister believes that, as he seems to, it is hard not to agree to an amendment or new clause, even if he does not like the wording of this new clause, which would make that a feature.
New clause 1 is an attempt to introduce an element of retrospective audit of regulatory impact assessments in respect of regulatory reform orders. That has been suggested by the Association of Chartered Certified Accountants, which in fact goes further and says that there should be
“compulsory retrospective audits of Regulatory Impact Assessments”
to look at their accuracy and effect. We believe that that should be supported.
My hon. Friend the Member for Christchurch (Mr. Chope) made the point that new clause 1 might provide too soon an assessment of the impact. I will consider that point further. However, I hope that he will accept that I was trying to do something that
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is good business practice, which is to have the retrospective audit of the impact assessments and the impact of the regulations.
I was encouraged by the intervention on that point by the hon. Member for Edmonton (Mr. Love). He said that he hopes for a later reference by the Minister to that matter, and to deregulation more generally, on Report. I hope that the Minister will engage with the Committee’s deregulatory spirit. I also notice that the Minister himself recognised that it was important that there should be later analysis of the impact of regulation. If he believes in that, why not include it in the Bill? I do not seek a separate Division on new clause 1 at this stage, but I hope that the Minister may return to the subject later, as he considers it important.
Mr. Heath: Is not this the critical part of the process for the entire Bill? Unless the Minister is prepared to put into statute what he asserts he agrees with, he will not have his Bill in its present form when it goes to another place. It is in his interest to listen to what we say and bring forward appropriate amendments in Committee or on Report.
Mr. Heald: I could not agree more with the hon. Gentleman. We are being very constructive. None of the amendments is framed so as to be impossible for the Minister to accept. He may not like some of the drafting details and he might want to change that, with the help of his thousands of officials. I accept that, working in opposition with limited numbers, one can get these things wrong. However, surely a reasonable person could hardly argue with the spirit of what we suggest, and the ideas behind it. Certainly, as to new clause 1, the Minister’s own words suggest that he could return to us with a gift.
Amendment No. 29, tabled by my hon. Friend the Member for Christchurch, is designed to stop Ministers expanding or changing Law Commission proposals. The Law Commission deals with some controversial matters. The Sunday Times recently ran this comment:
“Thousands of co-habiting couples are to be the subject of ‘palimony’ provisions being drawn up by the Law Commission”.
That was on 29 January. It was reported as being a very controversial matter. The report continued:
“Critics are likely to see the proposals as the latest threat to the status of marriage”.
The Law Commission website confirms that the property, family and trust law team is considering
“the potential financial hardship suffered by cohabitants or their children on the termination of a relationship”.
A consultation paper is expected in early 2006. Those sorts of proposals should, as I have already said, be subject to full debate before the House. They should not be dealt with by the order-making power in part 1, but by a proper Bill proceeding in the usual way.
The point that I am making is that if the Minister wanted to, he could take the Law Commission proposal and change it—a proposal about a controversial matter—quite substantially. For example, if the Law Commission wanted to give rights to cohabitants who had lived together for 20 years, he
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could, if he wanted to, say, “I think it should happen after five years”—or 10 or 15 years, or six months. There would be nothing in the Bill to prevent that.
The Parliamentary Under-Secretary of State for the Cabinet Office (Mr. Jim Murphy) indicated dissent.
Mr. Heald: The Minister shakes his head. When he was talking about it he said that the Government could make only a minor change to a Law Commission proposal, and that anything more than that would mean that they were in breach of the law, so it could not happen. However, the Bill does not say that the change must be minor. That may be the Minister’s hope or intention. His idea may be that he does not want to make more than a minor change under the Bill. If so, the Bill should state it.
The point that the TUC made, and which has been made from both sides of the Committee, is that the Minister’s personal assurances apply to him. They do not even apply, in a sense, to the Government as a whole. If he were to move on to a different Department another Minister might decide that he did not totally agree with the way the relevant provision had been expressed; under the Bill, with no firm safeguard, that would be in the hands of the individual.
We are talking about making law for the future. As the TUC said, there might be a different Government in the future. That Government might not agree with the Minister about some of these points, so we need the Bill to say the right things. I am thinking of some of the other proposals that the Law Commission is considering, on tenants’ rights and on provocation in respect of the law of murder. In those areas, if a Minister did not agree with the Law Commission proposal and expanded what was proposed, that would be a very controversial measure and something that the House should consider, but it would not be considered properly by the House.
One matter that the Law Commission is considering is codification of the general principles of criminal law. Are the Government really saying that they should have the power to change general principles of the criminal law by order and to depart from the Law Commission recommendations and that we should not have a full say on that in the House of Commons? That would be deeply worrying. I hope that my hon. Friend the Member for Christchurch will seek to divide the Committee on amendment No. 29, in respect of which the Minister seems to have no argument that he can advance to persuade the Committee of his view.
The key amendment, No. 20, and new clause 4 would focus the Bill on the purpose of deregulation and provide a vital safeguard. As my hon. Friends the Members for Christchurch and for Forest of Dean (Mr. Harper) said, constituents are concerned about the breadth of clause 1; it gives power to govern by ministerial fiat. The Minister says that he would not do that and he should be trusted. Fair enough, but we do not make law in the belief that one Minister will remain continuously in office. Even someone as ambitious as this Minister cannot believe that he will be a Cabinet Office Minister in, say, 100 years’ time, but this is the sort of law that will not be abolished.
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Mr. Heath: Even if the Minister were the deputy Chancellor of the Duchy of Lancaster in 100 years’ time, there would be no guarantee that the Home Secretary of the day, the Lord Chancellor or even the Chancellor of the Duchy of Lancaster himself might not refer to his better judgment the question whether a particular matter should be put through a proper degree of scrutiny.
Mr. Heald: The hon. Gentleman makes a good point. If there were Ministers like some of those whom we have come to know over recent years, who have been prepared to propose quite draconian laws in the area of civil rights, one would be extremely worried that this measure was on the statute book and that there were no proper safeguards in relation to it.
Amendment No. 20 would redefine the ambit of clause 1 to make it a matter of allowing deregulatory reform and removing burdens from business. New clause 4 would define the term “burden” far more widely than the 2001 Act does, specifically to meet all the concerns that the Government expressed in their document. Those measures would give the Government what they consulted on. They accepted that the removal of burdens should remain part of the picture and be a focus for clause 1. They added simplification measures, which my proposals would allow for, provided that the simplifications could be justified as removing some inconvenience or cost. The Government must have available their own draft along the lines of amendment No. 20 and new clause 4, because it is inconceivable that they would have consulted on such a proposal otherwise. What I propose is basically what the Government consulted on and what was supported by business. The Government have decided to go off on this frolic of their own, to use a legal phrase, and have gone for something much more draconian. However, as the Regulatory Reform Committee said in its excellent report, safeguards are needed. If the Minister will not think again, I will press amendment No. 20 to a vote.
Question put, That the amendment be made:—
The Committee divided: Ayes 7, Noes 9.
[Division No. 2]
AYES
Carswell, Mr. Douglas
Chope, Mr. Christopher
Harper, Mr. Mark
Heald, Mr. Oliver
Heath, Mr. David
Howarth, David
Watkinson, Angela
NOES
Banks, Gordon
Cooper, Rosie
Dhanda, Mr. Parmjit
Hillier, Meg
Hodgson, Mrs. Sharon
Keeley, Barbara
Love, Mr. Andrew
Murphy, Mr. Jim
Seabeck, Alison
Question accordingly negatived.
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4.15 pm
Amendment proposed, No. 29, in clause 1, page 1, line 9, leave out ‘with or’.—[Mr. Chope.]
The Committee divided: Ayes 7, Noes 9.
[Division No. 3]
AYES
Carswell, Mr. Douglas
Chope, Mr. Christopher
Harper, Mr. Mark
Heald, Mr. Oliver
Heath, Mr. David
Howarth, David
Watkinson, Angela
NOES
Banks, Gordon
Cooper, Rosie
Dhanda, Mr. Parmjit
Hillier, Meg
Hodgson, Mrs. Sharon
Keeley, Barbara
Love, Mr. Andrew
Murphy, Mr. Jim
Seabeck, Alison
Question accordingly negatived.
Mr. Christopher Chope (Christchurch) (Con): I beg to move amendment No. 30, in clause 1, page 1, line 12, leave out ‘or local Act’.
The Chairman: With this it will be convenient to discuss amendment
No. 31, in clause 1, page 1, line 13, leave out paragraph (b).
Mr. Chope: These amendments are linked and I do not think that I need to introduce them at great length. They offer an opportunity to ask the Minister why he believes that it is necessary to take the power to use this procedure to change local Acts.
Mr. Heath: We have an initial problem. There is no reference in “Erskine May” to “local Act.” Nor does it appear in the standing orders of the House. There are local authorities Acts and Acts applicable to several localities—one example is the Home Counties (Music and Dancing) Licensing Act 1926—but there is no reference to local Act. I wonder whether the Minister might intervene on the hon. Gentleman to explain what he understands by the term “local Act”. Would the Government of Wales Bill be a local Act, for instance?
Mr. Chope: The hon. Gentleman makes a very good point. I may be seeking to remove something for which no one has a definition. I will happily sit down to allow the Minister to intervene.
Mr. Murphy: Later.
Mr. Chope: The hon. Member for Somerton and Frome (Mr. Heath) has drawn our attention to the definitions that might apply or the ones that do not apply, but this will be new, wide drafting. Basically, anything that the Government want to do they will be able to do with the power that is currently proposed in the Bill. I think that we should take it out and likewise I do not understand why the Government want to be able to change subordinate legislation through this method.
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Subordinate legislation can be changed already by statutory instrument. The procedures for dealing with statutory instruments are pretty streamlined. Many of us would say that where the negative resolution applies, there are effectively no powers for elected Members to intervene, because subordinate legislation is implemented before the House has a chance to do anything about it. If the House does anything, it can only be after the event.
Why do the Government believe that the powers that can be exercised through statutory instruments, whether through negative or affirmative resolution, are inadequate and need to be streamlined further in the way proposed? I do not understand what they have in mind. The Minister may have some examples, which I hope he will share with us, of a public demand that something be changed using the new powers. I have not received any representations about such a demand and until I am convinced, I shall remain of the opinion that the change is unnecessary.
Mr. Heald: I assumed that the term “local Act” referred to local authority Acts, but I suppose that it could refer to private Acts related to particular localities, of which there are many. Does my hon. Friend have any thoughts about whether the definition of local Acts would be so wide as to include such private Acts? If so, would there be any danger of the Bill suffering hybridity?
Mr. Chope: That is another good point, and I am sure that the Minister will be able to issue a certificate to say that he has no intention to mix private interests with the public interest and thereby create a hybrid Bill. My hon. Friend raises an understandable concern.
When the House legislates on local issues, whether by a private Bill or through a private Act of Parliament, it often creates a controversial situation. I well remember that when I was the Member of Parliament for Southampton, Itchen, Southampton city council proposed to bring forward what was described as the Southampton Rapid Transit Bill, a highly controversial piece of legislation. It was eventually defeated in a free vote late one evening, much to my delight. That was a private piece of legislation concerned only with the people of Southampton, but it was highly controversial.
We see in the Bill that the Government wish to take powers to make significant changes to private or local legislation. We know that local legislation is often used as a pathfinder for Government legislation. We have seen a lot of examples of that recently, such as the Mayor of London and the London Assembly seeking powers for all sorts of draconian measures to be used against motorists in particular and others within the Greater London area. That legislation has gone through and then normally turned out to be the precursor to similar legislation with a more general application. Much of it, as I recollect from its consideration in the House, has been pretty bland and has gone through without much problem. However,
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there are always things slipped in when somebody has decided, “Let’s try it on. Let’s have a go to try and extend our powers in one respect or another.”
Although this point is in parentheses, and our main concerns are about the Government’s power under the Bill to change primary legislation—public general Acts, as they are called—we should not forget the impact that local legislation can have on individuals and businesses in our constituencies. The Minister should be put to proof in that regard.
Mr. Heald: With respect to amendment No. 31, is my hon. Friend concerned as to why it should be necessary to use the order-making power under clause 1 to effect changes, for example, to Orders in Council, orders, rules or regulations, when a simple system is already in place to do that? It is not as though Ministers have great difficulty in changing orders. In fact, they are often so badly drafted that they need to be changed two or three times soon after their introduction. Does my hon. Friend share my concern as to what the Government are getting at in subsection (3)(b)?
Mr. Chope: The mind boggles as to what the Government are getting at. As legislators, we try to put safeguards into legislation. Safeguards are sometimes accepted by the Government—sometimes only reluctantly after a ping-pong between the two Houses. I think that it may well be in the Government’s mind that they could reach an agreement or a compromise between the two Houses on a piece of legislation and then, immediately after it is passed, use the provisions in the Bill to remove the effect of the ensuing subordinate legislation.
I think, for instance, of a controversial piece of legislation that I was involved in on more than one Friday; the high hedges legislation. That was pretty controversial even when it applied only to evergreen hedges, but there is a power in that legislation to extend the provisions to deciduous shrubs. If the power in the Bill was used to extend that legislation—effectively, that would be legislating by fiat—to define a hedge as a high hedge even if it was comprised of deciduous plants, it would cause many people a lot of grief, and they would have no say.
Although there are some safeguards in the Bill, which can be dealt with when it goes to the Select Committee, those who are not represented in the House—the small minority interests—may lose to the greatest extent. Such people often do not realise what has happened until it is too late. Their interests may not be known to Members of the House, either collectively or individually, yet if the Government use the power before there has been chance to make clear to the general public what the implications are for particular interest groups, we will find that the legislation is on the statute book.
An incoming Government of a different political persuasion might be tempted to use the powers that the Government are giving themselves for totally different purposes. I can envisage someone saying that we could emasculate the Hunting Act 2004 by using the powers in the Bill. That should be a cause for concern for
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Members on the Government Benches as well as for Opposition Members, because it shows that the powers could be abused or used in an unpredictable way.
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