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The Parliamentary Secretary, Cabinet Office (Mr. Graham Stringer): We have had a full and interesting debate on an important, powerful and perfectly formed Bill. Some contributions were longer than expected, and in my reply I shall probably not be able to deal with every point that was made. During the debate, I prepared an hour-long speech, but thanks to the major contributions from the Opposition, I am down to a 15-minute speech.
Two aspects of the debate surprised me. The first was that the Opposition have not accepted the principle behind the Bill. When their Conservative colleagues in the other place accepted the principle, I naively expected the Conservative party in Parliament to speak with one voice. The second point has been reiterated by several Members and is due, I believe, at best to a misunderstanding, and possibly to hon. Members being disingenuous. The Opposition have praised to the hilt the Deregulation and Contracting Out Act 1994, and we agree that it has done some useful work, but they have described as trifling and trivial a Bill that builds on it but which has a wider power.
Yes, the 1994 Act could deal with single items of regulation that were burdensome, but do the Opposition not want to use a parliamentary process that has proved satisfactory to deal with matters such as fire regulations and weights and measures that need reforming? Those regulations are in various pieces of primary and secondary legislation, and business could benefit from that legislation being reformed. Do the Opposition want the burdens created by different regulations under different Acts to be dealt with? We certainly want the regulations to be dealt with.
The debate has gone all over the place. Regulations cover all walks of life, and we have been taken for a walk around Europe by the hon. Member for Buckingham (Mr. Bercow). We have discussed fish, oysters, transport, gambling, dancing, lambing, pigs, building directions and telecommunications. There is almost nothing that we have not debated, so clearly I cannot respond to all the points raised.
In general terms, to make sense of the red tape debate, policy costs must be distinguished from administration costs. That distinction has not always been apparent in the debate today. The Government make no apology for and are proud to have introduced the minimum wage, protecting workers from having to work excessively long hours and making it easier for parents to maintain a balance between their work and family duties.
It is extremely misleading to argue that entitlements and benefits that individuals receive constitute bureaucracy or red tape. The real cost of administering Government policies are a fraction of what has been suggested. The hon. Member for Buckingham asked for facts. Here are some facts: the annual cost of all employment legislation introduced by the Department of Trade and Industry since 1997 is approximately 1 per cent. of the annual wages and salaries bill for the economy as a whole. That is just under £4 per employee per week, and almost all of that is due to providing extra benefits for workers.
Although the debate has been comprehensive, it is notable that the ferocious debate that took place during the introduction of the Deregulation and Contracting Out Bill, as it then was, has not been replicated. Hon.
The Deregulation Committee's work has been truly invaluable. It made a number of recommendations, the most immediately relevant of which is that subordinate provisions orders should be made by affirmative resolution. The Government have responded by agreeing to an amendment tabled in another place by Lord Borrie to ensure that orders can stipulate whether the negative or affirmative procedure should be used. In its latest report, the Committee welcomes the commitments made by Ministers in the Lords. I am delighted to repeat those commitments, which the hon. Member for Weston- super-Mare (Mr. Cotter) asked me to reiterate. First, I am happy to confirm that the order-making power will not be used for large and controversial measures. Secondly, the Government would not proceed with an order against the Committee's wishes. Thirdly, the Government will report in three years' time on the procedural workings and constitutional implications of the power.
The Bill's second power is a new reserve power to set out a code of good enforcement practice. One or two of the comments that were made showed that some hon. Members did not understand that simple point. The reserve power has not received much comment, but bad enforcement can be the most burdensome part of regulation. The light-touch nature of the power was developed with input from a consultative exercise involving enforcers and those subject to enforcement. The power is intended to counter unjustifiably inflexible or over-zealous enforcement. It allows the Government to exert pressure on enforcers who fail to apply best practice along the lines of the concordat.
Mr. Redwood: When will the Ministry of Agriculture, Fisheries and Food provide clear, consistent, transparent and fair regulations for farmers? It is currently all over the place and is offering all sorts of different rules about the movement of animals that need to be moved.
Mr. Stringer: I am grateful to the right hon. Gentleman for that intervention, as it gives me the chance to explain the basic misunderstanding that he demonstrated in his speech. The Bill allows a new code of practice to be introduced when it is shown over time that enforcers are not behaving reasonably and proportionately. Clearly, such provision does not apply to the emergency situation in which agriculture and farmers currently find themselves.
My hon. Friends the Members for Liverpool, Walton (Mr. Kilfoyle), for Burnley (Mr. Pike), for Eccles (Mr. Stewart), for Dumfries (Mr. Brown) and for Milton Keynes, North-East (Mr. White)--[Interruption.]
Mr. Stringer: My hon. Friends' contributions demonstrated the considerable understanding of the deregulatory process and of the nature of the Bill that they have gained from their participation in the proceedings of the Deregulation Committee. My hon. Friend the Member for Milton Keynes, North-East spoke about the need for objectives in the process of policy making and regulation. That is an explicit part of the regulatory impact assessment. At the start of the process, the objective of Government policy must be properly considered. Before we think about regulation, we must decide whether our aims can be achieved by self-regulation, co-regulation, codes of practice or other means.
I think that the hon. Member for South Cambridgeshire (Mr. Lansley) got to the heart of many points. Unfortunately, he was wrong. He went through the regulations, quoted from an article that I had written for The Times, and said that the number of regulations had remained constant. In the article, I cited the number of overall regulations. Of the statutory instruments agreed in the past year, only 4 per cent. of regulations apply to business. In the last full year of the Conservative Government, the figure was 7 per cent. That means 230 regulations that put a burden on business compared with 126.
Mr. Lansley: Let us get to the heart of the matter. Do the Government intend the measure to be used to introduce orders that have a net deregulatory effect--yes or no? If the answer is yes, will that provision be included in the Bill?
Most Conservative Members' comments have not been about the Bill, but about regulation in general. I concede that the Government, like every other Government in the world, are not perfect at regulation. We introduced the Bill because we want to improve our performance. Clearly, Conservative Members do not want to improve or to understand the international and historical comparisons.
Independent reports confirm that our performance on regulation compares favourably with that of other countries. According to the economic outlook of the Organisation for Economic Co-operation and Development, which was published in December 1999, the UK has the lowest product-market regulation of any OECD country. The intelligence unit of The Economist found that the UK was ranked second in the 60 largest economies in the world for places in which it was good to do business. They were rated against 70 factors, including flexibility of the labour market and openness to foreign investment. We are currently the subject of an OECD study on regulatory performance. It will establish in greater detail the effectiveness of our measures to combat over-regulation.
It is instructive to consider our performance not only internationally but historically. Comparisons with the performance and aspirations of the Conservative party are telling. The rhetoric that we have heard today matches that of Conservative Members in the past. The right hon. Member for Henley (Mr. Heseltine) said that the 1994 Act would be used hundreds of times to repeal burdensome regulations. From 1994 to 1997, it was used 37 times. In 1995, the right hon. Gentleman pledged that he would reduce the number of different business licences from more than 250. By 1997, it had increased to 365.
The hon. Member for South-West Hertfordshire (Mr. Page), who was Minister with responsibility for small businesses, admitted in 1997 that, since the beginning of the deregulation initiative in 1994, the Department of Trade and Industry had repealed 93 regulations but had introduced 315. Between the beginning of the deregulation initiative in 1994 and the 1997 election, 13 times as many regulations were introduced as were scrapped.
With such a record, Conservative Members should quietly and thankfully support the Bill. However, they have used it as an opportunity to break their trappist silence on the economy. Conservative Members' target has been not the complicated matter of improving the Government's regulatory performance, but improvement in workers' rights and the protection of the environment.
The Opposition failed to light their bonfire of red tape because it was based on a simplistic analysis of the impact of regulation on business. The Bill is one part of the Government's programme to improve regulatory performance without reversing necessary protection. I urge hon. Members to support Second Reading and to reject the amendment.