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Legislative and Regulatory Reform Bill

15th May 2006

This has been a complicated debate, not helped by the Government's ineptitude over recent months in taking the Bill through the House.

Mr. Djanogly: I declare my interests as they appear in the Register of Members' Interests.

This has been a complicated debate, not helped by the Government's ineptitude over recent months in taking the Bill through the House. The Government new clauses, including new clause 19, were tabled very late, which has not been satisfactory or productive. Here we are, on Report, debating the main clause, which was tabled only a few days ago.

The process of the Bill has been bizarre. I have never seen anything like it. On Second Reading, the Government were saying that the Bill was purely a tool for delivering their better regulation agenda. My hon. Friend the Member for North-East Hertfordshire (Mr. Heald) and I rebutted that on Second Reading. We said that it was a gross understatement of the purpose of what became the "abolition of Parliament Bill". We argued that, as a constitutional Bill, it should have had its Committee stage on the Floor of the House. The Government chose not to listen to us, but in retrospect they probably wish they had.

The hon. Member for Perth and North Perthshire (Pete Wishart) rightly mentioned the lack of preparation. By the time of the Procedure Committee on 7 February, the then Minister said that he would be able to respond to the Regulatory Reform Committee's recommendations in good time, in advance of the Standing Committee, but when the Standing Committee started on 28 February, the Government had given their response to Committee members only the day before and no Government amendments had been tabled, as my hon. Friend the Member for Christchurch (Mr. Chope) correctly pointed out in Committee.

The timing of the proceedings has been unsatisfactory throughout. My right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer) mentioned that in his intervention and noted that that is becoming increasingly common on the Government's part, although it is particularly the case in relation to the Bill. Not least for these reasons, my noble Friends in another place may well want to review carefully the implications of the clause, which has been impossible for us, because of the lack of time and the fact that the Government ripped out the main clauses of the Bill. Even now, they are tabling amendments to change the title of the Bill.

Government new clause 19, which was tabled only a few days ago, has, along with new clauses 20 and 21, the effect of replacing clauses 1 and 2. These changes, or perhaps I should say climbdowns, will refocus orders that are to be introduced under the Bill towards deregulation, as advocated by the Conservative party since Second Reading. Since the Bill's publication in January, we have consistently expressed grave concerns that the powers granted to the Government were too widely drawn and would result in a severe weakening of parliamentary power, the sidelining of legislative scrutiny and the possibility of a move towards ministerial authoritarian rule.

As my hon. Friend the Member for North-East Hertfordshire noted, we were happy with the Government's announcement on 12 April that they had effectively agreed with the framework arguments advanced over the past few months from the Conservative Benches. We therefore welcome the new clause, which aims to focus the Bill on genuine deregulatory matters, although it would have been helpful to see the new clauses sooner, not least because of the widespread interest in the subject and our belief that other, later amendments should go further than the Government are prepared to accept.

The Conservative party has always supported measures that would result in the provision of a swift tool for delivering regulatory reform. However, we wanted to ensure that such a tool would not pose a serious challenge to the concept of parliamentary supremacy, which is a central element of the United Kingdom's unwritten constitution. Our policy is aimed at reducing the harm caused to the country by over-regulation introduced by the Government since 1997. The cost of regulation during that period is estimated to have surpassed £50 billion a year, despite the Labour party's manifestos for the 1997, 2001 and 2005 general elections promising to regulate only where necessary and to deregulate where desirable.

The over-regulation of business is a massive drain on the economy, leads to an inefficient bureaucracy, strangles small businesses and wastes the valuable time of thousands of police officers, nurses, teachers and people in the private sector on filling in forms.

Rob Marris: The hon. Gentleman mentioned the sum of £50 billion. Quite a large part of that calculation, which I think was made by the British Chambers of Commerce, refers to the national minimum wage. Is he saying that he opposes the national minimum wage as a regulatory burden?

Mr. Djanogly: The figure does not refer to the national minimum wage. My hon. Friend the Member for North-East Hertfordshire dealt with that point earlier.

Over-regulation is severely damaging Britain's international economic competitiveness. As my hon. Friend reminded us, according to the World Economic Forum, between 1997 and 2005, the UK slipped from fourth to 13th in the list of the most competitive countries. The London School of Economics has cited over-regulation as one of the main causes of that decline. Small companies have been disproportionately hit, which is why in new clause 9 we propose that any Minister making an order under part 1 powers must ensure that it is deregulatory as it relates to small business.

That is also why, in new clause 17, my hon. Friend the Member for Stone (Mr. Cash) seeks to ensure that, where a fast-track deregulation order is made in connection with a provision concerning our EU obligations, it should be legally binding and effective. The Minister responded that that was an attempt to change policy, but my hon. Friend's amendment deserves a more considered approach. I look forward to hearing the Minister's views.

Mr. Cash: In the context of legislative supremacy and the role of the judiciary, and in the context of the Constitutional Reform Act 2005, will my hon. Friend confirm that, irrespective of the rule of law, which insists that they should be independent, it is the duty of judges to give effect to Acts of Parliament, as has been historically, legally and constitutionally the case for generations?

Mr. Djanogly: That sounds like good law to me. The Minister will, of course, tell me if he thinks otherwise.

My hon. Friend the Member for Buckingham (John Bercow) and the hon. Members for Stoke-on-Trent, Central (Mark Fisher) and for Cambridge (David Howarth) expressed concern that the Bill could be used for a wider purpose than striking out business regulations. An example given was the abolition of jury trials. The Minister, fairly, showed the lack of clarity in the 2001 Act and how clauses 5 and 6 answered the important points made, but he did not go far enough. There is more to come out in that respect, probably in the other place. Following an intervention from my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke), it turned out that the restrictions relating to tax relate only to increases in tax.

The right hon. Member for Ellesmere Port and Neston (Andrew Miller)-I congratulate him on being appointed a Privy Councillor-

Andrew Miller: No. That was a joke.

Mr. Djanogly: I apologise to the hon. Gentleman. We have not had many jokes during the debate.

The hon. Gentleman properly noted that Standing Orders of the House will need to be reviewed in the context of the Bill. I enjoyed hearing his views on the sugar beet order, or rather, the problems in getting rid of it.

The hon. Members for Somerton and Frome (Mr. Heath) and for Cambridge made many valuable points in the debate, not least identifying the posing threat of the laws forcing the Government to review the scope of the Bill in the first place, and also in reducing the scope of the Executive to interpret the provisions of the Bill. Their explanation of why amendment (a) should introduce the word "reasonably" to create objectivity rather than ministerial subjectivity was persuasive.

8 pm

I agreed with many of the sentiments about the growth of the power of the Executive and the serious consequences that could follow from that, not least in relation to the Bill, expressed by the hon. Member for Stoke-on-Trent, Central, but he should have a quick read of the debate on Second Reading, including my remarks.

My right hon. and learned Friend the Member for Rushcliffe noticed the irony in what he called the minor miracle that turned what should have been a positive desire to reduce regulation into the messy Bill that is before us. He stated his position that new clause 19 is still too lax in its wording. I am sure that his arguments on the new clause will be carefully reviewed by colleagues, not least in another place. Many of his comments, not only in relation to veto rights, will be addressed later in our proceedings. We benefited from his experience in his summary of how Government have been nibbling away, as he called it, at parliamentary freedoms over the past 50 years. His comments were strongly supported by the remarks of my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd), who also spoke up for amendment (a) and new clause 17, and gave a general call-

Andrew Miller: Does the hon. Gentleman agree that the right hon. and learned Member for Rushcliffe (Mr. Clarke), who is not prone to over-exaggeration, slightly got things wrong? The hon. Gentleman will recall that the legislation enacted by his right hon. and learned Friend, in section 2(2) of the Value Added Tax Act 1994, means that a statutory instrument to change VAT could have effect only for a short period. That is notwithstanding all the restraints of the sixth directive. I think that the hon. Gentleman is slightly exaggerating the case.

Mr. Djanogly: The hon. Gentleman has made his point in his own way.

My hon. Friend the Member for Aldridge-Brownhills made a general call for proper time to be given to the important changes that are proposed. I think that he was making a general point about legislation being rushed through the House. My right hon. Friend the Member for Wokingham (Mr. Redwood) loaned us the significant benefit of his large experience of deregulation. He questioned whether the provisions in the Bill were the best way to achieve the initial objective. He thought not, and I shall return to that key issue. I like the idea of having an annual deregulation Bill and the implied requirement to tutor civil servants in the merits of deregulation, that being key to the cultural change.

My right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) gave a good example of the dreadful droit de suite law as a showpiece of gold-plating of EU regulations and demonstrated the importance of keeping the 1972 legislation in the context of parliamentary sovereignty.

The hon. Member for Luton, North (Kelvin Hopkins) made a thoughtful speech. I liked his idea of short Bills. My hon. Friend the Member for Christchurch has closely followed consideration of the Bill, and was active in Committee. He put a good case for amendment (b). He argued that the reduction of the burden for one should not be justified by increasing burdens for others. On that, my hon. Friend has our support.

Will the Government amendments work? Will deregulation be improved as a result of the new formula that is proposed? The expectations of businesses are high. The Government have talked the talk. In May of last year, the Financial Times reported that the Bill would be an attempt to slash the estimated £100 billion of the cost of regulation on business. In January, the Minister then responsible was quoted as saying that the Bill is the

"cornerstone in achieving essential and long-promised reductions in unnecessary red tape."

It is part of a plan to achieve one of the most radical regulatory reform agendas in the world. The then Minister's press release in January spoke of savings through reducing bureaucracy of £10 billion, equivalent to 1 per cent. of gross domestic product.

The fact remains that regulations on business have continued to soar. We know that, since 2001, only about 20 regulatory reform orders have been made, although the target was 60 by 2005. On average, with 3,887 new regulations a year, let us say that the Government get really ambitious and raise the target of scrapping regulations from 60 every four years to 60 a year, or even 100 a year. Is that not like putting in a barrier the size of a road hump to stop a tidal wave? Are 60 fewer regulations worth the destruction of parliamentary sovereignty? That is what we were considering in the early stages of the Bill. We came to the conclusion that the answer was no.

We appreciate that the Government have gone some way towards understanding the issues and addressing the concerns of the House, not least with the amendments. However, in the new atmosphere of realism, will the Minister please care in his remarks to reassess the impact that he thinks that the Bill will have on regulation?

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