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Speech on Deregulation to The House of Commons
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Mr. John Redwood (Wokingham) (Con): The Under-Secretary showed great courtesy to the House. I got the impression that he, like many hon. Members, has deep reservations about two aspects of our proceedings. I thought that he acknowledged that the Bill had considerable constitutional implications and he might well share the view that it should be considered on the Floor of the House so that the implications of part 1 can be properly exposed. I got the impression, as did the Select Committee, that he believed that the House should have the right of veto on any measure going through the accelerated procedure if it, or its Committees, thought that the matter was of considerable significance or controversy and thus should be dealt with in a more lengthy and suitable manner.
The fact that an Under-Secretary is handling the Bill, rather than a Cabinet Minister, is sad. The Government, through speeches made by the Prime Minister and other means, have said that they regard deregulation as central to their mission. The Under-Secretary himself opened his speech by telling us that the setting for the legislation was the pressing need for deregulation because too much bureaucracy and regulation was eroding the competitiveness and success of British commerce and industry. Is it thus not curious that we do not have someone of Cabinet seniority handling a central measure that is part of the Government's economic and wider social strategy? Although I pay full compliments to the Under-Secretary for handling our proceedings as he is, is it not worrying that no one with Cabinet rank and clout is available to solve such difficult problems? It is much easier for a senior Cabinet Minister to go to the Chief Whip or business managers and say, "There's trouble in the House. What we're trying to do is a bit extreme. I must have time on the Floor of the House to deal with these sensitive matters." It is much easier for a Cabinet Minister in a debate such as this one to say, "Of course the House must have a veto on these procedures for controversial and difficult issues, and I am happy to make that compromise today." The Under-Secretary has done his best with gestures and kind words, but he does not have that authority or power because the Prime Minister has not backed him and given him the job of Chancellor of the Duchy of Lancaster. We need a Chancellor of the Duchy of Lancaster to deal with the issues and sort them out. Today, we have before us an unfortunate set of examples of the sort of issues whose treatment requires that degree of seniority. I shall not rehearse all the arguments that have been elegantly and well rehearsed by right hon. and hon. Members on both sides of the House about the so-called Henry VIII clauses in the Bill. I will, however, agree with those who say that Henry VIII is getting a very unfair press. I think that calling them Stalin clauses would sum them up better, but then I regard Henry VIII as one of England's first and leading Eurosceptics. After all, he brought back from Rome amazing powers to govern affairs in this country and proceeded in an entirely democratic way, with everything done through major legislation in the House of Commons, properly debated in the style of the day, and very good I am sure the debate was. I hold no brief for what he did to his wives and I do not hope to emulate him in that respect, The issue I wish to raise is not the powers in the Bill, although we need to reach a conclusion on that, but whether the Bill—as suitably amended, perhaps—will tackle the Government's underlying problem. Will it help the Government to deregulate—will it help them to deal with the many clogs in the arteries of business and commerce that the Prime Minister himself has identified? Many months have passed since the Prime Minister made a brilliant speech on deregulation, full of admirable sentiments and analysis—a speech that I would have been proud to have made. The Prime Minister has a big advantage over me in that he is the Prime Minister and he can do more than make speeches; he can actually implement measures. He can make change happen in the Government that he leads—when he is leading it, that is. Since that speech was made, however, we have seen nothing to back up the fine words. The Prime Minister has told us that, for every new regulation introduced, one would be removed—a crude device that would allow the Government to introduce a big and expensive regulation while removing a cheap and ineffective one, but it would be better than nothing. What has happened since the Prime Minister opined? About 4,000 new regulations have been introduced and almost none has been struck off. It is not working. Since the Prime Minister made his speech in support of better and more sensitive regulation, we have seen no such development—there has been no abolition of quangos, no reduction in the intrusiveness of the regulators and no measures have been brought to the House for repeal. The wide powers in the Regulatory Reform Act 2001 that we were told would be used to achieve that aim have not been so used. A mere 27 measures have been subjected to them and even the Under-Secretary was hard pressed to remember any of them or to claim that anything good had happened as a result. People outside are not saying, "Oh, I'm so grateful for the 2001 Act—my life has been transformed and great swathes of regulation that I used to have to slave under have been removed." Nothing memorable has happened. The Under-Secretary made a promising start to his speech. He honestly stated that he had inherited the 2001 Act, which clearly has not been working well—we might be less flattering and say that it has not worked at all—and his analysis suggested that the 2001 Act lacked sufficient teeth, so he was introducing today a Bill with more teeth. The House pointed out two problems with his argument: first, the Bill does not actually state that the powers will be used for deregulation—they could be used for extra regulation—and, secondly, there are some democratic affronts in the proposals. His defence was interesting. He said that there were more protections in the Bill than there were in the 2001 Act. If that is the case, how can the Under-Secretary claim that the Bill will solve the problem of the 2001 Act which, he established, lacked teeth, was too democratic, too cautiously worded and did not allow Ministers to operate without parliamentary control and oversight? We should repeat the big question for the Treasury Bench in the hope that the Under-Secretary can provide an answer. If these new large powers are given to Ministers how will they be used in the next couple of years, and what is their programme? What do Ministers want to strike off the statute book, and what do they wish to amend or refine, using the powers that could not be done under the 2001 Act or by introducing straightforward primary legislation in the House? The Under-Secretary was wrong to suggest that I bind my Front-Bench spokesmen and speak for them. As chairman of the policy review, I am not a member of the Front-Bench team and I am not governed by collective responsibility, but I believe that I speak for my right hon. and hon. Friends when I say that, if the Under-Secretary has a good list of things that he would like to repeal, we would be happy to expedite their passage through the House using the usual procedures. If he wished to introduce a deregulation Bill or a repeals Bill—I can see that my hon. Friends are excited by that prospect, for which we have been waiting for eight years—I am sure that we would expedite the passage of such measures. It would be possible with the agreement of the usual channels to introduce a Bill that would not need very much scrutiny at all because we would be happy with the measures that it contained. Such a Bill could then proceed using the correct procedures. Whenever I make the case for deregulation, Labour Back Benchers and sometimes Ministers intervene to ask what specifically I would do, hoping that that is the knockout question. They know that when I was shadow Secretary of State for deregulation in the previous shadow Cabinet, I drew up a list of 53 items that we wish to deregulate, in primary legislation where necessary, including some very significant items indeed. I have sent them on several occasions to ministerial and regulatory offices—they never seem to remember them—and whenever I am asked what exactly I would deregulate, those proposals remain on the table. The list will not be the same at the next general election, as my right hon. and hon. Friends in the Front-Bench team will compile a list suitable for the circumstances of 2009 or 2010. It will probably be much longer, as many more things will have been put on to the statute book in the meantime by the Government that we will consider unnecessary or undesirable. It is useful, however, to consider whether one or two things could be achieved by using proposals in the Bill or by using more direct means. First, only in the United Kingdom have we managed money-laundering regulations in such a cack-handed and clumsy way that people who want to deposit a couple of hundred pounds in a building society or a bank have to take their gas bill, their passport, their driving licence, and testimonials from their neighbours to prove that the money was not obtained illicitly. I cannot for the life of me understand how taking a gas bill to the bank proves that one's money was not obtained illicitly, but apparently it provides protection. I cannot understand how possession of a gas bill proves conclusively that someone lives at an address all the time or that they are an upright member of the community. I think that that should be established in different ways, and it would be better established by the appropriate authorities when there are grounds to suspect someone. That is a better method than making my constituents take all those ridiculous bits of paper to the bank. Often the bank manager or clerk knows exactly who the applicant is, but they still have to go through the rigmarole of asking for those bits of paper. Could that not be sorted out? Why do we regulate venture capital at all? If we want a flourishing and dynamic economy, the venture capital industry is quite capable of carrying out its affairs business to business without any regulatory intervention. We should deregulate venture capital and take it out of the net. Why do we need to regulate business to business transactions in financial services? We have a great City of London, but people tell me now that it is getting too regulated and quite a lot of the best innovation in the City of London now is available for markets outside Britain but not for the British marketplace, for the simple reason that there is too much regulatory hassle to go through to get the new idea agreed, and further elaborate restrictions on sale, offer and advertisement. Would it not be possible for Ministers to decide that we do not need to regulate business to business, professional to professional transactions in financial services, and exempt them from all the current regulatory hassle? Why do we need regulation on data protection? This was not on the original list of 63 items that the official Opposition sponsored, but we have a clumsy system of data protection. It is one of the bigger burdens mentioned in the list referred to by my hon. Friend the Member for North-East Hertfordshire in his opening remarks—over £5.5 billion of compliance, and I do not see that it necessarily offers the protection that the Government have in mind. When one looks at the impact of regulation, one often finds that it does not protect the data against abuse by criminals and potential criminals and it does not necessarily inform the public, but it represents a very large burden indeed. How many times have hon. Members tried to use data protection and freedom of information to find out legitimate things from the Government only to find that, under existing legislation, there are ways to block that legitimate inquiry and stifle one's appetite for information? Data protection certainly needs a haircut, even if the Government do not want to go as far as reducing it entirely. It seems a disproportionately expensive and complex machine for a rather limited goal. If we look at EU regulations, we see marvellous examples of the legislative pen working overtime. It is one of the great pities of both the Brussels government machine and of the British government machine that they are so inefficient at doing all the things a Government ought to be doing, apart from legislating, where they seem to be highly productive and capable of churning out large amounts of regulation and law. Built into the EU system is the idea of the presidency. The new country assuming the presidency of the Community for six months is always told by astute officials in Brussels that its presidency will be judged by how much new regulation it manages to get on the statute book. Each one is given a suitable challenge, sometimes pandering to its inclinations, so the British presidency would be told that some measure was market-opening and a French presidency would be told that a measure was market-closing, and they would be encouraged to go about the business of trying to get it through. Sometimes the Commission has an even better sense of humour, as in the case of the last British presidency, where it set them ridiculous things to do, like giving away the British rebate, and—surprise, surprise—the British Government fell for it. One could not make it up. The idea of the presidency is used to make sure there is more regulation than we need. The British Government are always telling us they are leaders in Europe, so why can they not find a way of saying to colleague members of the European Union that maybe we have enough European law now, or that if we want a little more European law, perhaps we should take some off first, to make room for it? Mr. Peter Bone (Wellingborough) (Con): Is my right hon. Friend aware that the Joint Committee on Statutory Instruments recently reviewed European legislation and found that many European directives were so badly drafted that, if it had been domestic legislation, it would have been rejected and sent back to the Department? The Government must impose penalties as required by EU legislation, but the instruments are often so badly drafted that business does not know whether it has complied. Mr. Redwood: My hon. Friend has put his finger on an important problem. I remember when I was a Minister cursed with the task of transposing such directives into national law. On one occasion, I was so frustrated by what I thought was the over-regulatory nature of our draft—it was something like a 100-page draft to implement a 10-page directive—that I said, "Let's just implement the directive as it stands, because it is clearly less onerous than the civil service draft we have come up with. I then received extremely strong and pompous legal advice—I suppose that I am not meant to reveal this, so I shall call it non-legal advice—the burden of which was that it was wrong to make the directive the law in Britain, because it was so badly drafted that we could face infraction proceedings. It was apparently seen to be the task of British civil servants to try to make good law out of bad and to ensure that it fitted into our British legal codes. Mr. Heald: Does my right hon. Friend agree that one problem is that, once European law is implemented in a member state, there is not a proper process for reporting back to Europe—the Commission and the Council of Ministers—that the regulation does not work on the ground, that it is appallingly badly thought through and that it needs reform? Does he have any thoughts on how the process might become more two way? Mr. Redwood: That is where British leadership could come in. We should try to persuade like-minded member states and in due course the Commission that the European Union needs a way of death for bad legislation, just as surely as it has an effective way of birth for new legislation. It would be better if we paused for reflection and had a year with no new legislation in the EU, other than perhaps amendments to existing EU regulations where they are not working. A period of reflection would create more space and allow the removal of some of the unnecessary burdens. The Under-Secretary began the debate by saying that the problem is not hugely serious, because Britain is still high up the competitiveness league. As my hon. Friend the Member for North-East Hertfordshire pointed out, we have slipped from fourth to 13th in less than a decade since this Government came to power. Ministers should be very worried about that—in some rankings, we are down at No. 22. I do not want my country to settle for being 13th or 22nd, because if one is 13th or 22nd, one does not even get on the list of locations when people decide where to put a new car plant or steelworks. There is a lot of chunky, footloose investment around the world, of which Britain used to get more than its fair share because it was more competitive than other countries. Over the coming months and years, Britain's share will fade, because we have slipped too far down the competitiveness league. The subject of today's debate—too many clumsily enforced regulations—is one reason why we have slipped down the competitiveness league, and we need legislation to tackle that important issue. The Bill is silent on tax regulations. We need a method of reforming our tax codes and reducing the burden of some of our taxes, which would contribute to restoring competitiveness. The famous IR35 was an attack on self-employed people, particularly in the computer industry, and it did a lot of damage: some people gave up, while others were driven offshore. Why have the Government not done something about that decision, which should be reversed? If the Bill is not amended, it cannot be used to achieve that result, because it does not involve tax. Why have the Government not done something about the deferment of national insurance? If my constituents have more than one employment and if their situation has not changed, they must go through an elaborate administrative ritual every year of tabling information in order to get so-called deferment, whereas in practice they do not have to pay any extra national insurance if their main employment involves paying the full amount under the law as it stands. Why do they have to go through that complicated administrative ritual? That is a little example, and there are hundreds more throughout our tax codes. The Conservative party would like to see substantial deregulation of local government, because there has been too much centralisation and too many burdens have been placed on it. We would love to see the fair value and comprehensive performance assessment regimes scrapped in their entirety. We have taken outside advice on the matter, which has told us that that would save £1 billion. That money could either be returned to council tax payers at a time when they are not getting good value for money and are paying too much or—this would be a choice for elected councillors—it could be ploughed into front-line services to strengthen any areas in which they are deficient. The Government could use the Bill as a vehicle to change the rules affecting local government. Regulations bear down much more heavily on small businesses than on large businesses—naturally, because large businesses can afford the extra cost of compliance workers and specialists who can lobby Government to try to move regulation in the direction that they wish, and then to employ specialists to avoid the worst of the impact of the regulation when it is in place. Small businesses do not have that luxury. In a small business employing five or 10 people, the one or two people at the top do not have time to lobby Governments to try to move things in their direction; they scarcely have time to implement regulations fully and often have to spend a lot of money on expensive outside consultants to tell them what they mean and what they have to do to get up to speed. We heard the estimate—it was a good guess—that regulations effectively cost a small business five times as much as a big business because of the impact on its fragile cost structures and stretched management resources. We should institute a review of all the small business exemptions with a view to levelling them up so that more businesses can be taken out of the scope of many of these regulations. We will then have more small businesses and more jobs, with all the associated benefits. The issues before the House are straightforward. I get the feeling that there is agreement across the parties, and on the Treasury Bench, that we need to deregulate because there are too many unnecessary regulations, and that while some may be desirable, the costs are not proportionate to the beneficial consequences. I would add that many regulations achieve precisely the opposite of what they set out to achieve. If we had a system of review, as many Members would like, more of that would become obvious, and the case for removing or amending the harmful regulations would, in turn, be more obvious. We would welcome a Bill that made it easier to cut the burdens and to repeal regulations that are having unfortunate consequences. This Bill, however, allows the Government to re-regulate without reference to the House in a way that is the opposite of deregulation. Given that Ministers have failed to provide clear examples of how they are going to use these powers, I fear that they will find among Labour Members, as well as elsewhere, that it is difficult to make the case for the Bill as it stands. I have given a few ideas out of my list of 63—I will not bore the House with the whole list, but Ministers have it—of regulations that could be stripped out to the benefit of this country's economy, leading to the creation of more jobs, an improvement of our competitive position, and a lightening of the burden on many individuals who are frustrated by heavy-handed and excessive regulation. Will Ministers listen and come up with a practical programme? Will they understand that grandstanding with these rather crude bits of legislation is not the same as running a deregulation programme? Can we soon have a Cabinet Minister who means business and cuts through the jungle? |
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