REVIEW OF ORDERS (Hansard, 5 April 2001)

§ Mr. Andrew Lansley (South Cambridgeshire)
I beg to move, That the clause be read a Second time.
I am pleased to have the opportunity to move the new clause, which I tabled with my hon. Friends. In Committee, we had an opportunity not afforded to us on Second Reading to debate some of the purposes for which the Bill will be used by the Government. We did not, in Committee, seek to revisit the question whether the Bill should be wholly deregulatory, or whether it should have the scope to amend regulations in a manner that would create new burdens. We are concerned to use the structure of the Bill to best effect to deliver the objectives on which we all agree—to improve the quality of regulation—and wherever possible, from the Opposition's point of view, to ensure a reduction in the burden of regulation.
New clause 1 deals with the improvement of regulation and would ensure that in the long run it is put within a structure of regulation which helps to reduce the burden on citizens generally. I shall describe briefly how the clause would work and the benefit that it would bring. New clause 1 might be termed a sunset clause, but strictly speaking, it is no such thing. The purpose is not to disapply regulatory reform orders, but to provide that after a time—in the fifth year after a regulatory reform order has come into effect—a report should be made to the House about its effects. The new clause would give either House the opportunity to make a resolution disapplying the order.
The reason why we do not propose a sunset clause, as one might wish to do in relation to burdensome legislation, is that we continue to hope that the power will be used mainly, if not exclusively, for deregulatory regulatory reform orders. If that is the case, a sunset clause would reintroduce burdens that would otherwise have gone.
The new clause provides for review, expressly related to the original purposes for which a regulatory reform order was made. As the House knows, clause 6(2) provides for a substantial range of factors to be examined in relation to the proposal, including the burdens that will be affected and the extent to which those burdens will be reduced. The Bill requires Ministers to apply specific tests to legislation, to establish whether necessary protection is 525 retained, whether reasonable expectations continue to be met, whether a fair balance is struck between the public interest and the interests of persons affected, and whether, on balance, given the benefits that may flow from the order compared with the burdens that may be created or imposed, it is desirable for the order to be made.
All those tests, and the savings and costs that would result from a regulatory reform order, are to be reported in the document to be laid before Parliament before an order is made.

§ Mr. Michael Fabricant (Lichfield)
I am grateful to my hon. Friend for giving way. Is the purpose of new clause 1 to investigate the effect of legislation over the previous five-year period, because it is considered that the regulation might be wrong; or is it necessary, as I suspect, because although a regulation may not have a deleterious effect on business when it is introduced, it may begin to do so after a while, as a result of changed circumstances in the business community?

§ Mr. Lansley
My hon. Friend makes a good point. It is reasonably obvious that the first of the considerations to which he referred will apply. His point flows directly from the one I was making on the need to examine the impact of the new structure of regulation that will be delivered by the regulatory reform order process, and to compare it with what was intended or expected to flow from it. He was right to say that the structure of activity within industry can change. That is especially important with regard to the burden on business. The burdens that flow from any given structure of regulation can also change over time.
As my hon. Friend asked about the purposes for which the new clause could be used, I should point out the reasoning that underlies the proposed requirement for an order to be reviewed in the fifth year after it has taken effect. It is not simply that sufficient time must be allowed for the impacts to be made and measured, although that is true, but that, of necessity, the provision would ensure that a report on the operation of the new regulatory structure would be presented to the Parliament subsequent to the one in which the order was made.
The new clause does not represent an intention that the structure of regulations or legislative activity should be continually re-examined anew by every Parliament. It is important, however, that, without examining the whole structure of new primary legislation, we should be always looking at the structure of regulation and using the process of regulatory reform orders to try to deliver progressively reduced burdens.

§ Mr. Fabricant
I thank my hon. Friend for his answer, and for giving way a second time. The new clause refers to review of the operation of the order in the fifth year". Does that requirement imply that there will be no further reviews after the review has occurred? Should there not be ongoing reviews every five years? I fully appreciate that the burden that such a requirement would place on Parliament—if not business—might become quite heavy.

§ Mr. Lansley
It is not our intention, as will be obvious to my hon. Friend, that the new clause should create a 526 structure of continuous reviews. Of course, a balance must be struck in terms of the burden that we place on the House and on the civil service in producing the reports to which the new clause refers. We do not want to impose a bureaucratic process for the sake of it.

§ Mr. Peter L. Pike (Burnley)
rose—

§ Mr. Lansley
I shall happily give way to the Chairman of the Select Committee on Deregulation.

§ Mr. Pike
A few moments ago, the hon. Gentleman listed all the tests that are applied. Has not the Deregulation Committee in the current and previous Parliaments carried out its duties carefully to ensure that all proposals meet those tests? Is it not reasonable to assume that, in the next Parliament, the new Committee will do its job in exactly the same way. whoever serves on it? If such a five-year clause is to be implemented, could not a similar provision be contained in almost every single other Bill that the House enacts?

§ Mr. Lansley
As Chairman of the Deregulation Committee, the hon. Gentleman will be only too aware of the structure into which the new clause would fit. He is perfectly right that it is one of the tasks of the House of Commons Deregulation Committee and the Delegated Powers and Deregulation Committee in the House of Lords to scrutinise in due course the tests that must be met under the regulatory reform orders. It is certainly our hope that the conscientiousness with which those Committees conduct their work will be reflected in the next Parliament, as it has been in this one.
The hon. Gentleman will perhaps understand that the new clause is in no sense intended to undermine the task of the Committees or to suggest that they might not do their job effectively when regulatory reform orders are made. It is simply to reflect the fact that, over time, decisions and judgments can change. For example, the fair balance test applies to the public interest versus the burdens that are imposed on others. Although that balance is expected to be fair and to pass the test, time may show that not to be the case.
To complete my answer to the hon. Member for Burnley (Mr. Pike), just as we hope to create a review structure for regulatory reform orders, there is also good case for introducing sunset clauses, which create burdens.

§ Mr. Robert Jackson (Wantage)
Does not my hon. Friend agree that the mechanism in the new clause resembles the regulatory impact assessment that the Deregulation Committee sought to obtain from the Government? My hon. Friend seeks an assessment of regulatory impact after five years rather than when the measure is introduced.

§ Mr. Lansley
It is true that the document that new clause 1 proposes is a review of the regulatory impact. However, my hon. Friend knows that the tests that will be applied and reported under clause 6(2) are wider than conventional regulatory impact assessments. For example, the fair balance test does not test regulatory impact as such, but whether the balance between the benefits to the public interest and the burdens on private persons necessitate making the order. That is also true of benefits that accrue generally when burdens are imposed. A fair balance and 527 desirability do not exactly constitute the mechanism of a regulatory impact assessment. A judgment must be made about costs and benefits. Ministers must review that after an order has been introduced.

§ Mr. Brian White (Milton Keynes, North-East)
I have some sympathy with the first part of the hon. Gentleman's aim, which is a review after five years. However, the Deregulation Committee or its successor will examine the impact of the orders after three years. What is the hon. Gentleman trying to achieve that is different from the aim of the Deregulation Committee?
New clause 1 would provide for the order to expire. Reintroducing an order after five years in a completely different climate, which the hon. Member for Lichfield (Mr. Fabricant) mentioned, may not be the best way in which to proceed. Its effect would be re-regulation.

§ Mr. Lansley
I do not agree with the hon. Gentleman's first point, because, as I understand it, the review that the Deregulation Committee proposes would not allow a detailed examination of each order's effects. It would examine the process and the purposes for which the regulatory reform order procedure had been used. I hope that the volume of deregulatory activity under regulatory reform orders will be so substantial that examining each one in detail would be beyond the scope of a review by the Deregulation Committee. A flow of reports that would allow the House to examine the effect of individual regulatory reform orders is a better process.
On reviewing regulatory reform orders differently, future Ministers may find that, in practice, such orders create a new structure of regulation One of the most obvious examples that Ministers have presented is the proposal to re-regulate the complex structure of fire safety legislation. I suspect that Ministers would freely acknowledge that the likelihood of their getting that structure right first time is limited. The prospect of having to return to the process is quite high
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We are not proposing that there would of necessity have to be the disapplication of the first regulatory reform order on fire safety legislation before bringing in another. It would be open to Ministers to bring forward a new order and to go through the normal process of scrutiny, for example, so as to deliver the objective.
The new clause is intended to introduce a review process, which is valuable in itself. In circumstances where the review gives rise to the conclusion, by Ministers or the House, that the regulatory reform order agreed to previously did not have the benefits that it was intended to have—it did not meet, for example, the fair-balance test, or in the event had removed necessary protection that should have been retained—the best way in which to proceed may be to disapply the order rather than to seek to start again with a new order.
The benefit of the new clause is primarily in the obligation which it lays before Ministers to present a review. Secondarily, it gives Ministers the opportunity to use the simple mechanism of disapplying an order before thinking again about how to deal with it.

§ Mr. John Bercow (Buckingham)
My hon. Friend is making a persuasive case for the new clause. Is he aware 528 that in addition to reflecting the wishes of the authentic voices of British business, the new clause also enjoys vociferous support from Mrs. Marion Rix, the excellent prospective Conservative parliamentary candidate for Milton Keynes, North-East? That is a matter of importance to the House, as she is about to replace the hon. Member for Milton Keynes, North-East (Mr. White) as that constituency's representative in this place.

§ Mr. Lansley
I am grateful to my hon. Friend for his support. I would be grateful for the support of the prospective parliamentary candidate to whom he refers, who I know happens to have many positive qualities.
My hon. Friend brings me to an important point. He says correctly that the principle of sunsetting—we are talking of a review provision that allows for that possibility—has wide support. Only about a week ago, the British Chambers of Commerce published its pre-election manifesto, entitled "Empowering Business". One of the organisation's objectives, in the context of a better regulatory environment, is that the Government should make the criteria for sunsetting regulations explicit and use sunsetting as a norm in all new regulations. The Institute of Directors has likewise said that it believes that the Government should introduce a programme of reviewing the regulations that affect individual sectors on a regular rolling basis. This could be every five years. Regulations should have sunset clauses so that they expire unless there is a conscious attempt to renew them.

§ Mr. Fabricant
My hon. Friend has talked about the need for a cost-benefit analysis as part of the review, and there was a discussion of fire safety regulation. Does he share my concern that when it comes to fire safety regulation and health and safety at work regulation, in practice it is difficult for Members to take the decision to repeal legislation that may result in someone's injury or death, no matter how small the chance of that event might be?

§ Mr. Lansley
Yes, I take my hon. Friend's point entirely. I shall not be tempted by him to analyse health and safety legislation. I referred specifically to fire safety legislation because it is one of the most prominent examples that the Government have used of the way in which regulatory reform orders are intended to be used.
In this context, it illustrates rather well the importance of such a review procedure, because a regulatory reform order relating to fire safety legislation might be laid before the House to structure the whole fire safety system round risk-based assessment rather than the present prescriptive approach. I am sure that the Minister will recognise that that might be a novel way of trying to address this form of regulation. That is not a bad thing, and it might be a good thing. It would, no doubt, redistribute burdens, in that it would create burdens for some and reduce them for others. Prospective impacts would be expected to flow from it, and they would be speculative. It is, therefore, important to review the operation and structure of such legislation, and I hope that Ministers will recognise the value of the new clause in allowing that to happen.
I illustrated my case with the example of fire safety legislation. However, the new clause also fits with the business community's estimation of what a good regulatory environment should look like because it involves a constant 529 process of review. That is not the same as the constant downward pressure that the Government should apply to the total regulatory burden, but it is an essential part of helping to achieve that pressure.

§ Mrs. Ann Winterton (Congleton)
Bearing it in mind that the reviews would be held approximately five years after the introduction of the orders, does my hon. Friend believe that they would exert a downward pressure on the number of orders introduced, and that that could have a beneficial effect on the over-regulation of business?

§ Mr. Lansley
I indeed believe that, for a rather civil-servant, Whitehall reason, among others. I am loth to create a bureaucratic process that creates additional burdens for the sake of it. Far be it from us to do that; we want to do quite the opposite. The process of review by which Departments will have to bring back before Parliament and substantiate earlier decisions and judgments will be a constraint on those Departments under-estimating the costs and impacts that flow from new regulation, or over-estimating the benefits. I hope that such a review process would be a persuasive psychological constraint on those who introduce regulation in the first place.
My hon. Friend's intervention leads me to an interesting point. The five-year period would have a further benefit, because we would have allowed sufficient time to pass to understand the wider impacts of any regulation. There is a tendency, which we discussed briefly in Committee, at the point at which regulations are made, for the discussion of impacts to focus on the direct compliance costs, and the measurable, immediate, direct effects of introducing a regulation. However, the impacts of any legislation tend to be wider and longer. As my hon. Friend the Member for Lichfield (Mr. Fabricant) implied earlier, the impacts tend to be on an industry's relative competitiveness, and the relative costs to businesses.
I shall illustrate that point with one of the most forceful examples of the necessity of re-examining the kind of regulatory impact assessments that have previously been made by Departments. The House will recall the recent passage of the Regulation of Investigatory Powers Act 2000. At that time, a regulatory impact assessment was attached to the legislation. I have it here. The regulatory impact assessment on part I of the Act states: Total compliance costs in the short term are not expected to exceed the measure of significance (£20M) used by the Regulatory Impact Unit of the Cabinet Office. Subsequently, the assessment says of part III: total compliance costs to business relating to Part III of the RIP Bill are not expected to exceed the measure of significance (£20M) used by the Regulatory Impact Unit of the Cabinet Office. On the face of it, the 2000 Act seems relatively benign. However, in the course of an examination of the economic impact of the Act, the British Chambers of Commerce commissioned an independent report, to which there were a number of contributors. It was essentially conducted by independent academics. It is interesting to look at their conclusions about the prospective impacts of the Act. They stated in relation to part I that the direct cost to internet service providers over five years would be £640 million.
530 The report then looked at the costs arising from the technical design requirements that would lead to the diversion of business away from UK suppliers to non-UK suppliers. It said that estimates of the overall cost to the UK vary considerably, but are likely to reach more than £1 billion a year by 2002.
The report's authors considered that the compliance costs in relation to part III were substantially underestimated, and that a five-year estimate would be of the order of £640 million. They then looked at the overall financial implications of the Act. They looked at the losses and leakage, as they put it, to the UK economy from diversion generally and the cost, and put those at a total of up to £46 billion in the first five years of operation.

§ Mr. White
Is the hon. Gentleman aware that the Home Secretary has written to the British Chambers of Commerce pointing out that the figures just quoted are greater than the entire internet turnover of the various companies at the time? The figure for leakage is given as 5 per cent. but the figures add up to more than 100 per cent. of current turnover.

§ Mr. Lansley
This is not the time to examine the whole report, which runs to 35 pages. However, the hon. Gentleman will understand that the report anticipates diversion not from an existing but a prospective level of business over up to five years. In a sense, he has helped to make my point. The authors of the report are working within a range of estimates of the growth of business for internet service providers over five years.
Given the conflicting estimates of the regulatory impacts over a five-year period, we could find that the Home Office is right and that the regulatory impacts of the legislation over five years are modest. Alternatively, we could find that the costs are at the high end, illustrated by the report prepared for the British Chambers of Commerce, which I agree seem very large indeed. If the report is right about the direct costs of £640 million or the cost of the diversion of business amounting to £1 billion, those figures are orders of magnitude greater than the regulatory impacts foreseen by the Home Office in the report.
We may not know for two or three years whose estimate is right. However, it would be regrettable if Ministers legislated on the basis of one set of estimates and the whole system goes to "fire and forget" when it ought to be the responsibility of the House to look again at the legislation. It is the commitment of my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) that when we have the opportunity to do so, we shall review it for that reason.

§ Mr. Bercow
We do not need to look into the crystal ball when we can read the book. Is it not the case that the torrent of regulations and the absence of any trigger mechanism for their review prevents businesses from expanding, causes them to stand still and forces many of them to shed staff? Does my hon. Friend agree that even if we leave aside the considerable number of companies that go bankrupt, large numbers of small business owners, 531 faced with this unfavourable regulatory environment, choose to give up the unequal struggle against the regulatory leviathan altogether?

§ Mr. Lansley
My hon. Friend makes a case against the burden of regulation, as he does regularly. He sets the argument in the right context. It is wrong for us to think, as we are often tempted to, about individual regulations while ignoring regulation in general and the overall burden that it imposes.
It is vital, as both my hon. Friend the Member for Buckingham (Mr. Bercow) and my tight hon. Friend the Member for Wells, the Opposition spokesman on trade and industry, have made perfectly clear, to set our regulatory activity in the context of commitments not only to sunset clauses but to regulatory budgets so that we bring down the burden of regulation progressively. That is the only way to unlock competitiveness and bring further growth.

§ Mr. Ian Stewart (Eccles)
The hon. Gentleman outlined a range of important issues that need to be addressed. However, does he not accept that his view that deregulation is the only way to success is wrong and that underinvestment has had at least the same impact, if not a greater one, than regulation?

§ Mr. Lansley
I am surprised that the hon. Gentleman should characterise my remark as suggesting that regulation is the only issue for competitiveness. It is, none the less, important for that. The latest MORI survey of business suggests that the ranking of importance of issues to businesses for their future competitiveness is skills shortages, followed by regulation. He should not underestimate the importance of regulation to business in its future competitiveness.
Of course the hon. Gentleman is right that investment is important. Businesses will find, I am afraid, that the structure of domestic savings in the economy is such that the future prospects for investment are considerably reduced, as is the prospect for private sector investment and consumption, because the Government are crowding out private sector activity with extravagant growth in the public sector.

§ Mr. Fabricant
My hon. Friend is more than generous in giving way to me. What is important, as the Prime Minister might say, is to recognise that there is a problem. Is my hon. Friend aware that the World Economic Forum has identified the fact that Britain, which was in fourth place in the competitiveness league for businesses in 1997, when the Government came to power, has fallen to ninth place?

§ Madam Deputy Speaker (Mrs. Slvia Heal)
Order. Will the hon. Gentleman please confine his remarks to the new clause?

§ Mr. Fabricant
This has everything to do with new clause 1. You will have read new clause 1, Madam Deputy Speaker. Does my hon. Friend agree that the lack of competitiveness can be combated by new clause 1, which would ensure that regulations that create uncompetitiveness can be repealed?

§ Mr. Lansley
I am grateful to my hon. Friend. New clause 1 would create a structure of review similar to 532 sunset clauses and should be applied to new burdens created in primary legislation. It is an important part of creating a deregulatory framework.
Sir Martin Jacomb was instrumental in privatising British Telecom in the mid-1980s. He later became chairman of the Prudential and deputy chairman of Barclays bank. This week, he wrote in The Daily Telegraph about the impact of regulations and bureaucracy on business. I shall refer to only one of his recommendations for turning back the tide of regulation. He stated that home-grown regulations should have sunset provisions built in, that they should be subject to automatic review after a specified period, and that they should automatically expire if not renewed. The Bill is a regulatory measure as well as a deregulatory measure, so it is important to build a sunset review into the structure of regulation.
Finally, I draw attention to the fact that a review provision under the new clause would allow the House to become more aware than hitherto of the burden of regulation as experienced outside. We want to get away from "fire and forget" with regard to regulations, because even now our knowledge of regulatory impacts is limited.
In March, the Minister for the Cabinet Office published the latest of her six-monthly reports on regulatory impact assessments. It detailed the 79 assessments made between 1 July and 31 December 2000—more than enough for six months, one would have thought—but one or two seemed to have been omitted. I was surprised at that, given how comprehensive and thorough she is, so I investigated further.
I found that 20 regulatory impact assessments made by Government Departments were not listed in the report. For example, an assessment was published of a European directive relating to measures to be taken against air pollution by emissions from passenger cars and light commercial vehicles. The assessment was signed by Lord Whitty on 5 December 2000, and estimated the cumulative effect of the proposals in annualised costs to UK manufacturers at between £980 million and £1.47 billion, with a price impact on a new medium-sized vehicle of between £420 and £885.
Other assessments of orders or regulations absent from the March report are equally interesting. They include assessments of orders dealing with regulating the supply of number plates, which has a less marked impact than the example that I have just given. Another assessment was of an order dealing with the supply of new cars, which was signed by the Secretary of State for Trade and Industry on 31 July. Another missing assessment relates to the Disability Discrimination Act 1995, in which additional continuing costs were estimated at £74 million a year.
Among the other assessments missing from the report was one of an order relating to a proposal to introduce vehicle identity checks. That order was signed by a Minister in another place from the Department of the Environment, Transport and the Regions, and its cost was estimated at £22 million a year. Another order—the only one that I could find that benefited industry through a reduction in compliance costs—related to the Gaming Act 1968. Another, dealing with fees for goods vehicles—

§ Mr. Ken Purchase (Wolverhampton, North-East)
The hon. Gentleman mentioned the costs of implementing 533 regulations to assist disabled people. I remind him that many disabled people have made a huge contribution to the country's economy but, without the regulations that allow them to work, their skills would be lost to us.

§ Mr. Lansley
The hon. Gentleman must not misunderstand me. My purpose is not to debate the merits of the measures, which may be greater than their costs. That relationship is examined when any regulation is introduced. I am sure that he will agree that the Disability Discrimination Act 1995 was an excellent measure. It was taken through the House by my right hon. Friend the Member for Richmond, Yorks (Mr. Hague). I agree that there is a need to protect disabled people in law.
Some of the measures incur substantial costs, but it is beyond many hon. Members to keep track of the regulatory impacts of legislation.

§ Mrs. Ann Winterton
My hon. Friend has given the House a list of orders and regulations subject to regulatory impact assessment. Do most of them emanate from the UK Parliament, or from the EU? Does not he believe that sunset clauses or a five-year review should apply equally to regulations emanating from Europe? Unlike Britain, other countries in Europe do not even try to implement regulations that inflict tremendous on-costs on our business.

§ Mr. Lansley
My hon. Friend makes an important point. The Government must show a determination to achieve deregulation in British legislation, and demonstrate a willingness to impose the sunset clause structure on UK regulation. Otherwise, they could not argue in good conscience, to the European Commission and the European Council, that a similar structure should be imposed on European legislation. It is vital that we do that, because many of the measures to which I referred emanate from European legislation.
I should clarify to my hon. Friend that I was not quoting from the Cabinet Office report. I was referring to regulatory impact assessments that apparently were made in the relevant period but which did not appear in that report. Some of the regulations and orders stem from domestic legislation, but others, such as the one dealing with changed emission standards for passenger and light commercial vehicles, are made domestically in response to European directives. The RIA in that case found the costs involved to be very large, and the relevant regulations arose from European directive 98/69/EC. The measure was therefore not so much UK-inspired as EU-inspired.

§ Mr. Bercow
I am relieved that my hon. Friend agrees with my hon. Friend the Member for Congleton (Mrs. Winterton), that the principle of the Bill should also apply to European directives and regulations. Does he agree that, when it eventually does so, it should be capable of retrospective effect? Unless that were the case, the House could not address the legitimate concerns of business organisations about the Part-time Employees (Prevention of Less Favourable Treatment) Regulations 2000. I am sure that my hon. Friend is intimately familiar with every line of them.

§ Mr. Lansley
I may be, but then again, I may not. My hon. Friend makes an interesting point, although I must confess that I am not often tempted by retrospection. One of the objectives of regulation is to provide certainty and clarity. The greatest uncertainty that one can create for businesses is to make them believe legislation is one thing only for them to find that it has been changed, so I am not tempted to say that we should pursue retrospection. Indeed, sunset clauses are not designed for that purpose but to enable a review of what has occurred to be undertaken so that the necessary changes can be made to achieve a deregulatory effect.
Certainly, if the objective—to which I know my hon. Friend subscribes—is to reduce the burden of regulation systematically and progressively, no doubt he will look to the proposals that my right hon. Friend the shadow Secretary of State for Trade and Industry has made to apply a regulatory budget to Government Departments. That would have to include the impact of EU measures on the UK. To return to the point that my hon. Friend the Member for Congleton (Mrs. Winterton) rightly made, the necessity of taking such measures in new clause 1 and applying them to European legislation should be borne in mind. If we do not do that, we shall have no way of preventing those burdens from being imposed on us by Europe.
In conclusion, it will be apparent to the House that the objective is a measured one. It is not to disapply regulatory reform orders willy-nilly, but to provide for a review process. Business organisations clearly subscribe to the idea of a systematic process of review, as was illustrated on Second Reading by Ministers and Labour Members who claimed to attach importance to the views of business organisations in relation to the Bill. I hope that they accept that those organisations believe that the structure of the legislation would be much improved by a built-in sunset provision. The need for review is clear because—I hope—the volume of regulatory reform orders and their importance will be such that we should not allow legislation to be made without Parliament being aware of its effects.
I hope that the Bill will have a beneficial impact on Whitehall in ensuring that the statements in documents laid before Parliament when regulatory reform orders are first made are as rigorous and justifiable as possible, because Ministers and officials will know that they will be subject to detailed scrutiny against subsequent experience. New clause 1 will therefore help to position the Bill in the structure of the new deregulatory intention that the Conservatives will achieve when we are in government after the general election.

§ Mr. White
The hon. Member for South Cambridgeshire (Mr. Lansley) began by making a fairly good case in relation to the review, but the longer he continued his argument, the more it revealed the true nature of his intentions. If we are serious about having a review, we should address the way in which the House reviews regulations and the myriad Committees involved. They include the Joint Committee on Statutory Instruments, the Deregulation Committee and various European Standing Committees. New clause 1 does not even attempt to do that.
It became clear from the hon. Gentleman's speech that he continues to confuse content with application. There may be a fundamental argument about content. 535 The intervention of the hon. Member for Buckingham (Mr. Bercow) completely confused the content of regulation with its application, and I am glad that the hon. Member for South Cambridgeshire was not tempted down the route that the hon. Member for Buckingham was leading him. I would be the first to say that a great deal of bureaucracy is involved in the application of regulations on health and safety and employment rights, for example, but their content is extremely important. In those cases, the content may be right, but there is an argument about whether their application is the best way of proceeding.

§ Mr. Bercow
It is always a pleasure to joust with one of my parliamentary neighbours. The hon. Gentleman may disagree with me, and frankly I should be considerably alarmed if he did not, but he is quite wrong to accuse me of being confused as between content and application. I am not in any way confused about this important matter. I strongly deprecate the content of much of the regulation that is foisted on British and Buckinghamshire business and I strongly object to the manner of its implementation.

§ Mr. White
I am sure that the hon. Gentleman is not confused and that he is indeed opposed to the content of certain regulations. If a Tory Government were ever to be re-elected and the hon. Gentleman were to get the chance to implement his views, I fear that the country would be damaged by the removal of regulations protecting employees' rights or health and safety. I am reminded of Churchill's comments when he introduced the wages councils. He spoke of the need to introduce regulation in order to stop the worst driving out the good. The hon. Gentleman and the modern Conservative party should look again at the history of their party in providing those protections.

§ Mrs. Ann Winterton
The hon. Gentleman has been talking about the content and the implementation of regulation and making assertions about what a future Conservative Government may or may not do. Will he give a moment's consideration to the amount of regulation that the Labour Government have introduced over the past four years? It has increased exponentially. Every business—small, medium and large—complains about it, as does every part of the public sector, including the teaching profession, doctors and hospitals. Does he agree that we have had far too much regulation, and does he not welcome means to reduce it?

§ Mr. White
I sit on the Joint Committee on Statutory Instruments, which looked at the number of regulations that are made per year—it averages about 3,000, which is the same as under the previous Government. The hon. Lady misses the point that a high percentage of those regulations simply change the level of a fee or have some similar effect. Therefore, it is not enough simply to look at the total number of regulations.
The Deregulation Committee or its successor will consider regulatory reform measures, and that is the appropriate way forward. The hon. Member for South Cambridgeshire is right to say that review is absolutely critical, but he is wrong to propose the introduction of a sunset clause that would allow re-regulation, which is why I fear that new clause 1 takes entirely the wrong direction. 536 As I have said in the House, there is a role for a sunset clause in respect of certain pieces of primary legislation, but new clause 1 would not achieve that. Nor does it address the mechanisms with which a review should be conducted. I would argue that the Deregulation Committee's recommendation of a review after three years rather than five is the appropriate way forward and I would urge my hon. Friend the Minister to reiterate the commitment that he gave in Committee to take on board the proposals of the Deregulation Committee.

§ Mr. Robert Jackson
I rise at this late stage of the proceedings on the Bill as possibly the only hon. Member present who was not a member of the Standing Committee to support the good intention of the Bill and to join my hon. Friends on the Front Bench in urging the Government to go further in a number of significant areas.
I look at the issue with a fresh mind, unclouded by the experience of the Committee. It seems to me that the Bill reflects a considerable amount of common ground between the parties. First, there is general recognition among Members on both sides of the House that the extent, burden, complexity and enforcement style of Government regulations are serious issues.
The story began under the previous Conservative Government. When my right hon. Friend the Member for Henley (Mr. Heseltine) was appointed to the Department of Trade and Industry in 1992, he created the deregulation taskforce and set up a unit of DTI civil servants to support it. When he became Deputy Prime Minister five years ago, he took that unit with him to the Cabinet Office—the heart of the Government machine. When the Labour Government came to power in 1997, they retained the unit in the Cabinet Office. It is true that they renamed it the "better regulation taskforce", arguing—perhaps ominously—that, whereas deregulation implies that regulation is not needed, in fact good regulation can benefit us all". That shift of philosophical perspective has so far not turned out to be as portentous as might have been feared. Lord Haskins and his colleagues in the taskforce and the officials in the regulatory impact unit scrutiny team and in the departmental regulatory impact units deserve our thanks for their continuing work.
A second area of common ground between the parties is reflected in the Bill. The measure builds on the Conservative Government's Deregulation and Contracting Out Act 1994. At the time, the Labour Opposition strongly criticised the Act, but in government—as in so many other areas—Labour has been content to build silently and without acknowledgement on what they inherited, covering their retreat from the asperities of Opposition with the odd name change and the occasional philosophical flourish.
The 1994 Act was an innovative piece of legislation; some of its innovations were clearly experimental—they were always going to require improvement in the light of experience. For example—

§ Madam Deputy Speaker
Order. I remind the hon. Gentleman that we are debating new clause 1 rather than Second Reading.

§ Mr. Jackson
As I did not participate in the Committee proceedings, I wanted to give some background to my thoughts on new clause 1, but I shall address it directly.

§ Mr. Lansley
Does my hon. Friend share my view that one of the benefits of new clause 1, in allowing a review 537 and a simple disapplication of regulatory reform orders, is that it introduces an additional buttress to the supra-affirmative procedure that is at the heart of the new mechanism introduced under the Deregulation and Contracting Out Act? At the time and since, the procedure was seen by the House to be exceptional—it was designed for a particular purpose.

§ Mr. Jackson
I thank my hon. Friend; that is precisely one of the points that I want to make. At this stage of my speech, however, I am suggesting that, as there is much common ground, that may be a reason for the Government to move towards the Opposition on new clause 1.

§ Mr. Bercow
My hon. Friend helpfully traces the background to our discussion. I have a characteristically non-partisan observation. Of course, my hon. Friend is right to refer to our right hon. Friend the Member for Henley (Mr. Heseltine), who is very important, very senior, very distinguished, very influential, very respected and very busy, but does he agree that one of the difficulties during the tenure of our right hon. Friend was that, although he presided over the elimination of a good many regulations, a substantial number of new regulations simultaneously appeared—not least from Europe? Does that not underline the importance of a structured and strategic approach and of a proper review mechanism? Apparently, that did not occur to our right hon. Friend.

§ Mr. Jackson
My hon. Friend is right. The issue is important. There is a continuing tide of regulatory activity—much of which is justified, but some of which may not be. It is appropriate that there should be proper mechanisms in the House and in the other place to address that matter. My hon. Friend the Member for South Cambridgeshire makes proposals, which I support, to improve those mechanisms, but I want to continue to outline why the Government should acknowledge that there is common ground between the parties on which we can build.
A final and important area of common ground is the way in which the operation of the legislative procedures in both Houses of Parliament has been developed under the 1994 Act. The Select Committee on Deregulation, whose Chairman was in the Chamber earlier, and the Select Committee on Delegated Powers and Deregulation in the other place are examples—I hope, pioneering examples—of Select Committees performing what are, in essence, legislative functions.
The Bill reflects a welcome convergence of views between the parties on both the substance of the matters with which it deals and the procedures by which we address them. Of course, the Opposition would like the Government to go further and faster. Although the Cabinet Office is probably right in claiming, on its internet site, that the number of new regulatory measures significantly affecting business has remained broadly stable in recent years"— a figure of 166 in 1999 is given—that is merely a statistical measure; it does not adequately reflect the growth, under the Labour Government, of the burden and complexity of regulation.
538 The Opposition have opposed that trend as it has manifested itself in successive pieces of legislation. As my hon. Friend the Member for South Cambridgeshire explained, in the specific area of regulatory reform—the subject of the Bill— we have made proposals to strengthen the arrangements set up in the mid-1990s and maintained by the Labour Government.
The issues raised by new clause 1 are the subject of continuing debate—we have yet to hear what the Parliamentary Secretary, Cabinet Office has to say about it; there seems to be a divergence of view between the Opposition and some Government Back Benchers, especially on sunset clauses, which are addressed in the new clause. I urge the Government to build on the wide common ground that I have described and to give a fair wind to my hon. Friend's proposal, even at this late stage of the Bill's proceedings.
The Government ought to offer a package deal, in relation to which I refer to the point made by my hon. Friend the Member for South Cambridgeshire in his intervention. In many ways, the most important feature of the Bill is its provision for the use of new procedures set up under the 1994 Act not only to simplify and reduce the burden of regulation, but, in certain strictly defined circumstances, to apply new regulatory burdens. I realise that the Government are sensitive to the natural concern to which the proposal gives rise—that innovative procedures, which have been working well on the implicit basis that regulatory burdens should be reduced, might be diverted into the expansion of such burdens. That is why we have associated with the proposals all the provisions in clause 3 for necessary protection, reasonable expectations, fair balance and desirability and, in clause 1, for proportionality. That is why the Government made concessions on desirability to Lord Goodhart in the other place.
I hope and believe that it will be possible to maintain all-party consensus on the matter; that is why we want to introduce amendments dealing with the creation of new regulatory burdens—although as that issue is dealt with by amendment No. 2. I shall not address it now. It is clear that the approach taken by my hon. Friend the Member for South Cambridgeshire is to build that consensus. The two Select Committees were unanimously of the view that the new powers could be constructively exercised in the spirit of the work that has been going on since 1994.
I draw attention to the reservations, expressed in the Deregulation Committee's third special report, about the Government's refusal to accept a requirement for the provision of regulatory impact assessments. I referred to that matter during an intervention on my hon. Friend the Member for South Cambridgeshire. The Committee suggested that there should be a link between the new powers desired by the Executive to extend regulatory burdens and the introduction of a new procedure to contain and limit regulatory burdens. That is what I had in mind when I referred to a package deal.
If the type of regulatory impact assessment that is sought by the Deregulation Committee in this place is impractical for some reason, or is too burdensome, surely the Government could look constructively at whether the Opposition's proposal in new clause 1 might offer a more satisfactory alternative. As my hon. Friend the Member for South Cambridgeshire explained, the Opposition do not have in mind the simple, sunset provision that was examined and rejected last year by the Delegated Powers 539 and Deregulation Committee in the other place. The Opposition recognise that a provision for the automatic expiry of all regulatory reform orders after a certain period could create an intolerable burden for Parliament and officials.
My hon. Friends propose a system of automatic post facto regulatory impact assessments, by which the Government have to report on the operation of all orders approved under the new procedures after five years, so that their effectiveness in practice may be considered and their continuing operation approved by Parliament in the light of those reports.
That proposal seems eminently reasonable. It could offer the sort of balance required for the Executive's new regulatory powers under the legislation and also required in the spirit of the joint work on deregulation. In the other place, the Cabinet Office Minister, Lord Falconer, gave a commitment to report to Parliament on the operation of the Act three years after its enactment. We may have to wait for that review before the Government take on board the thinking that is embodied in new clause 1.
I hope that, even at this late stage in our proceedings, the Government will demonstrate that they have an open mind and that they are open to constructive suggestions. On that basis, I commend the new clause to the House and hope that the Government will say that they are willing to accept it.

§ Mr. Ian Stewart
Hon. Members have said that there is some cross-party agreement about regulation and deregulation. I think that all sensible commentators acknowledge the urgency of removing unnecessary burdens. What disappoints me about Opposition Members is their unbalanced approach to the issue. They focus, properly, on industry, but they do so in an unbalanced way. The regulations and this system of deregulation will affect individuals across the spectrum. They will affect not merely industry but social policy.
The intention behind the Opposition's new clause is to ensure that the Government review regulations after five years. The Opposition keep referring to sunset clauses, with which new clause 1 does not deal. That policy is not acceptable to Labour Members and, in particular, to Labour members of the Deregulation Committee. We are firmly in favour of the constant review of regulations in the bid to get rid of those that are unnecessary or burdensome. The three-year period that the Government have suggested is a much better option, when one bears in mind the continuous regulatory review philosophy.
Therefore, I will vote against new clause 1 and I hope that my colleagues on the Labour Benches and in the other Opposition parties will join me.

§ Mr. Fabricant
I do not follow how one can have a constant review as the hon. Member for Eccles (Mr. Stewart) has suggested. This Government alone have introduced 3,000 regulations. How could a committee keep so many regulations constantly under review?

§ Mr. Stewart
The hon. Gentleman has highlighted the point made by my hon. Friend the Member for Milton Keynes, North-East (Mr. White). What is at issue is the process. No single committee could do that on its own. 540 Therefore, we have to establish a culture of regulatory review across all Departments and have a proper structure, in line with that outlined by my hon. Friend.

§ Mr. Fabricant
That culture patently does not exist, which is why the Government have introduced the Bill and I commend them for doing so. As my hon. Friend the Member for Wantage (Mr. Jackson) pointed out, successive Governments have tried to regulate the burden on industry and, as the hon. Member for Eccles said, on other parts of our society, and we all welcome that.

§ Mr. Bercow
My hon. Friend is being extraordinarily gentle with the hon. Member for Eccles (Mr. Stewart). Does he agree that the hon. Gentleman, in a thoroughly unpersuasive fashion, erected an elaborate smokescreen by talking about an on-going review, when the Government are undertaking nothing of the sort? Does my hon. Friend agree that it would at least be a credible earnest of the Government's good intentions in this matter if they were to publish an annual statement of the costs of regulation? The Government do not do so, as they told me in readiness for my ten-minute Bill on 27 April 1999.

§ Mr. Fabricant
The Government do not produce a cost-benefit analysis of their regulations, just as they do not want to produce one for our membership of the European Union, simply because they do not want to publish whether there is a cost or a benefit for either. As for my hon. Friend's remarks about the intervention by the hon. Member for Eccles, the process of continual review has been singularly ineffective—

§ Mr. Bercow
Absent.

§ Mr. Fabricant
Indeed, it has been absent. That is why the Government are trying to change the situation by introducing this Bill. It is necessary, but new clause 1 would strengthen it. I fear that, without the new clause, the Bill would simply be another paper tiger. There is no question but that the new clause is necessary.
As I tried to point out earlier, the competitiveness of British industry—I shall deal with other aspects of our social life in this country—has declined. It was in fourth place in 1997 and now it is ninth, which is a drop of five places. That is serious. To those who say that we are booming and booming, I point out that the first thing that suffers when business, and commerce in general, declines is advertising. It is always the first to go.
Capital Radio plc—an organisation with which I was intimately involved before I came to the House—has had to issue a profit warning and Scottish Radio Holdings, which may be closer to the heart of the hon. Member for Eccles, has also—

§ Mr. Stewart
indicated dissent.

§ Mr. Fabricant
The hon. Gentleman denies it, but I pointed it out only because I thought that I detected from his accent the slightest Scottish connection.
In Scotland too, commercial radio stations have had to issue profit warnings on the amount of advertising revenue that they receive. The first thing that companies do when they start to get into difficulties is to cut their advertising budgets; hence the need for new clause 1. 541 The hon. Gentleman was right to say that it is not merely industry per se that will be affected; other aspects of our lives will be affected, too. My hon. Friend the Member for South Cambridgeshire (Mr. Lansley) talked about fire safety and I mentioned health and safety regulations in an intervention. I greatly fear that, if new clause 1 is accepted and the Government try to conduct reviews in those areas, they will find it difficult.
3 pm
It has to be said that all Governments have the gravest difficulty in handling regulations that have been introduced to produce safety mechanisms for workers and people in general. There is a ratchet effect. No one wants people to be put in harm's way, but as my hon. Friend the Member for South Cambridgeshire has said, there must be a risk assessment—a new approach to the way in which we analyse the effect of regulations on businesses and individuals. However, as we have seen already in relation to the consequences of the Hatfield tragedy, that risk assessment is not easy.
A huge amount of money has been invested, quite rightly, in refurbishing our rail stock and, to some degree, the lines themselves. Given the statistics provided by the Department of the Environment, Transport and the Regions, one must consider that, post Hatfield, it is still eight times safer to travel on the railways than on the roads per passenger mile—perhaps I should say per passenger kilometre nowadays.

§ Mrs. Ann Winterton
Oh, don't.

§ Mr. Fabricant
I shall stick to using the phrase "per passenger mile".
That is the sort of risk assessment that people have to make when considering the possibility of injury or death. If we were to say that travelling on the roads carries a greater risk, the Government would not say that we must close all our roads, because that would be a ridiculous consequence.
The point that I am making—perhaps not very well at the moment, but I shall clarify it—is that there is a risk to everything in life, whether travelling by road, by air, or even crossing a road on foot, and Governments have constantly to assess whether the risk is so great that regulations must be introduced. However, new clause 1 would go further than that. It states that there should be a review as to whether a regulation should be removed, which is a wholly different question. New clause 1 states that, if the review says that something is not worth keeping, the House can consider a resolution to that effect … within ninety days of the regulation being removed. That would create huge difficulties for individuals and Parliament.
If there were only a 10 per cent. risk—no, let me go further—if there were a one-in-a-million chance of someone being killed, that regulation may not be laid before the House in the first place. Post facto, as my hon. Friend the Member for Wantage (Mr. Jackson) said, would Members of Parliament have the courage to say 542 that, with a one-in-a million chance of injury or death, the regulation was not worth keeping if the consequence of its removal was the death of 60 people in this country?

§ Mr. Bercow
At least part of the valid point that my hon. Friend makes is the fact that something with a benign name does not necessarily mean that it will have a benign content. Does he agree that we should take care not to confine ourselves to the discussion of manufacturing industry or high-tech business, or even of the impact of regulation on the public sector, but that we should be prepared to consider the impact of regulation on agriculture? May I tell him that regular reviews of the integrated pollution prevention controls would be warmly received by Mr. James King of Cowley farm, Preston Bisset, near Buckingham in my constituency, as a welcome, if belated[...] wedding present?

§ Mr. Fabricant
I can well imagine that Preston Bisset welcomes the very important remark that my hon. Friend makes. Incidentally, I wish Mr. King a very happy wedding in the hope that he might be watching on the Parliament channel—but that, of course, would be out of order, Madam Deputy Speaker, so I shall not pursue that line further. As well giving a plug for his constituent, my hon. Friend points out that, as the hon. Member for Eccles said, the Bill and new clause 1 would apply to many areas.
We should not underestimate the inability of new clause 1, or any of the provisions in the Bill, to deal with regulations that emanate from the House under a directive from the European Union. My hon. Friend the Member for Congleton (Mrs. Winterton) has already said that many regulations come directly from EU directives. We in the House must ask ourselves two questions. First, are we gold-plating the directives? Are we making the directives so tough that they provide an imbalance—an unlevel playing field—between this country and other EU countries? Secondly, do we enforce such directives to a greater degree than those in other EU countries, so that, yet again, we have compounded the problem of the unlevel playing field? I should like my hon. Friend the Member for South Cambridgeshire to say in winding up whether new clause 1, which Conservative Members support, would deal with that problem. Could we review legislation that is a direct consequence of EU directives? How could we seek to reverse such orders?

§ Mr. Geoffrey Clifton-Brown (Cotswold)
My hon. Friend makes some, powerful and cogent points. He is dealing with whether regulations arise from our own domestic Parliament or from Europe. I draw the attention of the House to my entry in the Register of Members' Interests. Many of the regulations relate to agriculture, which is probably the most regulated sector in the EU. Has he any evidence that the United Kingdom tends to implement such regulations quicker than any other member state? I commend the official Conservative agriculture policy, which is now only to implement European regulations at the speed of the slowest European country. Does he think that that would encourage the Commission to issue fewer regulations?

§ Mr. Fabricant
My hon. Friend makes a powerful point. The whole House recognises his expertise in agriculture. I do not claim to compete with him on his knowledge of agricultural affairs, even though there are 543 many farms in my constituency, but I can give an example that relates to agriculture—food distribution. I beg my hon. Friend the Member for Buckingham (Mr. Bercow) not to intervene and ask me to mention someone's name, but two years ago—this relates directly to new clause 1, Madam Deputy Speaker—I was with him in Boulogne, where we happened to visit a supermarket with someone else. He—not my hon. Friend—is a director of the John Lewis Partnership, which owns Waitrose. I know that I am trying your patience, Madam Deputy Speaker, but I want to make the point, which is relevant to the question that my hon. Friend asks, that he was looking at the freezer cabinets in a large supermarket, and it was very clear that they were not complying—

§ Madam Deputy Speaker
Order. I hope that the point that the hon. Gentleman wants to make is germane to new clause 1.

§ Mr. Fabricant
I am very conscious of the fact that you think it might not be germane, Madam Deputy Speaker, but it is because new clause 1 seeks to level the playing field, as, I hope, my hon. Friend the Member for South Cambridgeshire will confirm. The example of the supermarket clearly shows that France, at least, does not abide by EU regulations. Waitrose and, no doubt, other supermarkets have spent hundreds of millions of pounds in the past few years complying with British and EU regulations, whereas that is not the case at least in that large supermarket in Boulogne.
I hope that new clause 1 will consider not only whether regulations should have been introduced in the first place, but whether they are enforced more strictly in the United Kingdom than in other EU countries. That should form part of the review that is mentioned in new clause 1(1). I hope that my hon. Friend the Member for South Cambridgeshire will confirm that, when European directives are enforced in the United Kingdom, they will be examined in terms of not only their content but their application. That follows on directly from the points—some of them admirable—made by the hon. Member for Milton Keynes, North-East (Mr. White). These are the key issues.
Regulations that are not enforced will not be a burden on industry or society but, if they are concerned with the protection of the individual, they will not provide protection. Not only the content of regulations but their application need to be considered. That means considering whether they are applied not only in this country but in a similar manner in other countries.

§ Mr. Mark Hendrick (Preston)
Has the hon. Gentleman done any research or cost-benefit analysis on the speed of implementation of European Union directives in other EU member states? Would he be willing to place that burden on civil servants in the United Kingdom?

§ Mr. Fabricant
The hon. Gentleman raises a very interesting point, and I am grateful to him for doing so; he is right to ask that question. I have not done that analysis, but I have read analyses produced by the British Chambers of Commerce, the Engineering Employers Federation and by many other organisations. I am sure that he has read them, too.
The hon. Gentleman asked whether it was right for the Government to have to conduct such reviews and I say, "Yes, it is right for them to do so." Remember who 544 pays for government—the taxpayers. Taxpayers, Madam Deputy Speaker, include you, me and the businesses that pay corporation tax. If businesses cannot sustain their business because they are uncompetitive, they will not pay tax. Therefore, it is in civil servants' interests to carry out such reviews to ensure that the tax stream continues to flow and that they continue to be employed, unlike those who would be laid off if we dropped from 9th to 20th place.

§ Mr. Lansley
My hon. Friend might be interested to learn that, in a report produced for Politeia recently, Nicholas Boys Smith estimated the proportions of the regulatory burden on industry that derived from UK legislation and from EU legislation: half the total cost of £12.6 billion by May 2001 derives from EU legislation.

§ Mr. Fabricant
That is very revealing. It demonstrates that, if EU regulation were enforced in the same way in other countries and were enshrined in national law in the same way throughout the EU, the burden might be difficult, but it would be equal. Does that not demonstrate that the problem in this country is one of gold-plating and of enforcement?
You will know, Madam Deputy Speaker, of the businesses in the Lichfield area that have suffered as a direct consequence of EU regulation. Does the House believe that we are punching our weight in the European Union, given that we are the second largest contributor to EU funds? However, I shall rapidly move on from that point.
3.15 pm
In answer to the question of my hon. Friend the Member for South Cambridgeshire, I remind him that an Institute of Directors' press release has pointed out that, not only has Britain become less competitive, but that that has happened primarily because Britain's tax/GDP advantage has been eroded by the significant increase in the tax/GDP ratio since 1997 (from 35 per cent. in 1996/97 to 38 per cent., allowing for tax credits, in 2000/01) and"— this is the point— secondly, the significant increase in labour market regulations. It does not take a helicopter ride over Stuttgart to see the cars piled up in the Mercedes car parks or a ride over Munich to see the holding stores for BMW cars to realise how much damage regulation has done to the German markets. Sadly, as has been demonstrated by the fall in advertising receipts, that is beginning to happen in the United Kingdom.

§ Mrs. Ann Winterton
My hon. Friend raises an issue about competition, regulation and what is happening in some European countries—and he mentioned Germany. Is he aware that Germany is exporting its manufacturing industry because of the increased regulation that he has described? The European Union will have to tackle that issue head on if there is not be to a disaster for manufacturing throughout.

§ Mr. Fabricant
My hon. Friend is right, but I can see from your expression, Madam Deputy Speaker, that I should not expand on the point that she has made other 545 than to say that I wholeheartedly agree. The problem is found in the United Kingdom, too. We are now exporting work to Hungary and the other Visegrad countries.

§ Mr. Bercow
My hon. Friend's speech has been characterised by the restraint and self-effacement for which he is renowned on both sides of the House. I hope very much that he will not conclude his remarks without reminding us of the scenario that he faced as a small business man in the 1980s. Will he confirm for the record and beyond peradventure that, if he were faced with the decision as to whether to start up a broadcasting business in the context of this Government's regulatory policies, he probably would not do so and he would probably not be in the favourable position in which he now is, having sold it so that he can concentrate 100 per cent. on his duties in the House?

§ Mr. Fabricant
Again, I see the expression on your face, Madam Deputy Speaker, but I agree with my hon. Friend. The environment now would make it quite difficult for me to start up a business. New clause 1 would ensure that businesses can start up in the future and that those that are already established survive.
The weakness of the Bill is that it is full of good intentions, just as my right hon. Friend the Member for Henley (Mr. Heseltine) was filled with good intentions when he also tried to regulate the number of new regulations—that sounds like a contradictions in terms—being introduced in the House and imposed on business. The importance of new clause 1 is that it would lead to a review after the fifth year and, as I said in an intervention on my hon. Friend the Member for South Cambridgeshire, that is important for two reasons.
The first is that it is not always easy to anticipate the effects of a regulation when it is introduced. Secondly—this is an important point—the circumstances of a regulation in a business environment can change. Businesses in 2001 might have to operate in circumstances that are very different from the prevailing conditions in 1997. We have seen that happen time and again. I shall not repeat myself, but this country's competitiveness has fallen from fourth to ninth place.
The new clause is important because it forces the Government to act. However, it has two weaknesses. First, it is not a sunset clause. I want it to be stronger. A review is helpful, but not enough. The new clause should provide for laws to be repealed if the cost-benefit analysis finds that they are an excessive burden on business. Secondly, I am not totally satisfied that the review happens only once. My hon. Friend the Member for South Cambridgeshire did not manage to convince me about that. He conceded that circumstances in a business environment can change after five years, but they can change again after 10 and 15 years. All regulations need to be kept under constant review, but not by the mechanism espoused by the hon. Member for Eccles because it has clearly not worked.

§ Mr. Lansley
On the possible weakness of the new clause, the other place discussed an amendment moved by our noble Friends to disapply regulatory reform orders if, in the course of a review, they were found to impose much 546 greater costs than the original statement implied or did not substantially deliver the benefits that were intended. I have to confess to the hon. Gentleman—

§ Mr. Fabricant
Oh!

§ Mr. Lansley
Sorry, he is very much my hon. Friend.
I have to confess that we did not think it right to do that because of the inherent complexity and difficulty associated with trying to measure and quantify costs and benefits to the extent of creating an automatic disapplication.

§ Mr. Fabricant
I am grateful to my hon. Friend for that explanation. When I did an economics degree all too long ago, we examined cost-benefit analyses and it is difficult to make them accurate. There is no question but that if there is "x" number of economists, there will be "x" number of results on virtually everything in a cost-benefit analysis. Perhaps that is why the Government are so keen not to accept my Bill, the Analysis of Costs and Benefits (European Union) Bill.

§ Madam Deputy Speaker
Order. Once again, the hon. Gentleman is wandering from the subject.

§ Mr. Fabricant
On that note, I shall give way.

§ Mr. Clifton-Brown
My hon. Friend mentions the need for regulation to change in the light of new technology. He is an expert on e-commerce. Does he agree that e-commerce and, in particular, the rolling out of the broad band, will change radically the way in which many businesses operate? It will be necessary to review a range of trade and financial regulations. Hence the need for new clause 1 to keep regulations under constant review.

§ Mr. Fabricant
My hon. Friend makes a salient point. There are many examples of the problem, but I shall give just one. Telephony companies know that simple narrow band technology enables people to make telephone calls all around the world using internet systems for the price of a local call. They do not need broad band technology to do that. Telephony companies anywhere in the world, such as AT&T Communications and British Telecom, know that their days are numbered for charging premium rates for long-distance and international calls.
New clause 1 would enable us to review the regulations that established Oftel when British Telecom was privatised and the telephony companies were freed up. However, as my hon. Friend says, circumstances have changed and they will change again in five years. You can bet your bottom dollar—or, regrettably in 10 years' time, your bottom euro—that circumstances will continue to change. It is not simply the rate of technological change that is relevant; the way in which companies undertake business will also change.
I shall confess to you, Madam Deputy Speaker, that I am a great admirer of Margaret Thatcher and was a Thatcherite in the 1980s, but what was right then is not right now. Economies move on and circumstances change. I have no doubt that I would have been a member of the Labour party—old Labour—had I been in politics in 1900, but things change. As economic circumstances change—often driven by technological changes—so the 547 effect of a regulation on a business changes. A cost-benefit analysis might not have a positive flow in five years' time and, as I said to my hon. Friend the Member for South Cambridgeshire, that will change again in 10, 15 or 20 years.

§ Mr. Bercow
I understand my hon. Friend's revisionism, and far be it from me to chide him for it. However, does he agree that it is important not to misrepresent—even if only inadvertently—the stance of one of our most distinguished noble Friends? To avoid doubt, does he agree that our right hon. and noble Friend Baroness Thatcher of Kesteven is an enthusiast for new clause 1?

§ Mr. Fabricant
Yes.
I have probably spoken for long enough. The Bill is excellent, but toothless. The new clause would give it some teeth. If the Government oppose it, that will demonstrate that they merely have good intentions—as did the previous Government—to control the amount of regulation. It will show yet again that they are all about spin with no delivery.

§ Mrs. Ann Winterton
I want to make a brief contribution to this excellent debate. Like my hon. Friend the Member for Wantage (Mr. Jackson), I, too, did not have the benefit of serving on the Committee and it has been interesting to listen to the arguments made by hon. Members on both sides of the House.
I want to respond to the hon. Member for Eccles (Mr. Stewart). I like him enormously; he is a good guy—no doubt I have now blighted his career. However, he chided the Opposition for concentrating too much on the business aspects of regulation. In an intervention I tried to point out that regulation affects every aspect of our lives, and I gave one or two examples. However, I hope that the hon. Gentleman and others will forgive me if I concentrate my remarks on the business aspect of regulation and the part that new clause 1 can play in ensuring that regulation is reviewed and, if possible, removed to assist business.
3.30 pm
My whole background is in small business. My father worked down the pits in County Durham, came south during the depression and worked in Birmingham. Eventually, after the war, he founded his own very small company at spaghetti junction with two partners. My young life, at weekends anyway, was spent going into "the works", as we said. It is perhaps that background that leads me to reflect on the fact that my constituents and organisations that represent businesses tell me that they are overburdened with regulation of one sort or another. I know that the point has been made several times during the debate, but I am reflecting it from my own particular experience.
The previous Government and this Government have made efforts to restrict the amount of regulation. I admit that the previous Government's attempts were not overly successful, if they were successful at all. I have no doubt that Members in this place and the other place work extremely hard on the Deregulation Committee. However, 548 industry and business—small, medium and large—have not seen the benefits of the Committee's labours; they have not seen effective, helpful deregulation.

§ Mr. Lansley
My hon. Friend is kind to the members of the Deregulation Committee when she points out how hard they work, and I have no doubt that they do their job most conscientiously. However, she will no doubt want to know that whereas before the last general election, the Committee received a substantial number of deregulation and contracting-out orders, that number has since dwindled away to virtually nothing. The Committee will have to gear itself up if it is to make a substantial number of regulatory reform orders in future.

§ Mrs. Winterton
I hope that my hon. Friend knows me well and indeed I hope that I am a kind person. I believe in saying nice things about people whenever I can find something nice to say. However, I said in my next breath that although the Committee's work was to be commended, it had not been very effective. My hon. Friend has pointed out precisely how ineffective it has become of late. I trust that the Bill, including new clause 1, which naturally I hope the Government will support, will contribute towards reducing regulation.

§ Mr. Ian Stewart
rose—

§ Mrs. Winterton
I give way with great pleasure to that nice, kind man, the hon. Member for Eccles.

§ Mr. Stewart
Calm down. Does the hon. Lady agree that the effectiveness of a particular Committee is determined by its work, not its work load?

§ Mrs. Winterton
The hon. Gentleman makes an interesting point. I am inclined to view the Committee's work as business views it, and to ask whether business feels the good effects of its work, so I might not judge the work of that Committee, of which he is a member, from the same point of view as him.

§ Mr. Fabricant
The hon. Member for Eccles (Mr. Stewart) made an interesting and philosophical intervention, but does my hon. Friend agree that work and work load are intimately linked? If a Committee is overburdened, it might not he able to produce any good work or, for that matter, bad work simply because the system will become blocked.

§ Mrs. Winterton
My hon. Friend is absolutely right, and he brings me neatly to my next point, which was made earlier in the debate. As he said, if a Committee is overworked, its output will be affected. The over-regulation of business takes up the time of the Executive, costs money and adversely affects companies' output, which affects their profits, which go back into investment. I believe that the hon. Member for Eccles pointed out earlier how important investment is. He will know that cash flow is equally important for small businesses.

§ Mr. Bercow
Like my hon. Friend the Member for Lichfield (Mr. Fabricant), my hon. Friend has been rather kind to the hon. Member for Eccles (Mr. Stewart). Does she agree, however, that no man should judge in his own cause, 549 so the hon. Gentleman's rather feeble self-justificatory efforts should be treated with due circumspection? Does she accept that the Deregulation Committee now does too little work because it is too little interested in the responsibilities with which it has been charged? Frankly, a majority of the members of the Deregulation Committee do not believe in deregulation.

§ Mrs. Winterton
My hon. Friend makes a good point, and overall I agree with him. The focus that Baroness Thatcher placed on deregulation when she came into government has been lost over the years.
Returning to new clause 1, it is encouraging that many organisations that represent business men support the idea of a sunset clause. My hon. Friend the Member for South Cambridgeshire (Mr. Lansley) has tried to interpret and refine that concept into a power of review after five years, which is the essence of new clause 1.
I note that the British Chambers of Commerce, which recently published its manifesto, is very much in favour of the loose description of the sunset clause. The manifesto broadly states that the first priority should be simplification of the tax system, and there is a hell of a regulatory burden in that. The organisation believes that business compliance costs should be considerably reduced and that there should be regulation only when it is absolutely necessary. I should have thought that the first question that should be asked by any Government who are about to introduce regulation is whether it is absolutely necessary. The British Chambers of Commerce believes that when regulation is necessary, the lightest of touches should be used. I agree with the hon. Member for Eccles that regulation is needed in some cases, but it must be good regulation, it must be properly considered and it must not be onerous. It must fulfil the purpose and no mores.
As I pointed out earlier, the British Chambers of Commerce believes that we need fully to engage with the European Union to ensure that it promotes business competitiveness. If that happens, it will take a long time. I am 60 and my mother is 91, so I hope that the EU will consider business competitiveness as a matter of urgency, rather than letting Europe become more and more uncompetitive compared with the rest of the world.

§ Mr. Fabricant
If when I am 60 I have a complexion like my hon. Friend's, I shall be a very happy man. Does she agree with me and, more important, with the Institute of Directors, which shares my belief, that the review mentioned in new clause 1 should not be a one-off event? In its submission, the IOD states that we should Introduce a programme of reviewing the regulations that affect individual sectors on a regular, rolling basis. Does she agree that what is important—as the Prime Minister would say—is that because circumstances change regularly and nothing remains constant over time, reviews are needed, not as one-offs, but continuously and for as long as the regulation exists?

§ Mrs. Winterton
The IOD is most enthusiastic about the concept of rolling reviews, but I believe that if we take the first step set out in new clause 1 and implement a review after five years, that will bring in its wake a 550 beneficial effect on regulation. I hope that my hon. Friend will forgive me, I prefer to leave matters as they are in new clause 1 and not to pursue that course any further.

§ Mr. Anthony Steen (Totnes)
I usually agree with my hon. Friend the Member for Lichfield (Mr. Fabricant), who is a man of great charisma and intelligence, but I believe that in this case he is wrong. Before my hon. Friend the Member for Congleton (Mrs. Winterton) leaves that point, will she reflect on the fact that a review is needed only if there is a regulation, and that if there were no regulation in the first place, no review would be needed? The whole problem is that one needs sunset clauses to get rid of regulations only if there are too many of them. Does she agree that the purpose of new clause 1 is not to act as a sunset clause, but to ensure that we do not have so many regulations that we have to get rid of them?

§ Mrs. Winterton
My hon. Friend makes a strong case and I am sure that many hon. Members will agree with him. I have tried to say that what everyone—including the British Chambers of Commerce, the Institute of Directors, the Federation of Small Businesses and the Forum of Private Business—wants, rightly and properly, is less regulation to he introduced. My views and those of my hon. Friend marry well together.

§ Mr. Steen
As usual, my hon. Friend has encapsulated in a few seconds what many of us have taken hours to say. Is not the point that this country is burdened by too much bureaucracy and regulation? Is it not amazing that while Opposition Members talk about trying to reduce the amount of bureaucracy, the Government are introducing a Bill that will extend—

§ Mr. Deputy Speaker (Sir Alan Haselhurst)
Order. Let us get back to the new clause.

§ Mrs. Winterton
Mr. Deputy Speaker, I shall say only that my hon. Friend the Member for Totnes (Mr. Steen) has made his point in his own inimitable fashion.

§ Mr. Clifton-Brown
My hon. Friend has made a point that I have heard few make previously, which is that if the EU makes too many regulations, it will, as a trading block, become uncompetitive with the rest of the world—

§ Mr. Deputy Speaker
Order. That has absolutely nothing to do with new clause 1.

§ Mrs. Winterton
Thank you, Mr. Deputy Speaker.
Other hon. Members have touched on the important subject of agriculture. We all know the circumstances currently prevailing in the countryside, but my local farmers have been telling me for years that they have imposed on them regulation after regulation—most, if not all, of which originate in the EU, I hasten to add, but which are frequently gold-plated by the United Kingdom Government for the simple reason that we in this country have an ethos and custom of obeying regulation.

§ Mr. Hendrick
indicated dissent.

§ Mrs. Winterton
The hon. Gentleman disagrees, but he has obviously not travelled far on the European 551 continent, as I did during my years as a member of the Select Committee on Agriculture. Had he done so, he would have seen that the amount of regulation that is implemented in other EU countries is quite minimal compared to the United Kingdom.

§ Mr. Hendrick
I speak as one who has served as a Member of the European Parliament, visited all 15 EU member states and legislated in Europe. That we obey European legislation and other countries do not is a myth that is constantly peddled by the Opposition.

§ Mrs. Winterton
I have to tell the hon. Gentleman that I consider him to be part of the problem. If he swans around Europe with his eyes closed, he will come to the House and make such ridiculous statements. Perhaps he should speak to representatives of small, medium-sized and large business and to farmers and hear what they have to say. I assure him that the views that they would express would not chime with his.

§ Mr. Hendrick
rose—

§ Mrs. Winterton
I shall be delighted to give way again to the hon. Gentleman—

§ Mr. Deputy Speaker
Order. Not if the purpose is to have a European debate.

§ Mrs. Winterton
We shall abide by your judgment, Mr. Deputy Speaker. We live to fight another day and in another arena.

§ Mr. Steen
I am sure that you, Mr Deputy Speaker, will not rule me out of order. It is my hon. Friend's submission that the concept embodied in new clause 1 is that, with the effluxion of time, legislation will wane and ultimately die. Is that a process that she would want to be applied to European rules and regulations that have been passed by the House?

§ Mr. Deputy Speaker
Order. I really do not know how the hon. Member for Congleton (Mrs. Winterton) managed until the arrival of the hon. Member for Totnes (Mr. Steen), but I congratulate him on having at last focused on the right target.

§ Mrs. Winterton
Thank you, Mr. Deputy Speaker.
I favour new clause 1 because, as I see it, it will strengthen the Bill, go some way to tackle the amount of regulation that has been discussed, and exert downward pressure on the amount of regulation that remains on the books. It would provide a good mechanism—one that might not be perfect, but which will strengthen the Bill. I shall now rest my laurels on my case. I hope that the Minister will take on board the comments made today and that he will indicate that the Government intend to accept new clause 1.

§ Mr. Clifton-Brown
The need for the new clause becomes stronger all the time because of the accelerating tendency in the Government to pass primary legislation that allows for secondary legislation to be made by order. To my mind, that is an unwelcome trend, which betrays 552 a certain sloppiness of thought when Ministers introduce legislation. I think that that is the root of many of our problems.

§ Mr. Steen
Is not my hon. Friend really saying that the whole concept of the Bill and the reason why we proposed the new clause are to prevent a system whereby the Chamber is bypassed by secondary legislation, which would extend law-making powers by extending existing rules and regulations and running them parallel to new laws passed by the Chamber?

§ Mr. Clifton-Brown
My hon. Friend has far more experience in this field than I do—although I draw the House's attention to my entry in the Register of Members' Interests. I have many years' experience in business and have suffered the imposition of regulations—many of which were unnecessary—by successive Governments. I think that the new clause is especially relevant and that my hon. Friend is right.
If there were greater precision in our legislative process, the need for secondary legislation would not be so great. That precision has been considerably blunted by the Government's tendency increasingly to rush legislation through the House without proper debate. That has been accelerated by the increasing use of Henry VIII clauses—hence the need for new clause 1. To my mind the use of such clauses is even more reprehensible than the ordinary use of secondary legislation, as they permit the alteration of primary legislation by secondary legislation without reference to the House. New clause 1, which deals with reviewing all that regulation, is therefore particularly important.
I hope that the House will accept that I have a pedigree on the subject. Several years ago, under the excellent auspices of the Industry and Parliament Trust, I was at a lunch at which I sat next to some senior Boots executives, who asked me about the role of a Member of Parliament. I said that a Member's role is to pass legislation only in extremis and, furthermore, to repeal a lot of existing legislation. The new clause will be beneficial as it will force Ministers and civil servants to look at all our legislation, particularly secondary legislation, to see whether it is still necessary or relevant.

§ Mr. Bercow
May I encapsulate my hon. Friend's argument in a slightly different form? In reflecting on the merits of new clause 1 and the proposed review mechanisms, does he agree that Opposition Members are guided by the philosophy enunciated by our noble Friend Lord Lawson of Blaby—to wit, that the business of government is not the government of business?

§ Mr. Clifton-Brown
I agree entirely. One reason for the fall of the Roman empire is simply that it was shackled by bureaucracy. Had it had regulations such as those proposed in new clause 1, it would have had to review all its legislation and perhaps it would have continued a great deal longer.

§ Mr. White
rose—

§ Mr. Clifton-Brown
I do not really want to go too far down that path. If the hon. Gentleman's remarks are relevant to the 21st century, I shall happily give way. If they pertain to the Roman empire, I will not. Which is it?

§ Mr. White
I am curious. The hon. Gentleman is talking about new clause 1; it relates to the Bill, which deals with the removal and reduction of burdens. However, his argument relates to regulations in general. How will his proposals and those of his hon. Friends tackle regulations under the Bill, not the generality of regulations?

§ Mr. Clifton-Brown
If the hon. Gentleman will be patient and allow me to develop my argument, I shall come on to that precise area. I shall therefore answer his question in a little while.
We need to look at the culture of regulation, which stems from the increasing tendency to blame and litigate that emanates from America. We seem to need a regulation to try to cover every aspect of every conceivable thing that could go wrong, instead of leaving it to individuals to make sensible decisions—those individuals are hammered heavily when they transgress general and basic rules—which is a better way to go about our legislative process. I also commend the idea of self-regulation, which can work particularly well for businesses and does not always need the Government regulations that would be reviewed by new clause 1. There could be more self-regulation, for example, in relation to lifts and hoists regulations. That may seem obscure, but it would make businesses regulate themselves.

§ Mr. Deputy Speaker
Order. I need to underline a point that has already been made to the hon. Gentleman in an intervention. New clause 1 relates specifically to clause 1 of the Bill, so it is not in order for him to go wider than that.

§ Mr. Clifton-Brown
Indeed not, Mr. Deputy Speaker. Briefly, if we did not have regulations in the first place, new clause 1 would not bite and we would not need to pass the Bill. Before moving on, may I cite, in half a sentence, the lifts and hoists regulations, which, by insurance, allow businesses to regulate themselves, so government does not need to interfere in regulations on maintaining lifts and hoists. I commend that principle to the House.
New clause 1 also bites on the proportionality of regulation, and tackles the issue of regulation going beyond what is necessary to deal with the problem. That is often the case because, rightly, we have a culture of honesty in this country and tend to gild the lily when introducing European and domestic legislation. If, as I said, we left it to individuals to make up their own minds, we would get on a great deal better.

§ Mr. Deputy Speaker
I am sorry to interrupt the hon. Gentleman again, but I have already ruled on the matter to which he is now alluding. I must remind him to look at the Bill and remember that new clause 1 relates to clause 1 of the Bill and nothing else.

§ Mr. Clifton-Brown
I am grateful, Mr. Deputy Speaker. However, clause 1 refers to order-making powers and new clause 1 refers to the need to review those powers. A major proportion of those orders come from Europe, so it is difficult to have a debate on reviewing orders if we cannot discuss the mechanisms of the origins of those orders.

§ Mr. Deputy Speaker
Order. I shall try to offer the hon. Gentleman guidance. The powers that are being 554 sought in the Bill are ostensibly to reduce regulations. New clause 1 is directed at a qualification or limitation of that. That is all that the hon. Gentleman may allude to.

§ Mr. Lansley
On a point of order, Mr. Deputy Speaker. May I ask for further clarification to help my hon. Friends and me? Regulatory reform orders are designed to reform legislation, including reimposing or creating new burdens in circumstances in which Ministers believe that that strikes a fair balance between the public interest and other benefits. Opposition Members believe that new clause I would require review of regulations in circumstances in which additional burdens are created.

§ Mr. Deputy Speaker
Order. I was merely trying to advise the hon. Member for Cotswold (Mr. Clifton-Brown) that he has to tie his remarks on the new clause to the clause in the Bill to which it refers. That is the sole point that I am trying to establish. It seems that he—and, on one or two occasions, other hon. Members—have tried to make a more general point than is allowed.

§ Mr. Steen
Further to the point of order, Mr. Deputy Speaker. As I understand it, clause 1 is not about reducing regulations, as was said by the Chair, but about increasing them. Strangely enough, although the Bill is supposed to reduce the number of laws in this country, it will have exactly the opposite effect.

§ Mr. Deputy Speaker
Order. That is not a point of order for the Chair, but a matter of debate. The House can go only by what said in the text of the Bill, to which I was referring. Of course, the new clause also relates to that text. That is what the debate should be about.

§ Mr. Clifton-Brown
I am a little clearer, but I am not totally clear. Clause 1 states: Subject to subsections (3) to (5) and sections 3 to 8, a Minister of the Crown may by order make provision for the purpose of reforming legislation". The new clause states: Every order made under section I shall include a provision for the Minister to present a report on the operation of the order in the fifth year". As a lot of directives and regulations from Europe are, to my mind, covered by clause 1 and new clause 1, it is difficult to discuss the amendment without discussing the vast bulk of our order-making powers, more than half of which come from the European Union. If one cannot discuss the mechanisms by which they come from the EU, it is very difficult to have any debate at all about new clause 1.

§ Mr. Fabricant
Does my hon. Friend agree that the hon. Member for Eccles (Mr. Stewart) presented a compelling argument by saying that it was important to consider both the content of regulations under new clause 1 and the way in which they are implemented in the United Kingdom compared, by inference, with other countries?

§ Mr. Clifton-Brown
I am grateful to my hon. Friend, who made that cogent and powerful point in his speech. It is a secondary point. The first point is how the regulation is framed, whether it be from the domestic Parliament or from Europe and whether it is 555 all-encompassing or not. I would prefer regulations to be more general and, when individuals transgress them inadvertently or stupidly, the power of the courts, including the European courts, should be brought down on their heads. Regulations are implemented by the French, Germans and other European countries in a more general way. We tend to implement them in a more specific way.
The second point is that if regulations are framed in such a way as to be specific, and we enforce them to the letter, we are doubly gilding the lily, in respect of both domestic and European legislation. My hon. Friend the Member for Lichfield (Mr. Fabricant) is right.

§ Mr. Steen
My hon. Friend makes an interesting point. If we are speaking about reviewing sunset clauses, which is the purpose of the new clause, how does my hon. Friend believe that we will accomplish that, bearing in mind the fact that more than 50 per cent. of regulations come from Europe? Can we do what we want to do under the new clause if 50 per cent. of the rules and regulations are outside our powers?

§ Mr. Deputy Speaker
Order. I must try to redefine the debate. The terms of new clause 1 relate to regulations that might be created under clause 1 of the Bill, not to the generality of regulations that may exist. I am anxious that the hon. Member for Cotswold (Mr. Clifton-Brown) and other hon. Members should confine their remarks to that.

§ Mr. Bercow
On a point of order, Mr. Deputy Speaker. I seek further clarification, as this is the kernel of our debate this afternoon. May I take it that although it would not be legitimate to dilate upon them, it is in order to animadvert to past directives and regulations which are on the statute book and which affect people in businesses in this country, as justification in the development of the argument for the review mechanism that we commend to the House in new clause 1?

§ Mr. Deputy Speaker
To animadvert is possible, and in the course of two or more hours, the occasional animadversion might be permissible, but excessive animadversion would be out of order. I hope that that is clear.

§ Mr. Clifton-Brown
Animadversion or not, the gravamen of the point of order of my hon. Friend the Member for Buckingham (Mr. Bercow) is a useful adjunct to the debate.
The new clause is necessary because there should be a certain discipline among Ministers and civil servants. When they introduce a regulation under primary legislation, they should consider whether the regulation needs to be permanent, or whether it deals with a temporary problem that will pass as a result of new technologies.

§ Mr. Steen
We are on to an important point, and I would not like my hon. Friend to leave it without further consideration. Many of the rules and regulations coming out of the House apply to social services, supplementary benefits and so on. They must constantly be repealed and 556 replaced. Under the new clause, they would, through the passage of time, end without the need for further legislation.

§ Mr. White
On a point of order, Mr. Deputy Speaker. Is the hon. Member for Totnes (Mr. Steen) trying to make up for the fact that he missed the Deregulation Committee and the Standing Committee?

§ Mr. Deputy Speaker
Order. The hon. Member for Milton Keynes, North-East (Mr. White) knows that that is a point for debate, not a point of order—

§ Mr. Ian Stewart
It is a point of fact.

§ Mr. Deputy Speaker
Order. I have tolerated quite sufficient in the way of sedentary comments from the hon. Member for Eccles (Mr. Stewart). I hope that he will now maintain a decorous silence.

§ Mr. Steen
On a point of order, Mr. Deputy Speaker. As a matter of fact, the hon. Member for Eccles—

§ Mr. Deputy Speaker
Order. The hon. Member for Totnes (Mr. Steen) would be better advised to leave me to decide on rules of order.

§ Mr. Clifton-Brown
I had intended to make a five-minute speech, but I have been speaking for almost a quarter of an hour. I shall try to keep my remarks concise and in order, for which I am sure you would commend me, Mr. Deputy Speaker.
My hon. Friend the Member for Totnes (Mr. Steen) brings me to my next point, which concerns the culture among civil servants and Ministers with regard to the making of orders. The new clause will cause them to consider whether the orders that they propose to introduce are of a long-term or a short-term nature. Including a sunset clause in a regulation introduced under clause 1 will make everyone think hard whether the order needs to be introduced in the first place, and whether it should be reviewed and revoked after five years.
My hon. Friend the Member for Totnes cites the example of social security legislation. The other area in which orders are continually made and remade is criminal justice legislation. We seem to have a criminal justice Bill in the House almost every year, and certainly every other year, and many such Bills contain order-making powers. The House is often required to alter what it has done in the past, by amending primary legislation.
If everyone who introduces legislation would think more carefully about it before they introduced it, which would be the impact of new clause 1, it would do us all a huge favour. Who knows?—perhaps we would not need to sit so many days in Parliament, because we would introduce fewer regulations, have fewer Committees considering statutory instruments, and fewer debates on the Floor of the House. That would be a good day for everyone.
Secondary legislation is introduced upstairs, sometimes by way of affirmative procedure and sometimes by way of negative procedure. There seems no good reason why a particular set of regulations should be introduced under the affirmative or the negative procedure. By ensuring that 557 the regulations were reviewed, the new clause would require Ministers to make it clear why it was necessary to introduce them under the negative procedure.
As you know from your many years in the House, Mr. Deputy Speaker, it is much more difficult to overturn secondary legislation made by negative resolution. Secondary legislation made by affirmative resolution can be debated and amendments can be tabled, whereas that is not the case under the negative resolution procedure. Under the latter, it is not possible to introduce amendments; it is simply a matter of voting for or against the statutory instrument in question.
When the Government have as large a majority as the present Government have, the new clause becomes even more important. It prevents an overbearing Executive from introducing regulations that subsequently turn out to be faulty. Democracy is about trying to introduce better legislation and better regulations.

§ Mr. Fabricant
I am grateful to my hon. Friend for giving way again. He heard our hon. Friend the Member for South Cambridgeshire (Mr. Lansley) speak about the need for a cost-benefit analysis to be undertaken as part of the review of regulations. Does my hon. Friend share my concern that so many statutory instruments effectively give the Secretary of State a blank cheque to impose levels of fines, and to increase or decrease the power of a regulation, thus making a cost-benefit analysis so much more difficult, precisely because of the imprecision of the statutory instruments?

§ Mr. Clifton-Brown
My hon. Friend is right. I always thought that it was enshrined in legislation, but perhaps it was merely a convention of the House, that when a Bill—primary legislation—was introduced, its cost implications had to be stated. That is rarely the case with orders—statutory instruments that we discuss upstairs. Almost always, the Opposition of the day have to probe the Government about the cost implications. That is where the gravamen of the new clause lies. If people have to decide whether an order should remain in place five years after it was introduced, circumstances may have changed considerably, and they will have to think in terms not only of risk assessment, but of cost-benefit analysis.

§ Mr. Bercow
My hon. Friend reminds me of a further reason and justification for our insistence on the new clause. He rightly referred to statutory instrument Committees. Will he confirm, drawing on his personal experience as a member of the Opposition Whips Office, that it is becoming increasingly common in Standing Committees on delegated legislation for the Minister winding up the 90-minute debate deliberately and calculatedly to refrain from answering the questions asked by the principal Opposition Front-Bench spokesman, and simply and limply to say, "I will write to the hon. Gentleman, but will he approve the measure in the meantime?"

§ Mr. Deputy Speaker
Order. That has nothing to do with new clause 1, either.

§ Mr. Clifton-Brown
One of the reasons why the new clause is necessary is the need for a cost-benefit analysis.
558 It is often difficult to obtain from any Government source information about the cost of a particular measure. The new clause would require a report to be prepared at the end of five years, and I hope that that report would include a cost-benefit analysis. If it does not, I do not see how a proper assessment can be made about whether an order should remain in force.
Although cost-benefit analyses have an important role, an even bigger part is played by risk analysis. Orders and regulations are often introduced to try to prevent a particular disaster or risk. A risk analysis is, therefore, important to us as legislators and also to the public, who will want to see that we are introducing good legislation. Politicians are often not very good at putting orders in perspective. BSE is a good example. The previous Government were criticised for not implementing properly the regulations that the Labour Government drafted in 1979. However, we were implementing the regulations in accordance with the best scientific evidence that was available at the time. Scientific evidence often has to be interpreted on a risk-analysis basis. A human has less chance of catching Creutzfeldt-Jakob disease from a cow with BSE than he has of being killed by lightning.
Perhaps regulations should more often be reviewed on the basis of risk analysis. To put such analysis in context, politicians must often distil difficult and complex arguments into relatively simple concepts, so that the public can understand what we are doing. If the public do not understand what regulations seek to achieve, but are suddenly inadvertently caught out by them, we will, in my terms, have introduced bad regulations. Those are precisely the regulations that should be dealt with by the new clause.

§ Mr. Lansley
I draw my hon. Friend's attention to the fact that the new clause would require a review to be made in relation to the statement required by clause 6. It would, therefore, cover a post facto review of costs and benefits. He makes an important point, as clause 6 does not require any risk assessment to be made in relation to regulatory reform orders. Interestingly, however, one of the five consultation papers issued in anticipation of provisions in respect of the letting of business premises under section 57 of the Landlord and Tenant Act 1954 includes a risk assessment, although that requirement is not set out in the Bill and the other four consultation papers do not refer to it.

§ Mr. Clifton-Brown
I am grateful to my hon. Friend, who has a great de al of experience in these matters, for raising that issue. His comments reinforce the points that I am making. Not only do we need to include a risk analysis in the quinquennial review, but we need to ensure that it is presented in terms that ordinary members of the public can understand. It seems to me that regulations are often drafted in such convoluted terms that it is difficult for anybody except a lawyer to interpret their precise meaning. That is another reason why we need the new clause. The regulations should be drafted in terms that ensure that they are effective. If they are seen not to be effective, that is a very good reason why they should be reviewed after five years.

§ Mr. Bercow
rose—

§ Mr. James Gray (North Wiltshire)
rose—

§ Mr. Clifton-Brown
I shall give way first to my hon. Friend the Member for Buckingham, and then to my hon. Friend the Member for North Wiltshire.

§ Mr. Bercow
For the avoidance of doubt, will my hon. Friend confirm that one of the main merits of the periodic review, which will occur at five-year intervals, is not only that we can reconsider the policy content of the measure in question, but that we will have the opportunity, to paraphrase the late, great Sir Winston Churchill, to delete language up with which we should not be obliged to put?

§ Mr. Clifton-Brown
My hon. Friend is absolutely right. I think that it was George Bernard Shaw who said that genius is simplicity and that any fool can make things complicated. If we, as legislators, bore that maxim in mind more often, we might produce better legislation. For example, as the tax rewrite Committee parallels the Select Committee on Deregulation, could not that principle be applied more broadly to regulations? One of the factors that should be borne in mind in respect of the quinquennial report is whether the regulation is effective in terms of being regularly understood and sensibly drafted. If we can ensure such effectiveness, we will all be doing a better job.

§ Mr. Gray
I have been following my hon. Friend's comments with great care. He makes a strong point, but I fear that he cited a poor example by speaking about BSE and the CJD deaths. If the new clause were implemented, the regulation in question would be subject to five-year review. However, many of the tens of thousands of regulations that are in place today, many "up with which we shall not put", affect only minute areas of life and could be left out of the statute book altogether. Should it not be those regulations that fall at the end of the five-year review, rather than those that affect catastrophically important matters?

§ Mr. Clifton-Brown
If I may say so, my hon. Friend makes a different point. My first point was that scientific evidence and technology move on. We live in a world in which change is occurring at an increasing pace. I intervened on my hon. Friend the Member for Lichfield to speak about e-commerce—a theme that I want to develop in a moment. My hon. Friend the Member for North Wiltshire (Mr. Gray) makes a different point. The fact that we seem to make regulations that affect every aspect of people's lives is important People's morals, attitudes and life styles can change enormously in five years. Thus what is appropriate now might not be seen to be appropriate in five years' time. That is an especially good reason for introducing the new clause.
Finally, I should like to speak about technological change. I intervened on my hon. Friend the Member for Lichfield to speak about e-commerce. I believe that, in respect of a raft of financial and trade legislation, e-commerce will rapidly change the way in which we do business. The movement around the world of electronic information and hundreds of millions—or even billions—of pounds at the touch of a button will produce a need for regulatory authorities to be very much quicker on their feet.
560 They will have to think much more quickly about existing regulations and whether they need to be changed. That, too, makes the case for new clause 1. Nowadays, a transaction can take place in one country and be electronically billed in one currency to a second country with a different currency; it can then be settled in a third country and delivered in a fourth country. That makes regulation difficult. Our patterns of trade are changing, and that makes the need for a quinquennial review even greater.
A culture of blame and litigation is growing in this country; that unfortunate trend stems from the United States of America. We should resist it. The Bill goes a long way, but not all the way, towards that. It would be greatly improved by new clause 1, and I hope that the Minister will provide a cogent and detailed response.

§ Mr. Bercow
It is a delight even at this late stage to contribute to the debate. I shall begin by placing my remarks in context. My hon. Friend the Member for South Cambridgeshire (Mr. Lansley) opened the debate with skill and reason. He was followed in characteristically thoughtful fashion by my hon. Friend the Member for Wantage (Mr. Jackson), who is sadly no longer in his place. He was a distinguished member of the previous Government, and he reminded us of their approach to such matters. His speech was followed by a powerful oration from my hon. Friend the Member for Lichfield (Mr. Fabricant), who was duly succeeded by my hon. Friend the Member for Congleton (Mrs. Winterton).
I shall not indulge in any personal asides that would cause your brow to furrow, Mr. Deputy Speaker. Suffice it to say that, passionate opponent of regulation though I am, I do not object to being frequently regulated—the regulation is periodically reviewed—by my hon. Friend the Member for Congleton. She made the case in a formidable fashion, as did my hon. Friend the Member for Cotswold (Mr. Clifton-Brown).
I regret the tone of Labour Members' speeches. The hon. Member for Eccles (Mr. Stewart) knows that I hold him in considerable affection and esteem, but there was much belated and retrospective special pleading from Labour Members. They did not focus on the justice of the case and the sequence of historical events that led to the growing clamour for a review mechanism as proposed in new clause 1. They appeared to wish to dam it simply by referring to the work of the Deregulation Committee. However, that Committee's perceived feebleness, inadequacy and comatose deliberations partly led to the current troubling position. That is why my hon. Friend the Member for South Cambridgeshire proposed new clause 1, about which I have much to say. Before I do that, I give way to my senior colleague.

§ Mr. Steen
As a member of the comatose Deregulation Committee, I agree with my hon. Friend's epithets whole-heartedly. I am sure that he realises that the reason for our new clauses is well illustrated by the Committee's behaviour. Only one regulation has been repealed this year, and only one last year. Yet more than 2,500 new regulations were introduced by statutory instrument this year. Our case is made.

§ Mr. Bercow
My hon. Friend makes a pertinent point with which I agree. I am getting old and my memory is not what it was, but I cannot recall whether he was present for Scottish questions earlier this week.

§ Mr. Steen
I was not.

§ Mr. Bercow
I am sure that my hon. Friend had pressing business elsewhere. However, had he been present, he would have heard a brief exchange between the Secretary of State for Scotland and me. That exchange was not carried on all the news bulletins, but it was significant because I argued that the massive increase in regulation justified a review mechanism and a reconsideration of the wholly inadequate approach that the Government have adopted thus far. By contrast, the right hon. Lady, who oozed smug complacency—I apologise for the serious understatement of which I am guilty—believed that the Government's record was fine, that we had nothing of which to complain, and that business was queueing up to congratulate the Government on the merits of their policies. That is not the case, as my hon. Friend the Member for Totnes (Mr. Steen), who has a long-standing background in small business, knows well.

§ Mr. Deputy Speaker
Order. May I ask the hon. Member for Buckingham (Mr. Bercow), who has not been in the House as long as the hon. Member for Totnes (Mr. Steen), not to be lured by his wiles into moving away from new clause 1, which is the focus of the debate and specifically relates to the regulations in clause 1?

§ Mr. Bercow
I shall not be lured by the wiles of any hon. Member, with the possible exception of my hon. Friend the Member for Congleton. However, for the avoidance of doubt, I stress that I am always and unfailingly constrained and guided by the wisdom that you generously volunteer in a paternal fashion towards me, Mr. Deputy Speaker. I worry about your furrowed brow, so I shall not test your patience with a lengthy dilation on the philosophical background to the case for new clause 1.
My hon. Friend the Member for South Cambridgeshire, brilliant though he is, is known for a certain restraint, self-effacement and reluctance loudly to speak up for his point of view or his record. I therefore hope that he will not mind if I do it for him. He has a strong background in such matters, not least through his experiences as deputy director general of the British Chambers of Commerce. He was a distinguished occupant of that post. He knows that the authentic voices of British business genuinely desire deregulation and review of the existing encumbrance of regulation, which damages our companies. I shall consider that important subject later, but my hon. Friend the Member for Lichfield referred, not entirely accurately, to the stance of my noble Friend Baroness Thatcher of Kesteven, and I wish to explain briefly that the Opposition have three guiding lights or mentors on new clause 1.
No debate on regulation, deregulation, enterprise or the development of entrepreneurial potential would be complete without reference to Dr. Ludwig Erhard, the post-war Chancellor of Germany. He first devised the idea of a deregulatory mechanism and the need to apply it across the board to administrative imposts and burdens, 562 which crushed small businesses. He argued that there should be an on-going review of the burden of regulation on companies in his country.

§ Mr. Clifton-Brown
My hon. Friend makes the point that new clause 1 will apply prospectively to all new regulations. Most 1egislation is prospective. On the Erhard principle, does he believe that the new clause should also be retrospective and apply to all existing regulations?

§ Mr. Bercow
I certainly do. I am glad that my hon. Friend and I have a symbiotic relationship. He correctly anticipates a point on which I intend to dilate. There is good reason to do that, simply in the terms that the late Dr. Erhard articulated. I do not want to take his name in vain because he is not a Member of Parliament; he is sadly no longer with us and therefore in no position to speak for himself. However, it is legitimate to refer to the historical record. As a student of history, my hon. Friend will know that Dr. Erhard talked of the urgent need for "a bonfire of controls". He will know also, as you will testify, Mr. Deputy Speaker, with the full majesty and authority of the Chair, that it is difficult—indeed, thus far I think that it would have been considered impossible—to apply a bonfire to things that do not yet exist. It is eminently impossible, of course, to apply a bonfire to things that exist but of which one wishes to be rid.
I agree with my hon. Friend, and I would like to argue—I have taken note of your earlier strictures, Mr. Deputy Speaker—that new clause 1, relating as it does to regulatory reform orders and the review thereof, has the potential to apply to a number of the burdens that are now on the statute book and that are costing British businesses dearly, of which more anon. My hon. Friend the Member for Totnes is becoming itchy.

§ Mr. Deputy Speaker
Order. We are dealing with new clause 1. We are not having a stand part debate. The hon. Gentleman's remarks must be directed to the new clause. The debate has continued for almost three hours, and there is a danger that repetition will creep in. My ear will be ever more attuned to it.

§ Mr. Bercow
Thank you, Mr. Deputy Speaker. I have noted that guidance and I assure you that I will be bound by it. I do not want to suffer a grisly fate.

§ Mr. Steen
I do not want to suffer a grisly fate either, but I want to get to the bottom of a matter that troubles me, as it should the whole House. How does my hon. Friend think that the new clause would work with European regulations that are passed by the House? They comprise more than 50 per cent. of the rules and regulations that apply in the United Kingdom.

§ Mr. Bercow
That is an important point, to which I want to turn. I hope that my hon. Friend will forgive me and not regard it as impolite if I do not do so immediately. There is a reason for it, which is that there is an attempted chronology to my speech. There is a sequence of events and arguments through which I want to take the House. I have not yet reached his point but I promise that I shall make my best endeavours to do so. I know that my right hon. and hon. Friends would not, through their interventions, seek to prevent me from adumbrating the three inspirations for the new clause.
563 I have mentioned Dr. Erhard, and I need to say no more about him. However, it is legitimate in this context to say that one of the people to inspire new clause 1 was Walter Lippmann, who was a regular commentator on this subject. It was he who said that in a free society the state does not administer the affairs of men, it administers justice among men who conduct their own affairs. He should, of course, have referred also to women, but the gravamen—to quote my hon. Friend. the Member for Cotswold—of his argument was sound. That is to say, as Lord Lawson of Blaby has regularly said, that the business of government is not the government of business. The new clause derives inspiration from those two individuals and from Baroness Thatcher.
I turn to the Government's stance. The Bill is of great importance and the new clause, which seeks to improve it, is of inestimable value. In these circumstances—I say this with no disrespect to the Minister for the Cabinet Office and the Parliamentary Secretary, Cabinet Office—it is disappointing that we are not graced with the presence of the Secretary of State for Scotland, whose responsibilities include such matters She has a deep background in the Department of Trade and Industry. She sidled into the Chamber in ghostly fashion earlier but has now left it. That is a pity, but I will say no more about it.
There is a basic difference—it informs the entirety of our debate so far—between the Government's attitude to the new clause and the attitude that has been set out by my hon. Friend the Member for South Cambridgeshire. It is a divide which legitimately, but from the opposite point of view, the hon. Member for Eccles picked up. It was dwelt upon also by my parliamentary next door neighbour, the hon. Member for Milton Keynes, North-East (Mr. White). They are saying that Conservative Members are somehow guilty of failing properly to distinguish between the process of regulation on the one hand and its content on the other.
Indeed, the hon. Member for Milton Keynes, North-East accused me personally of being guilty of that confusion. I explained clearly, so as to brook of no contradiction, that I was not in any way confused and that I am critical both of the Government's process and procedure in relation to regulation and of much, though not all, of the content of the regulations that they have rammed through the House since 1 May 1997.
The hon. Member for Eccles was keen to argue that all that was necessary was to look from time to time at the procedure whereby a regulatory reform order had been implemented. I fundamentally disagree, and I shall explain why. However, I shall not do so before I have heard the pearls of wisdom of my hon. Friend the Member for Cotswold.

§ Mr. Clifton-Brown
Does my hon. Friend agree that it is not only the process and content of legislation but its enforcement that determines how hard it bites on the individual or on industry? For example, if the regulatory authority goes looking for people who transgress, that is much more rigorous enforcement than merely waiting for transgression to occur.

§ Mr. Deputy Speaker
Order. I see no connection between that point and new clause 1. I insist that the hon. Gentleman sticks strictly to new clause 1, otherwise I may have to resort to the Standing Orders.

§ Mr. Bercow
I am grateful to you, Mr. Deputy Speaker. I will not be tempted down the wrong path. I shall stick to new clause 1.
It is not a question only of process, but of content. It is precisely because we believe that Parliament can periodically review—and take a different view—on the merits of regulation that we argue for new clause 1. It is a direct response on our part to the position that was explained by Lord Falconer of Thoroton in the other place. I can succinctly encapsulate the difference between us and the Government on the new clause.
Lord Falconer is on record in the 10th report of the Select Committee on Delegated Powers and Deregulation, in relation to the Bill, on page 6 at paragraph 1, as saying: I undertake that that report that is the report that he is saying should be published every three years— will cover the operation of the order-making process and any associated constitutional and procedural issues. In fairness to Lord Falconer, he does not leave the matter there—this is the root of our dissatisfaction with him—but explains: I do not think that it would be right for such reports to reopen matters of policy which had been debated fully during the consultation, scrutiny and approval stage of the order-making process. I think that he is completely wrong about that. If a Government have an idea—perhaps in relation to matters of regulation—they may issue a Green Paper or a White Paper and there may be a wide-ranging debate, with perhaps exchanges on the Floor of the House. Eventually the Government of the day may decide to introduce legislation of a regulatory character. Some of it will be introduced as secondary legislation, possibly even involving the negative procedure to which my right hon. and hon. Friends and I so strenuously object.
Lord Falconer's view is that once that is done, the only issue left to consider is whether the procedural requirements of the initial statute that we passed have been complied with in full. I do not accept that. Of course it is right that we should consider whether the procedural requirements and the spirit of Parliament in the initial enactment have been honoured. However, we should be prepared to do more than that, otherwise we are in a sense—I do not want to make a Second Reading point—flouting the very principle of parliamentary sovereignty, which is that Parliament should have an opportunity from time to time to return to a point. In relation to new clause 1—on which I am very focused, Mr. Deputy Speaker—the Government are guilty of an ostrich-like mentality. They are burying their head in the sand, and failing adequately, if at all, to listen to the legitimate voices of criticism of their policies. That is disappointing.
We should not need new clause 1, but we do. Why do I say that we should not need it? This is directly relevant to the potential of, as well as the need for, the new clause. In April 1997, in "Equipping Britain for the Future", Labour's business manifesto, the then shadow Chancellor, the right hon. Member for Dunfermline, East (Mr. Brown), said: We will not impose burdensome regulations on business because we understand that successful businesses must keep costs down. 565 Nineteen months later, on 25 November 1998, in one of his final shots as Secretary of State for Trade and Industry, the right hon. Member for Hartlepool (Mr. Mandelson) said to the House: we have no intention of introducing any legislation that presents a burden on business and reduces the competitiveness of British firms."—[Official Report, 25 November 1998; Vol. 321, c. 214.] The problem with that, Mr. Deputy Speaker—as you, with your acuity will readily discern—is that there is a massive contrast between the rhetoric and the reality. If that initial pledge had been honoured, we would not be debating this Bill this afternoon. We would probably be doing something else. For certain, we would not be debating the merits or otherwise of new clause 1.
The position that the Government take is not commended by, or even acceptable to, the representatives of business. You know, Mr. Deputy Speaker, because you are an exceptionally experienced parliamentarian, that it is popular sport for Members of Parliament of all political parties to invoke third-party support to back up their arguments. My right hon. and hon. Friends do it, and Labour right hon. and hon. Members do it. I find it irritating and irksome, but it is not uncommon for members of the Government to quote business spokesmen in support of their economic and industrial policies.
In relation to new clause 1, I think that I am entitled to quote some support. I have already referred to the distinguished commercial lineage of my hon. Friend the Member for South Cambridgeshire. At least as pertinent for the purposes of our debate is the stance of the current leadership of the British Chambers of Commerce. I have what might be described as news hot off the press for the purposes of our exchanges today. I had a conversation with the director general of the British Chambers of Commerce on this matter on the Sunday before last. It was at 7 am and we were in the green room in readiness for interviews on "The Sunday Programme" with Mr. Alastair Stewart.
I said to the director general, Mr. Chris Humphries, whom I hold in high regard, "It is good to meet you. You are probably aware that we will soon debate the review mechanism for regulatory reform orders, and our advocacy of new clause 1. You might also be aware that, on 8 March last year, in a debate on the regulatory business, I prayed you in aid." I am not apologetic about that, because what he said—among other things that he has said since—was that despite their rhetoric, the Government had dramatically increased the regulatory burdens that threaten small businesses' competitiveness.
Mr. Humphries made that statement on 20 January last year. More than 14 months on, there has been no material improvement; if anything, there has been a regression. Further regulations have been introduced; further statutory instruments have been rammed through the House; and further businesses have either gone bust as a consequence of regulation—

§ Mr. Deputy Speaker
Order. The hon. Gentleman is going way beyond the terms of new clause 1. Ritualistic reference to it every now and again is not a substitute for debating it. The points that he is making are much wider than, and not appropriate to, this debate. I say that for the last time.

§ Mr. Bercow
I am grateful, Mr. Deputy Speaker, and I shall be guided by you.
Earlier in my brief remarks, I suggested, in agreeing with my hon. Friend the Member for Cotswold, that new clause 1 could and should apply to existing regulation. That is fundamental to our debate. Of course we are concerned to minimise future burdens, but we are informed in our views, guided in our assumptions and encouraged in our arguments by our assessment of what has already taken place.
I think that I remember your helpful distinction, Mr. Deputy Speaker, following a point of order from me, between dilation and animadversion. I know that animadversion is all that I shall be permitted, and that is all that I seek from you. However, it is fundamental to why I believe in the new clause and why I have told a number of constituents this week that I intended to speak in support of it. Many existing regulations, whatever their purpose, and whatever their impact—so far as their immediate beneficiaries are concerned—are implemented in such a way as to inconvenience, burden and make less competitive our companies.

§ Mr. Deputy Speaker
Order. We have been over this many times, and I must remind the hon. Gentleman that the new clause relates to the regulations that may or may not be made under clause 1. I do not wish to hear him go beyond that.

§ Mr. Bercow
I am very grateful to you, Mr. Deputy Speaker, and I will be guided by that.
However, this is obviously a matter of considerable dispute. I had a discussion with my hon. Friend the Member for South Cambridgeshire about it. It is his view, as shadow spokesman for Cabinet Office matters and the parent of the new clause, that if it were passed by the House, it would be capable of rolling back the frontiers of a number of existing regulations. That is all that I have in mind to say on that. I was talking about some of the regulations that have regularly been debated in the House.

§ Mr. Gray
You have correctly pulled my hon. Friend up once or twice, Mr. Deputy Speaker, for talking about previous regulations. However, does he agree that the only way to see the true value of new clause 1, and understand why it is so essential that it should form part of the Bill, is by referring to previous regulation of one sort or another—in business, agriculture, or other areas—that would have fallen off the edge and so no longer have borne down on our people had new clause 1 existed at the time? It is only by using such regulations as an example that—

§ Mr. Deputy Speaker
Order. I am sure that the hon. Gentleman is inadvertently overruling the ruling that I have given.

§ Mr. Gray
No.

§ Mr. Deputy Speaker
In which case, he has not heard it and I will repeat it. This debate, which is a narrow debate despite its length, has to focus on the relevance of new clause 1 to clause 1. This cannot be a general debate about regulations.

§ Mr. Bercow
I am very grateful to you for that guidance, Mr. Deputy Speaker, by which I stick. I simply 567 make the point that one of the reasons for believing that we need to be better protected in the future than we have been in the past is that we rue that past experience. That is a point about which I have regularly expatiated, not least in your presence, Mr. Deputy Speaker, in a variety of forums. I will not talk about the parental leave directive, because you will not permit it, and it seems that I am not to be permitted to talk about the merits or demerits of the Part-time Employees (Prevention of Less Favourable Treatment) Regulations 2000. Let me say again, for the avoidance of doubt, that I will not talk about them. However, they are uppermost in my mind when I say to my hon. Friend the Member for South Cambridgeshire that I believe that the new clause makes good sense.

§ Mr. Clifton-Brown
When I was making my speech, my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) referred to clause 6, which is mentioned in new clause 1. Clause 6(2)(a) refers to the burdens which the existing law affected by the proposals has the effect of imposing". Does my hon. Friend agree that every new regulation has the incremental effect of imposing extra burdens?

§ Mr. Bercow
That is certainly true. I do not know whether we are about to have what is described in the parlance of basketball as a time-out, in which consideration of the position can be undertaken, but in the interim, I will continue—

§ Mr. Lansley
Will my hon. Friend give way?

§ Mr. Bercow
I will—very conveniently.

§ Mr. Lansley
As my hon. Friend referred to advice that I may have given him about the uses new clause 1, let me say, for the avoidance of doubt, that its purpose is to require a review by reference to the matters set out in a statement laid under clause 6(2) of regulatory reform orders. As you have quite rightly directed us, Mr. Deputy Speaker, that does not mean that we can discuss regulation willy-nilly, but only those regulations that might be affected by regulatory reform orders made under this legislation. The Government have helpfully set out 51 possible measures, and there may be others, but we cannot discuss the merits of every regulation.

§ Mr. Bercow
I offer my hon. Friend the bouquet that that is helpful, although I couple it with the brickbat that it is only partly helpful. I will not talk about previous regulations because that, apparently, is not in order. However, subject to your guidance and authority, Mr. Deputy Speaker, I think that I am entitled to say that the representatives of business have been arguing for a reduction in the regulatory burden and for a regular and consistent review of imposts ever since the Government took office. I am not making a narrow and partisan point. You know that I am neither narrow nor partisan, Mr. Deputy Speaker.
My hon. Friend the Member for Wantage referred earlier to what happened under the previous Government. I intend no discourtesy to someone who is very senior, distinguished, important, respected, influential and busy, with many commitments and a very full diary—namely my right hon. Friend the Member for Henley 568 (Mr. Heseltine)—but he did not come up with the review mechanism proposal that has wisely occurred to my hon. Friend the Member for South Cambridgeshire. If he had done, we might not have needed to debate this today. However, I think that I am entitled to point out, as in business questions earlier today I had occasion to, that representative groups for British business want such policies to be introduced. Whatever they think about the Government's attitude on other matters, whatever their view about the European single currency or late payment of commercial debt and interest charged thereon, they are of one mind about the need to tackle the burgeoning and damaging phenomenon of over-regulation. The British Chambers of Commerce has called for the introduction of a review mechanism. That is what the new clause would do.
We should not overstate the case. We in politics are given to exaggerated ambition and no little rhetorical hyperbole. I do not indulge in it myself, but I am conscious that others do. It is not that I think that as a result of the introduction of the review mechanism proposed in new clause 1 the situation would be perfect. The new clause is not a panacea. It is an incremental measure; indeed, the president of the Adam Smith Institute, Dr. Madsen Pirie, would describe it as a micro-incrementalist measure. It does not take a holistic view and it certainly does not take a wildly radical view. It is rather piecemeal; it is not a provision for sunset clauses, which I originally commended to the House in my ten-minute Bill on 27 April 1999.
I do not want to open up a division with my hon. Friend the Member for South Cambridgeshire on this subject, because we are both on the Conservative Front Bench. I am a very junior spoke—a minor cog in the wheel—whereas he is a senior and celebrated member of the shadow Cabinet. However, we both sing from the same hymn sheet. I think that he believes that it is better to have half a cake than no cake at all. He is taking a cautious, reasonable, tactical approach to a long-standing problem.
In trying to devise solutions to the problem of the sea of regulation confronted by business, we have to run very fast to stand still. That point was made in a different context by my noble Friend Lord Biffen in relation to public expenditure. The same difficulty in bearing down on existing spending totals applies to regulations. There is a natural leviathan tendency in government. Ministerial advisers are usually keen on more regulation, direction and legislation, for it is, in a sense, their very raison d'être—

§ Mr. Deputy Speaker
Order. I have been very tolerant with the hon. Gentleman. I have suggested to him on a number of occasions that he has been engaged in irrelevance. I now directly invoke Standing Order No. 42, to remind him and the House that any hon. Member who persists in irrelevance may be required to discontinue his speech. I hope that the hon. Gentleman will not oblige me to go down that path.

§ Mr. Bercow
I have no desire to do so, and I am grateful to you, Mr. Deputy Speaker, for showing me the yellow card rather than the red. I have no intention of courting further disfavour.

§ Mr. Lansley
Before my hon. Friend concludes, I want to assure him that our views on sunset clauses are not 569 remotely inconsistent. If regulatory reform orders have a substantial deregulatory purpose, we would not want to invoke a sunset clause simply to disapply them after a period of time, as we would want the deregulatory purpose to be sustained. However, orders may be introduced that impose new burdens, and the expected benefits may not flow from them. Under those circumstances, does he agree that our deregulatory purpose would be best achieved by the new clause, which would allow them to be stopped when that happened?

§ Mr. Bercow
I entirely agree, and my hon. Friend's point makes good sense. There is therefore no difference between our views.
My final category of remarks relates to whether the review mechanism in new clause 1 applies to future regulation and legislation flowing from the European Union. It is important to clarify that. I have no interest in debating the European Union. I have pronounced on that topic often and occasionally at length.
The House must consider two crucial enabling devices relevant to the debate—article 3(b), on subsidiarity, of the Maastricht treaty, and the protocol on the application of the principles of subsidiarity and proportionality which is an annexe to the treaty of Amsterdam. We should hear more about them.

§ Mr. Lansley
My hon. Friend rightly touches on a point mentioned previously by my hon. Friend the Member for Totnes (Mr. Steen). It seems to me that EU legislation that has direct effect would not be susceptible to regulatory reform orders, so the new clause would not apply. However, other EU measures require domestic legislation in this House. Does my hon. Friend agree that they could be implemented by regulatory reform order, in some circumstances, and so be subject to the new clause?

§ Mr. Bercow
I am grateful to my hon. Friend, but I like to make short speeches, and I have now concluded this one.

§ Mr. Steen
I could not face incurring your wrath, Mr. Deputy Speaker. I hope that the House finds what I have to say helpful: if not, I shall not continue. However, in the past I have found that the House finds the odd observation helpful.
My concern has always been the number of rules and regulations passed by the House. I have been a Member of Parliament for very nearly as long as you, Mr. Deputy Speaker, and I know that the House exists to pass more rules, regulations and laws. A real deregulatory process would mean that hon. Members did not have to spend so much time in the House. When Britain had an empire, the House did not have to sit nearly as long.
5 Pm
We now have a very complicated society with an increasing number of rules and regulations. We are making more laws and sitting longer. The purpose of new clause 1, as I understand it, is to reduce the amount of legislation on the statute book by providing that after five, four or three years, legislation can be removed from the statute book. I cannot understand why anyone would 570 oppose that concept. Nor can I understand why right hon. or hon. Members would not want there to be less legislation, unless they had concluded that its removal would put various sections of society at risk and that more laws meant increased safety, hygiene and security. Despite the fact that we have passed a great deal of legislation on hygiene, the incidence of health epidemics such as BSE and foot and mouth disease has increased. Indeed, there seems to be a direct correlation between the amount of legislation that we pass on hygiene and the incidence of sickness, ill-health and food poisoning.
I am making a perfectly reasonable speech, which I hope the Minister will respond to in his reply to the debate, if he gets the chance to speak. I am very keen on sunset clauses and reviews simply because they might reduce the amount of legislation that remains on the statute book. When the Conservatives were in office, we talked about deregulation, which meant fewer laws. We are now talking about reducing legislation by the effluxion of time.

§ Mr. William Cash (Stone)
Will my hon. Friend give way?

§ Mr. Steen
If it is a useful point.

§ Mr. Cash
I hope that it is. It may interest my hon. Friend to know that I too wish to speak in the debate because in 1984, within a few months of being elected, I introduced the Small Business Bill, which dealt specifically with the reduction of legislation, as my hon. Friend may recall. He may even have been a signatory to it. Furthermore, I have even written a pamphlet on the subject, on which I can dilate at great length.

§ Mr. Steen
There are very few subjects on which my hon. Friend has not written a pamphlet. I am delighted that he is here today and that he hopes to contribute to the debate. I shall make a short speech. I am not interested in extending the debate because I think that all the points have been covered from every possible angle, but I am concerned about why the Government are not in favour of new clause 1, which would reduce the amount of time, effort and energy that we devote to debating and passing legislation. I should have thought that most right hon. and hon. Members would like more time away from this place, but it seems that Labour Members would like to be here day and night, seven days a week, producing more and more legislation. The new clause is about less legislation.
I make one simple point that I have made before. I have sat on the Deregulation Committee, and for four or five years I chaired the Conservative Back-Bench committee that tried to reduce the amount of rules and regulation by secondary legislation, but the new clause is much cleverer. As I understand it, it proposes to write into primary legislation a means of getting rid of legislation if it is no longer relevant. That is an advanced and progressive way of thinking. Under the Bill as it stands, the Government would have to find parliamentary time to cancel a rule or regulation that they had passed either on the Floor of the House or through secondary legislation. I can see that hon. Members are listening to what I am saying and I am quite sure that I am striking a chord with them, but I would love to give way to the Minister if he could tell me why I have got it wrong.

§ Mr. Clifton-Brown
My hon. Friend has got one simple fact wrong. The Labour Government want to spend less and less time in Parliament, producing more and more regulation. Would not it be better to spend less time in the House and produce less legislation?

§ Mr. Steen
I entirely agree with my hon. Friend; that is what I should like to do. I am a member of the Select Committee on European Scrutiny, which passes thousands of rules and regulations. I want those to be reviewed every five years; otherwise, we shall have even more books of legislation that someone will have to repeal—probably us, when we return to government.
The new clause is a sensible provision that any reasonable person would want to support. I am not making a party political point; I do not want to extend the debate—heaven forbid! However, after listening to it for several hours, I am at a loss to understand why the Government have set their mind against a progressive, radical, thoughtful, attractive and helpful provision and why they want to allow the Bill to be passed without amendment. It would allow the Government to keep all the existing rules and regulations and extend them—a type of gold-plating—without primary legislation.
The Bill is a device that is completely contrary to the new clause. It will allow the Government to multiply rules and regulations with ease; if 2,500 rules and regulations a year are introduced by Europe, the Government can turn them into 50,000—a nightmare progression. I do not say that the Government would want to do that, but the measure will give them that power.
I want less Government intervention. The new clause will reduce the amount of Government intervention in our lives. It will free us from the bureaucracy and official enforcement that control our lives. That is where the difference lies. The Bill would extend the powers of the state; the Opposition's new clause would reduce the powers of the state. I do not know whether that point is helpful, but I think that it is the essence of the new clause. It is amazing that I could make it so forcefully in only nine minutes. I hope that my hon. Friend the Member for Stone (Mr. Cash) will also have the opportunity to speak.

§ Mr. Owen Paterson (North Shropshire)
I had not intended to speak in the debate—I had planned only to listen carefully to the arguments. Before I became a Member of the House, I was in business and travelled widely around the world, and I have to find a country that was regulated to prosperity. I congratulate my hon. Friend the Member for Totnes (Mr. Steen) on his excellent, short and pithy comments which went to the nub of the debate.
Some Members believe that the state is a real agent for good, while others think that more good comes from individuals. I was especially struck by the comments of the hon. Member for Preston (Mr Hendrick), which contrasted completely with my experience both outside the House and as an MP. I have received so much correspondence from businesses worn down by excessive regulation that I think that the new clause will benefit many businesses—especially small ones that cannot cope with regulation.
Much regulation and legislation is drawn up with the best intentions, but it is never subsequently reviewed. Despite the comments of the hon. Gentleman, there is no doubt in my mind, or in the minds of many of my business constituents, that legislation is gold-plated.
572 We should not go too far into the origins of legislation, but I want to draw the attention of the House to one point. On one day, 1 November last year, the Select Committee on European Scrutiny—on which I served with my hon. Friend the Member for Totnes and my hon. Friend the Member for Stone (Mr. Cash)—passed 78 documents within two minutes of the beginning of our meeting. With the best will in the world, we could not have gone into the intricacies of how that legislation would bear down on businesses that are trying to be competitive and make a living.
Specific practical examples have been missing from the debate. If you will bear with me, Mr. Deputy Speaker, I will cite two examples—one that has happened and one that may—of legislation that would benefit from new clause 1. It would ensure that there was a mechanism retrospectively to assess the impact of legislation and improve it. The first example is the regulation on integrated pollution prevention and control, which claims to be following European Community directive 96/61. When that came into force, the National Farmers Union said that for practical purposes, most mistakes or unintended consequences cannot be remedied.

§ Mr. Deputy Speaker
Order. I cannot allow the hon. Gentleman to continue on that line as it is a Second Reading point. He must confine his remarks to new clause 1, which is in turn confined not to regulations made elsewhere or in the past but to those that could be made under clause 1.

§ Mr. Paterson
I listened carefully to your strictures to my hon. Friend the Member for Buckingham (Mr. Bercow) among others, Mr. Deputy Speaker. I am trying to be careful to cite two examples that show how new clause 1 could help, as the debate has been general. As I understand it, new clause 1 relates to clause 6(2), which refers to burdens which the existing law affected by the proposals has the effect of imposing". I am not test to tempt your patience, but I am trying to give a practical example that shows that, by agreeing new clause 1, we would improve existing legislation that is causing trouble.
The NFU said that most mistakes or unintended consequences could not be remedied. New clause 1 would offer a mechanism for remedy. The NFU continued: The Commission's zealous attitude towards compliance with the letter of the law means that the financial consequences of mistakes or unintended consequences from European environmental legislation tend to fully impact on the affected sectors. If new clause 1 is added to the Bill, that lacuna about which the NFU is concerned could be corrected. The NFU continued: In combination with UK legislation requiring the costs of regulation to be fully recovered from industry, this means that in the agricultural sector farmers bear the full financial consequences of deficiencies in the drafting of European environmental legislation. My hon. Friend the Member for Congleton (Mrs. Winterton) picked up on that point.
I am trying to be practical by mentioning a real case. New clause 1 would enable us to improve and review that IPPC legislation and assess the costs to the agriculture 573 sector. That point was brought home again to me by a business that wrote to me to make four brief points. The letter reads: My main concerns are … Cost of registration and ongoing fees being completely out of line with current agricultural cost. Surely new clause 1 would tackle the worries on that point.
The second point—this falls absolutely within the remit of new clause 1—that is made in the letter is: Nobody can tell me what … impact this will have on my business bearing in mind we are meeting all current environmental legislation. Those lines alone justify the new clause. The person running that business is complying with all the current legislation. It is a successful business, but it is having difficulty competing with competitors here and abroad. No one can say what that important legislation will do to the business. The new clause would provide a mechanism, although it might not come in time. My worry is the five-year time limit. Many regulations have an impact within the first couple of years.
The third point that is made in the letter is about the cost of legislation. It states: The expected cost to our business at current rates will be approximately £100,000 registration fee and £40,000 annually thereafter. That is a substantial cost to a small farm business. New clause 1 would bring transparency to the process. Instead of pushing the legislation through, as happens at present, hoping that business gets on with it, and then reading some worrying stories in the press a few months down the line, we would at least have a chance to rethink. I cannot see how any sane person can oppose that.
We need more business, more enterprises and more activity, especially when there are such problems in agriculture. The problems were bad enough before the foot and mouth outbreak, but they are extreme at the moment. There is a depressed, crushed feeling among many of my constituents, who believe that there is no escape from regulation. They write letters to me; I can speak and vote in the House. but there is no comeback when regulations are passed. New clause 1 would give them hope, although I am concerned about the five-year gap. I should like the review to take place more frequently.

§ Mr. Steen
Every year.

§ Mr. Paterson
We should bear in mind the fact that the current directory of European legislation is 1,278 pages long, so the burden of carrying out the review every year would be too great; it would be impractical. However, my hon. Friend is on the right lines because the worry is that much of the new legislation introduced is not properly scrutinised and the consequences are not thought through.
5.15 pm
I should like to cite one more case, but I think that, sadly, my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) will tell us that new clause 1 will not cover it. It is the very interesting case of a 574 regulation. As all hon. Members will know, one of the worries in agriculture in recent years has been the closure of small abattoirs; some of the problems of foot and mouth have been caused by the excessive movement of beasts around the country to large units. The general consensus is that small is good in that sector, yet we have seen the wholesale devastation of the sector, mostly by regulation.

§ Mr. Deputy Speaker
Order. The hon. Gentleman is now going far too far. I can anticipate the hon. Member for South Cambridgeshire (Mr. Lansley), by saying that new clause 1 applies only to regulations introduced under clause 1. I have allowed the hon. Member for North Shropshire (Mr. Paterson) to cite some illustrative examples, but he has now had his ration of them.

§ Mr. Paterson
I am making a desperately serious point. The measure that I shall mention will have a dramatic impact on many small businesses.

§ Mr. Deputy Speaker
Order. I am not sure that the hon. Gentleman understands the ruling that I have given. He has, regrettably, heard me more than once, but the fact is that I have to try to focus the debate on the matter before the House. New clause 1 relates to regulations introduced under clause 1. He cannot talk about any regulation that might exist on the statute book at present. The debate is on whether it would be right to apply new clause I to clause 1.

§ Mr. Paterson
I was about the mention the regulation. I should very much like to know whether new clause 1 would encompass the regulation, but I have not had time to say what it is.

§ Mr. Lansley
Perhaps I can help my hon. Friend. The Government have already referred to some of the purposes for which they wish to introduce regulatory reform orders. The Ministry of Apiculture, Fisheries and Food wishes to introduce a regulatory reform order to extend the powers of the Meat and Livestock Commission. It is perfectly possible, of course, for a regulatory reform order to be introduced that would not only extend those powers, but impact directly on the Meat Hygiene Service. As my hon. Friend will remember, we have already had experience of the Deregulation and Contracting out Act 1994, which the Bill will replace, being used to reduce some of the regulatory burdens on small abattoirs. So it is clear that the power could be used, if he were to construe it in that way, to reduce regulations in slaughterhouses.

§ Mr. Deputy Speaker
Order. Hon. Members must not debate the merits of matters that may or may not be subject to regulation in future. The hon. Gentleman must direct his argument to whether the House should agree new clause 1, in so far as it affects clause 1.

§ Mr. Paterson
I should just like to mention the regulation that I had in mind, because if new clause 1 could affect that regulation, it would be a thoroughly worthwhile addition to the Bill. It is especially pertinent that my hon. Friend the Member for South Cambridgeshire mentions the Meat Hygiene Service, because I want to mention the Restriction on Pithing 575 (England) Regulations 2000, which have been introduced in the past five days under Commission decision 2000/418/EC. This is a most interesting case and it is germane to our debate. The regulation was introduced with well-meaning intentions, but I shall not go into the process of pithing.

§ Mr. Deputy Speaker
Order. I do not think that the hon. Gentleman will. I rule him out of order on that, because it is not within the scope of this debate.

§ Mr. Paterson
I have a final question for my hon. Friend the Member for South Cambridgeshire. Do regulations from European legislation come under the remit of the new clause?

§ Mr. Clifton-Brown
Has my hon. Friend considered the difference between a European regulation and a directive? A regulation automatically becomes law when it is passed; a directive has to be incorporated into—

§ Mr. Deputy Speaker
Order. That has absolutely nothing to do with the debate.

§ Mr. Paterson
I will not be tempted to discuss the point raised by my hon. Friend the Member for Cotswold (Mr. Clifton-Brown), but the debate touches on the impact of regulations on many people trying to run small businesses. I know that you, Mr. Deputy Speaker, are trying to set a clear remit for the debate, but I wish to end my remarks by asking my hon. Friend the Member for South Cambridgeshire how regulations would be impacted on by the new clause. Directives are reinterpreted by this Parliament under clause 6(2), so it seems to me that they would be impacted on. That is very welcome. The IPPC, which I mentioned, would appear to come under the review, and my constituents would welcome that.
I am worried that the new clause does not cover regulation; that is the simple point that I wish to make. I would like clarification on that, but I endorse the spirit behind the remarks of my hon. Friend the Member for Totnes. Five years is probably too long a gap—we would like it to be less—but it is a very good start. Given the appalling burdens that the Government have inflicted on the entrepreneurial classes of this country, the new clause deserves our support because it would begin to try to reverse the ratchet.

§ Mr. Cash
I apologise for not being in the Chamber for as long as you may have wished, Mr. Deputy Speaker, but I have watched the debate with great interest from other parts of the precincts of the House of Commons.

§ Mr. Deputy Speaker
Order. The hon. Gentleman should not refer to such a fact. The only debate that he can possibly know about is the one that takes place in the Chamber.

§ Mr. Cash
I was of course blind while I was watching it.
I have a real problem with new clause 1, even though I support its objective. I wish to deal with the procedural questions that lie at the heart of the provisions. As you, 576 Mr. Deputy Speaker, have often pointed out, the new clause covers orders made under clause 1. It states: Every order made under section I shall include a provision"— it has to refer to the fact that it includes such a provision— for the Minister to present a report on the operation of the order in the fifth year after it has come into effect". There is a simple but serious problem with that and it deserves close consideration: no order or statutory instrument of the House can revoke a provision made under section 2 of the European Communities Act 1972. The European directives and regulations to which my hon. Friend the Member for Cotswold (Mr. Clifton-Brown) referred cannot be repealed simply by an order of the House.
I mention that fact because I was on the Joint Committee on Statutory Instruments for far too long. I proposed to the Speaker's Counsel and to the Committee some years ago that, when legislation was being introduced by statutory instrument—whether it was subject to annulment or approval—the letter "E" should be used to designate some of the instruments in the exceedingly long and ever-growing list of statutory instruments. My intention was to demonstrate to the Committee that, no matter what disposition it might make or what it might recommend to the House after discussing those statutory instruments, we cannot revoke or repeal, pass or not pass them because of the 1972 Act.

§ Mr. Bercow
I learned much at my hon. Friend's knee, so far be it from me to argue against him or query his superior knowledge. However, will he confirm that we cannot do what we want because new clause 1 would be incompatible with, and overridden by, the protocol on proportionality in the treaty of Amsterdam, against which we were co-conspirators in January 1998?

§ Mr. Cash
Some overriding problems will prevail because the 1972 Act was passed in its present form. If it does not change, it will be impossible to breach the acquis communautaire. I shall go no further down that route, but my point is important. I am not trying to string out the debate.

§ Mr. Lansley
My hon. Friend makes an important point, but the case that he makes does not frustrate the purpose of new clause 1. It would allow for a review and possibly a disapplication of a regulatory reform order, which can be made only if secondary legislation allows for such a reform. To disapply such a reform order by using new clause 1 cannot infringe restrictions on the use of secondary legislation under the 1972 Act.

§ Mr. Cash
I do not want to get into a dispute with my hon. Friend, so perhaps we could discuss that later. It is a different story when the new clause applies to provisions that are not derived from European legislation. There is a tremendous advantage in having such a measure on the statute book in so far as it does not contradict the principle that I have just mentioned with respect to the 1972 Act.
I am worried about the five-year provision, which my hon. Friend the Member for North Shropshire (Mr. Paterson) mentioned. In an intervention on him, it was suggested that it would be better to hold a review every year, but there are difficulties with doing that too frequently. It is too generous simply to assume that we 577 can judge whether an order has outlived its usefulness or become obstructive to small or other businesses on the arbitrary basis of a five-year term. If orders are to be made under clause 1, it should be possible to make them at any time. It should not be necessary to refer to an arbitrary period of five years.

§ Mr. Paterson
I mentioned the Pollution Prevention Control Bill, of which Lord Peyton said in another place: I do not believe that I have ever seen a Bill which shows more manifestly a deep and profound contempt for Parliament"—[Official Report, House of Lords, 15 February 1999; Vol. 597, c. 471.] On that basis, many laws need reviewing as soon as their impact on business is seen. I should have thought that five years was the longest that we would want to wait to do that, because many Bills will have an impact long before that.

§ Mr. Cash
That is why I should have preferred the new clause to say that the Minister should "present a report on the operation of the order within five years of its coming into effect", or something along those lines.
I take account of the fact that the object of the Bill, and clause 1 in particular, which is to try to knock sense into legislation, should be encouraged. I was the chairman of the Centre for Policy Studies reduction of legislation committee in the 1970s, so I have taken a significant interest in the subject. As I said earlier, I also introduced the Small Business Bill within four months of entering the House. That Bill specifically included as one of its objectives the reduction of legislation. I regret to say that very little was done for far too long. I am glad to note that the previous Government sought to tackle the problem. I have some sympathy with the Bill in that it seeks to achieve the objectives that many hon. Members share.
As I pointed out in a document that I wrote several years ago, there is a system that should be followed for reports such as those mentioned in new clause 1. The new clause says: Every order made under section 1 shall include a provision for the Minister to present a report on the operation of the order in the fifth year". The question is, how should that be done? I should like the House, and the Minister in particular, to consider that carefully.
I have always believed that there is a mechanism for achieving the objective of removing the burden of legislation. In preparing the report, the Minister responsible should ask the Law Commission to make a recommendation on the nature of the reforms that are needed. The Law Commission is an independent body, so it could be seen to be doing that objectively, and not in a purely internal, political manner. Once the report had been received, the Minister, having drawn together a team of specialist lawyers, could invite them to make the necessary reforms to the entire statute book.
That was done by no less an authority on the reduction of legislation than Justinian himself. In the second or third century AD, he was faced with a monumental volume of legislation that had built up in the Roman empire. He simply drew together all the lawyers he could lay his 578 hands on and instructed them to go through the statute book and reduce it. They did so most effectively within a couple of years. Reports such as those that would be required by new clause 1 should address the fact that there is today a vast amount of obsolete and unnecessary legislation. That can be effectively addressed only by an objective analysis such as the one that I have described.
Let me tell the House why. My following remarks are made without disrespect to the civil service. Ministers are Ministers of Departments; they get their advice from within those Departments. Every single piece of legislation creates a conflict of interest for the civil servants engaged in the repeal or reduction of that legislation, because legislation has to be administered by them. The bottom line is that an order would require those civil servants to be given the objective advice that I have described by the Law Commission, because they would otherwise have a disincentive to reduce legislation, which is, in effect, the source of their pay cheques. Therefore, new clause 1 is extremely important.
Leaving aside my point about European legislation—it is insuperable and will remain so until proposals of the sort that I have in mind, such as renegotiation on a proper scale, are implemented—there is an important question about, for example, the volume of public expenditure connected with the sort of report that a Minister would be expected to introduce. Legislation necessitates the employment of a number of departmental civil servants who are required to monitor it, which gives rise to public expenditure. One cannot overestimate the need for arrangements to reduce the volume of legislation by the means set out in the Bill. It is essential to reduce the volume of legislation and thereby to reduce administration and the number of administrators. There is a tremendous amount to be said in favour of the new clause.
Clause 1(2) refers to the "legislative competence" of the Scottish Parliament. There is a serious problem in that respect, but I do not need to spend much time on it. The relationship between the Scottish Parliament and the United Kingdom central Government throws up important questions relating to the sort of orders that can be made to achieve the objectives set out in clause 1 and, by implication, new clause 1. I remember debating this very subject with the late lamented former Secretary of State for Scotland during the passage of the Scotland Act 1998. If a provision passed by the Scottish Parliament is ultra vires the arrangements under the Act, the Secretary of State can make an order; however, he cannot make an order that is itself ultra vires arrangements prescribed by the European Union—at whose table the UK sits in the Council of Ministers. Therefore, there is a serious problem with Scottish statutory instruments under new clause 1, just as there is within the new clause itself.
There are many reasons to be enthusiastic about any provision that reforms laws, but the most important is that it is effective. Such provisions must reduce the amount of legislation. The Confederation of British Industry, the Institute of Directors, the Federation of Small Businesses, farmers—all are crying out for a reduction in legislation. We are living in a madhouse of legislation; it is far too complicated. Now, even accountants are saying that legislation has got out of hand. Some years ago, I sat on the Committee dealing with the consolidation of the Income Taxes Acts. I felt that the most useful thing I could say was that it was pointless of the Committee to try to reduce the volume of legislation, as clause 1 and 579 new clause 1 would achieve, if within a matter of years of their reform, the Income Taxes Acts redoubled in number. That is exactly what happened.
The task is impossible unless people have the political will to undertake it. That political will involves a procedural arrangement within the arrangements prescribed under the report specified in new clause 1, which will permit people to know that the task will be achieved. It is one thing to say that we shall seek to achieve that task; it is another to do it.

§ The Parliamentary Secretary, Cabinet Office (Mr. Graham Stringer)
I almost expected not to speak on the new clause. May I remind Members who did not have the benefit of serving on the Standing Committee that new clause 1, which we have been debating this afternoon, was discussed in Committee as new clause 4? The only difference between the wording of new clause 4 and new clause 1 is that "will" has been changed to "shall". The Committee discussion was satisfactory, we explored all the issues and Opposition Members decided not to press their new clause to a vote. I am surprised that we have had such a long debate this afternoon when few, if any, new points have been made.
I should like to repeat the commitment that my noble Friend Lord Falconer gave on Second Reading in the other place on behalf of the Government. Because the hon. Member for Wantage (Mr. Jackson) asked for it, I shall repeat the Government's commitment to review the workings and constitutional implications of the Bill in three years' time. New clause 1 asks for a review in five years' time, which would be based on clause 6 and would allow either the House or the other place to annul unsatisfactory regulatory reform orders.
As we discussed in Committee, the Government contend that the structures that we have in place for reviewing regulations are a more effective procedure than waiting five years to review a regulatory reform order. It is possible for the Government, or any other Government, to get a regulatory reform order or my other piece of legislation wrong. If a regulatory reform order does not have the effects and impacts envisaged in debate, it should be reviewed as soon as possible. To do that, every Department has appointed a regulatory reform Minister whose responsibility is to keep current legislation and regulations under review and look at forward regulations to make sure that they are created in the best possible way and that their burdensome effects are minimised.
My right hon. Friend the Minister for the Cabinet Office chairs the ministerial panel for regulatory accountability, which has the facility to invite Ministers from any Department to account for their current regulatory performance and ask them what they will do in future. If any regulatory reform order is operating as envisaged, the Minister for the Cabinet Office and the members of the panel can summon Ministers from other Departments to discuss it. As well as those processes, there is the independent—

§ Mr. Bercow
I am grateful to the hon. Gentleman for giving way, but I am afraid that he is very insouciant about the matter. In relation to the performance of individual Departments, he says that his right hon. Friend the Minister for the Cabinet Office can go and see the 580 Minister concerned and remonstrate with him or her. Does not the hon. Gentleman understand that we are arguing for something much more exacting and rigorous? That is why we have spent the best part of three and a half hours arguing for new clause 1.

§ Mr. Stringer
The hon. Gentleman misunderstands me. The panel has the right to call people before it. It is the new clause that is cool and calm about regulation that goes wrong. If regulation goes wrong, why should the Government and Parliament wait for five years? Something should be done about it sooner. That is one of the reasons why I ask the hon. Member for South Cambridgeshire (Mr. Lansley) to withdraw the motion or the House to reject it.
The better regulation taskforce, which is independent, also reviews regulation. The hon. Member for South Cambridgeshire said, with regard to the Regulation of Investigatory Powers Act 2000, that huge costs had been postulated by business, whereas the Government argued that the costs would be considerably less. If the Government were wrong, their response to the report of the better regulation taskforce—that they would keep the workings and the impact of that Act under review—was a better response than waiting for five years. If the Government had got it wrong, it would be better to have a continual review, which was the Government's stated policy in response to the better regulation taskforce's report on e-commerce.

§ Mr. Cash
If the Minister cannot immediately answer my question, which I ask in all seriousness, will he write to me? Can he explain, with reference to new clause 1 and more specifically to clause 1, how it is possible to change laws if they are derived from European Union regulations or directives? There is nothing in the Bill which states that it shall not apply to provisions that derive from those sources. Is it to be assumed, therefore, that such provisions cannot and will not be changed, because of section 2 of the European Communities Act 1972?

§ Mr. Stringer
My understanding is that if European legislation is transposed into British legislation by primary legislation, and that legislation is a regulatory framework, the regulatory reform order process can amend the primary legislation. That is the purpose of the Bill.

§ Mr. Paterson
Not surprisingly, the Minister is defending his Government's mechanism for reviewing legislation and regulation. Can he tell us how many measures have been reviewed, and how many have been repealed or reduced as a result of those reviews?

§ Mr. Stringer
If the hon. Gentleman looks through the DTI programme, the recommendations of the better regulation taskforce and the number of deregulation orders, he will understand that a great deal of work has been done. I cannot quantify it, without notice of the question. So much work has been done in this regard that it would be a costly exercise to quantify it.
I come to the second point, which is very different and much more dangerous than the first.
One can understand Opposition Members arguing for a review after five years, but it is much more difficult to understand the proposal to allow this House or the other 581 place to remove any regulatory reform order. I think that it derives from a fundamental misunderstanding of what such an order is. It can put previous Acts of Parliament in one place, simplify them and rebalance regulatory regimes, but it might refer to previous primary legislation. Disapplying the order before deciding what to do—I think that those were the words that were used by the hon. Member for South Cambridgeshire—could leave a huge hole in any regulatory regime. He gave the example of fire regulations. The removal of such regulation could leave everybody in the country without its protection.

§ Mr. Lansley
For the avoidance of doubt, I should tell the Parliamentary Secretary that in terms of fire regulation, the purpose of the new clause is to ensure that a review occurs if it has not happened under any other mechanism within five years. Of course, it is open to the Government to introduce a new regulatory reform order instead of simply disapplying orders, but the power to disapply the order might be the best way of achieving a deregulatory effect.

§ Mr. Stringer
The hon. Gentleman makes his point. I admit that fire regulations are an extreme example, but the essential point remains: a hole could be left in regulations. It would be within the power of this House and of the other place to leave such a hole. That is the second fundamental reason why I hope that he will ask leave to withdraw the motion. The new clause would give the other place power to remove chunks of primary legislation without the agreement of this House. That must be a brand-new position for Opposition Members, who seem to be saying that the other place should be able to do things that this House might not want. I do not know whether the hon. Gentleman understood what he was doing when he included the phrase "either House of Parliament" in the new clause, as it would allow either House to make an order. If he did understand it, that is an extraordinary position for Opposition Members, as the provision would give some legislative primacy to the other place.
I shall not follow Opposition Members all the way around Europe, the world and several dictionaries, which is where they went in their speeches. I do not think that the case has been made for the new clause. I am not sure whether many of the hon. Members who spoke understood the provision that they supported or were aware that it would pass power down the Corridor. I request that the hon. Gentleman seeks leave to withdraw the motion. If he will not do so, I ask the House to reject it.

§ Mr. Lansley
With the leave of the House, Mr. Deputy Speaker. In view of the time, and although I do not accept the Parliamentary Secretary's arguments, I want to move to the next group of amendments. I beg to ask leave to withdraw the motion.
Motion and clause, by leave, withdrawn.