Government

HL Deb 11 December 2002 vol 642 cc230-55

3.15 p.m.

Lord Peyton of Yeovil

rose to call attention to the growth of government and its attendant regulations and the case for action to reduce them; and to move for Papers.

The noble Lord said: My Lords, I start by saying a few words more about Parliament than about the Motion. I believe that Parliament, like other of our institutions, needs to be seen, heard and respected. If little or nothing of what is said or done here is reported, Parliament unventilated will perish for lack of fresh air. People will not care for an institution of which they know nothing and Parliament will lose confidence in its ability to perform its main task of controlling the executive. It will also cease to attract people of merit.

Governments will see no need to defer to such an enfeebled institution. They might then find it easy and convenient to tackle what they see as the nuisance of a free press. If the press should lose that freedom, it seems to me that it will have itself to blame in large measure for having allowed—if not actually pushed—an institution devoted to freedom to fall into obscurity where it can be neither seen nor heard. I make no apology for saying that because it seems to me that Parliament is in some jeopardy as so many of its procedures are totally ignored by those who think of nothing but football, money and sex.

I turn now to the Motion. I should like to share with your Lordships some of my thoughts in moving it. Government is much too large, such that as a whole and as individual departments it has become virtually unmanageable. The number of Ministers in government today serve only to increase the frictions that are part and parcel of every government's experience. Government makes too many rules and is devoted to short-term considerations. Its principal skill is in presentation and promising, not performing. The new-speak language that it employs—I shall go into that later—is extremely confusing.

I have made some sort of superficial study—it can hardly be anything else—of a volume entitled the Civil Service Year Book. It can be seen in the Library and it can be obtained from the Printed Paper Office. It is a chart of government as it exists today. A very brief editorial goes out of its way to call attention to the Office of the Deputy Prime Minister which, it says, becomes one of the largest departments of government.

I shall return to that matter later. It is interesting to note that the year book is accompanied by a compact disc and a guide which mean very little to me. One can place it in one's pocket but it would be very difficult to get it into one's mind.

We then read a foreword from no less a person than the Cabinet Secretary. I was rather surprised to find him lending himself to the newspeak arid saying that, over the years of his appointment, his aim will be to give front-line delivery to education, health, law and order, transport and the many public services which we tend to take for granted. I thought that delivery was something done by midwives, messengers and bowlers on the cricket field. I have not yet got used to the idea of Ministers delivering these items as if they were packages. I believe they would do well to change their language.

The size of government is a subject too large to be covered in a short debate such as this. We need time to dwell on it and on the huge volume of which it consists. I can refer briefly only to one or two departments. I turn immediately to the Office of the Deputy Prime Minister. I cannot think that anyone since Hercules has ever tackled such huge tasks. But, of course, Hercules had the benefit of being successful in his impossible labours. That has yet to be proved so far as concerns the Deputy Prime Minister.

To call it an "office" when it is really a substantial empire is to do violence to language. I do not believe that any office can be large enough to hold the Deputy Prime Minister. His empire is covered by no fewer than 120 columns in the Civil Service Year Book. It has eight Ministers and 10 directorates. I have no time to go into what all those directorates do, but I cannot help feeling that there are rather too many of them and I wonder whether the people in them spend a great deal of their time fighting over boundaries.

I have brought with me some quotations from the Year Book with which I want to weary your Lordships. At column 208 of this memorable book, it is stated that one of the purposes of the Office of the Deputy Prime Minister is to: Improve delivery and value for money of local services by: introducing comprehensive performance assessments and action plans, and securing a progressive improvement in authorities' scores". It continues in like fashion. That really is a classic piece of gobbledegook and I cannot help feeling that the Deputy Prime Minister would be well advised to see that his purposes are better presented than that.

I turn to another part of his empire. It is entitled the "Democracy and Local Leadership Division". It sponsors the institution of modern, democratic local government. From what I hear, it has caused a good deal of confusion in the ranks of local government. But this Democracy and Local Leadership Division has a subsidiary entitled the "Local Democratic Renewal Branch". Its task is to modernise, local governance and democracy in England, including new council constitutions, elected mayors, the conduct of local authority business (not Councillors' Code of Conduct—see Branch D), the role of the councillor, and councillors' allowances", and so on.

That is a huge function. I wonder why central government are taking it upon themselves to interfere so minutely in local government. Personally I recall that the government I used to support, at least in name, did a great deal of harm to local government in that they filleted it. At one time—it shows how wrong one can be—I thought that the present administration would show more respect for local government than they do.

I want to mention one more organisation—the Social Exclusion Unit—for which the Deputy Prime Minister is responsible. I shall weary your Lordships with one more quotation because it is something of a gem: The Social Exclusion Unit remit is to help improve government action to reduce social exclusion by producing"— mark the words—

`joined-up solutions to joined-up problems". I have the greatest possible respect for the noble Lord who is to reply to the debate, but I believe that he will be puzzled as to how to give a lucid account of what that means.

I have little time to dwell on individual Ministries but surely the DTI deserves a comment. It has 70 to 80 columns in the Year Book and seven Ministers. It claims to work closely with almost everyone in driving up innovation and productivity. How grateful industry must be! I have never heard any industrialist express either gratitude or admiration; nor have I ever heard it explained what the DTI has achieved, if anything, over the years.

I turn briefly to the subject of health. I want to express my admiration for, and gratitude to, the noble Lord, Lord Hunt, who listens to what is said in your Lordships' Chamber. However, I still find it difficult to extract any information about what is happening. I refer to an institution called RAFT, which is the heir to the organisation established during the war by McIndoe at East Grinstead for burned fighter pilots. That institution has been in jeopardy for some years. It has been threatened. It is said to be moving from Mount Vernon to Northwick Park, but no one knows when it will go and no one seems to bother about the continued uncertainty. In my view, that is a scandal.

I do not have time to deal with the question of transport, although I am glad to note that the pie-in-the-sky idea of a co-ordinated, integrated system of transport was recently put quietly on one side. However, I cannot resist the temptation to say that the situation in the capital city, where we live, is simply disgraceful. I know that the Mayor is doing his best to increase congestion, and he is being very successful in that. But the Government are standing back with folded arms and doing absolutely nothing to remedy a situation of increasing hardship and loss.

I was going to talk about the Department for Culture, Media and Sport but I must refrain. I end by saying that all the people about whom I have spoken have power but they never have enough. They are always looking for more. Last year there were 4,642 new sets of rules. I have commented on the language used by those in government but, if I had the right to counsel a government, I would say, "Be a little more modest both in your aims and in what you say you have achieved". That might impress people more favourably.

I have a last piece of advice: I would so much like Ministers to spend time reading a book published in the 1970s written by Dr Schumacher, entitled, Small is Beautiful. They might pay attention not only to the title but to its contents. I shall give one brief quotation: Man is far too clever to be able to survive without wisdom". In looking through the Civil Service Year Book with its chart of every limb of government, I saw no trace of wisdom My Lords, I beg to move for Papers.

3.30 p.m.

Lord Lang of Monkton

My Lords, it is a pleasure to rise in succession to my noble friend Lord Peyton of Yeovil, and to compliment him on the clarity with which he laid out the case for his Motion. It was a shrewd choice of subject, concerned with the growth of numbers in and burdens of government. It is illustrative not just of the Government's tendency to interfere, regulate and impose burdens; it also exposes the parallels that can be drawn with the major government areas of taxation, spending and borrowing that are now also growing and inflicting so much harm on our national well-being.

The combined burden on enterprise is now beginning to become unbearable. A concise example of the growth of government might easily be given by looking across the Border to Scotland. What used to be done by five government Ministers is now done by 22. What used to be done by some 70 Members of Parliament is now done by around 200. In addition, there has been the concomitant increase in civil servants. It might be argued that part of that is the creation of a separate government and that in the view of some there is an overwhelming imperative to create that additional separate government. But it is illustrative of the broader problem that we face in looking at growing government and growing burdens.

In the past year, 4,642 new sets of regulations were introduced; an increase of 50 per cent on five years ago. The British Chambers of Commerce, whose members have to struggle with those regulations, estimated that in 2000 the additional cost to business was some £10 billion. Now, just two years later, they estimate the cost at £15 billion.

To all the regulations is added the burden of endless government task forces and Tsars for this and Tsars for that. As someone once said, the Government have more Tsars than the Romanovs. They have even set up a task force to try to achieve better regulation, forgetting that the creation of all the other task forces has caused part of the problem. The Government's response to criticism of the excessive burden of task forces is to offer a red tape day on which all new employment regulations would come in on one day instead of being scattered throughout the year. A better solution would be to introduce fewer regulations, to reduce the number of Bills they bring before both Houses and to insert in as many of them as possible sunset clauses to reduce the cumulative burden of legislation.

A good example of the increased regulation and the burdens that that creates is something which happened immediately after this Government came to power in 1997. They threw away one of the great achievements of the previous government when the then Prime Minister, John Major, secured in the Maastricht Treaty negotiations an opt-out from the Social Chapter. The incoming government had a different set of priorities, and they were entitled to assert those. But I think that they should have weighed more carefully the downside to the changes they wanted to make, which would throw open the floodgates and cause the inflow of new regulation from the European Union to damage our more flexible and more competitive work forces with endless directives and red tape.

I refer, for instance, to the Information and Consultation Directive; the part-time workers regulations, which in two years is estimated to have cost over £300 million; the contract workers regulations; and the temporary agencies workers directive. In the United Kingdom there are some 700,000 agency temps, something like 65 per cent of the whole of the European Union sector. That, therefore, impacts much more heavily on this country than elsewhere. There was then the Working Time Directive, which in four years is believed to have cost over £7.5 billion to industry.

I am sure that some of those directives were worthwhile or had worthwhile components, and desirable ones at that. But collectively and cumulatively they are doing massive damage. With their surrender to the European Union on those issues, the Government have now thrown away the discretion to choose which to bring in; which to adapt to suit our circumstances and which to ignore. Elsewhere there seems to be an insensitivity to the economic consequences and a woeful lack of restraint in bringing in such regulation.

The lack of restraint at a time of obvious economic uncertainty and a compulsion to over-govern, which I believe my noble friend illustrated, led government spending plans to increase from £418 billion this year to £511 billion by 2005–06. Now it is absorbing almost 42 per cent of our national income; a rise of 2 per cent in a year, despite tax revenues having risen by no less than 42 per cent. In addition, tax changes will have risen by £47 billion by 2005. Again, burden is piled upon burden.

With borrowing we see the same rake's progress. We see borrowing in the public sector forecast last April at £11 billion for this year now forecast at £20 billion, and for next year at £24 billion. An overall budget surplus forecast of £3 billion is now to be a deficit of £6 billion, with a further £5 billion next year. I predict it will be much more; it always is. It is no wonder therefore that, overall, employment is now falling across the board. In the manufacturing sector alone, 400,000 jobs have been lost since 1997. The combination of the burdens of regulation, taxation and the other constraints imposed on enterprise have contributed to this result. GDP in the production industries is down by 5 per cent. Confidence is falling. Investment has been falling for two years. Inward investment is being frightened away.

Growth forecasts for the whole economy have belatedly had to be revised downwards by the Chancellor. Productivity growth has crashed in the past year. Again, that is a direct consequence of the mass of new regulations that so undermines our competitiveness. Corporate tax revenues, which were to rise by 15 per cent, have fallen by 14 per cent. We now have the worst trade deficit since records began.

Cause and effect are interlinked here. It is the worst time to have burgeoning government; over-regulating government; and over-spending government burdening business with regulation and financial penalty. The cost of it all to business, the public services and the economy is in turn reducing their capacity to deliver and so undermining the credibility of the Government's whole approach and making the problems worse. It is no wonder that the savings ratio has fallen from 10 per cent when the present Government came to power to the all-time low of 3.75 per cent now projected. Only the paper-thin confidence of high consumer spending sustained by dangerous levels of personal borrowing is keeping the economy from collapse.

Some of the statistics with which I have burdened your Lordships—I apologise for including so many in a relatively short speech— are in part the predictable consequence of the state of the world economy. But that should have led the Government to pause and adapt their behaviour. Many of the consequences that I have spelt out and many of the statistics that I have given, are the result of self-inflicted wounds. Against the background I have described, the extravagant growth of government, their numbers, aspirations, spending, taxing, borrowing, interference and the burden of their red tape and regulations are destroying both our prosperity and our prospects. I believe that it is time to call a halt.

3.38 p.m.

Lord Vinson

My Lords, it is a great privilege to follow the two previous speakers on this neglected but important subject. I recall reading when I was younger Gulliver's Travels. Your Lordships need no reminding that that was an allegory by Jonathan Swift on the regulations of the time, largely religious, but in the same vein as today. He said of Gulliver that: No single silken thread held him down but 1,000 made him immobile". That is the problem with regulations. I shall try to illustrate it by briefly giving some practical examples of how the multitudinous nature of these silken threads—each one of them perhaps of little importance—taken overall, is immensely damaging. That is why I think that this subject is so important.

My own background is that of an entrepreneur who started a small business and built it up, probably blissfully unaware of the problems that I should hit. In those days—40 or 50 years ago—the regulatory atmosphere was so much more benign and kind and, some would say, more unsafe, but at least it meant that entrepreneurs did not have to struggle with the huge burden of regulation that they have to struggle with today. As a result, I am sure that we are inhibiting and handicapping the growth of many of the firms that would give this country prosperity tomorrow.

Perhaps I can give two small examples as illustrations. The building trade is conditioned and governed by building regulations. These are, if one puts them all together, inches and feet—20 or 30 centimetres, if one likes—thick. I came across a typical example of this last week. My daughter is buying a house. I said to the builder: "Why is there no doorstep?" He said: "We are not allowed to put one in because wheeled invalid carriages of various kinds could not easily cross the threshold." I said: "Surely, a doorstep could be at least an inch high?" "No, it is not allowed." —he said—"But as a consequence, I cannot guarantee that when it rains heavily the water will not come under the door. What is even more important is that the frame of the door is now permanently sunk in a damp condition and will rot and will have to be replaced in 20 years". So in order to meet the relatively minor problem of enabling a disabled person to cross that threshold more easily, we cannot have a doorstep even an inch high. The unintended consequence of that ludicrous piece of legislative interference with builders' and architects' freedom to act will be one of enormous cost in the future as every one of those door frames will have to be replaced.

The other day I received a cri de coeur from an architect about new windows that he was anxious to install into an Edwardian house and was prevented from so doing by a building regulation. The explanatory note—not even a regulation itself—states: A new regulation 16A makes special provision for building work consisting of the installation of replacement windows, rooflights, roof windows and doors in existing buildings. It authorises a local authority to accept, as evidence that the work complies with regulations 4 and 7, a certificate to that effect by a person registered under the Fenestration Self-Assessment Scheme. Regulation 16A also provides for the notification of the completion of work where no certificate is to be given (regulation 2(4). Regulation 3 contains a transitional provision". The long and short of that is that the cartel set up by the Fenestration group now has a total monopoly on the installation of windows. I am sure that that was an unintended consequence of the regulation.

A very well known and respected architect wrote to me: It is such a joy to get in touch with you. It is good to know that the fears of those of us who still labour at the sharp end are not totally ignored at the top. Thank you for that. But I have to say that the resentments of the ordinary Englishman are now starting to form a critical mass at this level. I do sincerely believe that politicians continue to despise us, or I would say ignore us, at their peril". We may be the eagles, but the moles down there at the bottom of the heap are getting restless because of the damage that overregulation is doing to them.

Many of our regulatory bodies, I believe, pursue their own agenda, often regardless of the wider public considerations. It is time to ask the ancient Roman question: "who will judge the judges"?

I give the example of the work of the Food Standards Agency. It has just issued a recommendation to the EEC that sausage skins made from sheep should be banned. The background to that is that it is afraid that sausage skins might contain BSE. Even though we have all been eating sausage skins since the height of the BSE epidemic, it is now getting worried about it.

Sheep were last fed with contaminated meat and bone meal in 1988. Not a single case of BSE has been found in sheep, although scientists are hunting hard to find it. There cannot be a sheep alive that has been fed with those contaminating substances. But the Food Standards Agency in its wisdom decided to hold a stakeholder meeting to endorse its officers' recommendation for a ban. That meeting was held in Belfast, which is very difficult for English people to get to in a hurry from the mainland. It comprised 88 people, a bit of a circus really; 49 of the 88—over half—were staff or directors of the FSA. The others were invited guests from various bodies.

In practice, the Food Standards Agency has to take its decisions behind closed doors and then conducts, using its own officers, the stakeholder meetings in a manner to achieve the ends it needs. It argues that its decisions are based on the precautionary principle. In effect, that enables it to abandon the concept of risk assessment and balanced judgment based on proportionality.

Proportion is so much harder to justify than precaution. The avoidance of risk means that no decision has to be justified and that the decision itself is hard to criticise, because who is brave enough to challenge publicly the concept of putting safety above all else?

Thus, the precautionary principle stifles rational scientific debate regarding the nature of risk and is often nothing more than a cloak for intellectual cowardice.

One has to consider seriously whether the Food Standards Agency's stakeholder meetings are a sensible forum for taking decisions. They certainly appear to be little more than a mechanism for giving the FSA a veneer of public approval to its decisions. They certainly give little confidence to those of us who believe that the FSA's decisions should be taken on hard-tested scientific analysis after in-depth discussions with those with knowledge of the industries concerned. That is a perfect example of a body that does not seem to take its decisions in the wider context but is blindly pursuing its own agenda.

If time permitted, I could give umpteem other examples to the House of the problems of unintended consequences.

Noble Lords will remember Lyme Regis and the deaths caused by canoes capsizing. As a consequence, regulation was introduced that covered both trips abroad and canoeing generally. A report in The Times of 4th July 2001 stated: Commercial companies are now required to hold a licence under the Adventure Activities Licensing Scheme before they sell climbing, trekking, caving or watersports activities to schools or other groups of young people aged under 18. The Education Department insists that local authorities must obtain a licence for schools to take children on trips. The Adventure Activities Licensing Authority inspects the safety mechanisms of applicants and considers whether to grant or refuse a licence … Head teachers are expected to hold detailed briefings in school for parents who have to agree in writing to allow their children to join the trip". The unintended consequence of such safety fears is an end to playground games and sporting activities. I quote from our local newspaper: There will be no adult or family swimming at Glendale this year. The requirement for a qualified lifeguard to be on duty at all times makes the provision of swimming at present impossibly". In other words, parents can take their children to the sea and prevent them from drowning, but not to the local pool.

The outcome of all this overregulation and its unintended consequences is the headline, Children becoming softies as red tape halts adventure". which appeared in the Daily Telegraph of 31st May 1999.

Is this really the kind of world that we want to see and is this really the consequence of trying to make a supersafe society that we desire?

My time is up. I could continue to illustrate this issue in umpteen ways, but I shall merely try to he constructive and ask: what can we do about it? We must bring back some proportionality into the application of regulation; we must bring back sunset clauses, as mentioned by the previous speaker; we must give more power to the better regulation unit or the task force, or whatever it is called today: and we need more pre-legislative scrutiny.

Unless we do so, I am afraid that we shall wake up to find that the road to national decline is paved with well-intentioned regulations.

3.49 p.m.

Baroness Flather

My Lords, our society is complex and becoming more so. We all understand the need for regulation in such a society. Those of us who are reaching a certain age know that regulations have continued to grow to keep pace with the complexities. Currently, however, one feels that every day one comes up against something or other, small or big, that somehow impinges on one's everyday life. W hen everyday life begins to feel difficult in terms of what one can and cannot do, it is important for us to stop and ask whether things have gone too far.

For example, I do not know whether any of your Lordships have tried to give away anything recently. One may have an electrical appliance, a television set, perhaps, that is working perfectly. If one wants to change that television for a bigger one, it is impossible to give away the old one. One cannot give away a fridge; one cannot give away anything to anybody. One is stuck. It is not allowed: everything has to have a certificate. If one wants to give a mattress to someone who does not have one, one cannot. One may not be certain it ever had that little fireproofing label. And one needs to know when and where one bought it.

I read somewhere recently that specialist doctors say that they used to spend eight minutes with each patient and that now they spend five minutes. What do they do with the rest of the time? I do not need to spell it out: they have more forms to fill, more records to keep and more things to do.

My daughter-in-law decided that, as she has two young children, she would like to be a playgroup leader. She took a course, did extremely well and earned distinctions. She worked as a playgroup leader but lasted only one year. She was extremely good, but she could not find the extra day and a half, unpaid, to complete all the records. Children between the ages of three and five have to be assessed every week. Each child's record must be kept. Most playgroups run only from 9 o'clock until 12 o'clock. It is impossible for people who run playgroups to keep such records in the time available.

It is becoming difficult for people in caring professions to do their job, which is to give care. They spend a huge amount of time filling in forms, keeping records and making sure that they have met every regulation. There is so much centralisation that we have to ask ourselves whether we have got the happy medium between a regulated society and a totally controlled society. As my noble friend Lord Vinson said, regulations are supposed to be for our own good. They are supposed to protect us. But has anyone done a proper evaluation of all those regulations to establish whether we are safer and better off? Or is it simply a cost implication for everyone involved? I do not believe that a proper evaluation has been done.

We have a plethora of directives from Brussels, as noble Lords have said. Yes, we have to bring those directives into our legislation, but we do have some flexibility as to how that is done and to what extent. It feels as if we are already part of a federal Europe—a united states of Europe. Every time a directive comes up, we wholeheartedly take it in and push it through. Have we looked at our partners in Europe to see how much regulation they put into practice and how much they follow it? I shall not pursue that topic; it is for another occasion. The point is that we should spend more time considering our situation and seeing how directives could be modified to fit in with our needs.

If we go down this road continuously, we shall have a nation of form-fillers and buck-passers, as my noble friend Lord Vinson said. We shall not have intelligent, thinking, flexible or imaginative people. We are trying to educate our nation into being much more responsive to situations and ideas. If all ideas and spheres of life are going to be regulated, we are not going to produce people of that sort.

In the Government's first term of office, nearly all the legislation that passed through your Lordships' House was administrative in nature. There was little that changed anything. It is important for us to start thinking about what kind of country we are building. I am not making a political point here; I have made no political point. I have spoken very much from the heart, as I always do. I hope that the Minister will take that into account and at least give an assessment of what is in place.

Let us consider the situation in education, where there is such a burden on teachers, and in the health service. Those two matters are dear to the Government's heart. However, they are being drowned in all kinds of red tape and regulations. We need to see whether education and health have improved in any way since all the regulations were introduced. If the answer is a resounding "Yes", tell us, because we will accept that. It is not at the moment obvious to any of us.

3.57 p.m.

Lord Garel-Jones

My Lords, this is an important subject, and noble Lords are grateful to my noble friend Lord Peyton for introducing it. As with so many things in life, regulation is a question of balance, or "proportionality", as my noble friend Lord Vinson said. It is naïve to think that life would be better if all regulations were swept away. No one would seriously argue that the state does not have a duty to concern itself about food hygiene, the environment and so on. Equally, however, my noble friend Lord Hurd, speaking in the context of EU regulation, coined the felicitous phrase, "an invasion into the nooks and crannies of our daily lives".

The figure given by my noble friend Lord Lang of, I believe, 4,642 new sets of regulations, represents a 50 per cent increase on the number introduced in 1997. That leads me, at any rate, to believe that the nooks and crannies are in danger of being swept completely clean. No one who listened to the opening speech of my noble friend Lord Peyton could fail to believe that the Government are in serious danger of losing all sense of balance and proportionality in this matter.

I shall focus my remarks on the effect of excessive regulation in the City of London. The Wicks group identified four broad criteria that should govern our approach to regulation. First, practitioners, not legislators, create a functioning market. Not affording them the flexibility that they require to innovate will serve only to damage markets. Secondly, good regulation and good legislation can be ensured only through consultation with practitioners at all stages of the process. Thirdly, regulation must be risk-based, taking into account the different risks faced by different firms, customers, investors and counter-parties. Finally, enforcement of legislation and regulations is vital but requires constant monitoring at domestic and European levels.

Within those four guidelines, to which I wholly subscribe, I shall make five quick points establishing that the danger of over-regulation can damage the City of London. First, at the level of the European Union, regulation of the financial services sector is clearly necessary, but only in so far as it contributes towards creating a healthy and unified trading environment. There is a culture in the United Kingdom—my noble friend Lady Flather referred to it—of blind compliance with legislation from Brussels. In my day, we used to call it gold plating the legislation. The result is that directives are often implemented in the United Kingdom in an excessively legalistic fashion without accounting for the differences between markets and—again, my noble friend Lady Flather referred to this—the way in which other member states choose to implement such measures. That frequently leads to a relatively higher compliance burden in the United Kingdom than in other EU countries.

Secondly, there is a prevailing attitude among regulatory authorities that all forms of commercial risk should be covered. An overcautious approach ignores the requirement on firms to employ risk as a tool for innovation and competition. Stifling those elements damages the competitiveness of the entire sector.

Thirdly, regulatory cost is a huge issue, particularly under current market conditions. Declining volumes of business increase the potential for default. However, increasing the regulatory cost is the wrong approach to mitigate that. Although the FSA is required to undertake a cost/benefit analysis before adopting new rules, the analysis is generally cursory and always concludes that the benefit of new rules outweighs the cost.

Fourthly, firms and regulators are in clear agreement that the trend towards regulatory harmonisation is beneficial. Regulators often fail to see the need, even within this climate of harmonisation, for differentiated treatment of product lines and firms, such as SMEs. There is insufficient differentiation between types of market user and investor and differing levels of protection, which each may need. That is a particular feature of the European approach.

Finally, regulators may be at risk of overburdening themselves. Already, momentum exists to widen the scope of the financial services legislation to encompass a number of wholesale markets, for example, that of power. The inclusion of non-financial institutions and product ranges, under the umbrella of the FSA, will create the risk of their becoming overstretched and losing focus on the retail investor.

Initially, the concept of prudential regulation was designed to prevent retail customers losing money to unscrupulous investment firms. However, that initial "public good" objective has somehow been replaced by a massive compliance burden, which has not served and is not serving to fulfil the initial and wholly laudable objectives. What is required now is that authorities refocus their attention on the core principles of consumer protection rather than seek to broaden their scope.

4.4 p.m.

Lord Plumb

My Lords, I hope that noble Lords will forgive me for intervening; if the noble Lord, Lord McNally, agrees, I shall say a few words during the gap, having missed getting my name on the Speakers' List yesterday.

It is always a great pleasure to follow a Motion moved by my noble friend Lord Peyton. It is appropriate to debate this Motion because every person in the land is concerned with the effect of regulations on their individuality and in relation to various sectors, not least in relation to agriculture, to which I shall refer.

The Curry report says, regulation has to be proportionate and efficiently implemented and the likely benefit should be identified and if possible quantified". No single farmer could disagree with that statement but, given the way in which present regulations have become almost "set in concrete", is that easier said than done? There is one measure that could have a significant effect; that is, that the basis of all regulation should be subjected not only to examination but also to scientific peer review. One example will serve. The current proposal to extend nitrate sensitive area regulation across the bulk of the country is based on a perception that nitrogen is potentially dangerous to both human health and the environment. It will cause very great problems, all to little or no purpose. A full scientific examination would have avoided the problem.

Society will always have a keen interest in the operations of farmers and the food industry. Food safety will naturally be a high priority. But concerns about environmental impacts and animal welfare lag not far behind. Moreover, farmers and growers are subject to the same regulatory framework as the rest of the UK industry in their role as businesspeople and employers. Given the resultant substantial and cumulative impact of regulations on farmers, it is essential that the impact of each is kept to the minimum.

I ask the Minister to acknowledge that regulations must be kept under regular review. It appears that regulations are often applied to regulations, which causes conflict. I had six farmers—good people and good businessmen—around a table fairly recently and I asked them for their opinion on how four sets of regulations should be applied. I received six different answers from people who understand the issues; their interpretations were very different.

If a regulation has been introduced on the basis of a precautionary principle, the necessary work has to be commissioned to improve the decision-makers' knowledge base and we should review the regulation as soon as new information is available. Often, the cost of regulations that are imposed on other sectors is transmitted by economic force to farmers, growers and the whole agricultural industry. A clear example of that is the meat hygiene directive, which is complex to say the least. In that, farmers have to be involved in discussions about how to reduce the impact of the regulations, together with the directly affected sectors.

These are important matters—there are many others—and they show how regulations affect people, particularly those who are hard at work, who farm as individuals and who have no labour support. They have to deal with these bureaucratic regulations when they have finished their day's work.

4.9 p.m.

Lord McNally

My Lords, we all welcome the fact that the noble Lords, Lord Garel-Jones and Lord Plumb, who have expertise in this area, have taken the opportunity to point out the problems and dangers of over-regulation.

I have with me an excellent paper by the Liberal Democrat shadow spokesman, Dr Vincent Cable, entitled Unnecessary Regulation. I recommend it to all members of the Government. However, my one fear was that the debate would be just a catalogue of complaints and horror stories about bureaucracy and government interference. The debate has not taken that line, thanks to the way in which the noble Lord, Lord Peyton, introduced it. He brought a philosophical approach to the debate. That is something that I must confess that I have not always associated with him; I had rather thought of him as a kind of Dickensian character—a man who went home at the weekend to shoot pheasants, or peasants, as the mood took him.

Lord Peyton of Yeovil

My Lords, I am most grateful to the noble Lord for giving way. I merely point out that I do not shoot pheasants at the weekend. In so far as I have any wish to shoot at all, it is directed against some people.

Lord McNally

Well, my Lords, I was half right when I mentioned peasants.

The philosophical question—the tug between over-government and a desire to cut back on Government—has been present for at least the past 50 years since the Conservatives campaigned so successfully by promising to make a bonfire of controls. Successive governments have brought in whizz-kids from the private sector to consider the matter. That hides another even deeper trait of Conservative Members: they really want lower taxation and less government, but they do not have the courage to argue the full logic of their case. Hence the hiding of Mr Oliver Letwin during the most recent general election campaign, when he blurted out that they actually wanted to cut £20 billion of public expenditure, but they did not know how they were going to do so.

That is the problem: this debate should really be conducted in parallel with yesterday's debate on government expenditure, when the Government again came under fire from Conservative Members for not cutting expenditure, but few examples were given of how those cuts should be achieved—which parts of public expenditure should be cut to achieve the savings sought. The noble Lord, Lord McIntosh, gave the reply that my party has been giving for some years, to which the Government are a recent, welcome convert: that increased public expenditure may not be the whole answer to better public services, but it is certainly part of the answer. That is why we have supported the Government in devoting more expenditure to public services.

Whether they speak it loudly or whisper it darkly, we reject the Conservative approach, which is really just a resuscitation of old Reaganomics: low taxes, a minimal role for government, safety-net public services and a trickle-down distribution of wealth from the rich to the poor. That is their real agenda; they just do not have the guts to expound it. Instead, they choose a superficially easy target: meddling bureaucracy, red tape, inefficiencies in the public service—of which there are clearly examples—burdens on business or gold-plating from Brussels.

It is worth having that philosophical debate, because I am glad to meet the Conservatives on that ground. We on the Liberal Democrat Benches believe that the real answer is a coherent and radical programme of reform. We believe in individualism and civil liberties, as is often heard from these Benches. We want neither the nanny state nor the concept that the man in Whitehall knows best. But we also know, as the noble Lord, Lord Garel-Jones, acknowledged, that when we go to people's doorsteps, they usually ask: "What are the Government going to do about health, education and transport?" They know that the market's hidden hand will not deliver the health, education, transport or even public broadcasting that they want. The people want a political process responsive to their views and quality, value, effectiveness and accountability in their public service.

So where the Motion misses the point is in not accepting that the answer lies in political reform and, to use that horrid European word, subsidiarity—basically, moving power and decision-making to its most effective level. We have one of the most over-centralised states among advanced democracies. We need to get power out of Whitehall and to the appropriate level: whether local, regional, national or, indeed, European. Considering the work now being done in Europe and the century that stretches ahead of us, I should like much more emphasis on Europe being able to promote an effective foreign and security policy.

Lord Vinson

My Lords, I am anxious that the noble Lord should get to the point in this short debate dealing with regulation rather than with foreign affairs.

Lord McNally

My Lords, I will make my speech in my way, as I listened to the noble Lord make his in his way. There is a philosophical point to this, and I am making it. If he does not understand it, that is almost as much his problem as it is mine.

I am talking about moving power and decision-making to the right level. Get decision-making to the right level, and we shall deal with regulation. Is that clear enough? Right! Get power up to Europe on the important, global issues: foreign policy and security. Get power to the regions because, far too often, our regions are overburdened by Whitehall decision-making; and get power back into local government. That redistribution of power and moving power out of Whitehall would be one answer to the problem of over-regulation.

The problem is that having started off as genuine reformers, the Government have become machine-minders. They have lost their enthusiasm for reform. For example, we do not know what progress has been made on the Freedom of Information Act 2000. In fact, it has been handed over to the noble and learned Lord the Lord Chancellor as a damage-limitation exercise. Again, if the noble Lord, Lord Vinson, does not know what that has to do with regulation, I point out that unless we open up government, we give power to the bureaucracy.

Likewise, what has happened to the Civil Service Bill? One worry of recent years has been the centralisation of power in No. 10. Indeed, when the Deputy Prime Minister, to whom reference has been made, was told on 18th October by Annette Brooke, MP, that she was not sure that she understood the structure of power in No. 10, he replied: "Join the club". We now have a Policy and Government Division, a Communications and Strategy Division and a Government and Political Relations Division, all headed by political appointments. A central problem of Government is what has happened to reform of the Civil Service. In a lecture given recently by Mr Peter Hennessy, he said that at a Cabinet meeting of 7th March 2002, there was a review of the Civil Service, when it was said that everyone present was, deeply shocked by the sheer incompetence of the civil service to deliver in the modern world". As one Minister put it, the Cabinet Secretary's publicly expressed belief in the need for a Civil Service Act to clarify the proper roles and functions of a politically impartial Civil Service was, a … stunt to entrench the incompetence of the civil service". Is that an accurate review of the Government's attitude to the Civil Service and to a Civil Service Act? If it is, there is serious problem at the heart of government that must be addressed.

If we are to talk about the power of the bureaucracy and about over-regulation, we must address the reform of the machine and the system of delivery. lithe Government have some idea that they can take credit for anything that goes right in the economy or in government but can quickly blame everything that goes wrong on the incompetence of the Civil Service, that would be a sorry state of affairs.

As long ago as 1997, in an earlier lecture, Peter Hennessy warned against "politicised over-mightiness" in government. He said: The notion of a single profession with shared procedures and the bonding of a common ethic is no longer sustainable in an age of executive-type agencies, substantial contracting-out of work if not outright privatisation, separate recruitment and remuneration systems and a determined search for outsiders from beyond the public service to come in and improve performance and the delivery of the service to the public". That was written in 1997, at the end of the period of Conservative government, but it could have been written today. We are a long way from what Peter Hennessy determined as the ideal: The public service impulse—the desire to join a disciplined profession with its own ethic for the purpose, under democratically legitimated political guidance, of shaping or implementing public policy for the wider public good". He also said that that remained, one of the most powerful motivators for those who seek a career in the public service". If some of the things that I have suggested are true and there is, inside Number 10, a policy unit that believes in micro-management, rather than a Civil Service that believes in professional management, professional people and professional tools, we might be getting close to the core of poor delivery. In 1996–97, I had the honour of serving on the study of the public service carried out by one of your Lordships' committees, under the chairmanship of the noble and learned Lord, Lord Slynn of Hadley. I challenge the Government to call that committee back to the colours to examine our public services again, five years into the life of the Labour Government, as we did after 18 years of Conservative government. I know that the noble and learned Lord, Lord Slynn of Hadley, would be enthusiastic to do that, and I would certainly sit on the committee again.

It is not just the machinery of government that needs action, as the noble Lord, Lord Peyton of Yeovil said. We need reform of Parliament. There is too much sluggishness and too many rumours that things are being kicked into the long grass. There is no real feeling that the Government share the belief, which the noble Baroness, Lady Boothroyd, expressed in a recent lecture, that Parliament must reassert itself against what the noble Baroness described as the "insider trading" style of British politics.

By all means, we should have the war on red tape and over-regulation and keep up the drive for quality, efficiency and delivery in our public services, but we should not lose sight of the benefits of having a public service that is selected on merit, politically neutral and imbued with an ethos of public service. Accompanying the reform of public service, there should be more open government, devolved government, a healthier and more responsive democracy, a fairer voting system, a reinvigorated Parliament. That is the holistic picture of over-regulation or over-government; it is part of the reform. The impression—not least from a rather grey Queen's Speech—is that we have grey machine-minders, instead of a Government committed to radical reform who could deal with many of the problems associated with the Motion.

4.24 p.m.

Baroness Wilcox

My Lords, I thank my noble friend Lord Peyton of Yeovil for introducing this important debate. He described with wit and chilling clarity the proliferation of regulations, the sheer size of government today and the dramatically increasing tax burden being imposed on each of us and on the beleaguered business community. However, my noble friend must be disappointed that no one on the Labour Benches thought the subject worthy of attention. We are, therefore, grateful to the noble Lord, Lord McNally, for giving us the Liberal Democrat view on this important subject, although we do not agree with all that he said.

I shall start with the Government's public expenditure. The Chancellor is raising government consumption by approximately 10 per cent a year in money terms. We can now see how much that costs us—the taxpayers—following the publication of figures by the Office for National Statistics. In 2001, 8 per cent more money was spent on public services. It is alarming that that has resulted in only 3 per cent more or better services. The implication of the figures is that, as we on these Benches argued, the extra tax revenue has been less productive than if it had been left to us to decide how and when to spend our money. I fear that that demonstrates that the Government's interventionist instincts have created a situation in which not just businesses but our public services suffer under a sea of new taxes and a sea of red tape.

The competitiveness of British businesses is being undermined, as is their ability to win orders and create jobs. As failure to reform public services translates into failure to achieve improvements in standards on the necessary scale, the indications are that the Government's only answer will be to spend still more. That will lead to escalating problems and an ever-widening vicious circle and, eventually, to further tax increases and/or additional borrowing.

As resources are drained away from the business sector, the Government's failed approach to public services could, in time, undermine the foundations of our economic strength. On these Benches, we are keenly in favour of reducing the burdens on business, introducing sunset clauses, making special efforts to protect small firms and, once again, fighting our corner more vigorously in Europe. Given the opportunity, we will reform public services to ensure better delivery for people and businesses alike, while reducing the burden imposed by our failing services.

Our party is so concerned that we have set up a new commission to examine both specific regulations and the general burden of regulation to provide a new, systemic approach, incorporating the costs, benefits and outcomes of present and future regulation. No doubt, the Wicks group, referred to by my noble friend Lord Garel-Jones, will be listened to intently for City regulation. In outline, we would like to see the regulatory burden imposed by each government department fall year by year. As my noble friends Lord Lang of Monkton and Lord Vinson said, we want to see sunset clauses for new regulations, and we want to ensure that small firms are protected from onerous regulation by raising the employee threshold at which they apply. Increased business taxes inhibit business investment, holding back the future productivity and competitiveness of the UK economy. In November, ONS figures recorded business investment at its lowest level for 37 years.

The Government are committed to huge increases in public sector spending over the next few years. That spending assumes a buoyant economy and a thriving business sector. However, their approach to business—piling on costs and undermining competitiveness—threatens to undermine the revenue sources on which their plans depend. The CBI claims that the Government have increased taxes on business by £47 billion over the period 1997–2005.

In the latest Budget the Chancellor announced major increases in both taxation and public expenditure. Much of the extra taxation burden is on business with an increase from April 2003 in employers' national insurance contributions raising £4 billion a year and an increase in self-employed NICs raising £450 million a year. It is a tax increase which we on these Benches strongly oppose. The climate change levy represents another significant increase to business costs despite government claims that it is "fiscally neutral".

The Government have presided over a period of great prosperity, much of it due to difficult decisions taken by previous governments. Annual productivity growth has halved. In the first five years of Labour government, average annual productivity growth was 1.3 per cent. In the previous five and a quarter years, it was 2.7 per cent. And, after Labour's £5 billion a year tax on pension funds, the Red Book projects that the savings ratio this year will be 3.75 per cent—the lowest annual savings ratio since records began in 1963.

We have overwhelming evidence that the UK economy is starting to suffer and that the Government's favoured strategy of throwing money at the problem is to be exposed finally as unsuccessful, inefficient and seriously wasteful. What we on these Benches propose is fundamental reform so that the root of the problem is tackled. Whatever happened to the Government's Better Regulation Task Force'? Maybe the Minister will tell us.

I was a businesswoman for many years. After that I was privileged to be chairman of the National Consumer Council and represented people who bought both goods manufactured by businesses and services provided by the public and private sectors. In both roles I learnt one thing in particular: governments cannot and should not run things. This Government cannot keep their hands off anything. Government departments are growing and growing. If they are allowed to continue, the sheer size and meddling will stifle every bit of freedom and initiative in our beloved country.

4.33 p.m.

The Minister for the Cabinet Office and Chancellor of the Duchy of Lancaster (Lord Macdonald of Tradeston)

My Lords, I, too, am grateful to the noble Lord, Lord Peyton, for the opportunity to address these questions today. In facing the noble Lord in the past, I have usually disappeared quite quickly down some hole that he has set in the road ahead for me. I thought that I might avoid it today but I notice that at the end of his speech he came up with a strong swipe at transport. However, I welcome the professional contributions made today from obviously a depth of personal expertise. I welcome, too, the recognition of the complexity of modern-day society and its widespread aversion to risk, which is often driven by concerns reported strongly in the media.

This Government put regulation very close to the top of their priorities. The Prime Minister himself drives it with a particular passion. When we look at regulation—and I shall explain later to noble Lords why—we see that in some areas we come near the top of the international league, according to many objective experts. However, perhaps I may begin with an area that was not too much touched on, but was raised by the noble Lord, Lord Peyton.

Since 1997, there has been a growth in the number of people working in the public sector. That growth has been around 200,000 extra public servants. But that is inside a growth in employment of approximately 1.5 million more people in work, which has given us the lowest unemployment for decades. The interesting point here is that the proportion of public sector workers in relation to the overall workforce has fallen from 19.7 per cent in 1997 to 19.3 per cent in 2001. I make no apologies for the fact that there are 20,000 more teachers or 80,000 more classroom assistants and helpers or that there are 40,000 more nurses, and I doubt whether many noble Lords would complain.

In central government, again there are interesting statistics. In 1976 there were about 750,000 civil servants. That reduced to 494,000 in 1996, the year before the election. Today, the number is 4,000 down on that—490,000 civil servants. The trend has been up since 1999 but, interestingly, the pay bill costs in 2002–03 will drop by 1.7 per cent. Even in Scotland where, clearly, there has been a significant change in its governance, the number of civil servants there has increased by only 500 to just under 11,500. In Wales, the increase has been greater—up by 1,160 to 3.370. Interestingly, the number of quangos has gone down. In 1997, there were 1,128. That has dropped by 103 to 1,025, according to the latest figures that I have.

Therefore, I cannot accept that there is this rapidly growing government that has been described to me. The swings that were taken at the Deputy Prime Minister were a little unfair. His department is dealing with local government with 400 councils, including important areas such as planning, housing and the regions. As far as I recall, the number of Ministers is not the eight mentioned by the noble Lord, Lord Peyton, but six. However, I am happy to be corrected on that.

I should prefer to look at regulation in three areas. Perhaps, first, we may look at it in one of its most important forms: economic regulation. Looking internationally, the Wall Street Journal put Britain in the top 10 for its business-friendly environment, second only to the United States among major economies. The Economist intelligence unit, indeed, put us third on similar measures. Perhaps most tellingly, in October, the OECD report stated that Britain was at the forefront of regulatory reform. Therefore, if we look at the activities of this Government, we can see that they have been trying to keep Britain at the competitive edge of international business.

We have a regulatory impact unit; we have a Better Regulation Task Force, to which reference has been made. The Better Regulation Task Force is made up largely of business interests. It is chaired by David Arculus, a notable businessman. It has put 350 recommendations to government since it was formed in 1997 under the noble Lord, Lord Haskins, and all but nine have been accepted.

Therefore, when we take that in conjunction with the DTI initiatives to create the small business service—at present it is trying to streamline the plethora of some 500 grants—and when we think of the depth of consultation that has taken place with business and stakeholders across society, it helps to explain why our record on economic regulation internationally has been so widely applauded.

The second area is, admittedly, contentious: that of social and environmental legislations. Again, noble Lords would not expect me to make any apologies for bringing in a minimum national wage; for extending paid holidays to poorer workers; or for bringing in parental rights or rights for the disabled. However, I accept that there are difficulties as regards the Working Time Directive and the Employment Act. But in those areas we consulted thoroughly with the business sector.

Much of this regulation comes from Europe. Approximately 50 per cent of our regulation emanates from Brussels, and in the area of the environment it is probably around 80 per cent. We try to counter anything which seems overly damaging by scrutinising it in great detail through a Cabinet Committee. the Regulatory Accountability Committee, which I chair. Involved in the work of the committee are the chairman of the Small Business Service and the chairman of the Better Regulation Task Force.

We work very hard in Europe. Noble Lords may have heard of the Mandlekern report which seeks to bring some British disciplines into the activities of Brussels—for instance, regulatory impact assessments. I am delighted to say that the Mandlekern report was backed by the Heads of Government. The Commission now has an action plan for better regulation, and I was recently in Brussels lobbying to make it as effective as possible.

The third category relates to bureaucratic red tape, which has been the bane of British life for many decades. I remember from when I was in business the efforts made by Michael Heseltine to make a bonfire of red tape. He would admit himself that he had only limited success.

We have introduced a regulatory impact unit to build on what was there before. We have a public sector team inside that which has produced some 300 recommendations from across the public sector to strip out unnecessary regulation. We place great emphasis on our regulatory impact assessments and we have brought in the National Audit Office to monitor them much more strongly.

We have produced a regulatory action plan containing 268 measures. That was published earlier this year and its proposals will be delivered inside four years. We have built on the Regulatory Reform Act 2001 and we have introduced a new channel for regulatory reform orders, of which there are 63 in our action plan, to be enacted over the next three or four years.

We have established an office for public service reform which is working with departments. We have said strongly to departments that they must try to stop the flow of regulation. We have tried to place gateways in departments—successfully in areas such as health and education—to ensure that any proposed legislation is scrutinised thoroughly and discussed with those in the front line before it is introduced. This system is in a rudimentary form in some areas and we want to make sure that it is refined.

As to the stock of existing regulations, the regulatory reform orders are available and can be taken up by trade associations, lobby groups and MPs. When adopted by a Minister, they can run through Parliament on a faster track than other legislation.

A number of noble Lords raised the question of statutory instruments. Given the high standards of debate in the House, this is a rather unfortunate area in which to find distortion. Of the 4,642 statutory instruments, about 97 per cent of them, by our estimate, have no impact on business. The introduction of around 700 last year was the result of emergency measures related to foot and mouth disease. We hope that most of those will fall out from this year's total, which will be significantly lower. Many relate to road consent regimes. We hope that the Local Government Bill will help to make the process much easier and much less likely to lead to bureaucracy.

The Conservative Party spokesperson asserted that it would take 65 years to introduce all the measures in our regulatory reform plan. Again I do not recognise the figures involved. I worry, too, about some of the costs that the Opposition attach to regulation, which at times seem to be plucked from the air. The noble Lord, Lord Lang, mentioned the British Chambers of Commerce—a body with which I worked closely in the past and for which I have great respect. I noticed that one of its officials recently said that the red tape index was something that they had developed on the back of an envelope. That does not give me much confidence in the figures of billions that were attached to it.

Perhaps I may now refer to some of the individual points that have been made. I have tried to explain to the noble Lord, Lord Peyton, that the size of government is perhaps not the problem that he fears it will be. I agree with him that in the Government's approach to these issues it is always better to use the business maxim and try to "under promise and over deliver". I shall adhere to that approach where I can.

As a former Secretary of State for Scotland, the noble Lord, Lord Lang, was able to govern Scotland—he did so with great aplomb during my time—with five Ministers. Unfortunately, the Scottish Office which followed—in which I was a Minister—put the total up to seven. I sometimes felt in coming from business into government that I was doing three times the work I had done before, and so it came as no surprise that the figure went up from seven to 22 under the Scottish Executive. But that decision was taken by elected Scottish representatives following the decisive view of the Scottish people in the referendum that led to the 1999 elections.

As to the points made about the DTI, I would argue that it has listened to business in regard to unemployment law and that it has listened to suggestions made by the Better Regulation Task Force on the issue of the red tape day. These are predominantly business groups. As to the issue of sunset clauses, we agree that it was in our manifesto. We shall work on it and try to ensure that it is brought in as appropriate. Of course it is not appropriate for all legislation. Certainly we will fight any unnecessary regulation, not only at local level but in the EU. If the noble Lord will allow, I shall not go into his rather sombre analysis of the PBR, with which he would not expect me to agree.

The noble Lord, Lord Vinson, referred to the Better Regulation Task Force. We have given it a great deal of power. We have also introduced a business regulation team, consisting of secondees from big companies in the private sector, which has been working with trade associations, particularly in the area of fashioning the regulatory reform orders, to strip out any unnecessary regulation. Work is being carried out at present on fire regulations in an attempt to rationalise 100 years of accretions in that area.

I agree with the noble Lord, Lord Vinson—as I do with many of the points made by other noble Lords—that we have to have a more sensible policy towards risk. I recommend to him the document produced by the Cabinet Office in the last month which takes us through some of the complexities and contradictions of a more robust approach. I cannot agree with the noble Lord's doom-laden conclusions, but I accept that there can be unintended consequences. Who can ever forget the Dangerous Dogs Act when a politician is being badly mauled by the press pack? So I take all the points made in that respect.

I think the noble Lord, Lord Vinson, was a little unfair when he said that the FSA is not open; that it makes its decisions in private. It holds all its board meetings in public and publishes its minutes on all decisions. I believe that that procedure has built a degree of public confidence in the FSA.

Lord Vinson

My Lords, the point I was trying to make was not that the FSA does not hold its meetings in public but that it holds them like a circus in public—88 people and a huge gathering, with no one allowed to speak for more than two minutes. It is such a farcical way to take decisions. That is the point I was trying to make.

Lord Macdonald of Tradeston

My Lords, I thank the noble Lord for that clarification.

The noble Baroness, Lady Flather, referred to complexity and risk aversion and asked whether matters have gone too far. Again, I recommend the reading of a recent document. It is an area that we take very seriously. The noble Baroness talks about red tape surrounding doctors; but when a case arises such as that of Harold Shipman, inevitably more regulation is demanded. However, we have put our public sector team into the doctors' surgeries and they have come out with dozens of recommendations to try to remove that red tape. I take the point that there is far too much paperwork for doctors, just as there is for teachers and for the police. We are working in all of those areas.

Baroness Flather

My Lords, I accept that there are exceptional cases which need exceptional treatment, but the mistake is to think that by providing for one exceptional case we can control everything. Exceptional cases will continue to arise, and overregulation as the result of an exceptional case catches everyone. This happened even under the Tories in regard to local government. I recommend that we should treat exceptional cases as just that.

Lord Macdonald of Tradeston

My Lords, sometimes exceptional cases throw up areas where regulation is required, but I was attempting to agree with the general thrust of the noble Baroness's remarks. Society is more risk averse now. It is also safer in many areas. Our roads are much safer. The situation is much safer for workers on the railway; but I have no doubt that the costs of rail construction have risen because of safety demands. These matters have to be balanced, as I am sure the noble Baroness will understand. We do not want to "gold-plate". That is one oft he messages that we have sent in to our debates in Europe about better ways of doing things there. Yes, of course, our Civil Service has a great deal of integrity in the way in which it carries through legislation. I do not think that we should necessarily want that to be compromised, but I am quite prepared to do battle if there is any over-compliance there. I hope that we shall be able to answer the noble Baroness's question about whether we have improved health and education with a resounding "yes" before this term of government ends.

I turn to the well-informed points made by the noble Lord, Lord Garel-Jones, about governance, particularly in the City. As to consultation, there was a recent Cabinet code of' practice on consultation. The evaluation indicated a very low level of complaints about individual consultations. The range of matters used to supplement written consultation was quite wide: we have web debate forums and so on. So we have been working in many of the areas about which the noble Lord is concerned. I have mentioned gold-plating, and there is the covering of all forms of commercial risk—I return to the Cabinet Office document. The over-burdening of the regulators is presently being addressed by the Better Regulation Task Force. I strongly agree with the thrust of the noble Lord's remarks, but I should disagree with any implication that the regulatory impact assessments were not effective. They can he made better, and we are working on that.

I see that the time allowed to me is almost up. I recommend to the noble Lord, Lord Plumb, a reply given by my noble friend Lord Whitty earlier this year to the noble Baroness, Lady Byford, in regard to some aspects of regulation relating to the agricultural industry.

The noble Lord, Lord McNally, offered a measured analysis. I agree with much of what he said. He knows that the Government are committed to a Civil Service Bill, but the role of the Cabinet Office is one of nurturing a whole range of units, most of them led by civil servants. Sir Andrew Turnbull has taken that over and is driving it with great vigour. We await the suggestions of the PASC sub-committee and of the Wicks committee.

The noble Baroness, Lady Wilcox, has had a distinguished business career and I listened to her remarks with great interest. I shall not follow her into Treasury territory. Fundamental reform is what we are about. I believe that the great range of measures in which we are engaged in terms of regulation should help.

4.55 p.m.

Lord Peyton of Yeovil

My Lords, I thank all of my noble friends who have taken part in the debate, and particularly my noble friend—I do not always say this—who is such an ornament on the Front Bench. I appreciate what she was kind enough to say.

The noble Lord, Lord McNally, is quite wrong in thinking that I spend my weekends shooting pheasants. It is more than 40 years since I even tried to shoot one.

Lord McNally

My Lords, perhaps the noble Lord might think of me as a different kind of ornament then.

Lord Peyton of Yeovil

My Lords, l did say that if it came to shooting, there are one or two people whom I should like to shoot straight at.

In the few minutes allowed to me, I am hound to concentrate mostly on the noble Lord, Lord Macdonald. I always welcome him on the Bench opposite because I have the odd feeling that, unusually, he has ears, That does not make him remarkable. But what does make him remarkable is the fact that he is a Minister who knows what ears are for. He actually listens. Even more remarkably, from time to time he actually does something, and that is very welcome.

I was, however, slightly disappointed by the noble Lord's opening remarks. He opened with a tremendous burst of small-arms fire in the form of statistics. I felt very sorry that I had not brought my umbrella with me, because I needed to protect myself from the shower.

I have two or three brief points to make. First, I have come to suspect that there is no one in the Government who knows how to add up. They specify the great benefits that they have conferred on the needy and then say, "Of course, no one would grudge that sort of money". Perhaps no one would. But we are worried about the cumulative burden of all the benefits that the Government so nobly and generously confer at other people's expense. That is the worry, and I hope that the Minister will take the point.

The Minister mentioned the magic word "consultation". Only recently I have been told of cases of consultation where the person consulted was 'very much against the proposals and was told. "Well, it doesn't really matter what you think. We're going to do it anyhow". I refer to a small business in Trafalgar Square which is such a source of contentment and satisfaction to everyone who tries to use it.

If the Minister would be kind enough to give me a copy of the Cabinet Office paper he mentioned, the title of which I did not hear, I should be very grateful. One never knows, I might learn from it. I previously invited him to, "Read, mark, learn and inwardly digest" the book Small is Beautiful. I repeat the invitation. I couple with that a suggestion that, when the Minister is feeling strong in stomach and head, he might even cast an eye over the Civil Service Yearbook. He will find there traces of smugness. He will also find that tendency which characterises almost every action of this Government: to confuse promise with performance. It is a mistake that goes on all the time. I do hope that he will read it, and I hope that he will not feel too ill after doing so.

The time has come when I must withdraw the Motion. I certainly have absolutely no desire for any papers, so I shall do so. But I very much hope that something of what I and my noble friends have said will have sunk in—I know that the noble Lord is receptive. I hope that he might persuade his colleagues every now and again to look before they leap. I beg leave to withdraw the Motion for Papers.

Motion for Papers, by leave, withdrawn.