Regulatory Reform Bill
Public Bill Committee, 29 March 2001.
Standing Committee A
Clause 6 - Document to be laid before parliament
Brian Cotter (Liberal Democrat, Weston-Super-Mare)
I beg to move amendment No. 38, in page 5, line 23, at end insert—
`and a written statement as outlined in subsection (2A)'.
Frank Cook (Labour, Stockton North)
With this it will be convenient to discuss amendment No. 37, in page 6, line 6, at end add—
`(2A)The statement referred to in subsection (1) is a statement that in the opinion of the Minister his draft proposals do not have any significant constitutional implications.'.
Brian Cotter (Liberal Democrat, Weston-Super-Mare)
We have tabled the amendments because grave reservations have been expressed that the Bill's wide scope could lead to constitutional abuse. To narrow the Bill's scope artificially would defeat its object and reduce its overall effectiveness, but some form of safeguard needs to be introduced. In the other place, the Government undertook that the Bill would not be used in that way, but acknowledged that it was extremely difficult to define whether a measure was unconstitutional, or controversial.
The 15th report of the Delegated Powers and Deregulation Committee referred to Lord Falconer's comments on the problem:
``It will, he said, be for Ministers to decide whether or not the use of the new power would be `appropriate'...likening the task of so deciding to the difficulty of defining an elephant. `You cannot describe it but you know it when you see it.'''
I understand that stance, particularly given that we have no formal written constitution to act as a measuring stick. I also welcome the Government's promise, made in the other place, not to implement such legislation. However, I cannot share Lord Falconer's faith that future Administrations will interpret an ``elephant'' in the same way and comply with the agreement. Because of the Bill's constitutional implications, some safeguard must be put in place.
We reject the subjective opinion test, but recognise that it is difficult in practice. If the amendments were accepted, any Minister seeking to implement an order would have formally to produce a categorical statement in the parliamentary document to the effect that, in his opinion, the order in question had no constitutional implications.
We have chosen a ministerial statement as the means of ensuring constitutional sobriety because it would be more effective than seeking to define the measures to which the Bill should apply, which would narrow the Bill's scope. Instead, a personal pledge would be made, which would deter rogue Ministers who were able, and inclined, to abuse the power. Such a statement would also make the Minister publicly accountable for his actions, reassure Parliament and the public of his intentions, and ensure that he were not tempted to misuse the legislation.
The amendments are necessary to ensure a proper consultation process. They would act as a further safeguard, ensuring that organisations had adequate opportunity to state their case, and provide another test against which the Committee, or Committees, can measure the order. Were the Committees to feel that the consultation process was lacking, their decision as to whether to accept the order might be affected. A further constitutional safeguard would be provided: by having to account for the details of consultations, Ministers who wanted to abuse the power would be unable to undertake half-hearted consultations in an effort to prevent opposition to any controversial measures.
The amendments address two important points that were also raised in the other place, and I look forward with interest to the Minister's response.
Richard Page (Conservative, South West Hertfordshire)
I thank the hon. Member for Weston-super-Mare (Mr. Cotter) for moving the amendment. I had hoped that the hon. Member for Twickenham (Dr. Cable) might have made a guest appearance to reinforce the arguments that he has advanced, but I shall make a few comments.
As I understand it, a proposed regulatory reform order will be accompanied by a statement of the relevant Minister's views on its compatibility with the European convention on human rights. Lord Williams of Mostyn gave an undertaking in the House of Lords on 2 November 2000 that Ministers would always inform the House whether they were satisfied that secondary legislation subject to the affirmative procedure was compatible with the convention. The hon. Member for Weston-super-Mare has outlined that.
I do not always support the Government, but, with an election coming, I am practising with my new Red Box to get into the swing of supporting the system. I shall move on.
The Government have not suggested in the explanatory notes that any prospective orders will have constitutional implications, such as the hon. Gentleman indicated. It would, therefore, be difficult to implement the amendments, and I do not see any reason to support them.
Graham Stringer (Labour, Manchester, Blackley)
Before I discuss amendments Nos. 38 and 39, I would like to add a final point to our discussion on clause 5 and its relation to the devolution settlement. I said, at the end of Tuesday's debate, that the powers to make regulatory reform follow the devolution settlement. I should have added that the power under clause 1 had not been devolved to the Welsh Assembly. What I said was not incorrect, but did not give the full picture.
The amendment has two aims. First, it tries to define what is appropriate and to deal with the problem of the definition of elephants. That was referred to in debates in the other place. Secondly, it seeks to use detailed wording to tie down rogue Ministers, or even rogue Governments. That theme has run through debates on the Bill. The hon. Member for Weston-super-Mare suggested that a rogue Minister might be tempted to undertake only half-hearted consultation, in seeking to introduce a constitutional regulatory reform order in the guise of something else.
That misrepresents the strength of the consultation process that is laid down in the Bill. As was said on Tuesday, that process is not just a matter for the Minister. The Committees of both Houses will have to be satisfied that the consultation has been properly carried out. The Minister will have to satisfy a host of conditions, and the Committees can insist on further consultation, or even carry it out themselves. The structure of the Committees and of the consultation process means that a rogue Minister should not be a problem.
We are left only with the problem of appropriateness. The details that the Committees must address will reveal whether the Bill could cause conflict and disagreement over constitutional matters. If such a case were proven, that would be an inappropriate path for the measure to go down and even a rogue Minister would be too sensible to go down it.
The amendment is unnecessary because the structure of the Bill deals with the issue thoroughly. I am happy to echo my noble and learned Friend Lord Falconer, who said that it was not the intention of the Government to bring forward constitutional reform via the regulatory reform order process. I ask the hon. Gentleman to withdraw the amendment.
Brian Cotter (Liberal Democrat, Weston-Super-Mare)
It is important to raise the issue and to ensure that consultation really is consultation—that approach should apply throughout government, at all levels. Consultations are frequently embarked upon. Through discussion of the Bill, we have highlighted that we are concerned that consultation should be of a proper length, correctly done and that those who are concerned with the matter should be contacted. The Minister said that we had received reassurances from the other House and I appreciate that I have taken on an elephantine task in trying to identify rogue elements in the Bill. In view of the latest Conservative-Labour pact, I happily withdraw the amendment.
Amendment, by leave, withdrawn.
Frank Cook (Labour, Stockton North)
At this point I draw the attention of the Committee to the fact that male hon. Members may divest themselves of their upper garment.
Andrew Lansley (Conservative, South Cambridgeshire)
I beg to move amendment No. 24, in page 6, line 1, after `benefits', insert `and disbenefits'.
Frank Cook (Labour, Stockton North)
With this it will be convenient to take amendments Nos. 25 and 26.
Andrew Lansley (Conservative, South Cambridgeshire)
I am glad that our debate continues in the same good humour as that which characterised Tuesday's discussion. However, I hope that the hon. Member for Weston-super-Mare will not mention pacts again because that could lead us into bad humour. We would do best to avoid that.
The purpose of amendments Nos. 24, 25 and 26 relates to the comprehensiveness and efficacy of the document that will be laid before Parliament under clause 6. Amendments Nos. 24 and 25 relate to paragraph (i), which requires the document to illustrate the benefits that will arise from implementation, other than savings on costs identified in paragraph (h). The amendments seek to note the disbenefits that might flow from a proposal, in addition to the benefits—neither of which might be cost related. It does not always follow that elements that are not benefits are necessarily burdens. The Minister may ask for an illustration and I confess that I do not have one, but it appears to be true that if there are benefits that are not cost related there may also be disbenefits and, in so far as they do not impose costs, they are not necessarily burdens. I have now thought of an example. Clause 2 makes it clear that
``any burden which affects only a Minister of the Crown or government department''
is not included. In the context of regulatory reform orders, there may be disbenefits which are not cost-related but impact on Ministers and Government Departments, so they would not be burdens under the definition in clause 2. We want to be fair to Government Departments and it should be clear in the document to be laid before Parliament whether those disbenefits are covered.
I confess that the purpose of amendment No. 26 is not comprehensiveness of drafting. We perceive a significant gap in the armoury of the material required under clause 6 and the document to be laid before Parliament. The clause does not require a regulatory impact assessment as such, but many of the matters that would be included in such an assessment are included: burdens imposed, protection that must be maintained, legitimate expectations and, in paragraph (h),
``savings or increases in cost''
are isolated. The amendment would require
``a statement analysing the financial and other impact on persons likely to be affected by any of the provisions''.
Its purpose is not simply to ask for a regulatory impact assessment because, as hon. Members are aware, such assessments tend not to be comprehensive or uniform. The purpose of the amendment is to make it clear that we are looking not for aggregate estimates of cost, but to discover what the disaggregated impact might be on persons, industry sectors and sub-sectors, small businesses and so on.
I want to refer to one of the five consultation documents and will come to the others later. My reading matter has burgeoned during the past two days. The Minister said that five consultation documents were published in anticipation of the passage of the Bill. They are interesting because if they are intended, as they must be, to pave the way towards the preparation of a document under clause 6 in due course and are illustrative of what is occurring under the preliminary consultation in clause 5, they raise some interesting points.
The Department of the Environment, Transport and the Regions issued a consultation paper on the business tenancy legislation in England and Wales, but there are various problems with it. First, unlike the other four consultation papers, it sets out in detail, item by item, the tests that should be applied under the Bill. The chart in annex A states:
``Would the proposals impose a new burden? ... Would the proposals remove any `necessary' protection under the existing law? ...Would the proposals prevent someone exercising a right or freedom they might reasonably be expected to continue to enjoy?... Would any new burdens be proportionate to the expected benefit?...Would the proposals strike a fair balance?''
On the face of it, all those tests have to be applied under the Bill. The first three tests—Are there new burdens? Is there necessary protection? Are there reasonable expectations?—are perfectly proper. The preliminary consultation should indeed cover those elements. However, it is curious that the latter two tests—those of proportionality and fair balance—are being answered by the consultation document sent out by the DETR before the point at which the DETR, according to what the Minister said in the debate on Tuesday, would have had the necessary information to reach such a decision, as the persons who will be affected have not had an opportunity to tell the DETR what is to happen. In my view, the tests of proportionality, fair balance and desirability—although desirability does not appear in the chart—should be for the document and for the Minister's presentation to the House, not for the preliminary consultation.
The other three tests, and the Government's views on them, could be in the document; that would be perfectly reasonable. However—this is the issue that lies at the heart of the documents to be laid before Parliament—where is the prior test, namely: what are the existing burdens affected by the proposal, how are they to be changed, and where are the burdens to be reduced or removed? If a chart of this kind were to be set out, one would hope, in the context of a deregulatory measure, that the third step would be to illustrate to those receiving the consultation document that there are existing burdens and that they are going to be changed, and the net effect is to reduce or remove burdens. Yet there is no evidence in the DETR document that this proposal is intended in any way to reduce or remove burdens upon persons. Indeed, the opposite is the case. It gives a series of answers to the question,
``Would the proposals impose a new burden?''
On procedures for excluding security of tenure, it says:
``The proposals would impose new burdens''
in the form of
``a requirement for the landlord''.
On ownership and control of the business, it says:
``The proposals . . . would impose a burden on a landlord''.
On whether notices would require information, the answer is ``Yes''.
On renewal procedures, it says:
``One element could be considered a burden—a requirement for a landlord''.
On interim rent, it says:
``Yes—the formula for determining interim rent would be more complex, in the interests of greater fairness.''
So in five instances, the answer to the question whether the proposals would impose a new burden is yes. In at least three cases, the new burdens would apply to landlords in particular. That is interesting in terms of amendment No. 26. The impact assessment should not simply be an aggregate test of savings and increases in costs or benefits, but should isolate and identify for landlords the burdens that will be imposed on them as a consequence of such a measure.
I freely confess that I have no idea whether this is, on balance, a good or a bad proposal. It is clear from the document that burdens will be imposed on landlords. In the interests of fairness and a reduction of burdens on tenants, the proposal is desirable. However, the purpose of the impact assessment is to isolate and identify the burdens that fall upon landlords in particular, because it is they who should have an opportunity in the preliminary consultation to present their arguments to Ministers.
We need not delay ourselves on the Home Office documents, because the Home Office does not attempt a systematic examination of the kind that clause 6 requires. To be fair to Departments, they all set out in the consultation papers a uniform presentation of what the Bill will in due course require to be proven for an order to be passed and a note on the parliamentary consideration of those proposals. However, what really matters in this context is the extent to which those reading the document and looking at the proposals would have their attention drawn to precisely the facts and information that they should supply in order for a document under clause 6 to be created successfully.
The two Home Office documents are essentially deregulatory and I suspect, although I may be wrong, that they could have been introduced under the Deregulation and Contracting Out Act 1994.
It is interesting that the document about private sector housing renewal, which is clearly a substantive proposal, does not include the chart that the DETR sought to introduce on the business tenancies proposal. The document contains a draft regulatory impact assessment, but it is not set out like the chart, which I admittedly criticised. Nevertheless, the chart and the test should be set out in detail. Essentially, the proposal allows the DETR to spend money differently; it is not a deregulatory proposal. We hoped for exceptional proposals, but one of the first five to be introduced is not even deregulatory. It simply permits the Government to spend money, which might or might not benefit the public. That is not deregulation.
The last proposal is curious. The letting of business premises is covered by section 57of the Landlord and Tenant Act 1954. The DETR has included a relevant chart, but the tests are different. It sets out several options and seeks to address benefits, costs and compliance. However, it does not refer in a formal sense to matters such as necessary protection and it adds a first column that concerns risks. The Department is trying to apply what I regard as a risk assessment alongside a compliance-cost assessment, which is not what the regulatory reform order sets out to achieve.
At the risk of saying that we told the Committee so on Tuesday, the more comprehensive we can make clause 7, the more we shall encourage Ministers and Departments to use the structure of clause 6. Indeed, the document should be laid under clause 6, rather than under clause 3, making judgments that should be made subsequently. The structure of the document in clause 6 should be the basis upon which consultation occurs. On the evidence of the first five documents, it is self-evident that Departments are not proceeding down that path, or when they attempt to do so, they are not getting it right. Amendment No. 26 should be included to direct Departments to the necessity of identifying specific impacts that occur on persons. Of course, in that context persons means categories of business, which can be identified by size or sector.
The Fair Regulation Campaign, which is an umbrella body for several organisations, is an effective promoter of regulatory impact assessments. It produced a document—I confess that I do not know when—that contains a checklist for Departments on producing effective regulatory impact assessments. One item, which I referred to previously, states:
``The full commercial impact of regulation, rather than just the cost of adapting to it, is the key factor for organisations. Regulatory Impact Assessments should therefore take account of the effect of proposals on prices, sales and all overheads.''
It is important to understand the commercial impacts of a measure. Unless one has a statement that examines the financial and other impacts of the form that is required in amendment No. 26, it is unlikely that the additional commercial consequences of a proposal will be isolated in the document, so can be understood.
Impacts must be understood as meaning direct impacts in terms of costs—indeed, paragraph (h) may include savings and costs—and indirect impacts in terms of commercial and qualitative effects. Indirect impacts should be a significant part of the document provided in clause 6.
I hope that my colleagues and other members of the Committee have borne with me as I explained the purposes of the amendments and set them in context. I hope, too, that the Minister sees some merit in them and I urge my colleagues to support them.
Graham Stringer (Labour, Manchester, Blackley)
There is certainly merit in the arguments of the hon. Member for South Cambridgeshire (Mr. Lansley) and I congratulate him on doing his homework thoroughly—last night. However, in reality, he is trying to do the work of the Committees of the House and the other place. The points that he raises might well constitute inadequacies in the consultation documents and the consultation itself. However, the Bill's real strength is that it will enable the Committees to detect any such inadequacies at a later stage, should they feel that all the information and the impact on an organisation—whether financial, commercial or otherwise—have not been taken fully into account. In other words, the basic point is that the process will deal with such matters.
The hon. Gentleman raised a number of detailed issues, including the proportionality test, but I shall not attempt to deal with them by working my way through each draft consultation document. During Tuesday's debate, he argued that information should be provided, and I said that one must ask for it before it could be included. However, the real point is that one must have the information.
Sometimes, the information necessary for a proportionate test will be available at an early stage because it became known through the day-to-day workings of the Department, or because—as in the case of the consultation document to which the hon. Gentleman referred—a previous consultation was carried out by the Department prior to producing the document within the framework of the Deregulation and Contracting Out Act and, potentially, this Bill. It is simply a question of including as much information as possible when one can, rather than trying to put the cart before the horse. Therefore, the points that were discussed on Tuesday still apply.
I ask the hon. Gentleman to withdraw the amendment because the process itself will extract any inadequacies. The requirement established in paragraphs (i) and (f) is fairly comprehensive, particularly given that every regulatory reform order must be accompanied by a regulatory impact assessment that, as he said, compares the benefits and costs of each option, and considers not merely the proposals' impact but whether they can be implemented differently. The combination of paragraphs (i) and (f), which refer to clause 3(2), and the process through which the Committees will consider whether the information is adequate, will provide as much information as possible and allow both Houses to judge whether regulatory reform orders are good or bad.
Andrew Lansley (Conservative, South Cambridgeshire)
The Minister said that every regulatory reform order would be required by Ministers to have a regulatory impact assessment attached. However, that is not specified in the Bill, which includes only components of such an assessment. Why does the Minister oppose amendment No. 26, which could be interpreted as adding to the Bill the requirement to which he just referred?
Graham Stringer (Labour, Manchester, Blackley)
Indeed, the amendment could do that. It was suggested in debates in the other place, and in the consultations with the Committees, that the requirement to have a regulatory impact assessment should be specified in the Bill. However, regulatory impact assessments are improving. The Government believe that they have improved the previous Government's process for examining the impact of regulation on business.
In future, the process of regulatory impact assessment might improve further, so we have resisted including specific references to current procedure in the Bill. We would rather rely on the process itself to get to the heart of the matter, and ensure that the full impact of a proposed regulatory reform order on every relevant person is taken into account. I therefore ask the hon. Gentleman to withdraw the amendment.
The hon. Gentleman pointed to clause 2(1)(b) as an example of where burdens will not apply. However, that does not mean that burdens on Ministers or Departments cannot be taken into account if they are affected. It rather prohibits a regulatory reform order from taking burdens solely from a Minister or Department. I know that the hon. Gentleman struggled to find an example, but I do not think that that was a good one.
Andrew Lansley (Conservative, South Cambridgeshire)
I am grateful for the Minister's constructive response, and although I will not dwell on amendments Nos. 24 and 25, I will press amendment No. 26. He argued that there was no need to specify such details in the document under clause 6 because that was the purpose of the Deregulation Committee's scrutiny. However, that argument could equally be applied to cost savings, or to other matters that are specified.
The document will be the basis on which the Deregulation Committee will undertake its scrutiny. It should represent, as comprehensively and helpfully as possible, all the information that the Committee needs to conduct its business. It needs information on the impact on persons, categories of business, sectors of industry and so on. That will help it to ensure that it has examined the evidence in detail.
The Minister rightly said that it is current practice to present regulatory impact assessments in the initial proposals—although that is often done in an eccentric way. Amendment No. 26 is not, therefore, a requirement that such an assessment be attached to each document. As the Minister fairly said, the nature of such assessments changes over time.
I make no bones about the fact that the replacement of compliance-cost assessments with regulatory impact assessments has been an improvement. That is precisely the reasoning behind the amendment. Compliance-cost assessments led Departments and consultees to focus on the direct costs of adapting to a proposal rather than on understanding its consequential impacts. The difference can be enormous, as I will illustrate in a different context in a later debate. Suffice it to say—I am sure that the Minister will not dispute it—that the consequential impacts of proposals can be several orders of magnitude greater than the initial impacts as measured directly by compliance costs.
That is why the document in its current form carries the risk that one will tend to look at specifics. Departments will be tempted—quite reasonably—to try to quantify, as far as possible, the costs associated with what is to occur and the direct burdens. That degree of quantification and calculation gives a spurious definition to the impacts, whereas the subsequent knock-on consequential changes that flow from such proposals are often much more difficult to quantify. They may be expressed within quite large ranges, but they are none the less much greater in the long run than in their initial impact. That is why it is important to set out impacts in detail.
There are two key points, neither of which the Minister has successfully countered. First, it is important to see the consequential impacts. Secondly, it is important to see the impacts by reference to specific industry sectors, groups of individuals or categories of public bodies. Neither of those will necessarily be covered by the document as currently drafted in clause 6. I suspect that their absence, far from making the work of the deregulation Committees easier, will make it more difficult. That is not our objective: our objective is to make the document, at this stage in the consultation, a positive framework that will directly inform the preliminary consultation.
When the proposal is put to the Deregulation Committee, Departments should be able to set out the framework that they have to meet and the gaps in information that consultees can provide to show that they have done their work successfully. The Committee should generally find that there is little flaw in the Government's proposals, not, as the Minister implied, be challenged by the process to prove where the Government had got it wrong. I therefore propose to press amendment No. 26 to a vote.
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment proposed: No. 26, in page 6, line 2, at end insert—
`(ia) a statement analysing the financial and other impact on persons likely to be affected by any of the provisions of the proposed order,'.
Question put, That the amendment be made:—
The Committee divided: Ayes 5, Noes 10.
Ian Bruce (Conservative, South Dorset)
On a point of order, Mr. Cook. I do not want to delay debate. However, I know that you are a powerful man in the administration of this place and I would like you to examine why the original cards summoning hon. Members to the Committee were late and why those summoning us today were also late. I have with me a card, which arrived in my ordinary post. It appears that the card did go on the letter board. Certainly, it was not on the letter board yesterday. It appears that hon. Members are not receiving proper notice of Committees.
I am lucky that my hon. Friend the Member for North Wiltshire (Mr. Gray) keeps me straight on such matters. He told me about the sittings, which I have attended. I note that the hon. Member for Twickenham has not been present once. Perhaps he has received his cards too late to be able to attend. Will you, Mr. Cook, make inquiries about those delays?
Frank Cook (Labour, Stockton North)
I register my regrets about that situation. I give the hon. Gentleman the assurance that I will examine the matter and endeavour to report back later. Clause 7 Representations made in confidence or containing damaging information
Clause 7 - Representations made in confidence or containing damaging information
Andrew Lansley (Conservative, South Cambridgeshire)
I beg to move amendment No. 27, in page 6, line 13, leave out
```shall disclose the fact that the respondent has made representations, but'.''
Amendment No. 27 sets out to relate a respondent's representations to the subsequent disclosure of that information. Ministers can withhold the detailed content of a representation, but the purpose of the amendment is to remove the requirement of Ministers to disclose the fact that a respondent has made representations at all. It may help to reflect on the debate in the other House, which is set out in paragraphs 93 and 94 of the explanatory notes.
It is clear that Ministers recognise that a balance should be struck between a requirement for openness and a requirement to achieve the maximum benefit from the consultation, which might be hindered if those who responded to consultation felt that they were placing themselves at risk. They could be unwilling to disclose confidential or other interests because other persons would become aware of them through their representations.
I note that Lord McIntosh of Haringey appeared not to trust the Government in the way that one might expect. He said that the main reason for requiring the disclosure of information was that, if it did not happen,
``a weak or corrupt Minister might want to keep secret representations that were to the financial or political advantage of the Government and might influence his judgement.''—[Official Report, House of Lords, 13 February 2001; Vol. 622, c. 200.]
It is an astonishing thought for Opposition Members that a weak or corrupt Minister might wish to act in such a way. During our happy and constructive debates, we cannot imagine that such a situation might arise. However, perhaps such a situation is conceivable.
The requirements for a successful consultation could be hindered by the number of instances where the disclosure of representations—detailed or not—led to persons feeling that taking part would reveal confidential information. That is a greater risk than any other. It is a matter of balance and I shall not dwell on it. We have taken a view. I hope that Ministers will reflect upon it and incline towards it, but it is more important to achieve a balance.
Weakness or corruption by Ministers, which could lead them not to disclose representations, would be countered by two facts. First, Ministers can act only on the advice of civil servants, who, in my experience, are not prone to the same pressures. Secondly, the Deregulation Committees may require disclosure of representations, and later in the debate we shall discuss what they would do next.
Therefore, even if Ministers were not required to disclose respondents' names, there would be a check upon them because the Deregulation Committee could require disclosure and examine what had occurred. When people are presented with a preliminary consultation, it is important they can specify that the content of their representations should be kept confidential. Indeed, they should be able to keep the fact that they have made representations confidential from everyone except the Deregulation Committee. On that basis, I hope that the Minister will reconsider and incline towards amendment No. 27.
Graham Stringer (Labour, Manchester, Blackley)
I thank the hon. Gentleman for the amendment, which he has introduced in a fair and balanced manner.
It is a matter of judgment whether it is better to know that influential and powerful figures have been part of the re-regulation of industries such as arms, chemicals or retail. The history of the past 10 or 11 years indicates that on balance we should be open on such matters.
My noble Friends in the other place gave the example of an old lady concerned about her neighbourhood declining because of a change to regulations. Although her written representation had been anonymised throughout the process, she could still be identified. In my view, there are pathways for that old lady through residents and tenants groups. However, the question of whether one is open about consultees remains. On balance, it is better to be open, although there may be rare occasions when it is possible to identify consultees.
Andrew Lansley (Conservative, South Cambridgeshire)
I did not raise the particular instance of the old lady because it did not strike me as the best example. The most likely circumstances in which there would be a risk of impeding the consultation would involve a narrow business sector, such as gaming machines. If someone who had a prospective commercial interest that was not apparent from his holdings—for example, he may have been contemplating a merger proposal—were to make representations relating to the deregulation of a narrow business sector, the disclosure of his representations relating to that sector could indicate that he had previously undisclosed commercial interests at stake.
Graham Stringer (Labour, Manchester, Blackley)
I referred to the old lady because it is the most difficult case. Everyone sympathises with someone in that situation. If people with commercial interests know that their interest will be shown, it will form part of their judgment on whether to try to influence the regulatory reform order. If, as the hon. Gentleman indicated, they have a vested interest, it is sensible and appropriate that that be known. However, a balanced judgment must be made and I ask the hon. Gentleman to withdraw his amendment.
Andrew Lansley (Conservative, South Cambridgeshire)
I know that the Minister is trying to be constructive and that the Government will continue to reflect on the matter while the Bill is being considered. We shall give them the opportunity to do so. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Richard Page (Conservative, South West Hertfordshire)
I beg to move, amendment No. 28, in page 6, line 35, at end add
`and—
(c) is agreed by that committee to remain confidential and not be further disclosed.'.
The Committee will see that my name has been added to the amendment, which moves it up the Richter scale of importance. This is a golden opportunity for the Minister to justify the faith of the hon. Member for Peterborough (Mrs. Brinton). She has left the Room for a moment, but would be delighted to hear that the Minister will accept the amendment when the arguments have been made. The amendment follows logically from amendment No. 27. I am sorry that the Minister did not accept it and I have a sense of foreboding about his response to my comments.
I shall briefly set the scene. The clause makes sensible provision for the action to be taken when someone responds to the preliminary consultation exercise set out in clause 5 and asks that the response is not made public. It will allow Ministers to receive representations on a range of issues of public importance, including crime, civil wrongs and potentially adverse effects of a proposed order. Subsection (2) will ensure that the fact that someone has commented on a proposed order will be disclosed, but the contents will be made public only if that person agrees and if a third person is affected, with that person's consent also. Ministers will have the option of revealing representations without identifying the person making them or the third party involved.
Subsection (3) deals with circumstances in which a person has made representations about a third party which may, in the Minister's view, be damaging to that person's interest or may prove unverifiable. If the Minister believes that such information is untrue or is unable to obtain the consent of the third party, the Minister is not obliged to pass the information to Parliament.
Subsection (4) allows for a Committee of either House to have access to representations made to Ministers in response to the preliminary consultation procedure set out in clause 5. The consultation document accompanying any proposed order will make the potential release of information to a Committee of either House apparent to prospective respondents. The intention is obviously to provide a safeguard against undue or improper influence being exerted on Ministers when preparing regulatory reform orders.
I make no apology for setting the scene, but the Committee can now see exactly how our amendment sits within it. It offers further protection to those who make representations to a Minister on a proposed regulatory reform order and whose comments have been passed to the appropriate Committees of the two Houses. It will ensure that democracy is at work and that the relevant Committees can, if they so choose, see the representations made to Ministers. That will reinforce the safeguards against improper influence--my hon. Friend the Member for South Cambridgeshire referred to some of them--being brought to bear during the consultation period or thereafter, and protect those who made their comments to the Minister in confidence. Members of the House place their trust in Ministers to perform their duties in accordance with the Bill's provisions, although Opposition Members have expressed concern about ministerial power that will be granted under the Bill. In turn, Ministers should be able to place their trust in the Committees of the two Houses to exercise their judgment in respecting the confidences of those who respond to Ministers during the consultation period. Moreover, the Committees of the two Houses will have the power to determine that some representations remain confidential.
We are trying to give the two Committees yet greater influence and power to help them carry out their work. We believe that the amendment is sensible. It is limited in scope and protects the interests of Ministers and Parliament, and, during the consultation exercise, of respondents and the third parties on whom they comment. I look forward to the Minister's response.
Graham Stringer (Labour, Manchester, Blackley)
We have reached a part of our discussion that concerns judgment. The purpose of the amendment is to regulate the relationship between the Minister and the Committee, and to ensure that, where matters have previously been confidential, they remain so. However, the Government think it better to leave such matters to the Minister and the Committee.
Subsection (4) would empower the Minister to disclose matters that he or she cannot disclose under the preceding subsections. During such disclosure, the judgment of the Minister and the chairman of the Committee are important. The Minister might be up to no good, and in such circumstances one would not want to tie the Committee's hands. There should be co-regulation by the Minister and the Committee, rather than rigid rules that might occasionally prove inappropriate.
Ministerial relationships with the Committees of both Houses have been based on understanding and openness. The amendment would prove unduly restrictive and I ask the hon. Member for South-West Hertfordshire (Mr. Page) to withdraw it.
Richard Page (Conservative, South West Hertfordshire)
As you can gather, Mr. Cook, I am very disappointed that, despite the fact that I moved the amendment, the Minister has not accepted it. I hear his arguments, and yet again there is a tendency not to let the Committees do their job fully, taking the view instead that ``nurse knows best''. However, in view of his explanation, and because one of the most important factors is the working practices that will be established as the process gets under way, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 7 ordered to stand part of the Bill.
Clause 8 - Parliamentary consideration of proposals
Ian Bruce (Conservative, South Dorset)
One concern that I have expressed in this and other Committees is whether there is enough time to consider proposals. Often, we depart for the summer or Easter recess, only for a spate of orders and such like to be laid before Parliament. Our constituents then tell us, ``A regulation has come into force that Parliament has not had the chance even to comment on''. In future, will such regulations and deregulations be published, so that our constituents will have a fair chance of contacting us and we can make representations on their behalf? Indeed, the reason why I always open my post in Committee first thing in the morning is because otherwise, representations can come to light two or three days after we have considered the matter in question. People should have proper notice that something is happening, and time to make representations.
Graham Stringer (Labour, Manchester, Blackley)
I agree with the hon. Member for South Dorset (Mr. Bruce) that it is important to have time for consultation and to consider representations. We debated the initial consultation process on Tuesday. The Government are committed to a standard three-month consultation period. The procedure is extracted from the 1994 Act, under which the Committees had 60 days to consider representations and to undertake their own consultation, followed by a further 15-day period. If the House does not sit for four days, or is in recess, the time that it is not sitting is not included in the consultation period.
There must be a balance between detailed consultation and time to get things done, and I think that the Bill achieves that balance.
Brian White (Labour, North East Milton Keynes)
There have been problems when the Deregulation Committee has been set up immediately after the start of a new Parliament. The Committee's Chairman made that point strongly on Second Reading. House procedure must take account of that so that the Committee can properly consider reforms.
Graham Stringer (Labour, Manchester, Blackley)
My hon. Friend the Member for Burnley (Mr. Pike) made that point and I am sure that the House authorities were listening carefully.
Question put and agreed to.
Clause 8 ordered to stand part of the Bill.
Clause 9 ordered to stand part of the Bill.
Clause 10 - Making of codes of practice byministers of the crown
Andrew Lansley (Conservative, South Cambridgeshire)
I beg to move amendment No. 39, in page 8, line 42, after ``Wales'', insert—
`(ba) bodies representative of persons substantially affected by the enforcement activity to which the code of practice relates,'.
The amendment refers to Ministers' consultation on codes of practice for enforcement bodies. A Minister will have to consult representatives of enforcement officers, the National Assembly for Wales, and
``such other persons as he considers appropriate.''
That could include persons affected by the enforcement activity, but does not necessarily do so. When drawing up codes of practice for enforcement, it would be appropriate, in all circumstances, to consult representatives of those substantially affected by enforcement, to ensure that the code of practice met their interests, as well as those of the public or statutory bodies. The amendment would include in the Bill a requirement for Ministers to consult such persons. I hope that the Minister will accept it—that would make the hon. Member for Peterborough very happy.
Graham Stringer (Labour, Manchester, Blackley)
There is little substantial difference between our viewpoints. If such powers were used it would almost certainly be because enforcement powers had been exercised too vigorously. That is likely to have been brought to the attention of the Government or of the Welsh Assembly by the persons affected. Speaking practically, they would already be involved in the process.
On any reading, the word ``appropriate'' will include people on whom regulations are being enforced. The wording already covers the hon. Gentleman's aim, so there is no reason to accept the amendment.
Andrew Lansley (Conservative, South Cambridgeshire)
I am grateful to the Minister. I shall take it that in all circumstances where the enforcement activity substantially affects persons who should be consulted, Ministers will undertake to consult them and that the Bill covers that eventuality. On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 10 ordered to stand part of the Bill.
Clauses 11 to 14 ordered to stand part of the Bill.
Clause 15 - Short title and extent
Graham Stringer (Labour, Manchester, Blackley)
I beg to move amendment No. 34, in page 11, line 4, leave out subsection (4).
This is a standard amendment to show the primacy of the House of Commons in financial matters.
Amendment agreed to.
Clause 15, as amended, ordered to stand part of the Bill.
New Clause 1 - Annual report
Richard Page (Conservative, South West Hertfordshire)
I beg to move, That the clause be read a Second time.
Frank Cook (Labour, Stockton North)
With this it will be convenient to take the following: New clause 2—Expiry of this Act—
`(1) This Act will expire five years after the day on which it is passed unless in the fifth year the Secretary of State for the Cabinet Office by order made by statutory instrument provides for all of the provisions of this Act to continue in force for a further period of five years.
(2) No order shall be made under subsection (1) above unless a draft of the order, which shall be accompanied by a review of the operation of the Act over the previous five years, has been laid before and approved by a Resolution of each House of Parliament.
(3) Every further successive period of five years after the day on which it is passed this Act will expire unless a further order equivalent to that described in subsection (1) above, subject to subsection (2), is made.'.
New clause 3—Annual report—
`.—A Minister of the Crown shall lay before both Houses of Parliament every 12 months from enactment of this Act a report on the operation of this Act, including a report on the operation of orders made under the Act, and any need for their amendment.'.
New clause 4—Review of orders—
`.—(1) Every order made under section 1 will include 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 and for the order to cease to be in effect if there is a resolution to that effect by either House of Parliament within ninety days of that report being laid.
(2) In reckoning the period of ninety days referred to in subsection (1) above, no account shall be taken of any time during which Parliament is dissolved or prorogued or during which either House is adjourned for more than four days.
(3) The report described in subsection (1) above should include a review of the effectiveness of the order and of each of the matters set out in Section 6(2) above in comparison to the statements laid before Parliament when the order was first made.'.
Richard Page (Conservative, South West Hertfordshire)
New clause 1—I am looking at the hon. Member for Weston-super-Mare as I say this—has many similarities with new clause 3, with which we have a great deal of sympathy. However, I must delicately put it to the hon. Gentleman that our new clause is more finely honed and polished than his own, and I am sure that members of the Committee will take that into account.
The new clause has two simple purposes. First, it would ensure that Parliament receives an annual report on the operation of the legislation and on other regulatory or deregulatory matters. Secondly, it would give Parliament advance notice of the measures that the Government intend to introduce under the legislation in the next 12 months. Ministers in both Houses have been explicit about their regulatory and deregulatory aims, laying most stress on the latter. Conservative Members say amen to that. We want to see deregulation introduced in an effective and continuous fashion. However, what kind of organisation relies on a three-year assessment? No business relies on looking to see how it is doing every three years—in fact, I know of many companies that rely on a monthly assessment. In suggesting an annual report, we are merely falling in line with accepted standard practice throughout the commercial world.
With regard to our own deregulation Bill—which was vehemently opposed by the Labour party in opposition—I freely admit that we made a serious mistake in providing that it could deal only with pre-1994 legislation. That meant that the Committee could fish only in that pond of regulation and could not go further forward. The date should have moved forward annually. That is another reason why we should ensure that we flag up problems that have been experienced and successes that have been recorded. The Government were pleased to indicate in appendix C to the explanatory notes that they are contemplating 51 potential regulatory reform orders. If hon. Members can be tempted with that type of information before the Bill reaches the statute book, why should the Government be coy about their future intentions?
Ministers have made considerable use of the opportunities offered by the Bill. They include preliminary consultation with interested parties and outside bodies, such as the Law Commission, the Scottish Law Commission and the National Assembly for Wales. Draft orders will be laid before Parliament so the effect of prospective proposals and burdens may be judged. Future benefits, costs and savings will be assessed along with changes to a Minister's original proposal. Obviously, there will be parliamentary scrutiny of such proposals by either House or their Committees. The regulatory impact unit in the Cabinet Office, which will be aided and abetted by the Small Business Service and the Better Regulation Task Force, will back up that process, and the Minister for the Cabinet Office lovingly described its work on 19 March when she moved the Bill on Second Reading.
The amendment raises a straightforward issue. The Government have told the House that they are happy to have the advance assessment of proposed reform orders scrutinised, which is fine. However, the actual record should be examined annually so that the two Houses and the country can see how orders work in practice and take a view on their effectiveness and/or their failings. We hope that there are no failings whatsoever, but one must be realistic. There will be weaknesses, the swift eradication of which would surely be in everyone's best interests, rather than waiting for three years.
New clause 1 is the logical corollary to clauses 5, 6 and 8. It would ensure that both Houses were aware of the Bill's impact on orders. Members here and in another place would be able to form their own view on whether the burden of regulation was falling or growing and whether changes must be undertaken. It would also allow outside organisations to compare their experience of regulation with Ministers' claims. Small and medium-sized businesses have a better idea of where the shoe pinches than the bureaucrats in Whitehall and town halls. We should give them a chance to make their views known and to comment as soon as possible. I am sure that the two Deregulation Committees would welcome an assessment, and although I understand that everything will proceed swimmingly in the first flush of deregulation, the Act, as it would then be, and the two Committees are in for a long haul. They should, therefore, have regular assessments to ensure that everything is being kept up to snuff.
Andrew Lansley (Conservative, South Cambridgeshire)
I am grateful for the opportunity to rise and support my hon. Friend. I should like to discuss new clauses 2 and 4, which are grouped with new clause 1.
New clause 2 is a matter of principle on our part. We want, wherever possible, to introduce into legislation that may have a regulatory effect a presumption in favour of what is in effect a sunset clause, which would cause the Act, as it would then be, to expire after a certain period unless it had been used for the purposes for which it was intended. New clause 2 allows for such a procedure after five years. If the Act had not had the intended beneficial effects, or if it had been used for a substantially re-regulatory or burdensome purpose, it would be our view that it must be dropped and new legislation drafted to achieve that purpose.
New clause 4 has a similar purpose, although it is not a sunset clause in the strictest sense because it would not cause each regulatory reform order introduced to expire after a certain period. We accept that that would be unduly burdensome for the House. If the orders were substantially deregulatory in effect, we would be creating a procedure that would tend to increase regulations automatically, unless we passed resolutions to the contrary. New clause 4 has a different structure, which asks for a report to be presented on the operation of orders. That would give rise to a procedure that would allow the disapplication of such orders, if the House so resolved it.
The British Chambers of Commerce, at which I note leaders of the three main political parties were present over the past few days, has published its business manifesto. It is relevant that under the section of the manifesto entitled, ``The Best Regulatory Environment'', the following prescription is included:
``The next government should make the criteria for sunsetting regulations explicit, and use sunsetting as a norm in all new regulations.''
The purpose of new clause 4 is to allow for that effect. If the impact of regulatory reform orders was regulatory rather than deregulatory, or in any way did not have the intended effect, we hope that the House would resolve against them and disapply them.
We have already discussed regulatory impact assessments and it is important to recognise that they are not a science, but an art—an art that the Government sometimes subjectively pursue. Such assessments under the Regulation of Investigatory Powers Act 2000 set out compliance costs of up to £20 million for part I and up to £20 million for part III. The total compliance cost of that Act could be £40 million. An independent report on the economic impact of the 2000 Act, prepared for the British Chambers of Commerce in June 2000, made it clear that direct costs—not including opportunity costs—would be £640 million over five years. The estimated overall cost was more than £1 billion a year by 2002. The report examined the competitiveness implications and, astonishingly, found that by 2005 Britain could be losing £11 billion worth of business a year. It, therefore, regarded the opportunity costs as enormous. The regulatory impact assessment offered by the Home Office with the Bill and the economic impact which is assessed independently are different in orders of magnitude and are ample illustration of how the implications of the Act will have to be re-examined. We are committed to such an examination after the election. If the implications of the Act are wholly different from the basis on which it was enacted, we would review it and hope that there was a procedure to disapply it. That is the aim of new clause 4.
Brian Cotter (Liberal Democrat, Weston-Super-Mare)
I rise to speak to new clauses 1 and 3. I accept that the hon. Member for South-West Hertfordshire has introduced quite a good new clause. I would give it nine out of 10. He would get 10 out of 10 for getting to the point; he did pretty well. I do not want him to go away feeling full of himself, but he waxes very well and, on this occasion, briefly and to the point. However, he did not cover every issue. I support new clauses 1 and 3.
The hon. Gentleman suffers from one major disadvantage, as do his hon. Friends: a lack of representation of Conservative members on the Deregulation Committee. He will not know that we discussed reports and expressed the wish to have annual reports instead of three-year reports, as proposed by the Government.
I hope that the Minister will take on board my next comment. We hope that the new Deregulation Committee to be set up in the new Parliament will carry forward our suggestion for an annual report and do what the Government should be doing. If the new Committee agrees to that, I hope that the Government will listen to what is being said.
On the other two new clauses, there is merit in the argument of the hon. Member for South Cambridgeshire. We support sunset clauses in principle and I hope that the Minister will respond to his comments.
Graham Stringer (Labour, Manchester, Blackley)
I want to repeat what my noble and learned Friend Lord Falconer said in the other place: the Government are committed to a review of the working of the Deregulation and Contracting Out Act 1994 and its constitutional implications after three years. That is a reasonable period. The procedures have been used under the 1994 Act, but the power in the Bill is wider. It will become clear whether the Government's commitment and our expectations, as well as those of the Committee, are borne out in procedural terms and whether there are constitutional implications. Three years is an appropriate period to obtain a perspective. One year is too short because the provisions may still be bedding down.
On the general issue of sunsetting, the Government's position is clear. We shall consider whether regulations should be sunsetted case by case. There is a balance to be drawn because sunsetting will create uncertainty in an Act of Parliament. Business may feel uncertainty when the provisions come up for review, and the Departments and business will feel uncertain about whether there will be any use for the Bill when it is enacted in nine months.
When considering any regulation, it is right to consider sunsetting. The Football (Offences and Disorder) Bill was a good example. New and unusual powers were provided and it was agreed that they should be reviewed and sunsetted after a specific period. However, the arguments, which the Government accepted, must be balanced against uncertainty. Business wants certainty and stability and to know what will happen, which is why we are not keen on blanket sunset provisions throughout the legislative framework, or in the Bill.
The other issues raised include how the regulatory reform orders will be reviewed, as opposed to the process and constitutional issues. We debated that earlier. We believe that the structure of a panel for regulatory accountability chaired by my right hon. Friend the Minister of State for the Cabinet Office.
Andrew Lansley (Conservative, South Cambridgeshire)
She is the Minister for the Cabinet Office.
Graham Stringer (Labour, Manchester, Blackley)
Sorry, the Minister for the Cabinet Office.
Frank Cook (Labour, Stockton North)
Order. If I feel sure that our business can be concluded, I am empowered by Standing Orders to extend the sitting by 15 minutes. I have been given that confidence, so our sitting will be extended to 11.40 am, but woe betide any hon. Member who gives me reason to regret that confidence.
Graham Stringer (Labour, Manchester, Blackley)
That is helpful, Mr. Cook. I was about to sit down.
On Tuesday, we discussed the processes and procedures that the Government had put in place. The Minister for the Cabinet Officer chairs the panel for regulatory accountability and each Department has a Minister responsible for regulatory reform. We believe that that is a better process than that envisaged in the new clauses. The Government are committed to reviewing legislation and future programmes. I ask the hon. Member for South-West Hertfordshire to withdraw the new clause.
Richard Page (Conservative, South West Hertfordshire)
I thank the Minister for his response, but it hurts me to say that he has muddled a review and a report. It is right that processes should be reviewed, but an annual report keeps matters up to speed. I understand what Lord Falconer said about a three-year review. That is fine because we do not expect the whole process to be churned up and changed after a year, but it would be helpful to see how matters progress year by year. I shall not press the new clause to a vote, but I shall return to the matter on Report.
On the sunset clauses, I have been empowered by my hon. Friend the Member for South Cambridgeshire--he has given me a metaphorical tick in the box--to say that we welcome the Minister's agreement to consider the sunset clauses on a case-by-case basis. That is better than in the past. However, I am concerned that there is no presumption by the Government that that should be automatic. We are discussing the enthusiasm to introduce sunset clauses rather than introducing them in specific circumstances. There is a fundamental difference of approach between the Opposition and the Government on sunset clauses and we shall return to the matter on Report.
Brian Cotter (Liberal Democrat, Weston-Super-Mare)
I still want to make a point on new clause 3. I hope that the Government will listen to the new Committee that will be formed--
Graham Stringer (Labour, Manchester, Blackley)
I apologise to the hon. Gentleman for not dealing with that point. Of course, the Government take seriously the comments of the Deregulation Committee and will respond accordingly.
Brian Cotter (Liberal Democrat, Weston-Super-Mare)
I thank the Minister for his encouraging response.
Richard Page (Conservative, South West Hertfordshire)
I beg to ask leave to withdraw the motion.
Motion and clause, by leave, withdrawn.
Question proposed, That the Chairman do report the Bill, as amended, to the House.
Graham Stringer (Labour, Manchester, Blackley)
May I take this opportunity, on behalf of my hon. Friends, and I am sure, Opposition Members, to thank you, Mr. Cook, for the tolerant way in which you have chaired the Committee's proceedings. Our debates have sometimes been arcane, difficult and complicated. I never thought that I would spend half an hour of my life debating whether it was necessary to include the word ``necessary'' in a Bill. During the day and a half that we have been in Committee, our exchanges have been good- humoured, thoughtful and intelligent. I suspect that there has been less difference between members on both sides of the Committee than some may have thought when we started.
Andrew Lansley (Conservative, South Cambridgeshire)
I echo the Minister's thanks to you, Mr. Cook, for the good-humoured fashion in which you have presided over our proceedings. Our debates have been good-humoured and constructive. The flash of steel at the beginning probably helped in that context.
As the Minister said, not much divides us. The point of principle that was raised on Second Reading, which we brought briefly into the Committee's proceedings, continues to divide us. However, in the context of the principle to which the House agreed on Second Reading, we tried as best we could to be constructive in trying to improve the Bill. I do not share the Minister's view that the Bill is perfect. We have illustrated that one could ask many questions and make many judgments that led one to arrive at a different conclusion. We may come to those on Report.
We have had a constructive, positive and interesting debate, and I hope that it will be recognised as such outside the House. All members of the Committee can thank you for that, Mr. Cook, as well as congratulating ourselves a little on the speed with which we have concluded our proceedings.
Brian Cotter (Liberal Democrat, Weston-Super-Mare)
I, too, thank you, Mr. Cook, for your excellent and outstanding chairmanship, under which the Committee proceeded constructively. I do not say that on the basis of your potential chairmanship of future Committees—it is genuinely meant.
I thank the Clerk's Department and the other officials for all the work that they have put in, which we appreciate.
Frank Cook (Labour, Stockton North)
I simply register my gratitude for the co-operation displayed by all members of the Committee. I hope that there is no validity in the view expressed by one of our number, who described some of our exchanges in the manner in which people from Spain describe their national sport: un punto aqu—, un punto alla, y en medio muchasimo toro—which, as we all know, means a point here, a point there, and in between an awful lot of bull.
Question put and agreed to.
Bill, as amended, to be reported.
Committee rose at twenty-seven minutes to Twelve o'clock.