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Government Regulation

If the hon. Gentleman will forgive me, I must now get on. I am conscious that other people wish to speak and, sadly, I am only half way through my speech. I had better make progress. It is for some of the reasons that I outlined some time ago that we are not going to apologise to the House or to the British people for introducing the first ever national minimum wage, which has raised the incomes of more than 1 million people in poverty. Neither are we going to say that it was the wrong thing to do to introduce new rights to paid holidays and improved maternity and paternity arrangements. Those are important social advances. We are proud that regulation in the UK has helped to secure an excellent health and safety record, with workplace fatalities cut by about two thirds since the 1970s. More employment rights for parents, clearer health warnings on food and tobacco and a cleaner environment are all important and worthy objectives for us to pursue. The argument is not whether we should pursue them, but how. When we decide to regulate, we should try to do so proportionately on the basis of evidence and only if the benefits of regulating clearly justify the inevitable costs to which the hon. Member for Totnes referred. We are not solely concerned with improving new legislation, but simplifying existing legislation. We are stripping away regulatory burdens on business whenever possible. For example, we have implemented more than 400 deregulatory measures in the Government’s regulatory reform action plan, which was published in December 2003. Good examples of those are measures relating to reform of the fire safety laws, which will save businesses literally hundreds of millions of pounds over the next 10 years. We have raised the audit threshold for small businesses, which has exempted nearly 900,000 companies from onerous audit requirements and thus saved them at least £94 million a year. We have provided the highest VAT thresholds in Europe and reduced administrative costs for 500,000 of the smallest companies in the UK as a result. We have also committed ourselves to reducing £1 billion of the regulatory burdens on business arising from Department of Trade and Industry regulations over the lifetime of the DTI’s five-year programme. We have reduced the payroll burdens for 1.2 million businesses by paying working tax credit direct to individuals rather than via employers—[Interruption.] The hon. Member for Havant (Mr. Willetts) will get his chance later and I am sure that we all look forward to that. We are providing better, clearer information for business on regulatory changes, including, for example, the introduction of new common commencement dates so that all employment law changes now start on two days of the year. Business asked us to do that and we responded positively. I hope that I can reach out to the right hon. Member for Wokingham because I accept that the Government should be doing more. We have signalled our intention to do more by accepting the recommendations of the Arculus and Hampton reports, although he did not refer to them in his speech, and by setting out a clear programme for regulatory reform at the European Union level, which he accused us of failing to do. Altogether that adds up to the most radical regulatory reform programme under way anywhere in the developed world. It has been welcomed by business leaders, who have expressed their support for the direction of travel that we have set out. The policies are designed to reduce the costs of compliance, to strip away unnecessary and outdated regulation and to simplify the existing body of legislation so that those who are required to observe such laws have a better understanding of what they need to do. They will also address a further concern that business has expressed to us because they will fundamentally change the way in which bodies that are charged with inspection and enforcement set about their work. We will move to a more risk-based approach on regulation and inspection, with fewer inspectorates co-ordinating their work more efficiently and effectively. Their work will be focused on companies with a poor track record of compliance, so companies with a good record will be left to get on and run their businesses. The motion calls on the Government to introduce new legislation to give effect to those principles, so I am pleased to be able to remind the right hon. Gentleman that we will do precisely that during this Session. I look forward to him joining us in the Lobby when the Bill is introduced in the new year, but sadly I suspect that that might not happen. Taken together, these radical reforms should ensure that each new major regulatory proposal will have to be accompanied by offsetting deregulatory proposals so that the relevant sectors do not experience excessive growth in the cumulative burden of the regulation affecting them. The administrative costs to business, which are important and need to be tackled, due to the existing stock of regulations will be measured. That is the first step that we must take, although no Government have ever tried to do so, despite the right hon. Gentleman’s warm words. Challenging targets must be set for the reduction of those costs. We will rationalise the structure of the independent regulatory bodies to make them more efficient and to spread best practice, such as risk-based inspection. We will reduce the number of regulators that interact with business from the present number of 31 to seven, which will include consolidating several existing regulators into a new consumer and trading standards body. In Europe, we will continue to drive forward the better regulation agenda. Better regulation will be a key theme of the UK presidency. On Friday, my right hon. Friends the Secretary of State for Trade and Industry and the Chief Secretary to the Treasury and I met EU Commissioners to set out the UK’s priorities for better regulation during our presidency. Over the next six months, we will work hard to ensure that impact assessments are used fully by the institutions—they are not at present—and that Commission impact assessments are given proper consideration by the Council. We want to make progress on substantial measures to simplify existing laws and the Commission will make new proposals on that later in the autumn. We want to ensure that there is effective consultation with stakeholders, especially businesses in the European Union. The Commission should take such consultation into account when drafting new legislative proposals.