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Government Regulation

We have had a useful debate that was powerfully opened by my right hon. Friend the Member for Wokingham (Mr. Redwood) and included valuable contributions from my hon. Friends the Members for North-West Norfolk (Mr. Bellingham), for Braintree (Mr. Newmark), for Chipping Barnet (Mrs. Villiers) and for South-West Hertfordshire (Mr. Gauke). They all spoke about the sheer frustration that so many business people and British citizens feel at the burden of regulation that they now face. What a pity that the Chancellor of the Duchy of Lancaster just did not seem to be aware of the economic impact of the regulations that his Government are imposing. He gave a complacent account of the state of the British economy and seemed to fail to recognise the problem of regulation. All that he needed to do was to read this morning’s Financial Times, in which he would have found that Sir David Arculus—who is, after all, the head of the Government’s own taskforce—estimates that the cost of regulation to the British economy is between 10 and 12 per cent. of GDP. That makes up to £150 billion of regulatory costs on the British economy. Of that, some is, of course, desirable or necessary regulation; we recognise that. However, on Sir David’s estimate, one third is bad regulation. That means that £50 billion is the cost of bad regulation. That is the scale of the challenge that the adviser to the Chancellor of the Duchy of Lancaster set out. What a pity that he did not seem to recognise it. Many of us see at close hand in our constituencies the effects of some of the Government’s ill-thought-out regulations. I think of the volunteer who helped to check the electric wiring at our local church hall. He will now have to pay an exorbitant price to be certified as a competent person to carry on doing something that he had been doing as a volunteer. I think of the money laundering regulations that mean that people who want to start a small business and get on with creating wealth for our country have to spend weeks, if not months, presenting documents to a bank before they can even open a bank account. I think of the threat posed by the Licensing Act 2003 to our village halls and to many of our local charities. I think of the social hall attached to a firm in my constituency that previously paid £16 a year to be registered as a place where people could come and enjoy a pint and that is faced with a fixed charge of £1,000 and an annual payment of £300. Those are the burdens and human costs of the regulations that this Government have imposed, but one would not have believed it from anything that we heard from the Chancellor of the Duchy of Lancaster. Ministers, of course, pledge to act—they always pledge to act. In fact, that is what they have said in successive manifestos. The Labour manifesto of 1997 said:"““We will cut unnecessary red tape””." The Labour manifesto of 2001 said:"““We will cut back the red tape associated with regulation””." Its manifesto of 2005 said that it"““will set exacting targets for reducing the costs of administering regulations.””" That is what Labour always says, but it never does it. Meanwhile the burden of regulation gets heavier and heavier. All that we get is endless reports. In fact, Labour is so committed to cutting back the burden of bureaucracy and red tape that we got no fewer than two reports on the same day earlier this year about reducing the administrative burden and the amount of regulation. We have taskforces, we have panels, we have units, but we do not have action. We have a specific pledge that was made in 2002, and it would be interesting to hear from the Minister how he thinks he is doing on this. There was a Cabinet Office pledge to"““delivering the commitments in the Regulatory Reform Action Plan, including over 60 Regulatory Reform Orders by 2005.””" The Government set themselves the target of repealing and reversing 60 regulatory orders by 2005, but what happened? The score was a mere 25 orders, but they have got out of their manifest failure to meet that target by rewriting it, so the target is now 75 regulatory orders by 2008. That reflects their failure to tackle the problem. The Government promised to introduce business planning zones. The Treasury document, ““Enterprise Britain: a modern approach to meeting the enterprise challenge”” said, under the heading ““Regulatory reform””:"““New planning reforms will allow local authorities to cut red tape for new and expanding businesses by removing the need to apply for planning permission in designated Business Planning Zones.””" Three and a half years on, where are these designated business planning zones? They do not exist yet—not a single one has been created. The Government talk about things, but they do not do them. We have a Ministerial Committee on Regulation, Bureaucracy and Risk. It even has a Sub-Committee: the Sub-Committee on the Panel on Regulatory Accountability. The Sub-Committee has the Prime Minister as Chair, but just in case he needs support, it has a joint Chair: the Chancellor of the Exchequer. In case the Chair and the joint Chair are not enough—after all, the Sub-Committee is supposed to be cutting back on bureaucracy—the Chancellor of the Duchy of Lancaster is the alternate Chair. The Sub-Committee is supposed to hold Departments’ regulatory performance to account, but what has it done? What has it achieved and what has been delivered? Of course, very little has happened. The Chancellor of the Duchy of Lancaster said that good progress has been made and that the measures that the Government have taken had been welcomed by business, but as my hon. Friend the Member for South-West Hertfordshire pointed out, that is not what the Prime Minister says. It was not what the Prime Minister said in his speech to the Institute for Public Policy Research on 26 May 2005, when he said:"““The result is a plethora of rules, guidelines, responses to ‘scandals’ of one nature or another that ends up having utterly perverse consequences.””" Those words of the Prime Minister were very different from those that we heard today from the Chancellor of the Duchy of Lancaster. The Prime Minister went on in that speech to describe some of the problems realistically. He spoke about the Financial Services Authority, which was established to provide clear guidelines and rules for the financial services sector and to protect the consumer against the fraudulent. He said that the FSA was"““seen as hugely inhibiting of efficient business by perfectly respectable companies that have never defrauded anyone.””" One wonders who introduced the FSA. Whose legislation was the Prime Minister so savagely attacking? He was attacking his own legislation. The body was his own creation and the Prime Minister knew that there was a problem because he went out of his way to attack his own policy. Several of my hon. Friends have pointed out that the Prime Minister has talked frankly about the problems of EU regulation. In the same speech he said:"““About 50 per cent. of regulations with a significant impact on business now emanate from the EU.””" Conservatives Members know that that is a problem. He went on to say:"““And it often seems to want to regulate too heavily without sufficient cause. The EU vitamins directive is a good example.””" Conservative Members have regularly challenged the Prime Minister and the Government on the effect of the EU vitamins directive. It was no good him turning up to attack it last month because when he was asked about it by Conservative Members during Prime Minister’s Question Time last December, he said:"““As ever, we must proceed according to the science, and the position set out by the Government is the one that I support.””—[Official Report, 1 December 2004; Vol. 428, c. 633.]" He delivered a speech last month in which he attacked a regulation that he supported. The Prime Minister went further in his speech by attacking other regulations. He said:"““A village in the Cotswolds was required to pull up a seesaw because it was judged a danger under an EU Directive on Playground Equipment for Outside Use. This was despite the fact that no accidents had occurred on it.””" One might think that a powerful example of over-regulation attributed to that EU directive. The only trouble is that there is no such EU directive on playground equipment for outside use. In fact, playgrounds are not regulated by the EU at all. No EU directive covers playgrounds. So we have a Prime Minister who turns up to announce that he is against red tape, who denounces his own legislation, who claims to agree with us on a directive that he has defended from the Dispatch Box, and who invents EU directives that he can then attack. He is not a very good chairman of this panel on regulatory bureaucracy if he knows so little about his Government’s policies. Conservative Members understand the problem. We are committed to tackle it. That is why we will vote for our motion.