Deregulation Bill

Andrew Bridgen Excerpts

Monday 3rd February 2014 Commons Chamber

[Chi Onwurah]

We all know that small businesses need a cut in business rates, as we have proposed, and then a freeze. We will also freeze their energy bills, which will save an average of £1,800 a year. At the same time, we would change the economy so that it delivers secure employment, which would benefit businesses large and small.

We want this Government to acknowledge, once and for all, that it was not working people’s job security that caused the global financial crash and that preventing employers from discriminating against pregnant women is not the root cause of the cost of living crisis. This Government are so out of touch that they not only do not understand the challenge they face—the need for an economy that works for all, delivering good, well-paid jobs—but fail to understand the real solutions to the problems that they do see.

[Andrew Bridgen (North West Leicestershire) (Con)]

The hon. Lady talks about preventing mythical attacks on working people. Does she concede that under the policies of this Government more than 1 million more people are in work in this country?

[Chi Onwurah]

I know that almost 1 million young people are unemployed and that 1.3 million people in part-time work are seeking full-time work. I also know, because I speak to these people in my constituency, that some people who are supposedly in jobs with zero-hours contracts are getting no work, cannot make any plans and cannot go out and spend money. That is the working environment that this Government support and that the next Labour Government will change.

Let us turn to the first, and most worrying, part of the Bill—the general measures affecting business. Exempting self-employed people in certain industries will create confusion about who is covered and who is not. The Institution of Occupational Safety and Health, the chartered body of health and safety practitioners and the world’s largest health and safety professional membership organisation, is opposed to that, calling it

“a very short-sighted and misleading move”,

and saying that

“it won’t actually help anyone; it won’t support business; but it will cause general confusion.”

Even the Federation of Small Businesses, which supports the change in principle, says that the implications are not well understood and it is particularly concerned about the unintended consequences for insurance, which will need to be considered further in Committee if the Bill gets there.

The Bill will also remove employment tribunals’ power to make wider recommendations to employers who have been judged to have discriminated against someone unlawfully. Such recommendations are only advisory—they are not mandatory and they promote good working practice. Why are the Government trying to prescribe the ability of tribunals to make observations? What are they afraid of? The Prime Minister says that we are in a global race, but that race cannot be won by attacking employment rights at every opportunity. The Opposition will not support a race to the bottom.

The House of Commons Library considered the impact assessment for that measure and found that despite the Minister labelling it deregulatory and counting it as an out under the Government’s arbitrary one in, two out system, business will incur a cost as a result of the removal of the power. Only this Government could propose a supposedly deregulatory measure that costs business money. Those on the Front Bench look slightly puzzled; this is work by the House of Commons Library.

--- Later in debate ---

[Chi Onwurah]

The Labour Government did more to support working families and working parents than any Government before, and of course we support that measure.

I shall try to make progress and speak to my experience with business. Before entering the House, I worked for many years in telecoms in the private sector in the United States, the United Kingdom, France, Nigeria and many other countries around the world; I worked in companies large and small. I then worked for the industry regulator in this country, Ofcom, for six years, so I have seen regulation from many different viewpoints, and I am familiar with the impact that it can have on businesses of all sizes. I recognise the burden that it can represent, particularly on small businesses.

The Opposition believe that Government must seek to reduce unnecessary regulation at every opportunity, but unfortunately, this Government’s debate on regulation is stale and simplistic. Smart regulation underpins fair markets, and can level the playing field for small firms and new entrants—the very people and businesses that create new jobs and prosperity. Smart regulation saves lives. It is a matter of great pride for all of us, I hope, that the 2012 Olympic infrastructure was built without the loss of one life. We can certainly be sure that regulation played a part in that. The men and women working on those construction sites know the value of having clear health and safety laws in place, and I only wish that were the case for Government Members.

Smart regulation can help to drive innovation and growth. Labour’s zero carbon policy helped to make this country a world leader in low-carbon technology and architecture. Yes, regulation—

[Andrew Bridgen]

rose—

[Chi Onwurah]

I am going to make progress, as many Members wish to speak.

Regulation is a concern for some businesses, but business people understand that rules are needed to protect people’s safety and rights, promote competition and prevent employers from being undercut by those who do not play by the rules. As the Federation of Small Businesses has noted, the concerns of business are often about how regulations are developed and introduced, how they are enforced, and the duplication and overlapping rules that waste their time. The Government’s rather crude “one in, two out” approach fails to recognise that sensible and proportionate regulation introduced and implemented properly can promote healthy, competitive markets. The issue is more complex than the number of rules coming in and out.

We believe it is essential to take a fresh look at existing regulation, how it is implemented, and how—in response to the right hon. Member for Wokingham (Mr Redwood)—it is translated from European directives. Regulation protects consumers’ and employees’ rights, ensures that our industries play their part in moving to a green and sustainable future, and keeps citizens safe; it has saved many lives. It is important that it is effective and enforceable. Challenges arise when ill-thought-through regulation has unforeseen consequences or is interpreted bureaucratically and inflexibly. Some regulation can certainly represent an unnecessary burden on businesses, particularly small and medium-sized enterprises that may not have access to legal advice to interpret regulation accurately or the resources to implement it fully.

When in power, Labour sought to reduce regulation by introducing the Better Regulation Commission and the ongoing better regulation programme, and made a number of legislative changes to reduce the cost of regulation. Our programmes for simplifying regulation delivered—[Interruption.] Our programmes delivered— I would have thought this figure would be of some interest to Government Members—£3 billion of savings to business per year. In contrast, the impact statement for the draft Bill—Ministers have not dared to produce a comprehensive summary for the current Bill—estimated that it would save business and civil society £10 million over 10 years. So we have savings of £10 million or £3 billion; I think the Minister can do the maths. The figures underline that while we all agree unnecessary regulation can be a burden on business, a sensible approach to deregulation is about more than repealing statutes.

In government, we introduced legislative reform orders to help Ministers to get unnecessary burdens on business off the statute book. However, as the Regulatory Reform Committee has noted, instead of using those 11 procedures already available to Government for deregulating, Ministers chose to invent a new one. We also set up the primary authority scheme and the Regulatory Policy Committee, as well as a Cabinet Sub-Committee to focus minds at the very top of Government. That was our record in government.

Building on Labour’s progress in government, the Bill seeks to introduce a growth duty on regulators, as the Minister explained. This duty will compel them to have regard to the promotion of economic growth when carrying out their functions and to carry them out in a necessary and proportionate way. We support the aims behind the duty and, clearly, the principle that regulators should go about their business in a proportionate way, but we must ensure that the duty does not inhibit or contradict the primary function of any regulator.

The crude proposals in the Bill do not fit into an overall strategy or vision for this country. They show no recognition of why growth is important to deliver good, sustainable jobs, to help people’s incomes rise faster than costs, and to ensure that we become richer as a nation. They do not mention long-term or sustainable growth—they refer simply to growth—and they fail to recognise that good regulation is necessary to protect jobs and growth. Is it right that a housing bubble or a casino-capitalism-fuelled, short-term growth spurt should be a primary consideration for the Office for Nuclear Regulation? I hope we all recognise that markets need to be regulated in order to protect growth and jobs, or are the Government suggesting that the underlying cause of the global financial crisis was too much regulation?

--- Later in debate ---

[David Rutley]

My hon. Friend makes an important point that further highlights something I said earlier: 72% of the cost of all regulation—that is tens of billions of pounds—that has been put on UK businesses has come from the EU. That has to change.

Churchill once said:

“If you have ten thousand regulations, you destroy all respect for the law.”

Those words from the wise are worth listening to. Of course, 10,000 regulations also destroy competitiveness, so there is an urgent need to make targeted reductions in the swathes of regulatory burdens that are preventing British citizens from getting back to work.

[Andrew Bridgen]

My hon. Friend knows, as I do, that large businesses rather welcome a heavily regulated environment, especially in mature markets. Such an environment is anti-competitive, because it creates huge barriers to entry for small firms and cuts competition.

[David Rutley]

Absolutely. Providing for a more level playing field and enabling small and medium-sized enterprises to compete fully in the marketplace is at the heart of what the Government are trying to do, and that has to happen.

To secure the sort of reform that we are pushing for, we need to continue to inspire our EU neighbours with ambitious reforms such as the Bill. In that way, we can build alliances in Europe with politicians, citizens and businesses that also want a competitive EU—a single market, not a single over-regulated state. That is what we are working for. The EU institutions, especially the red tape-loving European Parliament, have become divorced from the economic reality of Europe and its people, including those in the UK. In the end, however, reality does bite, and the fantasy that it is a public good to have ever more legislation in ever more areas of life is fundamentally exposed. Barriers that hinder innovation, and the overall competitiveness of our entrepreneurs, employers and exporters, must be addressed at EU level as they are tackled in the UK.

In October, the Prime Minister’s taskforce showed what could be done with its “Compete” principles for better regulation and more than 30 recommendations for reducing the bureaucratic burden. The public outcry, especially in the UK, that led to rules on discards being swept away from fisheries policy shows that even Brussels, with enough pressure, will respond to the agenda for change. With the work that is being pushed forward and the alliances we are building in Europe, it is good that latent EU reformists have been enabled and even emboldened to get on to the front foot in arguing for a better Europe.

--- Later in debate ---

[Caroline Lucas]

I thank the Minister for that clarification. That is not as I understood it, but I am pleased to be corrected if that is the case. Certainly the lobby that I have been aware of—which is perhaps looking at broader issues than the question we are currently discussing—has been going on for a long time, but I thank the Minister for his clarification.

My second main objection to the Bill is that, in a sense, it just feels like the latest manifestation of a Government embarking on an evidence-free deregulatory path without due consideration of warnings, including from business. Those warnings say that effective regulation is essential to create jobs and innovation, and that ripping up vital green legislation risks locking the UK into polluting industrial processes for decades to come, jeopardising future competitiveness, damaging the UK’s attractiveness for green investment and undermining new industries. Let us take, for example, the UK Green Building Council, which works daily with more than 400 companies and organisations, from the largest to the smallest, across the built environment industry. In response to the Prime Minister’s comment last week about deregulation, Paul King, its chief executive, said:

“The Prime Minister’s boasts of ‘slashing 80,000 pages’ of environmental guidance is utterly reprehensible. It is the same poisonous political rhetoric from Number 10, devaluing environmental regulation in a slash and burn manner. These words are not only damaging and irresponsible, but misrepresent the wishes of so many modern businesses, both large and small.”

[Andrew Bridgen]

Apart from that one, rather spurious example, can the hon. Lady give the names of other business organisations that are demanding more regulation in the UK?

[Caroline Lucas]

I certainly can. I could talk about the Aldersgate Group as one or the Prince of Wales business trust as another. There are plenty of business organisations out there that make it clear that appropriate regulation is helpful to them. What they want is clarity, which is the very opposite of what they have had from this Government, under whom rules have been changed almost overnight. I am thinking, for example, of the feed-in tariff change, when suddenly the rules were changed retrospectively, more or less overnight, causing huge confusion and complication for many companies.

What those companies want is a level playing field, and clarity and certainty into the future. They are happy to have clear, sensible regulation that applies to all; what they do not want is a Government who simply come out with more and more rhetoric and introduce rules retrospectively or at the last moment. Many businesses in my constituency are tearing their hair out about not being able to plan for the future, because they do not know what the Government’s latest response will be to the UK Independence party or whoever else they are trying to close off.

[Andrew Bridgen]

I ran a business for 22 years, and what small businesses knew under the last Labour Government was that, on average, every working day we would get six more regulations affecting our businesses. Does the hon. Lady think that was very welcome?

[Caroline Lucas]

I am not a spokesperson for the Labour party, but if the hon. Gentleman wants to ask that question of those on the Labour Front Bench, he is very welcome to do so. What I am talking about is my knowledge of small businesses, with which I spend a lot of time in my constituency. What they would love to see is a reduction in VAT or an extension of the threshold, so that more small businesses are caught by the business rate relief. There are all kinds of things that they would like to see, but they are not necessarily telling me about a huge burden of regulation of the kind that the Government think they are trying to solve.

An example of the positive role of regulation is the 2016 zero-carbon target. This set a destination in advance and precipitated a huge amount of innovation from businesses figuring out how to get there—new jobs, new industries and new export markets for UK businesses. Customers are increasingly interested in energy efficiency, and a new home will probably save them £800 on their annual energy bills. Builders have responded to a clear stepwise trajectory towards zero-carbon homes, with uplifts in regulations in 2006 and 2010, and again this year, en route to 2016, from when all new homes are meant to be zero-carbon. The costs of building low-carbon, efficient homes have tumbled—by half in the last two years alone, according to forthcoming research. That example highlights the fact that Government regulation, not deregulation, can be incredibly successful in driving innovation, keeping energy bills down, creating jobs and cutting carbon emissions.

Environmental regulation to manage building in flood-prone areas will protect people from the nightmares that we have witnessed on our TV screens, if not in our own living rooms, over recent weeks. There are plenty of examples of disastrous deregulation, too. The US car industry lobbied and funded both Democrats and Republicans to reduce regulation. The result was that it drove itself to bankruptcy, because it was out-competed by overseas manufacturers that developed more efficient cars to meet tougher regulations elsewhere.

The Government seem to be ignoring business representatives speaking out in favour of strong regulation. I have mentioned the Aldersgate Group a couple of times. In 2011, it warned that the drive to cut regulations on business could threaten the economic recovery. In a report launched here in the House of Commons, it stated that Government initiatives such as the red tape challenge that threaten “to rip up” vital green legislation would lock in polluting industrial processes for decades to come, jeopardise future competitiveness, and damage the UK’s attractiveness to green investors. It questioned whether measures such as one in, one out rule made sense, and would address pressing environmental challenges such as climate change. That is just one example of a market failure that requires more, not less, regulation to safeguard the environment and drive development in new industries.

The Aldersgate Group also highlighted the negative impact of putting sensible environmental regulations at risk with a consequent loss of business confidence. Peter Young, the group’s chairman, said:

“It is a myth that all businesses want less regulation. Effective green laws create a level playing field which drives efficiency, early action and the innovation in UK companies that will be the engine for future growth and jobs.

A crude deregulation drive risks damaging competitiveness and severely threatens the Prime Minister’s commitment to a green industrial revolution. The regulatory framework should encourage a rapid shift to a sustainable economy rather than being held back by vested interests or the lowest common denominator.

The Government’s ‘war on red tape' must not become a crusade that threatens regulatory outcomes such as protecting the environment. Even the threat of deregulation on the Climate Change Act and renewable energy support is massively eroding investment and making growth more difficult.”

There you have it, Madam Deputy Speaker. That is not just the Green party speaking; some of the captains of some of the biggest industries in the country are saying, very clearly, that the idea that all businesses hate all regulation is a myth and a travesty.

--- Later in debate ---

[Andrew Bridgen (North West Leicestershire) (Con)]

May I begin by welcoming the Bill and commending my hon. Friends the Members for Macclesfield (David Rutley), for Witham (Priti Patel), and for Stroud (Neil Carmichael) for their excellent contributions to the debate? I believe that the Bill will act as another lever to encourage economic growth, and it builds on this Government’s record of scrapping obsolete legislation.

I have said before in the Chamber—and I will say it again—that the business of business is business, and the business of government is creating an environment in which business feels confident to grow, thrive and create jobs to create wealth and pay taxes that support our whole economy. The Bill is part of that.

Since the Government took office, some 800 regulations have been scrapped or improved, giving business a welcome lift, including, if you will excuse the pun, Mr Deputy Speaker, changes to working at height legislation. Indeed, there are 2,200 regulations in the Government’s sights for abolition or reform. It is estimated that when this work is completed—if it is ever completed, because regulation needs to be looked at all the time—these measures will save business £850 million a year, underlining the Government’s support for enterprise, entrepreneurs and job creators.

I should like to turn specifically to some of the economic growth clauses that have provoked the most interest, debate and discussion, including in the Chamber today, beginning with clause 1, which aims to take those who are self-employed and who pose no risk to others out of the scope of the Health and Safety at Work etc. Act 1974. That could remove the unnecessary burden of health and safety regulations from 800,000 self-employed people.

[Mr Letwin]

To give my hon. Friend some good news, we think that the figure is rather more like 2 million.

[Andrew Bridgen]

I thank my right hon. Friend for moving the goalposts in the right direction.

[David Rutley]

My hon. Friend is making a powerful case. Does he share my view that deregulatory steps such as this will give more people the confidence to want to become entrepreneurs, and to take on their first employees. Those are the aspirations that we need to support. Does he think that the Bill will help us to move in that direction?

[Andrew Bridgen]

I certainly do. Having been a business owner under the previous Government, and representing businesses as a regional chairman for the Institute of Directors, I know that the thought of ever more regulation is in the psyche of business people. The Bill is totemic—in fact what the Government are doing is totemic—not only in stemming the tide of regulation but in giving a commitment to reduce the burden of regulation over the term of this Parliament. That will take a lot of believing by the business community, and we need to reinforce that message. It will give confidence not only to people who have businesses but people who would not even consider starting up a business. There is no doubt that when people who work in a business see the pressure that the regulatory burden places on those who run it, they are dissuaded from going it alone and starting their own business. We want to reverse that situation.

Recommending the removal of the self-employed from health and safety law originated under the review ably chaired by Professor Ragnar Löfstedt, on which I served as a member of the advisory panel with the hon. Member for Ellesmere Port and Neston (Andrew Miller), Sir John Armitt, Dr Adam Marshall of the British Chambers of Commerce, and Sarah Veale, who was later replaced by Liz Snape, representing the TUC. The proposed change is based on the approach taken in a number of other European Union member states, including Germany, where legislation on health and safety at work applies only to employed workers; France, where, as a general rule, the provisions do not apply to the self-employed or to employers themselves, except when they are directly carrying out an activity on a site; and Italy, where the health and safety at work regulations do not apply at all to the self-employed. Clause 1 is nothing new in a Europe-wide sense as regards health and safety.

When the clause was scrutinised by the Joint Committee, on which I also served, with my hon. Friend the Member for Witham, a number of stakeholders raised concerns that the recommendation might lead to the self-employed in risky occupations such as construction being taken outside health and safety law. I can assure the House that Professor Löfstedt has made it clear that that was never, and is not, the intention of the proposal. The clause has the support of the Federation of Small Businesses, which believes that it will help with the perception of health and safety law. I fundamentally disagree with the groups who are arguing that this change will cause confusion, because asking the self-employed, “Does your work activity pose potential risk of harm to others?”, is not too taxing a question. As I said, major economies in the European Union seem to manage perfectly well without this unnecessary regulation. It is also worth noting that it could well save small businesses not only an enormous amount of time but an estimated £300,000 a year.

Clause 2 curtails an employment tribunal’s powers to make wider recommendations. This is another needless regulation. Its discontinuation is supported by business groups, as best summed up by the British Chambers of Commerce, which stated that the measure currently in place extends tribunals’ jurisdiction beyond the

“time, information and expertise of the panel”.

I fully agree with that view. The regulation is unnecessary because it serves only to create fears among employers about inappropriate or excessive recommendations. I therefore welcome this move to abolish it.

Clauses 58 and 59 imposes on regulators the economic growth duty—a new duty that requires them to have regard to the desirability of promoting economic growth when exercising their regulatory function. This is a welcome move, as all sectors that are in a position to do so should do what they can to contribute to and complement economic growth. The clauses have received a positive reaction from business groups and many of the regulators themselves, with the British Chambers of Commerce stating that the duty could

“help establish more constructive relationships between business and regulators”.

The Institute of Directors said that it could be helpful in serving as a catalyst for regulators to consider the costs and the benefits when developing new policies. I believe that there needs to be a new and dynamic—a symbiotic—relationship between business and the regulator rather than the historical one that has too often tended to be adversarial, and these clauses will help to achieve that. It is also encouraging that the measure is being positively embraced by many regulators such as the Security Industry Authority, which stated that it recognises the importance of economic growth and supports efforts to encourage it. These regulators are funded to the tune of £4 billion a year, and they need to make their contribution to economic growth if we are to compete on an international level against countries with far fewer regulations and regulators than the UK.

I recognise that the measure has not been universally welcomed, with opposition from, among others, the TUC, which described the duty as “a very odd concept”—but then it often appears that the TUC and its paid mouthpiece the Labour party view free market capitalism as a very odd concept, as underlined by some recent policy announcements. I find that view rather disappointing.

[Jeremy Corbyn (Islington North) (Lab)]

More for the sake of accuracy than anything else, may I point out that the TUC is not affiliated to the Labour party? Individual unions, some of which are so affiliated, do indeed politically and financially support the Labour party. The hon. Gentleman should be accurate in his abuse.

[Andrew Bridgen]

I thank the hon. Gentleman. I always try to be accurate in my abuse, as he well knows.

Business is always looking for help to comply rather than pure enforcement from regulators, and giving regulators a complementary economic duty should not undermine their primary regulating function. A number of regulators, such as Ofsted, have made it clear to the Minister that without a duty to consider growth, it is not something they would consider. I hope that the new head of Ofsted, when appointed, will embrace that concept. This demonstrates the importance of getting the duty on to the statue book to empower our regulators. I believe that it will lead to less burdensome and better regulation for business in future.

My hon. Friend the Member for Witham mentioned the use-of-land provisions in clauses 13 to 19. This aspect of the Bill has received a lot of attention, particularly in relation to rights of way and proposed changes to the designation of public footpaths. I am sure that all right hon. and hon. Members will be aware of how emotive and protracted disputes over rights of way and public footpaths can be. Definitive maps and statements setting out recorded public rights of way have never been completed despite work on this being done for well over 50 years. The changes proposed in the Bill will harness and streamline expertise by devolving decisions on public rights of way to a local level. I understand that there have been positive responses to the proposal, with the chief executive of Ramblers, Benedict Southworth, commenting:

“The proposed legislation has been carefully put together by representatives from landowners, paths users and local government—including ourselves and the NFU—who have worked together for over three years to simplify the law around rights of way for the benefit of everyone.”

We should all applaud that. This proposal will have a positive economic impact, as it will cut the time for recording a right of way by several years and save, it is hoped, almost £20 million a year by cutting needless bureaucracy. It is also worth noting that visitors to England’s outdoors spent £21 billion last year—a significant contribution to our economy—including in my constituency, where we have many well-used public footpaths as well as the heart of the new national forest.

Overall, the Bill builds on this Government’s achievements in cutting through needless red tape that has been allowed to build up on the statue book over many years. The previous Government used regulation as a first response rather than a last resort. As we have heard, they presided over the creation of 1,500 new working regulations a year for each of their 13 years in office, or six new regulations every working day. That was a burden that fell on and hindered individuals and businesses. By contrast, this Government have committed to freeing British business of the needless bureaucracy that damages our international economic competiveness, hinders millions of individuals in their daily lives, and reduces the efficiency of our public bodies and services. This Government are committed to reducing the regulatory burden on business by 2015, compared with the target of 2010 that we inherited, and this Bill is another important part of the delivery of that pledge.

--- Later in debate ---

[John Mann]

As I illustrated with the mining industry, if we move away from regulation, it will lead to civil litigation, and exactly the same will happen with the clauses in this Bill. That is illustrative not of a specific measure in the Bill in relation to the mining industry, but of the principle that moving away from good regulation creates a liability. It is not a cost saving for the employer because that liability comes back. In such a situation, yes, the Bill would have an impact because there is no overriding factor—that is the point. The case of the mountain guides is a wonderful example because the person who owns the mountain is normally the general public. We cannot say, “Ah well, this private landowner is responsible for this bolt coming out and this person who has been guided up falling to their death.” That is why this form of legislation came in.

The Minister without Portfolio, the right hon. and learned Member for Rushcliffe is the sole Euro-fanatic in the Tory parliamentary party these days. He is more Euro-fanatic than my good self. I note that in the past hour, UKIP has just nicked one of my Bills put to this Parliament about shifting the Department for Culture, Media and Sport to Manchester, and proclaimed it as its own.

[Andrew Bridgen]

Let me try and drag the hon. Gentleman back to the actual debate. With his vast business experience and knowledge, will he please explain how most of his employees were self-employed? That is a clear contradiction in terms.

[John Mann]

We are now dealing with the most extraordinary Conservative party. When the people being brought in are self-employed—and that is not an unusual situation—it depends what industry they are working in—[Interruption.] They are the contractors who are brought in. The hon. Gentleman may wish to make pedantic points, rather than getting to the heart of the weakness of the Bill.

--- Later in debate ---

[Andrew Bridgen]

Given the hon. Gentleman’s aversion to releasing the self-employed who do not pose a risk to anyone else from health and safety legislation, will he explain why countries such as France, Germany and Italy do not bring the self-employed under the terms of health and safety?

[John Mann]

I will not give a detailed exposition about climbing guides in France and Germany, save to say that they have a formalised responsibility for health and safety.