Lord Clarke of Nottingham
Main Page: Lord Clarke of Nottingham (Conservative - Life peer)Department Debates - View all Lord Clarke of Nottingham's debates with the Cabinet Office
(10 years, 10 months ago)
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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?
The Minister without Portfolio (Mr Kenneth Clarke)
I am sorry to put the hon. Lady out of her stride, but I have slightly lost her point; I will be replying to this debate, so I just want to follow her argument. She has said that she is in favour of regulators paying regard to the aim of getting growth in the economy and of their regulations being proportionate to the risks they guard against, but now she appears to be speaking against that. I do not follow her argument: is she proposing to vote against the regulators being asked to have regard to the growth of the economy and against their regulations being proportionate? If so, I have not followed her logic. How on earth would our proposed measures produce a casino-like growth bubble? We are simply proposing a sensible constraint on regulators to make sure that they remain proportionate and do not do out-of-proportion economic damage.
John Mann
As the hon. Gentleman said, he has not had time to read the Bill, which is why I itemised, for the record, every clause and schedule that removes Tory legislation. In fact, around 80% of the legislation being removed is Tory legislation. Indeed, when the Minister without Portfolio, the right hon. and learned Member for Rushcliffe (Mr Clarke), responds, he will doubtless wish to outline which bits he introduced in his various ministerial guises. Given his ministerial longevity, there will undoubtedly be several regulations that he was personally responsible for but now wishes to remove, and we on the Opposition Benches might wish to back him on that.
However, the Minister for Government Policy, a highly educated and learned gentleman, did not, when receiving his challenge on self-employment and safety, know what he was talking about. I cited, in relation to clause 1, what would happen with a self-employed mountain guide. He immediately jumped in to assist his hon. Friend the Member for Macclesfield (David Rutley), who was struggling, because he knew that I was right and that the clause represents an undoing of the self-employed mountain guide’s employment position. There is a critical flaw in the logic of the Bill. Mountain guides require insurance, and to get it they need to demonstrate that there is a health and safety profile, and that is relevant for those who employ self-employed mountain guides who take people out on ropes. By the way, I personally managed to negotiate, on behalf of the all-party group on mountaineering, exemption from the working at heights directive anomalies that affected that profession, demonstrating that the way the industry works meant it was not safe to put that application into place. I am not, therefore, on the side of unnecessary regulation, but the protection of the employment position of those self-employed people is fundamental.
A better-known example, the single biggest civil litigation case brought by a group of workers against a Government, demonstrates the issue more brutally. That common-law action brought by workers in the mining industry, for chronic obstructive pulmonary disease and Vibration White Finger, cost the Government a huge amount of money, because the people involved were employed primarily by the Government, so it was a taxpayer liability, although there were some private companies. The civil action was successful because the litigators had demonstrated that appropriate practices and procedures were not in place. If there had been proper regulation of the mining industry at the time, the cost to the health of the men forced to bring the case would have been hugely reduced, as would the financial cost to the taxpayer and other employers, which went into many billions.
That is the point of good regulation. A good health and safety procedure—for example on use of breathing equipment in a colliery or the handling of vibrating tools—would have been a mitigating factor in those processes, and a huge mitigating factor in terms of compensation. That is precisely why self-employed mountain guides require a structure within which they can get insurance and quantify it, to take them out of the provisions of the Health and Safety at Work, etc. Act 1974. What we are doing is leading to a lawyers’ paradise in which the agency that might employ people, and the individual, will be able to battle between one another over who is liable, if it can be demonstrated in court that particular procedures were not followed. A requirement of responsibility under health and safety law gives protection to that self-employed person as well as to the agency employing them.
Let me tell the House why I know that. When I ran a small business—as I did for many years—we had to deal with working at heights and a range of legislation, and I shall illustrate my point with some examples. A case was brought against us by an employee who had broken his foot. However, because of manual handling at work legislation and the fact that we had applied it, the case got nowhere. That was precisely because the legislation had created a structure with a sensible and rational procedure, which we could demonstrate and insist that the employee followed. When he did not follow that procedure, we could demonstrate that as the employer—with liability—we were not in fact liable for the accident.
It is a myth that good regulation damages small business. I lived with regulation day in, day out, and if we ask small businesses, we find that they nearly always object to two things: paperwork—that is always a nightmare—and cost. When small businesses complain—and when I did—it is about cost. If regulation costs a lot and someone is trying to make ends meet, it is difficult. However, regulations on manual handling at work, and health and safety legislation, do not involve cost other than training the work force. It is a miniscule cost. It is an absurdity when someone is handling heavy goods, as we were, not to have such regulation. Let me give a second example.
Mr Kenneth Clarke
The hon. Gentleman is making a passionate defence of the regulations under which he successfully defended a claim many years ago, but the Bill does not affect health and safety legislation as far as small employers—such as those whom he is speaking so eloquently in favour of, and such as he was—are concerned. It is an interesting illustration of the value of health and safety regulation, which I do not dispute, but what on earth has it got to do with the Government’s proposals?
John Mann
I do not find it amusing that the Government introducing the Bill have no idea what goes on in workplaces and of the effect that this change will have, so let me illustrate my point. In the kind of work that we were doing, such as setting up major concerts in huge halls, a variety of different people come in and work together. Who is responsible for ensuring that the ladders going up—perhaps 50, 60, 70 feet—are secure? If it is a self-employed person, without that requirement in law because of this change, that buck—that burden—can be shifted. One critical thing in such a situation is having an overall duty because then everyone is liable. When working in complex spaces, with people going backwards and forwards carrying huge loads of equipment, lugging it and putting it up on high, all—whether a single person, a company or a company bringing in self-employed people, as we often did—ensure that the systems and the space is properly secured because they have a responsibility without exclusion.
The Minister without Portfolio (Mr Kenneth Clarke)
A small and select group of specialist people have taken part in this debate, but it has been a very worthwhile one and while it has got very heated and agitated at times, I keep being reminded of how closely we have all been forced together, and the hon. Member for Hartlepool (Mr Wright) therefore finished on a very welcome note. The fact is that, so far as I noticed in every contribution from the moment the debate started, we all rather accept the need for deregulation. Everybody agreed on the other hand that there is a case for sensible regulation in the modern world. Indeed, it is highly desirable, but it is essential from time to time for Governments and Parliament to ensure that what is being done is proportionate, sensible, justifiable and does not impose unnecessary burdens on individuals and branches of government, and on business and small business in particular. We have gone round and round in circles and some Members have got wildly excited about particular regulations, but the fact is we come back to agreement on that point, and I get the impression that no one is going to press any objection this evening to the vote.
Caroline Lucas
I have been advised that it will be helpful to the House to let the right hon. and learned Gentleman know that I do not intend to press the amendment tonight.
Mr Clarke
I am very grateful to hear it because by its very nature a deregulatory Bill gives rise to many points that can be raised in Committee.
The hon. Member for Wansbeck (Ian Lavery) raised a lot of detailed points, and said that they should be considered in Committee. He has already served on the pre-legislative scrutiny Committee. It is inevitable, when the British cover such a wide variety of things in regulation, that we sometimes have to have an item-by-item vote.
I take it from the tone of the debate today that the general direction of policy set out by the Government has fairly widespread approval. I have endured the experience of opposition, albeit briefly, in my time, and I occasionally had the burden of being sent along to a debate of this kind and trying to find something to argue about. I think that that was the problem facing the two very able Front-Bench speakers representing the Opposition today.
A strange argument broke out at one point today about whether what we were doing was totally insubstantial, worthless and of no point to the outside world, or whether it was completely horrendous and, as the Green amendment, which is no longer being pressed, says,
“ripping up vital green legislation”.
It was suggested that our blood should run cold at the idea of what we were doing to everyone from those climbing mountains to those running small businesses.
The claim was also made that the last Government had somehow achieved £3 billion of savings through their strident deregulatory measures. I am not here to debate the record of the last Government, but that is quite the most startling exposition of what they achieved that I have ever heard. I do not recommend that any Labour spokesman should try to persuade an audience of any of the small businessmen I have ever met that that was what they were doing.
The Bill represents the most determined effort of any Government I have known to pursue the deregulatory aims to which most Governments have paid lip service for the past 20 years. We were all into deregulation in the early 1990s; then the Labour Government talked about “better regulation”. I believe that this Government can claim that the substance of what we are producing greatly exceeds anything that has been done before.
Some of the figures that have been quoted about the impact of the Bill disguise the fact that it is only one part of the red tape challenge that is being led by my right hon. Friend the Minister for Government Policy. The Bill runs alongside and is part of that challenge, and it contains the elements that require primary legislation. My right hon. Friend has mentioned the 3,000 regulations that need to be repealed or improved.
The Bill has to be big enough and long enough to deal with so many detailed areas, and it will supplement and add to that to produce a deregulatory effect for businesses—particularly small businesses—as well as individual citizens, local authorities and branches of government, all of which have better things to do than to waste money on statutory duties the reason for which no one knows, or to produce reports that nobody reads or to have obligations for things that nobody is asking them to give advice on. For example, school governors have to publish advice on discipline. Our reforms will not undermine school discipline; my right hon. Friend the Secretary of State for Education has talked about the need for school discipline. Most governors do not even know they are under such an obligation, but unfortunately some do produce a statement of policy, which is not required. That regulation will now be repealed.
The key part of the Bill is the one that relates to business. I agree with my hon. Friend the Member for Stroud (Neil Carmichael) on this. I think we will need a Bill of this kind every 10 years or so. In modern times, as a result of single-issue lobby groups and newspaper campaigns, Government Departments engage in ever-more legislative and regulatory activity, sometimes for the sake of being seen to be doing something or, in the case of the lobby groups, being seen to be demanding something new. That has an adverse effect not only on the statute book and the regulatory publications but on the administration of good government and the running of any successful business. The Bill is therefore a welcome, and drastic, attempt to change the culture and go back in the direction of common sense and proper regulation that involves a true public interest and to ensure that environmental standards and the safety of workers are maintained.
The hon. Member for Newcastle upon Tyne Central (Chi Onwurah), echoed by the hon. Member for Hartlepool, got on to matters that were of concern to her. Although such things can be discussed in Committee, I have to say that an attempt was being made to make a difference of principle that was not there. For example, we had the issue of employment rights and of the tribunals dealing with claims by employees against their employer. Let me make it absolutely clear that the Bill is not remotely trying to roll back the law on unfair dismissal or to reduce the protections against discrimination in the work place.
The hon. Member for Bassetlaw (John Mann) tried to identify the party political origin of every measure in the Bill. As it happens, it was a Conservative Government who set up employment tribunals, introduced employment rights and started the whole process that we now have. The intention was to provide a sensible, accessible and low cost way of resolving disputes and awarding compensation where some breach of employment rights had taken place. Over the years, the system has become legalistic. It has become almost habitual for anybody who loses their job to bring a claim, because there is very little risk to them and a great deal of encouragement to have a go. None of that is being tackled too directly by the Bill.
Addressing the power and cost of tribunals is much overdue. The principal fundamentals of employment rights are utterly beyond dispute nowadays. For the hon. Member for Newcastle upon Tyne Central to claim that this Bill is a serious threat to the real principles underlying employment rights and achieves no important benefits shows that she has not met enough employers. When we talk to small employers about the problems of running a competitive business, most will rapidly start raising the problem and cost of claims before employment tribunals. The changes we propose could be criticised for being too modest, but they are certainly heading in the right direction. They should not invite a knee-jerk reaction from the Labour party, or anybody else, that nothing should be done to deregulate in that area and to remove unnecessary cost.
Similarly, on health and safety, absolutely nobody is suggesting, in this Bill or anywhere else, that we lower standards in this country when it comes to protecting the health and safety of the work force, or anybody else. We are not short of regulation in that area. Most of it will remain intact, but what is proposed here seems to be perfectly sensible. The biggest single change is to take away the burdens of health and safety legislation from self-employed people who are not in an occupation that can pose a threat to other people, as will be specified. It is absurd. Let us take a self-employed person, not one of those self-employed contractors in the business of the hon. Member for Bassetlaw, but someone writing a novel in his cottage in the countryside in Dorset. He is a self-employed person. Is Labour going to argue passionately in Committee that he should be subject to health and safety at work legislation, which he is at the moment? Of course he is not likely to be sued unless he throws a book at somebody in a moment of bad temper, but even that is probably not a breach of the health and safety at work legislation. He is subject to inspection. He may have to pay regard to the guidance. I have taken an extreme example of what should be a harmless occupation—if he is a reasonable novelist.
There is a range of other self-employed people who may have to take professional advice on what impact the Health and Safety at Work etc. Act 1974 has on their particular activities. We are proposing to clarify that health and safety legislation applies to those people who are engaged in activities that could pose a risk to people other than themselves. Clarity will come when we produce information—as soon as we can in the course of the Committee, as my right hon. Friend the Minister for Government Policy has said—on the specified sectors of the economy and specified occupations. A statutory burden will be lifted from a wide range of self-employed people who have been covered by it by accident.
John Mann
No self-employed novelists have had health and safety inspections or a burden that they have had to consider. Is not the problem that once we say a line will be drawn and some will be covered and some will not, that creates a grey area? The grey area creates danger and damage and risk, including for the person themselves.
Mr Clarke
I deliberately chose, as the hon. Gentleman did at the other extreme, the rather way-out example with my self-employed novelist. I have not done the research on which self-employed people have found themselves subject to inspection, the recipients of guidance they do not want or feeling obliged to take inspections. I do not know whether self-employed beekeepers or all sorts of other people fall into this area, but there is no doubt that the legislative change and the clarity proposed will put the duty and burden on those who might pose a risk to others and move it from vast numbers of other people. Our independent regulatory committee has estimated the saving for the businesses of many self-employed people.
John Mann
The right hon. and learned Gentleman gives the example of a self-employed beekeeper. A beekeeper friend of mine was nearly killed when moving a hive during rain because he was not aware of the dangers during rain. If the person moving it with him had nearly been killed, there might have been a claim against him. Does that not illustrate precisely why an overarching approach is far better than additional regulation and somebody deciding who is in and who is out?
Mr Clarke
I admire the eclecticism of the hon. Gentleman. I knew that I could not engage with him on mountain climbing but I underestimated his knowledge of bees and beekeepers. I shall take considered advice on the application to beekeeping and I have no doubt that the matter will be raised in Committee if the position of beekeepers becomes a point of real contention when the list is published. The point that I am trying to make is that I think that the vast majority of self-employed people—I shall not name another esoteric profession—need not be covered by legislation, subject to the Health and Safety Executive, inspection and so on, or to take professional advice. We are rationalising and making sense of one area whereas otherwise our commitment to the health and safety at work of employees and the health and safety of the public remains undiminished.
Another measure that all Opposition Members tried to make a mainstream political point about is the growth duty we are putting on non-economic regulators. I am not a climate change denier; the Government are in favour of environmental protection, and the conservation of our habitat and essential national heritage is a perfectly important objective of the Government. It is completely over the top to describe the changes in the Bill as sometimes threatening all that. We are saying that the various non-economic regulators should have regard to the desirability of the growth of the economy while carrying out their other duties. That was described as a mad dash for casino growth and likened to our casting away of regulation on bankers, which we did not do—it was the previous Government who did that. I would have agreed with the hon. Member for Bassetlaw had he cited that example, as it was a good example of the importance of regulation and the pathetic inadequacy of the Financial Services Authority when the then Chancellor gave it that responsibility. In this case, all that we are doing is saying that while it remains liable to follow its existing guidance—it has been pointed out that it is supposed to regulate only where necessary and proportionate—it is supposed to have regard to the impact on individual businesses, and it should have regard to the growth of the nation. Serious conservation in a highly developed, advanced economy like ours and the protection of our natural environment have to take account of the fact that at the same time, we hope to be a growing economy and a powerful, modern, industrial nation. It is a question of balance, judgment and common sense between the Government’s economic interests and our desire to conserve what is best in our heritage. Describing the Bill as an attack on that is absurd.
That shows why the previous Government’s record was pathetic on deregulation and reducing the burdens on business. They constantly gave in to pressures that drove them in the other direction, and it requires a Government with clarity of purpose to get hold of the subject and make a detailed attempt to reduce unnecessary burdens, bureaucracy and paperwork. The printing of useless documents and general obstructions to growth and efficiency need to be removed if that is to be a success.
I welcome the fact that some things received universal approval. My hon. Friend the Member for Stroud (Neil Carmichael) discussed what we are doing on apprenticeships, and no one gainsaid him on that. Those are important measures that will strengthen skills training in industry and help to improve young people’s prospects of employment. The measures on yarn received widespread support from those in the House who do knitwork. The measures on rights of way achieved remarkably unanimous acceptance—this is an impossibly controversial area, but the stakeholders’ group has reached agreement. The Government’s proposals have been advanced, and I am glad that they have been accepted.
There was talk of the European Union. We are going to try to secure the application of the same principles there, and Barroso has begun a deregulatory drive, which faces the same difficulty in Europe that it has always faced in Britain, because most of the regulations are supported by some lobby or other. The European regulations are the result of the single market. To stay in the single market required a mass of regulations. When the then Government pressed for the single market to be created, the British Commissioner whom we appointed—Arthur Cockfield, I think—came up with thousands of amendments, which were required in a single market if it was to have common regulation, as we heard, of consumer rights, safety standards, consumer protection, environmental protection and so on.
Our example should be followed in the rest of Europe, and it will help us to guide other member states to adopt the same approach. I believe that for all European countries, but it is Britain that particularly concerns me. If we are to regain our competitive position in the wider market and return to normality as one of the stronger economies in the modern world, deregulation and reducing burdens on business is part of that.
As my hon. Friends the Members for Macclesfield (David Rutley) and for Witham (Priti Patel) said, we are not saying that this is the sole answer for our economy or for small business. It is merely a contribution to a Government policy that is wholly taken up with the plan for long-term economic growth, giving particular priority to small and medium-sized enterprises in this country as never before. We are reviewing the range of advice that the Government give to small businesses and the range of financial support available to them. We have reduced the tax burden on small employers, particularly for young employees. UK Trade & Investment is concentrating on small and medium-sized businesses that want to get into export markets. We are putting a great trade effort as a Government into supporting them. We are reforming UK export finance to make sure that it is available to those small exporters.
This Bill is far from being the entirety of what we are doing to turn Britain into a competitive nation again. It does not cover everything we are doing for the small businesses that provide much of the employment nowadays if one gets one’s economy moving again, but it makes a very important contribution. We actually have a Government who are anti-regulation, anti-bureaucracy and anti-pointless cost. I commend the Bill to the House as a very useful contribution to our efforts.
Amendment, by leave, withdrawn.
Question put and agreed to.
Bill accordingly read a Second time.
Deregulation Bill (Programme)
Motion made, and Question put forthwith (Standing Order No. 83A(7)),
That the following provisions shall apply to the Deregulation Bill:
Committal
(1) That the Bill shall be committed to a Public Bill Committee.
Proceedings in Public Bill Committee
(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Tuesday 25 March 2014.
(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.
Consideration and Third Reading
(4) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.
(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.
(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and Third Reading.
Other proceedings
(7) Any other proceedings on the Bill (including any proceedings on consideration of Lords Amendments or on any further messages from the Lords) may be programmed.—(Gavin Barwell.)
Question agreed to.
Deregulation Bill (Money)
Queen’s recommendation signified.
Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),
That, for the purposes of any Act resulting from the Deregulation Bill, it is expedient to authorise:
(1) the payment out of money provided by Parliament of any increase attributable to the Act in the sums payable under any other Act out of money so provided; and
(2) the payment of sums into the Consolidated Fund.—(Gavin Barwell.)
Question agreed to.
Deregulation Bill (Carry-Over)
Motion made, and Question put forthwith (Standing Order No. 80A(1)(a)),
That if, at the conclusion of this Session of Parliament, proceedings on the Deregulation Bill have not been completed, they shall be resumed in the next Session. —(Gavin Barwell.)
Question agreed to.