British business, like the British people, has a propensity to be fairly long-suffering and will accept most regulations as part of the burden of living in a democratic society. However, what arouses the fury of business most is the perception that under the cloak of European requirements, the British Government – and the British Government alone – legislate in a way that is significantly more anti-business than is the case in other member states. This Bill is designed to help British business become more competitive.
The irritation of business is encapsulated in the phrase "a level playing field". Whether it is the much publicised prosecution of a food producer or regulations that drive road hauliers out of business, it is the inequity of the British approach that so often generates the headlines. Although it is necessary to scrutinise all existing regulations to see if they can be sensibly simplified, a deregulatory approach on its own will not reduce the total net amount of regulation because new regulations are continually being promulgated in great detail.
The EU treaty sets out the legitimate extent of business regulation in article 36 and implementation nearly always increases business costs. The UK procedure sets out clear and well rehearsed reasons why different EU nations may have different approaches to the development of national legislation. Here in the UK, the impact of national legislation is normally much more rigorous than in several other European countries.
The body of domestic regulation that currently exists is a result of the consensus of all of the pressures that apply within our constitutional framework. In a democracy, the people who would stand to lose as a result of any proposed change in the law tend to shout a lot louder than those who stand to gain, and the former will often appear on the broadcast media and in the newspapers to set out their case. Those who should benefit from such changes are normally much more reticent and consequently the case for maintaining, or extending, existing regulations is invariably broadcast more forcefully.
Accordingly there is little chance of rolling back legislation through parliamentary means unless, unusually, there has been a massive shift in popular sentiment as a result of technological or similar change. Even apparently simple deregulation changes take much time and effort and, as someone who has recently devoted dozens of hours of time to the scrutiny of the Licensing Bill, I can confirm that to be the case. Likewise, Sunday trading was only finally approved in the mid-1990s, having initially come before the House as long ago as 1986.
Our political system has a much greater tradition of wider consultation, with draft proposals being sent to the broadest range of bodies for comment. That leads special interest groups to lobby hard for their particular concerns in using the proposed legislation to maximise their individual requirements. In contrast, British business organisations, such as chambers of commerce, are often significantly less important and well organised than the equivalent organisations in continental Europe. Commercial and trade bodies in other member states often have a far stronger tradition of business involvement at the senior levels of government and the civil service.
The tradition of UK parliamentary democracy also ensures that Ministers can be easily called to account, although perhaps less easily than many of my hon. Friends would like to believe. However, such lobbying is much more likely to be by an MP on behalf of a disgruntled constituent and rarely on account of a complaint from business. Even in my constituency – which is unusual, as some 950,000 people a day come to work in the Cities of London and Westminster and I have a slightly pastoral role for the vast number of businesses based there – I am very conscious that relatively few businesses seek to take up their concerns with Ministers. Officials in Departments are acutely conscious of that imbalance and, as a result, regulations tend to be couched in such a way as to protect the public, rather than the interests of business.
All Members know that parliamentary time is scarce and, as a result, it is difficult for Departments to claim more than a handful of legislative slots each year. The main opportunity for departmental initiatives therefore is through statutory instruments. The policing of British regulations is well established and comprehensive, with a culture that is both local and non-corrupt, but inevitably, each local inspector is appraised on the number of prosecutions that he achieves, rather than on the overall competitive success of the sector for which he may be responsible. As I have mentioned, much of that contrasts with a more lax enforcement regime on mainland Europe.
Many Members will have expressed concerns about gold-plating – where the UK goes beyond the minimum required by a European directive – and although there have been umpteen initiatives in the past decade or so to try to stem the tide of regulation, the burden on British business continues and the prospect of a level playing field with the rest of the EU seems, I am afraid, as elusive as ever.
The legislation that I am proposing, whereby a provision of UK domestic law made by statutory instrument under section 2(2) of the European Communities Act 1972 in purported implementation of an EC legal obligation could be attacked in the courts if it were shown that either the UK regulation contains burdensome regulations that are not required by Community law, or where member states have a choice about how they implement the relevant EC law and the UK itself has not chosen the least burdensome method of implementation; or if one or more of the other member states do not have in their law or, indeed, if do not effectively enforce their laws, such provisions equivalent to those imposed by the UK regulations.
In short, I seek to ensure that the lowest, rather than the highest burden would be placed on UK businesses and that the courts would have the power to grant a declaration to that effect, so the relevant UK regulation would cease to have effect to the extent that its provisions go beyond the basic minimum required by Community law. Businesses, affected individuals and bodies, such as trade associations, could go to court to apply for such a declaration. I should emphasise that such a defence would not apply in cases where the EC law obligation had been implemented subsequently by Act of Parliament, but only to the gold-plating that I earlier described.
The consequences of the Bill would be completely to turn the tables on the legislative priorities. Civil servants and officials, rather than being motivated to increase regulatory requirements, would in fact be keen to ensure that their proposals could not be overturned in court because they went further than those in other EU states. I hope that, similarly, UK embassies abroad in each EU member state would be obliged to discover more about the status of legislation in that country and feed back that information for the purposes of our good governance. Rather than Ministers having to defend European-derived legislation, any business that was prosecuted could argue its case for fair treatment in the courts.
May I take this opportunity to thank Sir Paul Judge, the businessman and philanthropist, for his work in promoting this initiative? I am also delighted to have received the endorsement of Ruth Lea of the Institute of Directors and John Blundell of the Institute of Economic Affairs, both of whom support the ideas in the Bill. Ideally, this small piece of legislation would have the effect of diffusing all the issues relating to that ever-elusive level playing field, which I understand to be the main regulatory complaint of British business.