Kenneth Clarke & Oliver Letwin: Ronald Reagan would have given our deregulation bill the thumbs-up

Kenneth Clarke is the Minister without Portfolio and Oliver Letwin is Minister of State at the Cabinet Office

It was Ronald Reagan who told us that the nine most terrifying words in the English language were “I'm from the government and I'm here to help”.  It is a sentiment which millions of businessmen and women up and down this country identify with, as they survey the entanglement of red tape in which their businesses have become wrapped.  It is also a sentiment which the Deregulation Bill we publish today aims to begin to change.

Any well-functioning economy does need to be properly regulated.  No one can object to sensible rules which keep people safe in their jobs, or prevent unfair treatment or wrongdoing.  But in recent years a mountain of the stuff has been unnecessarily piled onto the statute book.  All of it well-meant, perhaps, but the reality is that its major effect has been to waste time and money for hard-working people and tie honest business in knots.

What it also does, of course, is render British business less lean than it could be in the fiercely competitive global marketplace.  Each unnecessary regulatory burden has a cost, and this cost acts as a deadweight, working against the efforts of British business fighting for export business across the globe.  If we allow this situation to continue unchecked, we will find ourselves sorely stretched in the global race we face with the economic giants of China, India and Brazil.

The Deregulation Bill is the latest front in this Government’s ‘Red Tape Challenge’ campaign which aims to get to grips with this.  Already a major overhaul of health and safety has seen hundreds of thousands of businesses removed entirely from unnecessary inspections.  Corrosive no-win, no-fee legal claims have been totally reformed.  The qualifying period for unfair dismissal has been increased to two years.  New incentives have meant that roadworks on the busiest roads are done during quieter times – saving business over £27m per year.  In all, over 1,900 unnecessary laws have so far been identified for the scrapheap or reform. Business is already being saved a minimum of £212 million a year.

The Deregulation Bill takes this further.  It will free just under a million self-employed people in low risk occupations from health and safety laws entirely.  It removes Employment Tribunal judges’ powers to issue wide recommendations to businesses brought before them.  And by putting a duty on regulators not to burden business with unnecessary red tape, it will help to ensure that every nook and cranny of Whitehall is relentlessly focussed on growth.

Of course it is not just business which is affected by unnecessary red tape.  Excessive regulation also infuriates individuals and makes life more difficult for voluntary groups.  That is why the Bill will extend the Right to Buy to those who have lived in their council home for three years, scrap ridiculously heavy-handed bin fines for people who forget to close the lids of their bins, and improve Rights of Way legislation to prevent some of our ancient footpaths being lost forever while also making it easier to divert them sensibly around obstacles.  Other measures free schools from unnecessary targets and pointless paperwork, and remove prescriptive requirements on local authorities.

And this is not all.  Permanent challenge is, in our view, the only way to tackle a problem as pervasive as red tape.  That is why we now have a strict ‘one-in, two-out’ rule which means that nobody in Government can introduce a new regulation without identifying regulations worth double its value for the chop.  It is also why we have made a commitment to reduce the costs to business of tax administration by £250 million each year.  These moves are now joined by a new mechanism, introduced by this Bill, which will allow Parliament to identify and remove uncontroversial legislation much more quickly.  Our aim is that this procedure will become a regular fixture in the parliamentary calendar.

What happens next is that parliamentarians from both Houses will scrutinise this Bill, and make recommendations for ways in which it could be improved.  Once this is completed we will be able to introduce the final legislation to Parliament.  Meanwhile the Red Tape Challenge will continue. By the end of this year we will have reformed Employment Tribunals to weed out spurious claims and save business £40 million.  The next months will also see daytime and early evening licensing requirements for community halls scrapped, a big reduction in costly housing standards, a major rationalisation of environmental guidance knocking 80 per cent off the time it adds to setting up a business or starting a project, and much more.

This is the beginning of a fundamental change in the culture of government.  We think Reagan would have approved.