Image: Martin Deutsch / Flickr.

The innocuously titled Deregulation Bill, quietly tabled in draft by Oliver Letwin and Ken Clarke just before the summer break, strips citizens of our right to be consulted before services are closed or privatised. It imposes a ‘growth duty’ on regulators to ensure they act in a more business-friendly manner, which could force health watchdogs like the Care Quality Commission to prioritise ‘economic growth’.

And it gives a blanket power to government ministers to repeal inconvenient laws without parliamentary scrutiny. 

Some aspects of this bill even bear remarkable similarities to what was dubbed the "Abolition of Parliament Bill" - a bill introduced in 2006 by then Labour Minister Jim Murphy MP but heavily watered down after widespread outcry, including by the Liberal Democrat party conference. 

Collectively these changes significantly increase the power of the Executive over the voice of citizens and parliament. Will there be a similar outcry now? The first formal call for evidence to the Committee scrutinising the bill, closes this coming Monday.

A bonfire of red tape?

The Deregulation Bill originated with the government’s Red Tape Challenge, an initiative to remove unnecessary regulation and through Lord Heseltine’s ‘No stone unturned: in pursuit of growth’.

‘Red Tape’ is an easy target. We all come across irritating regulations in our daily life that we wish did not exist. Rarely do we think about the reason for the regulation and the potential benefits. As the government admits “Good regulation is a good thing. It protects consumers, employees and the environment, it helps build a more fair society and can even save lives.”  

Given that description, who could argue against “good regulation”? However, as you read through the Deregulation Bill it becomes very apparent who the beneficiaries are intended to be: business.  

Scrapping our rights to be consulted

Clause 47 of the bill removes the responsibility [1] for local authorities to consult the public before making changes that will significantly affect them - such as closing or privatising local services.

The government argues that “local authorities should be trusted to engage with local people without a duty being imposed on them to do so”.

If this bill becomes law, local authorities will be able to change policy and cut service provision without public consultation. This includes their new responsibilities for public health, public wellbeing and health inequalities, as well as their provision of social care and its increasing integration with healthcare.

All regulation must “promote growth”

The bill also imposes a new “growth duty” on watchdogs and regulators. Currently, such bodies exist to monitor particular sectors - like health - and take action in the best interests of the public according to the relevant law.

But Clause 58 of the Deregulation Bill puts a responsibility on regulators in England so that when they take regulatory action it has to be with regard to “promoting economic growth”.

There are many regulatory bodies. There are regulators of the healthcare professions like the General Medical Council, General Dental Council, Nursing and Midwifery Council, and General Pharmaceutical Council. There are those that regulate and inspect safety and healthcare such as the Health and Safety Executive and the Care Quality Commission. Others regulate medical treatments including the Human Fertilisation and Embryology Authority, Human Tissue Authority, Medicines and Healthcare Products Regulatory Agency.

These “arms length” regulatory bodies exist to safeguard matters such as safety, professional or clinical quality and to ensure the laws made by Parliament are adhered to. Their independence and freedom from political interference is important. They have a specific function. They were not set up to regulate or promote economic markets.

However, clause 58 has the potential to apply a blanket requirement to ensure that everything the regulator does promotes economic growth.

The Bill does not mention which regulatory bodies will be affected but gives Ministers powers to specify them using secondary legislation - generally a rubber stamping mechanism. Since neither the Bill nor the explanatory notes exclude healthcare regulators from this new responsibility we must assume that they will be affected and so it may mean that the organisations licencing and inspecting healthcare providers, medicines and healthcare professionals, put promoting economic growth ahead of safety issues.

The Office of Fair Trading and the Competition Commission - both given new duties to regulate healthcare provision by the Health and Social Care Act - could be amongst those having a “growth duty” imposed by clause 58. This could mean that the mergers of hospital trusts (for example the recent provisional rejection, by the Competitions Commission of the plan to merge Royal Bournemouth and Poole Foundation Trusts) could in future be based on the effect of the decision on economic growth rather than on patient care.

Paving the way for an international corporate charter?

Is this bill also designed to pave the way for the new EU/US Free Trade agreement that Cameron is currently negotiating behind closed doors?

International trade in healthcare services can be described as “economic growth”.Cameron suggested as much in 2011 when he controversially referred to the NHS as a “fantastic business”.

As academics have noted, secretive negotiations on the EU/US agreement have focused primarily on sweeping away regulations that are seen as ‘barriers to trade’.

Regardless of whether they “help build a more fair society and even save lives”, regulation is often considered a hindrance by business, particularly foreign companies not familiar with the business culture in this country.

The EU/US Free Trade agreement may well include healthcare - Cameron has refused to rule it out. This will make it easier for big profits to be made out of the NHS by private healthcare multinationals. Clause 58 of the Deregulation Bill could be used to smooth the path, relaxing regulatory barriers in advance of the treaty coming into force.

Abolition of Parliament Act - Mark 2?

Finally, this bill gives sweeping powers to Ministers to repeal laws by order.

Currently, repealing a law requires another Act of Parliament. It is subject to the same scrutiny as creating a new law - a careful process of debate in both Houses of Parliament, committee stages, and amendments.

The only way that governments can currently circumvent this mechanism is through the use of Henry VIII Clauses. These are clauses sometimes added to a bill to say that the law can be changed by a Minister through secondary legislation (statutory instrument) and thus without substantial Parliamentary scrutiny.

The House of Lords Select Committee on the Scrutiny of Delegated Powers named such clauses after Henry VIII, a tyrannical king who had little regard for Parliament, because they give Ministers immense power. In 2010, Lord Judge, the Lord Chief Justice, expressed his concern saying "Henry VIII clauses increase yet further the authority of the executive over the legislature…they should be confined to the dustbin of history. We must break what I believe to be a pernicious habit”.

Far from scrapping these pernicious powers, the Deregulation Bill extends them dramatically. Clause 51 of the draft bill says that “a Minister of the Crown may by order provide for legislation to cease to apply if the Minister considers that it is no longer of practical use”.

This means that all the minister needs to do to repeal a law is to use a statutory instrument. The Bill says that the only requirement for consultation is to consult the appropriate devolved Law Commission, and, if the law applies outside England, the ministers of the appropriate devolved assembly or parliament, but not the assembly or parliament themselves.

Schedule 16 of the Bill provides several obscure Acts that will be repealed in this way (for example, the Newspaper Libel and Registration Act 1881, or the Coal and Other Mines (Horses) Order), to reassure us that the new power will only be used for out of date laws. However, once law, this mechanism could be applied to any law that a government minister doesn’t ‘consider’ useful. This is far more powerful than Henry VIII Clauses, which can only be used to repeal laws by order if that intention was written into the original law.

We saw through the passage of the Health and Social Care Act how this government has little regard to its responsibility (for example, removing the responsibility to provide healthcare, so that now the Secretary of State merely has to “secure that services are provided”) so giving ministers the power to repeal acts could be very dangerous and could affect some of our cherished rights.

Taken as a whole, the Deregulation Bill isn’t so much a ‘bonfire of red tape’ as a serious attack on our rights and an increase in the power of government.

[1] Under section 3A of the Local Government Act 1999 as inserted by section 138 of the Local Government and Public Involvement in Health Act 2007.

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Editors note - since this piece was published, the government appears to have backed down on the old clause 51 giving ministers power to rewrite laws without parliamentary scrutiny, saying there was no appetite at this time. However the other key clauses identified above - particularly the 'duty to promote economic growth' on regulators - remain at time of writing (Feb 2015) as the bill approaches its final stages - see this piece for more.