21 May 2008 :
Speech
Regulatory Enforcement and Sanctions Bill
Mark Pritchard (The Wrekin) (Con): I am grateful to be called in this debate, Mr. Deputy Speaker. First, may I apologise to the House for the fact that, unfortunately, because of a prior commitment, I will not be present for the winding-up speeches?
The Government are very much a Johnny-come-lately to deregulation. I have touched on the irony that the Bill creates more regulation and legislation in order supposedly to reduce regulation. By that very fact, and by their previous form in this area, the Government are very much the worst offender and they set the worst possible example to the nation at large and to large, small and medium-sized businesses.
Given that other hon. Members wish to speak, I shall limit my remarks mainly to small businesses and the Bill’s potential impact on them. Small businesses are the lifeblood of the British economy; more than 95 per cent. of businesses in this country are small businesses of 25 or fewer employees. Without such businesses and hard-working small business men and women, the British economy, and the economy in both my constituency and the fine county of Shropshire, would grind to a halt.
Yet, small businesses are increasingly feeling the tightening of the regulatory noose and the big foot of Government trampling over entrepreneurship and innovation. What business men and women tell me—they mostly do so privately—both in my constituency and as I travel in different parts of the country is that they want Bolshoi light touch regulation, rather than the trampling big foot of Government. Regulation is not a bad thing in itself per se; it is not intrinsically wrong and it has an important role to play both in the private and public sectors—for example, in food safety, consumer protection and environmental health. However, many businesses feel that many regulations are unnecessary and burdensome, and they distract business people from their core raison d’être: creating jobs and investing in communities.
Money and profit have been mentioned in this debate, and there is nothing intrinsically wrong with them. If businesses are not profitable, they cannot grow, expand or employ people. If people are not employed, they do not have the disposable income that they need to go on holiday, to look after their families in the way that they want or, in this day and age of high food prices, to put a loaf of bread on the table. We should not confuse the important issues of profit and business, and the other social factors to which hon. Members referred.
It is not just Members of Parliament, either Conservatives or those in other parts of the House, who are aware of the burdens; the Federation of Small Businesses, the CBI, the Institute of Directors, the British Chambers of Commerce all testify to the fact that burdens on, and costs to, businesses are increasing, rather than decreasing. The CBI has said that since 1997, when this Government came into power, £55 billion-worth of new burden on business has been added. That is a huge sum, and clearly many casualties have resulted. Perhaps the Minister might tell us what research has been done with Companies House on the number of businesses—not only those that have gone into receivership, but those that have voluntarily wound up and have closed their companies—that have closed as a result of regulation and red tape.
Although I agree with many of the Bill’s sentiments, I am concerned that, once again, we are having more law, rather than better law. The Minister must answer another question: given that local authorities enforce about 80 per cent. of regulations and licensing procedures, and given that the need for enforcement continues to grow across the spectrum of various regulations, does he feel that those authorities are adequately and appropriately resourced to be given a greater role?
I am a member of the Select Committee on Work and Pensions, which recently reported on benefit simplification and found that there is still too much complexity in the benefits system. That is relevant, because Government need to set the right example—if Departments cannot do so, how can they expect small businesses to do so? The Government need to apply not only a light touch, but a lot more common sense.
I welcome many of the parts of this Bill, and many of the concessions and amendments made in another place. However, as it stands, the Government are not going to note the flaws that my hon. Friend the Member for Huntingdon (Mr. Djanogly) has rightly pointed out, and the Bill will remain a mess. I do not think that we will be able to support it in the way that the Government would want.
The suggestion that this Government will cut red tape and deregulate is as likely as the Prime Minister performing at a comedy club. If the Government are serious about this issue, they will listen to the concerns of my hon. Friend and of small businesses. It would be helpful if we had more Labour Members from a business background, but unfortunately very few are. I declare an interest as a former businessman, and my hon. Friend for a Northamptonshire seat—
Mr. Bone: Wellingborough.
Mark Pritchard: There are so many good MPs from Northamptonshire that I was confused. As my hon. Friend for Wellingborough rightly said, every burden placed on small businesses carries a cost. That cost is not always necessarily financial—although often it is—because it can be in time, with staff distracted from the key issues of running their business, employing people and investing in communities. I hope that the Government will rethink their position on many aspects of the Bill.
... MARK'S OTHER INTERVENTIONS IN THE SAME DEBATE Mark Pritchard (The Wrekin) (Con): I am grateful to the Minister, a fellow midlands MP, for giving way. Although I endorse the sentiment of the Bill, is the fact that the Government have had to bring it before the House not an admission of failure, not least as the CBI has said that £55 billion-worth of regulation has been placed on British business since Labour came to power? In a sense, it is ironic that today we are regulating to deregulate.
Mr. McFadden: The Bill is certainly not an admission of failure. The regulatory reform agenda in the UK is widely admired. The country remains a great place to invest and this year the World Bank’s “Doing Business” survey placed the UK second in the EU and sixth in the world for the best business conditions. ... Mark Pritchard: On the point about quantifying these issues, in Prime Minister’s Question Time, the Prime Minister indicated his support for the private Member’s Bill promoted by the hon. Member for Ellesmere Port and Neston (Andrew Miller) on agency and temporary workers. Will the Minister take this opportunity to put on record and quantify the cost to British industry of the Prime Minister’s comments today?
Mr. McFadden: We will publish any cost estimates and other information on that in due course. I do not want to get drawn into too long a debate on this issue, but, as in other fields, we have tried to achieve a method of meeting our goal while retaining the flexibility on which the country’s high employment record has been built. That will be our intention going forward. ... Mark Pritchard: The hon. Lady touches on the important issue of burdens and costs of regulation on business. Does she accept that currently the majority of new regulation in the UK comes from Europe? If so, why does her party insist on slavishly following European directives instead of standing up for British business? Her party would also sign up to the euro, which would create restrictions in monetary and fiscal policy.
Sarah Teather: I do despair of the Conservatives; they manage to get Europe into every possible debate. I am not going to get into a lengthy debate about it now, as I want to talk about the Bill. This is a Second Reading debate and I will deal with the Bill. I will not get drawn into wider discussions, as I suspect that if I were to do so I would be ruled out of order. Mr. Deputy Speaker is already looking at me far from approvingly.
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