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Small Business
Mr. Deputy Speaker (Mr. Michael J. Martin): Madam Speaker has selected the amendment in the name of the Prime Minister.
7.15 pm
Mrs. Angela Browning (Tiverton and Honiton): I beg to move,
- That this House opposes the growing regulatory burdens that the Government has added to business costs; deplores the failure of the Government to understand the contribution that the small business sector makes to employment, growth and UK trade; calls on the Government to recognise the failure of the Better Regulation Task Force and the consequences of ill-thought-through legislation and regulations that have damaged small business; and condemns the Department of Trade and Industry for unco-ordinated policy initiatives and for diminishing the status of small business debate in the House of Commons.
New Labour promised small business a lot when it came to office. Indeed, its manifesto said:
The Government also implement regulations in such a way that even their own chairman of the better regulation taskforce called it a dog's dinner. They were described in a Trade and Industry Committee report in terms that have not previously been seen in such reports on this subject. For example, the 13th report, on small businesses and enterprise, stated:
The Secretary of State for Education and Employment referred to
The Secretary of State will do anything rather than answer publicly for his failure to understand small businesses. Most important of all, by last year it was apparent to everyone, including small businesses and their representative organisations, that the Government and these Ministers are all talk and no delivery.
Mrs. Claire Curtis-Thomas (Crosby):
Would the hon. Lady be kind enough to tell us how often her Administration held lectures, or rather debates, on small business services?
Mrs. Browning:
We did not lecture the House, whereas we are used to having lectures from this Administration, not only on small business, but on just about everything. We held regular debates but, more important, Ministers in the previous Administration made statements to the House and held full debates. On both occasions, they were subject to questioning, whereas this Administration, especially the Secretary of State and his team, are reluctant to submit themselves to the scrutiny and questioning of hon. Members.
Mr. Gerald Howarth (Aldershot):
Does my hon. Friend recall that, in the early part of the Conservative Administration, we had Ministers, such as Sir David Mitchell, who understood businesses because they had run small businesses and brought their experience to the House?
Mrs. Browning:
It is an added bonus when Ministers who speak on a subject actually know what they are talking about. That is one of the distinctions between the previous and the present Governments when it comes to any matter to do with business, but especially small businesses.
Not only are this Administration adding to business costs they have completely lost the plot.
Mr. Geraint Davies (Croydon, Central)
rose--
Mrs. Browning:
I am happy to give way on that point.
Mr. Davies:
How very amusing. Will the hon. Lady confirm that the figure of £9.6 billion is based on old regulations? It is based primarily on the minimum wage, which I understand she will support, so the Conservatives would have that cost. Does she accept that the figure for the working time directive is massively inflated? Would she reverse the working time directive should the Tories come to power? I suggest that she could not do so, because of EU law.
Mrs. Browning:
All the burdens that the hon. Gentleman's Administration are putting on business are under review. They are all on the table, and are being closely considered.
The figure that I quoted for the total of the aggregate cost that the Government have put on business was produced by the British Chambers of Commerce. It was challenged by the Minister for Small Business and E-Commerce in the debate in Westminster Hall. The British Chambers of Commerce subsequently issued a press release, which I shall quote as it may be helpful to the hon. Gentleman. It was responding to the fact that the Minister for Small Business and E-Commerce had claimed that the figures were inaccurate--along the lines of the hon. Gentleman's argument. Chris Humphries, the director general of the British Chambers of Commerce, said:
Mr. Davies:
Will the hon. Lady confirm that those costs would continue under a Conservative Administration, and that there is no plan to reverse either the minimum wage or the working time directive? What is the point of bringing these matters to the table? It is not even true.
Support for small businesses will have a major role in our plans for economic growth. We will cut unnecessary red tape.
Three years down the track, the Government avoid debates on small business and have deliberately done the subject down. There is a reason for that, of course, which is that their track record over the past three years has been to add £9.6 billion of regulatory costs to business. They fall disproportionately on the small business sector.
From the situation as we saw it a year ago, where there seemed to be something of a policy vacuum on SMEs--
small and medium-sized enterprises--
we have moved to one where there is some risk of an excess of loosely connected and apparently uncoordinated policy initiatives shooting off in all directions, generating noise and interest, but not commensurate light.
When the Government came to power, they promised an annual debate on small firms and made quite a virtue of that. We certainly do not disagree with holding such a debate, but the then Minister for Small Firms, Trade and Industry began the debate in the first year of the Parliament by saying that it
fulfils a commitment that the Government gave while in opposition, when we said that we would institute an annual parliamentary debate about the small business sector in the United Kingdom.--[Official Report, 19 June 1998; Vol. 314, c. 606.]
They did not have a small firms debate the following year. Indeed, at business questions, my right hon. Friend the Member for North-West Hampshire (Sir G. Young), the shadow Leader of the House, kept asking when we might
have such a debate. A whole year went by. When it eventually took place, it was relegated to Westminster Hall. As the British Chambers of Commerce said:
From our perspective this has to be a downgrading of the importance of small firms. This debate should be in the House of Commons with the Prime Minister. It does not signal that the government is taking small firms seriously.
Even when the Government appear to have proposals to help small firms, the Secretary of State remains silent. Last June, they produced two documents, one of which was specifically about small firms and the Small Business Service. The Secretary of State for Education and Employment made a statement on post-16 training and the Secretary of State for Trade and Industry sat next to him as both documents were important to business, but the only reference to the Small Business Service document throughout the statement amounted to some 21 words.
the parallel consultation on the Small Business Service announced today by my right hon. Friend the Secretary of State for Trade and Industry.--[Official Report, 30 June 1999; Vol. 334, c. 345.]
There was no detailed presentation in that statement. It is a mystery why, if the Small Business Service is to be of such value to the small business community, the Secretary of State for Trade and Industry remained silent in his seat and did not take the opportunity to make a statement and, perhaps more pertinently, submit himself to questioning from the House about the new proposal that he was introducing on behalf of small businesses.
What matters to business is the overall cost of government regulation. We therefore stand by our overall figure of £10 billion and, in particular, the costs of the Working Time Directive.
that is the reports from the Department of Trade and Industry--
The Working Time Directive is by far the biggest cost facing business at £7.65 billion over the life of the Parliament. This includes the cost of minimum daily and weekly rest periods and a minimum paid annual leave, and the additional week's paid leave introduced from November 1999. This is of course the result of a European Directive but regardless of the source, business has to bear the cost.
However, I must stress that, contrary to reports--
BCC's figures do not include the cost of paying the minimum wage, which we do not treat as a regulation. If we were to add the recurring financial costs of paying the minimum wage, the total cost of red tape on business would increase to a massive £17 billion.
I hope that that has been helpful to the hon. Gentleman.
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