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Mr. Peter Kilfoyle (Liverpool, Walton): The hon. Gentleman waxes lyrical about small businesses and the burdens that have allegedly been imposed on them since 1997. I am sure that he will agree that most farms, with the exception of agri-businesses, are small businesses. How many livestock inspectors were there in 1992 under the previous Government, and how many were there in 1997?
Mr. Lansley: I cannot give the hon. Gentleman those precise figures, but a deregulation contracting-out order relating to the Slaughterhouses Act 1974 removed duplicate requirements for the licensing of slaughterhouses. He should know that in the year up to the last election, as my hon. Friend the Member for Totnes (Mr. Steen) made clear to the Minister, the previous Conservative Government introduced 26 deregulation and contracting-out orders. The pace of deregulation was growing. This Government introduced five such orders in the following year, four in 1999, one in 2000 and only one this year, which is a sad record.
Mr. Kilfoyle: Does the hon. Gentleman accept--will he take my word for it?--that the number of livestock inspectors decreased between 1992 and 1997? Deregulation is not always in the interests of small business.
Mr. Lansley: We all understand that deregulation has to be balanced. That is why the previous Administration were pursuing deregulatory measures while occasionally introducing regulatory measures. The hon. Gentleman seems unwilling or unable to accept the fact that the cumulative burden on business is a significant part of our competitiveness. It is no good Labour Members talking about the positive aspects of specific regulations without taking account of the context within which each regulation, which they regard as attractive, adds to the burden of the total costs on business.
At the last election, the Labour party said that it understood that burdensome costs should not be imposed on business, but the burdens barometer of the British Chambers of Commerce sets the total cost of burdens at £10 billion-plus. The analysis published for Politea by Nicholas Boys-Smith shows that the annual cost of this Government's regulations since 1997 will be £12.7 billion by May 2001.
Mr. Ronnie Campbell (Blyth Valley): Is the hon. Gentleman saying that the minimum wage, the working families tax credit, the directives on working time, maternity leave and part-time working and the Disability Discrimination Act 1995 put burdens on business that, if elected, the Conservatives would remove?
Mr. Lansley: The hon. Gentleman simply adds to the same point. Let us consider those measures--[Interruption.] If the hon. Gentleman allows me, I will respond to his question.
It is pretty straightforward. My argument is twofold. First, undesirable and unnecessary regulatory burdens have been imposed: for example, the burden of trade union recognition--[Hon. Members: "Oh!"]--yes, and the way in which that was done. It is clear that the threshold at which trade union recognition was introduced extends the requirement down to small businesses that, in effect, have no personnel function. Labour Members should understand that the way in which that requirement was imposed will act as a major additional burden on small businesses that are not equipped for trade union recognition.
Marjorie Mowlam: Will the hon. Gentleman give way?
Mr. Lansley: Let me complete my point before doing so.
There has been a string of such measures, including the working time directive. We had no choice about the implementation of the working time directive in this country, although the previous Conservative Administration tried to frustrate it. The way in which it was introduced--with a lack of lead times and a lack of clarity in the regulations that it imposed--was extremely damaging to business. In examining the costs and benefits of implementing the working time directive, I meet many business representatives. When I ask about their experience, most reply that they incur massive administrative costs and that most employees simply opt out of the directive's effect. Therefore, the costs are large and the benefits small.
Marjorie Mowlam: The hon. Gentleman should get his facts right. Small businesses employing fewer than
20 people are exempt from legislation on trade union recognition. The job of the Small Business Service, which he quickly dismissed, is to consult small businesses, and each regulation is considered to ensure that small businesses do not suffer.
Mr. Lansley: I have to take issue with the right hon. Lady. The director general of the British Chambers of Commerce says that his research shows that only 21 per cent. of firms with fewer than 50 employees have a dedicated personnel resource, whereas the figure for firms with more than 50 employees is 71 per cent. It is all very well for the right hon. Lady to talk about firms with 20 employees, but a more appropriate threshold for trade union recognition would have been 50 employees or more.
I question not the principle of trade union recognition, but the appropriateness of the way in which the requirement was introduced and the threshold that was set, given that the impact on small businesses has been disproportionate. The Government say, "Think small first", but they simply did not do that. Through the costs that it imposes on small businesses, the directive is having an effect on competitiveness.
The Parliamentary Secretary, Cabinet Office (Mr. Graham Stringer): Will the hon. Gentleman give way?
Mr. Lansley: Let me provide a couple of summaries to which I shall invite the Minister to respond. Digby Jones of the Confederation of British Industry says of the Government:
- "They have a track record over three years of being one of the most regulations-keen administrations for some time".
- "Despite all its rhetoric, the reality is that Government has dramatically increased the regulatory burdens that threaten small business competitiveness. Excessive red tape is stifling the very enterprises the Government is seeking to promote".
Mr. Lansley: The Minister simply does not understand the argument as business understands it. He will know that I am a former deputy director general of the British Chambers of Commerce; it was my job to represent small businesses and to understand their position. They know, as I know and he should know, that businesses constantly face the question of what will happen as the economic cycle turns down. The current Chancellor of the Exchequer has no more abolished the economic cycle than any previous Chancellor has been able to. British business most needs to be competitive when it competes in declining domestic and overseas markets. A few months ago, a PricewaterhouseCoopers survey showed that, compared with the average of EU businesses, two thirds
of UK businesses' relative advantage in competitiveness had been lost during the four years of the Labour Government.Such competitiveness is easily eroded and is difficult to regain. I am afraid that we will not begin to discover the damage done by the Government until businesses start to struggle and lose. Manufacturing businesses that are exposed to international trade have already discovered it; businesses in the service sector that are dependent on cyclical changes in demand will, unfortunately, discover it when the Chancellor's tax and spend policies take us down that unhappy path.
That is why, on 5 March, Forbes Magazine could, unfortunately, publish an article for an international readership, in which it said that the Government were
- "quietly loading the British economy down with new taxes and regulations that threatened to erode the advantages of doing business in Britain".
Too often, consultation is a dead letter. The business community, for example, will have seen that the Prime Minister was so keen on consultation on the work-life balance that, before it concluded, he was prepared to pre-empt it and make announcements at the Labour party's spring conference in Glasgow. Regulatory impact assessments, as provided for by the Government, have been wholly inadequate. They have not been independently audited and are highly subjective, reflecting Ministers' need to try to justify their legislation.
The right hon. Lady talked about policy costs on the one hand and implementation costs on the other. Regulatory impact assessments are highly confusing and tend to muddle policy costs and implementation costs. They tend to exaggerate benefits and underestimate costs. Most of all, the Government's record on regulation demonstrates complete unwillingness to recognise the cumulative effects on the business community of the regulations that they have introduced and continue to introduce.
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