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Mr. John Whittingdale (Maldon and East Chelmsford): I beg to move, To leave out from "That" to the end of the Question, and to add instead thereof:

"this House regrets that a wider debate has not taken place on how the benefits and burdens arising from the Employment Bill are shared between individuals and the workplace; declines to give a Second Reading to the Bill because, although it contains welcome measures which promote family friendly practices in the workplace and which seek to improve dispute resolution procedures, it depends excessively on secondary legislation which is likely to impose significant extra burdens on business, especially small businesses; and because it will impose extra costs on business, further damaging British competitiveness at a time when manufacturing industry is already in a fourth successive quarter of recession."

Let me start by declaring an interest as the employer of an assistant who helps me with my constituency work. Following Mr. Speaker's earlier ruling, I would like to withdraw the interest that I registered against my name on the amendment to the Bill, as I understand that it is now no longer necessary for it to be there.

The Bill has come as a surprise to the House and to business. Just five months ago, the Queen's Speech contained no mention of an Employment Bill. In the debate on the Loyal Address, the Secretary of State spoke about an enterprise Bill, for which we are still waiting, and about the Sex Discrimination (Election Candidates) Bill, but she made no mention of the 53 clauses of further employment legislation that we are debating today.

Some of the measures in the Bill are welcome, and I shall set out our approach in detail in a moment. Overall, however, the Bill represents yet another raft of rights and entitlements for employees and trade unions, which will have the effect of adding still further to the costs, burdens and work load of businesses, and of small businesses in particular. It is extraordinary that, in the press release that announced the publication of the Bill, the Secretary of State claimed that the Bill would reduce red tape for employers. The truth is exactly the reverse, as almost every organisation representing business has made clear in their detailed comments about the Bill.

The Bill needs to be viewed in the context of the present state of the economy. My right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard) has already done a great deal today to puncture the balloon of self-confidence that envelops the Chancellor of the Exchequer. It is crucial, when considering employment measures of this kind, to keep in mind the climate facing British business today. Across the world, economies are slowing and business men are having to operate in a harsher climate in which competitiveness counts above all. Although the British economy as a whole may escape a recession, manufacturing industry has been experiencing one for almost a year. Every business survey has shown a worsening outlook, with increased uncertainty and pessimism. When asked what the Government could do to help, business men have time and again pleaded for relief from the burden of regulation.

The Organisation for Economic Co-operation and Development's report on the UK economy highlighted the

"considerable volume of new regulations."

In its pre-Budget report, the Engineering Employers Federation said:

"The growing burden of regulation remains a serious concern for business—increasing costs, reducing flexibility and diverting management time from efforts to increase productivity."

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The British Chambers of Commerce stated earlier this month that

"there is a mountain to climb in halting the tide of regulation sweeping business."

The European Commission has said that the regulatory burden on companies is heavier here than anywhere else in the European Union. Even the Chancellor of the Exchequer spoke this afternoon of the need to cut red tape. Yet, within a few minutes of his sitting down, we are faced with another Bill that will add a little bit more to the burdens on business. The result will be that we slip a little bit further down the international competitiveness league.

Mr. Lloyd: Will the hon. Gentleman do us the favour of saying which of the existing protections for people in the workplace the Opposition regard as the red tape that they now want to get rid of? It would be helpful to have a specific answer to that question.

Mr. Whittingdale: The Secretary of State made it clear in her opening speech that we have opposed the imposition of extra burdens on business on many occasions. Such measures have to be taken cumulatively. We have to consider the overall effect of all the regulations taken together.

Mr. Swire: Does my hon. Friend agree with me and, more importantly, with Ruth Lea, the head of the policy unit at the Institute of Directors, who has today pointed out an increase in the regulatory burden on business, and who goes on to say that

"there is now little doubt that the cumulative increase in the regulatory burden on business over the last four years has been considerable and is beginning to damage business's flexibility and competitiveness"?

Mr. Whittingdale: My hon. Friend is right, and it is not only the Institute of Directors saying that. Every business organisation that one cares to consult says that the biggest problem facing business in this country is the burden of regulation, yet the Government are steadily increasing it.

Mr. Frank Doran (Aberdeen, Central): If the hon. Gentleman will not tell us which of the regulations introduced by this Government he would get rid of, will he tell us which of the 3,000-odd regulations made in each of the 18 years of Tory Government he regrets?

Mr. Whittingdale: I must point out to the hon. Gentleman that, as my right hon. and learned Friend the shadow Chancellor made clear in his response to today's statement, the number of regulations introduced under this Government has reached an all-time record.

Mr. Chaytor: Will the hon. Gentleman be more specific on the question of which regulations he would abolish? Does he, for example, think that investment in

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human capital and in the skills of the work force—which is partly what the Bill is about—are measures that he would like to do away with?

Mr. Whittingdale: I am all in favour of investment in human skills in the workplace, but we cannot achieve that through compulsion and regulation. I will deal with that specific element of the Bill in a moment.

Rob Marris (Wolverhampton, South-West): I should like to declare an interest in that my constituency received money from the Transport and General Workers Union before the general election was called.

I want to turn the question around and ask the hon. Gentleman what regulations he would keep. It is a simple question. Which ones does he think are worth having, and which ones would he get rid of?

Mr. Whittingdale: Unfortunately, it seems unlikely that we shall be in a position to make that judgment for a few years. When we do form a Government, we shall need to consider all the regulations, and I am afraid that there will be a whole lot more by the time that happens. This flow is relentless, and we know that there are more to come. I hope that the Secretary of State will be able to listen to and answer the pleas of business, and to make it clear that she will not introduce further regulations after the many that are contained in the Bill.

Part of our problem is that the cost to business of the regulations in the Bill is extremely difficult to judge. As is often the case with legislation introduced by this Government, the Bill contains enabling legislation that will result in many of the new regulations being introduced by statutory instrument at a later date. Business is in no doubt as to the overall effect of the Bill, however. My hon. Friend the Member for East Devon (Mr. Swire) quoted the Institute of Directors. I would cite the example of the Federation of Small Businesses, which has said that the Bill is a

"raft of legislation too far."

The Confederation of British Industry has said that this must be the only piece of new employment legislation in this Parliament. As I have already suggested, we know that that is not going to be the case. Only two weeks ago, we had the consultation paper on flexible working. We are now informed by the Secretary of State that many more regulations are to be incorporated into the Bill in Committee. In two weeks, another consultation paper will be published, this time on discrimination in the workplace on grounds of age, religion and sexual orientation. There is, therefore, no prospect of the halt to the flow that business asks for time and again.

Any measures that help to resolve more disputes in the workplace without recourse to litigation are desirable and necessary. The Secretary of State has on several occasions drawn attention to the trebling of the number of claims to employment tribunals in the past 10 years, and the cost that that has imposed on business. The CBI estimates a total cost to British industry of £633 million a year. The Government's own consultation document estimates the average cost to an employer of each application at around £2,000. Many employers put that figure considerably higher.

Yet it is this Government who have extended employment rights to whole new categories of workers, shortened the qualifying period before appeals can be

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made to an employment tribunal and increased the ceiling on compensation payments. It is therefore hardly surprising that there has been a large increase in applications in relation to those rights.

We support the proposal to require employees to use internal grievance procedures to resolve disputes in the workplace without going to a tribunal, but we are concerned that the Government have significantly watered down their original suggestion in the face of pressure from their Back Benchers and the trade unions.

Like the Federation of Small Businesses and the Institute of Directors, we are disappointed that the Government have dropped the proposal to require applicants to pay a charge for bringing a claim. The Government suggest that it did not receive widespread support, but a Forum of Private Business survey found that 80 per cent. of respondents supported it.

The Government have made optimistic forecasts that their proposals will cut applications by a quarter with savings to employers of about £70 million, but significant costs will fall predominantly on small employers. Those are acknowledged in the Bill's regulatory impact assessment, and a number of legal experts have already cast doubt on the effectiveness of the remaining provisions.

The Secretary of State seemed to suggest that there may be a probationary period in which to consider whether the flexible working proposals have been taken up. If they are not, the Government may have to revisit the issue. Will she give the same undertaking on these proposals? If the number of employment tribunal applications does not decrease, perhaps she will reconsider whether further measures are necessary, in particular the proposal she made in the consultation paper to introduce a charge for applying to a tribunal?

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