| Previous Section | Index | Home Page |
6.41 pm
Mr. Richard Page (South-West Hertfordshire): Although I broadly welcome the Bill, I do not consider its title entirely apposite. It could have been the "This is the other half of the insolvency legislation that we should have produced in the last Parliament" Bill, or the "These are the OFT changes that we have been promising for years and years and have just got around to" Bill. What we have, however, is the Enterprise Bill. A more truthful title would be the Enterprise Regulation Bill: this Bill has precious little to do with enterprise, and an awful lot to do with the regulation of industry.
I am not against that, in fact, but I think that the Government carry spin a little too far. When their time is up and the pundits engage in a critique of their activities, the one word that will sum up those activities will be "spin". It will run through them just as the word "Blackpool" runs through a stick of rock.
Nevertheless, as I have said, I support the Bill. I am not in favour of rushed parliamentary reform: in many instances, it is a case of "Legislate in haste and repent at leisure". However, I agree with my hon. Friend the Member for Maldon and East Chelmsford (Mr. Whittingdale) that the Bill should have been scrutinised before being presented to Parliament. It contains 269 clauses and 26 schedules. In Committee, if the Minister speaks for only 10 minutes on each clause, it will take just a tad less than 3,000 minutes—50 hours—to give the background and the Government's reasoning. The House should realise how much those involved in industry and commerce want to hear ministerial explanations that may help them to interpret the Bill. Pre-legislative scrutiny could have taken place at its own pace, allowing us to deal only with items prompting interest or contention.
This is a huge Bill. That pleases me in some ways—we shall be dealing in primary legislation with many matters that are normally contained in secondary legislation—but we are trapped in a savage timetable that will prevent us from devoting enough scrutiny to the Bill.
I had some mischievous thoughts when reading the Bill. It seems that various designated organisations will be approved. I wondered whether a political party would be deemed a consumer group. Would the Conservative party be deemed to represent consumers? I must tell the Minister that I think we do a splendid job representing consumers, and I think we should be allowed to make representations to the OFT as a designated body.
The hon. Member for South Ribble (Mr. Borrow), who has left the Chamber for a moment, raised an important point about trade associations, with which the Bill does not deal. I took a great deal of interest in the subject before 1997. I think consumer representation could be hugely advanced if leading trade associations were recognised, and if that recognition required appropriate insurance and certification. Government would recognise and deal with only those associations that wrote that requirement into their constitutions. Anyone dealing with, say, a builder who saw that the builder had that trade association accreditation would know that the insurance was there. The Association of British Travel Agents implements such an arrangement to a degree: it is one of the leaders in that regard. I can only commend it, and suggest that further thought should be given to the idea.
I experienced a moment of panic when my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) mentioned clause 254, which refers to bankruptcies among Members of Parliament. For a dreadful moment I thought we were going to remove the rule that an MP who became bankrupt could not remain in the House. It flashed through my mind that if we had removed that barrier, the noble Lord Archer would not have had to resign all those years ago. He would not have gone to the United States and written all those books, and none of the ensuing drama would have taken place. He would probably still be in the House, entertaining us in some other way, rather than in his current abode.
I listened to the Secretary of State's arguments in favour of the Bill with a good deal of attention, and at some points almost with enthusiasm. The repetition of the words "competition", "consumer" and "enterprise" from the Government Front Bench had a mesmeric effect on me. The Secretary of State's emergence from the chrysalis of clause IV socialism as a butterfly of enterprise is one of the more remarkable political transformations of the last 20 years or so. I welcome it: it is a definite step in the right direction.
As I have said, I am happy to support some aspects of the Bill. The distancing of various Ministers from decisions about competition and mergers is highly sensible, and has clearly received a general welcome in the House. I also support, in principle, the proposals to reduce the problems of those who become bankrupt through no fault of their own—although, as I said earlier, it is difficult to ascertain exactly what constitutes "no fault of their own". The hon. Member for Twickenham (Dr. Cable) summed that up rather well. As he agreed with me, I think I should agree with him. This mutual admiration society suggests that between us we must have got something right.
As a former small business Minister, I know that when people become bankrupt it is seldom through no fault of their own. Amazingly, there is a horrendous failure rate among those who start up businesses simply because it seems a good idea at the time. According to statistics I have seen, about one business in nine is still operating after a couple of years, but a much higher percentage of businesses whose programmes and financial statements have been vetted by various bodies, such as Business Links, are able to survive. We must consider that carefully in Committee.
Let me give a small piece of advice. I hope that the Bill will help in this regard. I have observed that if a company is going to go bankrupt, the faster it does so, the less cost and pain will be involved. Companies should not hang on until the bitter end, running up more and more debts. That just means that more people outside are hurt. Those lending money to such companies are hurt far more than they would be if the companies had closed weeks or months earlier.
I welcome the fact that the Crown will be put on an equal footing with other creditors of a failed business or a bankrupt person. That is long overdue. However, we must take care to discover whether the actions of the Crown will precipitate a more rigorous collection method, which may in turn cause businesses to have to close much sooner. I hope that in Committee the Minister will give guidance on how Crown organisations will behave.
Although, over time, the Secretary of State and her ministerial colleagues have adopted the rhetoric of saying that they want competition and consumerism, too great an extension of regulation seems to be taking place. They believe that there is too little competition in our domestic markets and that consequently British consumers suffer unnecessarily high prices. Their solution is to make even more stringent an already tough competition regime by creating a new corporate authority in the Office of Fair Trading and establishing new penalties for failing to comply with the enforcement regime. I support the measures to establish codes of practice for business and consumers. In case the Minister takes me seriously, I am only joking when I suggest that the Conservative party might become a designated consumer body. [Interruption.] I see that my hon. Friend the Member for Maldon and East Chelmsford is asking me to rethink that, but it would not be right for a political party to act in that way.
Is not Ministers' initiation of their "super complaints" system redolent of the approach of traditional old- fashioned socialists? The Secretary of State, who tries to make out that her new political colours are a tasteful pink, may be a tad redder than we like to think. I was intrigued to read a recent interview in which she claimed that she wanted the Department for Trade and Industry
- "to be run more like a well-rounded business"
- "entrepreneurs who take risks"—
- "get exceptional returns".
I shall illustrate the confusion that lies at the heart of the Bill by considering two of its provisions. I fully understand why organisations such as the Consumers Association have enthusiastically welcomed the proposal to allow designated consumer bodies to complain to the OFT that one or more features of a UK market is harming consumers' interests—they have lobbied for years for the Government to honour their promise in that respect. All the consumer body has to do is to follow the OFT's guidance on how to present its case. However, neither hon. Members nor businesses are being told what criteria will have to met by complainants. For example, will they include exceptional profit levels? If so, the risk-taking entrepreneur whom the Secretary of State wishes to encourage will think twice about operating in this country.
I am a practical person, not an academic economist or a lawyer—I live and operate in the real world—but it seems to me that the criteria are so widely drawn that any UK market of any kind could be open to investigation. In the Bill, the Government largely fail to appreciate that there are two sides to a market: supply and demand. Over the years, I have had a degree of experience in industry
and I have declared all sorts of interests for hon. Members who are paranoid about such matters. If one has a desirable product, there is a natural tendency for it to be in short supply and for its price to rise. Will the fact that a product is particularly desirable—other products are available, but they are not as nice—be subject to regulation and investigation by the OFT?Like my hon. Friend the Member for Maldon and East Chelmsford, I believe that the free market is the best system for providing the goods and services that any advanced commercial and industrial society requires. That system works best when the supplier of goods and services can respond rapidly to the changing demands of consumers. Perfect markets exist—dare I say it?—only in the minds of economists, civil servants and Ministers who are not of the real world. The idea that markets can be dragooned and regulated by criminal penalties to work better offers only a partial solution. When we consider the Bill in Committee, we must be given clear guidance about all the rules and regulations so that businesses know exactly where they stand.
This massive Bill needs to be examined in detail, but as we shall have insufficient time in Committee to do so it will pass largely unchallenged and undebated. That is part of the Government's relaxed approach to the role of Parliament. They are dragooning business through without enabling us to consider matters in the detail that is our task and duty.
I welcome the fact that the OFT will be structured as a board, not as a single person, and that rogue traders will face additional pressures. I also welcome the giving of more resources to trading standards officers. The Secretary of State made a lovely generalised comment about that, but those in local authorities would like to know—as would I—how many pounds will filter through to enable them to strengthen trading standards operations in their areas and in our constituencies. Several constituents have come to me with matters about which they have been told, "Sorry, we can't investigate it; we haven't got the resources." That is a common plea that will resonate with hon. Members on both sides of the House.
We should all welcome the completion of the insolvency legislation and moves to produce a cohesive consumer law to replace the current piecemeal approach.
This is a massive Bill, but we shall be in Committee for a very short time and it will not get the scrutiny that it deserves. As a result, consumers may ultimately be worse off rather than beneficiaries.
| Next Section
| Index | Home Page |