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David Winnick (Walsall, North): Does the right hon. Gentleman advocate dismantling the national health service?
Mr. Redwood: No. I have set out my views on the NHS at considerable length in print and the hon. Gentleman is welcome to read them. I suspect that I would be out of order if I wandered too far into the bigger health debate under the pretext of the Third Reading of this Bill. My point is that people are not offered a choice in those great public services, which are either removed from the Bill or, in the case of the regulated monopolies and regulated public enterprises, are covered by it but differently from anything else in the private competitive enterprise sector.
The aim of the Department of Trade and Industry—raising productivity and getting us up to the standards of the best in the world—is thoroughly laudable. I also agree that the prime method of sharpening competition even further, as recommended in the Bill, is the natural way to bring that about, because it will happen by the activities of people competing in the marketplace. However, the Government must think again on those parts of the economy that are Government owned, Government monopolies, or regulated in a way that makes them into cartels.
The Government should tell the House why they are deliberately trying to limit competition in the railways, where it is only just beginning to emerge, by reducing the number of companies offering services. They must tell us why they are not prepared to try out competition in a range of other public sector areas. They must also tell us why the areas in Britain that are furthest behind our foreign competitors are practically all in services and goods that are supplied by the public sector, usually through a monopoly, a cartel or a heavily hedged-about operation in which the Government are directly involved.
It is well known that the Government are the biggest monopoly in the country and that the Chancellor of the Exchequer is the biggest exploiter of monopoly in the country through his phenomenal powers to tax, with occasional support from people in this House. He is certainly not shy about proving beyond doubt that monopolies with too much power always overcharge and always deliver a lousy service for the money that they charge. We have seen that in the huge increase in taxation and the lack of improvement in public services.
We should also note—this is entirely relevant to the Bill—that in the most crucial ways of improving our productivity and business success, such as our transport and postal services, the Government do not practise what they preach: far from it. Instead, they are moving in the wrong direction by going towards monopoly cartel and protection and further away from the competitive model, which would produce better results.
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I am sorry to interrupt the right hon. Gentleman. I have allowed him a little scope, but I must remind him that on Third Reading we should be discussing the contents of the Bill, and he is tending to make remarks that would have been more suitable for Second Reading.
Mr. Redwood: I am very grateful for your guidance, Mr. Deputy Speaker.
I welcome the Bill's thrust towards more competition in the private sector, but I do not like the possibility that Ministers will use the Bill as an excuse to evade proper accountability to the House on difficult business issues. I certainly do not like the different treatment for the regulated businesses, because I believe that the Government will use that route to develop their public enterprises in a less competitive direction, which will be deeply damaging to overall productivity and to the success of the freely traded competitive sector, which in turn has to rely on many of those crucial public enterprises. For that reason, I do not welcome the Bill. It comes too fast on the heels of the Competition Act 1998.
The Bill seems to avoid the obvious point made by my Front-Bench colleagues, which is that we are, for these purposes, a vassal state. We are primarily under a European competition regime, which has been considerably strengthened in recent years. It is therefore strange to see the Government wandering further away from the European regime in this Bill, so shortly after the passage of the 1998 Act, when we were told that it was crucial to follow that regime in every twist and turn and that that was the sole purpose of the Act. Indeed, we were told that so perfectly had the Act mimicked the European system that we were in sync, and Europe would take most of the big decisions.
Apparently, that is not so. That shows that old Labour is beginning to come back, and it wants certain regulatory and monopoly activities to move in the other direction.
David Winnick: I would hope so.
Mr. Redwood: I am pleased to see that there are hon. Members present, representing old Labour, who know that they are on a roll. This Parliament is much more interesting because there are lively Back Benchers behind what was new Labour and is now rather tired-looking old Labour. It is now having to recognise that there are many people in the party who want to go in a rather different direction from the punk-Thatcherism that is sometimes sketched out by the right hon. Member for Hartlepool (Mr. Mandelson) and others.
I cannot say that I welcome the Bill. It is bizarre because it does not recognise European realities; it is dangerous because of the way in which it treats regulated monopolies. Let us hope that it at least increases competition in what remains of the free trading sector, because that would be a modest advance.
8.47 pm
Mr. Mark Field: It is a great pleasure to follow my right hon. Friend the Member for Wokingham (Mr. Redwood), who took what I hope he will forgive me for describing as a broad-brush approach to many of the issues.
One of the difficulties of having been in Committee and having gone through the mill on the Bill, as I have with several other hon. Members present, is that sometimes one cannot see the wood for the trees. I certainly do not think that my right hon. Friend could be accused of that. He made valid points about a range of competition issues, not least on the clear dichotomy between public sector and private sector competition. As he pointed out, it is clear that the Bill has several intentions that many Conservative Members would
support as they affect competition in the private sector, but it is a shame that they have not been replicated for our public sector monopolies. I also share a number of the concerns expressed about accountability, and I shall turn to those in a moment.Many of the Bill's provisions are positive reforms that will receive support from the Conservative party, and I understand that we will not be voting against Third Reading. However, it seems that it will have little effect on the British enterprise culture as long as the Government continue their policies of high tax and over-regulation. The Government seem to think that they can pick winners. An example is their help for the small business sector. I accept that they have been positive about entrepreneurialism, particularly in the capital gains tax regime that they have put into place over the past four or five years. However, the main effect of the policies, as we have seen from the Finance Bill, which is currently in Committee, is to encourage expensive avoidance measures and complicate the entire commercial framework.
Returning to competition, the Government are proposing ferocious new criminal powers. Those were brought into being under the Competition Act—even though it became an Act in 1998, many of its provisions came into effect only 18 months or two years ago. The Government's approach appears to be confused, but the penalties are draconian. Perhaps, as we have argued both today and in Committee, there should be a more meaningful assessment of the impact of the 1998 Act before we go though another set of wholesale changes.
My view is that the super-complaints procedure epitomises some of the worst aspects of what we might suffer in coming years. I am not convinced that Ministers will not utilise the spurious elements of consumer protection to undermine business certainty and add to commercial costs. When he was Secretary of State for Trade and Industry, the right hon. Member for Tyneside, North (Mr. Byers) conducted a misguided and cynical campaign against supermarkets as part of the "Rip-off Britain" campaign in 1999. I am glad that that has been put to one side.
One of the concerns expressed about many of the competition and Office of Fair Trading aspects of the Bill is that there will be insufficient accountability in the House. I have made it clear that I have some sympathy with the idea that certain competition decisions should have a political element, although I know that that view is no longer in vogue on either the Opposition or the Government Front Bench. It strikes me as invidious that decisions might all too often be made behind closed doors, with Ministers making representations away from Parliament, with the consumer none the wiser and no better off.
On bankruptcy, especially individual bankruptcy, there have been several debates on the way in which the Government seek to remove the stigma of bankruptcy. There are real dangers in their approach—dangers that we have articulated repeatedly. One need only look at the United States experience in the past decade or so of consumer-led bankruptcies. My main concern is not merely that the Bill will adversely affect a range of lending institutions, but that smaller businesses, which will be the main creditors in such cases, are the most likely to suffer from the relaxation of the personal bankruptcy rules. We fear that in the next few years we
will receive significant representations from the very small businesses that are supposed to benefit from the Bill, but that are the worst to suffer from aspects of its insolvency provisions.When the Government introduced the Bill, they referred to a regulatory impact assessment. With a wry smile, one reads that, in terms of the impact on businesses, the overall costs arising from the competition and consumer reforms would be neutral, and that the insolvency reforms and proposals on the employment of insolvency practitioners would have only a minor impact on business. One has to be somewhat cynical about the assertion that business will pay nothing directly.
We were told that there would be costs for Government—both sides of the House were approving of the fact that £70 million to £100 million a year was likely to be lost from the Government purse because of the changes to the Crown preference rules. We broadly support those changes, despite the concerns articulated by hon. Members on both sides about the fact that many small businesses find that the Government, in the form of the Inland Revenue or Customs and Excise, are often able to take a moderate view of debts built up when a business encounters difficulties during the early years of its existence, whereas the ending of Crown preference might mean that those institutions now try to get their money sooner, not later, rather than risk losing out entirely if bankruptcy results.
Apparently, the Bill will impose no costs on consumers. However, if our worst fears are realised and businesses have additional costs, undoubtedly consumers will suffer, because businesses will to a large extent pass on those costs to consumers where they can. We will have to wait to see the longer-term overall costs and benefits. I think I speak for many Opposition Members in saying that I support a number of provisions in the Bill which, however, is not simply an enterprise Bill, but an enterprise and regulation Bill. In the context of enterprise, we must ensure that we have proper scrutiny in the House of competition policy, which is inevitably political with a small "p" and always controversial. However, I hope that the Minister will reflect on the matter tonight, when the Bill becomes an Act, and as business develops in different ways in future. I wish the Minister godspeed in getting the legislation onto the statute book; I hope that she retains an open mind about the things that we have discussed tonight which we will no doubt continue to discuss both when statutory instruments are introduced and on the Floor of the House in the months and years ahead.
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