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18 Nov 2002 : Column 465—continued

9.31 pm

Mr. Tim Yeo (South Suffolk): I congratulate the hon. Member for Mid-Dorset and North Poole (Mrs. Brooke) on making a speech that might be more appropriate to Wednesday's debate. She stuck honourably to the time available and I am grateful to her for that, as is, I am sure, the Secretary of State for Trade and Industry.

I hope that the Chancellor will return before I sit down, so I shall save my remarks on his speech for a moment or two. I pass straight to the speech of my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke), his immediate predecessor as Chancellor, who gave a much more realistic and, indeed, sober analysis of the prospects facing the British economy than did the Chancellor. My right hon. and learned Friend included a timely warning about the unsustainable nature of a number of current trends, for example in household debt, the savings ratio, business investment and several other areas.

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I would like to find something nice to say about the Liberal spokesman, the hon. Member for Truro and St. Austell (Matthew Taylor), but the kindest thing to say is that, on the evidence of his remarks, the Liberal Democrats remain firmly anchored in cloud cuckoo land.

My hon. Friend the Member for Buckingham (Mr. Bercow) gave one of the thoughtful speeches for which he is becoming renowned, although I am grateful for the fact that he has no opportunity to cast his vote at the end of the debate as I cannot be held responsible for failing from the Front Bench to persuade him to support us. He spoke eloquently on the need for flexibility for employees as well as for employers and on the need to maximise job opportunities for women. I say quite genuinely that I would welcome his advice on how regulations might be revised with those concerns and a number of his others in mind. I hope he discusses that with me in due course. He is engagingly frank about the direction and extent of his political journey; my only hope is that it does not take him too far.

My hon. Friend the Member for North-East Bedfordshire (Alistair Burt), whose remarks were reported to me, made a strong speech that rightly emphasised, among other things, the disastrous consequences of the agency temps directive not only for the engineering and aerospace industries, but for many others. Other Members referred to that most important measure, the key point of which is that it bears particularly onerously on this country. It is a European Union measure, but, because of our employment patterns, Britain will be hit harder than our main competitor countries.

The hon. Member for Dumbarton (Mr. McFall), the Chairman of the Treasury Committee, rightly condemned the continuing scandal of the common agricultural policy. I can only say that it is a pity that France and Germany have so little respect for the Government's views that they recently stitched up a deal to preserve the CAP for many more years to come, without any reference to British Ministers.

The hon. Member for Gordon (Malcolm Bruce) gave a timely warning on the impact of Labour taxes on North sea oil and gas. I share those concerns. My hon. Friends the Members for Tiverton and Honiton (Mrs. Browning) and for Epsom and Ewell (Chris Grayling) made powerful pleas on behalf of small and medium-sized enterprises. I endorse all that they said about those vital contributors to the prosperity of the British economy. Few groups suffer from the burden of over-taxation and regulation as acutely as small and medium-sized enterprises.

The hon. Member for Birmingham, Northfield (Richard Burden) expressed the hope that the forthcoming regional assemblies may help the economy of the west midlands, among other places. I am glad to have a chance to express my opposition to the establishment of regional assemblies. Another tier of government will do nothing to improve the competitiveness of British business, just as it will do nothing to put a single policeman on the streets, a single nurse on the wards or a single teacher in the schools. There will merely be more politicians and bureaucrats, and I have never found anyone in my constituency or elsewhere who thinks that an increase in those two categories of people will do any good.

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My hon. Friend the Member for Huntingdon (Mr. Djanogly) rightly described the damage to our competitiveness inflicted by more regulation and less flexible labour markets. I shall save up what I intended to say about the Chancellor in the vain hope that he will return before a quarter to 10.

The key question that we should address is what the Queen's Speech means for business and for enterprise. What is there in the Queen's Speech to arrest the deterioration in Britain's competitive position, to which my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard) referred in his powerful response to the Chancellor of the Exchequer? What is there to speed up productivity growth, which has halved in the five and a half years of Labour Government since 1997? What is there to halt the decline in business investment? The answer is not very much.

We know what is not in the Queen's Speech. There was no announcement of higher taxes; indeed, one was not needed, because the Chancellor already announced higher taxes for 2003 in his 2002 Budget. The increases in national insurance contributions hit both employees and employers with an extra #8 billion of taxation. The Engineering Employers Federation says that those increases will mean that more firms will send jobs abroad. More than half the companies surveyed by the EEF said that the national insurance contribution rises would reduce employment levels. I hope that when the Secretary of State for Trade and Industry concludes the debate she will tell us whether she spoke up for British business when she heard that the Chancellor was to impose those increases. Perhaps she was able to persuade the Chancellor to curb the amount by which he originally wanted to raise national insurance contributions. Possibly she heard about them so late in the day that it was too late to have any input. Like my right hon. and learned Friend, I fear that the third option is the most likely.

Tax increases do not have to be announced in the Queen's Speech, because, sadly, under the Labour Government, businesses have had to get used to having tax increases sprung on them year after year. The pensions tax takes #400 a year from every contributing member of a pension scheme. The climate change levy, which has nothing to do with climate change, is a burden on many businesses. A Queen's Speech that contained a proposal to abolish the climate change levy and replace it with an emissions trading system would have received a warm welcome from industry and from Conservative Members. The petroleum tax, the aggregates tax and many more taxes are burdens placed on business by the Government. The Confederation of British Industry estimates that Labour has added #47 billion to industry's tax bill. That burden has been referred to and needs to be stressed. Few people can be optimistic that that figure will fall in the near future.

Something else that was not mentioned in the Queen's Speech was the thousands of new regulations that the Government will introduce during this Session of Parliament. The Institute of Directors estimates that those regulations will cost business #6 billion a year. Ministers talk the language of deregulation, but the experience of millions of business people, small and large, up and down the country is different. More than

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nine out of 10 businesses surveyed by the Institute of Directors believe that the burden of red tape relating to employment law is growing. In view of that, is it any surprise that the number of jobs in the private sector has now started to fall, as my right hon. and learned Friend the Member for Rushcliffe said? Many of us fear that although unemployment may remain low for some time to come, we have a situation where the loss of jobs in the private sector is merely being masked by an increase in jobs in the public sector, another of the unsustainable trends that the economy is now facing.

Lord Macdonald has argued that not all the regulations are aimed at business. He cited orders dealing with road closures as an example in an article to which my right hon. and learned Friend the shadow Chancellor referred. Only someone who spends his days being whisked around in a chauffeur-driven limousine could make such an absurd claim. The traffic chaos caused by road closures, however necessary they may be, inflicts a huge extra cost on business in lost employee time and late deliveries. The British Chambers of Commerce has estimated that road congestion now costs business #19 billion a year. There is nothing in the Queen's Speech that addresses that problem, either.

There is no Bill to stop the Mayor of London bringing the traffic in our capital to a total standstill. There is nothing to prevent London's decline from a great capital city to one whose transport system would be an embarrassment to a developing country. The misery that Labour's transport disaster imposes on private citizens and business alike, the damage it has done to our tourist industry, the erosion of Britain's appeal as a location for international business; not one of those problems is addressed in the Queen's Speech.

Equally serious is the omission of any reference to another crucial element in our national infrastructure, broadband. Many parts of Britain—sadly, they include much of my own constituency and many other rural areas, as the hon. Member for Gordon said—cannot access broadband. They see advertisements for broadband and know that it will not reach them in the foreseeable future. Those parts will be at as much of a disadvantage as the areas with no proper road connections. The Government set an ambitious target for broadband in Britain but we have been lagging behind other G7 countries in terms of broadband subscribers. On this issue, as on so many others, Labour Ministers complacently seem to think that rural communities can be ignored.

Energy policy is another concern. In addition to the White Paper, which is late, we are to have a liabilities management agency Bill that is actually only a draft. The Government cannot postpone indefinitely decisions about nuclear power. The deadline for sorting out the future of British Energy now looms very close. The Secretary of State committed #650 million of taxpayers' money without having submitted herself to questions in the House since making the decision; questions such as when Ministers first heard about of the extent of British Energy's problems and whether the Treasury overruled the Department of Trade and Industry over the renegotiation of British Energy's contracts with BNFL. If she cannot shed light on those questions this evening, will she at least confirm that an oral statement will be made to Parliament about the British Energy bail-out

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and the #650 million loan before the final date? Since Parliament is not sitting on 29 November, that means we need a statement no later than 28 November.

Another subject on which the Department has been conspicuously silent is rural post offices. Five weeks ago, when confirming the closure of many urban post offices, the Department was busy trailing news of a #450 million plan to help rural post offices, since when there has been total silence. Surely we are due at least a re-launch of the policy. Sub-post offices in my constituency and in other rural constituencies look forward to learning more details of what the Government have trailed in the press. [Interruption.] I am delighted that the Chancellor has returned just before I am to sit down.

The Chancellor opened the debate in characteristically cracking form—I have long been a connoisseur of his speeches. We all recognise that he is formidable debater, with a style that reminds me somewhat of my noble Friend Lord Heseltine, who had the same breezy disregard for facts that did not suit his argument and the same confident trumpeting of successes regardless of whether the achievements were his responsibility or someone else's.

The Chancellor shares another characteristic with Lord Heseltine. They both cherished ambitions to lead their parties and both believed that they could do the job better than the Prime Ministers whom they served. Indeed, the Chancellor's speech sounded to me suspiciously like a leadership bid, with so many successes being trumpeted. I have to say that many of my right hon. and hon. Friends wish him well in his leadership ambitions. But I wonder whether he has started to believe that the connection between hubris and nemesis has been permanently suspended.

The clear message from the debate is that the Government's mood about our economic and business prospects remains one not of optimism but of complacency, not of realism but of self-congratulation, while the people who have first-hand knowledge of what is happening at the sharp end know that business of all kinds is facing a tougher and tougher climate where new taxes and new regulations are increasingly undermining Britain's competitive position.

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