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Regulatory Impact Assessments

4. Mr. Philip Hammond (Runnymede and Weybridge): What procedures she has in place to audit regulatory impact assessments after implementation of (a) legislation and (b) regulations. [110633]

The Parliamentary Under-Secretary of State for Trade and Industry (Nigel Griffiths): The accuracy of RIAs is currently being considered by the National Audit Office, with the Government's full support. If the hon. Gentleman has an approach that would further improve the assessment without increasing the bureaucracy, the House would be delighted to hear it.

Mr. Hammond : Given that the Government have imposed £20 billion worth of additional regulatory costs on business since they entered office, I hope that the Minister agrees that it is essential that the costs to business of any additional regulations or legislation be accurately assessed. The fact is that business confidence in the current system of RIAs is, rightly or wrongly, low. Does he agree that to increase business confidence in the current system and to improve the quality of policy making, there should be a system of comprehensive post-implementation audit of RIAs, to determine how accurate they are?

Nigel Griffiths: The facts do not bear out the hon. Gentleman's statement. He should tell that to the 373,000 businesses that started up last year or the 1.7 million businesses that have started up in the past six years, with the best survival rates for a decade. In referring to the £20 billion figure, he contradicts his own Front Benchers, because that figure includes the cost of the minimum wage, which they now support, and the cost of paid holidays and paid pensions, which people should not have had to wait until the 21st century to get.

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The facts are plain: we have a robust method of assessing RIAs. What he suggests is a bureaucratic and burdensome further appraisal of RIAs, which we reject.

Geraint Davies (Croydon, Central): My hon. Friend will know that the Public Accounts Committee has considered this question. Does he accept that any RIA should take into account the positive impact on profit of measures such as the working families tax credit, which reduces the real cost of wages to business, along with form filling, and legislation that gives £10,000 tax-free profit to partnerships that become incorporated? Does he accept that we should examine the impact of legislation on profit and growth in the round, not simply focus on a bit of red tape?

Nigel Griffiths: My hon. Friend is right. It is a vote of confidence in the handling of the economy that so many small and medium-sized enterprises—1.7 million—have started up in this country in the past six years, and so many large companies have expanded, as Honda did when it opened a second plant in Swindon in 2000–01. It is recognised across the economy that the handling of our economic affairs by the Government, the Department of Trade and Industry, and the current Secretary of State in particular, is second to none.

Mr. John Bercow (Buckingham): Given that the burden of regulation, whatever the intrinsic merits of some of that regulation, tends to be disproportionately large upon small and medium-sized enterprises, will the Minister undertake, as I previously urged the Secretary of State to undertake, a review of the merits of the Regulatory Flexibility Act 1980 and the Small Businesses Regulatory Enforcement Fairness Act 1996 in the United States, for the simple and compelling reason that that country has a vastly superior record to any other in the generation of new private sector employment?

Nigel Griffiths: The hon. Gentleman makes a good point. My right hon. Friend the Secretary of State has looked closely at the United States in the respect that he requests. No one in the House would disagree with him when he asks that regulations and their impact be considered proportionately. I, as the Minister with responsibility for small businesses, accept that while larger companies have lawyers and accountants who can examine regulations in detail, smaller companies cannot afford them. I would rather the larger companies employed people who invented and developed products, not lawyers.

Renewable Energy

5. Mr. Gareth Thomas (Harrow, West): What further action she is taking to communicate to Ofgem the policy of her Department on renewable energy; and if she will make a statement. [110635]

The Secretary of State for Trade and Industry (Ms Patricia Hewitt): My ministerial colleagues and I, and my officials, have regular meetings with Ofgem to discuss a range of issues.

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Ofgem has committed itself to producing regulatory impact assessments, including environmental impact assessments for all significant new policies, and following the White Paper on energy policy, we are revising the statutory guidance that we give Ofgem on both social and environmental issues.

Mr. Thomas : I welcome that answer. Given that the early days of the new electricity trading arrangements, which were introduced by Ofgem, were characterised by serious problems, especially for smaller electricity developers such as those in the renewables and combined heat and power industry, will my right hon. Friend make it a priority for the new chair and chief executive of Ofgem that they seek to understand the needs of the renewables industry, and that they make accelerating the modernisation of the grid and sorting out some of the problems facing the CHP industry key priorities?

Ms Hewitt: Yes, I have already made precisely those points to Ofgem, and they will be reinforced in the new guidance to which I have referred. In addition to the work of the regulator, the renewables obligation, which by 2010 will be worth about £1 billion a year to the industry, and the new carbon emissions trading scheme, which we will bring into effect in about 2006, will both help to accelerate the development of the renewables industry that we need to deliver sustainable energy to domestic and business consumers in Britain.

Richard Ottaway (Croydon, South): One of the bolder claims set out in the energy White Paper was the stated ambition to achieve 20 per cent. of Britain's electricity sources from renewable energy by the year 2020, though it was not clear whether that was a commitment, a target or an aspiration. However, in recent weeks the Minister for Energy and Construction has indicated that if the Government do not look as though they are on target to achieve this, whatever it is, the situation will have to be reviewed. On a scale of nought to 10, how confident is the right hon. Lady that she can achieve this aspiration?

Ms Hewitt: I made it clear when I published the White Paper, and in a statement to the House, that I believe that our intentions to achieve both our climate change objectives and our energy efficiency objectives are achievable, by a massive increase in energy efficiency throughout the economy and by a substantial increase in renewable energy. There is no doubt that it will be tough. That is why we are putting in place not only the renewables obligation but the new carbon emissions trading system, which will be part of the Europe-wide trading system and hugely important in securing these goals. I believe that we can do it. I do not propose to start giving odds on that, and of course we shall keep the situation under review to ascertain whether the policies that we are putting in place are working or whether they need strengthening or changing.

Mr. Kevin Hughes (Doncaster, North): I agree that it is important for Ofgem to play a role and for us to continue to develop our renewable energy sources. However, does my right hon. Friend agree that it is

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important also to deliver the new generation of clean coal technology, which can play a significant role in helping us to meet our Kyoto targets, and also provide many new jobs in constituencies such as Doncaster, North?

Ms Hewitt: I entirely agree with my hon. Friend, which is why we are supporting the cleaner coal technology programme, which is worth £25 million over three years. That will help us both to reduce carbon emissions and to ensure that there is a future for the excellent British coal industry.

Mr. Crispin Blunt (Reigate): Just precisely how does one communicate an aspiration as policy? Is not the truth that the right hon. Lady's renewables aspiration is unachievable? She has just terminated the future for nuclear electricity and she expects the end of coal, leaving just natural gas, thus ushering in a new dash for gas as the energy Minister rushes from Norway to Russia, Algeria, Iran and Angola to try to secure our future energy supply. No wonder he is not here—he must be dealing with the emergency that now exists over our future single source of energy, thanks to her having an aspiration instead of a policy.

Ms Hewitt: I am not sure quite what the hon. Gentleman's question is. It is a great pity that he mocks the very real policy challenge facing our country as we shift from being an exporter of energy to an importer of energy which means, as we said in the White Paper, that energy policy will become an increasingly important part of our foreign policy. We must ensure both that we have the right infrastructure and the regulatory climate to get the necessary security of supply for gas from different parts of the world such as we have enjoyed for oil. However, as I have just said in response to an earlier question, by stepping up substantially our efforts on energy efficiency and securing a much larger share of our electricity from renewables, we will indeed be able to achieve both security of supply and our climate change targets.

Andrew Mackinlay (Thurrock): Will my right hon. Friend give an undertaking that the environmental impact assessments to which she has referred will take into account whether or not wind farms are to be sited in areas of outstanding natural beauty? Will she also look at the concern of a number of people that the location of wind farms close to rivers and the seaside can harm the ecosystem? In particular, can she get her officials to look at the proposed wind farm in County Londonderry, which has united elected representatives there and in County Donegal who are concerned about the impact on the area's fragile and precious ecosystem and salmon stocks?

Ms Hewitt: I am not aware of the particular application in County Londonderry, but of course I shall ensure that my hon. Friend the Minister for Energy and Construction looks at that. However, the issues to which my hon. Friend the Member for Thurrock (Andrew Mackinlay) referred are already taken into account when considering an application for wind farms or, indeed, other developments. I would just tell him, as I have told environmental organisations, that people

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cannot on the one hand say that they want more renewable energy and, on the other, campaign against every specific proposal for an increase in renewable energy in different parts of the country.

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