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Ms Hewitt: I am happy to say that my responsibilities do not include VAT, but I shall draw the attention of my right hon. Friend the Paymaster General to the case that the hon. Gentleman mentions, and I should be grateful if he would send me further details on it.
On corporation tax, I should point out that the company law review that we instigated and published last year is based on the whole philosophy of think small first. As we institute a complete rewriting of our company law framework, we will make it far easier for small businesses to become incorporated and to take advantage of the tax benefits that we have already extended to those smaller companies.
Our fourth responsibility as a Government is to ensure that business gets the practical support that it needs. Last year—and in just one year—British Trade International helped 28,000 companies to export, many of which were new exporters that are now able to grow their businesses because of our help. I do not know whether the Conservatives would abolish that. Business Link, which was started by the Conservatives, was in a pretty pathetic state when we took over, and there were many complaints from customers. Now, it is helping nearly a third of a million businesses each year to start and grow. We have increased the number of Business Link customers and significantly increased customer satisfaction. Some 1,000 SMART awards, amounting to more than £40 million, will help other businesses in the way that Cooke Optics was helped. Perhaps the Conservatives plan to abolish that as well.
We listen to our small business customers. They told us to simplify the business support schemes, many of which we inherited from earlier Administrations, and that is exactly what we are doing. They told us to bring together all the information and support available to small businesses—not just from the Department of Trade and Industry, but across government, in the regions and from local authorities as well—and that is exactly what we are doing.
Our fifth responsibility is, of course, to ensure that the regulatory framework is right and that markets are open and competitive.
Mr. Prisk: Before the right hon. Lady leaves the subject of business advice and the Small Business Service, I should point out that the Chief Secretary to the Treasury has advised me of a serious omission. I hope that the right hon. Lady can deal with this point, as the service is in fact accountable to her. Yesterday, this House discussed on Third Reading the issue of stamp duty land tax, which, according to a number of experts, will cost small businesses—especially retailers—£230 million. Yet the Chief Secretary has advised me that at no time during the legislative process and a year's consultation did the Small Business Service make written or oral representations. Is not that a neglect of its duties? Why did it not participate in that vital process?
Ms Hewitt: I am not aware of that point, or of what my right hon. Friend the Chief Secretary said about it. Let me check it, and I shall write to the hon. Gentleman.
The Enterprise Act 2002 has transformed the competition regime that we inherited from the Conservatives—it was, frankly, pretty mediocre by global standards—into one of the best in the world. That is particularly important for start-ups and for small, growing companies, because it makes it easier for them to take on the big businesses and break into new markets. Of course we have to keep addressing the issue of regulation, but let us be clear about what the issue is, and distinguish between fair standards for people at work and the administrative costs of filling in forms on compliance and so on.
Let us take the example of the national minimum wage. Of course it increased the wage bill for some businesses, but I make no apology whatever about that. I think that it was a disgrace that Britain, the fourth largest economy in the world, was paying its security guards £1.20 an hour. That was happening in my constituency and many others before 1997. However, we introduced the national minimum wage in a sensible way. We brought together employers, trade unions and other groups, and it was decided through that process of social partnership what the minimum wage should be. It was set at a level that ensured that people were not put out of work. I remember the scare stories from the Conservative party before 1997. We heard that the minimum wage was going to cost a minimum of a million jobs, but what have we done? We have delivered the national minimum wage and 1.5 million new jobs as well.
Family-friendly working is another issue, and the Conservative spokesman complained about the legal package on that. Again, however, we sat down with the CBI, the TUC and small businesses, forming a taskforce through which we all worked together to devise a package on family-friendly working that would work for businesses as well as employees. The hon. Member for South Suffolk appears to have gone to sleep. He is clearly not getting family-friendly working hours, despite the modernisation of the House of Commons, which he probably opposed.
We have also cut form filling and red tape for 700,000 small businesses through the flat-rate VAT scheme. We have got rid of automatic late penalties for VAT late payers. We have saved 150,000 businesses £180 million a year by raising the statutory audit threshold to £1 million, and before the summer recess, I shall be consulting on whether to raise the threshold even further.
Lembit Öpik: I accept that some of the Secretary of State's achievements are laudable, significant and beneficial to society. However, is it not a problem that we are becoming a rules-based society, in which everything has to be assessed against specific rules? Naturally, the rules will be pretty extensive. Has the Secretary of State thought of moving closer to a guidelines-based system in which every single opportunity does not have to be predicted? There is probably more good faith in such a system, because although some people will always look for the
loopholes, most are honourable. The United Kingdom could make do with a lot fewer rules if we had sensible guidelines.
Ms Hewitt: I have great sympathy for the extremely interesting point that the hon. Gentleman makes. Much of our approach is based on promoting best practice, co-regulation and sometimes giving statutory backing to self-regulation. The new family-friendly package and the new legal standards on family-friendly working for parents are good examples of where we are creating a general legal framework without specifying in great detail what is right for every business—which is, of course, impossible.
We have done a great deal to improve the regulatory system in our country and proof comes from the Organisation for Economic Co-operation and Development, which says that we are at the forefront of regulatory reform right across the developed world. Indeed, a forthcoming survey of small businesses by one of our leading banks finds that the amount of time that businesses spend each month on filling in forms and other compliance duties has fallen in the past four years. Of course, we need to keep on doing better.
I am not happy about the growth in employment tribunal cases. They represent a failure of the relationship between the employer and the employee. The Employment Relations Act 2002 will improve matters, because it will ensure that more disputes are resolved in the workplace, instead of going before a tribunal because the employer has no procedures and sacks someone without bothering to talk to them about what is wrong with their work. It will improve matters by devoting more resources to and placing greater emphasis on conciliation and by giving the tribunals much more effective powers to weed out the weak cases in advance. The Act will also ensure that if people abuse the system—whether they are employers or employees—costs can be awarded against them.
There is more to do, and if any hon. Member comes across an unnecessary form or an example of bureaucratic gobbledegook, I invite them to send it to me or to my hon. Friend the Minister for Small Business and Enterprise and we will deal with it. However, we should not run Britain down. We are the No. 1 destination for foreign direct investment into Europe and, according to the World Economic Forum, we have leapt from No. 7 in the world to No. 3 in international competitiveness. Indeed, as Digby Jones recently said:
- "I would much rather be doing business in Britain than anywhere else in Europe."
Mr. Bercow: I have already raised this issue with the Secretary of State on behalf of a constituent of mine from the beautiful hamlet of Singleborough. What assessment has the right hon. Lady made of the effect of the over-burdensome and prescriptive character of the Ofsted inspection process on the supply of mobile child care at conferences and other events? That is an important issue for my constituent.
Ms Hewitt: The hon. Gentleman raises an important issue, and indeed I raised it in the cross-cutting review of
child care that the Government published a few months ago. We have considered the issue, and I routinely raise the subject with child care businesses in my constituency. Both the work of the cross-cutting review and my own discussions with child care providers suggest that the problem is overstated. The hon. Gentleman may wish to write to me with details of the particular case that he raises, but the assertion that is often made does not seem to be borne out by the extensive inquiries that we have made.
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