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Ms Keeble: If the hon. Gentleman thinks that mortgage interest rate predictions of 5 per cent. are alarming, what on earth did he think about the 15 per cent. rates under the Conservative Government?

Mr. Atkinson: I agree that that is alarming, but the difference is in how interest rates go up. In earlier times, they were traditionally much higher and had been for many years, but they went down to 2.5 per cent. and have now doubled. That is a substantial jump in the calculation that people make and considering— [Interruption] If the hon. Lady will let me finish, considering the sums that are invested in property compared with those invested a decade or so ago, it hurts hugely.

The collapse of the pensions system explains another phenomenon.

The Secretary of State for Work and Pensions (Alan Johnson): Collapse?

Mr. Atkinson: The Secretary of State says, "Collapse?" and laughs at the word. He comes from a different background—public service—but if he had his own private pension he would know that he will probably get back more or less what he has put in, pound for pound, over the last 20 or so years and not a single pound in profit as a result of his investment. That is what most people in the private sector face, if they have a pension at all. Protected though he was by the public sector, he should, I hope, not be ignorant of what is happening in the real world.

Alan Johnson: There is obviously political knockabout here. The hon. Gentleman used the word "collapse" in relation to pensions, but will he confirm that the Pensions Commission has said that, at the moment, pensioner income is at record levels? It will continue to rise. There is no crisis at the moment; it will come 15 to 25 years down the road if Governments,
 
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whatever their political persuasion, do not act to ensure that we will be able to deal with the baby boomer generation moving on to retirement.

Mr. Atkinson: Crisis? What crisis? In fairness, the Secretary of State is talking about something slightly different. I am talking in particular about those with company pensions and private provision pensions. They are the ones who have been putting their money in bricks and mortar and in commercial property to safeguard their future. They are the people who are hit by the Chancellor's ridiculous decision to cut the amount that can be put tax free into individual savings accounts and other investments.

I accept what the Secretary of State says—in the long term, of course there is a problem down the line for the basic state pension—but that is a different problem from the immediate crisis that this Chancellor has caused for those with private sector pensions. It is a shame that he had nothing to say about that. The one word that we did not hear, as my hon. Friend the Member for Cotswold (Mr. Clifton-Brown) pointed out, is the magic word—prudence. Sadly, prudence is now dead and buried.

I want to make one or two other points about the problems facing business and to deal with the point made by the hon. Member for Wallasey about the welter of legislation, such as all the European directives. I agree that such measures must be simplified, but it is important to acknowledge their impact on growing and smaller businesses.

I represent a constituency in the north-east of England, which, as everyone knows, had a large number of old, declining industries such as coal, steel, chemicals and shipbuilding, which have long since been laid to rest. We needed to replace those, which we did with a large number of important high-tech inward investors. Some of them, such as the Nissan car company, have been tremendously successful, but others have been what might be described as false friends. They came here and made a contribution, but when economic circumstances changed they moved from the north-east to lower-cost economies. The lesson we have learned is that while they helped with the transition from the old heavy industries to a new type of economy, they are beginning to disappear.

Regions such as the north-east must now rely on home-grown industries. We in the north-east have been very successful in doing so and, to name a few, we now have companies such as Sage; Greggs of Gosforth, which was a little baker's shop but is now a national chain; the Go-Ahead group; and Reg Vardy in motor distribution. Those are great success stories, but we need many more. We will achieve that by building up our new smaller businesses, but regulation can damage them so much.

Regulations on discrimination, paternity leave and maternity leave are well intentioned, but for a small business employing three or four people they become a considerable burden in both time and expense. Letters and representations from local businesses in my constituency, which are mostly small businesses, show that such regulations are becoming a heavy burden that restrict their development. That fact must be taken on board when such matters are discussed.

Angela Eagle : Does the hon. Gentleman agree that consolidation and simplification of many different
 
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statutes, introducing a much-simplified and easier-to-understand statute, both for employees and employers, would improve the situation and not worsen it?

Mr. Atkinson: I wait to see the small print of what is produced and how it works, but in principle I agree that that would be desirable. When we have such a plethora of regulation, the way in which officialdom interprets it can often be the problem. In one area, enforcement can be draconian; in another, it can be more reasonable. Regulation in relation to access for disabled people requires a certain amount of common sense, and if common sense is not forthcoming, that can be very hard on a business. Such businesses need to grow, and we must not throw huge obstacles in their way. If the north-east is to rebuild itself and have a decent future, we need to encourage them, not discourage them.

I should also slightly chide the hon. Member for Ochil (Mr. O'Neill). Yesterday, if I read my Financial Times correctly, referring to the concerns of the British Chambers of Commerce about over-regulation, he said that its figures were "statistically dubious" and that employers were "obsessed" with protesting against regulation. I disagree fundamentally. My experience is that they are genuinely worried about such regulation, and see it as possibly one of the biggest drawbacks to expanding and developing their business.

Mr. O'Neill: I was questioning, in the first instance, the rather haphazard way in which the British Chambers of Commerce conducted its survey. There was no real sampling—it was a self-selected group of people, who had perhaps replied by computer, and perhaps sent in forms. It was rather sloppy, and it did not stand up to close examination as an accurate expression of opinion of British business. It was more of a propaganda tool for a group of people who seemed to have as much a political as a business agenda.

Mr. Atkinson: I am not sure that I can complain about the hon. Gentleman's last comment, but I am grateful that he has put it on the record. I urge him and his Committee to bear it in mind that over-regulation, and bad regulation, is seen as one of the greatest drawbacks for business.

Regulation can also be amazingly trivial. There is a small butcher's shop in my constituency, which, because it is owned by a number of farmers, likes to put up a sign saying, "This lamb came from so-and-so's farm", or "This beef came from so-and-so's farm." It received a letter about how it should label meat, its interpretation of which was that all that could be displayed on the board was a holding number, which would be utterly meaningless. I wrote a series of letters to Lord Whitty to try to get to the bottom of the matter. I discovered that the shop can show which farm the lamb came from, but that if it wants to do the same for beef it needs to obtain permission from the Department for Environment, Food and Rural Affairs and then get a form, which it can download. I worry slightly about chaps who work in the butcher's shop downloading forms from DEFRA. Nevertheless, they can download the form, fill it in, send it back on-line, and, I hope, get permission to put up a sign saying that the beef came from Joe Bloggs's farm. That is a silly example, but it nevertheless illustrates the kind of regulation with which people must deal these days.
 
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The Chancellor was silent on many aspects of the economy about which we wanted to hear. He was silent on one little aspect that is not mentioned much here nowadays, although it is very important, certainly to my constituency. Although it is never mentioned in Budget speeches or economic debates, agriculture—which had a reasonable year last year—has had a disastrous year in terms of farm incomes this year, because of wet weather and the new single farm payments scheme, which is causing uncertainty about the way in which they are paid. There have also been hugely rising costs.

Rising costs affect all businesses, but one of the businesses that they affect most is agriculture. Fuel and imported fertiliser costs form a large part of the agriculture bill. At a time when incomes have fallen because of a poor harvest, the supermarkets are yet again pushing down the price that they pay dairy farmers. One of Asda's suppliers is reducing the price by 0.5p a litre, which is a serious blow to the dairy farming community.

There was nothing much, apart from a rant, in the Chancellor's speech. I hope that we shall hear more tomorrow about how he proposes to address the real problems that face so many people in this country today.

5.46 pm

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