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Mr. Deputy Speaker: Order. Non-stop chuntering is not allowed, particularly from the Treasury Bench.
Mr. O'Brien: Thank you, Mr. Deputy Speaker. Clearly, Ministers want to close their ears to the real demands of business in this country to enable it to maximise its opportunities in a competitive global world.
When, on the advice of our business deregulation panel, the Conservatives called for sunset clauses, the Minister for Small Business and Enterprise dismissed them as a "quack cure for regulation". When the Conservatives backed post-implementation reviews, the Minister for Industry and the Regions derided them as
When the Conservatives published proposals for regulatory budgeting along the lines of the Dutch model, the Treasury this time claimed that such Budgets
"could easily be used up by the need to implement EU rules. This would leave no space in the Budget for legislation proposed by British politicians."
When the Conservatives announced plans to end gold-plating of EU legislation when it is transposed into UK law, the Minister for Small Business and Enterprise accused us of being advocates of what he called "copping out of directives".
Now, all of a sudden, and with a general election imminent, the Chancellor feigns to announce that he has had a Damascene conversion to Dutch-style regulatory budgeting and that he will, by no means for the first time, overrule his DTI subordinates by accepting the BRTF's recommendations on sunset clauses, post-implementation rules and ending gold-plating. The Chancellor and the BRTF have obviously been absorbed in studying our action plan to reverse the drivers of regulation. The Chancellor's speech included phrases that were extraordinarily familiar to me and my business deregulation panel; I cannot imagine where he managed to lift them from.
It is symptomatic of the DTI's extraordinary ineptitude under this Secretary of State that British business finds itself having to defer to a famously meddling and interventionist Chancellor to defend it from extra red tape and bureaucracy.
Mr. Robert Walter (North Dorset) (Con): I wonder whether my hon. Friend noticed an item in the Financial Times this morning referring to a Library study about regulations. The Chancellor has stated that 50 per cent. of regulations come from Europe, whereas the Minister for Europe, citing the House of Commons study, said only 9 per cent. come from Europe, which would mean that 91 per cent. emanate from the Government themselves and they cannot not hide behind the European Union.
Mr. O'Brien: I am grateful to my hon. Friend. Every which way one looks at it, it is clear that all the regulations being placed on business are deeply worrying and undesirable. That said, there is no doubt that the Government are having a spat among themselves as to the true provenance of all these regulations. On this occasion I think that the Chancellor is nearer the mark—he is certainly supported by the Library research—in saying that 50 per cent. of regulations placed on business emanate from Europe. Other estimates even claim that 80 per cent. of such regulations initially emanate from Europe. But as we know, with this Government it is all talk, and in this particular dispute it is all talk in two different directions.
This is a Chancellor who describes the creation of the Financial Services Authority, a super-regulator whose handbook runs to more than 8,000 pages, as
And this is a Chancellor who proudly, if rather strangely, refers to the new dispute resolution regulations as a "deregulatory measure". Those regulations are so complicated that the DTI had to spend £200,000 of hard-earned taxpayers' money pulping and then rewriting its guide to them, and the Federation of Small Businesses has described them as a
These regulations tell British businesses all they need to know about the difference between Labour and the Conservatives on red tape. Labour-speak is that introducing the new regulations is somehow
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"deregulatory". Sometimes Labour gets its newspaper headline, but it is long-suffering British business that gets the hassle of a costly and complex new set of Labour impositions. The Conservatives, by contrast, will take action to abolish the regulations via our deregulation Bill.
On his record so far, British business has no more reason to trust the control freakery of the Chancellor in the Treasury than the nannying of the DTI to deliver genuine deregulation and to get Government off the backs of the British business community. The Chancellor should beware, because no one is better able than British business to see through his pre-election "bribes of March".
Mr. Cousins : The hon. Gentleman may be aware that 160 people in the export credit section administer the arms export controls and export licensing systems of the DTI. Does he consider that to be far too many?
Mr. O'Brien: Our plans for the DTI, unlike those of any previous Opposition, have been set out line by line and are, as always, published for the hon. Gentleman to see. The straight position is that we have looked at what will be effective in helping our innovative and competitive exporters to win new markets overseas. In refashioning the quality of that representation, we are looking to appoint people of higher calibre. We would therefore redeploy some people and at the same time hire at least 50 very high powered and experienced business men and women who would be able to operate in the markets where we are seeking to develop export opportunities, and, more to the point, have the respect to get business-led generation as an extension of the resources to businesses that are so sorely in need of the support that has been lacking to date under this Government.
As we have heard today, on this outer planet the Secretary of State does not spend much time worrying about the over-taxation or the over-regulation of business, but she does spend a lot of time worrying about the straw men that the Government put up, which pretend to be Conservative policies but which bear no relation to the reality of our proposals. The new Labour spin machine was whirring at full throttle this morning as we heard about the imaginary Conservative plans to decimate Government support for science and research and development. Back in the real world—[Interruption.] It may be useful for Government Front Benchers to listen to this and to hear the facts for a change, as they are sometimes a little bit shy about that. I have made it quite clear that a Conservative Government, with the support of my right hon. Friend the shadow Chancellor, will at least match the current Administration's spending on science, innovation and R and D.
Furthermore, we will refocus the raft of ineffective Government-funded support schemes, which, as we know from the FSB's 2004 membership survey, only 17 per cent. of businesses, particularly small and medium-sized businesses, even access, let alone use—a depressing finding that is also borne out by the Forum of Private Business figures. Of those few businesses who have used those schemes, only one out of 10 in the FSB
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survey found the DTI's advice or support satisfactory. Refocusing those schemes is the correct and sensible approach that we will take. After all,
Those are not my words, but those of the Martin Wyn Griffith, chief executive of the Small Business Service.
We will therefore retain and enhance the manufacturing advisory service, the small firms loan guarantee scheme and Enterprise Insight. Although we will abolish the Small Business Service as a freestanding entity and save overhead administration costs, we will absorb its value-added activities back into the core DTI with a real outward customer focus. The Secretary of State has said that the SBS is indispensable, but it is not—it is the business support services that are delivered to customers, not advice to Ministers, that count in a competitive world. If I can bring the Secretary of State and her Ministers once again crashing back down to earth, the chief executive of the SBS has stated in clear terms that the SBS will discontinue its provision of direct support to businesses and downsize its operations
I commend to the House and to all the people who are engaged in this country's business community and workplaces our line-by-line analysis of DTI activities. We believe that taxpayers have an unqualified right to expect value for money from a Government. They know they are not getting that under Labour and that they can get it only from an organised and efficient Department of State, which is what we have set out in detail as a Department for business under the Conservatives. We note that according to a DTI staff survey, only 19 per cent. of DTI employees believe that
and fewer than half believe that
That is a startling indictment of the current structure and regime of the DTI under this Secretary of State.
The right hon. Lady should listen to her colleague, the Secretary of State for Culture, Media and Sport, who told the House earlier this month that the BBC's model of governance is "unsustainable" because the governors cannot be effective as both "cheerleader" and "regulator" of the BBC. No business or organisation has ever succeeded where its strategy is to pull in two polar opposite directions as today's DTI does. By the same token, in the real world the DTI cannot more than double its employment relations budget and introduce 17 major new pieces of employment regulation, showing just how much it really distrusts business, and at the same time claim to be an effective cheerleader for business. That is why a Conservative Government will restructure the DTI to champion, not regulate, business.
Championing businesses means first and foremost showing a willingness to listen to them and celebrating all those engaged in businesses in Britain. The Conservatives have already shown our willingness to listen to and engage with business, not only on deregulation but in developing our recent skills policy. Working with the CBI, the BCC and the Engineering Employers Federation, we have proposed a system of vocational grants—I hope that the Secretary of State heard about those earlier in the response by my hon.
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Friend the Member for Westmorland and Lonsdale (Mr. Collins) to the statement by the Secretary of State for Education and Skills—whereby we would create a skills strategy driven by what British businesses demand, not by what the education bureaucracy sometimes happens to produce. That is precisely what has not been successful under this Government and what our policies will produce, as has been endorsed by business.
After eight years of relentless regulation, for which the Secretary of State clearly remains stubbornly unapologetic—not least because she did not mention regulation on business in the whole of her opening speech, although it was a central piece of her own Chancellor's speech—smears about Conservative policies and fantasy Labour initiatives to deregulate are not good enough. British business will consider this Budget on the basis of the real-life facts on the ground, not the Labour myth-peddling machine.
It is a fact that before the last election, Labour said that it would not raise national insurance contributions. Immediately after the election, it did so. It is a fact, according to the CBI, that
It is a fact that there have been 15 new regulations every working day under Labour—50 per cent. more than under the last Conservative Government. It is a fact that under Labour, as we are told on page 62 of the Red Book,
It is a fact that for every job that the private sector lost last year, the public sector took on almost two jobs. And it is a fact that nearly 1 million manufacturing jobs have been lost under Labour.
Enough is enough. Instead of the endless talk that we hear from Ministers about the challenges facing British business—important as they are, and important as it is to recognise the global challenge now coming from China, India and other very fast-developing markets—businesses need a Government with a clear plan of action. They need a low tax and a real low-regulation economy; the right skills system, driven by the demands of business, to pull young people up through school and higher and further education; support for science and research and development through the stripping away of much of the current bureaucracy, not least in the mismatched definitions of development for the purposes of qualifying for research and development tax credit; and a refocused DTI. The DTI must be that loud, authoritative voice that is needed for the confidence, competitiveness, profitability and highest possible reputation of British business. That will be at the heart of a Conservative Government whose success will transparently be measured by its month-by-month, year-on-year real effectiveness in reducing the regulatory burdens on business.
None of that is rocket science. It is all deliverable—but, obviously, only under the Conservatives. It is clearly out of reach of the inhabitants of planet Hewitt.
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