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“Delivery of the Business Plan is monitored quarterly as part of the Department’s approach”—
“to performance management and within the framework of its Public Service Agreement with”.
Mr. John Redwood (Wokingham) (Con): Write your own happy ending.
Alan Duncan: The Department may well be consulting on that.
The DTI lists as its objectives a few clear targets: it should support successful business, promote science and innovation, ensure fair markets and secure sustainable and affordable energy. The departmental budget is about £6.8 billion, and about half of it is spent on science, which I shall come to in a minute. The Minister for Science and Innovation is nodding his head, and he will be pleased to hear that I think that that is one area where the money is well spent, although unfortunately I cannot say the same for everything else.
The DTI is also responsible for employment rights, energy policy, postal services, overseas trade and inward investment, competition policy, insolvency, business support, consumer issues, company law, the protection of intellectual property, and weights and measures. We believe that there must be a Department of State with a Cabinet Minister who sits around the table and defends the wealth-creating sector of the United Kingdom. If there is no voice for the wealth creators, the spenders will dominate every aspect of Government. The purpose of the debate that we have initiated today is to say that we think that that voice has been too weak, and appears to be imperilled by many of the rumours circulating at the moment.
Mr. Richard Benyon (Newbury) (Con):
When my hon. Friend looks at the annual report and the role of DTI Ministers, has he assessed how much of their time
is spent promoting British industry and British business and how much of their time is spent imposing ever more regulation and burden on small and medium-sized enterprises, which are the backbone of the economy?
Alan Duncan: I regret the fact that at the mere mention of imposing regulation there are groans from Government Members, which shows that they do not understand the effect of so many regulations. Regulations are especially punishing for small business, which, unlike larger business, feels that it has weak representation in getting its voice heard in the corridors of Government. I will address promotion in some detail in a moment, so I hope that my hon. Friend will be patient.
Rob Marris (Wolverhampton, South-West) (Lab): Will the hon. Gentleman provide three examples of regulations that if there were a Conservative Government—which I think unlikely—he would abolish?
Alan Duncan: I will cover that in a minute.
Let us examine the regard in which the Department is held at the moment. The Secretary of State admits that the DTI could do better, and recognises that it has underperformed. He said as much at the British Chambers of Commerce conference:
“The question is, could the DTI be improved, should changes be made? The answer is yes”.
I think that they appreciated his candour. They certainly agreed with him at the time. All the groups to which anyone speaks believe that the leadership and effectiveness of the Department of Trade and Industry are weak where they should be strong.
The Engineering Employers Federation argued that the structure is not sustainable because overlap with the Treasury often occurs in promoting economic growth. Martin Broughton, president of the CBI, said that the DTI had not been dealt with as a serious Department by the Government.
A study that the London Chamber of Commerce published today shows that nine out of 10 company directors in London support the creation of a dedicated Department for business, headed by a Cabinet Minister, to replace the DTI. The Secretary of State might say that we have already got that, but dissatisfaction with the Department’s current effectiveness lies behind the numbers in the survey. More than two fifths of directors said that the DTI was not fit for purpose in its current guise.
Nigel Griffiths (Edinburgh, South) (Lab) rose—
Alan Duncan: I shall give way to a former Minister.
Nigel Griffiths: Will the hon. Gentleman guarantee to provide a Department in that form?
Alan Duncan: I would love to be in a position to guarantee a Department in that form. We believe that there is a good case for a strong Department, perhaps with enhanced powers, to be a stronger voice for business, commerce and British interests at home and abroad. It is currently perceived as too weak.
The CBI’s view is that any changes to the structure of Government must strengthen the economic weight attached to Cabinet decisions. It believes that it is vital for a strong champion of business, which understands the realities of today’s global economy, to be at the heart of Government. It said that it did not want the competitiveness agenda to be undermined in critical policy areas, including employment and energy.
Most organisations that have to deal with the DTI believe that it is not doing as much as it could, although I confess that I would not go as far as Mr. Chris Rea, the chairman of Rotherham-based AES Engineering, who said that the DTI is a “complete and utter joke”. However, I agree with him that it needs to undergo a complete cultural transformation. That is what, essentially, I am trying to convey to the Secretary of State.
Let us take a quick canter through the Department’s responsibilities and ascertain whether it has performed as well as it should. We have debated post offices several times. In 2001, the Government promised to keep them open except in unavoidable circumstances. Those unavoidable circumstances appear to be arising thick and fast every day. The Government have presided over the largest annual closure of sub-post offices. In total, more than 4,000 have closed since the Government came to office. We know from a recent statement that they intend to close a minimum of a further 2,500 in the next two years. That amounts to a closure rate three times that under the Conservative Government.
The Government hide behind the access criteria, but even their analysis of those criteria in past years has shown that they can shut two thirds of all post offices and still meet the criteria, because 99 per cent. of people in rural areas live within 3 miles of a post office.
The bigger subject, which we have often considered in the House, is energy. We have had no end of reviews. In 10 years of a Labour Government, energy has been high on the agenda for five years. The publication of a White Paper—the third such White Paper since Labour came to office—was delayed twice. It was the product of the Government’s third major energy review, under their eighth Energy Minister. Yet no definite decisions have been made about the future of our electricity generation. Further consultations are under way, and there are questionable elements in the White Paper published just before the Whitsun recess—about the reform of the renewables obligation, for example—which will delay things further.
David Howarth (Cambridge) (LD): On the subject of the uncertainty of policy, will the hon. Gentleman take the opportunity to inform the House of the Conservative party’s policy on nuclear power? Subject to one or two legal cases, we know the Government’s view, and we know the Liberal Democrat view, which is clearly against, because we believe that nuclear power will crowd out carbon capture, renewables and energy savings—so what is the hon. Gentleman’s view?
Alan Duncan:
The idea that having a choice in how power is generated and having a fair regime for nuclear energy will crowd out renewable alternatives is, in my view, absurd. In that, we agree wholeheartedly with the
Government, and share the same view. The only thing that we have not done that the Liberal Democrats have done is to rule out nuclear power altogether—a simple posture that is unrealistic in its assumptions about how electricity will be generated in future. I will tell the hon. Gentleman exactly what Conservative party policy is. We want a cap and trade regime for carbon, in which permits are allocated as far as possible by auction and far less by historic use. We want a properly understood and priced regime—the Government have been slow on this—for handling waste. We would reform the climate change levy, which attacks nuclear energy even though it is a non-carbon-emitting process, and we would have a fair planning regime in order to enhance the regime under which a future nuclear power station can be built by having site and type approval. Does that suffice?
Mr. Tobias Ellwood (Bournemouth, East) (Con): Can my hon. Friend clarify why the Liberal Democrats are against nuclear power on land, but in favour of it when it is in the back of a nuclear-powered submarine?
Alan Duncan: I confess that even at my most imaginative I am unable to disentangle the thought processes of the Liberal Democrats, but I have no doubt that their spokeswoman will be able to do so when she rises to her feet and explains all to a baffled and mystified House!
Miss Julie Kirkbride (Bromsgrove) (Con): Before my hon. Friend moves on, I would be grateful to hear whether he believes it possible—or, for that matter, likely—for us to meet our carbon reduction targets without nuclear power.
Alan Duncan: That would depend on a number of factors. One is the early and effective advance of carbon capture technology, which I am coming on to in a moment, and another is the scale and scope of the contribution that the renewables sector can make. There is no doubt that in the absence of carbon capture, it will be very difficult to make the carbon emissions reductions that we all want to see. The Government have to admit—this is partly another charge to be levelled against the DTI in some respects—that carbon emissions are rising and that their plans are probably insufficient to meet their emissions targets. In March the Government signed up to an ambitious EU target to get 20 per cent. of all energy from renewables by 2020, but the measures outlined in the energy White Paper are nowhere near sufficient to meet it.
Another issue is carbon capture. I stood here a mere two weeks ago, and in an immediate response to the White Paper I said that buried in the statement was bad news for carbon capture. I was scoffed at by the Secretary of State for Trade and Industry, and by the Secretary of State for Environment, Food and Rural Affairs, who sat there grinning from ear to ear, saying that I did not know what I was talking about. I did, and I do. A mere hour later, BP announced that it was pulling out of carbon capture in Peterhead, which was the most developed and advanced experiment in the entire country. It was a pioneering project destroyed by the Government’s refusal to include it in the renewables obligation. Once again, the competition has been
deferred, so buried in that news was very bad news for carbon capture. I hope that the Secretary of State will have the good grace to admit it.
Mr. Mike Weir (Angus) (SNP): I agree with the hon. Gentleman that he was very quick in bringing this matter before the House after the statement was made. In fact, I too raised it during the statement, and no indication was given of any difficulty with it. Given that the Government have announced that there is to be a competition, and given that the current partners in the Peterhead scheme have already invested about £50 million in the pre-engineering phase, most of which appears to have been lost, what confidence can other projects have in this competition, which the Government are to announce some time later this year?
Alan Duncan: As I understand it, the Government have announced a competition that will either open or close in November. By whatever means they hold the competition, they cannot escape from the accusation that research and experimentation in carbon capture has been deferred, probably by as much as two or three years, compared with the point that BP had reached. That is a disaster in terms of wanting clean coal to make an effective contribution to our power generation mix. The Government’s track record on carbon capture is therefore pretty grim.
The Government’s strategy for nuclear waste is also unfortunate. Anyone who is to invest in a nuclear power station will need to know the planning regime and the costs of building and dismantling it. Those are now pretty well within the scope of a potential investor. But what they do not have—and they can only get it from the Government—is a clear understanding of the costs that they will face for handling, looking after or treating nuclear waste. Until the Government say in clear terms how new nuclear waste will be handled, and how the Government and the investor will interact, no company is likely to invest. If ever there were urgency, it is to clarify that. The Government have said that urgent decisions need to be taken about our future power stations, but no such decisions can readily be taken until they are clear about the handling of nuclear waste.
The House of Lords Science and Technology Committee described the Government’s proposals for dealing with radioactive waste as “incoherent and opaque”. Its report details serious concerns over the institutional framework for dealing with it. Will the Secretary of State tell us exactly what the regime will be for nuclear waste?
Sir Robert Smith (West Aberdeenshire and Kincardine) (LD): Does the hon. Gentleman believe, however, that once that regime becomes clear, it must be the investors who pay the price for that waste, and not the public sector picking up the subsidy through some back-door minimisation or transfer of risk to the state?
Alan Duncan:
Yes. Our view and the Government’s is that the nuclear sector should have no subsidies. We must accept, however, that government and the planet will outlast the life of a nuclear power station and probably its commercial capacity to handle waste. Thirty, 40 or 50 years from now, the ultimate
stewardship or treatment of that waste might have to be handed over. That is exactly the kind of detail that is necessary for anyone to decide to invest; without it, they will not do so.
The biggest area of DTI activity in which it scores well is science. The budget for science is about £3.5 billion, and is largely administered by the research councils. Broadly, the Government have done well on that. They have doubled the budget in the past 10 years. My criticism, however, is that science projects need continuity and certainty, which does not get bounced from one year to the next. I am critical of the Government’s decision to claw back £98 million from the science budget to pay for things that they knew had to be paid for, such as the Rover inquiry. In future, I hope that the Government will appreciate that continuity of science budgets is crucial.
Earlier, mention was made on the Conservative Benches of regulation. We never hear much from the Government about that. They deny that regulation does any harm. The small business sector in particular, however, finds regulation increasingly costly and burdensome— [Interruption.] Does the hon. Member for Wolverhampton, South-West (Rob Marris) have any experience in business? Perhaps he would like to tell me now. He does not.
The fact is that anyone who wants to set up a business must face no end of instructions. If one reads the Government’s “short guide” to setting up a business, one finds that it is about 50 pages long. That is intimidating for someone who simply wants to register as a sole proprietor or as a limited company with very few employees and get on, be self-reliant and earn a living for themselves and others.
Rob Marris: The hon. Gentleman asked whether I have any experience in business. The short answer is yes. I spent most of my working life in the private sector. I helped to run a small business in retail—ladies’ shoes, as it happens—and I was a partner in a law firm, which is private sector as well. That is where the majority of my career was spent. I agree that small business often finds it harder to cope with regulation than larger business, and there are exceptions from certain regulations to take account of that. However, on the question of regulation, what three regulations, by way of example, would his party abolish?
Alan Duncan: I shall pick one straight away. I would not force all businesses to put no-smoking signs in every public room throughout the country for ever and permanently. I hope that the hon. Gentleman will persuade his party to vote against such ridiculous and numerous regulations.
Mr. Jeremy Hunt (South-West Surrey) (Con): Does my hon. Friend agree that whether it is the ladies’ shoe sector or the legal sector, the single thing that helps small businesses most is to operate in a low-tax light-regulation environment? The biggest failure of the DTI under this Government is that it fails at any time to make the case for that competitive environment, which can be achieved only by sharing the proceeds of growth between increases in public spending and reductions in taxation.
Alan Duncan: I agree. It has been calculated that more than 30,000 new regulations have been introduced by this Government—more than 14 every day. The average British company has to spend over £13,000 a year implementing new legislation. On the back of that, we have dropped from fourth to 10th in the international competitiveness league. Let me point out the crucial deceit in the last Government. The Secretary of State for Trade and Industry might not have seen it coming, but he should have were he genuinely defending British business interests. The Chancellor raised corporation tax on small business. Where was the voice of the DTI in objecting to that?
Jane Kennedy (Liverpool, Wavertree) (Lab): As a Minister, I struggled to ensure that in the drive for regulation, which largely came from Europe—I know that the hon. Gentleman has quite an enlightened attitude to Europe, having listened to him in the past—the potential for burden was minimised. Colleagues in the Government work equally hard to do that. Does he accept that to minimise the impact of regulation from Europe on business we have to be part of an effective lobbying group? Being effective in lobbying in the European Parliament is an important part of that. Surely his party’s isolation within the European Parliament will not help in his avowed attitude to such regulation.
Alan Duncan: Based on the first half of the right hon. Lady’s comments, I am happy to act as a reference for her return to government as a Minister in the impending reshuffle. As for the second half, it is not about lobbying in the EU. An EU directive is an instruction to member states to make their domestic law conform to certain stipulations. Most of the gold-plating—indeed, all the actual gold-plating—is home-grown. It is the culture of the United Kingdom and the way in which we write our law to adhere to directives that causes so much of the problem. I applaud her attitude when a Minister of trying to keep that to a minimum, but the culture of Departments and the way in which we write our law tends to make those directives go far further than they need ever do. That is what I would like to see changed.
Mr. Redwood: Does my hon. Friend agree that Labour Members are being disingenuous? They will remember that our party made 63 deregulatory proposals as part of our manifesto for the last general election. We brought them to the House of Commons and debated them. We sent them to Ministers who kept on losing them. We are still waiting for them to implement them, and many of them would have made the work of business easier. I can promise my hon. Friend that the forthcoming economic policy competitiveness report will have an even longer list than the 63 because the Government have made so many more regulations in the past year.
Alan Duncan: I am grateful to my right hon. Friend. We all look forward to his report on competitiveness, which I am sure will make an important contribution to our policy making.
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