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“freeing firms from the cost of red tape and allowing them to get on with the job of running their businesses”.
Those are the words of our local chamber of commerce, but they are echoed around the country.
According to the Government’s figures, calculated in 2006, the burdens barometer was more than £50 billion. Not only do small businesses find the financial burden huge, but trying to set up a business is demoralising because the number of forms to be filled in is colossal. People may turn to their local Business Link—I have visited mine—but for many it is an intimidating process. The last thing I want is for people who plan to start up a business, especially young people, to be deterred from doing so by concern about the costs and aggravation they will incur.
Lorely Burt (Solihull) (LD): Is the hon. Lady aware of the report published last year by the Federation of Small Businesses, which found that only 4 per cent. of the 19,000 members who responded to its survey actually use Business Link? They find its plethora of services unacceptable.
Anne Main: I am aware that Business Link is not always as friendly towards small businesses as it might hope. Perhaps the Government could address that problem.
I am extremely aware of the time, so I shall cut short my remarks. On behalf of small businesses in St. Albans, such as Bravingtons and Patons on my high street, and those that are folding—sometimes because of high business rents, but sometimes because of the sheer burden of regulation—I ask the DTI to be a bit friendlier and listen to the small voice of small business.
6.34 pm
Mr. Mike Weir (Angus) (SNP):
Our debate about the DTI perhaps reflects the fact that priorities are changing. The Chairman of the Trade and Industry Committee made a good point about the way in which the Department’s functions hang together for business. However, energy is now perhaps a more environmental matter, given that it is one of the major sources of pollution. There would be sense in considering a way of removing energy from the DTI and linking it to the
Department for Environment, Food and Rural Affairs. I wish to make a few remarks about energy because it is obviously very important, especially for Scotland.
We have had the energy review and the Government have come up with the new nuclear option. Luckily, strangely enough, one of their planning functions that is devolved to Scotland means that Scotland will perhaps be saved from new nuclear stations. However, the problem of waste will affect us all. The Government and official Opposition Front Benchers had an interesting discussion about that. When the Government introduced the energy review, they talked about the private sector meeting a “full share” of the costs of disposal, but we have not yet had an explanation of what a full share actually means. Today, the hon. Member for Rutland and Melton (Alan Duncan) seemed to be talking about a deferred subsidy to the private sector. Under any provision, it appears that the public purse will have to bear the cost of disposing of new nuclear waste.
I have argued in the House on many occasions about the transmission charges affecting energy in this country, which result in higher costs of energy production in the north of Scotland than in the south of England and act against the interests of renewables. Nothing in the energy review will change the situation. The review includes a section on fuel poverty, but it does little to add to the attack on it. For example, nothing is proposed to help rural areas by examining price mechanisms and social tariffs. Various specific issues influence fuel poverty in rural areas.
We have already discussed carbon capture. The fact that BP is pulling out of the Peterhead project will be a huge blow to Scotland. Some 300 people are employed on the project, so its winding down will have a serious impact. However, it is worse than that. As I pointed out earlier, the energy review makes a lot of carbon capture’s potential to help developing countries that use a lot of coal and other fossil fuels to clean up their act. Such projects will be important as we move beyond Kyoto towards a new carbon reduction scheme, so it is clear that the developed world needs to deal with this.
The Government first said that they were in favour of carbon capture some three years ago. However, although BP, Scottish Power and others have made a massive investment in Peterhead, little progress seems to have been made in any other area. The argument that the Government cannot simply award a contract to one project does not hold water if we are seriously considering the technology as a contributor to carbon reduction, rather than just another aspect of energy policy. It is worth noting that even in the United States, which is often seen as an ogre by the green movement, a $90 million tax allowance is available for a carbon capture and storage pilot project. Other countries are pushing ahead on such projects, so, yet again, we might be left behind.
Carbon capture and storage could be important for not just Peterhead. Scottish Power is investing in cleaning up the Longannet and Cockenzie coal-fired power stations in Scotland, which could be important for the future of energy in Scotland and the UK.
I want to speak briefly about the Post Office—and I will be brief, as I hope that others may yet contribute.
What can I say about the Post Office? I have talked about it in this House for the past six years and things do not seem to be getting much better. I shall end with a story. The Government have taken away much business from the Post Office, but sometimes the Post Office does not help itself. A constituent contacted me today to say that they were moving house and went into their local post office with the simple aim of getting a redirection of mail form, but they were informed by the local postmaster that he could not supply one; it could only be downloaded from the internet. There were no redirection of mail forms in the post offices in Angus. That is utterly ludicrous. Not everybody has access to the internet, and for something as simple as that form to be not available is an absolute disgrace.
6.40 pm
Charles Hendry (Wealden) (Con): We have had a valuable and constructive debate this afternoon; it has been brief, but it touched on an important issue that goes right to the heart of government and the future structure of government. In his opening comments, the Secretary of State paid tribute to the Department of Trade and Industry staff, and we certainly wish to associate ourselves with that, given their dedication and the expert work that they do. Our criticism, such as it is, focuses on the failure in leadership at the Department, rather than on the personnel, with whom we hope to work in due course.
I join the Secretary of State in paying tribute to business in this country. There are many outstanding businesses in this country that do a remarkable job around the world. The entrepreneurial spirit still thrives in this country, but that does not mean that we should not do better. He asked various questions, and in particular he asked about our position on science policy. I should like to say to him and to the House that we broadly support the Government’s position on science, as my hon. Friend the Member for Rutland and Melton (Alan Duncan) made clear when he expertly opened the debate. Outstanding scientific work is being done in this country, but not enough is being done to turn that science to commercial advantage. It has to be recognised that leading companies at the forefront of technology are having to ask whether their next investment should be here or overseas because of the situation with regard to tax, regulations, skills and other matters.
I listened with great care to the hon. Member for Richmond Park (Susan Kramer) for some clarification of Liberal Democrat policy on trade and industry until I virtually lost the will to live. I think that none of us yet understands which DTI activities she thinks should be retained, and which she thinks should be got rid of, but what certainly came through, as my hon. Friend the Member for Mid-Worcestershire (Peter Luff) said, is the fact that business will be in despair at her proposals, which essentially remove the voice of business and subjugate it to the almighty Treasury, and give more power to the unloved regions, although she cannot even tell us what those proposals will cost.
The hon. Member for Richmond Park certainly seemed confused about aspects of energy; she spoke about the incompatibility of investment in nuclear with investment in other forms of renewables. In fact, today companies
at the forefront of the sector are diversifying, and it is the giants who are investing both in the major elements of nuclear, and in aspects of renewables. BP has announced an $8 billion investment in alternative energy, and E.ON is prepared to invest in not just nuclear, but offshore wind and tidal power. The involvement of those major companies in investment in those forms of energy is the key to helping new technologies to come forward.
My hon. Friend the Member for Mid-Worcestershire, the Chairman of the Select Committee on Trade and Industry, made an excellent and insightful contribution, as always. He was not always as impartial as he set out to be, but thank heavens for that. He reminded us that the foundations for the economic success for which the Government have been able to take credit were laid well before it came to power in 1997. One of the great things that the Government did right was not to roll back the changes that the last Conservative Government made, which made this country one of the most successful economies in the world. He is absolutely right to say that there must be a Department that represents business—not just a Minister in the Treasury, but a Department that will argue the case for business with other Departments, and which will make sure that the needs of business are fully understood.
My hon. Friend the Member for St. Albans (Anne Main) made a strong contribution and a passionate defence of small business and its needs, and the hon. Member for Angus (Mr. Weir) made a thoughtful contribution about the failings of the energy White Paper, although he misrepresented our position, as we have made it quite clear that there will be no subsidy for nuclear new build.
Sir Robert Smith: Will the hon. Gentleman give way?
Charles Hendry: I hope that the hon. Gentleman will understand that I do not have time to give way to him, especially as he has not been in the Chamber for most of the debate. It seems that in virtually every debate in the Chamber, someone creeps in from the planet Zarg and makes an out-of-this-world contribution. Today, that role fell to the hon. Member for Edinburgh, South (Nigel Griffiths), who said that there is a “creditable record” on manufacturing. He said so of a Government under whom 1.2 million jobs have been lost, as my right hon. Friend the Member for Wokingham (Mr. Redwood) made clear, and under whom the share of gross domestic product attributable to manufacturing has dropped from 20 to 13 per cent. I hate to think what the hon. Gentleman would regard as a disappointing or even a bad record but, nevertheless, we were glad to hear his contribution, and perhaps his next appointment in the new regime will be as Minister for space.
Charles Hendry: I am afraid that time is against us. The hon. Gentleman had the chance to make his contribution.
Little makes as clear as the energy White Paper the consequences of the Government’s indecisiveness. The Government say that they want a new fleet of new-build nuclear power stations, but businesses could not possibly invest when they do not know the nature of the waste disposal programme, how decommissioning will be required to take place, or the costs of those activities. They do not know at what level carbon will be taxed, which
makes it difficult for any business to come forward and invest. The Government say that they want to encourage renewables, yet the British Wind Energy Association reacted to the planning White Paper by saying that the UK
“is no nearer to the 2010 renewables target with the Planning White Paper”
and that the proposals will not bring any
“benefit for renewables in the short term”.
The association argues that the changes would affect only five of the 74 wind farm applications that are stuck in planning, and that there will be no benefit for one of the major sources of renewable energy from the changes proposed by the Government.
The Government say that they want Britain to take the lead in carbon capture and storage, but it is dithering and delays by DTI Ministers that have led to the cancellation of the only viable CCS pilot project in the UK. BP delayed the closure of that plant by a year to give Ministers time to introduce proposals to make the project feasible, but I am afraid that ministerial delays mean that an additional three years of delays have been built in before a pilot scheme can be made to work. It is the delays and indecision by DTI Ministers that have increased the likelihood of power cuts in the years ahead.
It is not necessarily what politicians think that matters—it is what business thinks that should matter most of all. In a recent survey by the British Chambers of Commerce only 8 per cent. of UK businesses described the DTI as
“playing an important role in promoting business.”
Nearly two thirds of businesses—61 per cent.—thought that the DTI is either ineffective or very ineffective. Just 7 per cent. think that it is effective. What business needs is a Department of Trade and Industry that regards its primary goal as supporting business, not regulating it. Some 30,000 new regulations have come into force since the Government came to power 10 years ago; there are 14 new regulations a day; and it costs the average business £13,500 a year to implement them. We need a DTI that is up to speed with business, and we need a culture that stops the unnecessary and over-zealous interpretation of EU directives, rather than one that fails to argue its corner and defend British business adequately in the EU. We need a DTI that does more to ensure that the needs of business are incorporated more effectively in the debate about skills, as we face unprecedented pressure and competition from countries such as China and India. There is no business today that is safe from the threat of relocation overseas, and even world-class British businesses find it hard to justify each new decision to invest here, rather than abroad.
Business tells us that it needs clarity: it does not need those 3,000 schemes, which should be slimmed down. It is frustrated by constant change, by nine Energy Ministers in 10 years and by the lack of a strong voice in discussions with other Government Departments. We do many things outstandingly, including bio-pharmaceuticals, finance, technology, design, services, aerospace and top-end engineering. We do many, many things that are brilliant. We are still a nation of great genius and innovation and brilliant leadership, but that is in spite of the Government, not because of them.
We need to know from the Government that they are still committed to a Department at the heart of Government, a voice at the Cabinet table, that will argue for wealth creation, because that is the cornerstone of everything that we want to achieve. The Government have taken that for granted for too long. British scientists and British business can still lead the world, but to do so they need a DTI and DTI Ministers who are more focused, more visionary and more purposeful than they are at present.
6.50 pm
The Minister for Science and Innovation (Malcolm Wicks): I will do my best to be both focused and purposeful in answering the debate. We have had an extensive debate and it has been interesting in all sorts of ways. The shadow Secretary of State for Trade and Industry opened the debate with a 45-minute speech, but that was not long enough, because he clearly did not have time to spell out much detail—to put it mildly—of Conservative party policy as it affects the DTI. When he did the saloon bar rant, as I might call it, on the need for a bonfire of regulations, he was challenged by my hon. Friend the Member for Wolverhampton, South-West (Rob Marris) to name just three regulations that should be abolished. After a while the hon. Gentleman said that he would take down all the no smoking signs that are going up—surely an indication that despite what we usually think, there can be smoke without political fire.
We then had an interesting contribution from the spokeswoman for the Liberal Democrat party, the hon. Member for Richmond Park (Susan Kramer). I was particularly interested in her plan to save £8 billion from the DTI budget—to be fair, I must add that that was to be saved over the lifetime of a Parliament. She, too, was unable to speak for quite long enough to say how that arithmetical conjuring trick would be managed. The science budget is about half of the DTI budget. It has gone up substantially and is some £3.4 billion a year. Clearly, to manage £8 billion-worth of cuts in the departmental budget over the lifetime of a Parliament would involve enormous slashing of the science budget. We will have to spend some time making sure that any academics who, sadly, voted Liberal Democrat last time know exactly what the plan is to slash the academic, science and research base of our country.
DTI issues affect everyone’s lives, from their gas bills to better training at work to parental leave, and from the level of the minimum wage to advice to a budding entrepreneur. The Chairman of the Select Committee, the hon. Member for Mid-Worcestershire (Peter Luff), is always a mild and reasonable man—but for two minutes I almost thought he was a Tory politician. He argued that all the great benefits to the country from a new Labour Government were based on a Tory economic heritage—but then he remembered where part of his salary comes from and became the reasonable even-handed Chairman of the Select Committee. Like the Opposition spokesmen and others, he paid tribute to the very good officials we have in different parts of the DTI. I thank him, and echo those words about the excellence of our officials, whatever our political differences might be about the DTI.
Let me take a step back and look at our work in context. Britain faces two major challenges—globalisation and climate change—alongside many other challenges. They are challenges, of course, but opportunities as well, for those willing to reach out to embrace them. We need to make globalisation work for us, and for the people of our country, and ensure that we shape globalisation rather than being shaped by it. That is the nature of the challenge. Over the coming decades there will be global changes at least as profound as those brought about by the industrial revolution of the 18th and 19th century. What took 200 years to evolve in that earlier epoch will take perhaps 20 or 30 years in the new global industrial revolution. My hon. Friend the Member for Edinburgh, South (Nigel Griffiths) spoke about one important aspect of that—the challenge for modern manufacturing.
The DTI is at the centre of ensuring that globalisation is good for UK employees through the creation of new high-value jobs, and that it is good for the consumer through fair competition and prices. In 2005-06, UK Trade and Investment—we have heard quite a lot about UKTI—helped nearly 6,000 UK companies move into overseas markets and landed more than 1,220 inward investment projects, with nearly 90,000 jobs being created or safeguarded. I saw at first hand the excellent work of UKTI at the recent Biotech 2007 conference in Boston.
The Government are responding to the changing business climate, which involves dealing with the challenges of globalisation and energy security. The DTI is tackling those challenges head on, taking tough decisions and making a real difference. We have heard about the energy White Paper, which will provide a framework for delivering a secure, low-carbon energy mix for the United Kingdom, tackling the twin challenges of climate change and—this is, as the Secretary of State noted, increasingly important—providing energy security. The White Paper announced specific measures to make inroads into reducing our carbon emissions and ensuring secure supplies for decades to come.
For the UK, but also for Europe more generally, globalisation demands what we increasingly refer to as a knowledge economy, which means a strong emphasis on science and innovation. The DTI continues to invest in our science base at unprecedented levels. The figure is currently £3.4 billion, which is more than half the DTI’s budget and double the sum of 10 years ago. That figure will rise to almost £3.9 billion in 2010-11. We have a worldwide reputation for being excellent at science. In the past few years, we have spent more than £3 billion building world-class laboratories, and one can see that huge investment in any local or regional university.
Patents are up 98 per cent. and income from intellectual property is up by 112 per cent. Since 1997, the value of collaborative research between universities and businesses has increased by more than 50 per cent.
Malcolm Wicks: I apologise, but I do not have time to take an intervention.
We take innovation—the appliance of science—seriously in all sorts of ways, and R and D tax credits and the new technology strategy board are important parts of that.
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