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House of Commons

Thursday 3 June 2010

The House met at half-past Ten o'clock


[Mr Speaker in the Chair]

Oral Answers to Questions

Business, Innovation and Skills

The Secretary of State was asked-

Regional Development Agencies

1. Emma Reynolds (Wolverhampton North East) (Lab): What plans he has for the future of regional development agencies; and if he will make a statement. [000766]

9. Alison McGovern (Wirral South) (Lab): What plans he has for future support for businesses in Merseyside and the north-west; and if he will make a statement. [000775]

12. Steve McCabe (Birmingham, Selly Oak) (Lab): For what reasons his Department plans to replace regional development agencies with local economic partnerships. [000778]

15. Sir Alan Beith (Berwick-upon-Tweed) (LD): What plans he has for the future of the regional development agency in the north-east; and if he will make a statement. [000782]

The Secretary of State for Business, Innovation and Skills (Vince Cable): The Government intend to replace RDAs with local enterprise partnerships and to bring together business and local authorities to establish local accountability. Where they enjoy clear public support, the partnerships may take a similar form to existing RDAs. In making the necessary reductions in RDA budgets and reviewing their functions, we will seek to mitigate the impact on economically vulnerable parts of the country.

Emma Reynolds: I thank the Secretary of State for his answer, and congratulate him and his team on their new positions. I wish them well.

Advantage West Midlands brings an economic benefit to the regional economy of over £7 for every £1 spent. Does the Secretary of State understand that the cuts that his Government have announced will put jobs at risk in my constituency and critical projects such as the i54 business park?

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Vince Cable: The Secretary of State does understand the importance of RDAs, which of course will be changed but in a way that makes them more effective. I am sure that the hon. Lady noticed that in my first comments on RDAs very shortly after I took office I recognised that several parts of the country were especially vulnerable. I mentioned the west midlands as one.

Alison McGovern: In my constituency of Wirral South there are a great many people who are very concerned about the coalition Government's proposals, and specifically those with special relevance to the projects that have been progressed by the Northwest Regional Development Agency. Will the Secretary of State give me some reassurance that this vital business support will continue?

Vince Cable: Within days of taking up this job I went to the north-west of England. I visited the RDA and talked to the chairman and chief executive and to businesses in the region. I reassured them that we are well aware of the problems faced by Merseyside and the north-west, and that it is an area of priority in terms of resources.

Steve McCabe: I too congratulate the Secretary of State, and I heard what he said about not tinkering too much in the west midlands. How many jobs would have to be lost in the west midlands before he considers this policy to be a failure?

Vince Cable: I congratulate the hon. Gentleman on being returned to the House. I remember that he was a formidable force in the Government Whips Office in his day. He has already noted the acceptance that the west midlands has particular structural problems, and they will be taken into account in the reordering of the RDAs. In my first answer, I stressed that the changes depend very much on the reaction of local business and local authorities. I am sure that he will make representations to Birmingham city council and local businesses, and I hope that they will reflect the priority that he wishes to give.

Sir Alan Beith: I thank my right hon. Friend for the part that he played in securing a very clear assurance from the Prime Minister yesterday that One NorthEast will continue to have a key role as a regional development agency. Will that role and the way in which it is structured enable it to continue to assist existing and new firms to develop the private sector, for example in assembling land where needed?

Vince Cable: I hope that it will continue to play a positive role. My right hon. Friend has been extensively involved in supporting the north-east, and I talked to him about these things on the several occasions I visited Newcastle and the region. He knows that one of the early decisions that came to me was to appoint the new chairman of One NorthEast, and appointing someone to manage the transition was a statement of a wish to maintain an element of continuity. I do not pretend that the RDAs will not change: they will, but I recognise that the north-east is a particular case because of its very high dependence on public sector employment and the generally very positive feedback I get about One NorthEast.

Margot James (Stourbridge) (Con): I congratulate my right hon. Friend and his team on their new positions. Is he aware of the Richard report commissioned by the
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Conservative party in opposition? It found that a third of RDA money was spent on administration and that much of the rest was spent on signposting to other sources of information. I beseech him to ensure that in the new policy businesses and locally elected authorities can get together to avail themselves far more directly of all that taxpayer money.

Vince Cable: Yes, I am aware of that report. There was a happy coincidence of thinking between my colleague's party and my own on the future of RDAs. She is quite right to say that there was a lot of administrative waste, some of which we are now removing as a result of the changes that have been made in the last week. There will be parts of the country-including, I think, the part that she represents-where we will have a substantial cutback in RDAs. However, they will be refocused and made more effective.

Philip Davies (Shipley) (Con): I thank the Secretary of State for last week coming to visit Pace International, an excellent company in my constituency. Following on from the excellent question from my hon. Friend the Member for Stourbridge (Margot James), I have been concerned that the Secretary of State has indicated that Yorkshire Forward may be given a reprieve. May I tell him that it is just as unacceptable for the unelected and unaccountable Yorkshire Forward to spend £300 million a year of public money as it is for similar organisations in the south of England?

Vince Cable: The language of "reprieve" is not quite right. All the RDAs will change their nature; they will become local partnerships.

Mr Speaker: Order. May I very gently say to the Secretary of State that he must turn to address the House?

Vince Cable: What I said is that Yorkshire, together with the north-east, the north-west and the west midlands, has particular structural problems that do need to be addressed.

Mr Pat McFadden (Wolverhampton South East) (Lab): I welcome the Secretary of State and his ministerial team to their post and wish them well. The Secretary of State and I have something in common: we both used to work for the late John Smith in times past, but that of course was before the Secretary of State fell in with the wrong crowd-and now he has fallen in with an even worse crowd.

The Secretary of State has said several times in recent weeks that his Department will be the Department for growth. I am not going to begin these exchanges by denying that whoever won the election, there would have been difficult decisions to take on deficit reduction, but does he accept that the £300 million of cuts to RDA budgets this year are not efficiency savings? They will mean real cuts in real business support, with less private investment leveraged in and cuts to important regeneration projects. Is it not the case that the specific feature of these cuts and his plans for replacing RDAs is that they will impact on our capacity to secure the very growth that is necessary to make deficit reduction a success?

Mr Speaker: There were two questions there. One brief answer will suffice.

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Vince Cable: I thank the right hon. Gentleman for his welcome and congratulate him on his elevation to the shadow Cabinet. He is quite right: we both greatly respected John Smith, for whom we worked. I should also like to thank the right hon. Gentleman for what he did as a very hard-working Minister. He has made the life of this Government easier as a result of all the preparatory work that he did preparing for private capital to come into Royal Mail. But in relation to cuts, I am sure he acknowledges that the fiscal position does demand drastic action. When I joined the Department I was already aware that this process was being undertaken-cuts were already being taken in science laboratories, and further education lecturers were being made redundant as a result of cuts made under his Government.

Flexible Working

2. Harriett Baldwin (West Worcestershire) (Con): What plans he has to extend the right to request flexible working to all employees. [000768]

The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Davey): I welcome the hon. Lady to the House and congratulate her on her election. The coalition agreement commits the Government to extending the right to request flexible working to all employees. We will be consulting businesses and listening to their views, and we hope to bring proposals to the House later in the year.

Harriett Baldwin: Thank you very much for that answer, and I am pleased to welcome all of you to the team. It is so nice to have you in this House.

I want to ask about flexible working arrangements in particular. I know from my own experience how valuable it can be to an employer to have employees on flexible working arrangements, but I realise that small businesses are very concerned about the potential impact of extending this regulation and I wondered what steps the team will take to consult on the extension of flexible working arrangements.

Mr Davey: Our commitment is for extensive consultation. I want to make it clear that my door is open to all business organisations and to the hon. Lady and hon. Members of the House. We will listen to those views and take them on board, but there is increasing evidence that flexible working arrangements are embraced by employers and employees and are welcomed in many businesses across the country.

Christopher Leslie (Nottingham East) (Lab/Co-op): Many employers regard flexible working as involving the hiring of temporary staff-agency workers and so on. Will the Minister put it on the record today once and for all that there is no truth whatever in the reports in the Financial Times that his Government-the coalition-are planning to scrap protections for agency workers, for temporary workers, which give them rights to equal pay after 12 weeks?

Mr Davey: I welcome the hon. Gentleman back to the House; I remember sparring with him in previous Parliaments. As a former Minister, he will know not to believe everything that he reads in the papers.

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3. Mr Peter Bone (Wellingborough) (Con): What his most recent estimate is of the financial effect on businesses of the present level of regulation. [000769]

5. Mr Tobias Ellwood (Bournemouth East) (Con): What his most recent estimate is of the financial effect on businesses of the present level of regulation. [000771]

7. Mr David Amess (Southend West) (Con): What his most recent estimate is of the financial effect on businesses of the present level of regulation. [000773]

The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk): While no official estimate currently exists, British Chambers of Commerce calculates that, since 1998, the additional regulatory costs introduced by the previous Labour Government have equated to approximately £11 billion every year.

Mr Bone: I thank the Minister for that response and welcome him to the Dispatch Box; I can think of nobody in the House better qualified to occupy his role. The cost that regulation has imposed is staggering. Can he estimate how much of that regulation emanates from the European Union, and what can he do to minimise that?

Mr Prisk: I am grateful to my hon. Friend for those kind opening remarks, and I hope to be able to satisfy my colleagues' desire to make sure that we make a real change in how we help small businesses. My hon. Friend is absolutely right to say that Europe is a key source of many of the regulatory problems that we have, but we gold-plate the situation. That is why the Government are determined to adopt a different approach. Let me briefly say what that is. There are two simple principles: first, we will ensure that the timing of implementation does not disadvantage British business, when compared to its European counterparts; and secondly, when introducing regulation, we shall do so in a way that does not substantially increase either the cost or the scope. That is a crucial commitment to small businesses, and I hope that it will stem the tide.

Mr Ellwood: I, too, welcome my hon. Friend to his position. Labour's red tape comes in all shapes and sizes. There are examples of that in Bournemouth, where a heavy goods vehicle licence is now required to drive one of the Noddy trains, which have provided an excellent service for years. Also, the police are now required to pass a course to allow them to climb an 8-foot ladder to erect Neighbourhood Watch signs. Does my hon. Friend agree that that is not what made Britain great?

Mr Prisk: My hon. Friend is right about the way in which common sense seems to depart from the way that this works. That is why we need to change the system, not just deal with the symptoms of the problem. That is why we are introducing a one in, one out approach to change the whole culture of Government: no new regulatory burden on business can be brought forward unless reductions are made to existing regulations. That will change the culture of Whitehall and stop some of the nonsense to which my hon. Friend refers.

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Mr Amess: As chairman of the all-party group on small shops, I receive many representations from shops in Southend West and across the country on the burden of such regulations. In these still unfavourable trading conditions, will my hon. Friend look carefully at those representations and, as a Minister open to new ideas, meet a small deputation from the all-party group?

Mr Prisk: I am very pleased to accede to that request. My hon. Friend is an excellent advocate of that vital part of our economy. It is crucial that we are open to fresh ideas, so I look forward to hearing those representations, and if he will contact my office, we can arrange that as soon as possible.

Catherine McKinnell (Newcastle upon Tyne North) (Lab): With reference to the Minister's desire to help small businesses, it has to be accepted that some effort needs to be made to create the right environment for manufacturing businesses. Will he therefore please explain the Government's plans to remove the annual investment allowance, which helps thousands of manufacturing businesses, hundreds of which are in my constituency?

Mr Prisk: The hon. Lady is right to point out the importance of manufacturing; it is a crucial part of our economy. Sadly, it became imbalanced when her party was in power, and we need to change that. On the tax measure in question, and the representation that she made, she will understand that we are in the period running up to Budget purdah and need to be careful not to get ahead of what I think the Chancellor's ambitions will be, but at the CBI dinner he made it very clear that, as regards corporation tax changes, we will not act in any way that impugns manufacturing in any form.

John Cryer (Leyton and Wanstead) (Lab): Does the Minister consider any part of health and safety regulation to be burdensome or, as he just said, red tape? If so, which bits?

Mr Prisk: The key principle in regulation is to ensure that it is proportionate and balanced, and that risks, where they exist, particularly in health and safety, are recognised. However, I say to the hon. Gentleman and to the whole House, let us ensure that regulations are introduced and implemented with a degree of common sense. Under the Better Regulation Executive we have good rules about proportionate regulation, and I want to ensure that health and safety meets those standards.

Ian Lucas (Wrexham) (Lab): May I offer my congratulations to the hon. Gentleman on his appointment? I was very pleased to read that this Government are to follow the previous Government's initiative in publishing the forward regulatory programme. Indeed, I was very pleased to read the press release in the Financial Times this morning, which I must say was very familiar to me. Press releases are the easy bit, but when will the Government bring forward the costings for additional regulations, such as minimum pricing and additional planning regulations, which have already been proposed and are set out in the coalition agreement?

Mr Prisk: I thank the hon. Gentleman for his kind remarks and look forward to jousting with him in a reverse of the situation we had before. I am very pleased
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to answer his point directly, because he raises the question of those regulations that are in the pipeline. I am pleased to tell the House that this Government will initiate a fundamental review of all regulation that is scheduled for introduction over the coming year. In the first few days of this Government, we have already identified several billion pounds of costs in those regulations, and we want to ensure that, where we can, we remove them so that business can get on and grow.

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