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Lord Simon of Highbury: My Lords, in response to the factual questions from my noble friend, the position is as follows: the Statement today did not mention share ownership because clearly that is a Treasury matter and this was a DTI Statement. However, my noble friend can be absolutely sure that the DTI, following his own good works in office last year, totally supports the Treasury plan to expand employee share ownership. It is a fundamental part of improving productivity across the firm as a whole and in getting the entire workforce committed to improved performance. We are therefore extremely supportive of it.
As to the scope of the scheme, the Revenue has laid documentation in the Library today and the scheme is now a public proposal. It will be developed by a group of tax practitioners and experts who will be looking at the proposals. It is our intention to have draft clauses published as part of the pre-Budget report package and the new scheme is intended to be in the Finance Bill 2000.
My noble friend's final question was whether there would be stimulation for employers as well as for employees. The intention is that in the matching scheme there will be advantages for employers as well as employees in terms of encouragement to participate in the scheme. At the same time I should like to mention, because it gives another facet to share ownership, the enterprise management incentives scheme which is being introduced in the Budget. That will seek to stimulate new people and experienced executives coming into ownership in small businesses via a more attractive ownership option for shares and a tax regime which gives them more option to grow capital quickly at less cost to them, vis a vis the Revenue, in their taking a new post.
The Earl of Dartmouth: My Lords, what the Minister has said is all very well, but when it is all added
up it makes nothing like sufficient contribution to putting right the damaging and harmful effects on small and medium-sized enterprises caused by the working time directive introduced as a direct consequence of the Government's signing up to the European Social Chapter.The working time directive imposes onerous record-keeping on small businesses and restricts the number of hours employees of all businesses can work. Frankly, in that context, what the Minister has just said is a complete nonsense. The damaging effect of the enterprise-destroying monstrosity that is the working time directive, is exacerbated and made much worse by the total shambles in the Minister's department which cannot produce a straightforward explanatory pamphlet on the working time directive even at the third attempt.
Lord Simon of Highbury: My Lords, I did not actually get the question.
The Earl of Dartmouth: My Lords, that does not say much for the noble Lord's intellect; I made myself abundantly clear.
Lord Simon of Highbury: My Lords, I did not get the question, but I certainly noticed the lack of hyperbole!
I felt I had just given a reasonably sensible answer on the issues of share ownership to my noble friend, who seemed interested in the way the workforce, the owners and managers in our society build a better partnership. What the noble Earl fails to recognise in the working time directive is that it is a basis for fairness which is usually worked out in agreement between the owners, the managers, the shareholders and the workforce. In my past experience in my own company those were matters that were handled by agreement between the workforce and the management. There is nothing surprisingly new about it, therefore, for many companies.
Lord Jacobs: My Lords, I thank the Minister for his Statement and I welcome it. If it is permitted to be wildly enthusiastic in this House about any part of a Statement, then I must express my own wild enthusiasm for the decision to investigate internationally competitive pricing. As one who has spent the past four years studying prices both in the United States and Europe, and comparing them with the UK in four areas--pharmaceuticals, cars, supermarkets and electrical goods--I have become aware that we may not be paying twice what they are paying in the United States, but we are certainly paying 30 to 40 per cent. more net of VAT. The people of this country would see a vast improvement in their standard of living if there was as little as a 7 per cent. reduction in the cost of living. Therefore I welcome what the Government plan to do.
My question is this: if, as is planned, these various industries or retailing areas are sent, for example, to the OFT for investigation and if, as I believe, in most cases--not necessarily all--it is found that nothing illegal is being done; nobody has breached any rules and everybody has behaved according to the regulations that
exist, will the Government then consider entering into negotiations with various suppliers and manufacturers to discuss ways and means by which they could get them to bring down their prices to the levels consumers are charged in other countries? Most of those companies are international companies. If the Government will consider such an approach after the OFT and so forth have done their work, we could make a lot more progress.
Lord Simon of Highbury: My Lords, I welcome the noble Lord's support for the attention given to international price comparisons and I know from answering in this House that he has a great knowledge of the subject. He has been tireless in trying to bring the more difficult areas to our attention.
On the question of how we can ensure that competition is realistic in situations where there is no problem in legal terms, there are probably two relatively simple ways of ensuring improvement. First, there is very much in our minds the issue of an educated and active consumer. That seems to me to be the best test of competitive capacity in the pricing sector. As I pointed out, we want to bring forward a consumer White Paper, and no doubt we will be thinking in terms of exactly the sort of issue that the noble Lord raised when considering such challenges.
The second means is to use the pressure of the supply chain in business itself. When you have information of this nature, it seems to me from my past experience that the best people to ensure that prices are moving in the right direction are the peer group of companies and those in a supply chain which are involved with the particular product. I see it less as a bureaucratic process of government forcing people to move prices in particular ways--that is to say, a sort of governor's raised eyebrows or a headmaster's little rap over the hands. In the long run, it is best to educate your consumers and have an extremely vocal and vibrant consumer sector, while activating your supply chains in the business peer group.
Lord Berkeley: My Lords, I welcome the Statement and have two quick questions for my noble friend the Minister. The first relates to utilities. My noble friend said that he was going to ask the regulators to look at prices more closely. However, does that cover the regulators of all utilities? Further, would that include rail regulators? I suppose that the latter is a question that I would ask, but it would be most interesting to hear my noble friend's reply.
Secondly, and more generally, the Government recently announced similar measures in several areas--for example, in the competitiveness White Paper, in the Budget and in today's Statement--such as supporting SMEs, science and technology and research. Is there a danger that, in particular, SMEs may be getting indigestion? Will my noble friend assure the House that he will try to keep the bureaucracy attached to all these measures as minimal as possible in accordance with
good government, so as to ensure that there is no conflict between the different documents that have been produced and the announcements that have been made?
Lord Simon of Highbury: My Lords, my noble friend's first question concerned which utility regulators are likely to be looking closely at prices. When delivering the Statement in the other place today, my right honourable friend specifically raised the question of electricity charges. I am not aware of the same question having been raised in terms of the rail regulator. However, as a result of my noble friend's question, I shall certainly make it my business to inquire into the position.
As regards the apparent duplication of the Government's attention to issues concerning small businesses, funding and science, I can confirm that we are well aware that we may be complicating life for the individual small business. In a sense, that is the purpose of setting up the small business service within the DTI, which will focus on clarifying the delivery of these services to small businesses.
My noble friend also raised another important issue which deserves a response. When we are talking about increasing competitiveness, increasing capabilities across the business community and increasing collaboration between government and businesses, we know that we have to indulge in a great deal of co-operation between government departments. This is not a single department issue. The Department for Education and Employment is deeply involved in the issue of capabilities and the Department of the Environment, Transport and the Regions is greatly involved with the services to small businesses out in the regions. It is very important that all government departments should be aware of the application of micro-economic policy. That is what we are really talking about; in other words, the balance between macro- and micro-economic policy which, if I may say so, has failed so often in the past in our economy. We need to bring together many departments and ensure that the priorities are understood across government, while still providing a focus of delivery for particular services.
If we take together the Pre-Budget Report, the Competitiveness White Paper, the Public Services Agreements--public sector agreements which are most important in getting departments to focus on their priorities and their capacity to deliver policy--we see joined-up government. I do not like using that phrase, but it is an apposite one because these are very complex issues which need pulling together.
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