Lord Hunt of Wirral (Conservative)
My Lords, I want to press the Government on this amendment. When we discussed the matter on Report, the noble Lord, Lord Sainsbury of Turville, supplied a number of figures for consideration. At the time, I said that I wanted to reflect on the information that he had put forward and consult more widely outside this House. Those with whom I have consulted, especially the CBI—and many others involved in industry and commerce in the wider sense—have urged me further to press the Government.
In the amendment I seek to delete the sum of £45 million and insert a reference to £100 million. When we debated the matter previously the Government admitted that they were dealing essentially with an informed estimate and that their method of calculation was not fool-proof. The CBI has reflected on the information put forward by the Government and has asked me to assert on its behalf the fact that it has carried out a considerable amount of research. The confederation sampled 522 companies, covering a wide range of industries, both high-tech and traditional, and produced a ratio of UK turnover to world-wide gross assets of 1.2:1. That ratio is supported by the rule-of-thumb test that turnover should be expected to exceed gross assets. Therefore, the new turnover figure should exceed the old £70 million gross assets figure. The Government's figure of £45 million fails the rule-of-thumb test.
I must also point out to the Minister that the Government have never responded to the proposal that allowance should be made for inflation, as the threshold was last set in 1994. They have used the old figure of £70 million in calculating an equivalent number of companies that would be caught by the new turnover threshold. Surely they should at least use the indexed figure of £85 million to calculate the number of affected companies.
On the Government's figures, about 7,500 companies would be caught by the £45 million threshold. If the Government were to accept the amendment and the £100 million threshold proposed by the CBI, that number would be cut in half and the regulatory burden on business would be reduced. That would also go some way towards making this a true enterprise Bill. I beg to move.