Small Business

– in the House of Commons at 6:49 pm on 8th March 2000.

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Photo of Angela Browning Angela Browning Shadow Secretary of State, Shadow Secretary of State for Trade and Industry 7:15 pm, 8th March 2000

I beg to move, That this House opposes the growing regulatory burdens that the Government has added to business costs; deplores the failure of the Government to understand the contribution that the small business sector makes to employment, growth and UK trade; calls on the Government to recognise the failure of the Better Regulation Task Force and the consequences of ill-thought-through legislation and regulations that have damaged small business; and condemns the Department of Trade and Industry for unco-ordinated policy initiatives and for diminishing the status of small business debate in the House of Commons. I am pleased to welcome the Secretary of State to the Dispatch Box for tonight's debate. He is here to discuss, at our request, small business and the burden that it bears. I believe that this will be the first time that he has addressed the House on that subject at any length since taking office and I am therefore pleased to see him. I look forward with interest to hearing what he has to say.

New Labour promised small business a lot when it came to office. Indeed, its manifesto said: Support for small businesses will have a major role in our plans for economic growth. We will cut unnecessary red tape. Three years down the track, the Government avoid debates on small business and have deliberately done the subject down. There is a reason for that, of course, which is that their track record over the past three years has been to add £9.6 billion of regulatory costs to business. They fall disproportionately on the small business sector.

The Government also implement regulations in such a way that even their own chairman of the better regulation taskforce called it a dog's dinner. They were described in a Trade and Industry Committee report in terms that have not previously been seen in such reports on this subject. For example, the 13th report, on small businesses and enterprise, stated: From the situation as we saw it a year ago, where there seemed to be something of a policy vacuum on SMEs— small and medium-sized enterprises— we have moved to one where there is some risk of an excess of loosely connected and apparently uncoordinated policy initiatives shooting off in all directions, generating noise and interest, but not commensurate light. When the Government came to power, they promised an annual debate on small firms and made quite a virtue of that. We certainly do not disagree with holding such a debate, but the then Minister for Small Firms, Trade and Industry began the debate in the first year of the Parliament by saying that it fulfils a commitment that the Government gave while in opposition, when we said that we would institute an annual parliamentary debate about the small business sector in the United Kingdom.—[Official Report, 19 June 1998; Vol. 314, c. 606.] They did not have a small firms debate the following year. Indeed, at business questions, my right hon. Friend the Member for North-West Hampshire (Sir G. Young), the shadow Leader of the House, kept asking when we might have such a debate. A whole year went by. When it eventually took place, it was relegated to Westminster Hall. As the British Chambers of Commerce said: From our perspective this has to be a downgrading of the importance of small firms. This debate should be in the House of Commons with the Prime Minister. It does not signal that the government is taking small firms seriously. Even when the Government appear to have proposals to help small firms, the Secretary of State remains silent. Last June, they produced two documents, one of which was specifically about small firms and the Small Business Service. The Secretary of State for Education and Employment made a statement on post-16 training and the Secretary of State for Trade and Industry sat next to him as both documents were important to business, but the only reference to the Small Business Service document throughout the statement amounted to some 21 words.

The Secretary of State for Education and Employment referred to the parallel consultation on the Small Business Service announced today by my right hon. Friend the Secretary of State for Trade and Industry.—[Official Report, 30 June 1999; Vol. 334, c. 345.] There was no detailed presentation in that statement. It is a mystery why, if the Small Business Service is to be of such value to the small business community, the Secretary of State for Trade and Industry remained silent in his seat and did not take the opportunity to make a statement and, perhaps more pertinently, submit himself to questioning from the House about the new proposal that he was introducing on behalf of small businesses.

The Secretary of State will do anything rather than answer publicly for his failure to understand small businesses. Most important of all, by last year it was apparent to everyone, including small businesses and their representative organisations, that the Government and these Ministers are all talk and no delivery.

Photo of Claire Curtis-Thomas Claire Curtis-Thomas Labour, Crosby

Would the hon. Lady be kind enough to tell us how often her Administration held lectures, or rather debates, on small business services?

Photo of Angela Browning Angela Browning Shadow Secretary of State, Shadow Secretary of State for Trade and Industry

We did not lecture the House, whereas we are used to having lectures from this Administration, not only on small business, but on just about everything. We held regular debates but, more important, Ministers in the previous Administration made statements to the House and held full debates. On both occasions, they were subject to questioning, whereas this Administration, especially the Secretary of State and his team, are reluctant to submit themselves to the scrutiny and questioning of hon. Members.

Photo of Gerald Howarth Gerald Howarth Conservative, Aldershot

Does my hon. Friend recall that, in the early part of the Conservative Administration, we had Ministers, such as Sir David Mitchell, who understood businesses because they had run small businesses and brought their experience to the House?

Photo of Angela Browning Angela Browning Shadow Secretary of State, Shadow Secretary of State for Trade and Industry

It is an added bonus when Ministers who speak on a subject actually know what they are talking about. That is one of the distinctions between the previous and the present Governments when it comes to any matter to do with business, but especially small businesses.

Not only are this Administration adding to business costs they have completely lost the plot.

Photo of Geraint Davies Geraint Davies Labour, Croydon Central

How very amusing. Will the hon. Lady confirm that the figure of £9.6 billion is based on old regulations? It is based primarily on the minimum wage, which I understand she will support, so the Conservatives would have that cost. Does she accept that the figure for the working time directive is massively inflated? Would she reverse the working time directive should the Tories come to power? I suggest that she could not do so, because of EU law.

Photo of Angela Browning Angela Browning Shadow Secretary of State, Shadow Secretary of State for Trade and Industry

All the burdens that the hon. Gentleman's Administration are putting on business are under review. They are all on the table, and are being closely considered.

The figure that I quoted for the total of the aggregate cost that the Government have put on business was produced by the British Chambers of Commerce. It was challenged by the Minister for Small Business and E-Commerce in the debate in Westminster Hall. The British Chambers of Commerce subsequently issued a press release, which I shall quote as it may be helpful to the hon. Gentleman. It was responding to the fact that the Minister for Small Business and E-Commerce had claimed that the figures were inaccurate—along the lines of the hon. Gentleman's argument. Chris Humphries, the director general of the British Chambers of Commerce, said: What matters to business is the overall cost of government regulation. We therefore stand by our overall figure of £10 billion and, in particular, the costs of the Working Time Directive.The Working Time Directive is by far the biggest cost facing business at £7.65 billion over the life of the Parliament. This includes the cost of minimum daily and weekly rest periods and a minimum paid annual leave, and the additional week's paid leave introduced from November 1999. This is of course the result of a European Directive but regardless of the source, business has to bear the cost.However, I must stress that, contrary to reports— that is the reports from the Department of Trade and Industry— BCC's figures do not include the cost of paying the minimum wage, which we do not treat as a regulation. If we were to add the recurring financial costs of paying the minimum wage, the total cost of red tape on business would increase to a massive £17 billion. I hope that that has been helpful to the hon. Gentleman.

Photo of Geraint Davies Geraint Davies Labour, Croydon Central

Will the hon. Lady confirm that those costs would continue under a Conservative Administration, and that there is no plan to reverse either the minimum wage or the working time directive? What is the point of bringing these matters to the table? It is not even true.

Photo of Angela Browning Angela Browning Shadow Secretary of State, Shadow Secretary of State for Trade and Industry

I am happy to assist the hon. Gentleman. One thing that is pertinent to small business in particular and to business in general is the cumulative cost of regulation. It is not this regulation or that regulation, but the cumulative cost of regulations and the point at which that has an impact on whether a business can expand, move to new premises or take on new employees. That is why the British Chambers of Commerce say that it is the overall cost of Government regulation.

Photo of Angela Browning Angela Browning Shadow Secretary of State, Shadow Secretary of State for Trade and Industry

I have given way twice to the hon. Gentleman. I will now give way to my hon. Friend the Member for Banbury (Mr. Baldry).

Photo of Tony Baldry Tony Baldry Conservative, Banbury

Does my hon. Friend agree that it is not only the British Chambers of Commerce that is reporting such burdens on business? I understand that, this coming Friday, Lord Haskins, who was appointed by the Government to monitor regulation, will report that the administration of the working families tax credit costs small businesses £25 million a year. One of the Government's own appointees is reporting that.

Photo of Angela Browning Angela Browning Shadow Secretary of State, Shadow Secretary of State for Trade and Industry

Lord Haskins chaired the better regulation taskforce. The Government claim to have tackled regulation, but they have had two key problems. When they have regulated, especially in the area of employment law, they have regarded it not as a cost on business, but as a social benefit that they have provided to people. The tab has always been picked up by business.

It is a little disingenuous for the Government to add regulation to regulation, thus adding to businesses' costs, and then to say, "Aren't we wonderful? We are providing workers with extra benefits. Someone else will have to decide how to pay for it". That is part of the problem that the Government have created, and it is the main reason why their better regulation taskforce failed.

Despite the efforts of Lord Haskins and others on the taskforce, regulation was moving apace, and they could not keep up with it, let alone cut it. The taskforce could not even make it better as time went by, given the Government's mismanagement by continually introducing new regulations on business, and given the inept way in which they went about their business and implemented regulations that they had put on the statute book. The Government had a manifesto pledge to cut red tape, but they added to the amount of regulation and cost until it became so out of control that they had to abandon the better regulation taskforce.

I have just had an exchange with the hon. Member for Croydon, Central (Mr. Davies) about the views of the British Chambers of Commerce. The Government consult, or so they say, but I am only too well aware that such consultation is meaningless when it comes to the legislative process. The views of business and its representative organisations are not taken into account. We constantly see a pattern in the regulations on small business and in other areas introduced by the Department of Trade and Industry and other Government Departments. They legislate and suddenly realise the inept way in which they have gone about it. They then have to shore up the situation by changing the regulations at the last minute. They parade that as listening to business, but the time to listen to business is at the beginning, during the consultation, not after the regulations are on the statute book and have had a damaging impact on people's businesses.

I should like to draw attention to some of the businesses and the varying sectors that have suffered under the Government. It is all very well to talk of £9.6 billion and of different sectors, but, at the end of the day, small business is about individuals—individuals who work hard. In many cases, we are talking about small family firms established by someone who may have gone as far as putting his or her house on the line to raise the necessary capital.

As all of us who have run our own companies know—I had 10 years' experience of running a company—it is necessary to get up, go out and secure business every day. Every aspect of the company must be managed. It is exciting; it is challenging; it is rewarding; but it is pretty scary at times. One of the key messages that I receive as I go around the country talking to those running businesses in various sectors is that they want the Government off their backs.

I can give the Government examples of what has happened to businesses in less than three years. A Mr. Chetwynd, who has a machining business in Warwickshire, writes: I have been in business now for 18 years and I have survived three recessions.

Photo of Angela Browning Angela Browning Shadow Secretary of State, Shadow Secretary of State for Trade and Industry

Are Labour Members suggesting that, if they were in charge for 18 years—which they will not be—the economic cycle would be as it is today? No one but a fool would say that. I suspect that even their prudent Chancellor would not make such a prediction. I must not allow myself to be distracted from what a real person running a real business has to say, in deference to some apparatchik who has a view on the subject. Mr. Chetwynd continues: I have expanded my company from 4 employees to 33 in this decade, all without the aid of grants, which I have not been clever enough to exploit. He believes that most of the problem is due to this government and their total nonchalance at our predicament and unforgivable lack of knowledge and understanding of what it is like to employ people.

Photo of Angela Browning Angela Browning Shadow Secretary of State, Shadow Secretary of State for Trade and Industry

No. I am reading an important letter from someone who is at the sharp end, rather than sitting here and talking about it.

Mr. Chetwynd writes: The increasing burden on us is intolerable. Do you think they know about the constant cost reductions which we operate under? There is no spare money to keep jobs open to people, or to administer more and more of their responsibilities. Those responsibilities were formerly paid for by the Government, but Government have now dumped them, as costs, on to businesses. Mr. Chetwynd adds a list showing how his costs have changed since the Government came to office.

The Government say that they listen to, and consult, business. As I have said to business organisations, that sounds all very warm and cosy, but, after three years, are the Government really listening? One would have thought that, during this great consultation period, they would at least have listened, and would have recognised nonsensical regulations, disproportionate regulations, or regulations that do not smack of fairness and justice.

I have a letter from someone who runs a privately managed residential and nursing home. That sector is very concerned. The lady in question writes: While everybody has to applaud the idea of higher standards for the provision of Care for the Elderly … it has to be understood that it can only be achieved at a higher cost. It is clear that, although the Government engaged in some form of consultation exercise in regard to changing the regulations for residential and care homes, that does not satisfy this particular home—and I have received many similar letters.

The letter that I have been quoting continues: The proposals exclude any choice for the Client or their families in deciding that maybe they prefer to pay less for their Care package and are happy with things as they are. The letter mentions the widening of doorways by 1.5 in, 10 sq m of usable space—not to include a door opening space—additional sitting and lounge areas, plus another room in which families can meet, and the provision of furniture over and above that provided. It appears that the Government are now to decide what sort of furniture each room should have. The letter also refers to the number of care assistants under 18, and asks how such assistants are to be trained for national vocational qualification 2. No one aged under 21 is to be in charge, so how can such people be trained for the important NVQ 3, which can be obtained at the age of 19?

I should have thought that, when the Secretary of State sat next to the Secretary of State for Education and Employment last June, joined-up government in regard to training would have been one of the things that we could expect; but here we have a whole sector under pressure. The lady writes further: Government should not be able to suddenly change the regulations and send so many Private Businesses to the wall. One of the problems is that those whom the Government consult tend to be those with a vested interest in seeing this sector develop into something like Trusthouse Forte. What will happen if all the little individual residential and nursing homes, with their funnily shaped rooms and, perhaps, not the right width of doorway, are forced to spend money—[Interruption.] Hon. Members are shouting "Wheelchairs". That may be appropriate in the case of new build, but some homes do not accommodate wheelchair users, and it is not reasonable to insist that they incur the capital expense involved in making changes on the chance that a particular person will need the facility.

We will end up—perhaps this is the Government's plan—not with privately owned residential and nursing homes, but with big Trust House Forte-style rooms where every piece of furniture is the same and every room is the same size, with the same wallpaper and the same carpet. I can think of no more sterile experience than that of people who must end their days in such an atmosphere. Institutions of that kind must be contrasted with some of the caring residential and nursing homes, catering for the individual, that my constituency—along with others, I am sure—contains.

Photo of Mr Martin O'Neill Mr Martin O'Neill Chair, Trade & Industry Committee, Chair, Trade & Industry Committee

Will the hon. Lady tell us when the regulations to which she has referred were introduced, and at whose behest? I understand that they were the product of the Conservative Government's processes.

People who live in homes are entitled to the best possible conditions. Second-rate accommodation of the kind that the hon. Lady supports is an insult to the elderly.

Photo of Angela Browning Angela Browning Shadow Secretary of State, Shadow Secretary of State for Trade and Industry

No, it is not. The Government have consulted on the regulations; they are not inherited from the last Government. Moreover, a Bill is proceeding through the other place. When it comes to the House of Commons, I will go into more detail.

The lady writes: We are at present registered for 25 Residents and have 2 double rooms, to accommodate the physical changes required we would have to reduce to 19 Residents. It is unlikely that our running costs would then be covered by the fees we are currently able to charge. The Government have paid no attention, but I have raised the subject of nonsensical rules of this kind on the Floor of the House. There is the construction industry tax scheme, which involves the absurdity of people having to present themselves in all four corners of the country. We still have the dreaded climate change tax—I received a letter from someone who runs a nursery, who will be buying all the plants from Belgium this year—and, of course, there is the much-publicised IR35 legislation, which is sending many businesses abroad.

The Government's answer is to abolish their better regulation taskforce, and to set up a star chamber in the Cabinet Office. The first Labour Minister for the Cabinet Office said that there was a difference between deregulation and better regulation. If only that had been true. There has been no better regulation; there has been chaos ever since, given the way in which the Government have implemented legislation. They have implemented it late, and have not given businesses the lead time that they need just to read the literature.

It seems that, when the present Government make a mistake of this kind and businesses are clearly in difficulty, their answer is not to take practical action to relieve businesses, but to re-budget, give it a smart title and send it off to the "cutting edge of business" in the Cabinet Office, of all places.

Photo of Mr Ian Bruce Mr Ian Bruce Conservative, South Dorset

My hon. Friend is perhaps unfair to the Secretary of State because, at a stroke last week, he halved the regulations on the utilities by abandoning half the Utilities Bill, which was supposed to be so important to consumers.

Photo of Angela Browning Angela Browning Shadow Secretary of State, Shadow Secretary of State for Trade and Industry

I am grateful to my hon. Friend for that intervention. I hope that the Secretary of State was listening to my hon. Friend because, last Wednesday, I tabled a named-day question asking the Secretary of State whether he was going to remove water and telecommunications from the Bill. Yesterday, I received a holding answer saying that I would receive an answer shortly. If he did not know five days after he had done it that that was what he had done, what hope is there that there will be any businesslike management in the Department of Trade and Industry? I hope that I shall get an accurate reply from him in short order.

The Government and the Secretary of State have learned the language of business, but they do not understand it; the regulations that they place on small businesses are testimony to that. The Conservative party will change that.

Photo of Angela Browning Angela Browning Shadow Secretary of State, Shadow Secretary of State for Trade and Industry

I am just about to tell the hon. Gentleman. When we come to office, we will set regulatory budgets. Every Secretary of State, after an independent audit, will be required over the lifetime of a Parliament to reduce the costs that the Department puts on business through regulation. Every year, that Secretary of State, unlike the present one, will stand at the Dispatch Box and account progress to the House: the right and proper place for such announcements.

We shall exempt small businesses from much regulation that the Government have put on them and have proper independent impact assessments before a Bill proceeds through the House, so that the consultation becomes a key part of the way in which a Bill is fashioned, we do listen to what business has to say and independent assessment plays its part in ensuring that we get it right. There will be no tsars or star chambers, just honest, common-sense policies that business supports from Departments where Ministers manage in a businesslike way.

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry 7:42 pm, 8th March 2000

I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof: welcomes the action taken by Her Majesty's Government to foster an environment in which small business can flourish, with macro-economic stability, a 10 per cent. starting rate of corporation tax, a research and development tax credit, regulation introduced in ways that minimise burdens on business, and the creation of the Small Business Service through which for the first time there will be at the heart of Government an institution dedicated to representing the interest of, and improving the services to, small firms; congratulates the ongoing work being undertaken by the Better Regulation Task Force, chaired by Lord Haskins, in spearheading the Government's campaigning for better regulation; and contrasts this with the boom and bust policies of the previous administration, which led to 15 per cent. interest rates, double digit inflation and the collapse of thousands of small firms. May I put the situation of small businesses in context? We have not been given a true picture of the strength of the small business sector. I regret that, but I can understand the reluctance of the hon. Member for Tiverton and Honiton (Mrs. Browning) to address the sector's success under this Government: it stands in stark contrast with the neglect that it suffered under 18 years of the Conservative Administration of which she was a member.

The hon. Lady will know, then, of the hardship and record level of insolvencies that were inflicted on the small business sector as a result of the three recessions about which she kindly reminded the House. She is right. There is an economic cycle. The Government have ensured for the first time that no recession has resulted from the economic cycle and the slowing down in economic growth.

The Government of whom the hon. Lady was a member three times imposed a recession, as she kindly reminded the House, but, if we look at the facts and get away from the prejudice that we have heard from her this evening, we will see the true value that the Government have been able to bring to the small business sector. More than 1 million businesses have started up in the lifetime of the Government. On average, 8,000 more businesses have started up every quarter under the Labour Government than in the first half of the 1990s. That is the record. That is because of the economic climate that we have been able to engineer.

In the past two years, the overall number of business closures has been lower than at any other time in the whole of the past decade. There has been a net gain of 140,000 small firms since the middle of 1997. That is because, under the present Government, with the economic stability that we have been able to create, small businesses can be formed and can plan ahead with confidence.

That is why, on taking office, we took immediate action to provide independence to the Bank of England and to ensure that we did not repeat the cycle of boom and bust about which the hon. Lady has kindly reminded the House.

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

I shall in a minute.

It is worth reminding the House that, 10 years ago this week, interest rates went up to 15.5 per cent. Inflation was in double figures. [Interruption.] Conservative Front Benchers say, "Oh dear." The thousands and thousands of small businesses that went into insolvency because interest rates were at 15.5 per cent. will not like them saying that so cynically.

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

Jobs and businesses were lost as a result of the Conservative party engineering boom and bust.

Photo of Michael Martin Michael Martin Deputy Speaker (First Deputy Chairman of Ways and Means)

Order. I will not tolerate the hon. Gentleman standing when the Secretary of State is speaking.

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

I will give way to the hon. Member for Stone (Mr. Cash) in a second, but someone has already asked me to give way—my hon. Friend the Member for Croydon, Central (Mr. Davies).

Photo of Geraint Davies Geraint Davies Labour, Croydon Central

Does my right hon. Friend not agree that the main point of Mr. Chetwynd's letter was that he had miraculously lived through three Tory recessions? As he knows, I have started a number of successful small businesses. What small businesses want is stability and growth to plan ahead, with low interest rates, more employment and a prosperous Britain in an uncertain world. That is what we are delivering.

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

My hon. Friend puts it extremely well: that is what we are delivering. I am grateful to him for pointing out, from his personal experience of running several small businesses—[Interruption.] He does not regret it. He knows the way in which small businesses operate.

There has been a net gain of 140,000 small firms since the middle of 1997, when the Government took office, as a result of the economic stability that we have been able to create.

Photo of Bill Cash Bill Cash Conservative, Stone

When the right hon. Gentleman is going on about the thousands of jobs that were lost during that regrettable period up to 16 September 1992, does he accept that the reason for the loss was the exchange rate mechanism, which many of us fought against all the way down the line? The real reason why the present Government have a more beneficial economy is precisely that they are out of the exchange rate mechanism and not in economic and monetary union. Does he not accept that those two things run together?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

The hon. Gentleman has been a powerful advocate in the House for a particular position on Europe. Giving the Bank of England independence over the setting of the exchange rate in 1997 and getting public finances under control for the first time have laid the foundations for the economic stability that we are seeing.

I know that I will never convince the hon. Gentleman of the argument. He has a particular view. We talked about it for hours during the debates on the Maastricht treaty. Thankfully, we are not going back to those days—at least I hope not—but if he looks back at what we have been able to achieve since May 1997, he will acknowledge that one of the great foundations of that economic stability was laid by the politically difficult decisions that we took in the early days of office. They have been proved to be absolutely right, so we have created the economic stability in which businesses can start, succeed and grow and in which people can invest with confidence. That is the framework that we have been able to establish.

Because we were able to do that, there has been a dramatic increase in small businesses starting up. It is a tangible demonstration of our success that more and more people are deciding to start their own businesses. That is a far better test than anything that we hear from Conservative Members in relation to the success, or otherwise, of the Government's policy: the fact that, day in, day out, more and more people choose to start their own businesses. Small businesses are starting at a rate that we have not seen for generations.

That is because of Government policies, not because of anything that the Conservatives are doing. They will go on about the burden of regulation and so on, but, day in, day out, people start small businesses. Those people will make a clear distinction between the need to provide their employees with decent minimum standards in the workplace—there is broad support for that approach there—and the cost of administration, red tape and bureaucracy. The big mistake that Conservative Members always make is to confuse the two. They cannot distinguish between red tape and bureaucracy and providing decent standards for people in the workplace.

Photo of Mr Ian Bruce Mr Ian Bruce Conservative, South Dorset

The right hon. Gentleman will know that, six months ago, we debated on the Floor of the House regulations on employment agencies. Why did he introduce those regulations, which occupied the attention of the House for about 18 months, but subsequently do a complete U-turn on temporary-to-permanent employment fees and on abolishing—as he was asked to do initially—value added tax on certain services?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

I know that Conservative Members find it difficult to understand that there are a Government and a Secretary of State who are prepared to listen. I hope that it will not affect the digestive system of the hon. Member for Tiverton and Honiton if I say that I shall not apologise for the fact that I very carefully examined the regulations, realised that a very powerful case on temp-to-perm was made by the hon. Member for South Dorset (Mr. Bruce), examined the regulations again, and said, "There is merit in the argument—so we'll change regulation of the matter." The whole point of consultation is to listen, and I have listened. I believed that the suggested approach was better, and we adopted it.

I also considered the value added tax issue. I said, "There is a better approach here. I have the agreement of my colleagues in the Treasury that we should not impose VAT", and we adopted that approach. Consequently, we have a far better provision, which has been applauded by the industry itself, which realizes

Photo of Mr Ian Bruce Mr Ian Bruce Conservative, South Dorset

There was no need to change the regulations in the first place.

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

As the hon. Gentleman will know, the industry itself is applauding our action—which stands in stark contrast to the 18 years of inaction by the previous, dogmatic Government, who listened to no one apart from themselves. That is the reality of the situation, and I make no apology for it.

Photo of Christopher Fraser Christopher Fraser Conservative, Mid Dorset and North Poole

Will the right hon. Gentleman concede that, given the debacle in the Department's handling of the Utilities Bill, the press are not complimentary to the Government? Rather, they are talking about a dog's dinner of a Government and are waiting to see the Secretary of State depart from the Department.

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

The phrase "dog's dinner" is being over-used in the debate. The hon. Member for Tiverton and Honiton used it, in quoting Lord Haskins—who is chairman of the better regulation taskforce—on the working time directive. The hon. Lady will be delighted to know that the better regulation taskforce is not being abolished. I know that she will be celebrating that great news tonight. She said in her speech that it is to be abolished, but it is not.

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

The star chamber is quite different. It is a very powerful body at the heart of Government. There are no tsars or tsarinas, but there is a star chamber—presided over by my right hon. Friend the Minister for the Cabinet Office.

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

I do not think that my right hon. Friend would like to be called a tsarina. There are many ways of describing her, but I do not think that that is one of them. The star chamber is working, and it is already doing some excellent work. We look forward, in the not-too-distant future, to announcing the product of its labours, which I hope will be welcomed by all hon. Members.

I was trying to provide the framework within which small businesses are able to prosper, and explain why so many small businesses have been created under this Government. There have been so many start-ups because of the economic stability that we have been able to create and the fact that we have been able to get interest rates down, inflation on target and public finances sorted out. Another reason is that we have introduced some of the lowest corporation tax rates ever. We have also introduced special tax rates for small businesses. We have created a situation in which a record number of small businesses are being established.

To encourage investment in new companies, the small business tax has been reduced to 20p in the pound, and we have introduced a new starting lop corporation tax rate for small companies. That will benefit 270,000 companies. We have also abolished advance corporation tax, thereby simplifying the tax system.

We also have to tackle the barriers that exist to enterprise flourishing in the United Kingdom. I accept that, currently, barriers stand in the way of many small businesses starting up and obtaining the finance that they need for success. Small businesses often have real problems and fail in their first three or four years because they have inadequate finance in their early days, when money has to be borrowed. In the early days, people over-extend themselves in credit and borrowing, then pay the price for it three or four years later. The Government therefore have to find ways of providing finance for small businesses to start up.

We have to recognise that one of the main issues concerning small businesses is the fact that some banks feel very reluctant to provide finance. The banking review that has been established by the Chancellor of the Exchequer, with Don Cruickshank as chairman, is very carefully examining the ways in which banks provide support, particularly to small businesses. The review will be reporting in the next few weeks. However, we shall have to take action over and above the recommendations that may be in the Cruickshank report.

We have to review all sources of finance available to small firms. One issue that we have been examining and that demonstrates a clear lack of support is provision of finance up to £500,000. Small businesses find it very difficult to access that level of finance. It is particularly difficult for some hi-tech start-ups and for small businesses in certain parts of the country to gain such finance. There is a real regional disparity in the finance made available to small businesses.

Photo of Mr Brian Cotter Mr Brian Cotter Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson

Will the Minister consider encouraging mutual guarantee schemes as a way in which small businesses might combine together to provide self-financing? Such schemes have operated in many other countries, and there have been trials of them in the United Kingdom.

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

The hon. Gentleman makes an important point. There have been trials in the United Kingdom, and we should learn from them. There are some very good examples of small businesses collaborating with each other. Although that did not happen before, small businesses are increasingly recognising that they can learn from each other, particularly on finance. I shall certainly draw such schemes to the attention of the Chancellor. I shall perhaps do so in the next few weeks, as he prepares, on 21 March, to unveil an undoubtedly hugely successful and popular Budget. That may be one of the issues that he will wish to address.

I was trying to identify the small business groups, such as those in the hi-tech sector, for which the market is not providing the financial support necessary for development. As I said, there are also regional disparities in access to finance. The third main group without sufficient financial support are small businesses in some of the United Kingdom's most deprived communities, where people who want to start businesses have huge difficulties in raising finance.

We have separate proposals to deal with the deficiencies affecting each of those groups—whether in the regions, hi-tech start-ups or business start-ups in deprived communities. In total, we have provided £180 million for an enterprise fund, within which we have targeted particularly those three groups.

There will be a hi-tech venture capital fund that will provide financial support to start-ups in the hi-tech sector. The United Kingdom—particularly United Kingdom pension funds—has been very bad in providing financial support to that sector. It is a bit of a condemnation that much of the investment for United Kingdom hi-tech companies is coming not from United Kingdom pension funds, but from the United States. We have to do something to encourage United Kingdom pension funds to invest in United Kingdom hi-tech companies.

We also have to do something about regional disparities. I am pleased that we have been able to establish, for the first time, a regional venture capital fund, which we hope to launch in the next few months and which will be able to offer finance to business start-ups in those regions which, perhaps historically, have not regarded the business start-up route as the way forward and the way of regenerating their local communities. The Phoenix fund, which we have established for deprived communities, is worth £30 million annually and will make a real difference. [Interruption.] The hon. Member for Buckingham (Mr. Bercow) may snort at the idea of a Phoenix fund; it may not be needed in Buckingham. However, it is needed in Barnsley, Bradford and many parts of the country where access to funds is simply not available at present. It will make a real difference to decent, hard-working people in deprived areas who want to start their own businesses, but cannot access finance at present.

Photo of John Bercow John Bercow Shadow Minister (Education)

I sincerely hope that the Secretary of State is not suggesting that there are no needy people in Buckingham, because there are. They need sound policies and Conservative representation. They do not have not the former, but they have the latter.

Will the Secretary of State tell us what further plans he has for sunset regulation? He dipped his toes in the water with the Electronic Communications Bill, which, I am pleased to say, was based on advice that I have proffered him for the past two years.

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

I am in danger of agreeing with yet another Conservative Member. The hon. Gentleman quite rightly says that he drew to my attention on several occasions the potential benefits that may come from sunset regulations. As I said to him at the time, they were worth investigating and we have done that. I am pleased that we shall be able to take a small step through provisions in the Electronic Communications Bill, but we can do more. However, that means breaking down a culture.

We are having an adult debate and, as the hon. Member for Tiverton and Honiton said of her experience as a Minister, there is a culture in Whitehall that is inclined to regulate first, because that is a soft option. If there is a problem, it is easy to regulate. What we must do is create a culture which asks, "If there is a problem, why do we not consider alternative means, such as guidance on best practice, codes of conduct and so on?" They are often a better way of approaching such problems. I know that the hon. Lady has said in the Chamber that, during her time as Minister, the previous Government did not do enough.

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

Let me finish my point, because it is a serious one. There will be political point scoring about regulation and the burdens of regulation, and I understand why that is necessary. However, if we can raise the debate slightly above that, there is an issue of the culture of government which we all need to address. How can we ensure that we provide minimum standards for people in the workplace that businesses will accept? The debate on the minimum wage, for example, has been interesting because most employers now agree with the principle. I am delighted that the Conservative party now endorses the principle of the national minimum wage. [Interruption.] Some Conservative Members do not endorse the principle. I am inclined to ask which of them do not agree with it, but I think that a majority of those present do not.

I am not altogether sure what the result would be if the five people on the Opposition Front Bench voted. I think I can spot one who is in favour of endorsing the national minimum wage, but I am not sure that the other four would. In fact, I can see that there is a four to one majority against the national minimum wage. That is interesting, and they clearly do not disagree with my analysis. However, we had better move on quickly.

The important issue is that, where there is a need to regulate—there will occasionally be such a need—it is done in a way that is as light-touch as possible. Figures from the British Chambers of Commerce that were cited by the hon. Member for Tiverton and Honiton show that there is confusion in terms of what is being covered. I can understand people being critical of the administrative burden that arises, but the hon. Lady kindly read out the letter from Chris Humphries, in which he confirmed that the figure of just under £10 billion that the British Chambers of Commerce quoted included the cost of providing four weeks paid holiday entitlement.

If the hon. Lady wants to go on the record as saying that the Conservative party regards such costs as unacceptable, the implication of her argument is that four weeks' paid holiday, which is part of the working time directive, is something with which she disagrees. A clear distinction must be made between administration and red tape, which we should all be against, as opposed to the costs of providing entitlements for people in the workplace. The figures that she cited referred to the costs of providing four weeks' paid holiday entitlement, which comes in under the working time directive. There is a cost there, but I think that most businesses are prepared to bear it. It is a matter of regret that the British Chambers of Commerce has included that figure in its costings.

Photo of Angela Browning Angela Browning Shadow Secretary of State, Shadow Secretary of State for Trade and Industry

Does the Secretary of State not understand why businesses have been placed under such pressure by the regulatory burdens that this Government have placed on them? They are under pressure because of the cumulative cost. It is not the number of regulations or any one regulation that has caused the problem. The cumulative cost has reached the point at which it impacts on the viability of businesses, and it is that cost that we intend to reduce. That is the difference between the Secretary of State's perspective and that of the Conservative party and small businesses. The right hon. Gentleman has come to the point where he has done so much cumulative damage to business that an individual regulation becomes the straw that breaks the camel's back, however worthy he may think it is.

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

The hon. Lady drew the House's attention to the detail provided by the British Chambers of Commerce. I pointed out that it includes in its figures the costs of providing four weeks entitlement for paid holiday. The implication of the hon. Lady's argument is that the Conservative party does not support that entitlement. People need to be aware of that.

The question is the balance that needs to be struck between providing minimum rights and entitlements to people in the workplace, which we support, and doing so in a way that is light-touch and does not create the over-regulation that can often result from doing that inappropriately. I should like to think that, in my time as Secretary of State, we have been able to change the regulations affecting the national minimum wage so that they are far more light-touch than they were when I came to office. We have taken steps to change record keeping in relation to the working time directive, That is far more friendly in terms of how it can be applied in practice without losing the entitlement for people not to have to work more than 48 hours a week if they do not wish to do so. That is the appropriate approach to take.

We have laid good foundations for small businesses as a result of the economic stability that we have created. At the beginning of April, we shall establish the Small Business Service which, for the first time at the very heart of government, will ensure that the small business sector has a voice and can argue for its interests. I am confident that the Budget on 21 March will be a Budget for enterprise and fairness. What has struck me in my conversations throughout the country with small businesses is that they are asking not for some form of special treatment, but for enterprise and fairness. That is exactly what the Government are delivering and we will continue to do so.

Photo of Mr Ernie Ross Mr Ernie Ross Labour, Dundee West

What message would my right hon. Friend send to the small business federation which is to meet tomorrow night in Tayside? Among its members are a number of sub-postmasters. Initially, they ran scare stories that sub-post offices were likely to close and they organised petitions. We dealt with those issues and we made it clear that the Government intend there to be choice even after 2003. They then switched the spotlight and now they allege that the administration of the working families tax credit is liable to threaten small businesses. What message would my right hon. Friend like to send to them?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

The strong message that I can give is that we understand the concerns. That is why we are expanding the Inland Revenue's new enterprise support initiative, which will specifically help small businesses with payrolls so that they will not experience the sort of difficulties about which my hon. Friend, as well as postmasters and postmistresses, are concerned.

Let me remind the House of some facts. More than 1 million businesses have been started under this Government. That is the clearest demonstration of the fact that we are getting things right. However, there is no complacency. We will continue our efforts to reduce regulation and to cut red tape. I invite the House to support the amendment in the name of my right hon. Friend the Prime Minister.

Photo of Mr Brian Cotter Mr Brian Cotter Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson 8:09 pm, 8th March 2000

I welcome the debate, although a motion such as this comes rich from the Conservatives. As the Secretary of State rightly pointed out, their record on the matter was not brilliant. At their peak, interest rates were 15 per cent., and they were in double figures for four of the Conservative party's 18 years in office.

Liberal Democrats were pleased when the Government gave the Bank of England independence as a way forward for the economy, a policy which we had advocated for many years. The right hon. Member for Kensington and Chelsea (Mr. Portillo) now says that that is a good idea. I wonder whether his colleagues on the Front Bench agree with him. I am glad to see that they support that policy, although the minimum wage may be a different matter.

I ran my business throughout the time of the previous Government when there was a tremendous number of business failures. I believe that during the last five years of that Government one business went bust every three minutes of every working day. Coming from manufacturing industry, as I do, I also remember the way in which that Government concentrated on investment in City jobs. Valuable as they are, that was at the expense of manufacturing industry and the small business sector.

In their last three years, the previous Government introduced about 3,000 additional regulations each year. I give them credit for their deregulation initiative, but it was not particularly successful. The Deregulation Committee is not brilliantly successful now. During those years, the Conservatives introduced about 15 times as many regulations as they managed to get rid of through deregulation.

I join Conservative Members in their concern about the present situation facing small businesses. We are still waiting for the Government to fulfil the many promises that they have made. In particular, I welcome the concept of the Small Business Service. We have long needed a one-stop shop. Training and enterprise councils, business links and so on have proliferated. The Small Business Service is dedicated to reducing regulation from April and to concentrating on firms with up to 250 employees. It is important that that service should address the micro-businesses, something which the business links system failed to do.

I can attest to the way in which the administrative burden falls disproportionately on small companies, particularly when it comes to taking on an extra employee. Having just taken on an extra employee in my company, I know how discouraging it is. I need someone who can do a number of different jobs and I had to search hard to find such a person. Large companies have personnel departments to do such work, whereas I had to do the job with others in the company. Taking people on is a big cost to business. Everyone would accept that if every small business took on one additional employee we would have a real solution to the unemployment problem.

I reiterate what Conservative Members have said about the better regulation task force. We have not seen what we were looking for from that. It tried to do its job with insufficient resources, although I take my hat off to its chairman, who does an extremely good job. The different areas that it has chosen have been rather arbitrary. I hope that the Small Business Service will address the issue. In a debate on small businesses in January, it was announced that each Department would have a Minister responsible for regulation, and I should be interested to know whether that is now the case, and to have some sort of feedback.

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

I can confirm that in each Department a Minister has been appointed with specific responsibility to monitor the development of regulations within their Department and to report to the new Cabinet Committee.

Photo of Mr Brian Cotter Mr Brian Cotter Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson

That is welcome news.

A key issue that I have raised before concerns regulatory impact assessments. Having served on a number of Standing Committees I have been struck by the poor quality of the information that those assessments contain. Moreover, I urge the Secretary of State, if he has not already done so, to ensure that they should come at an early stage. The Secretary of State talked about consultation, and an impact assessment should be available at that stage so that an appropriate assessment can be made. I would also urge him to implement an annual report to Parliament on the impact of such assessments on Bills and new regulations.

The Secretary of State sets up the Government to be conscious of small business issues, and one way of achieving that would be if civil servants and Ministers were aware of the work involved in running a small business. We have an interchange scheme whereby civil servants and others go into companies such as the Shells and BPs of this world. I urge the Secretary of State to consider the value to the small business sector if civil servants and others on that scheme worked in the smallest of businesses—the garage, pub or shop. Only a few days would be needed to recognise the enormous problems involved in running a small business.

One of the biggest problems in business is seeing regulation coming down the line. The way in which it pops up from nowhere at short notice and is dumped on business is a problem. A taxi driver came to my surgery recently wanting to take on a black taxi in Weston-super-Mare. As things stand at the moment, he could just about manage the investment, but he was worried about rumblings to the effect that in one, two or three years changes in regulations could affect him badly. I should be grateful if the Secretary of State could take that issue on board.

I am glad to hear the Secretary of State welcome sunset regulation, which has been implemented in the Electronic Communications Bill. I hope that he will consider that as a way of ensuring that regulation is allowed to wither away if it is no longer appropriate.

Liberal Democrats have always proposed regional development agencies as a way forward, and we wait to see what the Government intend to do about them. I hope that there will be a means by which the Small Business Service can be relevant to local communities. When I intervened earlier, the Secretary of State accepted the regional guarantee scheme as a possible way forward. We want to see such local initiatives rather than the Government issuing diktats from the top.

Photo of Geraint Davies Geraint Davies Labour, Croydon Central

What is the hon. Gentleman's view on regionally based venture capital funds? Does he agree that US venture capital funds are highly diversified, from corporate re-engineering to small and high-tech companies, and that we need to have such diversification to re-engineer British industry and take advantage of small business opportunities in the European market.

Photo of Mr Brian Cotter Mr Brian Cotter Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson

That is an excellent point. More than that, we want the RDAs to have real money following them, not just a rejigging of the deckchairs on the Titanic.

I welcome the Secretary of State's point about flexibility of enforcement. We support the small business community being excluded to some extent from regulation, but it is important to have flexibility. Inspectors should have the sense not to march in on day one and say that all the doors have to be a certain width, even if it is clearly impractical to get that done by next week.

Apprenticeships are very important. This country has a tradition of apprenticeship schemes, and many of us would like them to return. My party has been considering the concerns that people have about builders and others not doing work to the right standard, and a lot of that comes from the lack of apprenticeship schemes. When traders try to have apprenticeships, they find that the burden of paperwork is too much, and they are put off.

We look to the Government to deliver on what they say. We are concerned that the Small Business Service will not meet local needs if it is not linked in locally. The regional development agency concept must be sharpened and made clearer. I hope that the Secretary of State will bear in mind the extra costs involved in hiring people because of regulation. I urge him to ensure that when the Small Business Service begins its work in April, it delivers what he has promised. We shall be watching. We have long believed in the RDAs' local one-stop shop delivery of services, and we look to the Secretary of State to deliver on his promises.

Photo of Mr Martin O'Neill Mr Martin O'Neill Chair, Trade & Industry Committee, Chair, Trade & Industry Committee 8:22 pm, 8th March 2000

We debated this subject on 20 January in Westminster Hall. On that occasion, I believe that only three Conservatives attended the debate; there were certainly only three Conservative contributions. At the start of tonight's debate there was a sizeable Conservative presence, but we quickly got to the stage where there were more Conservatives on the Front Bench than on the Back Benches. It ill-behoves them to lecture us on the diminishing status of small business debates.

The most depressing factor about Conservative Members' contributions to small business debates has been the persistent complaining and whingeing about regulation. I suspect that they do that because they are unable to complain about inflation; about business rates, in any serious way; about industrial relations; or about the general level of economic activity.

If there is one thing that encourages people to set up small businesses, to take the risk and put their house on the line, it is the prospect of a stable environment in which to get the business up and running. That is what the Government have provided over the past two and a half years. That is what sickens Conservative Members. They told lies before the general election about our irresponsibility and how we would spend money on needless projects. They raised many questions about how we would handle the unions and establish decent pay and conditions while keeping inflation in check, but we have achieved all that.

Small businesses now express a sense of relief. Since just before Christmas, I have spent part of almost every Friday talking to small business people in my constituency. I can think of two firms in the construction industry, one of which is in building supply. There is a company that makes double glazing—and sells it, too, much to its embarrassment, as after politicians and, I think, journalists, double glazing salespeople are about the least popular group in the country.

People in those firms tell me that they are confident. That is in an area of Clackmannanshire where, because of the collapse in the textile industry, some large employers have gone to the wall and there is considerable disadvantage. The firms sense that people are willing to invest in their houses, so they feel that they are in a position to start employing new people.

I do not disagree with the hon. Member for Weston-super-Mare (Mr. Cotter) on many points on this subject—we have debated it before—but credit should be given to the variety of schemes that enable employers to take on extra labour. He spoke about apprenticeships. We tend to get hung up on old language, and I would rather we talked about progressive training programmes whereby people outwith the traditional skills areas can get formal qualifications to enable them either to go on to subsequent employment in the relevant area or simply to show that they are trained personnel, capable of undertaking work.

There is a plethora of schemes that are not too difficult to administer and which afford employers tremendous support in the early stages of a person's working career. To put an old-fashioned name to it, there is a subsidy to get people into work. Young people have been recruited by firms through schemes such as the new deal, and those firms have not said that that was the downside of regulation or an aspect of Government policy that they find reprehensible. Employers and small business people express quiet confidence and pride because they have been able to take on additional people with Government support.

A woman in my constituency has started a catering operation running factory canteens and the like. In two and a half years, she has gone from no employees to more than 50. She said that she has no objection to paying the national minimum wage—she recognises that catering is a low-paid industry—but that she would like due notice of an increase.

I pay tribute to my right hon. Friend the Secretary of State for the prudent way in which he has dealt with that issue. There was speculation about a rise, and now we have what most people would agree is a fair increase. It is just ahead of inflation and will probably be in line with it by October. People were given about six months' notice of the increase. It is important to small businesses to be able to make the appropriate calculations, feed them into their business plans and accommodate the change, rather than facing a drastic lurch into having to pay more.

Most of us would regard the national minimum wage as unreasonably low and would like people to be paid more, but we know that some fledgling businesses have serious cost problems, and those issues must be addressed. We all agree that workers are entitled to fairness and a decent crack of the whip, be it in their pay or, what is equally important, the number of weeks' holiday that they get. It will be interesting to learn whether the Opposition spokesman is able to tell us when he winds up whether the Tories will abandon the commitment to four weeks' paid holiday. Will they work through the EU regulations and find a way to renege on the undertaking of the Labour Government—in the unlikely event that the Conservatives ever again secure a majority in the House?

I know a small IT company that was woefully undercapitalised and going through a difficult spell. It found that by working with agencies such as 3Is, which works alongside Government but is not Government owned or controlled, it has been able to secure the continuing assistance that is necessary for its endeavours.

In the past couple of days, we have seen a dramatic shift of opinion on e-commerce. If one thing will assist an abundance of small businesses, it will be access to the net. When we last spoke on this subject, a Conservative Member was dubious about whether we would ever have free access to the net. Of course, access will never be completely free because a bill must be paid at some stage. There is no such thing as a free telephone call in any country under any circumstance. Payment is made through the rent, a standing charge or the metered call. However, as a consequence of the intervention of my right hon. Friend the Chancellor of the Exchequer—we recall the abuse that he received for intervening, even though he did so having consulted the Director General of Telecommunications and with his authority—he virtually shamed BT into providing free access to the net. First AltaVista announced its plans and then—surprise, surprise—along came BT. BT cannot be accused of the power of original thought, but it can be credited with speed of response.

I remember when the director general was to appear before the Select Committee on Trade and Industry, which I chair. Less than an hour before the Committee was due to meet, we received faxes informing us that BT intended to introduce an ultra-cheap scheme.

Photo of Mr Ian Bruce Mr Ian Bruce Conservative, South Dorset

The hon. Gentleman knows that as soon as BT saw competition in the market, it was going to act. I wish it had been first, instead of just a follower. Did the hon. Gentleman notice that on the same day that Oftel said that it would not accept BT's first offer for internet access, the Minister for Small Business and E-Commerce announced it to the world as the way ahead? She obviously gave way too quickly.

Photo of Mr Martin O'Neill Mr Martin O'Neill Chair, Trade & Industry Committee, Chair, Trade & Industry Committee

The point is that we have had the breakthrough we all wanted. The service providers are now confident that we have a climate in which the importance of electronic commerce is recognised. That is encouraging and important, because it will enable small businesses to expand their range of activities. It is clear that the experience of the United States is that cheap access has enabled small businesses to take advantage of the opportunity.

The Small Business Administration in the US, which is one of the great success stories of the American Government, has been the model for our Small Business Service. It is depressing that in the two speeches that I have heard the hon. Member for Tiverton and Honiton (Mrs. Browning) make on small businesses, she has not even deigned to mention the Small Business Service. She has never made any serious attempt to offer what should be the responsibility of the Opposition—an analysis of a Government proposal. She should tell us what parts of it she thinks are worth proceeding with and, before 1 April, what parts are dangerous and should not be included.

Photo of Angela Browning Angela Browning Shadow Secretary of State, Shadow Secretary of State for Trade and Industry

When the news was given to the House, the Secretary of State for Trade and Industry did not even stand at the Dispatch Box and present it; he just left it in the Vote Office, and the Secretary of State for Education and Employment referred to it in a passing sentence. That is hardly an inspiration to treat the proposal as a major plank of Government policy.

Photo of Mr Martin O'Neill Mr Martin O'Neill Chair, Trade & Industry Committee, Chair, Trade & Industry Committee

That is not an excuse for abdicating your responsibilities as an Opposition Front-Bench spokesperson. You have a duty—

Photo of Michael Lord Michael Lord Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. The hon. Gentleman must remember to use the correct parliamentary language.

Photo of Mr Martin O'Neill Mr Martin O'Neill Chair, Trade & Industry Committee, Chair, Trade & Industry Committee

The hon. Lady has a duty to the country, if not to her party, to let us know what she thinks about these matters. She has had two opportunities in my company to argue the case and on neither occasion has she addressed the issue with any seriousness. All we have had is whingeing and moaning about the fact that on a particular date the Secretary of State for Education and Employment made a statement and the Secretary of State for Trade and Industry sat alongside him. That is the best that the Tories can give us on the Small Business Service, which is probably the best opportunity that small businesses will have had in the past 20 years.

We will have a consistent service across the country, and small businesses will be guaranteed a good service regardless of their location. The previous Government introduced business links, but they were not an overwhelming success. Provision was patchy and depended on relations with chambers of commerce and the local training and enterprise councils. Some of those impedimenta have now been removed.

Photo of Mr Martin O'Neill Mr Martin O'Neill Chair, Trade & Industry Committee, Chair, Trade & Industry Committee

I cannot give way because I wish to leave time for other hon. Members. Several of my hon. Friends wish to speak and it is important that as many people as possible have that opportunity.

Small businesses have a better chance now than they have had for many years, with the Small Business Service and the support that it will be able to offer. There will be an ally of small businesses at the heart of Government, which will be similar to the position enjoyed by Mrs. Alvarez of the Small Business Administration in the US, who sits in President Clinton's Cabinet.

The debate tonight is a welcome opportunity for the Government to make the position clear. My right hon. Friend the Secretary of State and I have disagreements from time to time about presentational matters, but the presentation is not in doubt on this issue. The core position is that we have a climate of opinion in this country that is capable of supporting more small businesses, and that becomes ever more evident with every new business that starts. They receive encouragement from the Government and the institutions that surround the Government. I support the amendment and I am happy to do so.

Photo of John Bercow John Bercow Shadow Minister (Education) 8:37 pm, 8th March 2000

In April 1997, the right hon. Member for Dunfermline, East (Mr. Brown)—then shadow Chancellor—declared in the foreword to Labour's business manifesto, which was entitled "Equipping Britain for the Future": We will not impose burdensome regulations upon business because we understand that successful businesses must keep costs down. Nineteen months later, the right hon. Member for Hartlepool (Mr. Mandelson), then Secretary of State for Trade and Industry, told the House, apparently with a straight face, that we have no intention of introducing any legislation that presents a burden on business and reduces the competitiveness of British firms.—[Official Report, 25 November 1998; Vol. 321, c. 214] Sadly, only a matter of weeks after the first statement, and fully 18 months before the second, the Government had begun the process of betrayal that has so far resulted in an additional 2,700 regulations impacting adversely on British business.

As recently as 20 January, Mr. Chris Humphries, director general of the British Chambers of Commerce, put his view, on behalf of his members, fairly and squarely on the record. He said that

despite all its rhetoric, the reality is that government has dramatically increased the regulatory burdens that threaten small business competitiveness. Frankly, if I had to choose between the sayings of the Chancellor of the Exchequer and of the former Secretary of State for Trade and Industry, and the considered judgment of a person at the coal face—the director general of the British Chambers of Commerce—I would opt for the verdict of the latter every time. Mr. Humphries knows the facts, recognises the realities and hears the stories of his members who are struggling under the dramatic imposts of this Government. He knows the truth—that the burden of regulation is greater now than at any time in the history of the United Kingdom.

In her sparkling opening speech, my hon. Friend the Member for Tiverton and Honiton (Mrs. Browning) set out some of the sins, of commission and of omission, perpetrated by the Government since they came to office 34 months ago. There are several examples, and I shall illustrate some of them this evening.

The first example that springs to mind has to do with the Part-Time Employees (Prevention of Less Favourable Treatment) Regulations 2000. Their purpose is to give effect to the European directive on part-time working by 7 April. Conservative Members have two principal objections to the way in which the Government have proceeded. First, the consultation process has been a sham and a disgrace. We deserve an apology from the Minister for Small Business and E-Commerce, who is winding up the debate. She should apologise to all those people in business who have suffered as a result of that process.

The Government knew in April 1998 that they would implement the directive. They agreed to the directive, and intended to give it effect. However, in the intervening 21 months up to January this year, the Government chose to do nothing by way of consultation with the affected businesses in this country. Eventually, on 17 January, the Government issued their draft regulations for the purposes of incorporation of the directive in British law.

With a sniffy disdain unworthy of Government representatives, Ministers indicated that they expected that businesses might have some comments to make in response to the draft regulations, although it was not clear that the Government were inviting a full-scale consultation. Moreover—and this is a further indicator of the Government's frivolous approach to this partial consultation—Ministers said that all responses from businesses had to be received by 27 February.

That meant that businesses—and most of them were the small businesses for which a substantial proportion of part-time employees work—had 44 days in which to respond. That is risibly inadequate. If Ministers do not realise that, it is about time they did.

The Secretary of State made much of the fact that he had amended the regulations on the national minimum wage and those pertaining to the working time directive. In saying what he said, he was delivering an indirect and not very subtle attack on his predecessor, who is now Secretary of State for Northern Ireland.

We rightly castigated the former Secretary of State for Trade and Industry for the feebly inadequate period of consultation that he provided in respect of the working time regulations. According to my calculation, however, the present Secretary of State has done even worse with regard to the consultation period on the part-time employee regulations. He has allowed only 44 days for it, which is worse than the most palpable of the sins committed by his predecessor.

There is no good reason for that carelessness, for which Ministers should apologise. They do not have to apologise to Conservative Members: I know that to do so would stick in the Minister's gullet, and I could not give a tinker's cuss for any apology made to us. However, she has an obligation to apologise to this country's small businesses. She should remember that 99.6 per cent. of companies in this country employ fewer than 100 people, yet they account for almost 50 per cent. of the private-sector work force and generate two fifths of the national output.

Those business will be awaiting, with eager anticipation, bated breath and beads of sweat on their brows, an apology from the Minister for Small Business and E-Commerce tonight. If it is forthcoming, I will thank her and say no more on the subject.

The second objectionable feature of the proposals is that, not for the first time, and doubtless not for the last, the Government have gold-plated a European directive. How have they done so? Ministers have decided that if businesses do not wish to apply exactly the same treatment to part-time employees as they confer upon their full-time equivalents, they shall be obliged, in the form of a written statement within 14 days of a request so to do, to justify a continuation of differential treatment. That is not in the directive. There is no such requirement. Nor is it a simple matter of a brief memo bashed out by someone in a company's personnel department. Such memorandums or notifications will constitute admissible evidence in the event of a case going to an industrial tribunal. They therefore acquire a legal significance which any company anxious to limit its costs would be foolish to ignore.

Once again, this hits small companies particularly hard. It is all right, perhaps, for large businesses with in-house legal departments; it is a relatively trivial matter for them to attend to this legal requirement. But for the small companies for which, as I emphasised, a large proportion of part-time employees work, it is a costly burden and they could well do without it.

Once again, I suspect that consideration of the need to avoid such burdensome regulation did not even penetrate the inner recesses of ministerial minds at the Department of Trade and Industry. It probably did not even occur to them. Well, it should have done and it should do in the future.

Those, I believe, are two cogent objections to the Government's proposals for part-time employees. There are other legitimate criticisms of Government policy on regulation. The first that occurs to me is in relation to the parental leave directive. [Interruption.] As my hon. Friend the Member for Mid-Dorset and North Poole (Mr. Fraser) observes from a sedentary position, it has a chequered history. The House should be aware, and the country should know, that there was no obligation to implement that directive. It was specifically the result of a bone-headed decision by the Government voluntarily to sign up to the European social chapter. If we had been in office, it would not have happened.

Appearing before the Select Committee on Trade and Industry, chaired by the distinguished hon. Member for Ochil (Mr. O'Neill), on 4 November 1998, the then Secretary of State, the right hon. Member for Hartlepool, declined to accept the Confederation of British Industry estimate of the likely cost of the directive. Instead, he indicated that a cost to business of approximately £29 million a year was roughly accurate. I note that the figure has been creeping up since then. I believe that I am right in saying—although sometimes it is difficult to establish this for certain, because of the differences between what Ministers say on a Monday, a Wednesday and a Friday—that Ministers now estimate that implementing the directive will cost £42.3 million annually.

There are two points to be made. First, it was, frankly, shameful for the then Secretary of State—and he has not been disowned by his successor—to observe sniffily to me on 4 November 1998, in response to interrogation, that the cost was merely a tiny fraction of the total cost borne by businesses. That is both true and staggeringly irrelevant.

Photo of Mr Ian Bruce Mr Ian Bruce Conservative, South Dorset

I am grateful to my hon. Friend for giving way—I did not want to upset his customary flow. However, he has left the Chairman of the Select Committee on Trade and Industry under-reported. The hon. Member for Ochil (Mr. O'Neill) was extremely unkind to Conservative Members for moaning about the Department of Trade and Industry. Does my hon. Friend agree, that the hon. Gentleman himself is an even better moaner, and is quite right to keep criticising the DTI for its total failure to do its business properly?

Photo of John Bercow John Bercow Shadow Minister (Education)

My hon. Friend is entirely correct, and it has to be said that the hon. Member for Ochil has something of a Jekyll and Hyde quality. He is a very agreeable individual, but in political terms he has two faces. He has the face that is on display when he is chairing the Select Committee, on which occasions he demonstrates a remarkable independence of spirit. He is prepared to demonstrate his resolve to interrogate witnesses fiercely and to hold the Government to account, and he is not averse, from time to time, to insulting Ministers, if not about their personalities, at any rate about their policies.

When, however, the hon. Gentleman is in the Chamber, possibly conscious of the imminence of a hostile pager message from the Government Chief Whip, he is converted to an altogether different specimen. Suddenly, the criticisms that he habitually volunteers in the Select Committee and in the media are subdued or removed, and instead we have what amounts almost to a panegyric of Government policy from him.

So far as the hon. Gentleman's inner contradictions are concerned, I cannot be held responsible. I hope that appropriate treatment will be made available to him. I am a compassionate individual, and I am willing to assist. If he would like a quiet word in one of the darker and more pleasant recesses of the Palace of Westminster about this innate contradiction in his thinking and practice, I would be happy to oblige.

Photo of Mr Martin O'Neill Mr Martin O'Neill Chair, Trade & Industry Committee, Chair, Trade & Industry Committee

I cannot resist the temptation to respond to the hon. Gentleman on one issue. We had similar exchanges when we were on the same Committee. He had a brief stay on that Committee before he was relegated to the Opposition Front Bench. In none of the reports that were both favourable to and, on occasion, critical of the Government did he find grounds to disagree with the Committee's conclusions and recommendations. In some respects, the Janus-like qualities that he is attributing to me are perhaps more a function of his own experience in front of the mirror.

Photo of John Bercow John Bercow Shadow Minister (Education)

I think that there is a certain revisionist rewriting of history taking place. I always made my position and that of my right hon. and hon. Friends on these matters abundantly clear, and I am sure that the hon. Gentleman and I can agree on that point.

I said that there were two problems with the Government's position on the parental leave directive. The first was the rather silly comment by the former Secretary of State about its constituting only a tiny fraction of the costs borne by business, when what matters of course is the cumulative impact of all the regulation that the Government have foolishly foisted on the businesses of this country.

The second point is that there is no reason to believe that the Government's estimate is accurate in any event. A national opinion poll last year suggested that up to 15 per cent. of the relevant cohort—working parents with children under eight—might decide to take advantage of the directive and avail themselves of three months' unpaid leave. If they were to do so, and companies, believing that their services were indispensable, decided to recruit staff, perhaps to retain an important contract, and paid them, for the sake of argument, £10 an hour for a 40-hour week for 12 weeks, the cost would not be £42.3 million a year; it would be no less than £360 million a year.

We do not know precisely what the total cost will be, but we know that the Government have a habit of understating the pain and overstating the gain. There is no reason to believe that their behaviour on this occasion will be any different.

Another example of burdensome regulation from the Government is the working families tax credit. The Government have an unfortunate habit of celebrating the measure's apparent merits without acknowledging its drawbacks. I urge them to take account of the views of businesses, because they are petrified by the likely costs of operating the working families tax credit. We know that there is to be a recurring cost of £105 million a year; we know also that almost half that annual sum, £52 million, will be borne by small businesses that employ fewer than 100 people. That is a significant problem about which we have not heard anything from Ministers.

Photo of Mr Ian Bruce Mr Ian Bruce Conservative, South Dorset

Surely the effect on the cash flow of small businesses is even more damaging. They suddenly have to find money up front rather than paying taxes to a Government official a month or so after they have paid wages.

Photo of John Bercow John Bercow Shadow Minister (Education)

My hon. Friend is invariably helpful and that intervention was no exception. There is certainly a problem with cash flow.

There is also the consideration that, for small businesses, costs incurred through regulation are proportionately much greater than they are for large. For the smallest firms, we are talking about a cost—calculated by the Inland Revenue among others—of over £288 per person per year, whereas for the largest businesses, with more than 5,000 employees, the cost is of the order of £5 per person per year. Nowhere in the honeyed words of Ministers—veritably the Dr. Panglosses of our age—do we hear anything about the downside that flows from those Government policies.

Yet another example is agriculture, which has been consistently downgraded and hit by an insensitive Government for nearly three years. The extensification premium on beef animals, for example, will require farmers to submit detailed forms up to six times a year in order to get their just entitlements.

Then there is the consideration of the Draft Feeding Stuffs Regulations 2000, which have been handed down from Brussels and will effectively prevent farmers from feeding health-boosting vitamins or minerals to their herds, with the limited exception of compound feed. All that regulation is burdensome. The National Farmers Union says that there is no need for such regulation, but of course the Government have cow-towed, gone along with it, made no complaint and tried to put a brave face on it.

We were promised much and have been delivered little. The record of Ministers to date has been a litany of promises broken, trust betrayed and hopes destroyed. If the Minister for Small Business and E-Commerce is not aware of that important fact, it is about time she visited small businesses—not just for convenient photo opportunities, but to learn in detail from those in the know how they are suffering from the damaging regulatory policies of this anti-business Government.

Photo of Ms Linda Perham Ms Linda Perham Labour, Ilford North

I have thought about a couple of examples that the hon. Gentleman has raised. I am sorry that he is not in favour of rights for working parents and low-income families—parental leave and the working families tax credit. I am very impressed by his grasp of figures and the way in which he does not use notes. Will he tell me the cost of the 3,000 regulations introduced by the previous Government for each of the past three years?

Photo of John Bercow John Bercow Shadow Minister (Education)

The answer is very simply no. I do not have the square root of a clue off the top of my head, but I would be happy to engage in correspondence with the hon. Lady, if she would find that an enjoyable experience. I put it on record, just to cleanse the soul, that she, who, if I may say so, is a parliamentary virgin, was not in the previous Parliament, just as I was not.

I am not responsible for what happened under the previous Government. I accept that their record was mixed. My right hon. Friend the Member for Henley (Mr. Heseltine) made strenuous efforts on the subject of regulation. If the hon. Lady is asking me whether I believe that his record was one of unfettered perfection, the answer is no. My right hon. Friend is an estimable individual, but I am not responsible for his policy decisions and I am not going to be held responsible for them. I am concerned about what is happening now, and the fact that the regulatory burden is greater than ever. I am concerned that the Government have broken their promises and have no idea how to chart a better course.

I conclude—I know that other right hon. and hon. Members want to contribute to the debate—simply by saying this about the Government's record. There are three central problems for Ministers. The first is that there are six DTI Ministers in the House of Commons, and all of them have one thing in common. I appeal to the fertile minds on the Government Back Benches to discover their common characteristic. I shall tell the House what the right hon. Members for Tyneside, North (Mr. Byers), for Airdrie and Shotts (Mrs. Liddell) and for Sheffield, Central (Mr. Caborn), and the hon. Members for Leicester, West (Ms Hewitt), for Pontypridd (Dr. Howells) and for Hull, West and Hessle (Mr. Johnson) all have in common: they have never run a business. They have not the slightest experience of the private enterprise sector of our economy. That stands in stark contrast to the experience of the Opposition Front-Bench team, comprising my hon. Friend the Member for Tiverton and Honiton, who is a distinguished and successful business woman, and my hon. Friend the Member for Rutland and Melton (Mr. Duncan), who has an enviable business record. No Minister can compete with them, not least because none of these Ministers has ever run a business. The current team of Ministers has no feel for the issues.

The second problem is that, almost to a man or a woman, Department of Trade and Industry Ministers are fanatical European federasts. All of them believe in extensive European integration, they want to abolish the pound as soon as possible, they favour increased qualified majority voting, and they adhere to the European social model. They do not believe in the free enterprise, capitalist economy that has made this country great, developed living standards, created wealth and made Britain the success story that it has been for such a long time. Their hallmark is craven submission to every diktat from Brussels: diktats about the content of regulations; diktats about the period of consultation; diktats about the short notice of the requirement for implementation. In a shameful, risible performance, they prostrate themselves before the European Union and are not prepared to champion the legitimate commercial interests of United Kingdom plc.

The next problem with Ministers is that they have made no estimates of the costs of regulation and continue to refuse to do so. They have no ambition to deregulate. Above all, they simply do not understand the means by which to achieve such beneficial deregulation.

On a personal level, Department of Trade and Industry Ministers might be entirely convivial company, but as ministerial performers, they are hopeless—I use the word "hopeless" advisedly. They are a useless shower, they are totally complacent, they are failing to deliver, and they are letting business down. They should either get their act together and deliver for British business, or make way for my hon. Friends on the Opposition Front Bench who assuredly can do so.

Photo of Claire Curtis-Thomas Claire Curtis-Thomas Labour, Crosby 9:02 pm, 8th March 2000

I welcome the opportunity to participate in the debate. Unlike the hon. Member for Buckingham (Mr. Bercow), I shall have to use notes but, as a consequence, most of my references will be reliable. I promise not to use the words "sniffy", "Euro-federast" or "risible". I can offer plain speaking from one who has worked in business, albeit one who has never run her own business. I have been extensively involved in business and I take a passionate interest in regulation. Those hon. Members who read parliamentary questions will know that I have asked more questions about that subject than about any other since becoming a Member of Parliament. The Opposition Members who usually participate in debates on small businesses are here, but it is sad that there are not more present—not just more Members on the Opposition Benches, but more Members on both sides of the House.

I shall confine my comments to the first part of the motion, which says: That this House opposes the growing regulatory burdens that the Government has added to business costs. I shall examine the authenticity of the claim and then refer to points made by the hon. Member for Buckingham when he presented his Regulations on Small Businesses (Reduction) Bill to the House on 27 April 1999.

Let us examine the record on the imposition of regulatory burdens. In 1995, the previous Administration introduced 21 Bills that had an impact on business. There followed a slight slump: only eight Bills were introduced in 1996 and five in early 1997. The present Administration introduced five such Bills in 1997, 13 in 1998 and 12 in 1999.

Those are interesting statistics but, like other statistics that we have heard this evening, they are meaningless unless they are set in context. Nevertheless, it is right to say that the amount of regulatory legislation introduced by the previous and the present Administration is roughly balanced.

So much for Bills. What about assessment?

Photo of Mr Keith Darvill Mr Keith Darvill Labour, Upminster

Will my hon. Friend take the opportunity to discuss the merits of the compliance cost assessments introduced by the previous Government?

Photo of Claire Curtis-Thomas Claire Curtis-Thomas Labour, Crosby

I thank my hon. Friend for that intervention. I am about to deal with that matter.

Under the previous Administration, and for a short time under the present Government, compliance cost assessments were the only vehicle available to assess the impact of Bills on business. Unfortunately, they were not carried out independently, as is currently being advocated, and there were no exemptions for small business in those assessments. Compliance cost assessments were required only when costs might be incurred by a business, and there were no assessment orders which evaluated how money could be saved. It was this Administration who introduced such assessment late in 1998.

The compliance cost assessment was initiated by the Conservative Government in 1993 and was considered to be central to the deregulation initiatives, which we would all applaud. The assessment introduced in 1993 was an assessment of likely cost to business of proposed legislation, and was used to help parliamentary consideration of regulatory proposals. It was considered a vital part of the consultation process and gave businesses the opportunity to respond to proposals. In their speeches this evening, Opposition Members have commended that approach.

I note with regret that, although CCAs were introduced in 1993, it was decided only in 1994 that they would also have to show the effect of proposed legislation on small business. Clearly, when the assessments were introduced in 1993, small business was not at the forefront of the present Opposition's mind.

Unfortunately, like many of the "buzz" initiatives introduced by the previous Administration, apart from the inclusion of small businesses after a period of reflection, the CCA did not develop. It remained a document that discussed cost. There was neither the opportunity nor the desire to review its effectiveness, even though, as we have heard, there was considerable concern about that.

Yesterday, in the Library, I picked up a typical CCA at random. It related to the Firework Safety Regulations 1996. The document is dominated by cost consideration, and there is some reference to consultation. Given what we have heard this evening from the Opposition, who extol the importance of consultation, I am disappointed to tell the House that that document states that it has not been possible to undertake the usual consultation with industry on this occasion. Much was promised but not always delivered, as a random sample proves.

The compliance cost assessment was a minimalist approach. It referred to cost, but not to the innate value of, or the need for, regulation. In 1998, after a year in government, the Cabinet Office reviewed the deregulation agenda and the regulation appraisals initiative of the previous Administration and concluded, in the words of the teacher's report, "Must try harder."

Deregulation, which had been made almost impossible because of the restraints of the Deregulation and Contracting Out Act 1994, was subsumed by the far more onerous task undertaken by the Government—that of producing better business regulation. In 1998, the Government published "The Better Regulation Guide". For the first time, standard reports can be compared and contrasted.

If we are to have a meaningful debate, we must acknowledge that an attempt was made to understand the impact of regulation on business. However, no such attempt was made to ensure that reports from each Department were standardised. Any requests about costs, cumulative costs or impact have been impossible to tackle. The answer that the hon. Member for Buckingham suggested: "No, I can't tell you what the total cost would be" was valid. Even if he tried to find the answer today, he would fail because insufficient analytical rigour was exercised previously. That remains a problem. It is inordinately difficult to get the myriad Departments that have a significant impact on business to produce reports in a way that permits review and understanding of the total impact of any proposed legislation on business.

The compliance cost assessment has been swept aside and replaced by regulatory impact assessments. That is a step improvement, which requires not only the focus on cost that existed previously—we are building on previous measures—but a focus on benefits. Compliance cost assessments also refer to non-business costs, which had previously been ignored, and consider who would be affected by the Bill. More importantly, as my right hon. Friend the Secretary of State pointed out earlier, they require over-zealous civil servants who are keen on increasing the legislative tally to consider non-regulatory approaches to legislation. They include best practice and codes of conduct, which might be sufficient to achieve the Government's objective while not placing direct, burdensome regulations on industry.

What regulatory impact assessments have been undertaken to date? No Bill that has a bearing on business comes before the House without an associated regulatory impact assessment. The RIAs are detailed and expansive and they are required to include non-regulatory alternatives. They also emphasise consultation.

Let us consider the great deregulation crusade that was supposed to follow the Deregulation and Contracting Out Act 1994. For anyone who worked in business, the title alone was a joy. However, what did it mean and what could it achieve? It could not deregulate any Act that had been passed before 1994. Furthermore, any orders made under the Act could not impose costs. That restraint means that little deregulation has happened since 1994.

We are committed to trying to deconstruct the house that Jack built on regulation that was not reviewed. We must consider how many orders have been successfully executed under the 1994 Act. I am sorry to say that great enabling legislation, which was designed to cut red tape, led to only 42 orders because it was so constraining. I hope that, during this Parliament, a better deregulation Act will be passed. I hope that it will build on the 1994 measure, extend its powers and enable the Administration to provide what we all support: effective reduction in some of the bureaucracy and red tape that business experiences. The 1994 Act has not enabled us to do that.

I have asked each Department to inform me about the orders they seek or might seek, because people have discussed potential regulation. The long and the short of it is that, with the best will in the world, only so many orders can be made under the 1994 Act.

I shall consider some of the pleadings—and what pleadings they were—of the hon. Member for Buckingham, who is a zealot in matters that relate to small businesses. I offer that as a compliment. Like me, the hon. Gentleman is keen to learn the cost of all new regulation. That is important. I do not have to encourage him to visit the Library, examine the regulatory impact assessments and find the information for himself.

The hon. Gentleman's second heart's desire is to discover whether the Government intend to reduce regulatory costs in the coming year. If he puts such a request before them he will find, like me, that they are very amenable and will respond to his correspondence. If he has no joy in the short term, perhaps he would like to consult me later and I shall let him have a copy of my response.

In respect of the hon. Gentleman's desire to remove gold plating of European Union directives—I think that there is a general consensus here—he will be pleased that the Government, by and large, tend to be objective and conciliatory. They are keen to achieve the best and adopt a belt-and-braces approach. We know that that can have a significant impact on small businesses. I hope that they will do their best to encourage civil servants to take a minimalist approach when introducing European legislation. Having spoken to the regulatory impact unit and the better regulation taskforce, I have been assured that they would like to deliver on that pledge.

I must offer a plug here: I am also pleased that the Government have at least tried to take the research assessment initiative to Europe. We have produced guidelines for European legislation, which must have an assessment attached to it before it is considered here. Unfortunately, we have not made the progress with our European partners that we would have wished to make because the initiative has not been adopted universally, but everybody present would want that to happen. However, discussions are on-going. The hon. Gentleman is also keen for six-monthly reports reflecting the progress of deregulation to be made. Those may come from the Cabinet Office in due course.

Hon. Members on both sides of the House have done a substantial amount of talking during the debate, but we have yet truly to deliver. That is not through want of trying. I believe that we do not have the enabling legislation that we need to dismantle some of the past. However, I also believe that we have put in place suitable structures to evaluate what we are doing now. As hon. Members have said, they are not perfect, but we are administering a rapidly growing nation. Small businesses are proliferating, for which we are all grateful, but they present constant consultation problems. Getting it right at any time and achieving perfection is almost an ambition to which mere mortals can never aspire. That said, I welcome the Government amendment and shall not hesitate to support it.

Photo of Mr Ian Bruce Mr Ian Bruce Conservative, South Dorset 9:18 pm, 8th March 2000

I am grateful to be given time to speak on this important subject—[Interruption.] I was about to say that we have cleared the Gallery, although we are not supposed to mention it, but I am being told that I am wrong. People entered suddenly as soon as I got to my feet and I am glad to see them.

In some ways, the Government are doing well for small businesses—they have turned a large number of this country's big businesses into small ones. We notice in today's FTSE that a number of solid companies dealing with British industry and commerce have been replaced by candy-floss companies. That is the Government's hallmark: they are all spin and no delivery, and the candy-floss companies' lack of profitability represents the lack of delivery from the Labour party.

May I declare my interests? I am the chairman of Ian Bruce Associates Ltd., which is my own small company. It does not pay me anything. I advise the Telecommunications Managers Association and a firm of expert witnesses, Trevor Gilbert and Associates, which has employment agency and employment business interests.

Members of the House are small business people in some ways, as we all have thousands of constituents who want us to deliver for them. We understand some of the stresses and strains, but not all of them. However good or bad a job we do, at the end of the month we get a salary cheque. We know exactly what our expenses are, and we do not have to worry about the Government upsetting what we are doing. They always give us more money, because they want their Back Benchers to vote for them. We are in a privileged position.

I shall briefly run through some areas for which the Government are responsible. We can exchange comments about what happened in the 18 years of Conservative Government and spend the whole time looking backwards, but we should examine what the Government are currently doing.

I am surprised that many people do not understand IR35, which targets a small group of entrepreneurial business men. The limited company rules affect everyone, from the greengrocer to the garage proprietor, but that group will be treated in a special way. They get large salaries on which they pay large amounts of tax, but because there is a way of avoiding paying some of the national insurance moneys, the Government feel that they have to take action. Those people are paying enormous amounts of tax, and they feel insulted when the Government say that they are trying to avoid paying taxes. The way to avoid paying taxes is to put money into the business and invest for growth. That will provide the type of businesses that we need.

The Secretary of State seemed a little unhappy when I congratulated him on doing a complete U-turn on employment agencies. I should have said how pleased the agencies were. Employment agencies are pleased. They are a bit like hostages who are held in a darkened room with a knife to their throats and told that their businesses will be taken away from them. When the knife is removed, and the Government say "We ain't going to do that any more", they rush round saying "What a nice kidnapper. What a nice terrorist." They are all smiling because their businesses are not going to be destroyed. Why did the Government leave them in that position for 18 months?

I have been a strong critic of the new deal, because micro-companies could have put the long-term unemployed back to work, but they will not go through the bureaucracy that is necessary to set up the training schemes for individuals. The Government have lost sight of that. Please will the Government consider that issue sensibly?

A group of people want to take over the sports centre in my constituency which the Ministry of Defence has left empty for the past year or so. It would provide swimming and other sports facilities. I have been waiting 242 days for an answer from the Government in response to a letter from one of those people, who has been trying to find out how they can take it over. A big company came along and wanted to take over the facilities. It promised that it would do things for the community, and although it came late, the Government still gave permission, because they love large organisations, not small companies.

It is important to understand what happens to an employer who suddenly has to administer the working families tax credit, rather than his employees receiving family credit. Small businesses tend to have lower-paid workers, and administering the system gives them cash-flow problems. They will be hit hard, and it could put them out of business.

The Government are missing the point about Post Office businesses. My right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley), who was Secretary of State for Social Security, came from the Department of Trade and Industry realising that post offices would be closed down if the Department of Social Security decided to use automated credit transfer without introducing a measure to prevent post offices from going out of business. The Government do not understand that.

We have not mentioned local authorities. There is a Lib-Lab pact in my area, and the authority holds up businesses when they come along with a simple request. Sometimes it goes overboard. It grants permissions to larger businesses, but if a taxi driver wants to use his mobile phone in his taxi, it suddenly decides that it will change the rules for taxis and private hire cars to stop people for having dogs in their cabs. It will do anything to prevent people from making a few pennies.

We are currently considering the Utilities Bill, which I am afraid is beginning to become the futilities Bill. In that legislation the Government have halved regulation at a stroke, but they have threatened all the industries concerned with worse regulation.

There is very little time this evening. I am sorry that I cannot make the speech that I intended to make; I shall end by pleading with the Minister to think carefully before she acts. I am sure that she wants to remain Minister for Small Business, rather than Minister for only a small number of businesses.

Photo of Dr George Turner Dr George Turner Labour, North West Norfolk 9:25 pm, 8th March 2000

The majority of my constituents, like those of most Members, are employed in small or medium-sized businesses. We should put aside the party rhetoric that we expect in this place, and try to recognise the existence of a common wish—a core of intent—to seek improvement.

The Government should be congratulated on their general economic management. If economic management is wrong, the problems of regulation will be tiny in comparison. They should also be congratulated on the Competition Act 1998, which has not been mentioned this evening. Only today, I met representatives of the National Federation of Retail Newsagents, who told me that, for the first time, they as small businesses were being enabled to plead their case that big companies were using anti-competitive measures against them. I think that the legislation will help many small businesses.

On other occasions, I have identified a common fault exhibited by the House and by Governments of all political colours. When something is wrong, there is a feeling that the law or the regulation must be changed. I believe that Governments need better management techniques. If companies continually tried to change their procedures by issuing new rule books, they would not survive. I think that my hon. Friend the Member for Crosby (Mrs. Curtis-Thomas) also made that point, to which I believe the Government are, in fact, paying attention.

Ministers should also be aware that we need to change the culture in the civil service and in Government agencies, so that we do not administer the law as rule-bound bureaucrats. Let me cite the case of one of my constituents, who is a small business man—a hairdresser. I do so because his problem began under the last Government, and has continued under the present one. Mr. Tice found, to his surprise, that his company had been struck off. He believed at the time that there had been maladministration at Companies House, and that he had not been given the necessary warnings by registered post or some such method. He is convinced to this day that he never received those warnings. There was a full and lengthy investigation by the parliamentary ombudsman, who could not find the case proven for maladministration. My predecessor began work on the case; I had to pass the bad news to Mr. Tice.

I have corresponded with my hon. Friend the Minister for Competition and Consumer Affairs about Mr. Tice's case. Apparently, under the existing regulations, if he wants to reinstate the company that has been struck off, he must pay late filing fees for his accounts for the years during which he fought to reinstate it. I am certain that the law has been administered, but I do not think that that is good management, and I do not think it looks good when Government cannot use some discretion and say, "Here is a small business man who is an exceptional case. We will waive the fees." All Governments need to be more careful about the way in which they administer the law.

Another point has not really been raised this evening, although I understand why Ministers have not yet mentioned it. The agenda for opposition on Europe is a false agenda. The real agenda for the Government must be reform. I had the pleasure of being part of the all-party group on small business delegation that went to Brussels recently; I am pleased to see its chairman, the hon. Member for St. Albans (Mr. Pollard), in the Chamber. We talked to representatives of small businesses Europe-wide. The consensus was—indeed, it has fertile ground in the Commission—that there is a need for reform of Europe: Europe needs to be more people-friendly and more small-business friendly.

I have heard much said in private about the intention, but I hope that the Minister can give us a reassurance that the Government recognise the importance of ensuring that we deal with that agenda. It is not about whether we should be in or out, but about ensuring that Europe actually works.

I hope that, in reacting to Opposition attacks, Ministers will recognise that many Labour Members know that the strength and health of small businesses will help our economy to grow and to continue to deliver the prosperity that all our constituencies need. At the same time, increasingly, I find that small businesses recognise that we need family-friendly policies, so let us not give those up, but let us also ensure that we take the agenda forward and reduce the burden on small businesses.

Photo of Christopher Fraser Christopher Fraser Conservative, Mid Dorset and North Poole 9:31 pm, 8th March 2000

There is a lot to be said about the detail of Government policy. I am afraid that there is not much time to make all the points, so I shall stick to a few.

The Secretary of State refused to recognise the entrepreneurial spirit that was created in the 1980s by the last Conservative Government, from whom his right hon. and hon. Friends have much benefited, particularly the hon. Member for Croydon, Central (Mr. Davies), who, I am afraid to say, is not in the Chamber.

One point was made earlier about the British Chambers of Commerce. It has made a substantial contribution in highlighting the expenses that regulations have imposed on business, amounting to about £10 billion. The burdens barometer that it has published makes interesting reading.

I am particularly concerned about the increasing payroll burden. One area is the cost of compliance. It is highly regressive against small employers, in that the "bottom" 30 per cent. shoulder 75 per cent. of the compliance costs.

Small businesses have become unpaid tax collectors, administering the working families tax credit, student loans and stakeholder pensions, although I accept that the smallest employers have been exempted from the latter. The Government have already imposed a huge raft of burdens on small businesses through central policy planks that are highly unlikely to be repealed.

We must remember that the first year of a new business is the most important and difficult. If the business has an accumulation of regulation to apply, it will be a lot less effective in achieving its initial goals. It can be crippling at a time when the company should be spending time building itself up.

The hon. Member for Ochil (Mr. O'Neill) talked about analysis of Government regulation. Key new regulations on business have been introduced by the Labour Government through "Fairness at Work", which includes statutory trade union regulation and changes to dismissal; and the European Union social chapter, which includes parental leave and the working time directive, as my hon. Friends have so well articulated. That particularly affects areas such as the one that I represent, given that it relies so much on the tourism industry.

The "Making Work Pay" provisions include minimum wage administration and the working families tax credit. The environmental burdens include the climate change levy and the fuel escalator. There are other burdens, including administration of quarterly payments of corporation tax and, dare I say it, the ubiquitous IR35.

The area of social chapter regulation that concerns me was mentioned by my hon. Friend the Member for Buckingham (Mr. Bercow): the parental leave directive. We must remember that the costs of applying that will arise in three areas: arranging cover for people while on leave; obviously, additional administration; and defending unsuccessful applications to employment tribunals.

My hon. Friends have already pointed out some of the problems with the working families tax credit, but it must be said that business groups have focused their sternest criticism on the administrative burden that will result from companies being asked, effectively, to administer the welfare state. That cannot be good.

The Federation of Small Businesses has criticised the Government for failing to advise benefit claimants that they do not necessarily have to receive the working families tax credit in their pay packet. As the Government have failed to make that clear, the FSB itself is informing employees by sending leaflets to its 150,000 members, advising them of the option and by posting details on its website. It should not have to do that—the Government should be responsible for it.

The part-time workers directive is the latest burden introduced in the United Kingdom as a consequence of the Government signing the social chapter. According to the British Chambers of Commerce, under the Government's proposal for implementation of the European Union part-time workers directive, United Kingdom businesses will face increasing legal costs. I read much of the material that the British Chambers of Commerce publishes, simply because it gleans much information from those who are out there in the business world—unlike the Ministers mentioned by hon. Friend the Member for Buckingham, who do not have that experience.

Another problem that will arise if part-time and full-time workers have the same rights is the way in which company pensions are allocated.

One of the biggest criticisms of the part-time work regulations, besides the regulations themselves, is the manner of the consultation on them. The Government have consistently been criticised for the way in which they have conducted consultation on important regulations, allowing little time for scrutiny and business preparation.

The burdens on business introduced by the Government have a profound effect. Let us not forget that small business was the backbone of the 1980s and 1990s economic success that was led by the previous Government. This Government must ensure that there is a reduced regulatory burden on small businesses.

A more entrepreneurial spirit is the order of the day. Cumulative regulation stifles business, and it has a disproportionate effect on small businesses at a time when they can least afford to apply them.

Photo of Mr Kerry Pollard Mr Kerry Pollard Labour, St Albans 9:37 pm, 8th March 2000

Much has been made by Opposition Members of a lack of experience in the Department of Trade and Industry in running a small business. I ran a small business for many years before being elected to the House. Should such experience become a requirement in the job description for future Ministers, I am available.

I should like to mention quickly a small business in my constituency, Groot and Hartman, which is working double shifts to cope with demand for its product. That is quite typical of what is happening in my constituency—all small businesses are doing exceptionally well.

Small businesses require three things: stability, low inflation and low interest rates. The Government are delivering all three of those, with continuity. All small business people will, of course, say that they want no regulation at all—not one bit of it—which, as we know, and as they accept, is an impossibility. They certainly want less regulation.

The week before last, I was in Brussels, with my hon. Friend the Member for North-West Norfolk (Dr. Turner). Our counterparts from other European Parliaments said that the United Kingdom is far ahead of them in deregulating small business. There was no question but that they were envious of the action that we have taken on the issue. That is not to say that we have it right, but we are getting it better.

We want stability, and we want continuity. Above all, our small businesses want a trained and enthusiastic work force and less regulation. We are doing that very well, and we are moving in the right direction. I shall be supporting the Government's amendment.

Photo of Alan Duncan Alan Duncan Shadow Spokesperson (Trade and Industry) 9:38 pm, 8th March 2000

We have had a very lively debate in the three hours allotted to us today. It is difficult, however, to add to the scope and detail of the opening speech of my hon. Friend the Member for Tiverton and Honiton (Mrs. Browning), who, with her own experience of running a business, brings to the debate the detail and knowledge that Labour Members lack. She lamented the fact that the debate on small business has been downgraded by the Government and put into the Westminster Hall annexe. It has taken Conservative Members to bring it back to the main Chamber of the House of Commons.

My hon. Friend's main message was that people who run a small business are increasingly saying to the Government, "Get off our back." Indeed, my hon. Friend quoted a business man who said that the Government are showing an unforgivable lack of understanding of what it takes to employ someone. I shall address that issue in a moment. We see that interference extended further to the likes of nursing homes, with the absurdity of instructions to widen doorways by 1.5 in. When the Conservatives are in government, we shall have a full audit of regulations with a view to ensuring that there are fewer of them.

In sad contrast to my hon. Friend the Member for Tiverton and Honiton, the Secretary of State appeared disdainful of the problems caused by over-regulation. He simply does not understand what it takes for a small company to grow. In his policy, we see the absurdity of his making it hard for business to take risks, then setting up regional venture funds to tackle the problems that his Government have exacerbated.

The hon. Member for Weston-super-Mare (Mr. Cotter) made a pertinent point when he said that there are increasing disincentives to taking on apprentices. The hon. Member for Ochil (Mr. O'Neill), as the House heard, takes a slightly inconsistent approach to the topic. We all welcome his robust comments in the reports of the Select Committee, which he oversees. However, as if to atone for being so critical, he takes a different attitude in debates such as these. As my hon. Friend the Member for Buckingham (Mr. Bercow) said, the hon. Gentleman seems to have something of a Jekyll and Hyde character, taking the opposite view in these debates from that which he takes when he chairs the Select Committee, as he does so well. My hon. Friend the Member for Buckingham made a remarkable parliamentary contribution, characterised by his usual dynamism, authority and forensic and analytical skill.

The hon. Member for Crosby (Mrs. Curtis-Thomas) lamented the fact that it has not always proved easy for central Government to estimate the costs of regulation. That may be so, but the Government should appreciate the fact that there is another litmus test: if in doubt, they should just go and speak to those running small businesses, who will tell them whether the regulations are punitive—as they feel increasingly strongly they are.

We also had very helpful contributions from my hon. Friends the Members for South Dorset (Mr. Bruce) and for Mid-Dorset and North Poole (Mr. Fraser)—a sort of Dorset double—and from the hon. Members for North-West Norfolk (Dr. Turner) and for St. Albans (Mr. Pollard).

However, perhaps the tone of the debate was set by a recent document from the Forum of Private Business. On the front page, it says that employment regulations are a top priority for action. Later, it adds:

There is evidence that firms are facing extra costs from a range of increasing burdens, mainly in the form of employment regulation … There are also pressures on sectors, such as the construction industry tax scheme, regulation of care homes … and security companies. Many sectors of small business activity are feeling the strain of the Government's intervention. Many references have been made to the document produced by the British Chambers of Commerce, which puts the cost of the burdens on its businesses at something approaching £10 billion. That is dwarfed by the calculation on the next page in which the BCC says that the stealth taxes affecting its sector equate to something approaching 32 billion dollars, which is another cost that it, like other areas of business, has to face. [HON. MEMBERS: "Dollars?"] I meant pounds. Having been so long in international trade, which is something that Labour Members do not understand, I occasionally make a slip and take an international rather than a parochial view.

In taking such an international view, I note that, despite many weeks and months of campaigning by Conservative Members—and despite increasing evidence of the detrimental effects of the Government's policy—the Government still refuse to appreciate the bad decision that they have taken in adopting IR35. Even last night—and in this morning's debate in the Westminster Hall annexe about the internet—it became increasingly clear that their approach to IR35 will drive people out of this country.

I have here one of many hundreds, if not thousands, of letters from a person in such a predicament, who writes: It makes little difference to me. I will be long gone by the time the damage has been done by the idiotic Government. When will Ministers wake up to the fact that, at a time when they are attempting to promote the internet revolution, their own policy is destroying this country's position and chucking out of business, or out of the country altogether, those at the leading edge of the revolution that we wish to encourage?

When will the Government appreciate that, whenever they take a decision to collect more money or impose a directive, they are, as my hon. Friend the Member for South Dorset said, increasing the payroll burden on small businesses, which they cannot afford? They are being asked to fulfil tasks for Government as unpaid tax collectors, and often to do so with little notice, which throws their business into chaos and causes them to set aside the main purpose of their commercial activity in order to do the Government's work for them.

The Government must not only now make it their policy to put less of a burden on small businesses, but must ensure that, when they do increase that burden, because they have not listened, they at least give businesses sufficient notice so that they can organise their affairs and tackle their main priority before doing the Government's work for them.

I have a very few minutes to say the many things that I would like to say in this rich area of policy and, at the moment, of complaint. Perhaps at the root of what the Minister should appreciate—and the Secretary of State clearly failed to appreciate—is that what matters to a small business is the marginal cost of employing someone. It is that marginal decision which leads a company, at the beginning of its life, to take on that one extra person—and then, one hopes, another—that allows it to grow from a little acorn into the big oak that it needs to be if it is to appear in the FTSE 100.

The Government are increasing that marginal cost of employment, so that the burden of taking on a person is becoming increasingly difficult for small businesses which have to count their pennies, and which see one extra person on their payroll as an important element of all their costs and budget.

We are also seeing the continuing gold plating of directives. When will the Secretary of State appreciate that a new EU directive is not an instruction to shape a law according to an exact form of words, but merely a requirement for this Parliament to shape its law according to the parameters laid down, in words that we in this House choose and understand? Increasingly, those directives impose more burdens on our businesses—and comparatively greater burdens than those placed on many of our EU counterparts. That not only puts small businesses at a competitive disadvantage but leaves them facing obligations that they need not face.

Small shops and community post offices are under threat, and fuel taxes are imposed on companies such as garden centres, putting those businesses in jeopardy. It is time for the Government to leave small businesses alone. Let them be. Let them grow. The Government should stop paying lip service to that when in fact they are all mouth and no delivery. Let us leave small businesses alone, and relieve them of the burdens being imposed on them by the Government.

Photo of Patricia Hewitt Patricia Hewitt Minister of State, Department of Trade and Industry 9:49 pm, 8th March 2000

This has been an interesting and wide-ranging debate—the fourth on small businesses since we were elected. We have heard some excellent speeches this evening. My hon. Friend the Member for Ochil (Mr. O'Neill) rightly referred to the importance to small businesses of a favourable economic environment—the environment that we have created.

My hon. Friend the Member for Crosby (Mrs. Curtis-Thomas), in a most thoughtful analysis, spelled out how inadequate were the compliance cost assessments from the previous Government and how important it is to enact new regulatory reform legislation to strip out some of the old and unnecessary red tape.

My hon. Friend the Member for North-West Norfolk (Dr. Turner) made the important point that we need to promote economic reform in the European Union to create a climate that is favourable for the entrepreneur and for small businesses. I am happy to reassure him that we have indeed placed that issue on the agenda for the forthcoming Lisbon summit.

My hon. Friend the Member for St. Albans (Mr. Pollard), in a most effective job application, stressed again the need for small businesses, in particular, to have a stable macro-economic climate.

The hon. Member for Rutland and Melton (Mr. Duncan) and several other Conservative Members raised specific issues concerning regulation. The hon. Gentleman spoke about IR35, which we have debated extensively in the Chamber and elsewhere. He may not think that there is a tax loophole, but I suggest that he reads at least one of the computing journals which notoriously advised information technology contractors last year to pay themselves a salary of no more than just over £4,000 a year and to draw all the rest of their very substantial fees by way of dividends, thus ensuring that they paid neither income tax nor national insurance contributions.

The IR35 reforms are about a fair tax system that treats employees and the self-employed fairly. The Inland Revenue is working very closely with industry to ensure that there is proper understanding of the self-employment rules. IR35 will have no effect whatever on those who are indeed self-employed, and it will not prohibit in any way the use of personal service companies, but it will remove a tax loophole that clearly distorts the choice between employment and self-employment and leaves employees on modest salaries paying more national insurance contributions than those who are using personal service companies to avoid fair tax responsibilities.

Several Conservative Members spoke about the working families tax credit. Perhaps I can remind them that even in the worst-case scenario—that of a small employer with an employee entitled to the credit, who is doing his own payroll with a manual system—the additional compliance work amounts to about six minutes a week at a cost of about 70p: not, I think, an excessive burden on any small business, especially when the credit is a central part of our strategy to ensure that work pays and to help people to move from dependence on benefits to independence as they earn a living for themselves and their families.

The hon. Member for Mid-Dorset and North Poole (Mr. Fraser) repeated the accusation that we have failed to explain to people claiming the working families tax credit that they have a choice about how it is paid. That is simply not true. The application form makes it quite clear that before an application is made people need to consider who is to receive the payment: the person at work or a partner at home.

We start from a simple principle: wealth is created not by Government but by business. Our responsibility is to create the conditions in which business can succeed. One might not have thought so to listen to Conservative Members' whingeing, but British businesses are indeed succeeding.

As my right hon. Friend the Secretary of State said, more than 1 million new businesses have started since the general election. More businesses registered for VAT than in the previous five years. We have seen fewer businesses closing than at any time in the past 10 years. Since the Government were elected, we have had 700,000 more people in work than ever before. More people are now in work than ever were under the Conservative Government, most of them in small and medium-sized businesses.

Photo of Geoffrey Clifton-Brown Geoffrey Clifton-Brown Opposition Whip (Commons)

While the Minister is crowing about how many new businesses have started up, could she tell us what are the costs of the new burdens that the Government have imposed on those businesses?

Photo of Patricia Hewitt Patricia Hewitt Minister of State, Department of Trade and Industry

As my right hon. Friend the Secretary of State explained with great care, most of the figures that are bandied around by Opposition Members, and, I am afraid to say, most recently by the British Chambers of Commerce, simply ignore the changes that we have made to the administrative costs—real red tape and compliance costs. They complain about the costs of paying employees fair wages and ensuring that they have paid holidays for the first time.

Most businesses welcome the fact that at last they have a Government who have set fair standards for all employees. Every good business knows that if it wants to get the best people—and it is having good people that every business depends on for its success—it has to treat them properly. Good businesses do not want to go on being undercut by cowboy businesses that exploit their employees and very often break other regulations as well.

Photo of Mr Ian Bruce Mr Ian Bruce Conservative, South Dorset

The Minister will know that the British Chambers of Commerce has estimated that every small business has had £5,000 added to its costs by regulations imposed by the Government. Does she agree with that figure and, if not, will she give us the real figure?

Photo of Patricia Hewitt Patricia Hewitt Minister of State, Department of Trade and Industry

As I have pointed out on other occasions in the Chamber, the British Chambers of Commerce made the unfortunate mistake of taking early estimates of compliance costs before they were changed as we simplified the administrative procedures. I can give the hon. Gentleman an example. We amended the draft national minimum wage regulations to reduce the record-keeping requirements. We did that after listening to businesses and learning from them. By doing that, we reduced the costs to employers by more than £100 million a year. We amended the working time regulations, again to reduce record-keeping requirements, which cut compliance costs by approximately £13 million.

It was also this Government who acted on an important recommendation from the previous Government's deregulation taskforce back in 1995 to merge the Inland Revenue and the Contributions Agency, so that employers no longer had to deal with two different agencies and report to two different Departments. That was a recommendation that the previous Government had, but never acted upon. [Interruption.] The fact is that businesses in this country—[Interruption.] As some Opposition Members know, I have been speaking in several debates elsewhere this evening, and I apologise for the fact that I seem almost completely to have lost my voice. Happily, I have not lost my conviction. Businesses in this country are doing exceptionally well, in striking contrast to the bankruptcies that took place under the Conservative Government.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 159, Noes 309.

Division No. 98][9.59 pm
AYES
Ainsworth, Peter (E Surrey)Fallon, Michael
Allan, RichardFearn, Ronnie
Amess, DavidForth, Rt Hon Eric
Ancram, Rt Hon MichaelFoster, Don (Bath)
Arbuthnot, Rt Hon JamesFox, Dr Liam
Atkinson, David (Bour'mth E)Fraser, Christopher
Atkinson, Peter (Hexham)Gale, Roger
Baker, NormanGarnier, Edward
Baldry, TonyGeorge, Andrew (St Ives)
Ballard, JackieGibb, Nick
Beggs, RoyGill, Christopher
Beith, Rt Hon A JGray, James
Bell, Martin (Tatton)Green, Damian
Bercow, JohnGreenway, John
Beresford, Sir PaulGrieve, Dominic
Blunt, CrispinGummer, Rt Hon John
Boswell, TimHague, Rt Hon William
Bottomley, Peter (Worthing W)Hamilton, Rt Hon Sir Archie
Bottomley, Rt Hon Mrs VirginiaHammond, Philip
Brady, GrahamHancock, Mike
Brake, TomHawkins, Nick
Brazier, JulianHayes, John
Breed, ColinHeald, Oliver
Brooke, Rt Hon PeterHeath, David (Somerton & Frome)
Browning, Mrs AngelaHeathcoat-Amory, Rt Hon David
Bruce, Ian (S Dorset)Hogg, Rt Hon Douglas
Burnett, JohnHoram, John
Burns, SimonHowarth, Gerald (Aldershot)
Butterfill, JohnHunter, Andrew
Campbell, Rt Hon Menzies (NE Fife)Jackson, Robert (Wantage)
Jenkin, Bernard
Cash, WilliamKey, Robert
Chapman, Sir Sydney (Chipping Barnet)King, Rt Hon Tom (Bridgwater)
Kirkbride, Miss Julie
Chope, ChristopherLaing, Mrs Eleanor
Clappison, JamesLait, Mrs Jacqui
Clarke, Rt Hon Kenneth (Rushcliffe)Lansley, Andrew
Leigh, Edward
Collins, TimLetwin, Oliver
Cormack, Sir PatrickLewis, Dr Julian (New Forest E)
Cotter, BrianLidington, David
Cran, JamesLilley, Rt Hon Peter
Davey, Edward (Kingston)Lloyd, Rt Hon Sir Peter (Fareham)
Davies, Quentin (Grantham)Loughton, Tim
Davis, Rt Hon David (Haltemprice)Luff, Peter
Day, StephenLyell, Rt Hon Sir Nicholas
Dorrell, Rt Hon StephenMacGregor, Rt Hon John
Duncan, AlanMcIntosh, Miss Anne
Duncan Smith, IainMacKay, Rt Hon Andrew
Evans, NigelMcLoughlin, Patrick
Faber, DavidMalins, Humfrey
Fabricant, MichaelMaples, John
Mates, MichaelSpring, Richard
Maude, Rt Hon FrancisStanley, Rt Hon Sir John
Mawhinney, Rt Hon Sir BrianStreeter, Gary
May, Mrs TheresaStunell, Andrew
Michie, Mrs Ray (Argyll & Bute)Swayne, Desmond
Moore, MichaelSyms, Robert
Nicholls, PatrickTapsell, Sir Peter
Norman, ArchieTaylor, Ian (Esher & Walton)
O'Brien, Stephen (Eddisbury)Taylor, John M (Solihull)
Öpik, LembitTaylor, Sir Teddy
Ottaway, RichardTownend, John
Paice, JamesTrend, Michael
Paterson, OwenTyler, Paul
Pickles, EricTyrie, Andrew
Prior, DavidViggers, Peter
Randall, JohnWalter, Robert
Redwood, Rt Hon JohnWaterson, Nigel
Rendel, DavidWebb, Steve
Robathan, AndrewWells, Bowen
Robertson, LaurenceWhitney, Sir Raymond
Roe, Mrs Marion (Broxbourne)Whittingdale, John
Ruffley, DavidWiddecombe, Rt Hon Miss Ann
Russell, Bob (Colchester)Wilkinson, John
St Aubyn, NickWillis, Phil
Sanders, AdrianWinterton, Mrs Ann (Congleton)
Sayeed, JonathanWinterton, Nicholas (Macclesfield)
Shepherd, RichardYoung, Rt Hon Sir George
Smith, Sir Robert (W Ab'd'ns)
Soames, NicholasTellers for the Ayes:
Spelman, Mrs CarolineMr. Keith Simpson and
Spicer, Sir MichaelMr. Geoffrey Clifton-Brown.
NOES
Ainger, NickCann, Jamie
Alexander, DouglasCaplin, Ivor
Allen, GrahamCasale, Roger
Armstrong, Rt Hon Ms HilaryCawsey, Ian
Ashton, JoeChapman, Ben (Wirral S)
Atherton, Ms CandyChaytor, David
Atkins, CharlotteClapham, Michael
Austin, JohnClark, Rt Hon Dr David (S Shields)
Barnes, HarryClark, Dr Lynda (Edinburgh Pentlands)
Battle, John
Bayley, HughClark, Paul (Gillingham)
Beard, NigelClarke, Charles (Norwich S)
Beckett, Rt Hon Mrs MargaretClarke, Tony (Northampton S)
Begg, Miss AnneClelland, David
Benn, Hilary (Leeds C)Clwyd, Ann
Benn, Rt Hon Tony (Chesterfield)Coffey, Ms Ann
Bennett, Andrew FCohen, Harry
Benton, JoeColman, Tony
Bermingham, GeraldConnarty, Michael
Berry, RogerCooper, Yvette
Best, HaroldCorbett, Robin
Betts, CliveCorbyn, Jeremy
Blackman, LizCorston, Jean
Blears, Ms HazelCousins, Jim
Blizzard, BobCranston, Ross
Blunkett, Rt Hon DavidCrausby, David
Boateng, Rt Hon PaulCryer, John (Hornchurch)
Bradley, Keith (Withington)Cummings, John
Bradley, Peter (The Wrekin)Cunningham, Jim (Cov'try S)
Bradshaw, BenCurtis-Thomas, Mrs Claire
Brinton, Mrs HelenDarvill, Keith
Brown, Rt Hon Nick (Newcastle E)Davey, Valerie (Bristol W)
Brown, Russell (Dumfries)Davidson, Ian
Browne, DesmondDavies, Rt Hon Denzil (Llanelli)
Buck, Ms KarenDavies, Geraint (Croydon C)
Burden, RichardDavis, Rt Hon Terry (B'ham Hodge H)
Burgon, Colin
Butler, Mrs ChristineDawson, Hilton
Byers, Rt Hon StephenDean, Mrs Janet
Campbell, Alan (Tynemouth)Dobbin, Jim
Campbell, Mrs Anne (C'bridge)Doran, Frank
Campbell, Ronnie (Blyth V)Dowd, Jim
Campbell-Savours, DaleDrew, David
Dunwoody, Mrs GwynethKing, Andy (Rugby & Kenilworth)
Eagle, Angela (Wallasey)Kumar, Dr Ashok
Efford, CliveLadyman, Dr Stephen
Ellman, Mrs LouiseLaxton, Bob
Ennis, JeffLepper, David
Etherington, BillLeslie, Christopher
Field, Rt Hon FrankLevitt, Tom
Fisher, MarkLewis, Ivan (Bury S)
Fitzsimons, LornaLiddell, Rt Hon Mrs Helen
Flint, CarolineLinton, Martin
Flynn, PaulLloyd, Tony (Manchester C)
Foster, Michael Jabez (Hastings)Love, Andrew
Foster, Michael J (Worcester)McAvoy, Thomas
Foulkes, GeorgeMcCabe, Steve
Fyfe, MariaMcCafferty, Ms Chris
Galloway, GeorgeMcCartney, Rt Hon Ian (Makerfield)
Gardiner, Barry
George, Bruce (Walsall S)McDonagh, Siobhain
Gerrard, NeilMacdonald, Calum
Gibson, Dr IanMcDonnell, John
Gilroy, Mrs LindaMcFall, John
Godsiff, RogerMcGuire, Mrs Anne
Goggins, PaulMcIsaac, Shona
Golding, Mrs LlinMcNamara, Kevin
Gordon, Mrs EileenMcNulty, Tony
Griffiths, Jane (Reading E)MacShane, Denis
Griffiths, Nigel (Edinburgh S)Mactaggart, Fiona
Griffiths, Win (Bridgend)McWalter, Tony
Grocott, BruceMcWilliam, John
Grogan, JohnMahon, Mrs Alice
Gunnell, JohnMallaber, Judy
Hain, PeterMarsden, Gordon (Blackpool S)
Hall, Mike (Weaver Vale)Marsden, Paul (Shrewsbury)
Hall, Patrick (Bedford)Marshall, David (Shettleston)
Hamilton, Fabian (Leeds NE)Marshall, Jim (Leicester S)
Hanson, DavidMarshall-Andrews, Robert
Harman, Rt Hon Ms HarrietMartlew, Eric
Heal, Mrs SylviaMaxton, John
Healey, JohnMeacher, Rt Hon Michael
Henderson, Doug (Newcastle N)Meale, Alan
Henderson, Ivan (Harwich)Merron, Gillian
Hepburn, StephenMichie, Bill (Shef'ld Heeley)
Heppell, JohnMitchell, Austin
Hesford, StephenMoffatt, Laura
Hewitt, Ms PatriciaMoonie, Dr Lewis
Hill, KeithMorley, Elliot
Hinchliffe, DavidMorris, Rt Hon Sir John (Aberavon)
Hoey, Kate
Hood, JimmyMountford, Kali
Hope, PhilMullin, Chris
Hopkins, KelvinMurphy, Denis (Wansbeck)
Howells, Dr KimMurphy, Rt Hon Paul (Torfaen)
Hoyle, LindsayNaysmith, Dr Doug
Hughes, Kevin (Doncaster N)O'Brien, Mike (N Warks)
Humble, Mrs JoanO'Hara, Eddie
Hurst, AlanOlner, Bill
Iddon, Dr BrianO'Neill, Martin
Jackson, Ms Glenda (Hampstead)Palmer, Dr Nick
Jackson, Helen (Hillsborough)Pearson, Ian
Jenkins, BrianPendry, Tom
Johnson, Alan (Hull W & Hessle)Perham, Ms Linda
Johnson, Miss Melanie (Welwyn Hatfield)Pickthall, Colin
Pike, Peter L
Jones, Rt Hon Barry (Alyn)Plaskitt, James
Jones, Helen (Warrington N)Pollard, Kerry
Jones, leuan Wyn (Ynys Môn)Pond, Chris
Jones, Ms Jenny (Wolverh'ton SW)Pope, Greg
Pound, Stephen
Jones, Dr Lynne (Selly Oak)Prentice, Ms Bridget (Lewisham E)
Kaufman, Rt Hon GeraldPrentice, Gordon (Pendle)
Keeble, Ms SallyPrescott, Rt Hon John
Keen, Alan (Feltham & Heston)Primarolo, Dawn
Kemp, FraserProsser, Gwyn
Khabra, Piara SPurchase, Ken
Kidney, DavidQuinn, Lawrie
Kilfoyle, PeterRadice, Rt Hon Giles
Rapson, SydTemple-Morris, Peter
Raynsford, NickThomas, Gareth (Clwyd W)
Reed, Andrew (Loughborough)Thomas, Gareth R (Harrow W)
Reid, Rt Hon Dr John (Hamilton N)Thomas, Simon (Ceredigion)
Robinson, Geoffrey (Cov'try NW)Timms, Stephen
Roche, Mrs BarbaraTodd, Mark
Rooker, Rt Hon JeffTouhig, Don
Rooney, TerryTrickett, Jon
Ross, Ernie (Dundee W)Truswell, Paul
Ruddock, JoanTurner, Dennis (Wolverh'ton SE)
Russell, Ms Christine (Chester)Turner, Dr Desmond (Kemptown)
Ryan, Ms JoanTurner, Dr George (NW Norfolk)
Salter, MartinTurner. Neil (Wigan)
Sarwar, MohammadTwigg, Derek (Halton)
Savidge, MalcolmTwigg, Stephen (Enfield)
Sawford, PhilTynan, Bill
Sedgemore, BrianVis, Dr Rudi
Sheerman, BarryWard, Ms Claire
Simpson, Alan (Nottingham S)Wareing, Robert N
Singh, MarshaWatts, David
Skinner, DennisWhite, Brian
Smith, Rt Hon Andrew (Oxford E)Whitehead, Dr Alan
Smith, Angela (Basildon)Wicks, Malclom
Smith, Jacqui (Redditch)Willams, Rt Hon Alan (Swansea W)
Smith, Llew (Blaenau Gwent)
Snape, PeterWillams, Alan W (E Carmarthen)
Soley, CliveWills, Michael
Southworth Ms HelenWilson, Brian
Spellar, JohnWinnick, David
Squire, Ms RachelWinterton, Ms Rosie (Doncaster C)
Steinberg, GerryWise, Audrey
Stevenson, GeorgeWoodward, Shaun
Stewart, Ian (Eccles)Woolas, Phil
Stinchcombe, PaulWorthington, Tony
Stoate, Dr HowardWray, James
Wright, Anthony D (Gt Yarmouth)
Strang, Rt Hon Dr GavinWright, Dr Tony (Cannock)
Stringer, GrahamWyatt, Derek
Stuart, Ms Gisela
Taylor, Rt Hon Mrs Ann (Dewsbury)Tellers for the Noes:
Mr. Gerry Sutcliffe and
Taylor, David (NW Leics)Mr. Robert Ainsworth.

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments):

The House divided: Ayes 305, Noes 160.

Division No. 99][10.12 pm
AYES
Ainger, NickBlackman, Liz
Alexander, DouglasBlears, Ms Hazel
Allen, GrahamBlizzard, Bob
Armstrong, Rt Hon Ms HilaryBoateng, Rt Hon Paul
Ashton, JoeBradley, Keith (Withington)
Atherton, Ms CandyBradley, Peter (The Wrekin)
Atkins, CharlotteBradshaw, Ben
Austin, JohnBrinton, Mrs Helen
Barnes, HarryBrown, Rt Hon Nick (Newcastle E)
Battle, JohnBrown, Russell (Dumfries)
Bayley, HughBrowne, Desmond
Beard, NigelBuck, Ms Karen
Beckett, Rt Hon Mrs MargaretBurden, Richard
Begg, Miss AnneBurgon, Colin
Benn, Hilary (Leeds C)Butler, Mrs Christine
Benn, Rt Hon Tony (Chesterfield)Byers, Rt Hon Stephen
Bennett, Andrew FCampbell, Alan (Tynemouth)
Benton, JoeCampbell, Mrs Anne (C'bridge)
Bermingnam, GeraldCampbell, Ronnie (Blyth V)
Berry, RogerCampbell-Savours, Dale
Best, HaroldCann, Jamie
Betts, CliveCaplin, Ivor
Casale, RogerHarman, Rt Hon Ms Harriet
Cawsey, IanHeal, Mrs Sylvia
Chapman, Ben (Wirral S)Healey, John
Chaytor, DavidHenderson, Doug (Newcastle N)
Clapham, MichaelHenderson, Ivan (Harwich)
Clark, Rt Hon Dr David (S Shields)Hepburn, Stephen
Clark, Dr Lynda (Edinburgh Pentlands)Heppell, John
Hesford, Stephen
Clark, Paul (Gillingham)Hewitt, Ms Patricia
Clarke, Charles (Norwich S)Hill, Keith
Clarke, Tony (Northampton S)Hinchliffe, David
Clelland, DavidHoey, Kate
Clwyd, AnnHood, Jimmy
Coffey, Ms AnnHope, Phil
Cohen, HarryHopkins, Kelvin
Colman, TonyHowells, Dr Kim
Connarty, MichaelHoyle, Lindsay
Cooper, YvetteHughes, Kevin (Doncaster N)
Corbett, RobinHumble, Mrs Joan
Corbyn, JeremyHurst, Alan
Corston, JeanIddon, Dr Brian
Cousins, JimJackson, Ms Glenda (Hampstead)
Cranston, RossJackson, Helen (Hillsborough)
Crausby, DavidJenkins, Brian
Cryer, John (Hornchurch)Johnson, Alan (Hull W & Hessle)
Cummings, JohnJohnson, Miss Melanie (Welwyn Hatfield)
Cunningham, Jim (Cov'try S)
Curtis—Thomas, Mrs ClaireJones, Rt Hon Barry (Alyn)
Darvill, KeithJones, Helen (Warrington N)
Davey, Valerie (Bristol W)Jones, Ms Jenny (Wolverh'ton SW)
Davidson, Ian
Davies, Rt Hon Denzil (Llanelli)Jones, Dr Lynne (Selly Oak)
Davies, Geraint (Croydon C)Kaufman, Rt Hon Gerald
Davis, Rt Hon Terry (B'ham Hodge H)Keeble, Ms Sally
Keen, Alan (Feltham & Heston)
Dawson, HiltonKemp, Fraser
Dean, Mrs JanetKhabra, Piara S
Dobbin, JimKidney, David
Doran, FrankKilfoyle, Peter
Dowd, JimKing, Andy (Rugby & Kenilworth)
Drew, DavidKumar, Dr Ashok
Eagle, Angela (Wallasey)Ladyman, Dr Stephen
Efford, CliveLaxton, Bob
Ellman, Mrs LouiseLepper, David
Ennis, JeffLeslie, Christopher
Etherington, BillLevitt, Tom
Field, Rt Hon FrankLewis, Ivan (Bury S)
Fisher, MarkLiddell, Rt Hon Mrs Helen
Fitzsimons, LornaLinton, Martin
Flint, CarolineLloyd, Tony (Manchester C)
Flynn, PaulLove, Andrew
Foster, Michael Jabez (Hastings)McAvoy, Thomas
Foster, Michael J (Worcester)McCabe, Steve
Foulkes, GeorgeMcCafferty, Ms Chris
Fyfe, MariaMcCartney, Rt Hon Ian (Makerfield)
Galloway, George
Gardiner, BarryMcDonagh, Siobhain
George, Bruce (Walsall S)Macdonald, Calum
Gerrard, NeilMcDonnell, John
Gibson, Dr IanMcFall, John
Gilroy, Mrs LindaMcGuire, Mrs Anne
Godsiff, RogerMcIsaac, Shona
Goggins, PaulMcNamara, Kevin
Golding, Mrs LlinMcNulty, Tony
Gordon, Mrs EileenMacShane, Denis
Griffiths, Jane (Reading E)Mactaggart, Fiona
Griffiths, Nigel (Edinburgh S)McWalter, Tony
Griffiths, Win (Bridgend)McWilliam, John
Grocott, BruceMahon, Mrs Alice
Grogan, JohnMallaber, Judy
Gunnell, JohnMarsden, Gordon (Blackpool S)
Hain, PeterMarsden, Paul (Shrewsbury)
Hall, Mike (Weaver Vale)Marshall, David (Shettleston)
Hall, Patrick (Bedford)Marshall, Jim (Leicester S)
Hamilton, Fabian (Leeds NE)Marshall—Andrews, Robert
Hanson, DavidMartlew, Eric
Maxton, JohnSmith, Rt Hon Andrew (Oxford E)
Meacher, Rt Hon MichaelSmith, Angela (Basildon)
Meale, AlanSmith, Jacqui (Redditch)
Merron, GillianSmith, Llew (Blaenau Gwent)
Michie, Bill (Shef'ld Heeley)Snape, Peter
Mitchell, AustinSoley, Clive
Moffatt, LauraSouthworth, Ms Helen
Moonie, Dr LewisSpellar, John
Morley, ElliotSquire, Ms Rachel
Morris, Rt Hon Sir John (Aberavon)Steinberg, Gerry
Stevenson, George
Mountford, KaliStewart, Ian (Eccles)
Mullin, ChrisStinchcombe, Paul
Murphy, Denis (Wansbeck)Stoate, Dr Howard
Murphy, Rt Hon Paul (Torfaen)Strang, Rt Hon Dr Gavin
Naysmith, Dr DougStringer, Graham
O'Brien, Mike (N Warks)Stuart, Ms Gisela
O'Hara, EddieTaylor, Rt Hon Mrs Ann (Dewsbury)
Olner, Bill
O'Neill, MartinTaylor, David (NW Leics)
Palmer, Dr NickTemple—Morris, Peter
Pearson, IanThomas, Gareth (Clwyd W)
Pendry TomThomas, Gareth R (Harrow W)
Perham, Ms LindaTimms, Stephen
Pickthall, ColinTodd, Mark
Pike, Peter LTouhig, Don
Plaskitt, JamesTrickett, Jon
Pollard, KerryTruswell, Paul
Pond, ChrisTurner, Dennis (Wolverh'ton SE)
Pope, GregTurner, Dr Desmond (Kemptown)
Pound, StephenTurner, Dr George (NW Norfolk)
Prentice, Ms Bridget (Lewisham E)Turner, Neil (Wigan)
Prentice, Gordon (Pendle)Twigg, Derek (Halton)
Prescott, Rt Hon JohnTwigg, Stephen (Enfield)
Primarolo DawnTynan, Bill
Prosser, GwynVis, Dr Rudi
Purchase, KenWard, Ms Claire
Quinn, LawrieWareing, Robert N
Radice, Rt Hon GilesWatts, David
Rapson, SydWhite, Brian
Raynsford, NickWhitehead, Dr Alan
Reed, Andrew (Loughborough)Wicks, Malcolm
Reid, Rt Hon Dr John (Hamilton N)Williams, Rt Hon Alan (Swansea W)
Robinson, Geoffrey (Cov'try NW)Williams, Alan W (E Carmarthen)
Roche, Mrs BarbaraWills, Michael
Rooker, Rt Hon JeffWilson, Brian
Rooney, TerryWinnick, David
Ross, Ernie (Dundee W)Winterton, Ms Rosie (Doncaster C)
Ruddock, JoanWise, Audrey
Russell, Ms Christine (Chester)Woodward, Shaun
Ryan, Ms JoanWoolas, Phil
Salter, MartinWorthington, Tony
Sarwar, MohammadWray, James
Savidge, MalcolmWright, Anthony D (Gt Yarmouth)
Sawford, PhilWright, Dr Tony (Cannock)
Sedgemore, BrianWyatt, Derek
Sheerman, Barry
Simpson, Alan (Nottingham S)Tellers for the Ayes:
Singh, MarshaMr. Robert Ainsworth and
Skinner, DennisMr. Gerry Sutcliffe.
NOES
Ainsworth, Peter (E Surrey)Beresford, Sir Paul
Allan, RichardBlunt, Crispin
Amess, DavidBoswell, Tim
Ancram, Rt Hon MichaelBottomley, Peter (Worthing W)
Arbuthnot, Rt Hon JamesBottomley, Rt Hon Mrs Virginia
Atkinson, David (Bour'mth E)Brady, Graham
Atkinson, Peter (Hexham)Brake, Tom
Baker, NormanBrazier, Julian
Baldry, TonyBreed, Colin
Ballard, JackieBrooke, Rt Hon Peter
Beith, Rt Hon A JBrowning, Mrs Angela
Bell, Martin (Tatton)Bruce, Ian (S Dorset)
Bercow, JohnBurnett, John
Burns, SimonLoughton, Tim
Butterfill, JohnLuff, Peter
Campbell, Rt Hon Menzies (NE Fife)Lyell, Rt Hon Sir Nicholas
MacGregor, Rt Hon John
Cash, WilliamMcIntosh, Miss Anne
Chapman, Sir Sydney (Chipping Barnet)MacKay, Rt Hon Andrew
McLoughlin, Patrick
Chope, ChristopherMalins, Humfrey
Clappison, JamesMaples, John
Clarke, Rt Hon Kenneth (Rushcliffe)Mates, Michael
Maude, Rt Hon Francis
Collins, TimMawhinney, Rt Hon Sir Brian
Cormack, Sir PatrickMay, Mrs Theresa
Cotter, BrianMichie, Mrs Ray (Argyll & Bute)
Cran, JamesMoore, Michael
Davey, Edward (Kingston)Nicholls, Patrick
Davies, Quentin (Grantham)Norman, Archie
Davis, Rt Hon David (Haltemprice)O'Brien, Stephen (Eddisbury)
Day, StephenÖpik, Lembit
Dorrell, Rt Hon StephenOttaway, Richard
Duncan, AlanPaice, James
Duncan Smith, IainPaterson, Owen
Emery, Rt Hon Sir PeterPickles, Eric
Evans, NigelPrior, David
Faber, DavidRandall, John
Fabricant, MichaelRedwood, Rt Hon John
Fallon, MichaelRendel, David
Fearn, RonnieRobathan, Andrew
Forth, Rt Hon EricRobertson, Laurence
Foster, Don (Bath)Roe, Mrs Marion (Broxbourne)
Fox, Dr LiamRuffley, David
Fraser, ChristopherRussell, Bob (Colchester)
Gale, RogerSt Aubyn, Nick
Garnier, EdwardSanders, Adrian
George, Andrew (St Ives)Sayeed, Jonathan
Gibb NickShepherd, Richard
Gill ChristopherSmith, Sir Robert (W Ab'd'ns)
Gray, JamesSoames, Nicholas
Green, DamianSpelman, Mrs Caroline
Greenway, JohnSpicer, Sir Michael
Grieve, DominicSpring, Richard
Gummer, Rt Hon JohnStanley, Rt Hon Sir John
Hague, Rt Hon WilliamStreeter, Gary
Hamilton, Rt Hon Sir ArchieStunell, Andrew
Hammond, PhilipSwayne, Desmond
Hancock, MikeSyms, Robert
Hawkins, NickTayloer, Ian (Esher & Walton)
Hayes, JohnTaylor, John M (Solihull)
Heald, OliverTaylor, Sir Teddy
Thomas, Simon (Ceredigion)
Heath, David (Somerton & Frome)Townend John
Heathcoat—Amory, Rt Hon DavidTrend, Michael
Hogg, Rt Hon DouglasTyler, Paul
Horam, JohnTyrie, Andrew
Howarth, Gerald (Aldershot)Viggers, Peter
Hunter, AndrewWalter, Robert
Jackson, Robert (Wantage)Waterson, Nigel
Jenkin, BernardWebb, Steve
Jones, leuan Wyn (Ynys Môn)Wells, Bowen
Key, RobertWhitney, Sir Raymond
King, Rt Hon Tom (Bridgwater)Whittingdale, John
Kirkbride, Miss JulieWiddecombe, Rt Hon Miss Ann
Laing, Mrs EleanorWilkinson, John
Lait, Mrs JacquiWillis, Phil
Lansley, AndrewWinterton, Mrs Ann (Congleton)
Leigh, EdwardWinterton, Nicholas (Macclesfield)
Letwin, OliverYoung, Rt Hon Sir George
Lewis, Dr Julian (New Forest E)
Lidington, DavidTellers for the Noes:
Lilley, Rt Hon PeterMr. Keith Simpson and
Lloyd, Rt Hon Sir Peter (Fareham)Mr. Geoffrey Clifton-Brown.

Question accordingly agreed to.

MR. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved, That this House welcomes the action taken by Her Majesty's Government to foster an environment in which small business can flourish, with macro-economic stability, a 10 per cent. starting rate of corporation tax, a research and development tax credit, regulation introduced in ways that minimise burdens on business, and the creation of the Small Business Service through which for the first time there will be at the heart of Government an institution dedicated to representing the interest of, and improving the services to, small firms; congratulates the ongoing work being undertaken by the Better Regulation Task Force, chaired by Lord Haskins, in spearheading the Government's campaigning for better regulation; and contrasts this with the boom and bust policies of the previous administration, which led to 15 per cent. interest rates, double digit inflation and the collapse of thousands of small firms.