Orders of the Day — Education and Industry

Part of the debate – in the House of Commons at 1:50 pm on 8 December 2000.

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Photo of David Heathcoat-Amory David Heathcoat-Amory Conservative, Wells 1:50, 8 December 2000

If the hon. Lady will forgive me, I will not. I am replying to this debate, which included points that she made. I may give way later, if there is time.

The Department of Trade and Industry has undoubtedly got bigger during the past few years. According to its departmental report, it has taken on an extra 1,000 civil servants, if one includes the regulatory agencies, and it is spending about 25 per cent. more than in 1997. Despite that, it has become weaker as a Department and is losing out in Whitehall all the time to the Treasury. The DTI presided over an increase of £5 billion a year in business taxation, which was imposed by the Treasury, but DTI Ministers lecture businesses and commerce on competitiveness and on the need to be more productive.

Last week, the CBI's patience finally broke. It pointed out that, despite all the warm words and the pro-business rhetoric of the Secretary of State and the Government, the total burden on business—all the taxes and regulations—during this Parliament totals more than £32 billion. It is not surprising that it complained that the Government urge competitiveness on the one hand but undermine it on the other. They are damaging competitiveness in the world markets, where daily we fight a pitiless battle for jobs and revenue.

Of course, the problem is not over yet. The new energy tax—the so-called climate change levy—has not yet been introduced. It is due on 1 April next year and all firms, of whatever size, will pay it. It is an unnecessary tax—there are plenty of other ways to reduce CO2, emissions—and it is extremely complicated and very regulatory. It will also particularly damage manufacturing competitiveness, which was discussed by Labour Members. I notice that the Trades Union Congress recently pointed out that there had been a decline in manufacturing jobs. The rate of unemployment in manufacturing has accelerated, with 20,000 job losses in manufacturing in September alone. That is not surprising given that we have a Government who tax and regulate the very sectors, such as manufacturing, that are exposed to so much international competition.

My right hon. Friend the Member for Wealden (Sir G. Johnson Smith), with great force and much knowledge, raised the issue of the regulatory burden. He emphasised the damage that could be caused if nothing is done to ease that burden. Over the past three and a half years, layer upon layer of extra regulations have been imposed. Many international comparisons and many estimates of the total cost have been made. The Institute of Directors estimates the extra regulatory burden on British industry at £5 billion a year. The Institute of Chartered Accountants—my own institute—has recently shown that the burden on small and very small businesses has doubled in the past year. Legislation introduced at the start of this Parliament is now having an effect.

That breaks a Labour party manifesto pledge, but we are used to that. In its business manifesto, Labour pledged not to impose burdensome regulations on business. It broke that pledge within weeks of the general election, so it is now faced with a colossal and rising burden. A deregulation Bill is signalled in the Queen's Speech, but that is fake repentance. It is far too late, in the months before a general election, to do any serious work to turn back the tide of over-regulation.

It is noticeable that the Department of Trade and Industry is not to be trusted with that Bill: the Cabinet Office will deal with it. The DTI imposes the red tape and another Department comes along with a new Bill in the closing months of the Parliament to try to clear up the mess.

It is also striking that the Government are not using existing legislation. My right hon. and hon. Friends will remember the Deregulation and Contracting Out Act 1994, which was designed to enable Governments to make deregulating orders. The number of those orders has dwindled in past years—there were 12 in 1997, but only four last year. Rather than using the weapons at their disposal, the Government are dreaming up another Bill.

The Government were criticised by the better regulation taskforce. Their own taskforce said that the flow of orders under the 1994 Act had dwindled in recent years and the Task Force is concerned that the Government should continue efforts to generate and follow through orders. That has not happened, so the Government are defying the criticism expressed by their own task force.

A new Bill has been promised, and the Government said that it would deal with school crossing patrols, which I am sure are very important, and fire safety regulations. Where have the fire safety regulations come from? The British Chambers of Commerce, which has calculated the extra burden of regulations as £10 billion over this Parliament, has cited fire precaution regulations. When were they introduced? December 1999. Thus the Government are proposing regulations to clear up the regulations that they introduced only a year or two ago.

There are other examples, such as employment tribunals. The Government have suddenly twigged that the number of frivolous and vexatious cases taken to employment tribunals has escalated enormously, and they are proposing fundamental changes to deal with that. But who introduced those rules? Who changed the law and brought in the Employment Relations Act 1999? The Government did. Yet again, they are belatedly starting to clear up their own mess.

The Queen's Speech is highly regulatory. The Government have still not lost the habit of trying to ban things—that is their first instinct. Trial by jury and tobacco advertising will be banned. Hunting will be banned if most Labour Members get their way. That Bill is in the Queen's Speech. As my hon. Friend the Member for Cotswold (Mr. Clifton-Brown) pointed out, such a ban will do nothing to solve rural problems. People in rural Britain are amazed that, in the last Queen's Speech before an election, all the Government can produce is something about hunting. They have just published a rural White Paper, but they have done nothing about it in the Queen's Speech, apart from producing an entirely irrelevant proposal about hunting. That shows how hollow their promises have become.

There are deep-seated issues in rural Britain, which have been raised by my hon. Friend the Member for Cotswold and others: for instance, escalating fuel prices and post office closures. In an important speech, my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) analysed exactly what is happening—or not happening—to post offices. The truth is that the Government are in an enormous muddle. The only certainty is that sub-post offices are now shutting at a rate of nearly two a day—mostly in rural areas, but they have now started to shut in urban areas. Why? Because—this is the only definite figure in the whole business—from 2003 they will lose their income from the encashment of benefit and pension cheques. That will remove, at a stroke, 40 per cent.—in some cases, more—of the income of those threatened post offices.

In anticipation of that development, post offices are shutting. They are unsaleable. What business can survive, given that in three years' time there will be a definite reduction of such magnitude in their income? We know why this is being done: it represents another Treasury-driven saving, in this case of potentially £400 million. I say "potentially" because I have seen no costings to verify the figure. Again, the Treasury has set the policy.