In introducing new regulations, the Government are very careful to take account of the needs of the business community.
I am grateful for that concise reply. Given that small businesses in Scotland spend more than 31 hours every month trying to comply with regulations, does the Secretary of State agree that those regulations represent a burden and put Scottish businesses at a competitive disadvantage? Does she also agree that the improving regulations in Scotland unit has failed in its particular task?
No, I do not agree with the hon. Gentleman, and I know something about the small business community in Scotland, having previously run a small business, having been a sole trader and having set up other small businesses. I believe that the small business community in Scotland, like the overall business community in Scotland, is very grateful for the fact that since 1997 the Government have reduced corporation tax by nearly 25 per cent. In addition, we are committed to extending the 10p corporation tax rate, we are reducing and simplifying value added tax procedures and our capital gains tax regime is one of the simplest in the world and much more favourable than that in the United States. Indeed, in introducing what is in effect an MOT on regulation, which ensures that regulations are checked on a 10-yearly basis, the Scottish Executive are taking the sensible way forward, and it has been mirrored in the approbation that the small business community has shown towards such an approach.
Is my right hon. Friend aware of the recent Trades Union Congress research on the burden of regulation on business? Does she agree that at 5p a week, the cost of maternity provision is certainly a price worth paying for women of child-bearing age? Does she also agree that issues such as fire prevention, which costs less than 1p a week, are very important? If our businesses honoured their responsibilities, we would not need such legislation.
My hon. Friend makes a good and important point. In reality, much regulation is aimed at ensuring that the good employers who implement good conditions of work for their employees are not undercut by unscrupulous cowboys. Indeed, I draw attention to the fact that the national minimum wage has transformed the lives of 135,000 Scots. The benefits of regulation far outweigh the costs. Notwithstanding that, the Government have been anxious to ensure, through the introduction of the Small Business Service, that the level of regulation is proportionate, so that small firms continue to grow and our economy becomes even more competitive.
Is it not the case that much unnecessary regulation in Scotland comes from the Government's block on using derogations available under EU legislation? In that regard, will the Secretary of State seek to persuade the Secretary of State for the Environment, Food and Rural Affairs to use the derogations available to alleviate the plight of small farmers and crofters who are drowning under a sea of paper?
One of the Government's commitments is to be an active player in the European Union, but we also want to make sure that the systems under which we operate are proportionate and suited to the operation of our economy and our industries. I believe that we are doing that. In 1997, Britain was very much on the sidelines of Europe, and we have since become leaders in the EU. As a consequence, we are able to have a much greater impact on regulation to suit the economy not only of the urban but of the rural community.
May I caution the Secretary of State against the siren voices that call for complete absence of regulation? We are mindful of the financial scandals that are occurring—for example, those concerning Independent Insurance Co. Ltd. and Equitable Life, whose policyholders are writing to us. We need to exercise a light regulatory touch while fostering economic progress. Is not the big issue in Scotland's economy today the historically low growth of Scottish businesses? There is a need for the Government and local communities to ensure that those businesses are stimulated so that their growth equals the UK average and there are least 200,000 more people in employment.
I very much agree with my hon. Friend. Like most Members of the House, whenever Equitable Life is mentioned I have to declare an interest because, again like most Members, I have policies with that company. It is important that we create the proper climate for entrepreneurship so that new firms can be set up. Historically, Scotland has a problem with the formation of new firms, and the Government and the Scottish Executive are working together to address that. At the same time, there is a need for transparent and easily understood regulation to ensure that the most vulnerable in our communities—in that group I include pensioners and those nearing retirement age—have the maximum protection available.
Will the Secretary of State come clean and admit to the House that Labour's extra burdens on business are destroying jobs? Is she aware that, in 2001, 20,842 jobs were lost in Scotland and that Britain as a whole fell from ninth to 19th in the world competitiveness league? How many more people have to lose their jobs before Labour realises that the business of government is not the government of business?
Despite the fact that many members of the right hon. Gentleman's party lost their jobs in 1997—losses that were consolidated in 2001—I point out that Scotland has the highest levels of employment and the lowest levels of unemployment for more than a generation. Perhaps if he knew rather more about Scotland he would be able to understand that, and he would be prepared to join me in congratulating those businesses that have created jobs in Scotland and those people who have moved themselves from welfare into work, particularly the long-term unemployed, and he would be prepared to recognise the scale of the achievement in Scotland. There are more people in work now than there were when his Government left office in 1997.