House of Commons Hansard Debates for 19 Nov 1999 (pt 5)

Mr. Davies rose--

Mrs. Browning: I have given way once. I shall give way later if the hon. Gentleman wants to come in.

I want the Secretary of State to be fully aware of exactly what burden he has put on business. For example, the Centre for Policy Studies has calculated the impact on business of certain policies--the annual costs, not one-offs. The working time directive, which was described by Lord Haskins as a dog's dinner, will cost £2.3 billion a year. The rise in the limit for compensation claims in unfair dismissal cases from £12,000 to £50,000 will cost business £2.1 billion. Overall, family friendly measures will cost £50.7 million. The compliance cost alone of the working families tax credit will be £100 million. The compliance cost of administering student loans will be £79 million. The compliance cost of the stakeholder pension scheme will be £5.3 million. If the Government want to introduce stakeholder pensions, I do not understand why, statutorily, they have to be dealt with through the payroll. The total is £4.6 billion a year. That is the cost that the Government have put on to business.

The Institute of Directors has calculated a similar shopping list of costs for Government policies. It is all very well for them to say that their policies are all about fairness and justice for the working population, but they seem to have no strategy other than a dogmatic belief that they should rush to implement not only policies that they outlined before the election, but measures such as the revocation of the social chapter opt-out. They are dogma driven, and only when these measures hit the statute book do they get down to the nitty-gritty of how the regulations have to be applied in the workplace. That is when they suddenly realise the damage that they have done.

It is risible for the Secretary of State to make a virtue of establishing yet another Cabinet-based task force--he can call it whatever he likes--to try to resolve a problem that the Government themselves have created. That problem could have been avoided with a little more forethought, project planning and understanding of how business was likely to be affected by their policies, but they were simply being opportunistic and sought to gain an advantage by telling the general public, "This is what we have done for you in the workplace." They now readily admit that they have to solve the problem, but, because their policies have been put on the statute book, that will be much harder to do.

For example, the Select Committee on Trade and Industry has described the unbusinesslike way in which the Government approach their responsibilities, in particular their responsibilities to small businesses. Its 13th report, of September this year, states:

"From the situation as we saw it a year ago, where there seemed to be something of a policy vacuum on SMEs, 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".

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We await the Secretary of State's response to the report. There is a lot of criticism of him and his Department, the way in which they manage their own affairs and the way in which they have treated small businesses, and I believe that there is more to come.

The Secretary of State mentioned parental leave and we have seen what the Government have in mind--it is a classic example. They have introduced parental leave and made a virtue of it, and I am quite sure that the Prime Minister will want to take advantage of it fairly soon. We are all rather relieved to think that there will be 13 weeks in the next five years when we shall not see him on the television--I shall not say in the House, because he is rarely here.

A parliamentary Labour party brief on paid parental leave in the name of one Dan Corry, DTI special adviser, has been published. Members of Parliament on both sides of the House have been receiving letters from a range of people and from organisations such as the National Society for the Prevention of Cruelty to Children pointing out that the Government's legislation on parental leave is unfair, although fairness was a word that the Secretary of State used readily when he began his speech. The policy was not of our making, so before any Labour Member leaps up to say, "So what are you going to do about it?", let me say right now that it is not our job to sort the problem out--I had that discussion a fortnight ago.

Here is how the Government see the solution. They advise their MPs to write to their constituents in respect of parental leave and say:

"As employers come to value these benefits they will want to go beyond the statutory visions, possibly including some paid parental leave."

The Government have introduced parental leave in order to be popular, but they expect employers to bear not only the administrative cost. If the opportunity is to be made fair for all--in other words, if the proposal is to apply to people who are perhaps not well off enough to take unpaid parental leave--the burden will be put on employers who are clearly expected to pick up the tab yet again for another Government cock-up.

Mr. Dismore: How does the hon. Lady square her criticism of the Government--for saying that the arrangements should be effectively voluntary for employers--with her earlier comment that parental leave and similar issues should be for employers to address? Has she read the evidence given to the Social Security Committee by the Confederation of British Industry and the Institute of Directors, both of which thought that the matter should be for employers to deal with voluntarily? How does she square the two arguments?

Mrs. Browning: Had the Government not made the provision statutory, all aspects of parental leave--how much, when and how it should be funded--would have been a matter for negotiation between employer and employee. The merit of our proposals is that we would not have statutorily compelled employers to provide parental leave.

The Government have produced a parental leave policy for the few, not the many. The few who will be able to take parental leave are professional people--such as

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barristers--and others who are much more able to take advantage of the policy than, for example, people on low wages and single parents. Labour Members talk about fairness and justice, but they have enshrined inequality in one of the core policies that they parade as family friendly. The Government's parental leave policy is friendly only to well-off families. They have created a problem, and they will now have to sort it out.

Mr. Geraint Davies: Will the hon. Lady confirm that--should Conservative Members ever again be elected to power--they would abolish the provisions on parental leave? If not, specifically how would they change them?

Mrs. Browning: I have a feeling--but I am not quite sure--that the hon. Gentleman was in the Chamber a few weeks ago for our debate on family friendly policies. As he may not have been here, I shall repeat what I said several times to his colleagues. Conservative Members will examine all the policies introduced by the current Government in the light of how we may want to modify, maintain or abolish them. Those policy decisions will be made in good time for the next general election.

The Secretary of State for Social Security (Mr. Alistair Darling): Don't know.

Mrs. Browning: No. The right hon. Gentleman should be familiar with the procedures by which the shadow Cabinet produces policies, as the Government followed the same procedures when they were in opposition. In "The Common Sense Revolution", we announced various policies that have been agreed. We are currently working on many more policies.

I am dealing with Conservative party policy development--which clearly seems to interest Labour Members. For the benefit of the Secretary of State for Trade and Industry, I should say that my right hon. Friend the shadow Chancellor is currently taking evidence from a wide range of interested parties on Bank of England independence. When the evidence has been considered, we shall announce our policy in the customary way.

If we oppose a policy in Committee, that is a statement of our position. However, at the next general election, we shall have to consider our priorities, and which policies we may or may not abolish.

Mr. Geraint Davies: Will the hon. Lady give way?

Mrs. Browning: No; I have been more than generous. However, it might be helpful to the hon. Gentleman if I put on the letter board for him a copy of "The Common Sense Revolution", in which he will find many common-sense ideas that could well be applied by the Government. It might even get them out of a bit of a jam.

The Government are floundering on business and regulation issues. When one sees wording such as that which I quoted from the Select Committee on Trade and Industry report--which was an absolute indictment of how the Government and the Department deal with business--one knows that the Government are in need of help from all quarters. The Opposition will be as helpful to Ministers as we possibly can be.

The situation is not really getting any better, nor is it likely to get any better. Mr. Maurice Fitzpatrick, chief economist at Chantrey Vellacott, said that the new

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business regulation index, covering the year to next May, shows that the main index has risen from just over 117 last year to 120 this year. That compares with the base of 100 set for the year to May 1997, which represents the Government's inheritance from the previous Government.

Mr. Fitzpatrick stated:

"The index continued its remorseless upward trend, with additional costs to businesses arising for example from recent changes in employment tribunal legislation as well as the cost to businesses dealing with corporation tax self-assessment."

Mr. Fitzpatrick also warned of

"further legislation in the pipeline, not yet reflected in the index. This includes the EU recycling directive and the EU Workers Consultation directive."

Therefore, when the Secretary of State for Trade and Industry prays in aid the work of the Cabinet Committee with which he will be involved, I hope that he not only bears in mind the damage that he and his colleagues have done in the past two years, but seeks to intervene and prevent even more damage, which is on the horizon.

The Secretary of State said in his speech that Conservative Members had no interest in issues surrounding box-ticking and excessive paperwork. I am grateful to him for making that statement because nothing could be further from the truth, and it gives me an ideal opportunity to describe an exercise that he might like to set as a top priority for the new Cabinet Committee on red tape. The exercise would not require much effort to achieve results, as it would deal with the tax deduction scheme that the Government have introduced for the construction industry.

Many hon. Members have received letters from constituents involved in the construction industry, describing how they personally have to visit the head office of the company with which they are contracting to produce their certificates. They cannot fax certificates. Last week--in just one week--one constituent had to visit Edinburgh, Brighton and Worcester.

I have a letter from a small company--Bortec, of Brentwood in Essex--which I know will be of great interest to the Secretary of State, and I hope that he will go post haste from the Chamber to do something about the matters described in the letter. I shall quote the letter at length, as it describes precisely the type of case that the Minister for the Cabinet Office would have heard about if she had had round the dining table in Lancaster house people from small businesses, rather than from FTSE 100 companies--and I ask for the House's patience.

Bortec's managing director writes:

"The new system has been in force from the beginning of August this year and has already become a total farce.

We were issued with the requisite tax certificate and this has to be presented to each contractor in person by the individual shown on the plastic card. This can become totally uneconomic as my company works all over the UK. I might do a job in Aberdeen for a price of £1000. As I do not carry out the work myself I am required to then travel to Aberdeen at additional cost to show the certificate to the contractor in order to get paid."

Despite the Minister's words about e-commerce, businesses are not allowed to fax or e-mail anything. Certificates must be shown in person. The letter continues:

"In addition to the certificate we were issued with some voucher books. It appears that the system for dealing with these vouchers is not clear. We thought that we had to separate the pages and send

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them off to the various places, ie one to the customer (contractor) one to the Tax Office and keep one ourselves. Apparently this is not so as the whole set has to be sent to the contractor.

Having made the error and now having exhausted my supply of vouchers, I telephoned my Tax Office to request further supplies to be told--'Sorry we have run out. We were only supplied 10 sets per sub contractor'. The answer to the next question of OK when will we get some more was 'Well not only have we run out of voucher sets, but we have run out of the special paper needed to print new sets'."

I know that the Secretary of State will want to follow up that point and examine it in great detail. What is the reason for special paper? Perhaps he will tell us, as the practice seems to demonstrate bureaucracy gone mad. The letter continues:

"We will have to wait for them to make the paper. The vouchers then have to be printed and customised and sent to the sub contractor. It could take months."

I shall make a copy of the letter available to the Secretary of State. It continues for several more paragraphs, but ends:

"I presume this is another ploy by this incompetent set of Ministers to try to raise more money by imposing fines arbitrarily".

Before the Secretary of State challenges Conservative Members for having no interest in form-filling and what he regards as inconsequential regulations, he should get his own house in order. Before he starts to parry with Conservative Members, he should deal with the bureaucratic nonsenses that the Government have created and are now obliged to deal with. He would do well to begin with the type of nonsenses that I have described, rather than having grand dinners talking to large companies. Only if he does that will he even begin to address the problems that the Government have caused the business sector.

The implementation of regulation has been a great weakness for the Government. The working time directive required a 98-page book simply to explain to business how it should be implemented. The national minimum wage required a 112-page book. How many businesses have the time even to read the books, never mind to know whether they are complying with the legislation? The penalties are punitive if businesses have not read, for example, page 94.

I raised this issue at the beginning of my speech, because it is clear that there is a busy schedule of new legislation in the Queen's Speech for the Department of Trade and Industry. If the Secretary of State wants his Department to regain any shred of credibility, it is essential that any new legislation introduced this Session must pass the test that he has spelled out today. We shall examine with great care any Bills that pass through Committees this Session to ensure that they deal with the detail and any potential problems before they are put on to the statute book. To date, the Government's track record on that has been extremely poor.

The Secretary of State mentioned the Electronic Communications Bill. It has come round for the second time, because it was announced in the previous Queen's Speech. I am pleased that the Secretary of State was able to tell us that the Bill has been printed today, because we would like to give it a pretty rapid passage through the House provided that it does what business wants, is not prescriptive and genuinely has a light touch. The Select Committee on Trade and Industry considered the

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Government's approach to e-commerce in its seventh report and, on 12 May, it described their approach as being of

"glacial speed in this rapidly changing industry".

All too late, just before the end of the previous Session, the Government suddenly woke up to the fact that, despite the fact that they had announced an e-commerce Bill, they had not done anything about it. We want a light touch and, as the Secretary of State knows, most of business believes that we need rapid legislation to firm up the law on electronic signatures. Business clearly needs that, so that it can use e-commerce and electronic business-to-business systems more effectively.