We now come to the second debate on the Opposition motions. I must inform the House that Mr. Speaker has selected the amendment in the name of the Prime Minister.
I beg to move,
That this House notes with concern that since 1997 the competitiveness of the UK has fallen, that growth in productivity has slowed, that companies’ business investment and research and development spending as a proportion of GDP have declined, that the UK balance of trade is in record deficit, and that businesses are suffering under an increasing burden of regulation which especially harms smaller firms; is concerned at Government plans to close thousands of post offices, its recent clawback of the science budget to pay for the Rover enquiry, its failure to meet its energy policy goals, its inconsistent system of business support, the questionable focus and performance of Regional Development Agencies, and the failure of UK Trade and Investment effectively to promote British business abroad; and therefore calls for an improvement in the Department of Trade and Industry’s leadership and enterprise culture to make it a stronger and more effective voice for business and for the United Kingdom.
We have initiated this debate for a number of reasons. One of them is that too infrequently does the House ever look at the overall picture of an entire Department. Over the past few months we have debated energy, the Post Office, and Select Committee reports, but we have never stopped to take an overall look at the functions and effectiveness of the entire Department. It is the purpose of today’s debate to try to do that.
The attempt to take an overall look comes at a timely moment. With the inevitable series of changes that will follow the change of Prime Minister, there is likely to be upheaval in a number of Departments, reform, change and reallocation of responsibilities—and the newspapers are full of rumours that the Department of Trade and Industry is under the spotlight. Many think that the Department is even fighting for its very existence, and that it may not be long for this world. It is important to take a step back and assess and evaluate the purpose and effectiveness of the Department.
The DTI does not enjoy a high reputation among many people who have to deal with it. It is easy to deride. Some describe it as the Department of tinkering and interference, or the Department of timidity and inaction. Behind that lies a difficult paradox, with which we all have to wrestle. In a world of globalisation where free markets are left to be free as much as possible, the interference from a Department should be minimal.
Over the years there have been extreme contrasts of approach, even among Conservatives. [Interruption.] The right hon. Member for Coventry, North-East (Mr. Ainsworth) has taken the very words out of my mouth: Lord Heseltine, when he was President of the Board of Trade, said that he would intervene before breakfast, before lunch and before dinner. In contrast, the late Lord Ridley, as Nicholas Ridley, when he was Secretary of State for Trade and Industry said—I have to amend the quotation slightly in order to conform to the forms of the House—“What’s the DTI for? I’ve got damn all to do and thousands of staff to help me do it.” He did not use the word damn.
I confess that I do not totally share the late Lord Ridley’s utterly uncompromising laissez-faire approach. I am an unapologetic free market liberal, but that does not mean that there is not an important role for a Department of State that is a genuine champion of Britain’s interests and a champion of an enterprise culture in the country. There are real questions in the minds of many about whether the DTI is doing much good, or enough good; hence the rumours that the current Chancellor, the future Prime Minister, is likely to restructure it.
We should examine the Department’s record, and one of the best ways of doing that is to turn to the Department’s annual report. I was disappointed when I opened the report, which is a pretty shoddy document full of misprints. Indeed, I am surprised that the Secretary of State ever put his name to it. I am a complete apostrophe fascist, and my copy of the report is covered in red ink. I hope that the next report will be of a much higher standard. In addition to many thousands of misprints, in some cases paragraphs just come to an end. [Interruption.] The Minister for Science and Innovation has said that that is why they are paragraphs, but they should not end in the middle of the paragraph. Section 1.11 of the report reads:
“Delivery of the Business Plan is monitored quarterly as part of the Department’s approach”—
that apostrophe is wrong—
“to performance management and within the framework of its Public Service Agreement with”.
And there it ends.
Write your own happy ending.
The Department may well be consulting on that.
The DTI lists as its objectives a few clear targets: it should support successful business, promote science and innovation, ensure fair markets and secure sustainable and affordable energy. The departmental budget is about £6.8 billion, and about half of it is spent on science, which I shall come to in a minute. The Minister for Science and Innovation is nodding his head, and he will be pleased to hear that I think that that is one area where the money is well spent, although unfortunately I cannot say the same for everything else.
The DTI is also responsible for employment rights, energy policy, postal services, overseas trade and inward investment, competition policy, insolvency, business support, consumer issues, company law, the protection of intellectual property, and weights and measures. We believe that there must be a Department of State with a Cabinet Minister who sits around the table and defends the wealth-creating sector of the United Kingdom. If there is no voice for the wealth creators, the spenders will dominate every aspect of Government. The purpose of the debate that we have initiated today is to say that we think that that voice has been too weak, and appears to be imperilled by many of the rumours circulating at the moment.
When my hon. Friend looks at the annual report and the role of DTI Ministers, has he assessed how much of their time is spent promoting British industry and British business and how much of their time is spent imposing ever more regulation and burden on small and medium-sized enterprises, which are the backbone of the economy?
I regret the fact that at the mere mention of imposing regulation there are groans from Government Members, which shows that they do not understand the effect of so many regulations. Regulations are especially punishing for small business, which, unlike larger business, feels that it has weak representation in getting its voice heard in the corridors of Government. I will address promotion in some detail in a moment, so I hope that my hon. Friend will be patient.
Will the hon. Gentleman provide three examples of regulations that if there were a Conservative Government—which I think unlikely—he would abolish?
I will cover that in a minute.
Let us examine the regard in which the Department is held at the moment. The Secretary of State admits that the DTI could do better, and recognises that it has underperformed. He said as much at the British Chambers of Commerce conference:
“The question is, could the DTI be improved, should changes be made? The answer is yes”.
I think that they appreciated his candour. They certainly agreed with him at the time. All the groups to which anyone speaks believe that the leadership and effectiveness of the Department of Trade and Industry are weak where they should be strong.
The Engineering Employers Federation argued that the structure is not sustainable because overlap with the Treasury often occurs in promoting economic growth. Martin Broughton, president of the CBI, said that the DTI had not been dealt with as a serious Department by the Government.
A study that the London Chamber of Commerce published today shows that nine out of 10 company directors in London support the creation of a dedicated Department for business, headed by a Cabinet Minister, to replace the DTI. The Secretary of State might say that we have already got that, but dissatisfaction with the Department’s current effectiveness lies behind the numbers in the survey. More than two fifths of directors said that the DTI was not fit for purpose in its current guise.
I shall give way to a former Minister.
Will the hon. Gentleman guarantee to provide a Department in that form?
I would love to be in a position to guarantee a Department in that form. We believe that there is a good case for a strong Department, perhaps with enhanced powers, to be a stronger voice for business, commerce and British interests at home and abroad. It is currently perceived as too weak.
The CBI’s view is that any changes to the structure of Government must strengthen the economic weight attached to Cabinet decisions. It believes that it is vital for a strong champion of business, which understands the realities of today’s global economy, to be at the heart of Government. It said that it did not want the competitiveness agenda to be undermined in critical policy areas, including employment and energy.
Most organisations that have to deal with the DTI believe that it is not doing as much as it could, although I confess that I would not go as far as Mr. Chris Rea, the chairman of Rotherham-based AES Engineering, who said that the DTI is a “complete and utter joke”. However, I agree with him that it needs to undergo a complete cultural transformation. That is what, essentially, I am trying to convey to the Secretary of State.
Let us take a quick canter through the Department’s responsibilities and ascertain whether it has performed as well as it should. We have debated post offices several times. In 2001, the Government promised to keep them open except in unavoidable circumstances. Those unavoidable circumstances appear to be arising thick and fast every day. The Government have presided over the largest annual closure of sub-post offices. In total, more than 4,000 have closed since the Government came to office. We know from a recent statement that they intend to close a minimum of a further 2,500 in the next two years. That amounts to a closure rate three times that under the Conservative Government.
The Government hide behind the access criteria, but even their analysis of those criteria in past years has shown that they can shut two thirds of all post offices and still meet the criteria, because 99 per cent. of people in rural areas live within 3 miles of a post office.
The bigger subject, which we have often considered in the House, is energy. We have had no end of reviews. In 10 years of a Labour Government, energy has been high on the agenda for five years. The publication of a White Paper—the third such White Paper since Labour came to office—was delayed twice. It was the product of the Government’s third major energy review, under their eighth Energy Minister. Yet no definite decisions have been made about the future of our electricity generation. Further consultations are under way, and there are questionable elements in the White Paper published just before the Whitsun recess—about the reform of the renewables obligation, for example—which will delay things further.
On the subject of the uncertainty of policy, will the hon. Gentleman take the opportunity to inform the House of the Conservative party’s policy on nuclear power? Subject to one or two legal cases, we know the Government’s view, and we know the Liberal Democrat view, which is clearly against, because we believe that nuclear power will crowd out carbon capture, renewables and energy savings—so what is the hon. Gentleman’s view?
The idea that having a choice in how power is generated and having a fair regime for nuclear energy will crowd out renewable alternatives is, in my view, absurd. In that, we agree wholeheartedly with the Government, and share the same view. The only thing that we have not done that the Liberal Democrats have done is to rule out nuclear power altogether—a simple posture that is unrealistic in its assumptions about how electricity will be generated in future. I will tell the hon. Gentleman exactly what Conservative party policy is. We want a cap and trade regime for carbon, in which permits are allocated as far as possible by auction and far less by historic use. We want a properly understood and priced regime—the Government have been slow on this—for handling waste. We would reform the climate change levy, which attacks nuclear energy even though it is a non-carbon-emitting process, and we would have a fair planning regime in order to enhance the regime under which a future nuclear power station can be built by having site and type approval. Does that suffice?
Can my hon. Friend clarify why the Liberal Democrats are against nuclear power on land, but in favour of it when it is in the back of a nuclear-powered submarine?
I confess that even at my most imaginative I am unable to disentangle the thought processes of the Liberal Democrats, but I have no doubt that their spokeswoman will be able to do so when she rises to her feet and explains all to a baffled and mystified House!
Before my hon. Friend moves on, I would be grateful to hear whether he believes it possible—or, for that matter, likely—for us to meet our carbon reduction targets without nuclear power.
That would depend on a number of factors. One is the early and effective advance of carbon capture technology, which I am coming on to in a moment, and another is the scale and scope of the contribution that the renewables sector can make. There is no doubt that in the absence of carbon capture, it will be very difficult to make the carbon emissions reductions that we all want to see. The Government have to admit—this is partly another charge to be levelled against the DTI in some respects—that carbon emissions are rising and that their plans are probably insufficient to meet their emissions targets. In March the Government signed up to an ambitious EU target to get 20 per cent. of all energy from renewables by 2020, but the measures outlined in the energy White Paper are nowhere near sufficient to meet it.
Another issue is carbon capture. I stood here a mere two weeks ago, and in an immediate response to the White Paper I said that buried in the statement was bad news for carbon capture. I was scoffed at by the Secretary of State for Trade and Industry, and by the Secretary of State for Environment, Food and Rural Affairs, who sat there grinning from ear to ear, saying that I did not know what I was talking about. I did, and I do. A mere hour later, BP announced that it was pulling out of carbon capture in Peterhead, which was the most developed and advanced experiment in the entire country. It was a pioneering project destroyed by the Government’s refusal to include it in the renewables obligation. Once again, the competition has been deferred, so buried in that news was very bad news for carbon capture. I hope that the Secretary of State will have the good grace to admit it.
I agree with the hon. Gentleman that he was very quick in bringing this matter before the House after the statement was made. In fact, I too raised it during the statement, and no indication was given of any difficulty with it. Given that the Government have announced that there is to be a competition, and given that the current partners in the Peterhead scheme have already invested about £50 million in the pre-engineering phase, most of which appears to have been lost, what confidence can other projects have in this competition, which the Government are to announce some time later this year?
As I understand it, the Government have announced a competition that will either open or close in November. By whatever means they hold the competition, they cannot escape from the accusation that research and experimentation in carbon capture has been deferred, probably by as much as two or three years, compared with the point that BP had reached. That is a disaster in terms of wanting clean coal to make an effective contribution to our power generation mix. The Government’s track record on carbon capture is therefore pretty grim.
The Government’s strategy for nuclear waste is also unfortunate. Anyone who is to invest in a nuclear power station will need to know the planning regime and the costs of building and dismantling it. Those are now pretty well within the scope of a potential investor. But what they do not have—and they can only get it from the Government—is a clear understanding of the costs that they will face for handling, looking after or treating nuclear waste. Until the Government say in clear terms how new nuclear waste will be handled, and how the Government and the investor will interact, no company is likely to invest. If ever there were urgency, it is to clarify that. The Government have said that urgent decisions need to be taken about our future power stations, but no such decisions can readily be taken until they are clear about the handling of nuclear waste.
The House of Lords Science and Technology Committee described the Government’s proposals for dealing with radioactive waste as “incoherent and opaque”. Its report details serious concerns over the institutional framework for dealing with it. Will the Secretary of State tell us exactly what the regime will be for nuclear waste?
Does the hon. Gentleman believe, however, that once that regime becomes clear, it must be the investors who pay the price for that waste, and not the public sector picking up the subsidy through some back-door minimisation or transfer of risk to the state?
Yes. Our view and the Government’s is that the nuclear sector should have no subsidies. We must accept, however, that government and the planet will outlast the life of a nuclear power station and probably its commercial capacity to handle waste. Thirty, 40 or 50 years from now, the ultimate stewardship or treatment of that waste might have to be handed over. That is exactly the kind of detail that is necessary for anyone to decide to invest; without it, they will not do so.
The biggest area of DTI activity in which it scores well is science. The budget for science is about £3.5 billion, and is largely administered by the research councils. Broadly, the Government have done well on that. They have doubled the budget in the past 10 years. My criticism, however, is that science projects need continuity and certainty, which does not get bounced from one year to the next. I am critical of the Government’s decision to claw back £98 million from the science budget to pay for things that they knew had to be paid for, such as the Rover inquiry. In future, I hope that the Government will appreciate that continuity of science budgets is crucial.
Earlier, mention was made on the Conservative Benches of regulation. We never hear much from the Government about that. They deny that regulation does any harm. The small business sector in particular, however, finds regulation increasingly costly and burdensome—[Interruption.] Does the hon. Member for Wolverhampton, South-West (Rob Marris) have any experience in business? Perhaps he would like to tell me now. He does not.
The fact is that anyone who wants to set up a business must face no end of instructions. If one reads the Government’s “short guide” to setting up a business, one finds that it is about 50 pages long. That is intimidating for someone who simply wants to register as a sole proprietor or as a limited company with very few employees and get on, be self-reliant and earn a living for themselves and others.
The hon. Gentleman asked whether I have any experience in business. The short answer is yes. I spent most of my working life in the private sector. I helped to run a small business in retail—ladies’ shoes, as it happens—and I was a partner in a law firm, which is private sector as well. That is where the majority of my career was spent. I agree that small business often finds it harder to cope with regulation than larger business, and there are exceptions from certain regulations to take account of that. However, on the question of regulation, what three regulations, by way of example, would his party abolish?
I shall pick one straight away. I would not force all businesses to put no-smoking signs in every public room throughout the country for ever and permanently. I hope that the hon. Gentleman will persuade his party to vote against such ridiculous and numerous regulations.
Does my hon. Friend agree that whether it is the ladies’ shoe sector or the legal sector, the single thing that helps small businesses most is to operate in a low-tax light-regulation environment? The biggest failure of the DTI under this Government is that it fails at any time to make the case for that competitive environment, which can be achieved only by sharing the proceeds of growth between increases in public spending and reductions in taxation.
I agree. It has been calculated that more than 30,000 new regulations have been introduced by this Government—more than 14 every day. The average British company has to spend over £13,000 a year implementing new legislation. On the back of that, we have dropped from fourth to 10th in the international competitiveness league. Let me point out the crucial deceit in the last Government. The Secretary of State for Trade and Industry might not have seen it coming, but he should have were he genuinely defending British business interests. The Chancellor raised corporation tax on small business. Where was the voice of the DTI in objecting to that?
As a Minister, I struggled to ensure that in the drive for regulation, which largely came from Europe—I know that the hon. Gentleman has quite an enlightened attitude to Europe, having listened to him in the past—the potential for burden was minimised. Colleagues in the Government work equally hard to do that. Does he accept that to minimise the impact of regulation from Europe on business we have to be part of an effective lobbying group? Being effective in lobbying in the European Parliament is an important part of that. Surely his party’s isolation within the European Parliament will not help in his avowed attitude to such regulation.
Based on the first half of the right hon. Lady’s comments, I am happy to act as a reference for her return to government as a Minister in the impending reshuffle. As for the second half, it is not about lobbying in the EU. An EU directive is an instruction to member states to make their domestic law conform to certain stipulations. Most of the gold-plating—indeed, all the actual gold-plating—is home-grown. It is the culture of the United Kingdom and the way in which we write our law to adhere to directives that causes so much of the problem. I applaud her attitude when a Minister of trying to keep that to a minimum, but the culture of Departments and the way in which we write our law tends to make those directives go far further than they need ever do. That is what I would like to see changed.
Does my hon. Friend agree that Labour Members are being disingenuous? They will remember that our party made 63 deregulatory proposals as part of our manifesto for the last general election. We brought them to the House of Commons and debated them. We sent them to Ministers who kept on losing them. We are still waiting for them to implement them, and many of them would have made the work of business easier. I can promise my hon. Friend that the forthcoming economic policy competitiveness report will have an even longer list than the 63 because the Government have made so many more regulations in the past year.
I am grateful to my right hon. Friend. We all look forward to his report on competitiveness, which I am sure will make an important contribution to our policy making.
Let me turn to the issue of business support. A year ago, the Government announced their intention to reduce 3,000 business support schemes to a mere 100. Let us stop and think about that for a moment. The very fact that the Government imagine that a quantum leap can be made from 3,000 to 100 is a vivid illustration of the absurdity of the present regime. There are 3,000 schemes, and most people simply do not understand how they work. The Government are spending perhaps £12 billion on these schemes, and can provide no measurable evidence of the effect of that expenditure.
Only 15 per cent. of small businesses have had any contact with the schemes. Instead of a clear structure for support, there are roughly 3,000 schemes administered by around 2,000 public bodies. That is absurd. The system needs vigorous and urgent rationalisation, a proper assessment of its effectiveness, and an explanation from the Secretary of State of how he expects it to work in the future. The chief executive of the Small Business Service has described it as
“an incredibly complex system… an inaccessible business support system for customers that is inefficient and ineffective for Government”.
That takes us to a issue on which deep thought is needed: the issue of regional development agencies, on which the Government spend the second largest amount in the DTI budget. Each of the nine RDAs has a budget of anything between approximately £250 million and £450 million, and for a long time there has been no convincing explanation or analysis from the Government of what good they actually do.
As we all know, over the years Governments of different colours have wrestled with the best model for enhancing the economic development of our regions, and with the task of releasing pockets of poverty from economic inactivity. Where previously we had the development corporation model, involving some fantastically effective and evident flagship schemes in derelict docklands, we now have a lot of jam spread very thinly throughout the country. It is not clear whether that is to do with regional policy or with economic development. We do not know, for instance, whether the RDAs’ remit includes a demand that they should invigorate an enterprise culture in areas dominated by the public sector, such as the north-east.
Does my hon. Friend agree that as a consequence of the devolution of technical expertise from the DTI down to the regions through the regional development agencies, the country has lost what was for a long time one of the DTI’s strongest attributes—individual civil servants with sector expertise? An exporter seeking to extend his business to overseas markets can no longer turn to anyone in the DTI with that expertise.
I largely agree with my hon. Friend. Serious, preferably cross-party, debate could be had on the issue. It is no good the hon. Member for Burnley (Kitty Ussher) shaking her head. She is welcome to intervene and say why my hon. Friend is wrong, or to speak later, but this is exactly the complaint that we hear wherever we go in the country.
Talking of issues that might well be subject to party political agreement, when the Trade and Industry Committee has travelled abroad one of the main criticisms of RDAs that we have heard relates to the competition between them. Most people in India, China and Brazil, for example, think that England—or the United Kingdom, for that matter—is a small country stuck in the middle of the Atlantic. They do not know the difference between the west midlands and Tyneside, and they find that competition between the RDAs that turn up for the trade fairs trying to sell the wares of one particular region gets in the way of money coming to the UK.
I am going to come on to that in more detail in a minute, but essentially I agree with my hon. Friend. Regional development agencies opening offices abroad has become an absurdity. The Trade and Industry Committee has today published a report criticising the proliferation of those offices abroad. What is the point of having nine regional development agencies possibly competing with each other on the streets of Shanghai for business? That business needs to come to Britain if it possibly can, regardless of which region it goes to. It has become nutty. The Secretary of State needs to address that problem urgently.
I cannot see the logic of having RDA offices abroad to the point where we are simply exporting competition among ourselves into foreign markets that we would like to win for Britain. That means that our efforts abroad have become incoherent. I will come on to that, but it illustrates further the irrational and fragmented structure and activities of RDAs.
With some RDAs, I talk to people locally and they say, “We like them.” For example, they may have promoted the region effectively with advertising and branding, as One NorthEast has done. However, if one scratches a bit further, one discovers deep frustration among the business community about a wealth of resource ineffectively spent. It tends to be a spoonful of jam here and a spoonful of jam there, with a little joint venture in skills, a little joint venture in a building project and a little joint venture in some training project. That means that the RDA builds up an entire client base in its region and that, whenever there is a threat to abolish it, there will be people in the region who say, “That is half my project down the spout. The RDA should stay.”
The question we should ask is not whether RDAs should have all those partnerships with people that somehow justify their existence, at least cosmetically, but whether the RDAs are having a genuine effect and changing the culture of enterprise and the economic prospects of the region.
Does my hon. Friend agree that, although it is true, as my hon. Friend the Member for Bromsgrove (Miss Kirkbride) said, that regional development agencies are too small to compete internationally, in many ways they are too big to deal effectively with the diverse problems of a particular region? If we take the west midlands, it is difficult for a regional development agency to come up with a strategy that is equally applicable for Warwickshire and for Wolverhampton, which the hon. Member for Wolverhampton, South-West (Rob Marris) represents. That is part of the problem that RDAs face.
My hon. Friend has a good point. It means that the focus of the RDAs’ activity gets averaged out. Do they think that they should provide the bricks and mortar, restore derelict areas and clean up sites so that they are fit for further occupation? Do they think that they should be champions of infrastructure by asking that the A1, for example, be widened as it heads north past Newcastle? Should they be the ones that encourage enterprise and arrange for school leavers aged 16 or 17 to acquire the skills to get jobs that can give real added value? The RDAs do not really know what they are about. They are a bit of this and a bit of that. The danger is that in the end they are a lot of nothing. Therefore, I encourage a rigorous debate on the future of RDAs, with a clear picture, in policy and in purpose, of what they are there to do.
Let me move on to the allied issue of trade promotion. The biggest gripe one regularly hears is that UK Trade and Investment is an ineffective body for the promotion of British trade overseas. It is thought that inward investment increasingly means buying British companies, rather than bringing new investment into the UK. It is thought that UKTI’s efforts abroad are utterly fragmented and never cohere. It has concentrated on China, India and Brazil but its structure of offices does not seem to have much rhyme or reason. Although I accept that under Andrew Cahn much work has been done to sharpen up its act, under this Government we have completely lost the brand image of Britain abroad that we used to have. That is down to there being a multiplicity of offices, and to UKTI having lost its vim and vigour. That is destructive to the reputation and interests of British industry in other countries. I am also critical of the fact that DTI Ministers have made inadequate numbers of visits abroad to promote British interests.
It is only fair to record that it is the view of the Trade and Industry Committee that UKTI staff working at overseas posts are of exceptionally high calibre, but in a report published this morning we express reservations. There are morale and management problems at the centre of UKTI, and the Government must address them.
My hon. Friend is the Chairman of the Select Committee and I am sure that Ministers will read his report fully. From what I have heard about it today, it sounds as if it matches the conclusions that I and my Front-Bench team have reached over the past few months about UKTI and RDAs.
I wish to make a plea to the Secretary of State and his Ministers—or, perhaps, to his and their successors. Personal visits abroad matter, but over the past 10 years DTI Ministers have paid very few visits to much of the middle east. Some of our closest allies have received no trade visits at all. I understand that the Secretary of State will soon visit the United Arab Emirates, which is to be welcomed. However, there is at present a lot of money in the middle east and despite the Iraq war there is deep affection for Britain. People in the middle east understand that Britain is a good place to put their hundreds of millions—or even billions. We have neglected countries such as Oman and Kuwait. The last trade Minister to go to Yemen was Anthony Nelson in 1996, and he—[Interruption.] Yes, he joined the Labour party—but at least he was right to go to Yemen.
It is a serious point. It causes deep insult to people who instinctively have affection for us that our governmental apparatus appears to neglect them and that we send only Defence Ministers to their countries. That must be remedied. I can honestly say that I believe that I personally, and at my own expense, have been to more such countries than have the Secretary of State and his entire team over the past 10 years. I urge the Secretary of State to appreciate that this is a severe deficiency in the practices of his Department.
The Rover inquiry has cost a lot of money. [Interruption.] Yes, millions of pounds. However, we must remember that the problems that we faced in respect of Rover were made far worse by the ill-judged interference and intervention of one of the current Secretary of State’s predecessors in that post, the right hon. Member for North Tyneside (Mr. Byers). Two offers were on the table for Rover, and he took the one that he thought would save him votes. That accelerated the demise of the company. It cost people their pensions and pay-outs, and eventually their jobs. That is a stain on the reputation of the right hon. Gentleman.
The Government have also delayed the publication of legislation on construction for more than a year. The amount of manufacturing jobs is shrinking. Business investment is at a record low. Research and development spending has fallen by 9 per cent. as a proportion of GDP since 1997. Many of the figures that matter most in making up our competitive position are pointing in the wrong direction.
Within three weeks, we will know the fate of the DTI. My party is against its abolition, as that would be reckless and there must be a voice for business at the Cabinet table. On balance, we would favour the Department being enhanced. However, it is essential above all, regardless of the structure of the Department, that its culture is changed so that there is a stronger voice for enterprise and business in the UK. The DTI—or whatever the Department is called—must be what it has not been over the past few years: a voice for business around the Cabinet table, and a voice for Britain in the world.
I beg to move, To leave out from “House” to the end of the Question, and to add instead thereof:
‘acknowledges the outstanding performance of the economy under this Government with the longest unbroken economic expansion on record, in contrast to the boom and bust of the previous Government, with inflation and interest rates both on average half of the previous 18 years and over 29 million people in work for the first time; notes that the UK is recognised as one of the best places in the world to do business; supports the Government’s approach to better regulation and a 25 per cent. reduction in administrative burdens by 2010; praises the balanced approach to protecting working families through measures such as the national minimum wage and flexible working, while achieving the highest level of employment; commends the Government’s unprecedented commitment to a national post office network with clear access criteria and the financial support to underpin it; applauds the more than doubling in real terms of science funding after decades of under-investment; welcomes the Government’s leadership in tackling the challenges of climate change and energy security; endorses the commitment to reduce the number of business support schemes across Government to under 100 by 2010 after the Department of Trade and Industry’s successful simplification of its own programmes to under 10; recognises the increasing contribution of regional development agencies to regional prosperity and jobs; approves the new strategy of UK Trade and Investment which has received widespread business support; and calls on the Government to build on its achievements to secure the country’s growing economic prosperity.’.
I have to congratulate the hon. Member for Rutland and Melton (Alan Duncan), who spoke for nearly three quarters of an hour and said very little, although he said it very well. We are no further forward in knowing what the Conservative party’s policies are, except on one matter. He now tells us that, having stood on a Tory platform of abolishing the Department of Trade and Industry, it would be completely reckless to do so. I am sure that all those who follow the development of Conservative party policy—be it on grammar schools or the DTI—will follow this one with great interest. I presume that the grammar school compromise is that it should not be abolished but enhanced. We will have to wait and see what the Tory definition of “enhancement” is.
The House will understand that, for obvious reasons, I do not propose to say anything further about the DTI itself, except for one thing. During our exchanges across the Floor of the House, it is important that we record the fact that within the DTI, as within the rest of Whitehall, there are many dedicated and effective men and women who have served this Government—many have also served previous Governments—in an exemplary manner. Much that they do will continue to be necessary, however Whitehall is organised in future. However, it is important to record that many people have contributed greatly to policy development and, therefore, to the development of the economy.
I shall deal with many of the points that the hon. Gentleman raised, but I want also to speak to the amendment, which sets out our record over the past 10 years. I am very happy to debate for the rest of our time today and on many future occasions the contrast between what has happened in the past 10 years and what happened in the previous 18. Indeed, as my starting point, I could do no better than quote the report of the very committee that was chaired by the right hon. Member for Wokingham (Mr. Redwood), which the hon. Member for Rutland and Melton said would be published shortly. I look forward to that. My understanding is that it was ready last December, so it must be really good if it has been kept back. It says, among other things, the following:
“The UK starts from a strong economic position. It is the fourth largest economy in the world and it has the highest employment rate in the G7 group of industrialised nations.”
That is quite a good tribute to the British economy and does not fit easily with the Conservatives’ motion.
Of course I give way to the right hon. Gentleman.
I am delighted that the Secretary of State has given way. He is of course quoting from advice into the committee, not from the committee’s report. Why have we lost 1 million manufacturing jobs in the last 10 years, and why should we believe that the next few years will be any better?
Whether or not it is advice into the committee, it is extraordinarily good advice and I commend the right hon. Gentleman on having given it. He well knows that there have been major structural changes in our economy over the last 10—indeed, 20—years, as I shall discuss shortly. Despite the fact that the services economy has grown rapidly—I was surprised that the hon. Member for Rutland and Melton did not say anything about that—we still have a very strong manufacturing sector, particularly in pharmaceuticals and aviation, for example; I shall return to that issue shortly. The key for us, especially in today’s global economy, is to make sure that the United Kingdom economy is a good place to do business—we have that—so that as these changes take place, we get the new jobs and industries and the new research and development that will ensure our future prosperity.
When any objective observer looks at our economy, they will see that we have had the longest period of sustained growth on record. We have low inflation—it is about half what it was between 1979 and 1997—interest rates are half what they were when the Conservatives were in power, and employment has reached a record high of more than 29 million. That is 2.5 million people more than in 1997, and contrasts with the position for much of the 18 years in which the Conservatives were in power. People forget about that, but it should be remembered that whole generations lost the opportunity to get on and to do the best that they could for their families, because, at a time of massive change, no help was given to them when they needed it most.
The right hon. Gentleman is at least making a fist of defending the previous Government—something that his colleagues singularly failed to do.
I am grateful for that praise from the Secretary of State. Can he explain why 5.4 million people of working age are on benefit and have no realistic chance of a job today? Is that not a shameful record? What he is talking about is creating jobs for migrants, who are doing good things for our economy, at the expense of those who are already here.
I do not agree with the right hon. Gentleman. Since 1997, through the new deal and other measures, this Government have done more than any other to help people who were previously workless to get back into work. Many of the measures that we introduced were opposed—indeed, the Conservatives and the Liberals opposed the very funding of that programme—but they have made a difference. The right hon. Gentleman is right in that there are still people who would be capable of work, with the right support, and we want to ensure that they get into work, especially at a time when the economy continues to grow. It is right both economically and socially that we do everything we can possibly do to achieve that.
The hon. Member for Rutland and Melton raised other issues about our performance, but productivity has increased. We are closing the gap on France and the US, and we have overtaken Germany. Real-terms business investment has grown by almost 50 per cent. in the past 10 years and there was a 5 per cent. increase in research and development in 2005 over the year before. There is also much research and development and innovation taking place in intangible assets—such as skills and software, which are not always captured in the statistics but are very important to the service economy—and that is making a real difference. Of course, research and development in pharmaceuticals and aerospace are bearing fruit. Our pharmaceutical industry is doing extremely well, because that industry sees Britain as a good place to do business. Indeed, some firms have relocated their activities in the UK because they see it as a good environment in which to develop.
We have a strong basis for the future, although there are of course other things that we need to do. The hon. Gentleman mentioned regulation. However, despite being invited on three occasions to name three regulations that he would repeal, he could come up with only one—the taking down of the no smoking notices. I am sure that for some firms putting up such notices might be a burden, but I would hazard a guess that even if they were all taken down again it would not make much difference to whether businesses felt free of regulation.
When one presses Conservatives—although perhaps we will not do so today—on what it is that they really do not like, it is not long before they start talking about, for example, the right to request reasonable time off to care for children. They have never been keen on the maternity and paternity leave provisions that we have introduced. Even today, they are uncomfortable when such matters are raised.
I agree that reducing the regulatory burden on industry is essential. The companies legislation, which the House debated at length last year, removed many of the regulatory requirements on companies. The unfair commercial practices directive from the EU, something that is not universally popular in this House, repeals 22 separate consumer regulations. I am clear that the DTI has to play its part in reducing the regulatory burden. We should ask ourselves whether we need to regulate, and if we do not, we should not. It is important that we change the culture. Under successive Governments, if something undesirable happens, there is a call to ensure that it does not happen again, so legislation is introduced, but sometimes the consequences are not fully thought through.
We need to ensure that we have the appropriate regulatory environment, but we also need to ensure that we have the right corporate tax environment. I am sorry that the hon. Gentleman could not acknowledge that we have reduced corporation tax. We reduced it to 30 per cent. in the early years of the Government and when it comes down to 28 per cent., it will be the lowest in the G7. Indeed, it will be lower than in all the other major economies.
In his opening remarks, the Secretary of State praised the staff of the DTI. The north-east of Scotland would have much praise for staff in the DTI’s energy sector and their work with PILOT on the regulatory side of the industry. However, the weakness of the DTI as a voice in Government is exemplified by the corporation tax issue. The Government introduced a change in the tax regime during a tax year without warning when they introduced the supplemental tax in the North sea. People in north-east Scotland felt that the DTI, for all its work with the industry, did not have the ear of Government when it mattered—which that change did, because it had an effect on the investment climate.
I do not agree. Many people in the oil industry said that they wanted stability in the North sea oil tax regime, but earlier this year when they saw the reduction in corporation tax rates in the Budget they said they would like to take advantage of them, too. I understand why they might say that, as I also understand why low gas prices, which actually benefit large sectors of our economy, might have an adverse effect on North sea investment decisions. In addition, owing to the high cost of operating in the North sea compared to other fields throughout the world, the industry has to tackle a number of issues. We are working on a number of aspects with the industry, through PILOT, with which the hon. Gentleman is familiar, and we met recently—in April. We do not expect universal agreement on everything all the time, but I think the industry itself would readily accept that over the past few years the PILOT regime has worked quite well to resolve some of the difficulties that the industry faced. As I said a couple of weeks ago when I launched the energy review, although the North sea oil field is mature, it is in all our interests to do everything we can to exploit its remaining reserves.
I said earlier that I thought it strange that the hon. Member for Rutland and Melton had not mentioned the services industry, especially as we are a world leader in the export of services. According to the International Monetary Fund, we are the world leader in financial services, so we should bear in mind how important that is to the economy— not just self-evidently in the City of London, which is the pre-eminent place in the world to do business, but in other parts of the UK, such as Edinburgh, Leeds, Manchester or Bristol. The financial services industry is very important to us, as are other parts of the service industry where we are doing extremely well.
I shall deal with the hon. Gentleman’s point about trade later, but when I visit different parts of the world, I find much interest—in China and India, for example—in Britain’s services industry. The fact that exports of services have grown by more than 120 per cent. over the past 10 years demonstrates the importance of that sector of the economy.
Despite everything the Conservatives say, when we look around the world and ask what outside commentators say, we find that the World Bank ranks the UK as the top country in Europe for ease of doing business. The Organisation for Economic Co-operation and Development says that, of all OECD countries, we are first for economic stability and second for product market regulation. Ten years ago, in the last year of the Conservative Government, the UK was bottom of the G7 in terms of gross domestic product per head, yet now it is second only to the US, overtaking France and Germany. Our economy has of course grown by more than 28 per cent. over the past 10 years. We have a strong foundation for development in the future. Of course, there are more things we need to do, but the position now is a world away from what it was 10 years ago when we came to power.
As I said, I listened to the hon. Member for Rutland and Melton for 45 minutes, but I waited in vain to hear what the Conservative policy positions might be in some of the key areas he covered. I want to consider two in particular, because they are important. Both are long-term issues about which, for the good of the country, it would be useful to know what all the political parties think and whether they have set views—it might be too much to expect the Liberal Democrats to go that far, but it would be helpful for the rest of us. Those two big issues are energy and science and technology. The future of this country depends on our ability to invest and to get ahead of other countries.
Two weeks ago, I published an energy White Paper in which I made the point that we have two pressing issues to confront: climate change and security of supply. Even if people were in doubt about the importance of security of supply two weeks ago, a look at the newspapers of the past few days would have brought home to us the real problems we will face unless we start taking decisions now about security of supply to avoid becoming over-dependent on importing oil and gas from parts of the world where the political situation may be difficult.
Our strategy is to save energy; we want lower carbon energy. I was very sorry that BP decided it could not continue with carbon capture and storage—those of us brave enough to be facing Trade and Industry questions tomorrow will be returning to this subject—although I understand the problem caused by the cost of maintaining the Miller field. However, it is not right to suggest that after simply pressing a button, the company would be ready to go. It spent a substantial sum on preliminary work, but the project will involve not only power stations but the chemical processes to capture the carbon, in addition to transport and storage. The commitment could stretch to hundreds of millions of pounds. It would not be possible for the Government to award a contract to one company without a proper competition process.
More than half a dozen groups of companies are extremely interested in this. They realise that there is a lot of work to do on intellectual property and that contractual matters will need to be sorted out. Such preliminary work must be done. BP has told us that it would be interested in working with us in the future, albeit, unfortunately, perhaps not on the Peterhead field. CCS is important, but it is commercially untried and untested. It is not being developed anywhere else in the world. We are the first Government to say that we are willing to enter into a partnership to do that, but, given the public money involved, I must ensure that we get things right.
I understand what the Secretary of State is saying, but the White Paper makes it clear that there is a need for CCS technology, especially in developing countries. It also states that there is a need for developed countries to move ahead with the technology
“to show leadership and to prove the validity of the technology, firm up costs and reduce technical risks.”
As the Secretary of State said, a lot of money has been spent on Peterhead. The Government indicated their support for the project some three years ago, but it now appears that we are starting from scratch again. Given the number of coal-fired power stations and other carbon-emitting developments that are being built in China and India, should we not be taking a lead and pushing ahead with the one project that was the most advanced?
I understand why the hon. Gentleman and the leader of his party believe that it would be right to enter into partnership with BP, given the base at Peterhead. However, given the amount of money we are talking about and the fact that half a dozen other groups are interested, it is not possible for the Government simply to say, “Never mind the rest of you. We’re just going with one particular company.” We would be open to substantial criticism if we were to go down that avenue.
I accept that the Secretary of State cannot offer special favours to one company. However, he can change the rules of a regime so that everyone is affected equally. I understand that if the Secretary of State had said that successful carbon capture could be included under the renewables obligation, BP would probably have kept its project going.
Whatever else carbon capture and storage is, it is not renewable—it mitigates the effect of carbon. If I were to do such a thing, it would remove all the support for renewable energy itself—wind farms, marine power and so on—because the costs of carbon capture are so great that that would clean out everything else. In passing, I should point out that the hon. Gentleman is against the renewables obligation. Under his party in government, it would not be there in the first place, so that is not a terribly good point to make.
We have never said that.
The hon. Gentleman has said that; he has been extremely critical of the obligation.
The hon. Gentleman talked about our energy targets. We are one of the few countries that will meet its Kyoto obligations. We are on track to meet our 2050 target on reducing CO2. However, we must return to the point that we have raised time and again: exactly what is the Conservatives’ policy? The leader of the Conservatives said earlier this year:
“Anyone can say they’re green. It’s easy to do the softer things like ride your bike, visit glaciers and rebuild your house to make it green. But it’s only clear you mean it when you do the tough things as well.”
He is quite right. I was surprised, therefore, to find that this afternoon a Conservative council has turned down yet another application for a wind farm. Conservatives are blocking wind farms all over the country. The London array, which is an offshore scheme—one of the largest in Europe if it goes ahead—is being blocked because the electricity cannot be brought ashore. The hon. Member for Meriden (Mrs. Spelman), who speaks from the Conservative Front Bench, said a short while ago:
“Both the renewable energy industry as a whole, and our rural communities throughout Scotland, will benefit from a moratorium.”
That seems to be something less than a wholehearted commitment to renewable energy, which I understood to be one strand of the Conservatives’ thinking.
My right hon. Friend talks about renewable energy, but does he agree that the Conservatives are equally confused and in a mess on nuclear power?
I was going to come to that. The hon. Member for Rutland and Melton said at the beginning of last year:
“From about the age of 12, I have had an instinctive hostility to nuclear power. I treat it with profound suspicion.”—[Official Report, 17 January 2006; Vol. 441, c. 779.]
I was surprised, therefore, that on the day that I published my White Paper he urged me to go and build nuclear power stations as quickly as I possibly could. I was even more surprised that this morning, in an interview with Andrew Neil on the BBC, when he was asked what is Tory policy on nuclear, he said that “It’s pretty well the same as the Government’s.” [Interruption.] Well, we had better have a word with the BBC, because according to the transcript that I have here that is precisely what he said. Again, this is so reminiscent of the grammar school debate, where we are not sure whether the Tories are for something or against it, and then their leader comes along with a characteristic grammar school compromise and says:
“Let’s give green energy the chance and then have nuclear there as a last resort.”
In other words, perhaps in 2020 or 2030, if it has not worked because the Tories have blocked all the wind farms, we will start considering nuclear. That policy makes absolutely no sense at all.
In relation to planning, the hon. Member for Rutland and Melton has said that he supports a streamlined planning system. I welcome that. However, on the day before that, the shadow planning Minister had condemned the proposals. We all know in this House that if we want infrastructure of the sort that we need, whether for energy, transport, housing or whatever, we will have to reform the planning system. The test will come when proposals finally come before the House and we see whether they are supported.
I welcome what the hon. Member for Rutland and Melton said about science. He did not say much, but he said that we were doing the right thing. We have indeed doubled the amount that we are spending on science, and it will rise to just under £4 billion by 2010. We have spent £3 billion on rebuilding our science infrastructure in universities so that we have the first-class facilities that we need. Importantly, we are putting money into getting that research from the laboratory into the marketplace, which is absolutely essential. We are beginning to see the results of an improved science base in this country, with the decoding of the human genome, the fact that a fifth of the world’s top 100 selling medicines were developed in the UK, and the fact that we have only 1 per cent. of the world’s population but produce 9 per cent. of all science papers and 12 per cent. of all citations. Our expenditure on research and development has been increasing. Encouragingly, in the past three years 25 university spin-out companies have floated on the stock market to the value of £1.5 billion. That is all very welcome.
I hope, in the interests of the long term, that we will have the Conservatives’ support. I was rather surprised and disappointed to see that the Tory technology and science taskforce said that a Tory Government will not spend any more on science. We are spending more because we think that it needs to be spent.
I have had the privilege of witnessing some of the investment that the Government have put into large science projects by visiting the Synchotron project at Hanwell outside Oxford. Will the Secretary of State explain to the House why that excellent project was held up for more than a year by his predecessor, the right hon. Member for North Tyneside (Mr. Byers), who decided that he thought it better, despite all the scientific evidence available, to locate it nearer to his constituency than where the scientists wanted it in Oxford?
I have no knowledge of that, but I will happily look into the matter and write to the hon. Gentleman. There would be more force to what he said if he accepted that those who speak for the Conservative party have not always been saying the same thing. I was disappointed that when the shadow Chancellor went to silicon valley in California last year, he said:
“I have seen the future and at present Britain is not part of it.”
He was roundly condemned by academics and research institutions the next day. He was also condemned by the hon. Member for Havant (Mr. Willetts), who is of course the source of much wisdom, and who has said:
“After a slow start, licensing income is now growing fast, and we are better than the US in generating spin-offs”.
The hon. Member for Henley (Mr. Johnson), who is also often a source of great inspiration, has said: “British research is fantastic”—what a tribute to the new Labour Government! I very much hope that we will have the Conservative party’s support on science.
There is also the automotive industry to consider. The industry has had its problems, but a new generation of Astra car is being developed at Ellesmere Port. That plan was very much at risk just a year ago. The new Mini is being produced in Oxford, and BMW recently completed the millionth Mini. Toyota now manufactures engine parts in Deeside, and the north-east has the most productive car plant anywhere in Europe.
On the automotive industry, the support that we have had for research and development over the past few years is greatly welcomed; it allowed us to maintain production of the new Almera and the convertible Micra, a car that sold in huge numbers. Would my right hon. Friend care to reflect on the fact that in the past few weeks, Nissan has, for the first time in a long while, begun to export cars to Japan from the Tyne? That is a tremendous endorsement of the plant, and of the British motor industry.
I agree with my hon. Friend: that is a tribute to Britain’s car industry. Who would have thought 20 years ago that we would be exporting cars to Japan? The traffic seemed to be in the other direction. There is also the example of the aerospace industry.
Before my right hon. Friend moves away from the subject of the car industry, an equally successful plant is the Halewood plant in Merseyside, which produces X-type Jaguars and the Freelander 2 using a groundbreaking production process that is driven by new technology. Partnership between the trade unions and the management has enabled the plant to produce two completely different makes of car on the same production line at the same time. It is the first place in the world where that has happened. If he is in the region in the next few weeks, as he may be, he might like to extend his visit and come and visit the plant and meet the staff involved.
I should be happy to do that, if it is possible. My right hon. Friend makes an important point—the automotive industry has been transformed over the past few years, and we need to remember that. Of course there have been difficulties, such as those encountered by Peugeot, but there have been great successes, too. Similarly, in aerospace, although Airbus has its difficulties—I think that there are more problems yet to be resolved in that respect—we now have every opportunity to develop the new technologies that are likely to power new aircraft and enable them to fly. Of course, we have expertise from firms such as Rolls-Royce. I have mentioned the pharmaceutical industry, but there is also the environmental industries and bioscience to consider. They are all areas in which we are doing well. Incidentally, they are also the areas in which the regional development agencies have been able to help. I think that having RDAs is good; it has enabled us to focus help on different parts of the country, all of which have different needs, but of course it is appropriate to take stock and ask ourselves whether improvements can be made.
The point that the hon. Member for Mid-Worcestershire (Peter Luff) made about representation overseas is one about which I have expressed concern, and it is an issue that we need to consider. It is quite possible for us to market Britain while drawing attention to the fact that we may have particular strengths in different parts of the country, depending on what we happen to be involved in at the time. Before he asks, I have not had the opportunity to read his report, but I shall certainly do so.
I am encouraged by what the Secretary of State has just said. I do not like to be at all confrontational in these matters, but may I gently remind him that each and every one of the offices that was opened overseas was approved by a Government Minister? May I ask him to put a moratorium on approving any further offices, at least in the meantime?
I am sure that the hon. Gentleman is right. Should a proposal come up, I will scrutinise it with great care. In fact, when I get back to the office, I will search my in-tray and see whether there are any proposals.
The hon. Member for Rutland and Melton mentioned a promotion by UK Trade and Investment. Yes, the agency has been through some restructuring, as has the whole DTI. It is a tribute to its staff, at a time when there were substantial staff reductions and thus difficulties, that they concentrated on the job in hand. It is right to concentrate on those parts of the world where there are developing markets. I take the hon. Gentleman’s point about visits. I am not the greatest traveller in the world, but from my visits to China, India, Brazil and Russia, I know that it makes a difference if Ministers go out. Despite what he said, companies across the world think highly of Britain, and there are many areas where people can see great potential, particularly in our research. UKTI has done a great deal to encourage investment in this country, as well as investment in countries abroad, and that is something that I want to develop.
I believe that my right hon. Friend is soon to visit the United Arab Emirates, so will he congratulate the team in the Dubai embassy, who are very good at promoting opportunities for investment not just in the UAE but throughout the Gulf?
My hon. Friend is quite right: work has been carried out to promote trade across the world, but especially in the Gulf. It is important that we do whatever we can at whatever level to make sure that we promote British interests and British trade.
Finally, I want to touch on a point that has not been mentioned, but it is a significant part of the Department’s work. As well as making sure that Britain is a good place to do business—we have a competitive market and a liberalised economy, far more so than some parts of the European Union—we believe in having a fair society and we believe that fairness at work matters. Whether it is the national minimum wage, equal treatment for part-time workers or maternity and paternity leave—most of those measures were opposed by the Conservatives—it does, in fact, matter. When the hon. Member for Rutland and Melton talked about red tape, I was surprised that he could name nothing more than the no smoking notices that he wants taken down. I think that I am right that, last autumn, he launched the campaign for enterprise, which was hostile to what it described as Labour’s family-friendly legislation. It was not awfully keen on protection for sacked employees and it was not terribly keen on trade union rights. I seem to remember, too, that it coined the phrase, “discrimination is not a dirty word”. That probably gives us an inkling of the Conservatives’ position, so I very much hope that we can achieve consensus about the need to make sure that there is fairness in the workplace. We must recognise that people need to balance their responsibilities at work with their family responsibilities. Just as the leader of the Conservative party said that it is easy to talk green, so it is sometimes easy to talk about being family friendly: the proof is what we are prepared to do about it.
The sentiments that the Secretary of State has just expressed about fairness are ones to which we can all sign up to varying degrees. However, how can we square that with fairness for some of the more vulnerable members of our communities? At the same time that he says that we need fairness in business, post offices have been closed up and down the country, even though they provide the only access to financial services, cash, benefits and pensions for many of the most vulnerable people in the community.
It is very well for the hon. Gentleman to say that we can all sign up to fairness. This is the first Parliament in which he has served but, over the past 10 years, some of us can remember Conservatives fighting to get into the Lobby to vote against all those things. The national minimum wage, we recall, was going to cost millions of jobs: that is what the Tories said but, in fact, they were so wrong in that prediction that they have been forced to say that it is a good thing. As for post offices, I would make two points to the hon. Gentleman. First, we are committed to a national network. Secondly, unlike the Opposition, we can pledge the money that is necessary to support that network.
The weakness of the Conservative party’s policy is summed up by a comment from the hon. Member for Rutland and Melton in the Financial Times last year. He was trying to defend the Conservatives from the perception that they were always attacking big business. I was struck by his remark that the party—the Conservative party, that is—was not involved in an ideological exercise but in a branding one. That is the problem that the Conservatives have. Whether on grammar schools, energy policy, nuclear policy, planning or any other topic, there is too much emphasis on branding, without the implications being thought through. They do not have an economic policy. We do. I commend the amendment to the House.
I feel that in this debate we are picking over the carcase of the almost dead. The Government amendment to the Conservative motion is astonishing in its lack of mention of the DTI. The word “Government” but not “DTI” frequently appears in it. The rather sniffy comments from the Secretary of State about the Liberal Democrats may reflect his chagrin that the policy that we have long advocated of eliminating the DTI is suddenly about to turn into Government policy. I understand why he might be feeling a little sniffy. We saw that coming a long way away. Indeed, we recommended it as far back as 1995. It is true that it has taken a long time for a good policy to be implemented, but I suspect that in the next few weeks it will be in place. That is perhaps long-term thinking at its best.
I associate myself with the right hon. Gentleman’s comments about many of those who work for the DTI. The words had the air of a eulogy. I heard my hon. Friend the Member for Cambridge (David Howarth) say, “Sounds to me like ‘Thank you and good night’”, but the words are fairly earned. Many civil servants at the DTI have carried out their roles very well, and I have found that many Ministers have performed their roles and represented their areas of responsibility well. The problem is an institutional one, not a problem with the individuals involved in the Department.
The mover of the Conservative motion, the hon. Member for Rutland and Melton (Alan Duncan)—I see that he has had enough of the debate and has chosen to leave—crafted something quite elegant in its criticisms of the DTI. However, when it comes to the punchline, the call for action, it says just about nothing, other than, “We’ll burnish it up a bit.” That seems to be Conservative policy.
Can the hon. Lady clarify which functions of the DTI she would scrap?
We have always been glad to go through the process. As I continue my speech, I shall indicate various functions that we do not consider appropriate. We have been clear about that in the past and we are looking at the issues again in further detail, because we think that will be extremely relevant to the conversations over the next few weeks. The Conservative party has not had the courage to call a dodo a dodo. It is time we did so.
One of the things that the DTI has been promoting in the north-east which it can be proud of is the science city initiative in Newcastle, which has been lauded and supported by the Liberal Democrat-controlled council. Is the hon. Lady saying that the DTI is wrong to undertake such an initiative, which has been warmly welcomed by Liberal Democrats in Newcastle?
Many of the things that have happened, particularly in science, technology and innovation, are positive. We have been, and continue to be, very supportive of cutting-edge basic research science. The hon. Gentleman is missing the point that many of the functions of the DTI could go elsewhere and be better carried out there. It is the institution itself that is fundamentally flawed. There are pieces of the DTI that work, that are relevant, that are effective and that are appropriate for Government to do. However, there is nearly always a related Department that also has an interest in those tasks, and they should be transferred to that Department. The dead wood should be dumped and the cost to the taxpayer saved—[Interruption.] For people who think that they have read Liberal Democrat policy over 10 years, I find that comment extraordinary. Both sides are about to support what we have been saying, and I will try to take them through the policy as we head on through this speech.
Perhaps the DTI had a rationale back in the days of nationalised industries, but we have ended up with a rag-bag organisation. The hon. Member for Rutland and Melton listed many of the DTI’s activities: it is involved in regulation, energy policy, trade policy, skills, science and innovation, nuclear decommissioning, the Royal Mint, the Royal Mail and oversight of the Government’s stake in QinetiQ. It has a rag-bag of activities, which means that we end up with a completely unfocused Department that has no clear and effective voice in the areas in which that voice must be effective. It is time the Department was restructured and the ineffectual activities were abandoned.
I have been DTI spokesperson for a few months, and every time an issue comes forward my first words are, “Which other Department is involved?” There is so much overlap and duplication in the policy area, and so little clarity on who takes the lead, that the Department has, in a sense, made itself ineffective.
On the subject of clarity, will the hon. Lady advise me which Department, under her proposals, would be responsible for regional selective assistance, which many hon. Members have to talk to the DTI about to help local companies with research and development?
If it still exists—I think that it has recently changed its title—the Department for Communities and Local Government would be the home for some of the active and effective parts of the DTI. The endless crossover and difficulties in communications suggest that that Department would be the right home.
Will the hon. Lady tell us the net staff saving and the net saving per annum from her proposals?
I am going to carry on.
You don’t know.
We will update our past plans—but in our previous manifesto, we came up with some £8 billion in savings over the life of the Parliament. We want to take another look at that range of issues.
I suspect that the Government will shortly step forward and tell us about the saving that they will make from the restructuring, which will be a fairly large sum. There will be an interesting conversation about those issues, and I will be interested to see what the Conservatives have to say as the savings are laid out, and whether they intend to reject them.
Will the hon. Lady give way?
I am going to carry on, because otherwise we will have had only three speakers in the entire debate, which would be insane.
Let us consider some recent events, if we are going to discuss the effectiveness of the DTI. The problems of the Post Office exercise more people in this country than any other issue. The DTI has looked on the Post Office as an organisation in terminal decline. Some 2,500 more branches are about to close, and there is the move to WH Smith—nearly always in unsatisfactory circumstances—of 70 more Crown post offices. What shows the negative view that the DTI is taking of the Post Office, even more than its looking upon it as a declining network and set of services rather than examining its potential, is the fact that it is also eliminating Postwatch, just at the key time when its services are needed to support consumers as they go through the process of trying to work out what the individual closures will mean.
Indeed, part of the problem with the Department is the constant fault in implementation. The timing of abolishing Postwatch shows lack of sensitivity to the way in which services should be delivered on the ground if they are to be effective. People need support to go through a proper consultation process about a critical decision, which will determine whether some communities thrive or decline further. It will have a big impact on many elderly people and on deprived communities. That is a good example of the Department’s general failure.
Hon. Members of all parties generally support the new National Consumer Council’s underlying mandate. However, proposed legislation is inadequate to implement it. In the Consumers, Estate Agents and Redress Bill, one has to hunt for any direction that makes the NCC a consumer champion. The intent that Ministers describe is not in the Bill, and therefore cannot be guaranteed.
The Government’s plan for the new NCC requires merging Postwatch and Energywatch. No headquarters have yet been identified. Redundancy notices should be issued shortly if the transition is to be accomplished by next April. Morale is declining in all the various parts of the organisation. Again, implementation has been fouled up. That appears to be inherent in the way in which the Department currently functions.
We all supported estate agent reform, but again opportunities have been missed. There is no ability to introduce, for example, lettings and direct sales as part of the reforms. Positive licensing is absent. The public want that to ensure that when they make the biggest investment of their lives, they are dealing with a trained and qualified estate agent, not someone who put the sign out yesterday morning.
As the guardian of public interest, the NCC should be a vital body, yet the implementation process is again fundamentally flawed. That could disillusion the public about protection in the long term.
On energy, the Department could not even manage a consultation on the costs of nuclear power without running into trouble with Mr. Justice Sullivan and a judicial review. Something of a farce is now happening, with a repeat of a consultation. It is not clear that the required information on costing—for example, the Ernst and Young report, which is available only in heavily redacted form—will be in the public arena to enable us to hold an effective consultation. Indeed, the Government have refused to publish the submissions to that consultation until the end of the process, so no one can rebut them or respond to them at all. Flawed process is a constant feature of the Department’s actions. That leads to general scepticism that the Government’s direction, especially on nuclear power, is essentially driven by Downing street rather than by the Department, or by a reasoned review of all the issues.
Perhaps the hon. Lady could explain Liberal Democrat energy policy. Locally, Liberal Democrats appear to oppose every scheme, whether it is for a wind farm or onshore or offshore energy. Is there a national Liberal Democrat policy, or simply an opportunist policy of local opposition?
The hon. Gentleman picks up scraps here and there. Liberal Democrats certainly support renewable energy. There will be instances of opposition by local parties, but the Liberal Democrats have been overwhelmingly supportive. We will continue to be so, and to play a leading part in promoting the sort of political framework necessary for renewables.
Renewables are the core of the energy policy that we want to pursue. Our fundamental argument with the Government’s case on nuclear power is that it will effectively crowd out carbon storage and capture—the alternative transitional technology until we achieve an all-renewables-based energy system—as well as renewables. The BP Peterhead experience will be looked back on in a year or two as the first example of a carbon capture and storage programme that got crowded out by the nuclear announcement and by the direction being captured within the energy White Paper. Time will tell, but I suspect that we will look back on that as the very first example and illustration of what is really going on in this sector. There are finite resources for investment in future energy technologies, and they are now being diverted to what I regard as the most inappropriate technology.
The Minister also raised the issue of security of supply, but nuclear energy, even under the most optimistic programme that he could put together, would be providing something like 4 per cent. of the UK’s total energy usage. It does not eliminate the need for oil and gas. We hear about 20 per cent. of electricity being provided from renewables, but the Government constantly get electricity and energy muddled, and they have never been able to tell us how they will reach the EU target of providing 20 per cent. of energy—not electricity—from renewables by 2020. That is another feature of the DTI’s general problem in dealing with a wide range of issues.
The Government constantly talk about not subsidising nuclear energy, but we have heard clearly again today a commitment from both the Government and Conservative Front Benchers to what amounts to the most significant subsidy of all—the transfer of risk in connection with waste to the public and away from the commercial sector. That has always been one of the key core arguments against nuclear power, because that is the largest subsidy of all.
Whatever the hon. Lady thinks about nuclear power, does she not believe that waste is an issue for us to consider now? We have to tackle waste, so the problem has to be solved—now and for the future.
One can only agree with the hon. Gentleman’s argument that what has been done and ignored in the past has to be dealt with now, but unfortunately, creating more waste only adds to the problem and does not diminish it. It also adds to overall costs, so there is an underlying set of issues that has to be dealt with—[Interruption.] If only we were talking about rubbish, but this is waste, and it is far more dangerous.
The Minister spoke about the huge manufacturing potential in this country, but there really is substantial potential in marine renewables, if only we exploited the incredible skills built up through the sub-sea oil and gas industry. I have visited players in that industry and it is clear to me that they see nuclear power as their death knell. They thought that a source of funds might be provided for their industry to help them build on the real potential. Many projects are sitting in prototype, but they are unable to move off that prototype base into real demonstration and production, precisely because the funding lying on one side will be directed into nuclear if that is where the Government intend it to go. If the Minister does not know that, I suggest that he do some travelling and talk to some of the people in those industries. If he did, he would find it an eye-opening set of experiences.
Let us move on to the issue of science. I support what the Government and Opposition Front Benchers have said—that the Government have done many things very well in this area. However, the clawback of £68 million over the last year and the additional £30 million clawback from regional development agencies has been very disappointing. Half the latter came from the Engineering and Physical Sciences Research Council, but the research councils have suffered as a whole.
We were utterly frustrated to hear the Government describe this as “unspent money”, when it was really unallocated money in what had been promoted and produced as a multi-year programme, under a set of changes to the way in which grant money was to be allocated, supposedly allowing time to work out where best to make the allocations. According to the Conservative Front-Bench spokesman, the money was being diverted to cope with the overspend on the Rover inquiry, but, sad to say, there is a strong suspicion that it was really to do with part of the overspend on nuclear decommissioning. Here we have nuclear decommissioning actually impacting on what everyone has described as the most important aspect of what we are talking about—science and industry.
On trade issues, others have talked about UK Trade and Investment, so I will not go into it further, but let me say that one of the biggest disappointments has been the Doha round. When it comes to meeting our targets for trade and industry, along with international development—and with the Foreign and Commonwealth Office as a player—we have been incredibly inadequate and we need to strengthen what we do. This again illustrates the fact that the existence of a Department of Trade and Industry will not necessarily provide the international tool that we need to achieve our goals in what has been identified as one of the most important strategies of this Government—or, frankly, of any other Government. If developing countries are to have a future, something with the characteristics of a development trade round must succeed. Nearly all the time benchmarks have now been passed, and the hope offered to some of the poorest countries in the world has been lost.
I hope that some of my colleagues will be able to catch your eye, Mr. Deputy Speaker, to talk about small business. I was asked earlier what kinds of programmes we would be willing to eliminate, and we think that some of the business support services, which are described by the people whom they are offered to and targeted towards as utterly ineffective and inappropriate, ought to go into the dustbin. We want to make sure, however, that business, including small business, has a genuine and proper voice at the highest levels of government.
The Budget was a good illustration of the fact that small business, especially, has no significant voice in the key decision making and discussions in this Government. The policy that had the effect of raising corporation tax on small businesses seemed driven by a Treasury desire to discourage people from incorporating rather than remaining as sole traders—a side issue if ever there was one. It completely failed to recognise that those small businesses, given their nature and the way in which they function, could never take advantage of the research and capital allowances on offer. Clearly, the conversation with representatives of small business never took place.
The hon. Lady has now spoken for nearly 20 minutes. In her opening remarks, she said that she would enlighten us about the dead wood in the DTI, and explain how getting rid of it would result in a saving of £8 billion over the lifetime of a Parliament? When will she explain where the dead wood is, and where the savings will be made?
As I made clear, the £8 billion figure was in our previous manifesto. As there have been changes in the DTI, we are working through the numbers again. That is not inappropriate. We did not call this debate; we are responding to it. We will come forward with the numbers. We are not changing policy. [Interruption.] I have just described the business support services aspects; one can tell that that has not stirred the blood of many people to come and participate. There is plenty of scope to eliminate aspects of the regional development agencies’ activities, many of which compete with export schemes, and even the Government seem to have finally realised that that is a complete waste of time and money. As we work through the structure, we will come out with hard numbers, as we always do.
As the DTI disappears, two essential elements must remain and be captured within whatever the new structure is. First, there must be a voice for business at Cabinet level, where it will have an impact. That is less an issue for large business—which is able to lobby and reach Government in the ways that it finds necessary—than it is for small business, which has been under-recognised and under-heard over a long period. We envisage that role being in the Treasury, perhaps in the No. 2 slot. It should be a powerful voice, and perhaps the word “Business” should finally be brought into the Minister’s title, so that it is evident that that voice is at the Cabinet table, and heard within the context of economic development.
Secondly, the energy portfolio must be put in a place where climate change can be the umbrella, so to speak, under which it functions. In the past, energy policy has essentially been business-driven, and exceedingly slow to recognise environmental and climate change issues. That is partly why we are in such a pickle today, with the struggle to reach the necessary targets over the years. The structure that I am proposing will be essential. There are business voices that very much want energy, transport and planning to go off into a sort of infrastructure Department that would separate them permanently from the climate change discussion, other than in a most tenuous way. We do not support that, as it would be utterly inappropriate.
My goal in coming into this role has been to put both myself and every other Front-Bench DTI spokesman out of a job. It looks as if I will achieve that later in the year. When the Department is eliminated and elements of it restructured, it is crucial that it is not done simply to accommodate rival politicians who are looking for particular titles, or to sort out different political balances within the party. There needs to be a sunset clause on every aspect of what the DTI does, so that it will be examined and a decision will be made on whether it is a worthwhile and appropriate activity for the Government to carry out—and whether it can be carried out within a particular Department or constructed in an alternative way. An alternative home should be made available for those aspects that are worth while; that would be more effective, and would eliminate duplication. Those parts that are inappropriate should disappear for good.
I do not recognise in the motion the description of the Department of Trade and Industry and its functions as in any way reflecting its work. I notice that it omits the key word “manufacturing”. That is deplorable. The hon. Member for Rutland and Melton (Alan Duncan) made a passing mention of manufacturing and the number of jobs lost, but he did not say what the Opposition would do to ensure that manufacturing continues to play a vital role in this country’s economy. On the issues that the motion does mention—energy, science, research and development, workplace rights and business support—and on manufacturing, the record of the DTI and Ministers is a creditable one.
I feel passionately about manufacturing. As right hon. and hon. Members know, I come from a constituency that is massively and predominantly in the service sector—finance, insurance and connected services—but my constituents know that there would be no financing or insurance of products if they were not being manufactured. It has been a drive of the Government to ensure that as much manufacturing as possible is carried out in this country, and in automotive, pharmaceutical and other key areas that has been achieved.
That has been achieved by a strategy started by the first inquiry into manufacturing in 30 years—the developing our manufacturing strategy—and by creating the manufacturing advisory service and a centre of excellence for manufacturing in every region. We heard about the benefits of that. The right hon. Member for Liverpool, Wavertree (Jane Kennedy), who spoke for Halewood, highlighted the multimillion pound—£7 million—DTI investment that has brought in £1 billion of investment in Jaguar and the new X-type. There are many other such examples. In fact, more than 50,000 manufacturers have been helped by the Government’s manufacturing strategy, which is why manufacturing productivity has risen by 30 per cent. since they came into office.
The hon. Gentleman is not seriously saying that, given that 1 million manufacturing jobs have been lost under his Government’s strategy, that that strategy is a success?
The 1 million manufacturing jobs that the hon. Member should be telling the House about are the 600,000-plus manufacturing jobs lost in one year alone in the first Tory recession and the 400,000 lost in one year alone in the second recession. Those are the records that we had to rescue this country’s manufacturing from, and we did a creditable job in doing it.
Our success is shown by the fact that, whereas under the last Government manufacturing jobs flooded other countries, we have repatriated key projects such as the construction of the new Mini engine. A substantial investment by the DTI has multiplied itself 10, 20 and 30 times in another massive investment at Hams Hall so that the engine can be made there. The Department has also underpinned £1 billion of investment in aerospace. Our Rolls-Royce Trent engine now powers almost a third of the world’s commercial aircraft, again as a result of the Government’s manufacturing strategy.
Manufacturing productivity increases have returned this country to the world-beating league in certain key areas. That is one reason why our pharmaceutical industry now exports more by value than almost any of its foreign competitors, our aero-engines—as I have said—power a third of the world’s commercial aircraft, a quarter of Ford cars in the world have engines with “Made in Britain” stamped on them, and projects like the one in Brazil are being returned to this country.
This Government established the Automotive Academy to increase skills and productivity. They established the Chemistry Leadership Council and the national aerospace technology strategy, and have worked closely with industry to reflect its needs in those crucial areas. And they have done more. Ten years ago there were only 75,000 apprentices in the country, which was a disgrace. Now there are more than 250,000, 70,000 in manufacturing alone. However, I urge my colleagues—who I know will take my words to heart—to do still more to promote even higher-quality manufacturing apprenticeships and jobs.
The DTI is an unsung hero in another key area, that of decent rights for working people. We have delivered to part-time workers rights that they never had under any previous Government. More than 3 million have been given the right to four weeks’ paid holiday, more than 6 million have benefited from pay and conditions equal to those of full-time workers, and more than 1 million—1.5 million, I believe—have benefited from the national minimum wage. I will not make political points about who supported those measures and who did not.
As for the DTI’s contribution to the environment, I applaud the work of the Minister for Energy, my hon. Friend the Minister for Science and Innovation—the former energy Minister—and my right hon. Friend the Secretary of State in securing a £1 billion investment in renewables, including £800 million for microgeneration, more than £110 million for offshore wind generation, £60 million for energy crops and biomass, and investment in key technologies such as photovoltaics, which now power some of the computer laboratories and libraries at Napier university in my constituency.
I challenge the Liberal Democrats to name two onshore wind turbine projects for which they have supported planning permission. It seems to me that they never support such projects on their doorstep, although they have a general and, I am sorry to say, rather hypocritical policy of supporting them nationally. I note that they remain seated, and do not attempt to name even one such project. In fact, I do not believe that they support any of them.
I am glad that on science, at least, we have consensus in the House. In 10 years we have taken science investment from £1.3 billion to £3.5 billion. That has led to spectacular successes, one of which was mentioned earlier. Let me add to the many tributes paid to Lord Sainsbury. He was an outstanding science Minister, I believe the best science Minister. He was a great ambassador on behalf of science to Government and a great securer of Government resources for science.
On UK Trade and Investment, I thought that the criticisms of the hon. Member for Rutland and Melton (Alan Duncan) were a little unbalanced. Had he read today’s report from the Select Committee on Trade and Industry, he would have seen in paragraph 38 praise for the success of UKTI, for its strength in attracting R and D facilities from overseas into this country and for the targeted investment in China and India, which is proving immensely profitable for UK companies. UKTI, its predecessor, the DTI and other Departments have succeeded in making this country the magnet for foreign investment because of our favourable tax regime and our regulatory regime, which is far more favourable than that in many other countries.
The report touches on regulations, as the hon. Member did. It says in paragraph 3 that the Organisation for Economic Co-operation and Development ranks this country
“as having…the most liberal product market regulation amongst the G7 countries.”
That reflects what is being said by other surveys that the hon. Member should be reading.
The RDAs have been giving business advice and have been highly praised for the business advice that has been delivered through the small business network, which has advised 600,000 small businesses.
I was provoked by this: I was rather surprised that the hon. Member for Richmond Park (Susan Kramer) raised the issue of post offices. I note that the hon. Member for Rutland and Melton, who speaks for the Opposition, wisely steered clear of that because the Conservatives closed 3,500 of them.
In fairness to the Liberal Democrats, no one knows more about the betrayal of post offices than them. Their councillors in towns and cities such as Aberdeen refuse to let local citizens use the post office to pay the council tax, rents, business trade waste bills, home help and other charges. By contrast Labour-run councils such as Edinburgh pay a fee to the Post Office to allow that to happen. Of course, the net result of that is that 20 per cent. more post offices closed in Aberdeen. Again, the Liberal Democrats have failed to put at least some money where their mouth is. Instead they wanted to save money and they did not care that it cost us the post offices.
Nationally, Liberal Democrat policies on post offices are just as bad. The hon. Member for Sheffield, Hallam (Mr. Clegg) wrote a policy paper advocating the privatisation of post offices along Dutch lines, which has meant mass closures. By contrast, this Government have invested some £3 billion in post offices to secure the best possible network that can be secured in this day and age. That reflects what Labour councils such as Edinburgh have done. The Government have given financial support because it was worth while putting money into post offices.
I rise just to confirm with the hon. Gentleman that 2,500 branch post offices are to be closed. Do I understand that, if any of those are in his constituency, he will support the closures? That is the implication of what he has just said.
I will come to that directly but I thought that I was giving way to the hon. Member because she had thought of one wind turbine project on mainland Britain that the Liberal Democrats support.
I refer the hon. Gentleman to the Cambridge local plan, which went through when I was leader of Cambridge city council and which supports wind farms.
I ask the hon. Member, are the wind farms there now?
The position is clear. I make sure that in my constituency people do not have to travel beyond the recognised distance to visit a post office. I also support my local postmasters and postmistresses who decide that they want to move out of that business and into another one. That might be one of the reasons why I got their support in the election—because they realise that in Edinburgh we have had a realistic strategy that has led to managed closures, even though we regret some of them, of course. However, I am not in favour of the Liberal Democrats telling this House one thing—that they will save every post office at all costs—and then failing to support post offices in Aberdeen by not paying for the services there.
Does the hon. Gentleman’s newly confirmed commitment to localism mean that he now considers the post office to be a local service rather than a national one?
No, I shall explain what I am saying. The Government are being criticised because they are unwilling to pay high fees to post offices to deliver certain services where technology has taken over. However, local councils are, like the Government, spending money; the sum being spent on this programme is £3 billion. If local councils are willing to spend money, they should do so. Under Labour, they did so in Edinburgh, but they did not do so in Aberdeen, which is indefensible.
No. I have given way often enough, and other Members wish to speak so I do not wish to hog the proceedings.
The hon. Member for Rutland and Melton was wrong to criticise my right hon. Friend the Secretary of State for saying that the Department of Trade and Industry could do better and that it is not perfect. That, of course, is true of every Department. I welcomed my right hon. Friend’s commitment to seek to improve the quality of service. He listened, and he took on board some justified criticisms about UK Trade and Investment and regional development agencies. I know that he will study the Trade and Industry Committee report with great care, and that the Government will respond with a considered view. I urge the House to reject this absurd motion.
It is a great pleasure to follow the characteristically lively and well argued speech of the hon. Member for Edinburgh, South (Nigel Griffiths), even though I did not agree with every word he said. He did, however, anticipate my opening remarks. The debate is about the effectiveness of the Department of Trade and Industry. If true perfection were the test of which Departments to abolish, in my opinion many others should come before the DTI. My list would include the Department for Environment, Food and Rural Affairs, the Department for Communities and Local Government, the Home Office and the Department of Health before the DTI.
I wish to spend a few moments analysing Liberal Democrat policy. I am the Chairman of the Trade and Industry Committee, and I must be as non-partisan as possible, but I must say that the Liberal Democrats are profoundly and seriously wrong, and I urge them to reconsider their position. Their policy is good news for the two major parties in the House because it will lose them the votes of business, but I genuinely believe that what they advocate is not in the interests of UK business.
Two issues flowed from the Secretary of State’s opening remarks. Whenever I speak in this House on DTI or economic matters, I seem to have to make the following points, and especially the first. The Secretary of State talked a lot about macro-economic stability and the Government’s great economic record. It is worth reminding the House that that is built on Conservative foundations. The reforms of the Thatcher and Major Governments and the golden economic inheritance of 1997—the likes of which few incoming Governments have ever received—enabled that record to be continued. The Government should, however, take the credit for not having blown it, which previous Labour Governments did. They did not blow it, although they have nibbled at the edges of that inheritance and made matters more difficult.
The roots of what have been achieved lie in Conservative policies. Those with longer memories will remember the mess that we inherited in 1979; that was the real mess that had to be cleared up, and it was done very successfully. [Interruption.] I did not catch the Minister’s sedentary remarks, but I am sure that they were characteristically witty and well argued.
The Secretary of State also rightly paid tribute to the success of the automotive sector in the UK. That is also a Conservative policy that has come to fruition. I had the privilege of being a special adviser at the DTI in the late 1980s when the then Secretary of State, now Lord Young of Graffham, set as an industrial strategy—to employ a word that he would not like me to use—the attraction of all internationally mobile automotive investment to the UK. He aggressively wooed Nissan, Toyota, Honda and other companies, and they all came. It is from those companies driving up standards, particularly in the automotive supply sector, that so much of the good that has happened to the automotive sector has come. So it is worth remembering that two of the great bits of credit that the Government have sought to take in fact belong to the Conservatives. But never mind—we move on.
I want to emphasise in my, hopefully brief, remarks that the DTI has a crucial role to play, albeit in perhaps a slightly different incarnation. However, the centrality of the need for not just a Minister but a Department representing business within Whitehall is crucial. At a time when Britain faces competitive challenges as a result of globalisation—an issue that many people in this country, and even in this House, do not fully understand—it has never been more important to have an effective voice for business. We need not a junior Minister in the Treasury, where other issues will always take priority, but a Department that stands on its own, free in the Whitehall jungle to argue the case for business on each and every issue that impacts on it. It is not a sign of weakness that the DTI has to interact with many other Departments; it is a sign of its importance and of the number of issues in Whitehall that affect businesses. The voice of business must be there and expressed clearly.
Will the hon. Gentleman give way?
I will give way once or twice but not more, in view of the fact that a number of other Members want to speak.
I thank the hon. Gentleman for giving way, and the argument that he is making is certainly one to take into account. However, is not the difference between having a Minister and a Department that the latter spends its time looking for activities to justify its existence? In general, those activities are not about supporting business in other parts of government, but about inventing new regulations. That is the danger of having a Department devoted to such matters.
I am afraid that the hon. Gentleman has seriously misunderstood the DTI. I have some sympathy with the arguments of the hon. Member for Richmond Park (Susan Kramer) about the Small Business Service, which seems to be a relatively unloved part of the DTI. However, her proposal certainly would not save £8 billion in the lifetime of a Parliament, even if the SBS were abolished. I cannot think of any other function—she did not, I think, name one—that could be abolished within the DTI. [Interruption.] I will run through the list later, but I doubt whether there is another function that we could even consider abolishing. Of course there are things that could be reformed, improved and made more effective; but abolition, no. All these functions have one thing in common. They are not the rag-bag that the hon. Lady suggested; they are coherent and deal with issues affecting business. That is the common theme that gives them their importance, and the DTI its coherence. Perhaps the DTI is not always as effective as it might be, but broadly speaking it is a very coherent Department.
The DTI has done a lot of things well. Under this Government, I would single out the handling of the problems relating to Airbus, where a very successful outcome was achieved by the Minister for Industry and the Regions. Actually, the DTI’s handling of the fallout from MG-Rover—working, to be fair, with Advantage West Midlands—was not bad, either. However, in a number of areas it has fallen short of the high standards that we have a right to expect. Reference has been made to deregulation, and the Department has not been effective enough in getting other Departments to be as strong on deregulation as they might have been.
A recent report by the Hertfordshire chamber of commerce estimates that the burden of regulation has cost £431 million since 1998. According to the chamber of commerce:
“This government continues to write cheques that they expect businesses to cash”.
Regulation is becoming so burdensome that it will kill the goose that lays the golden egg.
I entirely agree with my hon. Friend. I am currently doing battle with regulations emanating from the Department for Communities and Local Government and DEFRA, not the DTI. It is really important that the DTI is there arguing the deregulatory cause, to make sure that such burdens are reduced and minimised.
The Government were slow and confused in their handling of energy policy. I personally welcome their conversion to the nuclear cause, but it is a shame that a previous White Paper effectively dismissed the nuclear possibility. Of course, their handling of the energy review did not cover them in glory: it led to a successful judicial review that has significantly delayed the energy review’s implementation. Aspects of the post office closure programme have also caused my Committee concern. We have produced one quite critical report already, and another report, to be published on Saturday morning—I will not say much about it, as I must not leak my own report to the House—will have further things to say about the closure programme. We were concerned, moreover, about the lack of priority that the Government in general and UKTI in particular attached to places such as India. However, the Government have responded magnificently, and I am very grateful for the serious way in which not just the DTI but other Departments treated our report.
The real problem for the DTI is that it has taken quite a hit on efficiency savings. Its staff have struggled hard to face round after round of cuts. It has not been confident of its own future, which has been very damaging and has demoralised it. That is another reason why the Liberal Democrats are seriously mistaken in the position that they are adopting. They do not understand the demoralising effect that such talk has on hard-working civil servants. That is another reason I urge the Liberal Democrats to abandon their policy.
The Department has also been subject to external pressures. The report on UKTI, which we published this morning, highlights the fact that that organisation has had three strategies in four years. Those strategies have been imposed on UKTI by the Treasury, so the ineffectiveness of UKTI—which my hon. Friend the Member for Rutland and Melton (Alan Duncan) mentioned—is not its fault, but that of the Treasury for demanding arbitrary and unnecessary changes in strategy. The organisation now needs a period of stability, because it is capable of doing a very good job.
As a member of the Committee, I agree with the hon. Gentleman about UKTI. Does he recall that when we spoke to members of UKTI abroad, many of them were well thought of and were doing good work, but they felt that the problem lay back here, with the continual changes that the organisation had been put through? A period of stability is essential if it is to make progress.
It will not surprise the House to learn that I strongly agree with my—for these purposes—hon. Friend, who was present for our consideration of the report. He makes an important point. Although performance is obviously variable, in the main the UKTI staff overseas do a first-rate job and we have been consistently impressed by the quality that they offer to exporters. We have often had reservations about management back here, and that could be an element in the successive strategy reviews and the demoralisation. We are concerned about that, as we say in the report.
The functions of the DTI do need to be done, somewhere. The “Capability Review of the Department of Trade and Industry”, which has not been mentioned so far, is an excellent document. It has some criticisms to make, but it is an objective and fair document. Its major concern is the one that I expressed about the lack of political stability undermining confidence in the Department. That is one of the major reasons why the Department has not performed as well as it might have done.
The document lists the areas with which the DTI deals. I remind the hon. Member for Richmond Park that those include inward investment; outward investment; encouraging innovation; management of Government assets and liabilities, including nuclear liabilities and coal, steel and shipbuilding; Government interests in public corporations, such as the Royal Mail and British Nuclear Fuels; competition policy; and company law. Those functions have to be performed by someone. What is the point of moving the deckchairs around for no net benefit?
The capability review is clear about the importance of the DTI strategically in delivering any Government’s objectives, never mind this one’s. The voice of business is also clear on that point. I have received a briefing from the British Chambers of Commerce which mentions the importance that it attaches to maintaining the DTI, although it has doubts about the way in which it is administered.
I also have a copy of the detailed report of a survey for the London Chamber of Commerce and Industry, which says that 59 per cent. of respondents think the DTI is fit for purpose, but 92 per cent. think there should be a Government Department responsible for enterprise, business and the private sector, and 92 per cent.—presumably the same 92 per cent.—think a Cabinet Minister should be responsible for business interests in the community. Fascinatingly, the survey also lists the duties that the respondents think are important for a Department with responsibility for business, and the Liberal Democrats must answer the questions raised by those findings. I am aware that I sound partisan, but I speak out of passion for UK business, not out of partisanship. Some 99 per cent. thought that it was essential, very important or important to have a Department that supported small businesses, and 85 per cent. think it should promote corporate and social responsibility. Some 75 per cent. think it should be responsible for employment relations, 96 per cent. for deregulation, 97 per cent. for productivity, and 98 per cent. for the promotion of UK trade overseas. Those are high figures. The only area of responsibility that the respondents do not think important is regions policy. There is a strong consensus in the business world about the need for a Department, not just a Minister, with responsibility for business.
I must give way to the hon. Lady because I have said much more than I intended to about her party’s policies.
In that same report, only some 7 per cent. of businesses think that any of the tasks have been performed with any quality over the past God knows how many years. Businesses have thrived without that, so the hon. Gentleman is arguing for something that the present environment demonstrates is relatively redundant.
The hon. Lady is simply wrong. Although the DTI does not get hugely good scores, 66 per cent. think that it has been good or adequate at creating the conditions for business success, to take one example.
I must bring my remarks to a conclusion. I refer the whole House to the excellent Engineering Employers Federation report on the business of Government, from which I had intended to quote at length. It makes an extremely cogent case for changes in the handling of responsibilities, as well as for the need for a Department for business.
I had hoped to say much more, but time is against me. The DTI is an extremely important Department but there is much room for improvement, so I shall have great pleasure in supporting the motion. I am slightly nervous about the wording on UKTI, which does not do justice to the organisation; the problems it has experienced are not of its own making, but due to external factors. UKTI, like the whole DTI, could do better; it needs stability and a vote of confidence. I am delighted that the official Opposition called the debate because I agree strongly with my hon. Friend the Member for Rutland and Melton that opportunities on the Floor of the House to argue the case for the DTI and its functions come all too rarely. I am delighted that my hon. Friend did so with such passion when he opened the debate. We need less duplication—RDAs in particular need to be re-examined; we need less external interference and a period of calm in the Department so that it can do its crucial job of standing up for British business in a challenging world.
I am aware that time is pressing so I shall simply touch briefly on the role of small businesses and the problems they often experience with the Department of Trade and Industry. I have never run a business, but I felt that if I used the words of people who run businesses in St. Albans, and struggle with the regulations, the Government might understand the burden their regulation imposes.
I realise that these comments about people struggling with regulations are anecdotal, but the reality is that St. Albans has lost many small businesses over the years. Mr. Nigel Cox runs a printing business in St Albans. He said:
“I’ve got so fed up with it, I’m going to retire…It’s too much hassle employing staff any more. It’s becoming too much paper work, I can’t even remember the numbers of the forms.”
He is not alone. Mrs. Linda Gibson, of London Colney, said:
“I spend a lot of my time dealing with formalities…The area where it is getting worse is employment. I only employ my husband, and he’s not too much trouble. I would think twice before employing staff.”
[Laughter.] I am glad her husband is not too much trouble, but the point she is making is about all the forms and form filling.
The regulatory burden has cost small businesses dear. As I said in my intervention, the Hertfordshire chamber of commerce estimated that the cost is staggering—more than £431 million. The Secretary of State said that things have improved enormously, but Sally Low, director of policy and external affairs at the British Chambers of Commerce, would beg to differ. She said recently:
“Red tape and regulation are costing businesses in Hertfordshire a phenomenal amount of money…It is critical for future economic growth in the city that politicians in Westminster”—
that is us, so we need to wake up—
“and Brussels realise the impact excessive regulation is having and take action to ease this burden.”
My hon. Friends have been calling for such action for a long time. If there is one thing we take pride in, it is being a party that supports business, especially small businesses. We should be
“freeing firms from the cost of red tape and allowing them to get on with the job of running their businesses”.
Those are the words of our local chamber of commerce, but they are echoed around the country.
According to the Government’s figures, calculated in 2006, the burdens barometer was more than £50 billion. Not only do small businesses find the financial burden huge, but trying to set up a business is demoralising because the number of forms to be filled in is colossal. People may turn to their local Business Link—I have visited mine—but for many it is an intimidating process. The last thing I want is for people who plan to start up a business, especially young people, to be deterred from doing so by concern about the costs and aggravation they will incur.
Is the hon. Lady aware of the report published last year by the Federation of Small Businesses, which found that only 4 per cent. of the 19,000 members who responded to its survey actually use Business Link? They find its plethora of services unacceptable.
I am aware that Business Link is not always as friendly towards small businesses as it might hope. Perhaps the Government could address that problem.
I am extremely aware of the time, so I shall cut short my remarks. On behalf of small businesses in St. Albans, such as Bravingtons and Patons on my high street, and those that are folding—sometimes because of high business rents, but sometimes because of the sheer burden of regulation—I ask the DTI to be a bit friendlier and listen to the small voice of small business.
Our debate about the DTI perhaps reflects the fact that priorities are changing. The Chairman of the Trade and Industry Committee made a good point about the way in which the Department’s functions hang together for business. However, energy is now perhaps a more environmental matter, given that it is one of the major sources of pollution. There would be sense in considering a way of removing energy from the DTI and linking it to the Department for Environment, Food and Rural Affairs. I wish to make a few remarks about energy because it is obviously very important, especially for Scotland.
We have had the energy review and the Government have come up with the new nuclear option. Luckily, strangely enough, one of their planning functions that is devolved to Scotland means that Scotland will perhaps be saved from new nuclear stations. However, the problem of waste will affect us all. The Government and official Opposition Front Benchers had an interesting discussion about that. When the Government introduced the energy review, they talked about the private sector meeting a “full share” of the costs of disposal, but we have not yet had an explanation of what a full share actually means. Today, the hon. Member for Rutland and Melton (Alan Duncan) seemed to be talking about a deferred subsidy to the private sector. Under any provision, it appears that the public purse will have to bear the cost of disposing of new nuclear waste.
I have argued in the House on many occasions about the transmission charges affecting energy in this country, which result in higher costs of energy production in the north of Scotland than in the south of England and act against the interests of renewables. Nothing in the energy review will change the situation. The review includes a section on fuel poverty, but it does little to add to the attack on it. For example, nothing is proposed to help rural areas by examining price mechanisms and social tariffs. Various specific issues influence fuel poverty in rural areas.
We have already discussed carbon capture. The fact that BP is pulling out of the Peterhead project will be a huge blow to Scotland. Some 300 people are employed on the project, so its winding down will have a serious impact. However, it is worse than that. As I pointed out earlier, the energy review makes a lot of carbon capture’s potential to help developing countries that use a lot of coal and other fossil fuels to clean up their act. Such projects will be important as we move beyond Kyoto towards a new carbon reduction scheme, so it is clear that the developed world needs to deal with this.
The Government first said that they were in favour of carbon capture some three years ago. However, although BP, Scottish Power and others have made a massive investment in Peterhead, little progress seems to have been made in any other area. The argument that the Government cannot simply award a contract to one project does not hold water if we are seriously considering the technology as a contributor to carbon reduction, rather than just another aspect of energy policy. It is worth noting that even in the United States, which is often seen as an ogre by the green movement, a $90 million tax allowance is available for a carbon capture and storage pilot project. Other countries are pushing ahead on such projects, so, yet again, we might be left behind.
Carbon capture and storage could be important for not just Peterhead. Scottish Power is investing in cleaning up the Longannet and Cockenzie coal-fired power stations in Scotland, which could be important for the future of energy in Scotland and the UK.
I want to speak briefly about the Post Office—and I will be brief, as I hope that others may yet contribute. What can I say about the Post Office? I have talked about it in this House for the past six years and things do not seem to be getting much better. I shall end with a story. The Government have taken away much business from the Post Office, but sometimes the Post Office does not help itself. A constituent contacted me today to say that they were moving house and went into their local post office with the simple aim of getting a redirection of mail form, but they were informed by the local postmaster that he could not supply one; it could only be downloaded from the internet. There were no redirection of mail forms in the post offices in Angus. That is utterly ludicrous. Not everybody has access to the internet, and for something as simple as that form to be not available is an absolute disgrace.
We have had a valuable and constructive debate this afternoon; it has been brief, but it touched on an important issue that goes right to the heart of government and the future structure of government. In his opening comments, the Secretary of State paid tribute to the Department of Trade and Industry staff, and we certainly wish to associate ourselves with that, given their dedication and the expert work that they do. Our criticism, such as it is, focuses on the failure in leadership at the Department, rather than on the personnel, with whom we hope to work in due course.
I join the Secretary of State in paying tribute to business in this country. There are many outstanding businesses in this country that do a remarkable job around the world. The entrepreneurial spirit still thrives in this country, but that does not mean that we should not do better. He asked various questions, and in particular he asked about our position on science policy. I should like to say to him and to the House that we broadly support the Government’s position on science, as my hon. Friend the Member for Rutland and Melton (Alan Duncan) made clear when he expertly opened the debate. Outstanding scientific work is being done in this country, but not enough is being done to turn that science to commercial advantage. It has to be recognised that leading companies at the forefront of technology are having to ask whether their next investment should be here or overseas because of the situation with regard to tax, regulations, skills and other matters.
I listened with great care to the hon. Member for Richmond Park (Susan Kramer) for some clarification of Liberal Democrat policy on trade and industry until I virtually lost the will to live. I think that none of us yet understands which DTI activities she thinks should be retained, and which she thinks should be got rid of, but what certainly came through, as my hon. Friend the Member for Mid-Worcestershire (Peter Luff) said, is the fact that business will be in despair at her proposals, which essentially remove the voice of business and subjugate it to the almighty Treasury, and give more power to the unloved regions, although she cannot even tell us what those proposals will cost.
The hon. Member for Richmond Park certainly seemed confused about aspects of energy; she spoke about the incompatibility of investment in nuclear with investment in other forms of renewables. In fact, today companies at the forefront of the sector are diversifying, and it is the giants who are investing both in the major elements of nuclear, and in aspects of renewables. BP has announced an $8 billion investment in alternative energy, and E.ON is prepared to invest in not just nuclear, but offshore wind and tidal power. The involvement of those major companies in investment in those forms of energy is the key to helping new technologies to come forward.
My hon. Friend the Member for Mid-Worcestershire, the Chairman of the Select Committee on Trade and Industry, made an excellent and insightful contribution, as always. He was not always as impartial as he set out to be, but thank heavens for that. He reminded us that the foundations for the economic success for which the Government have been able to take credit were laid well before it came to power in 1997. One of the great things that the Government did right was not to roll back the changes that the last Conservative Government made, which made this country one of the most successful economies in the world. He is absolutely right to say that there must be a Department that represents business—not just a Minister in the Treasury, but a Department that will argue the case for business with other Departments, and which will make sure that the needs of business are fully understood.
My hon. Friend the Member for St. Albans (Anne Main) made a strong contribution and a passionate defence of small business and its needs, and the hon. Member for Angus (Mr. Weir) made a thoughtful contribution about the failings of the energy White Paper, although he misrepresented our position, as we have made it quite clear that there will be no subsidy for nuclear new build.
Will the hon. Gentleman give way?
I hope that the hon. Gentleman will understand that I do not have time to give way to him, especially as he has not been in the Chamber for most of the debate. It seems that in virtually every debate in the Chamber, someone creeps in from the planet Zarg and makes an out-of-this-world contribution. Today, that role fell to the hon. Member for Edinburgh, South (Nigel Griffiths), who said that there is a “creditable record” on manufacturing. He said so of a Government under whom 1.2 million jobs have been lost, as my right hon. Friend the Member for Wokingham (Mr. Redwood) made clear, and under whom the share of gross domestic product attributable to manufacturing has dropped from 20 to 13 per cent. I hate to think what the hon. Gentleman would regard as a disappointing or even a bad record but, nevertheless, we were glad to hear his contribution, and perhaps his next appointment in the new regime will be as Minister for space.
I am afraid that time is against us. The hon. Gentleman had the chance to make his contribution.
Little makes as clear as the energy White Paper the consequences of the Government’s indecisiveness. The Government say that they want a new fleet of new-build nuclear power stations, but businesses could not possibly invest when they do not know the nature of the waste disposal programme, how decommissioning will be required to take place, or the costs of those activities. They do not know at what level carbon will be taxed, which makes it difficult for any business to come forward and invest. The Government say that they want to encourage renewables, yet the British Wind Energy Association reacted to the planning White Paper by saying that the UK
“is no nearer to the 2010 renewables target with the Planning White Paper”
and that the proposals will not bring any
“benefit for renewables in the short term”.
The association argues that the changes would affect only five of the 74 wind farm applications that are stuck in planning, and that there will be no benefit for one of the major sources of renewable energy from the changes proposed by the Government.
The Government say that they want Britain to take the lead in carbon capture and storage, but it is dithering and delays by DTI Ministers that have led to the cancellation of the only viable CCS pilot project in the UK. BP delayed the closure of that plant by a year to give Ministers time to introduce proposals to make the project feasible, but I am afraid that ministerial delays mean that an additional three years of delays have been built in before a pilot scheme can be made to work. It is the delays and indecision by DTI Ministers that have increased the likelihood of power cuts in the years ahead.
It is not necessarily what politicians think that matters—it is what business thinks that should matter most of all. In a recent survey by the British Chambers of Commerce only 8 per cent. of UK businesses described the DTI as
“playing an important role in promoting business.”
Nearly two thirds of businesses—61 per cent.—thought that the DTI is either ineffective or very ineffective. Just 7 per cent. think that it is effective. What business needs is a Department of Trade and Industry that regards its primary goal as supporting business, not regulating it. Some 30,000 new regulations have come into force since the Government came to power 10 years ago; there are 14 new regulations a day; and it costs the average business £13,500 a year to implement them. We need a DTI that is up to speed with business, and we need a culture that stops the unnecessary and over-zealous interpretation of EU directives, rather than one that fails to argue its corner and defend British business adequately in the EU. We need a DTI that does more to ensure that the needs of business are incorporated more effectively in the debate about skills, as we face unprecedented pressure and competition from countries such as China and India. There is no business today that is safe from the threat of relocation overseas, and even world-class British businesses find it hard to justify each new decision to invest here, rather than abroad.
Business tells us that it needs clarity: it does not need those 3,000 schemes, which should be slimmed down. It is frustrated by constant change, by nine Energy Ministers in 10 years and by the lack of a strong voice in discussions with other Government Departments. We do many things outstandingly, including bio-pharmaceuticals, finance, technology, design, services, aerospace and top-end engineering. We do many, many things that are brilliant. We are still a nation of great genius and innovation and brilliant leadership, but that is in spite of the Government, not because of them.
We need to know from the Government that they are still committed to a Department at the heart of Government, a voice at the Cabinet table, that will argue for wealth creation, because that is the cornerstone of everything that we want to achieve. The Government have taken that for granted for too long. British scientists and British business can still lead the world, but to do so they need a DTI and DTI Ministers who are more focused, more visionary and more purposeful than they are at present.
I will do my best to be both focused and purposeful in answering the debate. We have had an extensive debate and it has been interesting in all sorts of ways. The shadow Secretary of State for Trade and Industry opened the debate with a 45-minute speech, but that was not long enough, because he clearly did not have time to spell out much detail—to put it mildly—of Conservative party policy as it affects the DTI. When he did the saloon bar rant, as I might call it, on the need for a bonfire of regulations, he was challenged by my hon. Friend the Member for Wolverhampton, South-West (Rob Marris) to name just three regulations that should be abolished. After a while the hon. Gentleman said that he would take down all the no smoking signs that are going up—surely an indication that despite what we usually think, there can be smoke without political fire.
We then had an interesting contribution from the spokeswoman for the Liberal Democrat party, the hon. Member for Richmond Park (Susan Kramer). I was particularly interested in her plan to save £8 billion from the DTI budget—to be fair, I must add that that was to be saved over the lifetime of a Parliament. She, too, was unable to speak for quite long enough to say how that arithmetical conjuring trick would be managed. The science budget is about half of the DTI budget. It has gone up substantially and is some £3.4 billion a year. Clearly, to manage £8 billion-worth of cuts in the departmental budget over the lifetime of a Parliament would involve enormous slashing of the science budget. We will have to spend some time making sure that any academics who, sadly, voted Liberal Democrat last time know exactly what the plan is to slash the academic, science and research base of our country.
DTI issues affect everyone’s lives, from their gas bills to better training at work to parental leave, and from the level of the minimum wage to advice to a budding entrepreneur. The Chairman of the Select Committee, the hon. Member for Mid-Worcestershire (Peter Luff), is always a mild and reasonable man—but for two minutes I almost thought he was a Tory politician. He argued that all the great benefits to the country from a new Labour Government were based on a Tory economic heritage—but then he remembered where part of his salary comes from and became the reasonable even-handed Chairman of the Select Committee. Like the Opposition spokesmen and others, he paid tribute to the very good officials we have in different parts of the DTI. I thank him, and echo those words about the excellence of our officials, whatever our political differences might be about the DTI.
Let me take a step back and look at our work in context. Britain faces two major challenges—globalisation and climate change—alongside many other challenges. They are challenges, of course, but opportunities as well, for those willing to reach out to embrace them. We need to make globalisation work for us, and for the people of our country, and ensure that we shape globalisation rather than being shaped by it. That is the nature of the challenge. Over the coming decades there will be global changes at least as profound as those brought about by the industrial revolution of the 18th and 19th century. What took 200 years to evolve in that earlier epoch will take perhaps 20 or 30 years in the new global industrial revolution. My hon. Friend the Member for Edinburgh, South (Nigel Griffiths) spoke about one important aspect of that—the challenge for modern manufacturing.
The DTI is at the centre of ensuring that globalisation is good for UK employees through the creation of new high-value jobs, and that it is good for the consumer through fair competition and prices. In 2005-06, UK Trade and Investment—we have heard quite a lot about UKTI—helped nearly 6,000 UK companies move into overseas markets and landed more than 1,220 inward investment projects, with nearly 90,000 jobs being created or safeguarded. I saw at first hand the excellent work of UKTI at the recent Biotech 2007 conference in Boston.
The Government are responding to the changing business climate, which involves dealing with the challenges of globalisation and energy security. The DTI is tackling those challenges head on, taking tough decisions and making a real difference. We have heard about the energy White Paper, which will provide a framework for delivering a secure, low-carbon energy mix for the United Kingdom, tackling the twin challenges of climate change and—this is, as the Secretary of State noted, increasingly important—providing energy security. The White Paper announced specific measures to make inroads into reducing our carbon emissions and ensuring secure supplies for decades to come.
For the UK, but also for Europe more generally, globalisation demands what we increasingly refer to as a knowledge economy, which means a strong emphasis on science and innovation. The DTI continues to invest in our science base at unprecedented levels. The figure is currently £3.4 billion, which is more than half the DTI’s budget and double the sum of 10 years ago. That figure will rise to almost £3.9 billion in 2010-11. We have a worldwide reputation for being excellent at science. In the past few years, we have spent more than £3 billion building world-class laboratories, and one can see that huge investment in any local or regional university.
Patents are up 98 per cent. and income from intellectual property is up by 112 per cent. Since 1997, the value of collaborative research between universities and businesses has increased by more than 50 per cent.
I apologise, but I do not have time to take an intervention.
We take innovation—the appliance of science—seriously in all sorts of ways, and R and D tax credits and the new technology strategy board are important parts of that.
I listened very carefully to what the hon. Member for St. Albans (Anne Main) said about the difficulties faced by small businesses. We do not understate those difficulties, and we need to cut unnecessary regulation. There are now 600,000 more small and medium-sized enterprises in the UK than there were 10 years ago, so something is going right, and I hope that that includes the estate of Verulamium as well as the rest of the United Kingdom. The work of the Small Business Service and its delivery partner, Business Link, is very important.
It is also important to consider some of the domestic challenges that we face. As this century progresses, in our judgment there will be growing demand among our citizens for a better balance between economic activity and their private lives—what we often call the work-life balance. Reforms in the labour market, which now help parents and carers to make choices about flexible working to balance their time at work and time with their families, are important.
We are taking action across a wide range of areas that I do not have time to discuss. We want to ensure open and competitive markets, which are a hallmark of our approach. We are committed to reducing the administrative burdens of regulation by 25 per cent. Our plans will see 500 areas of red tape abolished, which will deliver an overall £2 billion reduction.
It is important to discuss the political differences between us. There are areas of consensus that I welcome, but whereas the previous Conservative Government devalued science, Labour has invested heavily in it. Labour has produced an energy strategy of which we can be proud to tackle climate change and bring about energy security, which is so important to national security.
It is worth quoting again the views of the leader of the Tory party, which my right hon. Friend the Secretary of State quoted earlier. What was his contribution to energy security? He said:
“Let’s give green energy the chance and then have nuclear there as a last resort.”
rose in his place and claimed to move, That the Question be now put.
Question, That the Question be now put, put and agreed to.
Question put accordingly, That the original words stand part of the Question:—
Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments), and agreed to.
Mr. Speaker forthwith declared the main Question, as amended, to be agreed to.
That this House acknowledges the outstanding performance of the economy under this Government with the longest unbroken economic expansion on record, in contrast to the boom and bust of the previous Government, with inflation and interest rates both on average half of the previous 18 years and over 29 million people in work for the first time; notes that the UK is recognised as one of the best places in the world to do business; supports the Government’s approach to better regulation and a 25 per cent. reduction in administrative burdens by 2010; praises the balanced approach to protecting working families through measures such as the national minimum wage and flexible working, while achieving the highest level of employment; commends the Government’s unprecedented commitment to a national post office network with clear access criteria and the financial support to underpin it; applauds the more than doubling in real terms of science funding after decades of under-investment; welcomes the Government’s leadership in tackling the challenges of climate change and energy security; endorses the commitment to reduce the number of business support schemes across Government to under 100 by 2010 after the Department of Trade and Industry’s successful simplification of its own programmes to under 10; recognises the increasing contribution of regional development agencies to regional prosperity and jobs; approves the new strategy of UK Trade and Investment which has received widespread business support; and calls on the Government to build on its achievements to secure the country’s growing economic prosperity.
BUSINESS OF THE HOUSE
That, in respect of the International Tribunals (Sierra Leone) Bill [Lords], notices of Amendments, new Clauses and new Schedules to be moved in Committee may be accepted by the Clerks at the Table before the Bill has been read a second time.—[Huw Irranca-Davies.]