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Business, Enterprise and Regulatory Reform

Volume 464: debated on Thursday 11 October 2007

The Secretary of State was asked—

Coal Mining

1. When he last met representatives of the coal industry to discuss prospects for the deep coal mining industry. (156868)

In the past year, Ministers have regularly met coal industry representatives to discuss a range of issues under the auspices of the coal forum, and they will continue to do so.

The Minister might be aware that there has been discussion in the coal forum about an indicative figure for coal—a target figure for domestic coal of, say, 20 million tonnes per annum, split roughly between deep-mine coal and open-cast coal. What is his view on that? Does he support it?

My hon. Friend gives me the opportunity to pay tribute to the work of the coal forum. We welcome the engagement of all the different coal industry stakeholders through the forum. I am aware of the discussions that my hon. Friend describes. Let me say that we recognise the continuing importance of coal, particularly to electricity generation in the UK. He might be aware that last year coal generated an average of nearly 40 per cent. of the UK’s electricity, rising to 50 per cent. at peak prices. As he will know from the energy White Paper published last year, we continue to recognise the importance of coal. I am sure that my right hon. Friend the Minister for Energy will want to discuss my hon. Friend’s point with him when he visits.

Open and deep-cast coal production now barely meet a quarter of total UK demand, and the figure is dropping every year. Regardless of whether demand for coal increases or falls in the years ahead, the truth is that domestic production will continue to fall. Rather than getting caught up in discussions about how to slow the decline in domestic production, should not the Minister’s focus be on what will happen to our coal-fired power plants, and on whether the development of carbon capture technology can be accelerated in time to create a new generation of clean coal-fired power stations? Such stations will help to protect us against an over-reliance on gas-fired generation.

The hon. Gentleman rightly recognises the importance of carbon capture and storage. As a result, I am sure that he will welcome the announcement made in the pre-Budget report. We see considerable potential for carbon capture and storage and think that it has a significant contribution to make in helping us deal with the carbon dioxide issues that we face; it will also help our energy industry more generally.

Is the Minister aware that most remaining privatised coal companies own vast acres of land around their pits? Is he further aware that in recent times some pits have been closed and vast sums made out of them as property? Many of us believe that pits are being shut to make money as property developments. Will the Minister keep a wary eye on the few remaining companies involved in the production of coal? It is important to exploit the huge deposits of coal underground, rather than being concerned about the land on top.

I pay tribute to my hon. Friend’s long-standing championing of the coal industry. We certainly continue to keep a wary eye on the prospects for the coal industry in the UK. One of the reasons we established the coal forum was precisely to enable ongoing discussions with all the different stakeholders in the coal industry, to understand the pressures on businesses and the attitudes of those who work in the industry, and to make sure that they are properly taken into account in our assessments of its future needs.

My hon. Friend the Minister will be aware that the crisis in energy is likely to come between 2012 and 2015, when we will see the simultaneous decommissioning of coal-fired stations and of some nuclear stations. It is therefore important that we ensure that the investment in new technologies is continued; there are, for example, integrated gasification combined cycle and carbon capture and storage projects. The Government are going to help with a demonstration plant, but we need more such plants if we are to ensure that such technology will be available to tackle climate change. If we are to tackle that problem, the transference of such technology has to be involved. Will the Minister ensure that we will be likely to see more than one demonstration plant for carbon capture and storage?

My hon. Friend will know that we are working extremely hard not only on carbon capture and storage but on a variety of other low-carbon technologies. We are, for example, seeking a trebling of energy from renewable sources. We recognise coal’s contribution to the energy mix, and through a variety of forums, not least the coal forum, we will continue to discuss the UK’s future energy needs with all stakeholders.


2. What funding and other support is available for those businesses working on the use of hydrogen as a fuel. (156869)

Available funding includes a £15 million fund operated by my Department for hydrogen and fuel cell technology demonstrations. The Department also funded £6.5 million towards the establishment of a fuel cell and low-carbon vehicle technology centre of excellence based in Loughborough.

I am sure that the Minister is aware that the Governor of California visited this country recently, and that California has been a champion of the use of hydrogen fuel technology. Hydrogen is being used as a fuel throughout the state of California. What steps is the Minister taking to adopt some of its widespread availability?

I heard something about the Governor of California coming to the UK, and I welcome the fact that he has championed not only the potential of hydrogen but further investment to reduce carbon dioxide emissions. We recognise the potential, which is why we set up the fund. I also welcome the initiatives such as those taken by the Mayor of London, who has committed to having 70 public transport vehicles powered by hydrogen sources. I know that the hon. Gentleman has an interest in this matter, and I am sure there will be many exchanges about the future of hydrogen. We recognise its potential, but it is still some way from fulfilling it because of research needs. I hope that the funding that we have committed will help to move the technology forward.

My hon. Friend the Minister rightly mentions the institute at Loughborough, and we welcome the announcement of the energy technology institute and the £1 billion that it will bring, which will be focused on Loughborough. He talks about potential, but will he visit Intelligent Energy, a company that has a hydrogen fuel cell motorbike ready for production? We talk about potential, but what can his Department do to assist companies that are ready to produce the vehicles and fuel cell technology that will drive this country forward? We must not just talk about potential but ensure a marketplace for such vehicles.

In principle, I am happy to come to Loughborough to meet my hon. Friend and see the company that he describes. In my original answer to the question of the hon. Member for Rochdale (Paul Rowen), I gave two examples of support that is available to move this new technology forward. There are a range of other sources to help us take it forward and I—or perhaps my right hon. Friend the Minister for Energy—look forward to meeting him to discuss those options.

In Havering, BP conducted a very successful experiment in the use of liquid hydrogen fuel for single-decker buses that ended last year. The only trouble was that the buses had to come down from the east end of London to Havering, because that is where the fuel was. Does the Minister agree that it is not just a question of the viability of using a different fuel, but of its availability, in order to make experiments environmentally friendly and to encourage businesses to try them?

I accept the hon. Lady’s point. We need to get to a point where we expand the pilots, which is why I hope she will join me in welcoming the initiative of the Mayor of London to commit to 70 hydrogen-powered public transport vehicles by 2010. Such initiatives will help to move the technology from demonstration projects to reality.

Nuclear Power

The Secretary of State for Business, Enterprise and Regulatory Reform
(Mr. John Hutton)

The public consultation on the future of nuclear power in the United Kingdom closed yesterday.

Over the past five months, we have consulted widely, seeking views from a broad range of interested parties on the information and arguments set out in our consultation document. We are now giving careful consideration to all the responses.

We have already lost vital time because of the way in which the Government botched this consultation. Will the Minister assure us that he at least has the bottle to make a quick decision on this matter?

We need to make a quick decision; I can certainly agree with the hon. Gentleman to that extent.

The latest figures from the Nuclear Decommissioning Authority reveal a 16 per cent. increase in the cost of decommissioning legacy waste, to £73 billion. Is my right hon. Friend confident that he can honour the Government’s guarantee that there will be no future subsidy from the taxpayer for any new nuclear build, given that no one has the slightest idea about what the future decommissioning and waste management costs will be?

Yes, we are clear about that, and the arguments that support it were clearly set out in the nuclear consultation document. My hon. Friend raises a fundamentally important aspect that has come up repeatedly during the public consultation, but I believe that we have set out the right way forward. There will be no taxpayer subsidy and no hidden subsidies for new nuclear if Her Majesty’s Government reach that decision. That is the right and sensible way to proceed.

As the hon. Member for Barnsley, West and Penistone (Mr. Clapham) said earlier, crunch time for domestically generated power in the United Kingdom is only five years away. Bearing in mind how long the Government have taken to make a decision about nuclear power and that it has to form part of the mix in future if we are to meet our climate change targets, how soon will there be a recommissioned nuclear power station that produces new nuclear energy in the UK?

I respect the hon. Lady’s concerns, which are shared by all parties. She should, however, be careful about saying that her party has a monopoly of wisdom. I have been carefully studying the words of the hon. Member for Rutland and Melton (Alan Duncan), who appears to take three different positions on nuclear power. He was opposed to it, then it was a last resort and now he is apparently in favour of it. However, we shall shortly discover the position of the official Opposition.

My hon. Friend the Under-Secretary set out in previous answers some of the measures that we are taking to deal with the hon. Lady’s point. We are aware of the importance of getting on with the matter, and the Government are determined to do that.

The Secretary of State wills the end but not the means. Will he confirm that the Nuclear Decommissioning Authority has not been able to appoint contractors to decommission the old Magnox power stations because they are not interested in doing the work at the price that the Treasury is prepared to pay? Is it surprising that companies such as E.ON and EDF say that the window for new build nuclear is closing in this country, when the Government’s dithering means that old stations are not being decommissioned, there is no clarity about the price of carbon and the Government cannot even set out the regime for nuclear waste disposal? Does not the greatest threat to our energy security come not from the Russians or the middle east, but from the Government’s delays and inability to make the big decisions?

No. Again, I have a lot of respect for the hon. Gentleman, but his remarks are ridiculous. His point would be much more valid if there was any consistency or coherence behind his party’s energy policy. When he supports our reforms to the planning arrangements, others will take his comments a little more seriously.

Postal Services

4. What recent developments there have been in Government policy on the long-term future of sub-post offices; and if he will make a statement. (156871)

On 17 May, following public consultation, my right hon. Friend the Secretary of State confirmed, subject to European state aid clearance, funding of up to £1.7 billion until 2011 to support the post office network and place it on a more stable footing.

That Government funding includes a network subsidy of £150 million a year to support the network. Despite that subsidy, because of continued losses of around £4 million a week and a reduction of approximately 4 million a week in the number of people who use post offices, it is necessary, as the Secretary of State announced, to reduce the size of the network while maintaining national coverage. That process began last week and will continue in the next 15 months or so.

Notwithstanding the subsidy of public money involved, that answer reveals a paucity of long-term policy and intellectual thought about how we can use that much-loved and much-needed facility, which all our constituents want. Will the Minister confirm that the 77 closures that were announced in the east midlands recently would not have been announced—the announcement would have been held back—if a general election had been called? Will he also confirm whether, when he announces the closures in Leicestershire and Rutland in November, there is any genuine chance of a consultation period that allows some of the closures not to happen? Or will they be enforced?

The timing of the programme has nothing to do with general election timing.

There is a balance to be struck between finishing the programme and the uncertainty that hangs over sub-postmasters and mistresses while it continues. We have set out our timetable to try to achieve that balance.

I thank my hon. Friend for visiting my constituency last Thursday to see for himself exactly how rural services are being delivered through what was initially a pilot scheme two years ago. Would he care to share the experiences that he had last Thursday with the rest of the House?

My hon. Friend is absolutely right. Alongside the difficult closures that are taking place, the Post Office is developing valuable outreach services. I had the pleasure of seeing them in his constituency last week, in the village of Twynholm, for example, where a member of staff from the neighbouring post office visits several days a week for several hours. The hours are well known to local people and the service has been up and running for two years. From talking to members of staff and the customers who use the service, I found that it was extremely popular. There are imaginative and creative ways in which the Post Office can provide services, particularly in rural areas where it might no longer be possible to sustain a full-time permanent post office.

One of the Post Office’s outreach services, to which the Minister just referred, is the possibility of home visits. When I suggested to the Post Office that it might like to make 3,500 home visits in my constituency, it seemed reluctant to do so. The loss of footfall arises largely from Government policy, which has removed business. Having closed rural post offices, we are now proposing to close urban post offices in some of the most deprived areas of the country, which will do immense social damage. Instead of ramming that proposal through, would the Government care to take it back and consider the proposals that the National Federation of Sub-Postmasters has made to develop proper businesses, so that instead of killing those small businesses we can allow them to grow?

The hon. Gentleman refers to the National Federation of Sub-Postmasters, whose general secretary has said:

“Although regrettable we believe that these closures are necessary to ensure the remaining post offices are able to thrive in the future.”

If the Opposition’s policy is to reverse making available the payment of benefits into bank accounts, I should remind the hon. Gentleman of the cost. It costs the taxpayer 1p for a benefit or pension to be paid into a bank account. It costs 80p to make that payment through the Post Office card account and £1.80 to do so by girocheque. If the Opposition’s policy is to reverse that, the cost would be about £200 million a year, which I am afraid we would have to add to the list of other uncosted spending promises that they have already compiled.

I declare an interest as a member of a multi-generation sub-post office family in the village where I live. Has the Minister had a chance to read the National Consumer Council report, “Post office closures 2002 to 2006”, which was critical of the closures in that period? The post office closures that were announced then did not produce a strategic reshaping of the network; rather, they hit the poorest and most vulnerable members of society. The NCC does not believe that the 95 per cent. requirement for people in rural areas to be within three miles of a post office will be adequate to prevent that from happening again. Would the Minister care to comment on that?

I have indeed read the report to which my hon. Friend refers. He is right that there are lessons to be learned from post office closures. The access criteria are important to ensure national coverage even after the change, which is why we are compensating the hard-working sub-postmasters and sub-postmistresses for their efforts. The process does the right thing by them, but also ensures that closures do not happen in an ad hoc way, on a first come, first serve basis that leaves holes in the network without trying to ensure national coverage.

Does the Minister not recognise that, once closed, a post office is lost for ever to the community? Those vital services, which are so valued by the community, require the community’s input, to ensure that no unnecessary closures are made and that decisions are not made that do the same damage as the urban reinvention programme did to the post office network in urban areas. Will he therefore extend the consultation period, once the Post Office has made its proposals, so that it can be meaningful for local communities and so that any mistakes made by the Post Office can be corrected?

The hon. Gentleman asks about extending the consultation period. As I said a few moments ago, there is a balance to be struck in doing that and lifting the uncertainty from sub-postmasters around the country. That is why we have tried to strike the balance in the way we have.

I have certainly encouraged Post Office Ltd to engage properly with local communities. Postwatch, the consumer voice, has a critical role to play in the consultations. Local authorities, too, have a critical role in engaging with Post Office Ltd and informing it of future regeneration plans and so on, so that plans can be made as best as possible. However, we cannot escape the fact that 4 million fewer people a week are using post offices, compared with a couple of years ago, and that the network is losing £4 million a week. We are committed to social network subsidy for the Post Office, and if that subsidy were not available, many more post offices would close. That is why we have committed £150 million a year to support the network.

Post Office Network

The Secretary of State for Business, Enterprise and Regulatory Reform
(Mr. John Hutton)

The Government are committed to securing a long-term viable future for Royal Mail and the post office network. To this end we have made substantial investment available both to support the modernisation of Royal Mail and to provide a comprehensive and accessible national network of post offices.

How come it took until yesterday for the Prime Minister and the Secretary of State to condemn the Royal Mail strike? Could it have anything to do with the fact that, until the Prime Minister bottled at the weekend, he was expecting lots of funds from the Communication Workers Union to fight the election?

That is untrue. I have made it clear repeatedly since I have been in this job that the strikes should end. There has to be a sensible solution to this industrial dispute. My interest is to safeguard the investment that the taxpayer has made in this business and to ensure that the business can operate effectively in the liberalised market in which it operates. It is completely untrue to say that Ministers have been silent. We have made our views known on this matter repeatedly since the summer.

The Secretary of State rubbishes the point made by my right hon. Friend, but over the past four years the CWU has made political contributions of £4.5 million, half of which has gone directly to the Labour party, with the rest being used for campaigning in the Government’s favour. This presents the Secretary of State with a huge conflict of interest, given that the Government are the sole shareholder in Royal Mail and a recipient of funds from the principal union involved.

There is absolutely no conflict of interest of any kind whatsoever. I have made it clear repeatedly, as has my right hon. Friend the Prime Minister, that we will always speak up for the public and the taxpayer when it comes to the future of Royal Mail and the Post Office.

Yes, I am a member, and I am proud to be one.

May I ask the Secretary of State why the Government are refusing to intervene in this dispute, which is costing Royal Mail millions of pounds and inflicting countless damage on hundreds, if not thousands, of other businesses across the country?

Let me explain to my hon. Friend that our role in this regard is to speak up for the public and for the taxpayer. We are not going to take sides in this dispute. That is our perspective, and I think that it is entirely proper that the management and the unions negotiate the terms and conditions for people in Royal Mail. I am not, for example, going to intervene to provide further funding to support a different offer to Royal Mail staff. We have given Royal Mail substantial investment, and it must operate within those investments and ensure that the taxpayer gets a return on them. I believe that the offer that has been made to Royal Mail staff is a decent and fair one, and I hope that this industrial dispute ends as quickly as possible.

Given that the Government intervened strongly and energetically to sort out the affairs of a private company, Northern Rock, is there not a case for following that example and adopting a more even-handed approach and acting as an honest broker in this dispute? Should not the Government intervene before breakfast, intervene before lunch and intervene before dinner—in the words of a former Secretary of State for Trade and Industry—to get a fair, just, negotiated settlement, not least in the interests of all the businesses that are suffering at the moment?

I agree that there must be a fair, just and negotiated settlement, which is what we believe should happen. I remind him and other hon. Members that in 2001 Parliament—with general consensus and with the agreement of both Royal Mail management and the trade unions—agreed that Royal Mail should operate with commercial freedom. I am not going to get involved in individual discussions on terms and conditions because I do not believe that it is appropriate for Ministers to do so. What I believe is appropriate is that this industrial action should end, as I agree that it is damaging businesses and inconveniencing the public.

Is the Secretary of State aware of the real anger felt by people in my constituency, particularly in Walton, Kirby and Clacton, about the news that their post offices and sub-post offices might be closed? Is he aware that under these proposals post offices that are paying their way, on which many older people depend, could be shut?

As the Minister for Employment Relations and Postal Affairs has made clear, there is an obvious case for pressing ahead with these changes. The post office network must find a long-term and sustainable basis for going forward and it has to reflect changing customer preferences, which are visible to all of us in our constituencies. It is inconceivable that any sensible Government could follow the advice of the hon. Member for Rutland and Melton (Alan Duncan) and find up to another £1 billion to subsidise the post office network, which I understand is now his policy. That is simply not economically credible. It is a deep disappointment to me to see the Conservative party, which always used to clothe itself in respectability when it came to financial matters, now displaying utterly hopeless economics.

Will my right hon. Friend confirm whether the current management of Royal Mail has his full confidence in searching for a solution to the present dispute on how it delivers a secure and solid future for Royal Mail, its customers and its employees?

Does the Secretary of State understand that the questions that he has heard from his hon. Friends today only reinforce the growing view in the country that the Government need to use their authority—as the Government and sole shareholder in the Royal Mail Group—to intervene decisively in the dispute and bring it to an end? The dispute is causing huge damage not just to the Royal Mail Group, but to the whole social and economic fabric of the country. I therefore welcome the Secretary of State’s preparedness to come before the Trade and Industry Committee next week—I hope that a date can be organised shortly—to answer questions on the dispute.

I always look forward to appearing before the hon. Gentleman’s Select Committee and I am sure that this occasion will be no exception. We should bear one important fact in mind: fortunately, we live in a country where no Minister has the power to compel people to work or not to work. I therefore have limited powers in this case, which is obvious to everyone. Our job, I think, is to make it clear to the management and the unions where we believe the public interest lies in this matter. We have done that very clearly indeed.

I hear what my right hon. Friend says, but it cannot be helpful when the chief executive of Royal Mail makes the comments that he has about his own work force. Postal workers are greatly depressed about the dispute and its possible outcome. It is outrageous that people who have given their lives to the organisation are now having imposed on them changes in terms and conditions of their work that would be completely unacceptable in other sectors. Is it not about time that the Secretary of State understood what postal workers are suffering and intervened?

I have had the very good fortune to discuss these issues with some of my own constituents who work for Royal Mail. I understand their concern about the future, which we all share. However, as I said in an earlier reply, it is important that we have a sensible, negotiated solution to the dispute, which I believe is perfectly possible. I have the greatest respect for staff who work in Royal Mail—we all do; we know what an important and highly valued job they do in our constituencies—but we must not lose sight of the important fact that if Royal Mail is going to succeed in the liberalised marketplace in which it now works, change is inevitable. We must facilitate a process of change, as the status quo is not sustainable. There will have to be changes inside Royal Mail if it is going to have the successful future that we all want it to have. I strongly believe that the best way to progress that is through a sensible agreement.

The Secretary of State will appreciate that an area such as mine has been particularly hammered by the dispute, because of the absolute reliance on Royal Mail not just by individuals but businesses. In welcoming what the Prime Minister said yesterday, may I draw to the Secretary of State’s attention the fact that the GP who administers the Small Isles medical practice has told me that people on those islands who have had blood tests cannot now get the results because the method of communication between the regional hospital and those islands is no longer in place? That is a desperately serious state of affairs. Even if the Government cannot intervene in the negotiations over the dispute, could they at least, in concert with the Scottish Executive, consider emergency provisions for people who are medically dependent on that service?

I am very grateful to the right hon. Gentleman for bringing that point to the attention of the House, and I will pursue it. We should not forget that in some cases, one of which he has highlighted, the industrial action could compromise a person’s life. That is simply unacceptable.

The letters that MPs get from Royal Mail and the union all say that they want a modernised and more competitive business. If the management and the work force agree about where they want to be, cannot the Government, as the owner of the business, help them to agree how to get there?

That is very much what I want to do, and I want to try to make sure that that happens. I hope that there is still sufficient good will for the process to reach a sensible conclusion. Management and the trade unions are talking as we speak, and I hope that a way is found quickly—it must be quickly—to end this damaging dispute, which is compromising the investment that taxpayers have made in the Royal Mail, compromising businesses, inconveniencing the public and, in the worst case scenario, as the right hon. Member for Ross, Skye and Lochaber (Mr. Kennedy) said, threatening the health and well-being of individual citizens, which is unacceptable.

Is it not the case that 43 Labour Members have signed an early-day motion expressing implicit dismay at the Secretary of State’s apparent indifference to the growing severity of the dispute? At last, today, we have heard rather more from him, which is welcome. The Government are the sole owner, the company must modernise or decay, and businesses up and down the country are being hurt. Given his answer to his hon. Friend the Member for Stafford (Mr. Kidney) that that is the way he wants to go, what further steps will he take to make it clear that union leaders are not acting in the interests of postal workers and that an immediate settlement is in everyone’s interests?

We will continue to make that point. We have made the point clearly again to Royal Mail management, and this morning I had the opportunity to do so again to the general secretary of the Communication Workers Union. We do understand the severity and seriousness of the situation, we are behaving responsibly as the shareholder in Royal Mail, and we will do all that we can to bring the matter to a sensible conclusion. That must be done on the basis of terms that are acceptable to us as taxpayers and investors in Royal Mail. The Prime Minister set out clearly yesterday the terms on which the dispute should be settled.

Is not the cruel truth that in their weekly pay packet tomorrow 130,000 postal workers will receive only one day’s pay? Will not their understandable fury at the sacrifice that they are making illustrate harshly that they are being seriously misled by backward-looking union leaders and that their future is best protected by supporting positive negotiations and a constructive plan for modernisation?

The dispute must have a sensible outcome, as I have made clear repeatedly. I will not get involved in the blame game as the hon. Gentleman has tried to do. It is essential that the dispute be now brought to an end, and the best and only sustainable way in which that can happen is a return to work on the basis of the offer that Royal Mail has made. If there are still points of detail that need to be discussed and debated—I understand that there are—those should be debated in a sensible fashion and not in a way that inconveniences the public as the industrial action is doing.

During my recent visit to Watford sorting office, organised by my colleague Sal Brinton, comments by management and staff indicated that structural restrictions prevent Royal Mail from competing on a level playing field within its own sector. Is the Secretary of State willing to meet me to discuss the underlying structural issues concerning employees and management of the Royal Mail, which may be contributing to the current industrial difficulties?

I should be happy to meet the hon. Gentleman, and any other Member who wants to raise those issues with me.

The European Union has now agreed on a long-term framework for the future liberalisation of postal services, which is very welcome. There can be no turning back of the clock in relation to liberalisation in the United Kingdom—that would be a hugely retrograde step—but we are always willing and ready to discuss with the Royal Mail unions, the hon. Gentleman and other Members any points of detail or concern that they may wish to raise, and I look forward to that.

Small Businesses

6. What recent estimate his Department has made of the average number of hours a week spent by small businesses on the burden of administration and regulation. (156873)

My Department's annual small business survey showed that small and medium-sized enterprises typically spent three hours per week dealing with paperwork in compliance with Government regulations in 2005, down from four hours in the previous year.

As an active supporter of the east Northamptonshire branch of the Federation of Small Businesses, may I draw the Minister’s attention to a recent national FSB report which disputes the Government’s findings? A survey of its members found that, on average, small businesses nationally are spending as much as seven hours a week filling in forms and complying with the needs of regulators. Will the Minister agree to meet representatives of the FSB and outline ways in which he can address their concerns?

I meet representatives of the FSB regularly, and I pay tribute to their work. The survey to which the hon. Gentleman referred involved a sample of 100 businesses; the one that I cited involved a sample of 8,000. FSB surveys conducted between 2000 and 2006 show quite a large reduction in the proportion of FSB members dissatisfied with the volume of legislation, and other evidence shows a fall in the number of businesses citing regulations as an obstacle to success. Nevertheless, there is no room for complacency. We need to go further. That is why we are committed to reducing the burden of regulation on businesses by 25 per cent. by 2010, and why the second round of departmental simplification plans will be published in December.

May I remind my right hon. Friend that when I asked the hon. Member for Rutland and Melton (Alan Duncan) in the Chamber what regulations the Opposition would abolish he referred to only one—the provision for no smoking signs outside buildings? That was the only one that he could cite.

The question of regulation is, however, a huge one. Will my right hon. Friend assure me that the thrust of the Government’s approach to it will focus not on some bonfire of regulations, but on simplification of the regulations that we have? We have overlapping regulations that are excessively complicated. We need simplification, but we still need regulation.

My hon. Friend is absolutely right. There is, of course, a divergence of views among Conservative Members. The right hon. Member for Wokingham (Mr. Redwood) proposes a bonfire of regulations, apparently with the support of the shadow Chancellor, while the party leader calls for mandatory pay audits of companies.

My hon. Friend is absolutely right. That is why we are presenting the departmental simplification plans, the second round of which will be published in December.

I hope that the Minister will reflect on the incorrect statement that he has just made.

Small firms are fed up with the loose words and empty promises of Ministers. Let me take the Minister back to six years ago, when the Government introduced regulatory reform orders. We were told then that they would reverse the regulatory tide, but what happened? In six years, Ministers have issued just 33 reform orders and enacted 18,000 more regulations. That is the truth about the effects of RROs.

Given the dismal record of Ministers and their colleagues, may I ask the Minister for regulatory reform one straightforward question? How many regulations has his department scrapped in the last 12 months?

Let me remind the hon. Gentleman of the point that I made earlier. There is clear evidence that the proportion of businesses citing regulation as an obstacle to success has fallen significantly, from 21 per cent. in 2002 to 13 per cent. in 2005. Concern on the part of small businesses has fallen very sharply, reflecting the progress that we have made. However, we undoubtedly need to do more, which is why we are committed to a 25 per cent. reduction by 2010. Further details will be published in December. We have made very good progress, but there is more to come.

Energy Tariffs

The Secretary of State for Business, Enterprise and Regulatory Reform
(Mr. John Hutton)

Following publication of the energy White Paper, we are working closely with Ofgem and energy suppliers to consider the right way forward.

My right hon. Friend will be aware that the recent Ofgem report on social tariffs shows that energy suppliers’ take-up of social tariffs varies widely. As he knows, there is widespread consensus among non-governmental organisations working on fuel poverty issues that there needs to be much wider use of social tariffs by energy suppliers. He may be aware that the all-party group that I chair recently produced a report on the issue. Will he agree to meet me and some of the organisations involved in the sector to discuss the way forward and to ensure that the consumer interest is represented in the discussions?

I would, of course, be willing to meet my hon. Friend and all hon. Members who were involved in what I thought was a very useful report. It is worth reminding ourselves that there are 2.5 million fewer households in fuel poverty today than there were 10 years ago. I assure him that we are looking closely at how we can deal with the price gap between direct debit and pre-payment meters. We are also looking at easier ways to help pre-payment customers to switch to cheaper supplies. A number of Britain’s power companies are doing some excellent work in that area and we need to see how much more we can do.

Small Businesses

8. When he next expects to meet representatives of the small firms sector to discuss employment regulations. (156875)

The Department is in regular contact with the small firms sector. The sector is represented on the employment law simplification practitioner panel, which will meet my right hon. Friend the Secretary of State on 31 October. The Department's ministerial challenge panel, chaired by the Minister with responsibility for better regulation, which critically appraises the Department's regulatory and policy proposals, also has representation from the Federation of Small Businesses and the Small Business Forum.

I am pleased to hear that, but does the Minister agree that the two biggest challenges facing small businesses are employment regulations and tax? Has he had a chance to look at yesterday's remarks by Lord Bilimoria, the founder of Cobra Beer and a key Labour supporter? He said that investment in small businesses and entrepreneurship has been penalised by the proposed 80 per cent. increase in capital gains tax, and that it sends all the wrong signals for Government support for small firms. What representations will the Minister make to the Chancellor about that anti-business measure?

My advice to the Chancellor would be not to return to the days when the hon. Gentleman’s party was in power and the tax was 40 per cent. Britain is still one of the best countries in the world in which to do business. That is backed up by the World Bank, and it is shown by our economic record over the past 10 years. I remind him that there are 500,000 more businesses in existence now than when his party was in power.

What consideration has been given to the risk management element with regard to removing regulations for small businesses: for example, no smoking signs that are required in one’s own home when it is used for business purposes, and even in one’s own car when it is used for business purposes?

The hon. Lady makes the good point that we must always be alive to making regulations as simple as possible. I remind her that the Government have a very active programme on that. That is why we set a target to reduce administration burdens on business by 25 per cent. by 2010. It is why, around a year ago, a list was published which set out 500 simplification measures, saving businesses some £2 billion in administrative burdens costs. As my right hon. Friend the Minister for Competitiveness said, those simplification plans will be revisited shortly so that even more progress can be made on that agenda.

Could the Minister now answer the question that the Minister for Competitiveness failed to answer and tell the House how many regulations have been withdrawn in the past 12 months?

I have just given the hon. Gentleman some numbers. We published last December a list of 500 measures that would reduce admin burdens by some £2 billion for business as part of meeting the target to reduce admin burdens by 25 per cent. by 2010.

UK Competitiveness

The key to continued long-term improvements in UK competitiveness and productivity will be maintaining the remarkable new stability that has characterised the British economy over the past decade. We will need to continue to build on that foundation, for example, as the Chancellor announced on Tuesday, with continued investment in higher education and skills, in infrastructure and in the science base.

That statement does not match the facts. The Institute of Management and Development, which ranks international competitiveness, ranked Britain ninth in 1997. It now ranks Britain as 20th in its index. Who is to blame?

The most recent ranking that I have seen is the one referred to by the Minister for Employment Relations and Postal Affairs, my hon. Friend the Member for Wolverhampton, South-East (Mr. McFadden), from the World Bank. It ranks the UK sixth out of 178 countries. The latest global competition review ranks the Competition Commission joint first in the world. The new stability that we have secured is the key to that. We used to be the least stable country in the G7 on the inflation measure. Since 1997, we have been the most stable. That is the key to Britain’s new prosperity and to the huge improvements in the economy over the past decade—we are determined to maintain that.