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Small Businesses

Volume 464: debated on Thursday 11 October 2007

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.