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Small Business Regulation

Volume 474: debated on Thursday 3 April 2008

In December 2007, the Government announced that we had delivered £800 million of annual savings for business by reducing red tape. For example, from this Sunday, private companies will no longer need to have a company secretary, saving each of them an estimated £50 to £100.

Indeed, we have several other measures. For example, private companies no longer need to hold an annual general meeting, firms will have to apply for small business rate relief only once every five years rather than every year, and heavy goods vehicle operators can carry out their licensing transactions online. Those are examples of several measures that we have taken because, although the World Bank ranks Britain as the sixth best economy in the world to do business, we are not complacent. We want to ensure that Britain remains one of the best places in the world to do business.

The Minister knows that a batty European directive has been quietly pushed through the House without a vote. It places pub landlords in jeopardy if customers call the staff “love” or “darling”; I personally use “angel”.

More seriously, the directive places a further burden of some £10 million on small business to enforce and monitor it. What steps did the Minister take to stop that farcical additional burden on small businesses? When will the Government start saying no to stupid European regulations, which are unenforceable, encourage troublemakers and generally bring the law into disrepute?

There are certain rules about language in the House, but outwith those, the hon. Gentleman is entitled to call me anything he wishes and I assure him that I will not take offence.

This country has led the way in making the European Union alive to the need to ensure that regulation is proportionate and not over-burdensome. We have pushed hard for the European Commission to adopt a similar position to the one in this country, where we have a target of reducing the administrative burdens from the European proposals by 25 per cent. We intend to continue to push that with the Commission and other member states.

In his Budget speech, the Chancellor announced that there would be

“radical new proposals to impose a limit on the amount of regulation that can be imposed by Whitehall Departments.”—[Official Report, 12 March 2008; Vol. 473, c. 292.]

Given that regulation is six times more burdensome on small business than on large business, can the Minister throw any light on when those radical new proposals will be brought forward?

The hon. Lady will also have seen the enterprise strategy that was published alongside the Budget, which precisely discussed consulting on, for example, the introduction of regulatory budgets. She raises the burden of regulation, but let me remind her to look at her party’s policy programme, where she may find extensive proposals for additional regulation. Perhaps we should bear that in mind, as well as the Government’s record.

The hon. Member for Solihull (Lorely Burt) is absolutely right. The burden of regulation and bureaucracy falls far more heavily on small business than on large business, which can afford to employ the staff to deal with it. Does the Minister agree that regulation is damaging for smaller business because it takes the attention of the sole proprietor—or perhaps he and a co-partner—away from the purpose of their business, thereby causing the business to suffer and the Government’s tax take to fall?

I outlined several measures that are a specific help to small businesses, such as the requirements on AGMs and the lightening of the requirements on company secretaries. We are alive to the burdens on small businesses. That is why we have brought forward those measures and why we have introduced commencement dates, so that people know when any regulations will be introduced. We published the enterprise strategy alongside the Budget precisely to work with business to ensure that any regulatory burden is not over-burdensome.

Since 1997, the total burden of regulation has risen by £65 billion, according to the British Chambers of Commerce. Of that total, more than £32 billion has come from one Department—the one represented by those sitting opposite on the Treasury Bench. So despite the Minister’s earlier claims and offers for future action, his record shows that his Department is responsible for nearly half the total regulatory burden on small businesses. Given that, will he now stand at the Dispatch Box and tell us exactly how much of his £32 billion he will cut in the next 12 months?

The Department has a commitment to reduce its burden by £700 million. However, I take issue with the allegation that business burdens have risen by £66 billion, because that includes a number of measures that I would not classify as a burden, but which the hon. Gentleman might, such as access to transport for the disabled. Does he think that that is a burden? Those measures also include controls over asbestos. Does he think that health and safety measures such as those are a burden? Some of those measures are not burdens on business, but appropriate regulations, which are a mark of a decent and civilised society.