HC Deb 02 April 1976 vol 908 cc1867-78

4.1 p.m.

Mr. John Farr (Harborough)

I am grateful that the Minister of State, Department of Industry has seen fit to attend this short debate. Like him, I think that this is an important matter, the significance of which is not confined to Wilbury Engineering, of Market Harborough, as I shall seek to show. I must first say that the description given to my debate on the Order Paper, which says that I am: to raise the subject of the burdens imposed on small firms by official form-filling (case of Wilbury Engineering) was not exactly what I first submitted. I had rather condensed the matter by describing it as The case of Wilbury Engineering and over-government. I understand that "over-government" is not, as yet, a dictionary word and the proper channels translated the description in the manner they thought fit.

I had suggested the earlier description because it depicted much more graphically what I would call the whole plethora of officialese with which companies have to struggle today.

Wilbury Engineering, of Market Harborough, is one of the many companies that are struggling with this "over-government". I would like the House to look at its case in particular. The company is a typical, small, efficient and enterprising business, of exactly the same nature as thousands of others upon whose shoulders today depends, as never before, the prosperity of our country. The success of these thousands of small businesses and firms is a measure of the success of Britain. To their success is geared the nation's prosperity.

It is absolutely essential to ensure that such companies operate in conditions that make it possible for them to compete nationally and internationally. In turn, I maintain that it is the responsibility of the Government to see that these conditions continue to exist and are not eroded. In particular, it is very much a governmental responsibility if these conditions are eroded by governmental actions. That is what is happening today to Wilbury Engineering and many others, as I shall show.

Let me take the week commencing Monday 1st March. On Saturday of that week—6th March—I held an interview session in my constituency. A representative of Wilbury Engineering came to see me and brought with him some of the documentation which the firm had received in that week. Some documents had to be returned almost immediately, or retained for reference purposes, but I have with me about 25 official forms, booklets of advice and sheets of instructions. This is just one week's intake. They are all different, although many were sent to the firm in duplicate or triplicate.

It is right that firms should be properly acquainted with Government actions and the laws that we make in Parliament, but when this stream of new legislation and changes in old legislation affects the competitive efficiency of a firm, the matter should be brought to the attention of this House.

This is just a tiny firm, with fewer than 40 employees. It has been established for only 13 or 14 years and is not a great national concern. In one week, it received a 39-page "VAT News No. 9 ", and from the Department of Employment, a 25-page publication called "A Guide to Changes in the Contract of Employment Act 1972", an eight-page booklet called "An Outline of the Employment Protection Act", a 13-page document called "Guide to Equal Pay", an 11-page booklet called "Equal Pay—What are you doing about it?" and a 13-page document called "Personnel Records ".

From the Advisory Conciliation and Arbitration Service, the firm received a 13-page document entitled "Job Evaluation ", a nine-page booklet entitled "An Industrial Relations Service to Industry", a six-page booklet entitled "Trade Union Recognition", and a nine-page booklet entitled "Arbitration in Trade Disputes". The largest single document for the manager to browse through was 54 pages from the Home Office entitled "Sex Discrimination". On the same day, a 25-page document called "Unfair Dismissal" was received from the Department of Employment.

During the week, the Department of Employment also sent an eight-page document on the Employment Protection Act, a seven-page booklet entitled "The Fair Wages Resolution" and a 10-page publication called "Guide to the Trade Union and Labour Relations Act 1974".

In addition to all these documents, the firm received a total of 35 closely printed foolscap sheets from the Department of Employment containing new instructions and amendments to old instructions. A further addition to the avalanche came in the form of a circular from the Post Office, advertising a new telephone system.

That was most of one week's intake, and it totalled 283 pages of advice and instructions which need painstaking study and which no responsible firm can afford to ignore.

In the same week, lengthy official telephone calls took up more precious time of those in authority in the company, as did a two-hour visit from the local VAT inspector.

Wilbury Engineering was founded only 14 years ago and it came to Market Harborough four years ago. In that short time, by initiative, hard work and competitiveness, it secured a specialised market in power engineering. It employs about 34 persons, including three office staff simply to cope with the implementation of legislation. It is having to recruit a fourth member of the staff to the office, thereby increasing significantly its overheads and reducing its national and international competitiveness.

The case of Wilbury Engineering is typical. The top-hamper of legislation is threatening to capsize a small business. I hope that the Minister of State will at least show recognition that this problem exists for many small companies. Unless they can get some relief from this burden of paper work, having to put up their overheads in this manner will blunt their competitiveness and mean that they will be far less effective competitors at home and abroad.

I am sure that in his reply the Minister will recognise the problem, but I ask him to do more than just recognise it. Increasing its unproductive staff, which is what Wilbury Engineering is being forced to do, makes the vital difference in the competitive edge of any manufacturing or producing business. Wilbury Engineering is a typical example of an enterprising British firm, and it is in danger of going out of business unless this top-hamper of excessive legislation is dried up.

4.12 p.m.

The Minister of State, Department of Industry (Mr. Gerald Kaufman)

In his customary calm and moderate way, the hon. Member for Harborough (Mr. Farr) has raised a problem that affects many firms throughout the country, although he related it to only one firm in his constituency. I understand that his intentions on the subject of the debate were not translated as he would have liked on to the Order Paper. I hope that he will forgive me if I extend my reply and spend a considerable amount of time dealing with the problem of form filling, because that is one aspect of the subject and it may be useful to him and to a wider audience if I provide a little information about the Government's approach to this matter within our wish to be of assistance to small firms.

I quite understand that it must be daunting to a small firm with a small staff, which it does not want to increase beyond what the business will bear, to have to cope with a great deal of literature. It would be fair to subtract from the catalogue that the hon. Gentleman produced the circular from the Post Office about a new telephone system. All businesses are circularised by the Post Office, and it may be—I do not know—that Wilbury Engineering receives other catalogues and brochures from enterprises and industry which want to do business with the company. If it had simply been private enterprise, it would still have been documentation. Therefore, I am sure that at any rate the hon. Gentleman would not feel that that was wrong. Indeed, it is commendable that the Post Office wants to go out and get more business.

I fully recognise the concern that the hon. Gentleman feels that a small firm could be flooded by literature expounding Government legislation. At the same time, one could add that a good many of the examples he gave were of legislation that is what one might call not wilful, dogmatic or extraneous, but important and useful legislation, which is to the good of many millions of our fellow citizens. Again, it is necessary that those who are involved in this legislation should be fully informed of its detail and its consequences.

I do not know whether the hon. Gentleman was able to ascertain whether the 283 pages that he mentioned were a typical week's example or whether there were weeks when the reading for Wilbury Engineering was lighter. Nevertheless, I do not in any way belittle what the hon. Gentleman had to say.

I have always said, in as much as I am responsible for these things, that I am against the issuing of unnecessary documentation. I am against the issuing of unnecessary forms. On the question of form filling, I assure the hon. Gentleman that whenever these matters have come to my attention in my Department, which deals particularly with industry, I have questioned persistently the need for any documentation of any kind that comes before me. I am certain that it is for the good of the country that the amount of bureaucratic inquiries should be reduced to the minimum necessary for the purposes of good government. I assure the hon. Gentleman of that.

I fully realise that this kind of documentation and form filling in particular is a matter of concern to many small firms. I assure the House, on the other hand—I know that the hon, Gentleman, who is very fair, will accept this—that the Government recognise the significant rôle that small businesses play in the country's economic life, and I am grateful to the hon. Gentleman for having provided the House with a brief opportunity for discussing the problems confronting small firms.

I am sure the hon. Gentleman will not dispute that in order to administer an advanced industrial society, with the best will in the world documentation and form filling are requirements that cannot be avoided. There is, for example, the collection of taxes—an unhappy obligation but, nevertheless, one that is necessary for the good government of the country. There is the management of our system of social security—again something that benefits many millions of people. There is the payment of Government grants or subsidies, and small firms, among others, are obviously glad of any assistance that they can rightly and satisfactorily obtain from the Government. There is the compilation of statistical information, on which so many things, including our parliamentary debates, depend. All these depend on the distribution of documentation and the completion of forms. That is not to say that the Government are not concerned about the burden of form filling.

I assure the hon. Gentleman that it is Government policy to minimise the burden of documentation and of form filling which rests on firms. I attach very great importance to this. Ministers have made clear recently, in replies to a series of Questions put by the hon. Member for Harrow, Central (Mr. Grant), that all forms are kept continuously under review, with a view to reducing the burden wherever possible. I shall say more about this later, if I have time.

In November 1971 the Bolton Committee of Inquiry on Small Firms reported. The Committee's terms of reference were To consider the rôle of small firms in the national economy, the facilities available to them, and the problems confronting them; and to make recommendations. The burden imposed on small firms by official form filling was one of the aspects considered by the Committee, and a number of recommendations were made.

These recommendations included, first, an extension of the powers of the Survey Control Unit of the Central Statistical Office to object to all statistical surveys not considered by it to be essential in character and explicitly justified; secondly, the development of a central register of businesses; thirdly, the suggestion that all Departments should review existing and proposed forms with an eye to their cost to industry and with a view to redesigning and simplifying them; fourthly, the passage of statistics between different Departments should be increased, where possible.

In an attempt to improve the situation of the 1¼ million or so small concerns contributing to the gross national product, action has been taken to implement the Bolton Committee recommendations as rapidly as possible, and most of them have been partially or fully implemented.

Let me first describe the work of the Government's Survey Control Unit in the Central Statistical Office. In 1974, my right hon. Friend the Prime Minister renewed a directive to Departments made by his predecessor in March 1972, asking them to improve arrangements for the scrutiny of all statistical surveys. Departments are required to report as early as possible to the Survey Control Unit all proposals for new surveys and significant changes to existing surveys. It is the job of the Survey Control Unit to look critically at these proposals, to eliminate unnecessary duplication and to ensure that the value of the purposes served by each survey justifies its cost both to industry and to Government.

Before any new statistical survey is undertaken by my Department, representatives of industry and potential users are always consulted. No new survey is carried out without the "go ahead" from a Minister. Only recently, when one was brought to me, I inquired into it very thoroughly before consenting to it.

I turn next to the central register and the question of the passage of information between Departments. An encouraging development towards easing the burden of form filling was Section 55 of the 1973 Finance Act. This has enabled certain information about individual businesses obtained from value added tax records—namely, name and address of the business, its industrial classification, turnover and status—to be passed by Customs and Excise to the Business Statistics Office (BSO) for statistical purposes. The information is held on magnetic tape and is passed at negligible cost. Until this information became available, the BSO was not able to obtain an indication of the size of a firm in terms of its turnover or its industry classification without first having to send it a form to fill in. This can now be avoided. The VAT information is now being used by the Business Statistics Office to employ sampling methods in its inquiries to a much greater extent than was possible in the past.

For example, the BSO addressed an inquiry to a sample of 28,000 wholesalers in respect of their businesses in 1974, and some 50,000 businesses were exempt from the inquiry. These would otherwise have been required to complete forms. A sample inquiry into retailing for 1976 will go to not more than 30,000 businesses out of a total of some 350,000. Smaller retailers in the sample with a turnover of less than £50,000 will be asked to complete only a simplified form.

So far as we can judge, statistical forms account for only a small proportion of the total number of forms sent out by Government—possibly fewer than one in five. Of these, the great majority are directed to the medium-size and larger firms. In order to reduce the burden of form filling on small firms, the forms sent to them generally contain fewer questions and are simpler and easier to complete than those sent to the larger ones.

Returns made by businesses are continuously reviewed, with a view to simplifying them and making sure that they are not sent unnecessarily to smaller firms. Recently, for example, my Department completed an extensive review of the quarterly sales inquiries directed to manufacturing industry. As a result, the exemption limit for 20 out of 165 manufacturing industries has been raised from the normal level of 25 employees to a level of 50 employees. There will, of course, be some marginal deterioration in the quality of the statistics in consequence, but this must be set against the advantage that 1,000 establishments which previously received questionnaires each quarter will no longer do so. In fact, there are some 80,000 manufacturing establishments with fewer than 25 employees now exempt from completing the quarterly and monthly returns sent out by the BSO—

Mr. Farr

The Minister is dealing effectively with the form-filling side of the argument. I am glad to learn that his Department is aware of the burdens which an excess of form filling can impose on industry. Will he promise before he concludes that he will look into the possibility, instead of issuing, for example, in one week in March 11 pamphlets from the Department of Employment and another six from the advisory service, of providing perhaps a monthly consolidated issue to all employers who are affected? In that way, instead of pieces of paper pouring in through the post every day, they can obtain the information in a much more readily available form which can be referred to much more easily.

Mr. Kaufman

I am replying in my capacity as a Minister at the Department of Industry dealing with my own departmental responsibilities. I shall be very happy to pass on to my colleagues in the Department of Employment the hon. Member's specific suggestion. What is more, I shall see that it is passed on to any other Departments which have responsibility for distributing documents in this way to businesses, particularly to small businesses.

It is not possible for me to comment on the practicability of the hon. Gentleman's proposal, but I assure him that it will be passed on and that I shall request that a specific reply goes from the Department of Employment to him.

I was dealing with the question of form filling before the hon. Member intervened. Here again I think I can be of assistance. There are about 29,000 manufacturing establishments with 25 or more employees which receive the questionnaires to which I was referring. In the Annual Census of Production from 1973 onwards, the exemption limit was reduced from 25 to 20 employees to satisfy the requirements of the European Economic Community, but only a short simplified census form goes to firms employing fewer than 100.

The BSO makes every effort to ensure that the questions it asks are as far as possible of a kind which can be answered from the records which businesses normally keep. On such matters it consults not only its statutory advisory committees but members of the accounting bodies, national organisations like the CBI, and trade associations. The BSO is aware, too, that a standard form which applies to all the firms in an industry can look very formidable indeed, with sometimes 100 or more questions on it, although perhaps only half a dozen of them apply to the average business. The BSO is therefore studying the feasibility of using its computer to generate a special form for each contributor to its quarterly sales inquiries which will list only the products that the contributor is known to make. A pilot scheme covering three industries is now under way.

I acknowledge that the Government are responsible for collecting a very wide range of statistical information from industry and trade. This information is required if economic developments are to be monitored and if sound policy decisions are to be made. The statistics provide the basis for the monthly Index of Industrial Production; the quarterly National Income Accounts and Balance of Payments Statistics; Indices of Wholesale Prices; statistics of sales and orders; statistics of capital expenditure, investment intentions, and stocks, and so on.

The Government Statistical Service cannot magic or invent these statistics; they have to be based on information supplied from the business community itself. The great majority of firms appreciate this and recognise the necessity for providing the information and co-operate well. I should like to record the Government's appreciation to these firms for their co-operation.

Accounting accuracy is not required in most of the statistics collected by Government, but the Business Statistics Office imposes checks on the information it receives and these checks identify gross inaccuracies, which can, if necessary, be investigated with the firms concerned. If firms experience special difficulties in providing information required, my statis ticians are always willing to discuss the problems with them.

The hon. Gentleman can rest assured that the Government are deeply conscious of the need to minimise the burden of form filling on smaller firms, that these matters are kept under constant review by the Government and their Statistical Service, and that the Government take full account of the kind of considerations that he has referred to in his useful and helpful speech. I shall ensure that the points he has raised which are not specifically relevant to my Department will be pursued with other Departments. I shall try to get him answers to the questions he has raised which I am not competent to answer. I thank him again for raising this subject

Question put and agreed to.

Adjourned accordingly at twenty-nine minutes to Five o'clock.