Regulatory Obstacles to Business (Hansard, 14 March 1990)

§ 6. Mrs. Gorman
To ask the Secretary of State for Trade and Industry what actions he has taken to remove the regulatory obstacles to business.

§ The Parliamentary Under Secretary of State for Corporate Affairs (Mr. John Redwood)
The Department of Trade and Industry has a co-ordinating role around Whitehall in deregulation matters. In addition, each of the major Departments has a Minister and officials responsible for deregulation in their own areas. They are charged with the task of reviewing existing regulations to establish whether they can be simplified and reduced and for ensuring that new regulations meet the right standards so that they do not impose an unreasonable burden on business.
On 21 December 1989, at columns 395–97 of Hansard, the Government listed the deregulation reviews currently under way. I am pleased to tell my hon. Friend that the Department is conducting a series of studies of the problems faced by new businesses trying to establish themselves in particular sectors to see whether further help can be given to them in the form of more deregulation.

§ Mrs. Gorman
I thank my hon. Friend for that reply and I applaud his will to do something about the 468 over-regulation of the business community, but is he aware that the DTI still administers 48 quangos with esoteric functions such as the "persons hearing estate agents' appeals" body, and so on? Is he also aware that the section of the Civil Service guide dealing with the ramifications of the Department's interventionist bodies runs to 70 columns? When will those bodies be curtailed?

§ Mr. Redwood
My hon. Friend may rest assured that the DTI is extremely keen to reduce unreasonable regulation. We are busy in many areas—for example. in the financial services. Tomorrow we shall take up the powers under the Companies Act 1989 to simplify the financial services regulations, without in any way endangering investor protection. We are also announcing the removal of the need for company seals under the Companies Act. We have set out arrangements for simplified financial statements and we have introduced a great deal of simplification in export licences.
However, if my hon. Friend knows of specific cases of bodies that she thinks are unnecessary, or whose work could be handled better in some other way, I should be happy to hear of them.

§ Mr. Matthew Taylor
As the Minister has referred to so many people involved in trying to help businesses to avoid the problems imposed on them by the Government, has he had any representations about—and is he planning to take action on—the problems caused to small businesses by plans to force them to administer and enforce attachment orders related to poll tax? There is considerable anxiety about the personnel problems as well as the administrative problems that they could cause.

§ Mr. Redwood
If I receive representations I will forward them to my colleagues at the Department of the Environment. The burdens on business that the Government impose are modest compared with those that would be imposed by the policies of the Opposition parties. I was interested to see a recent study by Public Policy Consultants, an independent body, which said that if Labour policies were adopted the burdens on business would rise substantially, which would be deleterious to the conduct of business in this country.

§ Mr. Grylls
Does my hon. Friend accept that despite his positive answer about the review of the work of the deregulation unit, which is certainly encouraging, there is a need to reduce the considerable hurdles that firms have to overcome when they start up and to prevent new hurdles from being placed in their way? My hon. Friend's Department may be good at preventing such hurdles, but not all the other Departments are so good. Will he therefore keep a vigilant eye on them because that is also part of his task?

§ Mr. Redwood
As I explained earlier, the main responsibility lies with each Department and its deregulation Minister to see that its regulations are responsible and reasonable and that the burdens on business are not insupportable. That is what they are doing. Of course my Department will remain vigilant through its co-ordination role, and my hon. Friend is right that particular problems affect small businesses and new businesses. That is why the deregulation unit at the DTI, in conjunction with other Departments, is making a 469 special study of a group of small business start-ups problems to see whether we can cut through still more red tape.

§ Ms. Mowlam
Will the Minister explain in what conditions he would use the existing regulatory structure applying to businesses under section 8 of the Company Directors Disqualification Act 1986? We should be interested to know under what conditions he would operate the phrase "public interest" if not in the case of the Fayed brothers and the House of Fraser.

§ Mr. Redwood
I have nothing to add to the statement that my right hon. Friend the Secretary of State made on that subject last week, or to my right hon. and learned Friend the Attorney-General's remarks at Question Time. It was made quite clear that my right hon. Friend the Secretary of State had taken into account all necessary matters and had decided that it was not in the public interest to pursue that case.

§ Mr. McCrindle
My hon. Friend has referred to the Companies Act 1989 and financial services. Is he satisfied that the whole approach of self-regulation, with its plethora of self-regulatory organisations, continues to operate in the interests of the investor and as expected when the legislation went through the House?

§ Mr. Redwood
I think that the 1986 legislation is a major advance on what preceded it. A statutory framework operates through the Securities and Investments Board. I also welcome the fact that the SIB is currently keen to see regulation reduced to the minimum required to meet the necessary standards of investor protection and is working hard on the rule books with the self-regulatory organisations to ensure that that is so. I am also pleased that in the Companies Act 1989 the House passed the provision ensuring that the cost of compliance must be taken into account when forming regulations for financial services.