- '.—(1) The Assembly shall make a scheme (referred to in the Act as the business scheme) setting out how the Assembly proposes, in the exercise of its functions, to sustain and promote business in Wales.
- (2) The Assembly shall consult with such businesses and business organisations in Wales as it considers appropriate before making, remaking or revising the scheme and in making, remaking or revising the scheme the Assembly shall have regard to any advice which has been given and to any representations which have been made to the Assembly by businesses and business organisations in Wales.
- (3) In determining at any time the provisions to be included in the scheme the Assembly shall consider how it intends to exercise such of its functions as relate to matters affecting, or of concern to, business in Wales.
- (4) The scheme shall specify—
- (a) how the Assembly proposes to consult business and business organizations in Wales about the exercise of such of its functions as relate to matters affecting or of concern to such businesses and organizations, and
- (b) how the Assembly proposes to monitor the extent to which any proposed subordinate legislation is consistent with sustaining or promoting business in Wales and the extent to which it imposes obligations or costs on businesses in Wales.
- (5) The Assembly shall keep the scheme under review and in the year following each ordinary election shall consider whether it should be remade or revised.
- (6) The Assembly shall publish the scheme when first made and whenever subsequently remade and, if the scheme is revised without being remade shall publish either the revisions or the scheme as revised (as it considers appropriate).
- (7) After each financial year of the Assembly, the Assembly shall publish a report of how its proposals as specified in the scheme are implemented in that financial year.'.—[Ms Lawrence.]
§ Brought up, and read the First time.
§ 6 pm
§ Ms Jackie Lawrence (Preseli Pembrokeshire)I beg to move, That the clause be read a Second time.
New clause 14 would require the assembly to establish a scheme stating its proposals on sustaining and promoting business in Wales. From the commencement of our debates on the Bill, and following publication of the White Paper, the Secretary of State has maintained that the legislation is built around partnership and inclusivity. In clause 64, the Bill is already innovative in stating a commitment to consult business in Wales, which has not previously been consulted. The new clause attempts to recognise that innovation, but goes a little further and gives business interests parity with the interests of both local government and the voluntary sector, which are already more comprehensively provided for in clauses 110 and 111.
The proposals in the new clause attempt to establish a proactive approach in the relationship between the assembly and the business sector, rather than a merely reactive approach by the assembly, which might have a knock-on effect on the Welsh business sector.
I have determined from my discussions with businesses in my constituency that there is widespread support for the Bill's proposals requiring the assembly to assess the cost implications for business of any proposed regulations and to consider businesses' views. There is widespread support also for a strategic approach to economic development in Wales—via the new Welsh Development Agency—by establishing links with the four economic forums, by placing renewed emphasis on indigenous businesses and, therefore, by implication, by placing emphasis on sustainable development.
The Federation of Small Businesses has stated that there are 3.45 million small and medium-sized enterprises across the United Kingdom, and that if the economic climate enabled each of them to take on one more employee, there would be no unemployment in the UK. UK-wide, 80 per cent. of jobs are provided by companies employing fewer than 20 people. In my constituency, that percentage is even higher.
In the spirit of the partnership and inclusivity promised by the Secretary of State, the views of SMEs must be heard and listened to if we are to make real progress in the battle to improve gross domestic product in Wales. Within the framework of the national assembly, there must be a recognition of the role of business in that process. Every effort must be made to improve Wales's ability to produce competitive goods and services. 749 The assembly's economic structures and policies must promote Welsh business as the basis of improving the standard of living of everyone—not only selected parts of Wales.
Establishing in the Bill a scheme specifying plans to promote and maintain Welsh business will give Welsh business parity with local government and the voluntary sector. Clauses 110, 111 and 33, for example, provide for the assembly—quite rightly—to create a scheme to sustain and promote local government in Wales, to promote the interests of the voluntary sector and to support cultural aspects of Welsh life. However, it is equally right that similar arrangements should be made to promote the interests of businesses in Wales, on which the vitality of the Welsh economy ultimately depends. New clause 14 would meet that need, and ensure that the assembly listened to business and worked in partnership with it. New clause 14 would also have the benefit of ensuring that outside expertise from the business community was available, ensuring that the assembly's Committees were well informed in their decision making.
As a member of the Select Committee on Welsh Affairs, I have been involved in recent investigations into the effects that the national assembly will have on economic development in Wales. Evidence given to that Committee, which was published last week, shows that business believes that the assembly holds tremendous potential, but also that it is essential that extra burdens are not placed on Welsh business in comparison with business in England. Businesses' concerns related to both the implementation of secondary legislation and to such pragmatic matters as the assembly's handling of issues such as planning appeals and call-ins.
The Confederation of British Industry, for example, feared that proposals to handle in Committee the Secretary of State's current role in determining appeals and call-ins might cause delays that would disadvantage Welsh business. That concern provides a simple example of the need for the assembly to think not only proactively but strategically in maintaining its links with business, and to think through the impact of all its actions on Wales's businesses. A scheme such as that outlined in new clause 14 would create the framework for such an interchange.
Clause 41(2) provides for the assembly to make subordinate legislation provision for Wales that is different from that for England, recognising Wales's and England's different needs. However, it is vital to ensure that businesses in Wales are not disadvantaged in economic development, by having to bear greater compliance burdens than businesses in England.
A local cheese maker in my constituency informed me that the business's compliance burden increased tenfold during the time when the previous Government were in office. The assembly will have the responsibility not only to ensure that that burden is not increased but, I hope, to reduce it. Similarly, the new clause will ensure that a mechanism is established to avoid such increases in compliance burdens.
The opportunities offered to Wales by the establishment of the national assembly, as stated in the Bill, are exciting and innovative. However, the additional benefits gained by implementing a scheme such as that outlined in the new clause would be even more significant.
§ Mr. EvansAt this juncture, I should declare my interest in having a small business in Swansea, which I 750 still own, and in having—as have several generations of my family—many years of business experience in the retail trade.
§ Mr. Ron DaviesWas it handed down?
§ Mr. EvansYes, of course; like new Labour, we believe in the hereditary principle. [Interruption.]
I am generally in favour of new clause 14. I hope that the proposed scheme will make transparent the assembly's plans for supporting businesses.
The super-quango consisting of the Welsh Development Agency, the Development Board for Rural Wales and the Land Authority for Wales will also have policies to promote businesses in Wales. In Wednesday's debate, we discussed the CBI's concern about whether the assembly would meddle too much in the new super-quango's daily functions. The question arises as to whether new clause 14 enables the new WDA to formulate strategic policy and to eliminate confusion. If the new clause does that, it is a good idea.
The new clause's proposals to consider businesses' interests on the same level as those of the voluntary sector and of local government are also absolutely right, so that there is no confusion in the super-quango's demarcation of its various roles.
We shall have to do a bit more than merely pay lip service to our desire to promote business in Wales. I am sure that all political parties in Wales want Welsh businesses to do well, whether they are established by inward investment or are new indigenous Welsh businesses. We want all businesses in Wales to prosper.
We know that businesses in Wales already must confront problems such as the 48-hour working week, a minimum wage and works councils. Moreover, with the introduction of regional development agencies in England, we shall want to ensure that businesses in Wales are able to compete on an equal footing with businesses in the rest of the United Kingdom.
I support the ethos of the new clause. I hope that whatever scheme is set up—irrespective of whether it is under the new clause—consultation will go further than the CBI and the Institute of Directors, as many other all-Wales bodies are equally relevant.
The hon. Member for Preseli Pembrokeshire (Ms Lawrence) was absolutely right to mention small businesses, as they represent the vast majority of businesses in Wales. We have to look to that sector to increase employment. We can no longer rely on the large industries that employ 15,000 to 20,000 people to generate extra jobs. Small and medium-sized enterprises are spread around Wales, and they should be given every encouragement, as that will benefit the whole of Wales. We should consult the Federation of Small Businesses and local chambers of commerce throughout Wales and listen carefully to their views on promoting business.
The hon. Lady mentioned that the gross domestic product in Wales is very low, especially in certain areas. That was demonstrated by the reply to my recent question to the Secretary of State for Wales. There is clearly inequality in that respect. Therefore, we need to ensure that areas that are doing badly will be boosted by any new scheme.
751 On Wednesday, we agreed that "business" should have a wide meaning, and that certainly applies to the new clause. Given yesterday's events, we should remember that many farms in Wales are desperate for support. I hope that any new scheme will also consider how the assembly can establish policies genuinely to assist small businesses in the rural community, and particularly farmers. We must also consider the ripple effect. Businesses that supply farms with tractors and capital goods, and which repair barns and erect fences and walls, are also affected by the current crisis.
The next debate will be about the regional aspect. Any new scheme must reach all parts of Wales.
§ Mr. LivseyI congratulate the hon. Member for Preseli Pembrokeshire (Ms Lawrence) on introducing the new clause. It is absolutely essential that the assembly should consult business. The proposed scheme would provide business advice to the assembly and would undoubtedly benefit the Welsh economy and investment prospects for Wales.
The hon. Member for Ribble Valley (Mr. Evans) referred to small businesses, which are particularly important as they are more likely to provide indigenous growth, which is vital to increasing employment and wealth creation throughout Wales. In many of our constituencies, particularly rural ones, up to one third of the population is self-employed. Many self-employed people run small businesses and are often burdened with a great deal of bureaucracy. There will be a need for businesses—particularly small businesses—to liaise with the assembly in respect of how they can best be assisted. There is evidence of a lack of a level playing field for small native businesses as compared with inward investment schemes from other parts of the world. Certainly in mid-Wales, businesses from other parts of the United Kingdom appear to have greater advantages than indigenous enterprises.
Reference has been made to the agriculture industry. About 56,000 people are involved in farming in Wales—I was one of them for a considerable time, although I was never a newsagent. I hope that the new clause will enable a policy to emerge, to assist those small businesses to develop for the benefit of everyone in Wales.
§ Mr. John Smith (Vale of Glamorgan)I also congratulate my hon. Friend the Member for Preseli Pembrokeshire (Ms Lawrence) on introducing the new clause, which the Government should consider carefully. It is vital that the new assembly consults business, but there is already a requirement in the Bill for it to do just that. It is a welcome innovation.
We should be careful, however. It is my view that the assembly's relationship with business is crucial to the success of the assembly and to economic development in Wales in the coming years. We have to get that relationship absolutely right. There are dangers in thinking that we can legislate on a relationship between Government and business in Wales and thereby solve most of our problems. It is not quite that simple. We have to establish a relationship that allows business and Government to do what they do best without interference. 752 We should not ask business to behave as a philanthropic or democratic organisation or expect Government to behave as a business. Traditionally, the record on that is not terribly good.
Wales has been particularly good at establishing just such relationships. Our economic success in respect of inward investment has been due almost exclusively to the "team Wales" approach and has set the standard for the rest of the United Kingdom. It is one reason why other regions look to us with envy—and so they should—in respect of attracting direct foreign investment. However, trying to attract the English investment to which the hon. Member for Brecon and Radnorshire (Mr. Livsey) referred presents a more difficult problem. We have to be clear about making sure that we get our fair share.
We should remember that London and the immediate surrounding area accounts for 40 per cent. of our GDP per capita. Wales has the lowest percentage in the United Kingdom and the gap is widening, so we have to take a balanced approach to developing indigenous small and medium-sized companies. Of course we have to do that, especially in areas that depend on small businesses, but we must also recognise that we must continue the battle to attract our fair share of United Kingdom investment and build clusters of small Welsh companies to service incoming companies. That means that we have to get the formula right, so I ask the Government to consider the new clause carefully.
§ Mr. WigleyI welcome the opportunity that the new clause provides to examine the opportunities for business. The National Assembly for Wales should provide a stimulus for the business sector and encourage people to take the initiative, take risks and set up enterprises because of the atmosphere of confidence that we hope will be engendered. It should not tie businesses in knots and prevent them from undertaking ventures.
In examining the phrasing of the new clause, I fear that businesses might expect to play a greater role in determining policy than might be possible in practice. The hon. Member for Preseli Pembrokeshire (Ms Lawrence) gave the example of the town and country planning function. Businesses are understandably worried that the processes may be slowed down. They may hope that subsection (4) would provide them with a means of influencing planning decisions as
matters affecting or of concern tothem. That might give them inappropriate leverage in the planning function. If the provisions are to mean anything, businesses will want such influence, but it may not be possible to provide it in the mechanism for even-handed planning at assembly level.The assembly must feel itself to be a partner with business and industry in Wales, working hand in hand with them to create the conditions for a thriving economy. The hon. Lady obviously has the creation of such a partnership in mind. The thrust of the new clause must be of relevance to the Government and the assembly.
§ Mr. DalyellI should like to raise a practical problem. Last year, I had the good fortune of opening a branch unit of Personnel Hygiene Services in the small village of Blackridge in West Lothian. The Secretary of State will know that the headquarters of Personnel Hygiene Services are in his constituency, in the Western industrial estate in 753 Caerphilly—the postcode is CF83 1XH. I expect that he knows it well. They are good people. The Welsh leaders were most welcome among us.
However, the company has a problem. On 19 February, Mr. Louis Howe wrote to me on behalf of the company about the Special Waste Regulations 1996. He said:
Of particular interest is point two, which brought to the attention of the Environment Agency the fact that the Scottish Environmental Protection Agency are interpreting the Regulations differently to the Environment Agency.We find this particularly annoying as we believed the establishment of the Agencies would lead to common national standards enabling us to standardise our practices and procedures nationally. Unfortunately, we must now regard England/Wales and Scotland as two separate entities and we wonder what disparities will occur in the future to further complicate our businesses.The House of Commons should be careful about complicating people's businesses. I shall ask the relevant Ministers for the full answers to the details in the letter. Such problems are bound to arise when, to use the phrase of my right hon. Friend the Member for Llanelli (Mr. Davies), we start unbundling the United Kingdom.
Mr. Gareth ThomasI accept the sentiments behind the new clause. The premise is that because small and medium-sized enterprises are so important for the Welsh economy, it is essential that the legislation facilitates a partnership between them and the assembly, as my hon. Friend the Member for Vale of Glamorgan (Mr. Smith) said.
No doubt my hon. Friend the Under-Secretary of State will refer to clause 64, which provides for a regulatory appraisal before general subordinate legislation is approved by the assembly. The effect of legislation on small business will be taken into account in the appraisal. However, that clause does not go far enough. The Government should take on board the points made so well by my hon. Friend the Member for Preseli Pembrokeshire (Ms Lawrence). Small businesses are vital. Clause 64 refers to a regulatory appraisal simply in the context of subordinate legislation. That is narrow in scope, contrasting with the general reference in the new clause to the functions of the assembly. Clause 64(2) says that an appraisal will not be necessary if it is
inappropriate or not reasonably practicable".
§ The Parliamentary Under-Secretary of State for Wales (Mr. Win Griffiths)I congratulate my hon. Friend the Member for Preseli Pembrokeshire (Ms Lawrence) on presenting the new clause in a positive spirit, with the strong support of all sectors of business in Wales. She has clearly had considerable consultation with the larger business sector and small businesses. I am also pleased that the Opposition are taking a new constructive view, with the hon. Member for Ribble Valley (Mr. Evans) supporting the important issues raised in the new clause. My hon. Friends the Members for Vale of Glamorgan (Mr. Smith) and for Clwyd, West (Mr. Thomas) raised some relevant points, which I shall try to deal with later. Coming in from the flank, the right hon. Member for Caernarfon (Mr. Wigley) and the hon. Member for Brecon and Radnorshire (Mr. Livsey) also supported the principles of the new clause.
We have always believed that the assembly should provide an environment in which business can flourish. In our White Paper, "A Voice for Wales", we laid great 754 stress on the importance of the assembly's role in creating a growing and sustainable economy. That will largely be a matter for the policies of the assembly, which we should not attempt to predetermine in the Bill. As a democratic body, the assembly must develop its own policies and account to its electorate for their effects. We can create an effective institutional framework for it.
We have created a mechanism to ensure that the assembly's legislative procedures take proper account of their effect on business. My hon. Friend the Member for Clwyd, West mentioned clause 64, which provides for statutory regulatory appraisal. That is a significant and radical legislative innovation in Britain, which the CBI has recognised and welcomed.
The new clause is a different matter, going beyond that. In providing for the assembly's relations with local government, the voluntary sector and business, we are not trying to create a blockbuster clause to deal with all the issues, such as sustainable development. We have tried to tackle the issues in a way that will be suitable for each sector. For local government, we have a duty to promote, a scheme and the partnership council—that builds on the existing concordat with local government and the established negotiating machinery. For the voluntary sector, we have consultation arrangements and a duty to promote, building on and strengthening the existing consultation arrangements and the concordat that we are finalising. For business, we have the statutory recognition of a process of regulatory appraisal.
The new clause would knit all those factors together and add them on top of statutory regulatory appraisal. That would create a risk of greater complexity and a slowing down of decision making, referred to by the hon. Member for Ribble Valley. The assembly could become too bureaucratic, which is what business fears most.
We shall resist the detail of the new clause, but I am pleased to tell my hon. Friend the Member for Preseli Pembrokeshire that we accept the spirit of it: there should be regular, open and constructive dialogue between business and the assembly—not just with big business but with small business, as the hon. Member for Ribble Valley said, and not just with traditional industries but with business in rural areas. My hon. Friends the Members for Vale of Glamorgan, for Clwyd, West and for Preseli Pembrokeshire all laid stress on encompassing all business in order to get the framework right.
We propose to return to the matter with a Government amendment. In the light of that, I invite my hon. Friend the Member for Preseli Pembrokeshire to withdraw the motion.
§ Ms LawrenceI thank the Minister very much for accepting the new clause's principles. Bearing in mind his commitment to take them on board, I beg to ask leave to withdraw the motion.
§ Motion and clause, by leave, withdrawn.