HL Deb 16 July 1985 vol 466 cc610-8

2.57 p.m.

The Minister Without Portfolio (Lord Young of Graffham)

My Lords, with the leave of the House, I should like to make a Statement on the White Paper entitled Lifting the Burden.

"One of the major objectives of this Government is to make sure that the right conditions exist for enterprise to flourish. This is essential for the creation of jobs and wealth. The country needs more jobs and we need more wealth to pay for all the socially desirable things we expect to be provided—such as pensions, the health service and education.

"For far too long, successive Governments —albeit with good intentions—have tended to stifle much needed enterprise with restriction and regulation. Today, we are publishing a White Paper called Lifting the Burden, which sets out to put that situation right.

"As noble Lords will recall, in March of this year, my right honourable friend the Secretary of State for Trade and Industry published a report entitled Burdens on Business. This showed that Government requirements do constitute a major drain on business—particularly small business—in terms of direct cost and of management time.

"Lifting the Burden is the result of the Government's consideration of the recommendations in that report and of looking more widely at the scope for change. It also reflects the widespread representations on the report which the Government have received.

"The White Paper is the first major step in a continuing programme of removing unnecessary regulations. It refers to some 80 measures covering a wide range of initiatives in a number of areas including planning, tax and social security, employment protection, and trade and industry—some of which have already been undertaken and some of which are for the future. Each is designed to allow firms to divert scarce resources away from complying with bureaucratic requirements and towards developing and expanding their business.

"This is but the beginning of the process, for one of the most important elements in the White Paper is the setting up of a new system within Government to assess proposed and existing regulations from the point of view of the burden they may impose on business. The primary responsibility for this must be within the appropriate department, but a central task force is being set up, within the Enterprise Unit in the Cabinet Office, to assist departments in their consideration of how the burden on business of regulations can be minimised.

"I should emphasise to your Lordships' House that we are not seeking to remove all regulations. Essential protection for workers, consumers and the general public must be maintained. And we must protect our quality of life. The Government have sought to strike the right balance between liberty and licence. The White Paper adopts a balanced approach. It represents a major step forward in giving businesses the freedom to flourish and grow. I commend it to your Lordships' attention".

My Lords, that concludes the Statement.

Lord Barnett

My Lords, on behalf of the Opposition, perhaps I may thank the noble Lord the Minister for his Statement and for the lengthy White Paper that goes with it which will obviously need a little time for study. Is he aware that the Opposition support, and always will support, measures that will provide real help for industry generally, and for small companies in particular? The Statement says that the country needs more jobs. Few will disagree with that expression. But if the noble Lord detects any scepticism in my remarks or anybody else's, I am sure he will recognise that the gimmicks we have seen in the past, such as enterprise zones, have done little or nothing to help industry, whether small or large, and that in some cases they have been a positive hindrance.

In the past six years company liquidations have been at the highest level ever. A few questions arise. For example, how will the proposals affect companies which at some cost have moved to enterprise zones to obtain assistance from deregulation? One of the major constraints on small companies is the shortage of risk capital. The noble Lord the Minister has said nothing about what the Government propose to do about the loan guarantee scheme. Is it to continue or is it now to be scrapped because of what has become a somewhat high cost?

Nothing has been said so far as I can see (and I have not had an opportunity to read the whole of the White Paper) about the other burden which the Government have placed on small companies—for example, by the transfer from departments to small companies of the particularly heavy burdens of administering health and sickness benefits and unemployment benefits which were previously dealt with by departments. The Government have been able to reduce expenditure by placing that burden on companies. It is a very heavy burden on small companies. Is that to be removed?

Finally, one of the greatest burdens on small companies at the moment, as I am sure the noble Lord the Minister will be aware, is administering pay-as-you-earn, and in particular, benefits in kind. The way that it is being administered by the Inland Revenue at the present time is causing an enormous problem for small companies. I shall be glad if the Minister will have a word to say about that. However, in view of the importance of the White Paper and its length, I hope that he will be making representations to his noble friend the Leader of the House so that there is ample opportunity to discuss it in some detail.

Lord Diamond

My Lords, perhaps I may echo what the noble Lord, Lord Barnett, has just said in terms of thanking the noble Lord the Minister for making this Statement and for what he said about the need to consider it most carefully, and no doubt to have a full discussion at some point when the usual channels can arrange it. We give it a general welcome. We on these Benches welcome any step forward which makes life easier for the entrepreneur—of course we do. We recognise that the Government have had this in mind, although our view is that far from slimming down business, the Government have taken a number of steps to deny industry the necessary nourishment. They have gone too far. Therefore, any steps that are taken which will enable scarce resources to be diverted from form filling into getting orders, looking after manufacturers, and so on, are of course welcome.

I differ from what the noble Lord, Lord Barnett, has said in the sense that he may have had an opportunity to consider this matter in detail. I certainly have not done so, and I shall not therefore attempt to ask questions relating to any detail. Quite obviously Parliament has to be made aware of what is going on so that it can consider whether it is purely an administrative matter within the Government's normal remit or whether Parliament should be consulted. It is in that sense that I am asking what I regard as the most important question that arises out of this document. To what extent is it the intention of the Government to consult Parliament on the various steps that they are taking? Are they proposing new legislation? Are they proposing affirmative resolutions? Are they relying on negative resolutions? Are they going to deal with a number of these matters purely as administrative departmental matters without consulting anybody in any form whatever? That is the main question that I wanted to ask the Minister so that we shall know in future how to deal with this matter.

I gather from the Statement that although these are matters especially for small business, they do not relate exclusively to them. They relate to all businesses but have small businesses in mind. The Statement refers to the protection of employees. It is open to many Members of your Lordships' House to take the view that small employers need as much help in turning themselves into good employers as do large employers. In fact, if I were to make a guess—an uninformed one—it would be that large employers are naturally more concerned with the welfare of their employees than small employers—

Noble Lords


Lord Diamond

My Lords, that is an uninformed guess—I put it no higher than that. Therefore one would want to be quite sure that the employees in a small firm—the firm with a handful of staff, a dozen or so people—are fully protected and that there are not too many so-called removals of bureaucratic requirements. Is it not the case that these bureaucratic requirements were thought to be proper requirements at the time that they were instituted by one Government or another? I repeat that although we give the White Paper a general welcome, one has to approach this with considerable caution and care for the individual.

Lord Young of Graffham

My Lords, I am grateful to the noble Lord, Lord Barnett, for the general welcome that he has given to the White Paper, although I fear that once again it falls upon me to correct him in some detail. I believe that some enterprise zones have prospered very well. However, enterprise zones are, in truth, besides the point. The noble Lord tells us that this is the hightest level of liquidations for six years. But what the noble Lord overlooks is that in the 1970s we lost 100,000 self-employed; that so far this decade we have created 600,000 self-employed people; that so far this decade 140,000 more businesses have started than have closed; and that we are on the way back to the entrepreneurial society that made us great.

I am afraid that this White Paper is about lifting the burdens. I sincerely hope that the loan guarantee scheme and all the help to small businesses constitute not a burden but assistance. We are concentrating on and are concerned solely with the bureaucratic burdens which fall upon small firms and large firms—upon all employment—as a result of government action. The SSP to which the noble Lord referred is a matter which is before your Lordships' House at the present time; but during the course of this very week a consultative document will be going out as part of this general work which will endeavour to give an opportunity for small employers to have the burden lifted from them.

I am grateful to the noble Lord, Lord Diamond, for his general welcome of the White Paper. I say at the outset that I would not expect for one moment that a White Paper which is very much 40 pages of nuts and bolts is something which can be debated with any seriousness today. I hope very much that through the usual channels time can be given to take this further. I, for one, would certainly welcome it. But perhaps I may say that there are no particular statutory requirements. We shall consult Parliament as is appropriate to the circumstances. Some, in the course of time, might be primary legislation; some might be orders; some might be affirmative resolutions. But what we are talking about is a long process which involves the setting up of a central unit, it involves giving the primary responsibility to departments; it involves lifting the burden from people, to let them come back and to let them look after themselves—for the very greatest protection we can ever give to an employee is a job. This is what the White Paper is about. It is about restoring an economy, restoring the growth of jobs, restoring ourselves to what I believe sincerely we can be; it is about letting us all do what we want to create our wealth. But we must do it with care. I do not wish to bore the House but the third paragraph of the White Paper says: But this must be done with care. The line between liberty and licence is fine and can easily be crossed. We have to bring about the conditions to promote growth but not abuse. It is on this basis that the White Paper is presented.

Lord Orr-Ewing

My Lords, will my noble friend accept that these Benches warmly welcome the initiative in which he has set an example? Can he say whether time will be found in the next Session for an enabling Bill because in his Statement he said that it would be up to individual departments, individual ministeries, to take action. Would it not be better to have an enabling Bill early in the next Session if time can be found on the lines of the Private Member's Bill introduced by Mr. Grylls in the House of Commons, so that the Government can make sure that action is taken all along the line on the 80 administrative functions which are listed in the White Paper?

Lord Young of Graffham

My Lords, I assure the House that such steps as are necessary will be taken to put into effect all the proposals outlined in the White Paper, the precise form of which may vary according to circumstances. However, it is not for me to look ahead to the contents of the Queen's Speech.

Baroness Nicol

My Lords, will the Minister comment on the report that all planning controls are to be abandoned in some areas? Will he remember that one man's expansion of industry is another man's nuisance, and that to abandon planning controls completely might defeat the very objectives which the Government are trying to fulfil?

Lord Young of Graffham

My Lords, I am very grateful to the noble Baroness for that question, because the last thing we are about to do is in any way to abandon general planning controls. We are here discussing three main matters. The first is simplified planning zones, which will generally operate in the centre of cities in order to help us make those city centres live again. The second is the introduction of some changes to a general development order, which will allow warehouses and factories to increase in size by up to about 20 per cent. without the bureaucracy of planning consent. The third is, among the principal measures, the establishment of a review of the use class orders. Town planning in this country is governed by the use class orders. They were introduced in 1948 and have been modified precious little since then. They were based upon the industrial classifications of 1875. The world has moved on since then, and I believe that we should move with it.

Lord Harmar-Nicholls

My Lords, is my noble friend aware that the burden that needs to be lifted is not always the regulations themselves? Sometimes it is rather the way in which the regulations are administered that needs attention. Is my noble friend aware that, for example, fire officers—who we all need to support because of the great hazards involved—sometimes appear to be excessive in the details they want to suggest?

Also, health and hygiene regulations applying to restaurants and businesses of that kind are often taken to a point that is quite ridiculous. We pass legislation in the hope that it will be administered with commonsense and discretion. We must make certain that that is how legislation is administered, if we want to remove some of the burdens which are most irksome.

Lord Young of Graffham

My Lords, I will answer that point with some care. In view of a recent disaster, I must choose my words carefully. Shortly we will be publishing a consultative document on a new system of control to replace the existing certification requirements of the Fire Precautions Act 1971. The essence of all the consultations will be, finally, that the person responsible for the premises will know clearly from the outset what his obligations are and how they can be met. It is essential that one person, somewhere, should know what his responsibilities are.

Baroness Seear

My Lords, will the Minister give an undertaking that those parts of his recommendations which deal directly with employee protection—for example, unfair discrimination, health and safety and fire regulations—will not be altered without Parliament having an opportunity to debate them?

Lord Young of Graffham

My Lords, those particular matters and regulations which require parliamentary debate will of course be debated. This is a matter as much for my right honourable friend the Secretary of State for Employment, and I will ensure that the remarks of the noble Baroness are passed on to him.

Lord Mottistone

My Lords, is my noble friend aware that some three years ago I had occasion on behalf of the small businessman to ask the Government whether the 32 pieces of paper he had to fill in when he expanded his business from being run by his wife and himself to hiring an outside employee could be reduced? Will my noble friend's new scheme reduce the number of forms which have to be filled in, in particular those originating from the Inland Revenue?

Lord Young of Graffham

My Lords, we have effected a reduction from the figure of 32 forms, but I will not pretend for a moment that life is as simple as it should be. However—and here I should give credit to the Inland Revenue and the Department of Health and Social Security—we have put together forms, some of which have won awards, to make it possible for the man in the street easily to comprehend the system of PAYE and national insurance. We have gone some way and it is my endeavour to go a great deal further.

Lord Oram

My Lords, in recent years has not one of the most encouraging features in respect of small businesses been the growth of small co-operatives owned and controlled by their members? Whereas some five or six years ago they numbered perhaps 200, they now number 1,000, with some 10,000 worker members. However, has not that expansion taken place despite certain special handicaps which co-operatives suffer, such as the number of members required for registration under the Industrial and Provident Societies Act? There are also certain taxation and financial problems which are a burden to co-operatives in comparison with ordinary companies.

Can the Minister assure the House that in the preparation of the White Paper and the measures in question the special handicaps of small co-operatives were taken into account, and that the burden will be lifted from them as well?

3.15 p.m.

Lord Young of Graffham

My Lords, this White Paper is really the first chapter of what promises to be a rather long novel. It sets the scene. It comes out within three-and-a-half months of the Burdens on Business report. It announces many provisions which will come into effect now and many which will be the subject of consultation, because we wish to proceed with care. I for one rejoice in the increase in entrepreneurial activity that has gone as far as the co-operative movement, and I look forward to a vast increase in their numbers as well as in the numbers of those working more directly for themselves. I certainly undertake to examine our existing regulations to see whether they hinder co-operatives unnecessarily.

Lord Beloff

My Lords, can my noble friend the Minister assure the House that his reference to the quality of life means that, contrary to some things which have been said, the changes in planning regulations will not adversely affect the green belt?

Lord Young of Graffham

My Lords, not only am I happy to give the House an assurance that nothing in these regulations will adversely affect the green belt in any way, but I can also say that the village of Graffham in West Sussex will be left safe and intact, as will be all rural areas.

Lord Kilmarnock

My Lords, does the noble Lord not agree that one of the most alarming developments of the past 20 years has been that the proportion of personal wealth tied up in house ownership, pensions and life assurances has risen from 40 per cent. to 79 per cent? Is it not therefore rather a pity that the White Paper has missed the opportunity to introduce some fiscal incentives for investment in small and family businesses along the lines, for example, of those at present afforded to housebuyers? Would it not be possible to look again at the business expansion scheme, which has become a tax haven for the rich, and to redesign it somewhat more in favour of the small businessman?

Lord Young of Graffham

My Lords, it is always a great danger for a Minister without Portfolio to let a White Paper go to his head, but I assure your Lordships that I am under no illusion that I am the Chancellor of the Exchequer. Such fiscal encouragement is a matter solely for my right honourable friend. However, I will pass on the noble Lord's remarks.

Lord Cledwyn of Penrhos

My Lords, can the noble Lord the Minister indicate what he meant when he said that this was the first chapter of a long novel? Does he not agree with me that the proposals he has announced, which may be very helpful in the removal of unnecessary bureaucratic controls, will not solve the unemployment problem?

Is the noble Lord not aware that in Anglesey 25 per cent. of the insured population are out of work and that there are comparable figures throughout Wales? Is he not aware also that the problems following the closure of coal pits and the reduction in the number of steel works are enormous in that area, and that the same applies in the north of England and in Scotland as well? Can the noble Lord give the House an assurance that the rest of the novel will give some hope to those people?

Lord Young of Graffham

My Lords, such is the theme of the book. The reason I told your Lordships a moment or two ago that this was but the first chapter was that we wish to proceed with care and concern for the rights of those we might affect. Therefore, while many of the proposals are coming into being many others will be the subject of consultations, which I for one will be following through and which will be taking place within a matter of months. I expect steady progress to be made but I do not expect the progress on jobs to be slow and steady.

The whole purpose of this exercise is to look at those parts of the world where closures may still come into being—I myself was in Anglesey only two weeks ago—and many other areas, and to restore to people the ability to create work for themselves.

Lord Graham of Edmonton

My Lords, without the benefit of having seen the White Paper, may I ask the Minister to tell the House whether it contains anything with respect to the burdens on small businessmen arising from the bureaucracy surrounding VAT? Is the Minister aware that the National Federation of Self-Employed and Small Businesses and the National Federation of Market Traders have drawn to my attention the growing unease of their members at various matters arising from increased powers of inspection in regard to VAT given in this year's Budget? Can the Minister tell us that when the White Paper is out consultations will take place with such bodies as I have mentioned?

Lord Young of Graffham

Yes, my Lords, the paper raises a number of matters relating to the operation of VAT, including ways of simplifying it and making it easier for retail businesses. It also notifies that we are negotiating with the Community the opportunity of raising the threshold of VAT, which, your Lordships will need no reminding, the Community is proposing to reduce.

While I am talking of the Community, perhaps I may further say that the White Paper also deals with European deregulation, upon looking at a number of proposed directives coming from Europe, and persuading our European partners that we shall look very carefully before we accept more regulations which serve only to inhibit business activity, including small businesses.

Lord Rochester

My Lords, is there any truth in the press rumours that an all-party Select Committee is to be set up to consider business problems? If so, is the membership of that committee to consist of Members of both Houses of Parliament? Can the Minister tell us whether he accepts that in this difficult and controversial area it is desirable to find as much consensus as possible?

Lord Young of Graffham

My Lords, I find much of novelty in the press but I must confess that that is a story which has so far evaded me. I have not heard of it elsewhere, either, and I remain to hear of it.

Back to
Forward to