Business and the Economy

Adrian Bailey Excerpts

Monday 14th May 2012 Commons Chamber

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

Above all, the Queen’s Speech demonstrates that it is impossible to legislate ourselves out of a problem created by a Treasury-imposed economic fiscal policy that is demonstrably causing such damage to the economy. The economy is flatlining, the number of business insolvencies is rising, real incomes, and therefore consumption levels for British business, are being squeezed, unemployment is rising and, perhaps most frightening of all, about two thirds of the potential public sector cuts, the impact of which on consumer spending could be devastating to British business, are yet to be realised. This Queen’s Speech contains a series of measures. Some of them are not bad in themselves, but they are essentially micro-measures designed to deal with macro problems. I am afraid that, typically, they are accompanied with overblown rhetoric about their potential impact, and if experience is anything to go by, their speed of implementation will be sclerotic.

Let us take the enterprise and regulatory reform Bill. The Government have been trumpeting their one-in, one-out policy and their red tape challenge. However, the Department’s annual report for last year highlights some of the regulations that they have abolished, which include article 22 of the Distribution of German Enemy Property (No. 1) Order 1950 and regulation 24(6) of the Gas Appliances (Safety) Regulations 1995. I am sure there are perfectly sound reasons for abolishing those regulations, but the idea that doing so will cause the economy to take off requires, shall we say, a leap of faith to which I do not think even this Government could subscribe.

We have heard about the potential impact on the regional growth fund, but in the west midlands there have so far been 72 bids, only one of which has received any funding yet. I have been questioning Ministers over the last year about the number of jobs created by the regional growth fund, but I could not get an answer. My hon. Friend the Member for Streatham (Mr Umunna) has now revealed that the National Audit Office has some idea, but the answer is nothing like the number of jobs created by the previous regional development agencies, which were so quickly abolished, and the cost is proportionately much greater.

[Robert Flello (Stoke-on-Trent South) (Lab)]

What would my hon. Friend say about the figures that have been published suggesting that the cost per job is roughly £200,000, which contrasts with the Remploy workers, who are being put out of their jobs, and where the cost per job is far smaller?

[Mr Bailey]

The figures my hon. Friend quotes are quite self-evidently a demonstration of the Government’s ridiculous priorities.

Let me turn to the green investment bank, which was Labour’s idea. It has been talked about for a very long time by this Government and now, two years later, we actually have it. However, it is inadequate, and unfortunately the Government have already introduced a series of policies on feed-in tariffs that will decimate many of the companies that would potentially have benefited from the green investment bank. Again, it is difficult to see how we will lift ourselves out of recession on the back of that.

There are certain measures that are welcome, such as the Groceries Code Adjudicator Bill. However, earlier I spoke about the slowness of implementation. Both the Select Committee on Environment, Food and Rural Affairs and the Select Committee on Business, Innovation and Skills, which I chair, examined the issue before the last summer recess, and we did so quickly at the request of the Government. The Bill could have been implemented last autumn or at the beginning of this year. Indeed, the parliamentary business over the last three months was hardly so crowded that such a quick and simple Bill that had received so much pre-legislative scrutiny could not have been introduced. Why is it being introduced only now?

[Andrew George]

Given that the hon. Gentleman is the Chair of a Select Committee and will want to be seen to be even-handed in this matter, does he agree that it was a great disappointment that the previous Government failed to act on the recommendations of the Competition Commission, which reported on 30 April 2008, and did not implement the measure during their time of office?

[Mr Bailey]

May I compliment the hon. Gentleman, who I know has been an ardent campaigner on this issue for many years? All credit to him for that. The measure was in the Labour party manifesto for implementation, and I am sure that it would have been implemented far more quickly, and perhaps more profoundly, than what is currently proposed.

I want to raise two issues about the measure, the first of which is fines. I welcome the Secretary of State’s comments about that, because our Committee recommended that there should be fines, not just a name-and-shame process. It would appear that he may be moving in that direction, although we will question him more closely on it. However, something that he did not mention was the ability of third parties such as trade associations to submit complaints. If individual companies or farmers have to make a complaint, they might fear discrimination. No doubt we shall tease out these issues during the Bill’s passage through Parliament.

I am most concerned about the missing elements from the Queen’s Speech. As a Labour and Co-operative party Member of Parliament, I am particularly concerned that, despite the Prime Minister’s trumpeting of his commitment to a co-operatives Bill, such a Bill is mysteriously missing. There is a degree of cynicism in the co-operative movement over the Government’s motives. They are keen to trumpet their commitment to co-operation when it is politically expedient to do so, but the absence of the Bill that the Prime Minister promised us during this parliamentary Session is bound to create a suspicion about their true commitment and motives in this regard.

The most astonishing omission of all from the Queen’s Speech was a Bill on higher education. My Committee carried out a long inquiry into this matter, and offered a raft of recommendations to the Government last November. To date, the Committee has not even had a reply to its recommendations. On two occasions, excuses have been given. The consultation on the White Paper ended in January, and we were told that further consultation was needed. We were also told that the matter would best be dealt with as part of an announcement of the Government’s policies in the Queen’s Speech in the new Session, yet the Queen’s Speech contained absolutely nothing about it. The inevitable suspicion is that there is such profound disagreement between the coalition partners on this subject that we shall have a White Paper and a consultation but no Bill on an issue of profound importance to hundreds of thousands, if not millions, of students in this country. This is also a serious matter in that higher education is one of the biggest export earners for this country. The omission of a Bill demonstrates a complete lack of consistency and commitment to it.