Deregulation Bill

Debate between Chi Onwurah and Andrew Bridgen

Monday 3rd February 2014 Commons Chamber

[Chi Onwurah]

We all know that small businesses need a cut in business rates, as we have proposed, and then a freeze. We will also freeze their energy bills, which will save an average of £1,800 a year. At the same time, we would change the economy so that it delivers secure employment, which would benefit businesses large and small.

We want this Government to acknowledge, once and for all, that it was not working people’s job security that caused the global financial crash and that preventing employers from discriminating against pregnant women is not the root cause of the cost of living crisis. This Government are so out of touch that they not only do not understand the challenge they face—the need for an economy that works for all, delivering good, well-paid jobs—but fail to understand the real solutions to the problems that they do see.

[Andrew Bridgen (North West Leicestershire) (Con)]

The hon. Lady talks about preventing mythical attacks on working people. Does she concede that under the policies of this Government more than 1 million more people are in work in this country?

[Chi Onwurah]

I know that almost 1 million young people are unemployed and that 1.3 million people in part-time work are seeking full-time work. I also know, because I speak to these people in my constituency, that some people who are supposedly in jobs with zero-hours contracts are getting no work, cannot make any plans and cannot go out and spend money. That is the working environment that this Government support and that the next Labour Government will change.

Let us turn to the first, and most worrying, part of the Bill—the general measures affecting business. Exempting self-employed people in certain industries will create confusion about who is covered and who is not. The Institution of Occupational Safety and Health, the chartered body of health and safety practitioners and the world’s largest health and safety professional membership organisation, is opposed to that, calling it

“a very short-sighted and misleading move”,

and saying that

“it won’t actually help anyone; it won’t support business; but it will cause general confusion.”

Even the Federation of Small Businesses, which supports the change in principle, says that the implications are not well understood and it is particularly concerned about the unintended consequences for insurance, which will need to be considered further in Committee if the Bill gets there.

The Bill will also remove employment tribunals’ power to make wider recommendations to employers who have been judged to have discriminated against someone unlawfully. Such recommendations are only advisory—they are not mandatory and they promote good working practice. Why are the Government trying to prescribe the ability of tribunals to make observations? What are they afraid of? The Prime Minister says that we are in a global race, but that race cannot be won by attacking employment rights at every opportunity. The Opposition will not support a race to the bottom.

The House of Commons Library considered the impact assessment for that measure and found that despite the Minister labelling it deregulatory and counting it as an out under the Government’s arbitrary one in, two out system, business will incur a cost as a result of the removal of the power. Only this Government could propose a supposedly deregulatory measure that costs business money. Those on the Front Bench look slightly puzzled; this is work by the House of Commons Library.

--- Later in debate ---

[Chi Onwurah]

The Labour Government did more to support working families and working parents than any Government before, and of course we support that measure.

I shall try to make progress and speak to my experience with business. Before entering the House, I worked for many years in telecoms in the private sector in the United States, the United Kingdom, France, Nigeria and many other countries around the world; I worked in companies large and small. I then worked for the industry regulator in this country, Ofcom, for six years, so I have seen regulation from many different viewpoints, and I am familiar with the impact that it can have on businesses of all sizes. I recognise the burden that it can represent, particularly on small businesses.

The Opposition believe that Government must seek to reduce unnecessary regulation at every opportunity, but unfortunately, this Government’s debate on regulation is stale and simplistic. Smart regulation underpins fair markets, and can level the playing field for small firms and new entrants—the very people and businesses that create new jobs and prosperity. Smart regulation saves lives. It is a matter of great pride for all of us, I hope, that the 2012 Olympic infrastructure was built without the loss of one life. We can certainly be sure that regulation played a part in that. The men and women working on those construction sites know the value of having clear health and safety laws in place, and I only wish that were the case for Government Members.

Smart regulation can help to drive innovation and growth. Labour’s zero carbon policy helped to make this country a world leader in low-carbon technology and architecture. Yes, regulation—

[Andrew Bridgen]

rose—

[Chi Onwurah]

I am going to make progress, as many Members wish to speak.

Regulation is a concern for some businesses, but business people understand that rules are needed to protect people’s safety and rights, promote competition and prevent employers from being undercut by those who do not play by the rules. As the Federation of Small Businesses has noted, the concerns of business are often about how regulations are developed and introduced, how they are enforced, and the duplication and overlapping rules that waste their time. The Government’s rather crude “one in, two out” approach fails to recognise that sensible and proportionate regulation introduced and implemented properly can promote healthy, competitive markets. The issue is more complex than the number of rules coming in and out.

We believe it is essential to take a fresh look at existing regulation, how it is implemented, and how—in response to the right hon. Member for Wokingham (Mr Redwood)—it is translated from European directives. Regulation protects consumers’ and employees’ rights, ensures that our industries play their part in moving to a green and sustainable future, and keeps citizens safe; it has saved many lives. It is important that it is effective and enforceable. Challenges arise when ill-thought-through regulation has unforeseen consequences or is interpreted bureaucratically and inflexibly. Some regulation can certainly represent an unnecessary burden on businesses, particularly small and medium-sized enterprises that may not have access to legal advice to interpret regulation accurately or the resources to implement it fully.

When in power, Labour sought to reduce regulation by introducing the Better Regulation Commission and the ongoing better regulation programme, and made a number of legislative changes to reduce the cost of regulation. Our programmes for simplifying regulation delivered—[Interruption.] Our programmes delivered— I would have thought this figure would be of some interest to Government Members—£3 billion of savings to business per year. In contrast, the impact statement for the draft Bill—Ministers have not dared to produce a comprehensive summary for the current Bill—estimated that it would save business and civil society £10 million over 10 years. So we have savings of £10 million or £3 billion; I think the Minister can do the maths. The figures underline that while we all agree unnecessary regulation can be a burden on business, a sensible approach to deregulation is about more than repealing statutes.

In government, we introduced legislative reform orders to help Ministers to get unnecessary burdens on business off the statute book. However, as the Regulatory Reform Committee has noted, instead of using those 11 procedures already available to Government for deregulating, Ministers chose to invent a new one. We also set up the primary authority scheme and the Regulatory Policy Committee, as well as a Cabinet Sub-Committee to focus minds at the very top of Government. That was our record in government.

Building on Labour’s progress in government, the Bill seeks to introduce a growth duty on regulators, as the Minister explained. This duty will compel them to have regard to the promotion of economic growth when carrying out their functions and to carry them out in a necessary and proportionate way. We support the aims behind the duty and, clearly, the principle that regulators should go about their business in a proportionate way, but we must ensure that the duty does not inhibit or contradict the primary function of any regulator.

The crude proposals in the Bill do not fit into an overall strategy or vision for this country. They show no recognition of why growth is important to deliver good, sustainable jobs, to help people’s incomes rise faster than costs, and to ensure that we become richer as a nation. They do not mention long-term or sustainable growth—they refer simply to growth—and they fail to recognise that good regulation is necessary to protect jobs and growth. Is it right that a housing bubble or a casino-capitalism-fuelled, short-term growth spurt should be a primary consideration for the Office for Nuclear Regulation? I hope we all recognise that markets need to be regulated in order to protect growth and jobs, or are the Government suggesting that the underlying cause of the global financial crisis was too much regulation?

Rural Broadband and Mobile Coverage

Debate between Chi Onwurah and Andrew Bridgen

Thursday 19th May 2011 Commons Chamber

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

I congratulate the Backbench Business Committee on securing this important debate. I know personally how difficult it can be to interest hon. Members in technical subjects. It is to the credit of the hon. Member for Penrith and The Border (Rory Stewart) that he has been so successful in communicating the critical nature of our broadband infrastructure and the importance of the coming spectrum auction.

I declare an interest: before being elected I worked for the telecommunications regulator, Ofcom. [Hon. Members: “Hear, hear”.] I thank hon. Members for that! Before that, I worked for 17 years in telecommunications in the private sector. I was personally most grateful for the rise of the internet because it finally enabled me to explain what I did for a living when I was working on an “integrated services digital network private branch exchange”, which was double Dutch to most people. Being able to say that I was helping to build the internet meant that my friends and family could finally have confidence that I had a legitimate occupation.

Of course, we have far more important reasons to be grateful to the internet, some of which were mentioned by the hon. Member for Penrith and The Border; others will doubtless be raised during the debate. The internet is well on the way to becoming a necessity rather than something that it is nice to have. For some, the transition has already taken place. According to the Federation of Small Businesses, 90% of its members use the internet in running their businesses, and a third of those think that the broadband speed is reducing their productivity. That is a real indictment of the current level of broadband provision. If broadband is such a necessity, why have the Government delayed the provision of universal access until 2015?

I welcome the motion’s emphasis on the importance of broadband, but I want to focus on the part that calls for the mobile auction coverage requirement to be extended from 95% to 98%. I could talk for a long time about the strengths and importance of broadband, but I want to focus on that specific technical area, because it is in that regard that I fear that the objectives of many Government Members may not be realised

Ofcom is not primarily concerned with raising revenue, as the hon. Member for Penrith and The Border suggested. Its primary aim, generally and as set out in the directive, is to maximise competition. If pressure is being placed on Ofcom to consider the amount of revenue raised, that pressure is coming from the Government. Ofcom is consulting on a 95% coverage requirement because that is the coverage that mobile operators feel they can achieve without significant additional investment. It is about putting equipment on existing base stations rather than building new ones. Considerable costs will still be incurred, because the equipment is costly, but Ofcom has judged that the cost will not prove prohibitive to the private sector business case. I am sure that Members on both sides of the House recognise the importance of a valid business case to investments in the private sector. However, extending coverage to 98% would increase the cost considerably. I was interested in the estimate of £250 million from the hon. Member for Penrith and The Border. I note that the Ofcom consultation specifically avoids giving an estimate, on the basis that the modelling is too complex and time-consuming to undertake at present.

One thing that should be emphasised is the importance of getting the spectrum out there as quickly as possible. We do not want to spend too much time on network economic modelling. However, we must also recognise that adding a line to a licence requirement will not get that equipment out into the field; nor will it get mobile broadband into Members’ constituencies. We need to ensure that private sector companies are properly incentivised.

Increasing the mobile coverage requirement may well reduce the Treasury’s income. I agree with the hon. Member for Penrith and The Border that that would be a reasonable price to pay if we could be sure of the results, but there are two main concerns. The coverage requirement is for 2017. That might seem a long time to wait—indeed, to small businesses painfully watching the hated Microsoft hourglass turn it must seem an eternity—but it is worth noting that the 3G coverage requirement, which was for only 80%, was not met until seven years after the auction. Can the rural small businesses of this country really wait so long? The Government have apparently committed themselves to providing universal broadband by 2015, but that leaves us still four years away from a decent broadband service for all.

[Andrew Bridgen (North West Leicestershire) (Con)]

I hate to break up the cosy consensus, but I am going to anyway. I understand that the Opposition are claiming in the media that they could deliver broadband roll-out both faster and at considerably lower expense than proposed by the coalition Government—indeed, £200 million less. Can the hon. Lady tell the House of any project at all that the Labour Government delivered both on time and on budget, let alone in reduced time and at reduced budget?

[Chi Onwurah]

The previous Government committed to providing universal broadband access at 2 megabits by 2012, whereas it is my understanding that the current Government have made a commitment to the best broadband—there is some doubt as to the exact definition of that term—by 2015. Our project was to be implemented not by the Government, but by the private sector, and with the right incentives. It was not only fully planned, but fully costed, and had the support of the vast majority of the telecommunications industry, who agreed that it was feasible. The current proposal to deliver superfast broadband by 2015 is, however, not fully costed, as I am sure broadband companies would set out in detail.

The coverage obligations do not match private sector business cases, and, unfortunately, are a very crude and ineffective way of correcting what is, effectively, market failure. There will be a cost to the public purse, but unlike in a directed programme, we will not have any say as to how that money is spent; so the Treasury will lose money, but we will have no guarantee or say as to how it is invested.