Industry (Government Support)

Nick de Bois Excerpts

Wednesday 16th June 2010 Commons Chamber

[Sajid Javid]

A few weeks ago, the OECD, the G7 and the International Monetary Fund said that we had no choice but to make the cuts, so I think they would agree with what I have just said.

We cannot rely on a benign global economic outlook as we approach the cuts. I believe that the international financial markets are at their most fragile since the collapse of Lehman Brothers in 2008; the euro’s troubles are only just beginning; the largest emerging economies in the world are about to raise interest rates, so demand will fall, which will affect global demand; and investor appetite for sovereign debt, including our own, is rapidly diminishing.

If we are to get our economy moving again we have no time to lose, so I look forward to the emergency Budget statement that my right hon. Friend the Chancellor will make next week.

To help industry, we need to get the banks lending again. I have met many people in Bromsgrove who tell me that it has never been so difficult to get a loan. Drawing on my 19 years’ experience of working in the City, I believe that bank lending will not recover until the banks are forced to admit the true state of their balance sheets. Right now, the markets just do not believe that our banks are being truthful about the problems that they face. In turn, the banks are not getting the capital that they need, so they are instead squeezing existing customers, as well as not lending.

As well as a thorough review of financial regulation and regulators, we need an independent audit or a stress test of each British bank, eventually leading to a private sector recapitalisation of weaker institutions that are identified. In that regard, the report that was recently issued by the Future of Banking Commission—of which, I believe, my right hon. Friend the Secretary of State for Business, Innovation and Skills was a member—has made some worthy suggestions.

Also to help industry, we need a dramatically different approach to business regulation, as many of my hon. Friends have said today—an approach that is radically different from that of the previous Government. Many business men and women say that the sheer cumulative volume of regulation makes their lives so difficult. People who need to be dealing with customers and products are instead too busy complying with regulators, and many regulations are simply not necessary to keep businesses honest and safe.

[Nick de Bois (Enfield North) (Con)]

The word “regulation” is often bandied around. Although many people hear it, they do not appreciate its full impact. Does my hon. Friend agree that, in the small business sector alone, nearly one full-time employee a year is needed to deal with the growth in regulation, particularly over the past decade—equivalent to a cost of about £11 billion a year—and that there is no greater signal for turning back the clock? I agree with my hon. Friend the Member for Stourbridge (Margot James) that it is perhaps time for a one-in, two-out policy on regulation.

[Sajid Javid]

Absolutely, and I think that my right hon. Friend the Secretary of State for Business, Innovation and Skills said earlier that 21,000 new business regulations have been introduced over the past 13 years—six every working day of the last Government—but such talk of regulation also applies as much to EU regulations as to domestic regulations. Much of what comes from Brussels is often unnecessary, badly thought through or just ignored by other member states when it suits them. So we need a new approach to EU regulations that helps British industry and business and not one that undermines them.

My constituency of Bromsgrove was once a very proud manufacturing hub, supplying much of the west midlands industrial complex. Much of that industry has now, sadly, disappeared. Some hon. Members may remember one of my predecessors, Sir Hal Miller, who was a passionate advocate of industry in the west midlands, especially the motor car industry.

In recent years, a large “closed for business” sign has been hanging over our country. Whether down to punitive taxation, excessive regulation or inadequate incentives, the effect was always the same: to repel new businesses and discourage existing ones. Having run a private equity business, I cannot stress highly enough how destructive those misguided policies have been. Consequently, I support the amendment, and it is hugely reassuring once again to have a Government who recognise the urgent need to re-open Britain for business.

--- Later in debate ---

[Rachel Reeves]

Thank you, Mr Deputy Speaker. This Government—the party of the hon. Member for West Worcestershire (Harriett Baldwin)—have called for £293 million of cuts from the regional development agencies. Yorkshire Forward was asked to make £44 million of cuts. It was written to and asked to come back with those cuts within two weeks—it had two weeks to determine cuts that will affect 24,000 businesses in my region. These are not Labour cuts; they are Conservative cuts.

I ask the Secretary of State for Business, Innovation and Skills to give my constituents some commitment and some hope and certainty that the work that Yorkshire Forward does to support innovation, manufacturing, jobs and skills will continue. I urge the Government not to destroy the support for jobs and growth that the Labour Government put in place. Without Yorkshire Forward, we would not have brought clean coal to our region and the 1,000 jobs that that means in South Yorkshire. Without Yorkshire Forward, we would not have negotiated a deal with Siemens and GE to bring offshore wind, with thousands of much-needed jobs, to Hull, Grimsby and Scunthorpe.

[Nick de Bois]

What I am hearing today is that growth depends entirely on regional development agencies. We have to liberate businesses from the heavy hand of regulation and taxation that the Opposition imposed under the last Government. That is the way to growth. It is not entirely dependent on the regional development agencies to which the Opposition seem to be so wedded.