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Should the Department of Trade and Industry be Abolished?

4th December 2003

5.35 pm

Mr. Jonathan Djanogly (Huntingdon) (Con): Thank you, Madam Deputy Speaker. As "Tail-end Charlie", I shall have to pick on only a few issues. One issue that has not been much mentioned today, but which must be debated, is the massive impact of regulation on businesses, particularly small businesses, in our country. There are 15 new regulations coming into force every day, which, according to the estimate of the British Chambers of Commerce, amounts to a cost hike of £20 billion a year on business. When I asked businesses in my constituency about that, 90 per cent. felt that the burden had increased under the Labour Government.

The evolving picture for British manufacturing is not a pretty one. Productivity growth has halved since Labour came to power. Output was down by 4 per cent. last year-the biggest fall since 1991-and profitability has fallen to its lowest level since 1992 with 300 manufacturing jobs being lost every day. In such a dire position, we need to ask what the Government wanted to achieve. It is certainly not equality, because the divide between rich and poor is growing. Clearly, the Government believed that low interest rates would encourage investment, but while the personal debt mountain has grown to ever-higher levels, corporate investment has fallen in the last quarter to its lowest level for 20 years.

I can only imagine that Europe must figure highly in Labour's grand plan-I have the inevitable feeling that they want to dumb down to the lowest level of the social chapter-and that the Government wish to appease the unions with a European social agenda that will lead to a less competitive and, ultimately, higher unemployment economy, which is more euro-compliant. Once comfortably in the euro, the Government will be able to blame others for setting an interest rate that destroys our own economy.

Having said that, Labour has also encouraged our very own British regulations, such as the climate change levy, the aggregates tax and, most recently, the income tax hike in the form of national insurance, which is itself equivalent to a 3 per cent. rise in corporation tax but is wholly unrelated to such niceties as whether the company concerned makes a penny of profit. Worrying as the red tape and regulations are to business, the growing sentiment that I hear from businesses is that they feel increasingly isolated. While their employees' protections and rights are becoming ever more entrenched, who in the Government is standing up for business interests?

The tide continues to flow in this year's Queen's Speech with a new draft disability discrimination Bill and Employment Relations Bill chipping away time and again at our competitiveness. It is a Government of technocrats and target setters, not innovators and leaders. Whenever there is a problem, they say, "Let's have another Bill", but before we move on to the new Bills, including the proposed Bill to regulate auditors and facilitate the raiding of companies and their directors by the Department of Trade and Industry, what about the comprehensive companies Bill that they have promised for five years-the one that will reduce form filling, ease statutory capital requirements for companies and remove the inherent discrimination that small companies face in our corporate legislation? I ask the Government, in whose in-tray is that now languishing?

I recently met the British Exporters Association, which said that the relevant Minister did not seem much concerned about attending meetings with foreign parties to help companies to win contracts, though that was regularly done by other European Ministers. I return to the question whether it is worth having a Department of Trade and Industry at all. The answer is, probably not, when the Secretary of State prioritises commenting on semi-nude women sitting on cars in motor shows, attacks the ability of British managers rather than supports them, and highlights the question of ageism as a sop to pensioners who are now forced to work due to Labour having smashed their pensions.

My opinion might be different if we had a Government who cut regulation for companies and fought Treasury plans to increase corporate taxes; who stood up for British interests abroad and demanded our fair share of Iraqi contracts; who travelled the world securing inward investment and British foreign infrastructure and export deals, and who sorted out rather than pandered to the unions and their ancient work practices, as we recently saw with the Post Office strikes. Only then might I give a cheer for the Department of Trade and Industry.

5.39 pm

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