Industry (Government Support)

Debate between Lord Willetts and Esther McVey

Wednesday 16th June 2010 Commons Chamber

[Mr Willetts]

We do believe that there are efficiencies to be made because of the very high overhead costs of RDAs. Government Members are committed to saving public money, and I have to say that one way in which we will do so is by saving money in the overhead costs of RDAs as we move to the new arrangements—and we make no apology for that.

We also believe that some roles currently carried out by RDAs can be scrapped to save money—regional spatial strategies, for example. We simply do not need them—full stop. There are other roles, including inward investment, that we believe should be led nationally and can be carried out elsewhere. We heard powerful examples from several of my hon. Friends of how individual RDAs were spending money around the world on regional offices; this type of function is better done at the national level. We believe that some RDA roles in sector leadership and taking responsibility for business support and innovation can also best be done nationally. That is the approach that we will take.

Our challenge is to rebalance the economy, to rebalance it in favour of manufacturing, to rebalance it in favour of investment and to rebalance it regionally as well. That is part of the inheritance that we take on from the previous Government.

[Esther McVey (Wirral West) (Con)]

I have listened to what has been said this evening, and I would like to raise the concerns of small business owners and family-run businesses in Wirral, Cheshire and Merseyside, as I have been part of the Merseyside Entrepreneurship Commission. What they say is drowning them is the burden and cost of regulation. Last year, in the north-west alone, it cost £8.3 billion and, since 1998, the overall figure has gone up by £11 billion a year. I want to know what we are going to do to help the small businesses across the north-west.

[Mr Willetts]

My hon. Friend is absolutely right. To indicate the challenge that we face, the previous Government introduced 20,938 new regulations. Between 1987 and 1997, 46 pieces of primary legislation affected the workplace. In the subsequent 10 years under the Labour Government, 92 pieces of legislation affected the workplace. In the Department for Business, Innovation and Skills, working with the Secretary of State, we have already identified on our forward programme 200 proposed regulations inherited from the outgoing Government that would have cost more than £5 billion to British business. Every one of those will be scrutinised, and we will roll back the burden of regulation, which is fundamental.

We believe in “rebalancing the economy”, and although those are the new words, I sometimes think that Winston Churchill, who served in the House as a member of the Liberal party and of the Conservative party, expressed it best when he said that he wanted to see finance less proud and industry more content. That is what the Government stand for. Getting a grip on the public finances is fundamental, because otherwise, as my hon. Friends the Members for West Suffolk (Matthew Hancock) and for Bromsgrove (Sajid Javid) described powerfully, interest rates will rise, which is a burden that British industry cannot be expected to bear. We need to bring down the burden of public borrowing and of the public finances.

The Government are not alone in believing in that—former Ministers who are now on the Opposition Benches signed up to such plans in government. They have failed today to give us any information about their plans to deliver the savings to which they publicly committed themselves. Let me remind them of what was in last year’s pre-Budget report with regard to the Department for Business, Innovation and Skills. It said that £300 million would be saved by reducing funding for adult skills budgets, and £600 million would be saved from higher education and science and research budgets. I agree with Labour Members about the importance of science, although it is a pity that they fought the last election on a proposal to save £600 million from higher education and science but have never informed us of exactly how they would have made those savings. We will now deliver the savings, and they are in no position to criticise the savings that they planned for but never had the guts to share with us and explain.

The Government are committed to a strategy for growth that involves an enterprise-friendly tax system, support for science, support for free trade and competition, a belief in investment in skills and training, and rolling back the burden of regulation, setting British industry free. As every contribution to the debate has revealed, there is a simple difference between the Government and Opposition. The Government believe in freedom, enterprise, initiative and competition, and the Labour party still believes in state control, higher public expenditure, more regulation, more RDAs, and more interference in the wealth-creating sector of the British economy. That is not the way we will recover from the recession in which the Labour party left the country.

The Government will commit ourselves to bringing down the burden of borrowing and managing the public finances prudently. In the Department for Business, Innovation and Skills, in which it is a privilege to work with the Secretary of State, we are determined to have a more flexible and dynamic industrial sector because of our commitment to free trade and free markets.

Question put (Standing Order No. 31(2), That the original words stand part of the Question.

The House proceeded to a Division.