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Regulatory Enforcement and Sanctions Bill [Lords]

It is a pleasure to follow my hon. Friend the Member for The Wrekin (Mark Pritchard), who made a powerful speech today, as he did yesterday. I need to declare an interest—I refer Members to the register—as I am a director of a small company. I am also a member of the Institute of Chartered Accountants in England and Wales. I am delighted to speak in this debate because of my personal background. I came to the House of Commons late in my career, mainly because the public kept rejecting me—[Interruption.] That is another issue. However, that allowed me to extend my business career. I started a company and went through all the traumas of growing it. Eventually it became a plc, and we sold it on and I started a new company. So I have some personal knowledge of the problems of regulation in business. I have one story, about VAT inspection, that will illustrate some of the problems. At the time, my company was only small, with five employees including me. We were told that we were to be inspected by the VAT man. We were told the date, and we did an enormous amount of work laying out the books. Unfortunately, on the day there was heavy rain. The inspector was due at 9 am, but still had not turned up by 10, so we rang up, to be told, ““Oh, he's not coming, Mr. Bone, because it's raining so hard.”” That is the sort of thing that drives owners of small companies mad, but they have to put up with it. We were not even inspected afterwards: the inspection was abandoned. It felt like inspection for the sake of inspection. Much of the merit of the Bill is that it would target rogue traders, or possible rogue traders. The Hampton review stated:"““During 2003…the local authority trading standards officers only inspected 60 per cent. of high risk premises in Great Britain, in 35,000 inspections, yet still inspected 10 per cent. of businesses classified as low-risk, in over 72,000 inspections.””" I understand that the Government now intend that high-risk businesses should be inspected more frequently, but they have not said that they will not inspect low-risk businesses. If high-risk businesses are to be inspected at the rate that the Government suggest, we should be able to reduce the number of inspectors. Do the Government have a target for the reduction of inspectors every year, so that we can see that the decrease in regulatory inspections is actually occurring? When I worked in business, I was also driven mad by conflicting advice from regulators. An inspector told us how to operate a VAT system for our travel business, but then three or four years later, another inspector came along and said that we had been doing it wrong and that we would be fined. We argued that we were doing what we had been told to do, but no, we had to pay the fine and change how we did things. As it turned out, we did not mind paying the fine, because the new way of doing things saved us an enormous amount of VAT. However, that should never have happened, because the procedure should be made clear to businesses. If the Bill helps to improve that, it should be welcomed. The real problem is not the implementation of regulation but the fact that the Government create regulation at an enormous rate of knots. I have three ideas for cutting back on regulation. First, we should get rid of the regional assemblies. According to a left-wing think-tank, they cost taxpayers £360 million a year. They do not do anything, so we should get rid of them. Secondly, we should abolish planning appeals. Local elected councillors should be able to decide the merits of a planning application, and that would save millions of pounds. Thirdly, I cannot find anyone who thinks that the Standards Board for England is a good idea, so we should get rid of that. If the Government were proposing such measures, we might believe that they wanted to cut regulation. The proposed LBRO—it does not have a very good title—should be extended. Why not have it cover the whole of government, not just local government? Why not call it the department for administrative affairs, and build up a big empire? Why not employ lots more civil servants to cut regulation? We could find a Minister to do that—perhaps a chap called Jim Hacker. This is straight out of ““Yes Minister””. The Bill will create a body that will cost £73 million a year and employ huge numbers of bureaucrats, with the idea of saving money. Another thing that used to drive me mad when I was in business was getting a letter from a Government organisation with no date or address, or with an illegible signature. I have a copy of the impact assessment by the Department for Business, Enterprise and Regulatory Reform—the second version, although I do not know why there were two—and the Minister's signature of approval is a squiggle, so I have no idea who it was. The name of the Minister who signed off on this document should at least be printed on it. Of course, the Minister may not want to be identified, because of the problems with the impact assessment. We are told that the Bill will save businesses a lot of money, and the impact assessment contains some very good figures. The LBRO will cost £73 million a year, although that is a Government estimate, so we can at least double it. Let us call it £146 million for a start. The annual benefit to business, according to the impact assessment, will be £200 million, so we can halve that to get the right figure, so it will be only £100 million. The result is a net loss of more than £40 million a year. The impact assessment goes into detail about the different costs between local authorities and businesses. One very telling argument is the fact that the impact assessment says that the cost of the new department to local authorities is £13.6 million a year, which will provide a saving of between £14.2 million and £17.9 million a year. That is hardly any saving at all. Everyone knows that local authorities are the most inefficient part of the whole system. They are far more inefficient than private businesses, but the Government are going to make a change that will cost the local authorities £13.6 million in order to save between £14.2 million and £17.9 million. We are told that it will cost businesses only £7.5 million, and that there will be a saving of between £59 million and £86 million a year. I do not believe any of it. If we review the situation after three years—I am grateful for the remarks made by the hon. Member for Brent, East (Sarah Teather) on that subject—I do not believe that we will find anything other than a glorious empire with a Jim Hacker-type figure at the top and lots of people sending out lots of bits of paper, which will cost a huge amount of money and not save a single penny.