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Secretary of State for Business, Innovation and Skills Order 2009

My Lords, I declare my interests as set out in the Register. I have tabled this Take Note Motion in order that we should enjoy an opportunity to debate what the Merits Committee quite rightly identified as an issue of public policy that is likely to be of interest to your Lordships’ House. I am speaking, of course, of the merger of the Department for Innovation, Universities and Skills and the Department for Business, Enterprise and Regulatory Reform on 5 June this year. The delayed date of the laying of this order, to accommodate the lack of Privy Council meetings in August and September, has given us an opportunity to assess the impact that the Department for Business, Innovation and Skills has had. So much was promised by the First Secretary of State in June that it is surely right that we should hold him to account for his delivery—or, as I will contend, his non-delivery—of those promises. On 9 June, the Secretary of State assured this House: ""We have a new phoenix in this department, which will be able, I hope, to extend its reach to outer space and beyond".—[Official Report, 9/06/09; col. 530.]" The First Secretary of State is nothing if he is not, as I suppose, ambitious. We have spoken before of his responsibility for outer space. I am not sure whether he realises that he also has responsibility for that hardy perennial issue, British Summer Time, so he is not only master of all he surveys but a Time Lord. He has underlined that point by enjoying several much publicised reincarnations and by taking us back in time, specifically, I would say, to the 1970s. This vast new department, headed by someone who cannot be held to account by elected Members in another place, is a ghastly throwback to the age of corporatism. Many of us had hoped and believed that that era had been consigned to the dustbin of history by the endeavours of my noble friend Lady Thatcher. It seems not; the Labour Party forgets nothing and learns nothing. Despite the supposed best endeavours of the First Secretary of State, Labour never fundamentally changes or modernises its view of the world. The Secretary of State’s new department boasts 2,900 staff members and a budget of £22,000 million for this year. The reorganisation of departments confirmed that the £9 million spent on consultants and IT during the establishment of DIUS, only two years before, was completely wasted—and that does not even include the cost of establishing DBIS. I suppose that we have become accustomed in recent times to talking about billions, particularly when looking at government waste and profligacy, but even £9 million used to be thought rather a large sum of money when spent by the Government on futile gestures. I hope that one day it will be thought so again. A major reorganisation, so quickly reversed, is surely a candidate for being considered futile, even if it is not perhaps as egregious as the short-lived renaming of DBERR as DPEI in 2005. Fundamentally, the matter in hand today is accountability. Can so vast a department really be held to account effectively when its only Cabinet Minister is here and not in another place? The First Secretary of State has intimated that he might be willing to go to another place to answer questions from colleagues there, but that totally misses the point. This country needs enterprise to deliver recovery; this is therefore a critically important department. It should be fully represented at Cabinet level in another place, where the elected representatives of this country are to be found. We come to what the Secretary of State has achieved from his little list of promises. DBIS has certainly not helped our economy to come through this recession more strongly. On the latest published figures, the UK is not out of recession yet, unlike so many other developed countries in Europe and further afield. Indeed, it was marked as worst placed in the world’s major economies by the OECD last year. Sadly, there are now 51 companies going bust every day and there are record levels of individual insolvency. We are also suffering from the lowest level of business investment since records began. To which planet, in which part of his outer empire, has the Secretary of State withdrawn if he genuinely believes that, as a result of his efforts, we have a strong and competitive economy? The many loan schemes and guarantees that DBIS has rolled out to support small businesses, provide credit and encourage growth have clearly failed to make a meaningful impact. The only two policies that have had any measure of success were ideas taken from the Conservative Party. The enterprise finance guarantee is a pale shadow of that much larger national loan guarantee scheme that we would have implemented. The Business Payment Support Service, which allows the deferral of certain taxes, is a copy of our VAT deferral scheme. On the innovation and skills areas of the new department, it is apparent that DBIS is doing no better. The recent near-collapse of the Government’s system of student finance has gravely damaged universities, which have been forced to spend thousands of pounds on helping to tide over their students, many of whom are at the beginning of their first year. Struggling to pay your rent and food bills is hardly the most auspicious start to an academic career. The unique DBIS brand of so-called help has unfortunately been extended to other, non-university, learners as well. The Government have talked the talk of increasing investment in training, skills and apprenticeships but behind the scenes it is clear that this spin bears no relation to the facts. We are now told that the Government are cutting £340 million from that budget as efficiency savings. It is true that waste is prevalent throughout Whitehall, but only £100 million of that far larger figure is apparently to be saved on administration and quangos. Around £250 million is to be drained directly from front-line services, such as apprenticeships and career development loans. It is estimated that this will lead to 335,000 fewer loans. How is this helping UK students to gain the skills and training that they so desperately need? How will it help to reverse the growing tide of youth unemployment? How does this embody the vaunted so-called investment, of which the Prime Minister so often aggressively speaks in another place? This may be only an interim report on DBIS itself, but we now have to consider almost 13 wasted years of this Labour Government, who have taken us from a golden economic inheritance in 1997 to a shambles now. The recent appointment of the so-called sorcerer’s apprentice, the noble Lord, Lord Sugar, as an adviser to speak with the full authority of the Government, will supposedly revitalise the Secretary of State and his department. I have already alluded to the First Secretary of State’s penchant for the arrogation of powers and the accretion of titles. He is the Lord Pooh-Bah of our day. Live on the BBC this morning I heard the Secretary of State say on the "Today" programme, "Who is Pooh-Bah?". I will tell him who Pooh-Bah is, with a strangely apposite refrain from Gilbert and Sullivan’s "Mikado", from Lord Pooh-Bah himself. He said: ""It is … my degrading duty to serve this upstart as First Lord of the Treasury, Lord Chief Justice, Commander-in-Chief, Lord High Admiral, Master of the Buckhounds, Groom of the Back Stairs, Archbishop of Titipu, and Lord Mayor, both acting and elect, all rolled into one. And at a salary! A Pooh-Bah paid for his services! I a salaried minion! But I do it! It revolts me, but I do it"." When it really counts, can this Lord High Everything Else before us really deliver when it matters? I would say that the answer is plainly no. The failure of the First Secretary of State to secure the safe passage of the Postal Services Bill in the previous Session shows how all the titles in the world cannot deliver success if an unreconstructed Labour Party and an unreconstructed, weak and cornered Prime Minister obstruct the path of progress. The First Secretary of State repeatedly and emphatically told us that that Bill was essential for securing the future of the Royal Mail and essential for UK business generally. Sadly, it soon became the flagship that sank without trace. We heard yesterday that even the Secretary of State’s modest plans to expand the financial services provided by the Post Office are to be delayed until after the election. Two weeks ago, when we were debating the Loyal Address, the Secretary of State’s noble friend Lord Myners expressed eagerness to hear more about Conservative policies. I sympathise entirely; I would much prefer to focus on what a newly elected Conservative Government would do than dwell on the abundant failings of this one. It is important to end on a positive note and to talk about some of the changes that we would make if we were able to bring the enormous resources of DBIS to bear on the problems that this Government have caused. We will introduce our national loan guarantee scheme to help to get credit flowing again and allow small businesses to defer their VAT bills for up to six months. We will help small companies with their cash flow by cutting national insurance and corporation tax. We will encourage job creation through tax breaks for start-ups and companies that hire long-term unemployed people. Instead of cutting the number of apprenticeships available, we will fund 100,000 new apprenticeships every year and make sure that they are credible, rigorous and relevant. We will introduce a £60 million business skills development fund to promote non-apprenticeship skills that businesses need and employees want. We will simplify research and development tax credits, targeting them more effectively at the small companies and start-ups that will drive the innovation and product development that our economy so badly needs. Instead of seeking to micromanage businesses, we will make substantial, transparent cuts to red tape and bureaucracy and make the institutional changes necessary to stop further regulatory creep. We will introduce the regulatory budgets that this Government have never properly delivered. I cannot emphasise enough how damaging this Government’s addiction to regulation has been to the UK economy—it costs us between 10 and 12 per cent of GDP—and how frustrating it has been for us to listen again and again to meaningless speeches from government Ministers about the importance of deregulation while they pass order after order after order. It is no accident that the words "regulatory reform" have been deleted from the title of this department. That is not a full list of the improvements that a Conservative Government would bring. It does, however, amount to much more than DBIS is able to deliver under this Labour Government. I hope that this debate will go some way towards shaking the Secretary of State out of his complacency about how little he and his policies have benefited workers and businesses over the past six months. My message is: let us see an end to the empire building and a beginning to some serious enterprise building. I beg to move.