---

Economic Affairs and Work and Pensions

It is a strange feeling to be standing here today—not only am I on this side of the Chamber, but I am speaking on Government proposals that incorporate the vast majority of policies that we, the Liberal Democrat business, innovation and skills team, produced as part of our general election manifesto. I know that many of those policies were in the Conservative manifesto as well, but it would be churlish to quibble about who thought of them first. Both the Conservatives and the Liberal Democrats see themselves as being the party of business, so it is unsurprising that many of our policies chime together. I want to speak briefly about my hopes for the implementation of some of those policies, but first I want to mention two policies that did not make it into the agreement. Access to capital has been a great problem for business for some time, and with the banks taking a more cautious—ultra-cautious some might say—approach to lending, we thought up a couple of creative ideas to use equity as opposed to capital as a mechanism to fund growth. For start-ups, we devised a policy of local enterprise funds, which would be a tax-efficient way for local companies or individuals to plough capital back into their area in return for equity. They could also have offered added value by offering advice if appropriate. In order for established companies to fund growth, we looked at the idea of having regional stock exchanges, which would be based on the same principles as national ones, but would be localised and geared up for smaller companies. They could use the regional stock exchanges to get cash for equity without the long-winded and exacting due diligence that would otherwise preclude them from entering the big boys' national stock exchange league. I hope that the new coalition will still consider those ideas at some point. There are great things in the agreement that, if properly implemented, will make a huge difference to the ability of business to do what it wants and needs to do, which is get on with the job. On regulation, I am greatly looking forward to seeing a system of one-in one-out, sunset clauses and an enforcement regime that seeks to help business meet regulatory requirements in a speedy and efficient way. I am glad to see that the Government will create a star chamber to bring those policies into being. Having been a member of the Select Committee on Regulatory Reform for three years, I know how easy it is for civil servants to focus on the smaller issues, and for the regulators and the regulated to cosy up in mutual congratulation. The star chamber must work on the plank, not the mote, in the regulatory eye. Other welcome policies are simple but very important to those they affect, such as IR35, which has been an issue for micro-businesses for a long time. We will not let business avoid tax, but we will make the system simpler and more straightforward, and take away the anxiety of someone not knowing whether they are covered by the rules or not. We welcome the automatic rate relief for small businesses, as it will bring relief to the very businesses that will benefit most: those least conversant with the system. One coalition Government policy—our plan for local enterprise partnerships—has been met with dismay by the regional development agencies, but RDAs that have done a good job can continue to work for enterprise in their regions. However, the policy will mean that we will have a form of organisation that is more accountable to the region that it serves and more flexible to its needs. Obviously, there are cuts in the proposals, but business knows what it means to cope with changing, more difficult circumstances and has been dealing with those since the beginning of the recession. RDAs must now deliver service to business more efficiently than ever before.