Charlie Elphicke: The Budget cannot be too pro-business

Charlie Elphicke is MP for Dover.

The Budget cannot be too pro-business, pro-jobs or pro-money, given the total mess Labour made of our economy. The Chancellor did the really difficult stuff in the Emergency Budget last year. Deficit reduction is the cornerstone of recovery.

What’s needed in the Growth Budget? Cut corporation tax to 19% by the end of the Parliament. Make the UK the best place for corporate headquarters in Europe. Reform the London equity markets to make the UK the best place to have a share listing.

Smaller business investment would be helped by the expansion of the business growth fund.  Reform of smaller business tax incentives would help entrepreneurs grow their enterprises faster. Smaller businesses need more help to boost exports.

Regulatory reforms can tear down the barriers to growth.  Helping to create new businesses, Enterprise Zones and employment law reform would all encourage jobs and growth.

There is so much to do to turn around Labour’s mess. We did it before and we can do it again. We can build the growth economy and make Britain successful once more.

Charlie Elphicke MP: How Dover provides a safe harbour for the Big Society

Charlie Elphicke is MP for Dover.

The Prime Minister’s Big Society initiative has the power to make a fundamental change to the way we live.

The situation in Dover is a concrete example why this change is needed. To the people of Dover, the port is an important facility. Yet people feel it has done little to benefit the town beyond that. As a public corporation, the board is appointed by Whitehall and it is to Whitehall they owe their allegiance. So why should they care about the local community?

Labour put our port up for sale. That plan, if carried through, would see the port sold off to big business from overseas. Dover would see hardly any benefit and zero community engagement. One remote interest would simply be swapped for another.

That’s why a bid has been organised for the people of Dover to take over the port. The People’s Port community trust is composed of serious experts living in the Dover community and eminent business figures like Sir Patrick Sheehy and Algy Cluff. A £200m bid has been submitted to the Prime Minister.  Anyone living or working locally can become a member for £10, as it is organised like the co-op.

This bid is serious and bank backed. City institution Evolution is the financial adviser and the bid has the support of the ferry companies operating at the port. The offer is fully funded. The business plan provides for £100m to be invested in the port over the next five years in the national interest and £50m for seafront regeneration.

Why does this matter?

Charlie Elphicke MP: A new fund to deliver growth from smaller businesses

Smaller businesses have been finding it hard to get the finance they need to create more jobs and money. A substantial new growth fund aimed at small business would help power Britain out of Labour’s recession.
 
SMEs, business with less than 250 employees, have been struggling to get the finance they need to grow. The latest Bank of England lending trends highlight how lending to smaller businesses has reduced and the chart below from the report shows how tough things have been for smaller businesses.
 

Charlie Elphicke MP: Less employment law = more jobs and money

If we want to see more jobs and money, it’s important to get employment law right. Businesses – particularly smaller businesses with less than 250 employees – feel strangled by the weight of employment law. Many are discouraged from expanding until absolutely necessary for fear of the costs that may fall on them if a hire goes wrong.

Flexible labour markets are key to increasing jobs and money according to the OECD’s growth project. The UK’s current employment laws reduce job market flexibility and are a major cost to business. Smaller businesses account for 6 out of 10 UK private sector jobs. All this means that so called employment protection is having the perverse effect of holding back new jobs that could be created in the UK economy.

The latest industrial tribunal statistics show that there were 236,000 claims made to Employment Tribunals in 2009/10. That’s a massive jump from 151,000 in the previous year. The CBI calculated the cumulative cost of employment law between 1998 and 2009 at £70Bn - which it says is equivalent to the employment costs for more than 215,000 people in full-time jobs paid at average earnings throughout the period.

What is to be done? There has been much discussion about increasing the period of employment protection from the current 1 year to 2. That would particularly encourage smaller businesses to grow and provide relief from much of the burden of labour law. Yet there are some other reforms, less discussed, that are also worth considering.

First, the maximum award an industrial tribunal can make is £63,500, rising to £68,400 from February. This is because the Labour Government increased the maximum level from £12,000 (at a time when average earnings were £14,888) to £50,000 in 1999. The amount has been uprated by inflation ever since. Surely it would be more appropriate for the maximum compensation level to be equal to average earnings?

Annual average earnings for employees stood at £25,900 as at April 2010. At that level, the fear factor for employers that a huge award could be made against them would be reduced. It would give more confidence to job creators. The number of tribunal awards greater than average annual earnings is just over 5%. So few would lose out in practice, while the confidence bounce to employers would be substantial.

Charlie Elphicke MP: The number and cost of quangos should be reduced - and they must be banned from lobbying altogether

Charlie Elphicke is Conservative MP for Dover and a member of the Public Administration Select Committee.

Lobbying by quangos should be banned and greater efforts should be made to reduce the number and cost of them in line with the Coalition programme. These concerns are highlighted in today’s Public Administration Select Committee report into the quango state.

Lobbying by quangos is an abuse of public money. It is completely wrong that our money should be used for the purpose of getting more of... our money. Lobbying and the hiring of lobbyists or PR organisations by quangos should be subject to a complete ban.

Lobbying of this sort is commonplace. It’s not just the UK Film Council who hired Portland Communications in a bid to save their neck. An RDA spent £250,000 using public money to attend party conferences. In my own constituency, the Dover Harbour Board, a public statutory corporation, hired Bell Pottinger to press their case for Government to allow a port sell off that will mean millions for management but little for anyone else. The response of Ministers that there are guidelines on lobbying is not good enough. We do not need guidelines, we need a prohibition.

The number and cost of quangos should be reduced. More could be turned into Big Society co-ops and mutuals and moved out of the public sector altogether (a case I have been making for the port of Dover’s future).  Yet of 901 quangos under review, this is planned for just 9.

Furthermore, while it is great news that Ministers are conducting a quango review, it should go wider. It surprised me that the review does not encompass value for money or efficiency. A focus on the cost of quangos will help cut the deficit. If something needs to be done by Government, it should be done in the Government Department. If not, it should be pushed out of the public sector altogether.

The twilight World quangos inhabit leads inevitably to a lack of clarity, an accountability deficit and, worst of all, function creep. These things are all premium ingredients for the wasting of public money. The Coalition programme’s pledge to reduce the number and cost of quangos is welcome. Yet this modernisation needs to be faster, deeper and wider.