The coalition still lacks a compelling vision for growth

Vince Cable's Enterprise Bill is incoherent and insufficient.

Britain and its businesses are crying out for a government that values enterprise and can spur jobs and growth.  We are in the longest double dip recession since the Second World War. Even if the one-off boost from the Olympics finally brings us out recession, and growth was one per cent in the third quarter, as some are predicting, our economy will simply be the same size as a year ago. We desperately need a government firing on all cylinders to help businesses drive the recovery.

In this context, the Enterprise and Regulatory Reform Bill, which returns to the House of Commons this week, could have been a great opportunity to put in place the measures necessary for business to plan ahead with long-term certainty. 

While there are elements in the Bill with which we agree - we support the creation of a Green Investment Bank, which was set in motion under Labour in government, and want to see improvements to the competition regime - like many business groups, we don’t believe it meets the challenges facing our economy.

It will not provide the crucial boost to demand to get us out of recession and into recovery, but it is also a rag tag of a Bill: incoherent, insufficient and sadly reflective of Vince Cable’s own concerns, articulated in his letter to the Prime Minister earlier this year, that the government lacks a compelling vision for the economy.  If you want to find a compelling vision from the government, the Business Secretary's Enterprise and Regulatory Reform Bill is not the place to look.

Take copyright as an example. Britain leads the world in creative and cultural industries.  One of the reasons for this is the strong, robust and clearly-understood legal framework that this country has in place.  But the Bill threatened to undermine this with an unnecessary and unnerving measure which had not been worked through with the sector and which risked undermining growth and investment opportunities, giving the Secretary of State wide-ranging and far-reaching powers to amend, remove or introduce exceptions to copyright without appropriate or adequate Parliamentary scrutiny.  Thankfully, last week, finally, the government saw sense and heeded the concerns we and the creative industries sector had raised, and has performed a welcome U-turn on these proposals.

However, it should use this opportunity to follow this up with U-turns on a whole host of other unwelcome measures within the Bill. Employment rights are a particular concern: ministers seem to believe that protections for people at work are the reason we are in recession, while in reality we already have the third most liberalised labour market in the developed world. According to a recent survey by BIS itself, only five per cent of small firms cited regulation as the main barrier to success, while 37% identified the economy as their primary obstacle.

The government has brought forward no evidence that making it easier to sack people produces economic growth. Indeed, when Adrian Beecroft, author of the No 10-commissioned report on employment law reform, came before MPs to give evidence, he admitted that his views “were based on conversations with a sample of people, which is not statistically valid”. Ever had a conversation with a bloke down the pub? Well that’s how government policy on employees’ rights is being devised.

Ministers’ stance on equality legislation is equally concerning. Quite what measures to water down the Equality and Human Rights Commission have to do with an Enterprise Bill needs questioning. This would seem to be further confirmation, if this were needed, of the return of the nasty party, aided and abetted by the Lib Dems.

It is disingenuous of Cable to suggest that these changes are merely “legislative tidying up”. The Liberal Democrat founder of the BAME Councillors Association, Cllr Lester Holloway, wrote in the Guardian in August that he was “deeply ashamed” at what Vince Cable was doing to the Commission, while Issan Ghazni, Chair of Ethnic Minority Liberal Democrats, has warned Lib Dem ministers that the changes in the Bill “amount to effectively abolishing the EHRC by stealth, which could potentially reverse progress made on equalities over the past decades.”   

The measures in the Bill, together with new amendments tabled last week by the government which weaken protections against third party harassment of employees, in direct contradiction to what Cable said to my Labour colleague Kate Green at the Second Reading of the Bill, will make life even harder for thousands of staff who run the risk of prejudice, abuse and harassment whilst doing their work.

We all want to see the economy grow and businesses thrive. As Chuka Umunna said in a letter to Cable last month, we would be keen to work with the government on a cross party basis to address the issues that matter to firms, to boost recovery and pull this country out of recession. But the rag bag of measures in the Enterprise and Regulatory Reform Bill fails to meet this challenge and, rather than helping business, makes the job of recovering from the recession made in Downing Street that bit more difficult.

The coalition has failed to answer Business Secretary Vince Cable's call for a "compelling vision" for the economy. Photograph: Getty Images.

Iain Wright is the shadow minister for competitiveness and enterprise.

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The Brexit Beartraps, #2: Could dropping out of the open skies agreement cancel your holiday?

Flying to Europe is about to get a lot more difficult.

So what is it this time, eh? Brexit is going to wipe out every banana planet on the entire planet? Brexit will get the Last Night of the Proms cancelled? Brexit will bring about World War Three?

To be honest, I think we’re pretty well covered already on that last score, but no, this week it’s nothing so terrifying. It’s just that Brexit might get your holiday cancelled.

What are you blithering about now?

Well, only if you want to holiday in Europe, I suppose. If you’re going to Blackpool you’ll be fine. Or Pakistan, according to some people...

You’re making this up.

I’m honestly not, though we can’t entirely rule out the possibility somebody is. Last month Michael O’Leary, the Ryanair boss who attracts headlines the way certain other things attract flies, warned that, “There is a real prospect... that there are going to be no flights between the UK and Europe for a period of weeks, months beyond March 2019... We will be cancelling people’s holidays for summer of 2019.”

He’s just trying to block Brexit, the bloody saboteur.

Well, yes, he’s been quite explicit about that, and says we should just ignore the referendum result. Honestly, he’s so Remainiac he makes me look like Dan Hannan.

But he’s not wrong that there are issues: please fasten your seatbelt, and brace yourself for some turbulence.

Not so long ago, aviation was a very national sort of a business: many of the big airports were owned by nation states, and the airline industry was dominated by the state-backed national flag carriers (British Airways, Air France and so on). Since governments set airline regulations too, that meant those airlines were given all sorts of competitive advantages in their own country, and pretty much everyone faced barriers to entry in others. 

The EU changed all that. Since 1994, the European Single Aviation Market (ESAM) has allowed free movement of people and cargo; established common rules over safety, security, the environment and so on; and ensured fair competition between European airlines. It also means that an AOC – an Air Operator Certificate, the bit of paper an airline needs to fly – from any European country would be enough to operate in all of them. 

Do we really need all these acronyms?

No, alas, we need more of them. There’s also ECAA, the European Common Aviation Area – that’s the area ESAM covers; basically, ESAM is the aviation bit of the single market, and ECAA the aviation bit of the European Economic Area, or EEA. Then there’s ESAA, the European Aviation Safety Agency, which regulates, well, you can probably guess what it regulates to be honest.

All this may sound a bit dry-

It is.

-it is a bit dry, yes. But it’s also the thing that made it much easier to travel around Europe. It made the European aviation industry much more competitive, which is where the whole cheap flights thing came from.

In a speech last December, Andrew Haines, the boss of Britain’s Civil Aviation Authority said that, since 2000, the number of destinations served from UK airports has doubled; since 1993, fares have dropped by a third. Which is brilliant.

Brexit, though, means we’re probably going to have to pull out of these arrangements.

Stop talking Britain down.

Don’t tell me, tell Brexit secretary David Davis. To monitor and enforce all these international agreements, you need an international court system. That’s the European Court of Justice, which ministers have repeatedly made clear that we’re leaving.

So: last March, when Davis was asked by a select committee whether the open skies system would persist, he replied: “One would presume that would not apply to us” – although he promised he’d fight for a successor, which is very reassuring. 

We can always holiday elsewhere. 

Perhaps you can – O’Leary also claimed (I’m still not making this up) that a senior Brexit minister had told him that lost European airline traffic could be made up for through a bilateral agreement with Pakistan. Which seems a bit optimistic to me, but what do I know.

Intercontinental flights are still likely to be more difficult, though. Since 2007, flights between Europe and the US have operated under a separate open skies agreement, and leaving the EU means we’re we’re about to fall out of that, too.  

Surely we’ll just revert to whatever rules there were before.

Apparently not. Airlines for America – a trade body for... well, you can probably guess that, too – has pointed out that, if we do, there are no historic rules to fall back on: there’s no aviation equivalent of the WTO.

The claim that flights are going to just stop is definitely a worst case scenario: in practice, we can probably negotiate a bunch of new agreements. But we’re already negotiating a lot of other things, and we’re on a deadline, so we’re tight for time.

In fact, we’re really tight for time. Airlines for America has also argued that – because so many tickets are sold a year or more in advance – airlines really need a new deal in place by March 2018, if they’re to have faith they can keep flying. So it’s asking for aviation to be prioritised in negotiations.

The only problem is, we can’t negotiate anything else until the EU decides we’ve made enough progress on the divorce bill and the rights of EU nationals. And the clock’s ticking.

This is just remoaning. Brexit will set us free.

A little bit, maybe. CAA’s Haines has also said he believes “talk of significant retrenchment is very much over-stated, and Brexit offers potential opportunities in other areas”. Falling out of Europe means falling out of European ownership rules, so itcould bring foreign capital into the UK aviation industry (assuming anyone still wants to invest, of course). It would also mean more flexibility on “slot rules”, by which airports have to hand out landing times, and which are I gather a source of some contention at the moment.

But Haines also pointed out that the UK has been one of the most influential contributors to European aviation regulations: leaving the European system will mean we lose that influence. And let’s not forget that it was European law that gave passengers the right to redress when things go wrong: if you’ve ever had a refund after long delays, you’ve got the EU to thank.

So: the planes may not stop flying. But the UK will have less influence over the future of aviation; passengers might have fewer consumer rights; and while it’s not clear that Brexit will mean vastly fewer flights, it’s hard to see how it will mean more, so between that and the slide in sterling, prices are likely to rise, too.

It’s not that Brexit is inevitably going to mean disaster. It’s just that it’ll take a lot of effort for very little obvious reward. Which is becoming something of a theme.

Still, we’ll be free of those bureaucrats at the ECJ, won’t be?

This’ll be a great comfort when we’re all holidaying in Grimsby.

Jonn Elledge edits the New Statesman's sister site CityMetric, and writes for the NS about subjects including politics, history and Brexit. You can find him on Twitter or Facebook.