Industry boss attacks 'hijacking' minister

By BBC News Online's Mike Verdin at the CBI Conference

The growing mistrust between executives and ministers has escalated into a public spat, after a swipe by Trade Secretary Patricia Hewitt stung industry chief Digby Jones into heightened attacks on the government.

Ms Hewitt, following up longstanding accusations of a growing budren of regulations, questioned why, if the issue was so important to Mr Jones, it had not been mentioned in a productivity improvement report he drew up with union leaders.

But Mr Jones, director general of the Confederation of British Industry, replied that the document had explored only areas where businesses and unions could agree.

These plainly excluded employment laws, Mr Jones said, accusing Ms Hewitt of "hijacking" the report for her "own purposes".

And he mounted fresh attacks on a growing mass of red tape, which he said was crippling companies at a difficult economic time.

'Regulatory minded'

"A government that last year brought in 3,800 regulations in 365 days, 10 a day, five in a morning, one while we are here," Mr Jones said, before being interrupted by Ms Hewitt.

"Most of them had no affect on business at all," she said. "Most were licensing telecoms."

"You are a regulatory minded government," Mr Jones replied, before accusing ministers of, for popularity reasons, singling out businesses for policy clampdowns, such as the anti-pollution Climate Change Levy.

With a two-stroke mower creating "more pollution than a Ford Focus", individuals should bear more of the burden of environmental laws, he said.

As it was, the burden was being carried by firms because "businesses do not vote".

Fuel poverty

Ms Hewitt countered by saying that a drive to tackle fuel poverty had been behind a decision to keep ful taxes on individuals low.

A lot of elderly people, and low-income families, had struggled to pay bills.

She also said the climate change levy had been introduced only after considerable consultation, and had been watered down to take account of companies' objections.

A rebate on national insurance contributions had been introduced to counter the levy's burden.

'Stealth taxes'

But Mr Jones said the biggest beneficiaries of the national insurance moves were not firms, but local and central government.

"We [business] are the bidden payers of stealth tax," he added.

While tempers then cooled, Mr Jones went on to attack the Rip-Off Britain campaign spearheaded by former trade secretary Stephen Byers shortly after Labour was elected to power in 1997.

"I found it offensive," Mr Jones said. "It did nothing to enhance the prestige of UK plc."

Mr Hewitt, blaming the press for inventing the Rip-Off Britain phrase, said the campaign was part of government campaign to clamp down on business malpractice.

Conservative trade spokesman John Whittingdale said there were goods, such as alcohol, cigarettes and fuel, for which Britons certainly paid more than Continental consumers.

"The reason is that the government taxes them more in this country," he said,