Orders of the Day — Budget Resolutions and Economic Situation

Part of the debate – in the House of Commons at 5:47 pm on 3rd July 1997.

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Photo of James Plaskitt James Plaskitt Labour, Warwick and Leamington 5:47 pm, 3rd July 1997

Thank you, Mr. Deputy Speaker, for giving me the opportunity to make my maiden speech in this debate. It allows me to confirm, especially for the benefit of the right hon. and learned Member for Rushcliffe (Mr. Clarke), that the Budget measures introduced by my right hon. Friend the Chancellor are welcomed throughout the constituency of Warwick and Leamington, which I have the honour to represent.

I have illustrious, not to mention knighted, predecessors. From 1924 until shortly after the Suez crisis, the constituency that I now represent was held by Captain, later Sir, Anthony Eden, who became a Conservative Prime Minister. My immediate predecessor, who served the constituency from 1968 until the last general election, was Mr., and later Sir, Dudley Smith. I am beginning to wonder whether my constituents think that it is a prerequisite that their Member of Parliament be knighted, judging by the number of letters that I receive addressed "Dear Sir James".

I have had the opportunity to look back at the maiden speeches of my illustrious predecessors. I note that they were all made during debates on historic issues of the time. Sir Anthony Eden's maiden speech urged the then Labour Government to embark on a programme of rearmament. Sir Dudley Smith's maiden speech urged the then Labour Government to toughen immigration restrictions. I am glad that I have the opportunity to maintain the tradition of Warwick and Leamington Members making their maiden speech in historic debates and addressing Labour Governments. I am delighted that I can set a precedent, because I can speak to a Labour Government from the Labour Back Benches.

I am somewhat surprised, looking back to my predecessors' maiden speeches of 1924 and 1968, that neither of them told the House anything about the constituency. So much for that tradition. As right hon. and hon. Members have heard little or nothing about Warwick and Leamington for 75 years, I think the House should receive a quick briefing.

There are many attractive features to my constituency. Warwick is an historic town in its own right and possesses one of the most splendid mediaeval castles in England. Similarly, Leamington is an historic town. It possesses many fine buildings, including some of the best examples of Regency architecture to be found in the United Kingdom.

The constituency incorporates many delightful Warwickshire villages. It includes, since the boundary revision, the attractive town of Henley-in-Arden. It is possibly the most prosperous part of the constituency but, interestingly, the only one to have approached the recent general election with any experience of Labour representation. It was formally part of the Stratford-on-Avon constituency, which was represented for a while, before 1 May, I am happy to say, by the Under-Secretary of State for Education and Employment, my hon. Friend the Member for Newport, East (Mr. Howarth), who was located a short while ago on the Government Front Bench.

My constituency benefits from a substantial cultural diversity, reflecting settlement into the area that began 30 or 40 years ago. It is a development from which the entire constituency benefits. I am pleased to say that we regularly celebrate the cultural diversity of our community. The efforts of many voluntary organisations and local authorities have ensured generally harmonious relations between the various communities. There is, however, a considerable caseload of immigration appeals as families in my constituency wrestle with various regulations.

I am happy to pay full tribute to my immediate predecessor for his tireless work on behalf of many of my constituents who were, or are, caught by immigration regulations. Things have already been made easier, I am glad to say, by the welcome abolition of the primary purpose rule announced by the Government.

Leamington Spa, for the past two years, has been designated in surveys as the most profitable town in England in which to do business. There are many thriving small businesses and many large employers, many of which are concerned with the car industry, such as Ford, Volvo and Automotive Products. We also have communications and technology-based companies such as IBM.

Thriving though these businesses are, they have concerns about the future. They were looking to my right hon. Friend the Chancellor of the Exchequer to bring forward certain measures to address their concerns. I am happy to say that their concerns have been met.

First among the concerns frequently expressed to me are those that relate to employment constraints, especially the shortage of skilled young people. Manufacturing employers tell me that it is often difficult to fill apprenticeship places. The fact that the manufacturing sector has spent so many years in decline has damaged the image of that sector for many young people. That is something that we shall need to remedy in years to come. I believe that we shall do so as we begin the vital task of rebuilding such an important part of the economy.

Despite apprenticeships, hundreds of young people in my constituency are out of work. Measures to create education, training and employment opportunities for 18 to 25-year-olds will be welcomed both by young people and by local businesses.

A second area of concern to businesses in my constituency is the exchange rate. Many firms export a substantial proportion of their output. They have been concerned about the recent 18 per cent. appreciation of sterling and the difficulties that that creates for winning and holding export markets in a global economy. Companies in my constituency may still be concerned to some extent that perhaps not enough has yet been done to restrain the appreciation of sterling.

If, as my right hon. Friend the Chancellor of the Exchequer judges—I think that he is right—the output gap has probably closed, it is important to dampen domestic consumption in the short term until my right hon. Friend's welcome measures to promote investment and expand the productive sector of the economy begin to bear fruit in the longer term.

If we rely primarily on monetary policy to do the job, there could be an appreciable further rise in sterling. The impact on our exporting manufacturing sector would not be welcome. Nevertheless, it will warmly welcome the fact that the Government have a commitment to fiscal rectitude and to a five-year deficit reduction programme. That will minimise the risk of higher long-term interest rates, which will combine with the welcome tax incentives in the Budget to stimulate investment. Progress towards a fiscal balance in line with the golden rule of my right hon. Friend the Chancellor of the Exchequer will in itself be a stimulus to business.

The third and final area of concern of local businesses in my constituency is the European Union. Companies in the constituency have had anxieties about relationships with the EU for some time, although I think chat they began to ease after 1 May. The companies of which I speak urge a constructive approach towards membership of the EU. They urge also completion of the internal market. They fear nothing from inclusion in the social chapter. That being so, they have every reason to welcome the support of business that has come already from the changes that the Government have brought about.

All the aspects of the Budget to which I have referred are welcome to the business community in my constituency. There are also other sections of the community, however, that will welcome my right hon. Friend's measures. At the same time as we enjoy a good business base, we experience also many of the results of past economic mismanagement. Too many families are living in hopelessly inadequate accommodation. In Royal Leamington Spa, for example, people are sleeping rough on the streets. There have been 100 this year so far. Also in Royal Leamington Spa, we have a daily soup kitchen, which is run by dedicated volunteers.

Tackling the housing crisis is an urgent imperative. The decision to begin the phased relief of capital receipts will be most welcome, as will other measures in the Budget to bring general stability to the housing market as a whole.

There are too many families caught in a welfare and poverty trap, and especially single parents who are anxious and willing to work but unable to find work that will pay in relation to benefit income. The decision to embark on a general review and begin to create a modern welfare system incorporating a child-care strategy will be most welcome.

In my constituency, there are no fewer than 19,000 pensioners, many of whom live in straitened financial circumstances. They will especially welcome the direct help that they will receive with the coming winter's fuel bills. I hope that my right hon. Friend will be able to do more for such an important section of the community in future Budgets.

The schools in my constituency are doing an outstanding job but under intense financial pressure. There are still some hopelessly inadequate buildings. These schools will raise a chorus of approval for the measures announced yesterday that will in due course bring urgently needed additional resources for classrooms and for children. I hope that this benefit will not be cancelled out by my right hon. Friend the Secretary of State for the Environment, Transport and the Regions as he considers Warwickshire's case for redetermination.

I reluctantly accept my right hon. Friend's announcement that local authority capping will apply again next year. It remains, as it always was, a fundamentally undemocratic practice, and it undermines meaningful local democracy. We are, of course, rightly committed to its removal. I hope that next year will be the last year of capping, and that thereafter we can begin the process of restoring vitality to local government and of seeing further improvements in important local services.

As I said earlier, my predecessors made their maiden speeches in historic debates. I am glad that I have been afforded the same opportunity. The Budget sets the course for sustainable growth, low inflation, stronger investment, fair taxation and decently funded public services. That is what the people of Warwick and Leamington voted for on 1 May. That is why they sent me here. I will be able to support the Budget, on these measures, confident that we have begun the task. I commend it to the House.