Orders of the Day — Budget Resolutions and Economic Situation

Part of the debate – in the House of Commons at 4:51 pm on 10th March 1999.

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Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry 4:51 pm, 10th March 1999

I am grateful to you, Mr. Deputy Speaker.

Why has the Budget done nothing to correct problems for manufacturing industry? It gives no answer to high sterling. It offers no relief from high taxes. It contains only more increases in the high costs facing industry.

When the Prime Minister says that he has abolished the cycle of boom and bust, does he realise that manufacturing is in recession? For a long time, the Government said that output had not fallen for two quarters. Now that it has fallen for many industrial companies for longer than that, we are told grudgingly that it is a technical recession. There is nothing technical about it. It means job losses for tens of thousands of industrial workers. It means many closed factories. It means financial ruin for some who have committed their cash and effort to making things in Britain.

Is the Prime Minister unaware of the job losses and factory closures? When he says that he has abolished the boom-bust cycle, does he mean that industry under Labour will simply stay bust? Is the magic new Labour ingredient in economic policy to be no recovery for industry now that it is down? There is certainly no sign in the Budget of any revival or any hope for the future for those who make things in Britain. There is no big reduction in their tax bills and no promise to influence Europe to reverse the continental countries' large devaluation.

The Prime Minister has as much chance of staying on his trade cycle as he has of persuading me that his policy on the euro is right. He is not merely wobbling on his trade cycle: he, and British industry, have long since fallen off. The Prime Minister may believe in new Labour's circus—as long as the spin doctors turn out the lights, no one will notice that British industry is on the floor. Unfortunately for him, people have noticed. The workers at Cadbury noticed when they got their P45s. The workers of Coats Viyella noticed when they got the sack. The workers in the FII shoe factories noticed when the factories were closed down. Even the Secretary of State for Trade and Industry noticed, and he was forced to go to the north-east with soothing words. Still not a single policy has been introduced that could reverse the industrial rout.