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 my hon. Friend. Her advice and that of other right hon. and hon. Members was good and well meant. We do not want this trade war, and we would dearly love the Prime Minister to have enough clout with the President to secure a change in the American position. We would dearly love the Secretary of State to have enough influence in Brussels to achieve some movement in the European position. [Interruption.]

Every time I mention Brussels, Labour Members laugh. It is so childish. Do they not understand that most of the big decisions affecting manufacturing in this country that are taken by the Secretary of State for Trade and Industry either have to be cleared with Brussels or are governed by Brussels regulations or potential court judgments? That is why I have to mention Brussels, and why the Secretary of State would be wise to do the same. He should understand the Brussels limitation on his powers.

In this case, the Secretary of State should spend time in Brussels attempting to get officials to understand that it is not fair for British manufacturers to suffer because of a row between the EU and the US about an entirely different issue: bananas. Instead of being difficult— saying that he rather welcomes this trade war and trying to hype up the language and the rhetoric against the United States—the Secretary of State, and the Prime Minister for that matter, should be trying to bring the sides together. That is what the cashmere industry wants, and it is even what the banana producers of the Caribbean want. They know that there must be negotiations and a deal. If the Secretary of State cares about Scottish cashmere, United Kingdom biscuit manufacturing and Caribbean bananas, will he please start negotiating, calm the tempers and inject some common sense into this very difficult situation?

Why is industry generally suffering so badly, according to the Chancellor's own analysis? It is because the Government are sucking it dry and taking its money away. There have been £25,000 million-worth of extra business taxes this Parliament. That money could otherwise be spent on much-needed new plant and equipment. The Government have imposed £15,000 million in extra costs from regulation. That money could otherwise be spent creating more jobs and new products and ideas. They have let the pound go sky high against the Asian and continental currencies, which has slashed our export earnings and left our industries struggling against a flood of cheap imports.

Let us look at the Government's impact on just one industry: the food industry. It is expected to pay £50 million for the start-up costs of the Food Standards Agency; £250 million in extra food safety costs; £21.5 million in additional Meat Hygiene Service costs; £500,000 in fish inspection costs; £1 million in egg inspection costs; £90 million in business rate increases; £92 million to implement the minimum wage; £4 million to set up the working families tax credit; and £78 million for the working time directive. The packaging waste regulations, staff car park tax and electrical recycling measures are three more costs in the pipeline. In common with other industries, the food industry must pay much more corporation tax, a tax on pensions and much higher motoring taxes. After that lot, how can any Minister say with a straight face that Labour looks after business and is seriously interested in making business more productive and more successful?

This Budget tells industry to go hang. The DTI told industry that loud and clear in its competitiveness White Paper. It stated that Britain will not be able to earn a living by making things. I know that the White Paper was produced by the Secretary of State's predecessor, but I think that he agrees with it. It states: An advanced industrial nation like ours cannot support rising prosperity by producing standard products and services made with pedestrian methods and commonplace technology. What a breathtaking statement by the DTI, writing off great chunks of our industry and services. It would be laughable if it were not so serious. The Government seem to be implementing this policy in the textile, steel, engineering and shoe industries, among others.

It is not possible for every company in the country to have the latest technology or to be full of scientists or the United Kingdom's best brains. We need other types of businesses and industries. Under a sensible economic policy, it is possible to employ people and make money by using ordinary technology to create commonplace things. There is nothing wrong with that. The Government have declared war on such businesses. They have been successful in that war and they are doing a lot of damage to our industrial base.