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

If that is true, of course I apologise. I said that an hon. Friend had observed the hon. Gentleman, and he was apparently driving a Vauxhall out of the House, which seemed a pity for one who is meant to be defending Rover. I assure the hon. Gentleman that my wife and I make sure that we buy British and represent the British motor industry.

The American economy has been growing much more quickly than the European economy. Industrial production has leapt ahead in the USA thanks to interest rates, tax rates and exchanges rates that make sense for business. Industrial production has been sluggish on the continent, and countries are trying to drag themselves out of the mire by devaluing against the UK and the US.

Why do the Government want to converge with slow growth and high unemployment? Do they want a fifth of our work force to be out of work, as in Spain or southern Italy? Do they want our output to crawl ahead as some continental output has done in recent years? Why does the Prime Minister tell us that he wants a single currency as long as Europe follows the American dream? Does he not realise how stupid that sounds? Even he must realise that it will not happen. It is like saying that the Government are determined to have only fine weather and have instructed everybody accordingly on their pagers, so it is bound to work.

The Secretary of State for Trade and Industry delights in being the cover-up Minister. He will not answer letters and he does not like answering questions. When Parliament is not in Session, he waits until it resumes and then says that it is not permissible to write letters to him and that questions must be tabled instead.

The other day, I asked what impact a 1 per cent. increase in various costs would have on British industry. The Secretary of State must know the answer. I do not believe that he is so incompetent that he has not done his sums. His temporary lapse on his sums is not representative of his work as a whole. I am sure that he can work out percentages. So what did he say instead of giving me the answer? He replied that this Government were abolishing the boom-bust cycle. I asked nothing about cycles or busts.

The Secretary of State may be less grey than we thought if he has all those busts in his brain, but is it not about time that he lifted the quality of debate and told us what is the impact on companies of higher exchange rates, higher labour costs and higher regulatory costs, and what he is going to do about that? His failure to answer tells us a great deal about his state of mind. Either the Secretary of State is preoccupied or he knows that this is the big issue, but does not know how best to cover it up and so continues his trite mantra about no more boom and bust.

Of course, the Secretary of State and the Chancellor prefer to blame British industry. The Secretary of State tells us that it is not the Government's fault that we have a record trade deficit; that that has nothing to do with having sky-high sterling or higher interest rates than our competitors; that business is not short of cash because the Government are milking it dry; and that it is all industry's own fault for being unproductive. That is another nice irony. At precisely the time when one part of the Government are trying to subsidise people into work, the Trade Secretary and the Chancellor are trying to price people out of industrial jobs and to encourage a massive labour shake-out from traditional sectors. Everything that the Treasury and the DTI have done in the past two years has made it more likely that industrial payrolls will be slimmed down mercilessly.

One job is lost every 10 minutes. The Trade Secretary offers more job losses as his answer, which is dressed up as 75 points from a White Paper, but amounts to just one simple, painful, unfriendly point. It says to British industry, "Sack some of them now, or go bust. Get rid of some of them today, or get rid of them all tomorrow." That is Byers's choice. That is the Government's choice. They make it too dear to employ people and business has the horrible job of telling people that they are out on their ear.

This is a Budget of soundbites and contradiction. It is a family-friendly Budget which reveals just how family-friendly it is by removing the married couples allowance and mortgage interest relief. It is a shareholders' Budget which leaves in place the hated pensions tax, which taxes the main way that people in Britain own shares. It is a Budget for jobs, but its main recommendation to industry is to slim down the payroll and pray for better times.

The combination of trade war, stealth taxes and a big increase in regulation is lethal. Meanwhile, the Government weep crocodile tears over small businesses while tying them up in ever more paperwork and regulation and imposing higher national insurance on the self-employed. Businesses have to cope with new rules on unfair dismissal, the working families tax credit, the minimum wage, statutory sick pay, EU paternity leave, emergency leave, union recognition, the working time directive and extended maternity leave. We shall soon find that as the small business man comes to the end of his 48 permitted hours, he has worked only for the Government and has had no time to work for his customers and himself. The Government have swamped him with more paper than the Andrex puppy.

Pity the poor haulier facing more vehicle excise duty on top of the DERV and other taxes. What advice does that vanishing British industry get from Ministers? Hauliers are told to go to the continent to fill up. Some are doing more—they are going to Luxembourg to set up and pulling out of Britain altogether.

Labour views this as an election Budget for Wales and Scotland. The farmers will not see it like that because they will remain in slump. Rural dwellers will not see it like that as they seek a mortgage to pay to use their car. People who want better schools and hospitals will not see it like that as they watch the money being wasted on other things.

This is a Budget for manufacturing collapse and industrial unemployment. It may make work for accountants and lawyers, but it will not work for business. It certainly means bust for manufacturing. The only boom that I foresee is a continuing boom for spin doctors seeking to explain away the industrial collapse. I beg to oppose this Budget.