Industry and Employment

Opposition Day – in the House of Commons at 3:44 pm on 29th April 1999.

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Photo of Michael Martin Michael Martin Deputy Speaker (First Deputy Chairman of Ways and Means) 3:44 pm, 29th April 1999

We now come to the next debate. [Interruption.] Order. Hon. Members should be quiet in the Chamber, and the House must come to order. Madam Speaker has selected the amendment in the name of the Prime Minister.

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry 4:13 pm, 29th April 1999

I beg to move, That this House regrets the way the Government is making it too dear to make things in Britain; condemns the tax increases, increases in regulation and the poor climate for industry brought about by present policies; highlights the factory closures and 250,000 forecast job losses feared by the trade unions; condemns the New Deal for young people, which has failed to reduce youth unemployment, has disappointed employers and requires radical change if it is to stop wasting billions of pounds of taxpayers' money; and recommends a change of policy to avoid a prolonged and damaging industrial collapse and consequent rising industrial unemployment.

The House will be aware that I have declared my business interests in the Register of Members' Interests. I am not speaking on behalf of those businesses or at their request; I speak on behalf of all British business and industry.

In our motion, we say that we regret the way in which the Government are making it too dear to make things in Britain. We condemn the tax increases, the increases in regulation and the poor climate for industry brought about by the Government's policies. We highlight the factory closures and the 250,000 jobs that the trade unions forecast will be lost from industry in the months ahead. We condemn the new deal for young people, which has failed to reduce youth unemployment. Indeed, that figure is now falling less quickly than it was under the successful Conservative policies that the Government ditched. The scheme now needs radical change to avoid more damage being done and more money being wasted. I ask the House to forbear on the new deal because my hon. Friend the Member for Ashford (Mr. Green), who will wind up the debate, will put the full case on the new deal.

I want to do justice to the parlous plight that industry faces. The debate is particularly timely because I have learned grave news from the north-east which the House should know and discuss as it breaks. We have heard this afternoon that Siemens, which so recently closed a microchip plant in the north-east, is about to open a new microchip facility near Paris. I hope that the Government will now apologise for misleading the House, the constituents of the Secretary of State for Trade and Industry and those of the Prime Minister.

When the closure was announced, the Government were categoric and said, "The work is not going elsewhere because there are no types of microchip that can be made in the north-east that we can secure. The market is saturated. It is a world problem; it is nothing to do with Britain." Already this afternoon, trade unionists, workers and people who have been sacked from Siemens in the north-east have gone on record saying that they have the building, the skills, the people and the wish to succeed, and they would like the chance to make the microchips that will be made near Paris. They cannot do that because they have a Labour Government, who have priced them out of the market and whose policies have done terrible damage to the Secretary of State' s constituents. Day after day, week after week. more factories close and more jobs are lost. Now that problem is in the Secretary of State's backyard, and we have caught the Government misleading the House and the public.

Photo of Alan Campbell Alan Campbell Labour, Tynemouth

Siemens is in my constituency. Is the right hon. Gentleman aware that the company decided, last summer, to withdraw from north Tyneside because of its failure to develop a joint venture, as most microchip plants around the world have done, to guarantee a market for that product? Is the right hon. Gentleman further aware that, in a statement last summer, Siemens explained that its decision to pull out of north Tyneside had nothing to do with the Government's policies but was due to the collapse of the microchip market in the far east, which meant that the joint venture destined to come to north Tyneside went to the far east?

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

What a wriggle! However, the hon. Gentleman has confirmed my case. He says that a joint venture went to the far east, and I was saying that it is too dear to make things in Britain because of the Government's policies, so companies are going elsewhere. We now learn that an important new facility will be located in Paris, which is much closer to home and is an area with which we ought to be able to compete. Why cannot we compete with Paris? Because the Government's policies have priced us out of the market. Their taxes, their regulations, their exchange rate and their interest rate are all that we forecast, and, unfortunately, our forecasts have come true. I do not want British industry to be destroyed, but I said that it would happen, and it is happening.

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

Let us have some facts, rather than the prejudice on which the right hon. Gentleman's statements have been based. Will he confirm that Siemens's decision was to set up a joint venture with a company that is already located just outside Paris? Will he confirm the point made by my hon. Friend the Member for Tynemouth (Mr. Campbell), in whose constituency Siemens is based, that the company was unable to find a joint venture in north Tyneside for the simple reason that potential partnerships were already located on the continent?

Will the right hon. Gentleman now start to address the real issues of the Siemens case, rather than relying on prejudice? Prejudice will not help people in the north-east of England and, more importantly, it says more about his failure to lead for the Conservative party on trade and industry matters than anything else.

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

That last criticism was wide of the mark and revealed how desperate the Secretary of State has become. The people whom he represents, the constituents of the hon. Member for Tynemouth (Mr. Campbell) and I know that there is a new, purpose-built facility sitting empty in the north-east of England. They know that Siemens was committed to that region because of Conservative policies and is now pulling out under Labour policies. They know that Siemens had a Government grant, which it welcomed, but it does not now think that the grant is sufficient to make up for the cost burden in Britain. They know that if, Siemens wanted to launch a joint venture, it could be done, because the work force, the factory and the Government grant are available—all the conditions needed, except for an exchange rate, an interest rate and a set of Government policies that make sense.

The Secretary of State must understand that a competitive devaluation is under way from the continent of Europe. We are getting the thin end of the wedge on that, and the Government's policies have made Britain the centre for closure, and France and Germany the centre for those new developments.

Photo of Paul Keetch Paul Keetch Liberal Democrat, Hereford

Will the right hon. Gentleman give way?

Photo of Paul Keetch Paul Keetch Liberal Democrat, Hereford

Liberal Democrat Members are deeply sorry that Siemens is going. In the right hon. Gentleman's perception, what is the reason that Siemens is relocating in France instead of coming to Britain? Is it the fact that France is joining economic and monetary union or the fact that France has high social costs, as he would perceive them?

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

I have explained that the competitive devaluation of the euro—therefore, France's membership of EMU—allied to the high-cost policies being followed by the British Government, obviously lie behind the switch. The numbers do not add up in the north-east, thanks to the Government. They do add up, relatively, in Paris because of the change of exchange rate and the extra costs in Britain.

We have said that, at some point, Britain would have imported enough of the high costs from the continent to make such a switch all too likely. We have now reached that point.

Photo of John Bercow John Bercow Conservative, Buckingham

Does my right hon. Friend agree that the news that he has just relayed to the House is especially grave in the light of the fact that there have been 7,500 reported job losses in the north and north-east of England since July 1998, and that, in the first three months of this year, there has been a 29 per cent. increase in business bankruptcies in the north-east—the area represented by the Secretary of State for Trade and Industry?

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

I am grateful to my hon. Friend. I was hoping to mention later the way in which the disaster has been spreading throughout the north-east region. Siemens is just the biggest and best-known closure, but there have been many others.

Photo of Mr Ian Bruce Mr Ian Bruce Conservative, South Dorset

I do not know whether my right hon. Friend has yet seen the May edition of "CBI News"—which contains a smiling picture of the Secretary of State for Trade and Industry. It says that costs of £4.6 billion extra have been imposed on industry simply as a result of the working time directive and the minimum wage, before we get into all the other legislation that takes effect from 1 April. That figure of £4.6 billion is the Department of Trade and Industry's own figure.

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

My hon. Friend and many of my Back-Bench colleagues have consistently warned that even well-intentioned legislation can do grave damage. I am sure that the Government meant well by the minimum wage legislation but, unfortunately, it is not much good having wage protection if one loses one's job as a result. That is happening to too many workers.

Photo of Bill Rammell Bill Rammell Labour, Harlow

What possible logical consistency is there between the right hon. Gentleman's assertion that companies are transferring to France at the moment because of additional on-costs, and the argument that he usually uses—that we should resist further integration within the European Union because of other countries' uncompetitive situation with regard to social on-costs?

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

Those are entirely consistent propositions. I am saying that, if we had stayed with the level of social on-costs under the Conservatives and the level of exchange rate that we then had, we would be more competitive. We were very competitive then. Investment came here; it did not go to the continent. During the past two years, we have warned that, if the pound were allowed to go too high and the euro too low, and if too many of the additional costs that continental countries already enjoyed were imported into this country, a point might come at which a switch-over would begin. We are now witnessing the start of that switch-over.

If the Government simply heap on more costs, more regulations and more taxes, the switch will get worse. There will be more closures. If they allow the pound to rise further and keep a high pound and high interest rates, more factories will close. More companies will move to the continent. That is the way it works.

The Secretary of State says that he believes in putting wealth creation before wealth distribution. I should like to see some evidence of that. He says that he has understood the free enterprise revolution launched successfully by the Conservatives in the 1980s, but he does not seem to have a clue how markets work, and he and his right hon. Friends seem to be amazed when Siemens pulls out of this country and sets up in Paris.

Indeed, I have the words of the previous Secretary of State, the right hon. Member for Hartlepool (Mr. Mandelson), who, when I said that I feared that the closure of the Siemens plant on north Tyneside meant that business was being diverted elsewhere, said that it had nothing to do with conditions in Britain. He said that the Siemens management had cited the collapse of the world market in semiconductor products. He said that that was the only reason for the closure, and that one would not see that work, or work like it, being done elsewhere; the work had gone completely. Now, a different type of chip, which can be made in Britain, will be made near Paris, when the Secretary of State's local work force would love to have the chance to do so.

If the Secretary of State will not take my views seriously, I hope that he will take seriously the views that the local Amalgamated Engineering and Electrical Union official expressed when he said today: this is an insult to the people of Tyneside and that Siemens should return and use the superb factory that it has. I hope that the Secretary of State will meet him and his friends and colleagues and try to do something about it at this late stage. There must be a change of policy, which might start to change the mind of industry about Britain. Our charge, this afternoon, is that the Government do not care about industry. They say that they do, but everything that they do makes industry's plight worse. They put interest rates up too high, making it too dear to borrow money to expand a business. They put the pound up and kept it up, making it too dear to export. They passed huge increases in business taxes, making it too dear to make things in Britain, taking money out of business that could have been used to create new jobs. They have heaped regulation on top of regulation, making it too dear to employ people in some places in Britain.

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

Hon. Members ask, "Such as?" The minimum wage, the working time directive and employment relations legislation are all increasing costs.

Photo of Barry Sheerman Barry Sheerman Labour/Co-operative, Huddersfield

We have heard many accusations this afternoon, some of them totally unbelievable. I would love to see the right hon. Gentleman's diary, so that I could check which companies he talks to, because when I meet representatives of the leading companies, they all tell me that this is still the best country to invest in and to do business in, and that they like the environment that the Government have created.

The right hon. Gentleman is very slippery about many of these things, but will he answer one question? If the Conservatives ever returned to power, would they abolish the minimum wage?

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

I have endlessly stated a very clear position. We oppose the national minimum wage. We urged the Government not to do it. We will set out the measures that we intend to repeal in the next Parliament when we launch our manifesto. I have also made it crystal clear that there are several ways of dealing with the damage to jobs done by the minimum wage. It could be repealed, or it could be frozen—one could limit the damage by not increasing it, instead of destroying more jobs.

What are the Government going to do about the minimum wage? Will they increase it by wages, by prices or not at all? Will they increase it annually, semi-annually or biannually?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

Does the shadow Trade Secretary disagree with the shadow Chancellor that a Tory Government would put the minimum wage on hold?

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

We have stated exactly the same policy—that we shall announce our clear intentions for the next Parliament on the eve of that Parliament, when we are fighting a general election about it. Both the shadow Chancellor and I opposed the introduction of the minimum wage and warned that it would do damage. We take no joy in seeing the damage that it is doing. We take no joy in seeing the fiddles that are limiting the damage—there are now lots of ways round it, because the legislation was so badly drafted. However, we must return to the attack today, when we see industry in chaos and crisis under the Government.

Photo of Judy Mallaber Judy Mallaber Labour, Amber Valley

I believe that the right hon. Gentleman said that, if the Opposition ever got back into government, they would either repeal or freeze the minimum wage. Can he confirm that he is considering those two options only?

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

No. I am considering a range of options, but I want to take the advice of the policy group that I am forming, and I wish to hear the views of business. Having listened, I will announce our policy at the time of the publication of the manifesto. However, we are in no doubt that the national minimum wage is damaging, and we strongly oppose it. We urge the Government to do something, even at this late stage, about the damage that they are creating.

Photo of Owen Paterson Owen Paterson Conservative, North Shropshire

Labour Members do not seem to have a clue as to the damage that the minimum wage is doing to small rural businesses. I am in correspondence with a small accountant in the town of Ellesmere, who handles the accounts of small businesses, who has specifically asked me take up the problems that the minimum wage is bringing to those businesses, which cannot pass on the extra costs to their customers and will simply lay off their work force.

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

I am grateful to my hon. Friend for his heartfelt advice, which reflects the advice that we are getting from all round the country through my hon. Friends and direct from British business.

When the Government are challenged about the factory closures that happen day after day, all that we are offered is a new spin. The hon. Member for Huddersfield (Mr. Sheerman) asked me which companies I talk to. Is he aware of the closures that have been announced by the Co-op, by Siemens and by Rover-BMW? Textiles, steel or cars—the story is the same in every industry: either mass sackings or complete factory closures.

Photo of Geraint Davies Geraint Davies Labour, Croydon Central

Following on from the points that have been made about setting exchange rates and interest rates, can the right hon. Gentleman confirm that the official position of Her Majesty's Opposition is that the independence of the Bank of England will be abolished, as will the new deal? What is the probability of those policies changing next week in the light of a new statement by the Leader of the Opposition or his deputy?

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

Labour Members really are rattled, if that is the best that they can do. Conservative Members have opposed each of the policies identified by the hon. Gentleman. We are the Opposition; it is our duty to say either that we can live with a policy, and perhaps be quiet about it, or that a policy is outrageous and we oppose it tooth and nail. We have opposed the policies that have been referred to today. That is our official position, and we think that the country would be better off without the minimum wage and without an independent central bank in its current shape.

Photo of Barry Sheerman Barry Sheerman Labour/Co-operative, Huddersfield

On a point of order, Mr. Deputy Speaker. Labour Members appreciate that it is the job of Her Majesty's Opposition to oppose. If this is such a serious matter, will there be a better vote at 7 o'clock than there was at 4 o'clock, when—

Photo of Michael Martin Michael Martin Deputy Speaker (First Deputy Chairman of Ways and Means)

The hon. Gentleman knows that that is not a point of order; it is not a matter for the Chair.

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

That point of order was particularly bizarre, because I have been giving way to Labour Members and would have been happy to take that point of debate as well. Some Conservative Members will be out meeting the electors; important elections are coming up and we want to maximise the vote against the Government because of the damage that they are clearly doing to jobs and to business. On each of those policy areas, we will give our view nearer the time of the next Parliament. Our clear view now is, "Don't do it, or rescind it."

Photo of John Healey John Healey Labour, Wentworth

Is the right hon. Gentleman aware of how sick it makes people in such areas as South Yorkshire to hear him make accusations about Government policies causing job losses? Is he aware that 12,500 people were employed in metalworking manufacturing in Rotherham in 1979? After two recessions, and 15 years later, fewer than one in five of those jobs were left. There were 12 working pits in Rotherham in 1981. Now there is one. Is he aware that unemployment in Rotherham peaked at 23.5 per cent. when the previous Administration were in office?

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

The fact that people lost their jobs in a recession under the Conservatives does not mean that it is right for people to lose their jobs today under a Labour Government. The Government came to power promising something better. We have already agreed that the loss of jobs in the recession that took place under the Conservatives was a great tragedy; people wanted something better, but they are not getting it—they are getting something worse.

Instead of jobs in older industries going, jobs in new industries are going. Jobs in a state-of-the-art microchip plant are going, only to spring up, not so far away, in Paris, and the Minister concerned says that that is nothing to do with Britain's competitiveness against the continent, but everything to do with the world slump. I call that misleading the public and I want an apology.

Photo of Bill Rammell Bill Rammell Labour, Harlow

The right hon. Gentleman recites a litany of alleged crimes, but has he read any of the articles in the informed financial press this week, all of which suggest that, for the first time in a generation and within the downturn of an economic cycle, this country will avoid going into recession? Can he explain why that is happening?

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

The American economy is performing extremely well, which is helping some service sectors and, in particular, the economy of the south of Britain. I am grateful that that is happening. If the hon. Gentleman had been listening to the debates over the past two years, he would have known that, on behalf of the Opposition, I have consistently predicted a sharp and unpleasant industrial recession, but have never predicted a general recession.

I thought that we would have a two-tier economy; I thought that conditions would be all right for those who mend software, but not for those who make textiles. Unfortunately, we are seeing exactly that pattern. Terrible damage is being done in the industrial heartlands, which tend to be represented by Labour Members, but areas such as my own, which are much more dependent on hi-tech businesses, are not doing so badly. Even in my constituency, however, there have been two very unpleasant engineering closures in the past month.

Photo of Kali Mountford Kali Mountford Labour, Colne Valley

The right hon. Gentleman has referred to textiles. Is he ready to apologise for the loss of tens of thousands of jobs in west Yorkshire under his Administration? Constituencies that were entirely dependent on textiles now have not one textile job left.

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

We have dealt with those matters endlessly during our debates and I see no need to repeat all that I have said in the past. We are moving on and drawing attention to the present and to the future. I can tell the hon. Lady that that is what the electorate are interested in. They want to know what the Government are going to do, how their jobs will be secured or improved today and what will happen when they lose their jobs. They are no longer raking over the coals of 10 years ago; they want to know about the present and the future.

All that we ever get from the Government is new spin. Our charge is that fine words are no substitute for right actions from a Government. Business cannot sell more abroad because the Government say, "The pound is fine for you." Business cannot employ more people because the Government say that they believe in deregulation, but they have to achieve it, otherwise the jobs will not be available.

Industry cannot make a profit because the Government say that they believe in lower taxes, but they have to implement lower taxes so that there is more profit to keep and spend on other things. The bottom line is that most companies are under pressure from the Government's actions, and no amount of fine words can put that right. Those in government have to will the means as well as will the ends.

We have a Government of self-appointed saints and spinners. There is no public hint of self-doubt, and no suggestion that they might be wrong and that industry might be right. Industry has been warning for months that it is too difficult to make things in Britain. Why will the Government not listen and do something about that?

The previous Secretary of State, the right hon. Member for Hartlepool, did nothing to help industry; I see that he is so uninterested in it that he has not come to listen to the debate. He lived in a state of original spin. The present Secretary of State has done nothing to help industry either, but he lives in a state of unoriginal spin. Most of his spin is inherited from his predecessor.

Photo of John Bercow John Bercow Conservative, Buckingham

Is my right hon. Friend aware that the Secretary of State admitted to me last week, in front of the Select Committee on Trade and Industry, that the Government had not "got it right" on regulation? In the light of that, does my right hon. Friend agree that it is an absolute outrage that, only this week, the Parliamentary Secretary, Cabinet Office, told me in a parliamentary answer that the Government do not publish, and do not even intend to publish, an annual statement of the costs of regulation on British business? Does that not show how little the Government care about the problems they cause?

Photo of Michael Martin Michael Martin Deputy Speaker (First Deputy Chairman of Ways and Means)

Order. I appeal to Back Benchers to make interventions brief. The hon. Member for Buckingham (Mr. Bercow) is not the only Member who is guilty; other interventions have been far too long. Interventions must be brief, and they have not been brief by my standards.

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

As always, I am happy to take interventions. Many hon. Members would like to speak in the debate, and I have other remarks to make. Perhaps hon. Members will bear that in mind when they try to intervene.

I am grateful to my hon. Friend the Member for Buckingham (Mr. Bercow) and pay tribute on the Floor of the House to the Bill that he introduced to the House earlier this week. His Bill tries to do something about the problems of manufacturing and other industries and I recommend it to the Secretary of State.

The Secretary of State says that he wants a new consensus and believes in parties of good will helping enterprise. He says that he is a deregulator; my hon. Friend has done the work for him by giving him the very Bill that would solve some of his problems. I look forward to the Secretary of State graciously accepting it. I should be happy for him to amend it—I am sure that it could be improved—and we would give it a fair wind. I would not bring the Conservative army in to try to vote it down; I would come to the House to praise it. [Laughter.] Hon. Members who laugh at the idea of the Tory army's voting things down should remember that they lost two votes on a crucial Bill on the fair conduct of referendums not so many days ago. We look forward to doing the same when the need and the opportunity arise.

I warn the Secretary of State, who knows that his Government have lost two votes on a crucial issue, that the mood of business is turning against the Government. When the Government say that they care about industry, industrialists ask why, in that case, they are being crippled by the high level of the pound. When the Government say that they believe in deregulation, business asks why, in that case, the Government have introduced the minimum wage, the social chapter, the 48-hour working week and many new regulatory bodies. When the Government say that they are keeping taxes down, and occasionally cutting tax rates, business points out that the cost of taxation has risen massively. That is what matters—how much business is actually paying, rather than one or two particular rates of tax in special cases.

When the Government say that they want more savings and investment, the Opposition ask why the Government singled out pensions for penal taxation, and why the savings rate is plummeting under the current regime. When the Government say that more jobs are being created, all those who have recently been thrown out of their industrial jobs ask whether the Government have noticed that, and whether they care. When the Government say that they have now rescued Rover, we ask whose policies undermined it in the first place. In the last year of Conservative government, BMW came here and bought Rover. It was profitable, and BMW said that it was going ahead with a major investment programme. Under Labour, the losses built up and the thing turned around in the wrong direction. Under Labour, a rescue operation had to be announced.

Will the Secretary of State tell us how much has been offered to BMW to secure that investment—which, of course, we welcomed? Will he also assure us that he had clearance from Brussels before signing the deal, and that there is no chance of jobs' being jeopardised or lost at the last minute as a result of European Union intervention following an agreement between the Secretary of State, the company and all the other parties concerned? Those are important questions, to which we and the Longbridge work force need answers.

Photo of Mr John Wilkinson Mr John Wilkinson Conservative, Ruislip - Northwood

My right hon. Friend, who is making an important point, will know that the discredited—in a collective sense—Commissioner van Miert seems to want to instigate an investigation of the disbursement of some £150 million of Government aid to BMW-Rover. Surely the United Kingdom has a pretty good record, or did have until the present Government came to power. Industrial subsidies to manufacturing industry in Italy are six times as high as those in the United Kingdom, and those in Germany are four times as high. Has not the European Union got a cheek?

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

Of course I hope that the deal will go through and that jobs will be saved, but I condemn the level of support that has had to be given to secure those jobs. I blame the Government for that. I am delighted that we have a deal. Of course money had to be offered, because industry has been damaged so badly by the Government's policies; but if BMW-Rover had been making more money, retaining more profit and generating more cash in the United Kingdom, it would not have been necessary to offer so much money to secure the investment.

Now that this has been done, however, we want the jobs as much as the Secretary of State does, and we want no interference by the Secretary of State. My hon. Friend is right: there are massive industrial subsidies on the continent of Europe which are unfair, and which should be tackled before the rather lesser subsidies in Britain are subjected to scrutiny.

The Secretary of State does not like answering questions. I am almost tempted to ask for the return of the first Secretary of State, or President of the Board of Trade. She did not give away much at the time, but she was positively loquacious in comparison with the present Secretary of State. When I send him letters, either privately or publicly and politically—polite, or a little sharper—he says that he does not answer letters. I have never known a Secretary of State who refuses to answer letters from a parliamentary colleague speaking on behalf of the Opposition, but that is what this Secretary of State does, and I think that the public should know about it.

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

For the record, what I have said to the right hon. Gentleman—as he knows—is that when Parliament is in recess I am more than happy to answer his letters, but when Parliament is sitting I think it a gross discourtesy to the House to put questions in private, in letters, which could be tabled as parliamentary questions. If such questions were tabled, every hon. Member could see them and read the responses.

Photo of Edward Leigh Edward Leigh Conservative, Gainsborough

On a point of order, Mr. Martin. I seek your guidance, for the protection of Back Benchers. During my 16 years as a Member of Parliament I have written hundreds, maybe thousands, of letters to Ministers. Am I now to be prevented from doing that because I should be tabling parliamentary questions? That is an absurd notion, and should be stamped on immediately.

Photo of Michael Martin Michael Martin Deputy Speaker (First Deputy Chairman of Ways and Means)

Order. How the Secretary of State conducts his affairs is up to him. It is not a matter for the Chair.

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

I urge the Secretary of State to think again about this rather strange new constitutional doctrine. If I write him a letter, I write it because hundreds of thousands, or millions, or people out there share my point of view. I see it as a public duty to show that there is a different view, or a different way forward. There are times when I would like to write the Secretary of State a private letter, but, believe it or not, I care enough about business in this country to want occasionally to use my position, on behalf of business generally, to write to the Secretary of State privately to say, "If I were you, I would pay attention to this and do something about it."

When I was a Minister, if a Labour Member of Parliament—my opposite number, for instance—wrote a private letter, I respected that privacy. If it was a shadow Minister, I would invite him round for a cup of tea so that we could talk through what he had said. That is what the proper parliamentary process is about. If, on occasion, I write a private note and the Secretary of State thinks that I am being too cautious and that what I have said should be made public, I shall be happy for him to ring me up and say, "Let us publish the correspondence." When I write a general or political letter I will publish it anyway, so no discourtesy to the House of Commons is involved. Everyone will see it. I do not mind what the Secretary of State does with his letter, as long as I receive an answer myself.

Under the Conservatives, we followed the traditions of courtesy in this place. If a shadow Minister wrote a letter, it was treated as urgent. We took a personal interest in replying to such letters. If the letter was highly political, we sent a highly political answer; but at least we dealt with the letter there and then. If the letter was written in a different spirit and a different tone—we all know the different tones that are used in our job—it would be answered in a similar tone. We would accept that the shadow Minister had a point, and was speaking for his constituents or in the wider interest. [HON. MEMBERS: "Get on with it."] Hon. Members should not order me to get on with it. This is about how industry should present its case, and about whether the Government will listen.[Interruption.]

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

The Secretary of State's new doctrine is that I must table all the more subtle points in my letters in parliamentary questions. I have tried that once or twice. Let me tell the House what happens in such cases. First, the Department sits on it for a bit. It misses the deadline. Then it decides to shuffle the question over to the Treasury, which decides that it is too difficult to answer—or the person concerned is not allowed to answer because, if he did, the Chancellor would beat him up, or at least disagree with him. The Treasury then fails to come up with an answer at all. I shall give the House and the Secretary of State an example.

I asked the simple question: what will be the impact on unemployment of a 1 per cent. increase in labour costs? That is not a hugely difficult question that needs rocket science to answer: any Government economic model has such information built into it, and the Secretary of State must have considered such matters before he pushed through the remains of the Government's employment legislation designed to increase wage costs. The previous Government certainly looked into the issue when we considered the sort of ideas that the Government are now producing, and we decided that they would be damaging. The Government must have a view.

The Secretary of State shoved the matter over to the Chancellor. The Chancellor or one of his Ministers replied that it would depend on whether the 1 per cent. increase in wages was matched by productivity. Well, you don't say! That was well worked out. I then tabled a question saying that what I had in mind was a 1 per cent. increase not matched by productivity, which is exactly the type of increase that the Government are forcing on British business. The Government refused to answer. That is a disgrace. This is meant to be open government.

Are Labour's ideas helping to generate more jobs, or are they destroying jobs? That is the big issue. I asked a simple question that goes to the heart of the matter. The Government will not answer it in letters, and they will not answer it from either Department of State. How can they claim to believe in business or open government when they will not answer such a simple point? Perhaps they will argue that one cannot get the staff these days. We do not get much out of the Government for £330 billion: it is all spent on spinning—none of it is spent on answering questions or on proper policy analysis. The Secretary of State is paid money to answer questions. I look forward to getting value for that money when he has had time to reflect on these exchanges.

I enjoyed the recent spat between the Minister for Competition and Consumer Affairs and the Secretary of State over the decision on News International and its bid for Manchester United. We have had no opportunity to cross-examine the Secretary of State on that. There has been no statement, although it was a big issue that affected thousands of Manchester United fans and many media businesses in this country and elsewhere.

The Secretary of State consistently told me before the decision that the Government had been entirely neutral, and that he was relying on an independent body outside Government to settle this crucial policy issue. We now learn that the Government submitted advice to the competition authority telling it to turn down the bid. The authority recommended turning it down, and the Secretary of State turned it down. Why did the Secretary of State not tell us that at the beginning? He could have saved the fans all the worry and the trouble of campaigning to try to influence the decision that he and his colleagues had already made. He also put Mr. Murdoch to considerable expense and trouble on the other side of the account. [HON. MEMBERS: "Oh!"] I am delighted that the Labour party so dislikes Mr. Murdoch. I am sure that he will be interested to read these exchanges and to learn that his business investment in Britain and his newspapers are not valued by the new Labour party.

The Government gave Mr. Murdoch a slap in the face, and they put the fans through a great deal of unnecessary worry, trouble and uncertainty. If only they had the courage to set out a policy on the relationship between the media and sport, we might have an even more flourishing media and sports industry, more investment and more common working of the kind that must happen one way or another.

Photo of Tony McNulty Tony McNulty Labour, Harrow East

Get back to the motion.

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

Labour Members should read the motion, because it is about the state of British business. [Interruption.] They point at the clock, but they have wasted time by making trivial debating points, whereas we are trying to highlight the damage being done.

I want the Secretary of State to tell us how many shipyards will close. Is he worried that 5,000 jobs are at risk from Kvaerner? What does he intend to do about that? Would it not be the final curtain on Labour's miserable industrial policy if the Govan yard were to close under the Government's economic stewardship? I learn that more bad news is just in: 200 jobs have been lost at Crane Fluid Systems in Ipswich.

Photo of Chris Leslie Chris Leslie Labour, Shipley

The right hon. Gentleman loves it.

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

No, I do not love it; I hate it. I do not want my country to suffer and to do badly. I want the Government to listen to my warnings before another Crane Fluid Systems or another Kvaerner sacks staff and closes shipyards and factories.

The litany of woe from industry is all across the piece. The British Chambers of Commerce has said: Manufacturers continue to experience a deteriorating sales position at home … The knock on effect of the manufacturing slowdown is being … felt on jobs, the sector's employment figure has slumped to its lowest level for six years". The "Engineering Trends" survey was equally gloomy. It said: Total new order intake fell again in the first quarter, having consistently declined since the second quarter of 1998. It forecasts that more jobs will go. It says: Labour shedding became prevalent in the second quarter of 1998"— after the Government came to power. It continues: Since then the trend has become more emphatic … Employment in the industry is forecast to decline significantly both this year and next. Let us hope that labour shedding spreads to the electorate on 6 May. An awful lot of Labour votes and Labour councillors should be shed. The British public can pass their judgment on the job losses and the industrial failure that we see all over the place.

The Secretary of State sees mounting unemployment in his own constituency. The Foreign Secretary, having done so much damage to British business by his diplomatic blunders abroad, has had a huge increase in unemployment in his constituency. We now see the damage being done by the national minimum wage and the 48-hour working week policies. One of the many people who have written to me said that the minimum wage was great for those who will be receiving it but not so good for my son, and I am sure many more that are being made redundant because their employers cannot or are not prepared to pay it". The lady continued: My son was devastated when he was told that he is being made redundant because of it. It is all very well for Ministers to say that employers are not allowed to do that, but the fact is that employers are doing that because they have no choice. One company was quoted in the Daily Mail as saying that it has cut its work force from 50 to 30 to get ready for the minimum wage, which it could not otherwise afford.

All sorts of fiddles and diddles are being developed. Does the Minister know that some temporary employees who expected to get holiday pay are now told that their current rate includes it, and that they can take it or leave it? Does he know that lecturers with annual contracts are now told that they can have only 12-week contracts, so that they are not covered by the law? Does he know that there are so many holes in the policy that it looks like a sieve?

Does the Minister care that Business Strategies has forecast that 80,000 jobs will go because of the minimum wage? Does he know that an organiser for the GMB recently said that, because of the legislation, employees' hours of work are being cut, and that employees are being told to work harder for fewer hours to make the books balance? Another GMB official has said that some employers are making staff pay for their overalls and laundry to offset the minimum wage costs. I am sure that Labour Members did not want those effects, but they are the exact and inevitable consequences of sloppily drafted legislation, which, without those consequences, threatens people with the sack. We now see the emerging loopholes being used in an attempt to offset the job losses that otherwise would occur.

Now, 10 jobs are being lost for every hour of the Labour Government. Jobs are going across the country. If one makes things, one gets clobbered. If one elects a Labour Member, one gets clobbered. If one dares to elect a Labour Cabinet Minister, one gets clobbered particularly hard.

Since November, in Blackburn—which is meant to be looked after by the Home Secretary—unemployment has increased by 248, and many more jobs have gone. In Sheffield, Brightside, which is looked after by the Secretary of State for Education and Employment—a little joke there—unemployment has increased by 355, and many more jobs have gone. In Newcastle and Wallsend, which is presided over by the Minister of Agriculture, Fisheries and Food, unemployment has increased by 236. At least the Agriculture Minister is able to tell all the farmers that he is being entirely even-handed—they get the sack, and so do his constituents who work in factories.

Over at the Treasury, Ministers damage themselves as well as others. In Leicester, West, which is presided over by the Economic Secretary, unemployment is up by 349. In Pontefract, where the local Member of Parliament is full of good advice on how to run a successful economy, unemployment has shot up by 365 since October. I therefore suggest that she should go back to the drawing board.

Photo of Yvette Cooper Yvette Cooper Labour, Pontefract and Castleford

I am very grateful to the right hon. Gentleman for suddenly showing such concern about jobs in my constituency. I hope that he will answer a question on a matter that is very important in that regard. Does he agree with the desire expressed in a previous Opposition debate by the right hon. Member for Wells (Mr. Heathcoat-Amory) for a return to the previous Government's energy policy of replacing coal-fired power stations with gas-fired power stations—the effect of which would be to close pits and the coal industry, thereby losing 1,200 jobs in my constituency?

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

The previous Government's policy was kinder on the coal industry than the current Government's policy has been—[Interruption.] Labour Members do not do any thinking or reading. Do they not know that the present Government have tightened environmental constraints beyond the rather tight constraints introduced by the previous Government, the end result of which is that more pits will have to close now than under the previous, Conservative Government's policy? So the hon. Lady has scored an own goal with that one and completely misunderstood the important point.

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

I must make progress, as we are running out of time in this rather short but very important debate.

As my hon. Friend the Member for Buckingham said, bankruptcies are rising. In the first three months of 1999, bankruptcies soared by 62 per cent, in the east Midlands and by 40 per cent. in both Wales and south-west England. A KPMG survey showed that receiverships are up by almost half in the north-east. Even a much better new deal than Labour's could not keep pace with the industrial devastation that we see daily on our television screens.

The Labour Government's answer to that high pounding of industry is to take £5,200 million out of business with their windfall tax; £14,250 million out of business in the first Budget; and £4,900 million out of business in their second Budget. They then had the audacity to tell us that we should be grateful for the "tax cut". It is not so much a tax cut, more a spin—but there is little spinning going on in the British textile industry after those Government policies. All we see is closure after closure.

The Conservatives want the Government to change course, and we propose a five-point plan for industrial recovery. First, the Government must cut business taxes. That will leave more money in the hands of business for investing in new plant, designing new products and creating new jobs. Secondly, the Government must stop imposing all those new rules and regulations and admit that their labour market legislation is an expensive shambles. They must either repeal it or exempt all small firms, which could then generate the jobs that we need.

Thirdly, the Government must tell the Bank of England that manufacturing matters. We need interest rates and an exchange rate that work for British business. The Opposition have often called for more sensible interest rates than those imposed by the Government and the Bank, and if our advice had been heeded at the time, the damage would have been limited.

Fourthly, the Government must get a better deal for British business from Brussels. They must use any influence that they may have to avert a trade war with the United States of America, and to press for the trade ban on British goods to be lifted. They must warn our partners that the beggar-my-neighbour devaluation of the euro must stop because it is destroying jobs in Britain.

Fifthly, the Government must sort out the mess that they have created by their specific attacks on individual industries. Petrol and diesel taxes are destroying our haulage industry, the Government's agriculture policy is destroying our farms, and the fishing policy is good for Spain but bad for Britain. Their muddled competition policy leaves media and sports businesses in confusion, and anybody with a vertical tie at a loss, having to pay huge lawyers' bills.

The Conservatives are setting out a clear pro-business agenda. We are once again the voice of business. My postbag is full of letters from the business community condemning the Government. Business wants us to warn and advise it before more factories close and more jobs are lost. I urge the Secretary of State—for the sake of the unions and his own constituents, if not because of my pleadings—to take those issues seriously, to answer the questions in the spirit in which they were posed, and to speak up and do something for British business.

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry 5:02 pm, 29th April 1999

I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof: welcomes the actions of the Government to reverse the industrial decline and the destruction of jobs, not least for young people, that characterised the situation while the Opposition formed the Government; welcomes the creation of over 400,000 jobs since the last election; notes the contrast between this situation and that of the Tory slow-down of 1989 to 1993 when over a million manufacturing jobs were lost; welcomes the achievements of the New Deal and its contribution to the 35 per cent fall since January 1998 in the number of young people unemployed for six months or more; believes that the sound economic policies of this Government are a better way to support industrial success and job creation than the interest rates at 15 per cent, budget deficits soaring, high long-term interest rates and boom and bust economics that were the previous Government's policy; and welcomes the strategy set out in the Competitiveness White Paper for encouraging enterprise, investment and innovation as the right way forward for Britain.".

There is one aspect of his strange and rather over-long speech that I think the right hon. Member for Wokingham (Mr. Redwood) will regret—his comments about Kvaerner in Scotland. He should be aware that all political parties in Scotland, including the Conservative party, have agreed not to try to score cheap political points at the expense of the Kvaerner yard. I regret the way in which he introduced that element into the debate.

However, I can understand why the right hon. Gentleman did that. The debate is taking place at a difficult time for the Conservative party, because it is a party bitterly divided and in denial both about its record in government and about the principles that underpin it. I am pleased to see that the right hon. Gentleman, who speaks on trade and industry, has been joined on the Front Bench by the hon. Member for Chingford and Woodford Green (Mr. Duncan Smith), who speaks for the Conservatives on social security. Those two are not sitting round the kitchen table discussing the development of Conservative policy. They are being excluded from such matters, which are all being handed over to a group of former Social Democratic party members so that they can make the decisions.

I shall say more about kitchen table politics later, when I develop my theory about a party in denial of its principles. First, however, let us look at the Conservatives' denial of the past and of their record in government—a record of which the right hon. Member for Wokingham needs reminding. He was a Minister at most of the relevant times during the 1990s, yet he made no attempt to apologise for the mayhem and the destruction of the industrial base caused by his Government during the early 1990s, when they presided over one of the deepest recessions that we have ever seen in this country.

The right hon. Gentleman made no reference to the recession of the early 1980s, when the Conservatives were in office. In the early 1980s, GDP fell by some 6 per cent., manufacturing output fell by 18 per cent. and jobs were lost to the tune of 1.75 million, of which 1.5 million were in the manufacturing sector. That was the record of the Conservative party in government in the early 1980s.

The right hon. Gentleman touched briefly on the employment record of this Government. He said very little about youth unemployment—Hansard will show that he spent longer on our correspondence than on youth unemployment—but that perhaps reflects the status that he likes to give himself over and above the needs of those young people. Between 1979 and 1984, youth unemployment increased by some 650,000 and long-term unemployment increased by some 450,000. That was the record of the Conservative party in government in the early 1980s, and we will not let the Conservatives forget it.

Photo of Mr Ian Bruce Mr Ian Bruce Conservative, South Dorset

When the new deal started last April, the rate of unemployment among 16 and 17-year-olds was 159,000, but the latest figure is 183,000. For the 18 to 24-year-olds, unemployment figures were 444,000 and are now 456,000. Those figures may be wrong, but they are the Government's figures from the Office for National Statistics. Why has youth unemployment gone up since the introduction of the new deal?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

Yet again the hon. Gentleman is wrong, but at least he is consistent in that. The figures that he has mentioned include students looking for part-time work and parents with family responsibilities who are not seeking work. The claimant count—those who want employment—is down by more than a third under the new deal. That is the best way to count the figures for the new deal.

My right hon. Friend the Minister for Employment, Welfare to Work and Equal Opportunities will address the issue of the new deal when he winds up the debate. [HON. MEMBERS: "Oh."] I shall mention the new deal briefly when I need to address inaccurate and mistaken comments about it, but I wish to remind the House of the record of the Conservative Government in the early 1980s and the early 1990s. The latter period saw the second recession under that Conservative Administration.

The right hon. Member for Wokingham criticised this Government. He said that our interest rates were too high and that he was worried about the rate of inflation. I remind him that during the early 1990s, interest rates stayed at 15 per cent. for a year and were more than 10 per cent. for no fewer than four years, and inflation was at 10 per cent. During that time, manufacturing output fell by 7 per cent. and more than 1 million manufacturing jobs were lost.

The right hon. Member for Wokingham carries a personal responsibility because he was the Minister for Corporate Affairs during that time. In his contribution, he mentioned what he called a terrible record of personal bankruptcies and company insolvencies under this Government. Let us look at the record to see how successful he was as Minister for Corporate Affairs, and how companies and individuals prospered at that time. He became Minister for Corporate Affairs in 1989. In that year, the number of company insolvencies was 10,800, but then his magic began to work. In 1990, they were up to 15,500, in 1991 they were up to 22,400, and by 1992—when he left that office—they were up to 25,000. Of course, as soon as he departed, the figures went down again. In 1993, there were 21,000 company insolvencies.

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

I shall ask the Secretary of State a variant of the usual question in this often-rehearsed debating point. Does not the right hon. Gentleman recall that he and the rest of the Labour Opposition at the time supported the exchange rate mechanism policy that led to those dreadful events and bankruptcies? They have never apologised in the way that we have. How is it right to do the same thing again? Why did the right hon. Gentleman not learn from the experience?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

I know that the right hon. Gentleman hates to be reminded of his personal record. He likes to portray himself as a man of principle, but he was happy to remain a Minister in a Government who followed the course of action that I have described. He allowed the comfort of the leather seat in the ministerial car to take priority over his principles.

I remind the right hon. Gentleman of what happened when he was a Minister. I have shown how company insolvencies rose dramatically in that period, but we should also examine his record with regard to personal bankruptcies, a subject mentioned by the right hon. Gentleman himself. In 1989, when he took office, there were 10,400 personal bankruptcies, each one an individual tragedy. For the years 1990, 1991 and 1992, the personal bankruptcy figures were 16,400, 30,297 and 42,900. However, things began to look up after he left office in 1993—personal bankruptcies fell to 37,000 in that year. That is the right hon. Gentleman's record.

When the right hon. Gentleman talks about company insolvencies and personal bankruptcies, he should look at his own record: both rose dramatically while he was in office, and both began to fall as soon as he left office. That is the consistency as far he is concerned.

Photo of John Bercow John Bercow Conservative, Buckingham

What proportion of the 32 per cent. increase in small business bankruptcies in the first quarter of this year does the Secretary of State attribute to the savage tax and regulatory policies of his Government?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

The hon. Gentleman is trying to divert attention from the record of the right hon. Member for Wokingham. However, as I have told the Select Committee on Trade and Industry and as I said during Trade and Industry questions in the House three weeks ago, we as a Government have not got regulation right and we aim to improve our record in that regard. My right hon. Friend the Minister for the Cabinet Office said the same thing on Tuesday evening. We intend to put in place new procedures and mechanisms to ensure that we can lift the burden from businesses, be they small, medium-sized or large. I look forward to receiving a copy of the hon. Gentleman's Regulations on Small Businesses (Reduction) Bill, to see whether it contains any proposals of merit. I live in hope.

Photo of Barry Sheerman Barry Sheerman Labour/Co-operative, Huddersfield

Is not my right hon. Friend being unfair to the right hon. Member for Wokingham (Mr. Redwood)? My right hon. Friend mentioned company insolvencies and personal bankruptcies in that period, but not the levels of interest rates or unemployment. That is unfair, as it means that he could not compare them with their respective levels currently. I hope that my right hon. Friend will set the record straight so that we can get the full picture of those glorious days of "Redwood in action".

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

I know that many Labour Members like to be reminded of the days of Tory boom and bust. I wanted to avoid using the phrase but, given that the temptation has been put before me, I shall say once again that interest rates were at 15 per cent. for a year and 10 per cent. for four years, that inflation was at 10 per cent. and that more than 1 million manufacturing jobs were lost. That was the record of the right hon. Gentleman when he was Minister for Corporate Affairs.

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

Is the Secretary of State suggesting that, in this Government, the economy is run by the Under-Secretary in the Department of Trade and Industry who holds the post equivalent to the one that I held? Does he set interest rates and create the conditions that lead to employment or unemployment? If that is what the right hon. Gentleman is suggesting, I shall have to disabuse him: I did not do all that when I was an Under-Secretary of State.

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

It wasn't me, guy? The point is well made. The right hon. Gentleman was a member of a Government who were happy to preside over that economic position, and he did nothing about it. If he had disagreed, he could have resigned. He did not—at least, not until quite a bit later. The right hon. Gentleman can smile at that, but he knows that he jumped before he was pushed in a reshuffle.

The Opposition have had a deplorable 10 days, and they know it. They are in a desperate situation. The shadow Secretary of State for Social Security, the hon. Member for Chingford and Woodford Green knows that very well. He is isolated, ignored and not included in discussions that are taking place. Neither he nor the right hon. Member for Wokingham are part of what is happening in the Conservative party, and I understand why they are here together, clinging to each other in their splendid isolation.

Over the past 10 days, the Conservative party has clearly been in denial—denying its very principles. The right hon. Member for Wokingham and the hon. Member for Chingford and Woodford Green subscribe to those principles: they believe in the free market, and that the private sector should have an increased role in providing public services. We know that those are their views. But the pair of them have been consigned to the dustbin of history. They no longer represent the views of the Conservative party.

The right hon. Member for Wokingham is often hyperactive, but he has been very quiet during the past few days of debate within the Conservative party. I understand why that is so. He has put on the record his firmly held views, and they are in total conflict with the present policies of the Conservative party.

Last week, the deputy leader of the Conservative party showed a new way forward on the rejection of privatisation. But in The Daily Telegraph of 29 January 1997, the right hon. Member for Wokingham made his personal position clear. He said: I was an early advocate of privatisation, when it was thought wild-eyed and radical"— an appropriate thing for him to have said, of course— and an early practitioner, when it was still hazardous. No one can doubt my credentials as a privatiser. That was the right hon. Gentleman's position. It will be interesting to see how he reconciles it with the position stated last week by the deputy leader of the Conservative party.

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

That is terribly easy. I was always a keen and early advocate of privatising commercial trading business to which people paid money for services or goods and which we could hope to make profitable in the private sector. As Secretary of State for Wales, responsible for health and education there, I was extremely keen to increase budgets so that we had properly financed state schools and hospitals. They are vital services. I use the NHS myself, and I used the education system when I was of that age. I want others to have access to the best possible care, and I fully support all that the leader of the Conservative party said in his recent speech.

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

The right hon. Gentleman made a deliberate slip there. He said that he supported everything that the leader of the Conservative party had said. I had referred to the deputy leader. Does he agree with all that the deputy leader said in his speech last week? Yes, or no?

There we have it. The right hon. Gentleman has deliberately failed to put it on the record that he agrees with the points made by the deputy leader of the Conservative party, specifically referring instead to the speech made by the Leader of the Opposition yesterday evening. That clearly exposes the fundamental division in the Conservative party.

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

What I have said shows no confusion or split. The leader has gone further than the deputy leader did. The leader included all the things that I think important. The deputy leader was saying that he wanted properly financed public sector schools and hospitals, and I provided just that when I was a Secretary of State. I am very keen on that, and there is no difference between the deputy leader and me on the need to put enough money into a state school or a state hospital.

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

The right hon. Gentleman knows that that is not the point. The issue is whether the private sector should be involved in public services such as education and health. The right hon. Gentleman is on a hook, and I want to make sure that we find out his precise position. He deliberately sought to avoid my point about his leader and deputy leader.

Let us move on to the shadow Chancellor's position. Earlier this week, he said clearly that he believed that the Government's proposals on public spending should be agreed. Can the right hon. Gentleman confirm that, commenting in The Daily Telegraph on 11 August 1998 on the comprehensive spending review, he said: Labour's second big mistake was to announce huge increases in public spending"? He went on to say: The Opposition recommends promoting savings and reducing future public spending plans. If that is what the right hon. Gentleman believes, how can he reconcile that with the comments made on Monday by the shadow Chancellor?

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

There is a budget called welfare which is the shadow responsibility of my hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith). We in the shadow Cabinet all agree that the welfare bill is increasing far too rapidly. We have opposed a number of changes that have led to that increase. The right hon. Gentleman will hear from my hon. Friend the Member for Ashford (Mr. Green), if he catches Madam Speaker's eye later in the debate, about one of the areas where we think we can reduce that bill to the considerable benefit of the country at large. Our proposals are to have a lower rate of increase in the welfare bill than the Government are suggesting so that we can create more room for a sensible tax regime for business. We are fully behind, and always have been, increasing spending on health and education. This Government are increasing it more slowly than the Conservatives did in Government.

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

Conservative Members have not always been behind the increase because the shadow Chancellor called it reckless and foolish at the time. What we know—we have heard it now from the right hon. Gentleman—is that there should be cuts in welfare spending. We know that already because of the points made by the hon. Member for Chingford and Woodford Green. The Conservatives are on record as having said that they would cut the working families tax credit. Where else would cuts be made to reduce public spending to the level at which the right hon. Gentleman would wish it to be? He needs to answer those particular questions.

Over the past 10 days, we have seen a Conservative party divided. I now want to move on to show how a Labour Government can move forward and provide the economic framework in which businesses can prosper.

Photo of Geraint Davies Geraint Davies Labour, Croydon Central

Is my right hon. Friend aware that when the right hon. Member for Wokingham (Mr. Redwood) was Secretary of State for Wales, he denied Wales millions and millions of pounds of European funding that was available at the time? Therefore, as opposed to supporting public expenditure, his record shows that he handed back expenditure available to Wales and elsewhere for investment in public services.

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

I have no doubt that the right hon. Gentleman's record across the piece, whether in relation to Wales or corporate affairs, bears detailed scrutiny.

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

I agree absolutely. Perhaps we can move on now to the substance of what I want to say in relation to the economy that we inherited and the framework that we are putting in place.

There is no doubt that we inherited an economy that had strong inflationary pressures, with a large structural deficit on public finances and a public sector net borrowing requirement of £28 billion. In the face of unsustainable growth, rising inflationary pressures and high public borrowing, we had to take tough action to overcome the difficulties that we inherited. That is why we took the politics out of interest rates. We do not know yet whether the Conservatives agree with that policy. We are ensuring that rate decisions are taken in the national interest and on the basis of the long-term needs of the economy, and not on short-term political considerations.

We took action to put public finances back on track. As a result of those tough decisions, inflation is under control, interest rates have come down 2.25 per cent. in the past seven months and long-term interest rates are at their lowest for 40 years. We have put public finances back on a sound footing. We are on track to meet our strict fiscal rules while investing £40 billion in our schools and hospitals. The economy continues to grow and create new jobs. The latest figures show that the economy grew by 2.5 per cent. during 1998. More than 400,000 jobs have been created since the general election. Long-term unemployment has fallen by more than 50 per cent. and youth unemployment is down by more than 55 per cent. since then. There are a record number of people in work.

The right hon. Member for Wokingham likes to refer to the number of jobs that are being lost. I think that his calculation is one every six minutes; it was one every 10. That fails to acknowledge the number of jobs being created. One job is created every two minutes. That is the reality under this Government, and 400,000 people are benefiting from our policies.

Jobs are being created in all regions and we have had some positive announcements recently. This year alone, more than 68,000 new jobs have been announced. The right hon. Member for Wokingham referred to the north-east. More than 5,000 new jobs have been announced there so far this year. In particular, Nissan has recently started recruiting for about 800 new jobs linked to the production of a new model.

In the north-west, there have been more than 9,000 job gains since the beginning of the year. Yorkshire and Humberside have experienced net gains of more than 2,000 jobs since November. The west midlands has had 650 new jobs recently announced. In the east midlands, about 6,500 new jobs have been announced so far this year, in the east of England, 4,700, and in the south-east, around 7,500. In London, nearly 4,000 new jobs have been created since the end of last year. In the south-west, almost 6,000 jobs have been announced in 1999.

In Scotland, 1,800 new jobs have been announced so far in April alone. On Tuesday, I was pleased to visit Motorola's Easter Inch plant at Bathgate where 400 jobs have been announced in the past few weeks. In Wales, 500 new jobs have recently been announced. In Northern Ireland, the Industrial Development Board has announced investments that promise 1,400 new jobs.

Those jobs have already been announced, but I have good news for the House on recent offers of regional selective assistance to companies, which are considering whether to accept them. Up and down the country, regional selective assistance will bring thousands of extra jobs in the weeks and months ahead. In the north-east, offers have been made that will safeguard or create 1,700 jobs. In the north-west, the figure is 2,455; in the south-west, more than 1,000; in the west midlands, 2,800; in Yorkshire and Humberside 1,700. In total, 11,700 jobs will be safeguarded or created.

Photo of Kali Mountford Kali Mountford Labour, Colne Valley

I was delighted to hear that great list of new jobs. Can my right hon. Friend guarantee that we will not return to the policies of the previous Government? When I lived in Sheffield, Brightside, I saw unemployment go from being the lowest in the country to the 12th highest because of the closure of the steel industry.

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

I agree with my hon. Friend. Among industries doing well in a competitive environment, the steel industry is being remarkably successful.

The right hon. Member for Wokingham mentioned the Siemens plant in north Tyneside. Regional selective assistance is an important part of any package to attract inward investment. It is offered, and comes, with conditions clearly attached. When a company fails to meet those conditions, we shall take action to claim back the moneys that have been paid over. I can inform the House that this morning, my Department invoiced Siemens in full for the £18 million of regional selective assistance that was provided to it. We shall recover that money and we shall use every penny of it to secure additional inward investment, whether for the north-east or for the rest of the country. We shall provide employment with the money that will be paid back to the Government by Siemens. It failed to meet the conditions that we set. It will now be required, as a matter of urgency, to repay the £18 million that it received so that we can use it to create employment opportunities.

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

I wholeheartedly endorse that decision, and I am grateful that the Secretary of State has taken it and announced it to the House. Why did he not take it when I first recommended it to him at the time of the closure? Did he take it today because he learned today or just before today the news of the Paris development, or did he take it today because we forced a debate and he knew that I would raise the matter?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

The right hon. Gentleman should be aware that in the past few months, there has been an active marketing exercise to promote the Siemens plant on north Tyneside as a viable plant for the microchip industry. While that was so, it would have been inappropriate to reclaim the grant, because much of it was used specifically to develop the plant. He will know that just recently, Siemens took the decision to stop marketing the facility. In the light of that decision, officials in the Government regional office took action to reclaim the regional selective assistance. It was a matter in which I as Secretary of State was not involved. As the right hon. Gentleman will know, the procedures are very clear. If the conditions are not met, officials act in accordance with the guidance set by Ministers. That is what has happened today, and that is why the claim has been made. The two events coincided.

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

I want to finish this point; it is important.

The important point is that that £18 million will now come back to the Government. It will come back to the Department of Trade and Industry, not to the Treasury. We will be able to use the money this year to attract inward investment into the United Kingdom to safeguard jobs and provide new jobs.

As I understand it, there are particular reasons why Siemens has entered into the joint venture on the Paris facility. I regret that it was unable to secure a joint venture to develop microchips at the north Tyneside plant. The Government did all that they could to find a new buyer of the facility. When the record is made public, as I hope that it will be in the not-too-distant future, my constituents and people in the north-east of England will see clearly that it was not for want of effort by the Government that we were unable to find a buyer, but as a result of commercial decisions taken at a high level by Siemens.

Photo of Mr Ian Bruce Mr Ian Bruce Conservative, South Dorset

I am sure that the Secretary of State knows, as many hon. Gentlemen and hon. Ladies know, that when jobs go to France, one gets a lot of accusations that the French have unfairly subsidised jobs. Has the right hon. Gentleman investigated what subsidy is going into Siemens? Has he lodged a formal complaint with the European Commission on that?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

If there is a question of state aids being used in an inappropriate way, the Commissioner will need to investigate that. We have not yet seen the details of any agreement. We are relying on press reports at this stage. When we see the details, we will give close consideration to any subsidy.

It is vital that in the next few months, we continue to give support to industry. The White Paper that we published before December showing how the knowledge-driven economy could be used set out the new model for public policy and support for industry. It showed how the Government could invest to build on British capabilities, especially our science and engineering base and our skills. It showed how the Government could promote greater competition, principally by empowering consumers, and how they could act as a catalyst to collaboration between businesses, encourage greater business-to-business learning and encourage businesses to work with higher education institutions.

Success in tomorrow's fast-moving world depends critically on how well we exploit our most valuable and distinctive assets—our knowledge, including our world-class science base, our skills and our talent for invention. The first industrial revolution was based on investment in plant, machinery and equipment; I have no doubt that the new knowledge-based revolution, through which we are now living, will require investment in human capital—in learning, skills and education. That is why the Government have committed an extra £19 billion to our schools, and the Department of Trade and Industry is committing extra money to improve workplace training, so that we have skills for the future.

In his speech, the right hon. Member for Wokingham led us to believe that it is all doom and gloom, but it is most important to realise that, in the United Kingdom, we have a number of world-class companies in particular sectors. We lead the world in pharmaceuticals and biotechnology; a combination of market liberalisation and technical advance has created a number of world-beating businesses in our telecommunications industry; and we need only to look at Nissan, in Sunderland in the north-east of England, to see Europe's most productive car plant. We need to celebrate and support that sort of success, and we need it throughout the whole economy. The challenge for any Government is to try to lift the medium to the best; that is what we intend to do.

Photo of John Bercow John Bercow Conservative, Buckingham

Will the right hon. Gentleman give way?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

I want to make some progress so I shall give way to the hon. Gentleman later.

We need to focus on three key areas to raise our game. First, we must create an economic framework that rewards enterprise and promotes innovation and investment. Secondly, we must ensure that existing Government support for business is well tuned—especially to the needs of the manufacturing sector.

Photo of Mr George Stevenson Mr George Stevenson Labour, Stoke-on-Trent South

My right hon. Friend puts a powerful case—one that will receive the support of the House later this evening. I have two concerns on which I should be grateful for his comments: first, the growing trade deficit—especially in manufactures; secondly, the exchange rate, particularly in regard to European currencies—which is of particular concern in north Staffordshire.

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

I understand my hon. Friend's concerns. He has raised those matters with me privately. I understand that particular sectors face difficulties. However, he will be aware that the big appreciation in the value of the pound occurred before the general election. During the eight months running up to polling day, sterling appreciated against the deutschmark by about 22 per cent. Since the election, we have seen an appreciation of about 6 per cent. However, I am mindful of the problems. I hope to visit Stoke-on-Trent in the not too distant future, to see at first hand the particular problems faced by certain sectors.

Photo of John Bercow John Bercow Conservative, Buckingham

Given the Secretary of State's reference to human capital, I am a little surprised that he does not perceive the damage to its flexible use that is posed by the burdensome regulations on working time. Will he take this opportunity to confirm that he is aware of the statement, in the Daily Mail on 21 April 1999, by Lord Haskins—a lifelong Labour supporter, the chairman of Northern Foods and the chairman of the better regulation task force? The noble Lord said: We were consulted on the Working Time laws, but our advice was ignored … Its all a bit of a dog's dinner.

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

I understand that the noble Lord sells a great many dogs' dinners in his capacity as chairman of Northern Foods, so he probably knows far more about them than I do. I pointed out to the Select Committee on Trade and Industry that we are reviewing the guidance on the working time directive. I believe that improvements can be made and that the changes that we shall introduce will be welcomed by business and employees alike. That is the role that we intend to take.

I want to address the points made by the right hon. Member for Wokingham about trade. Those points are important at present, given the banana regime and the position taken recently in relation to the United States and hormone-treated beef.

I believe that a shared commitment to open trade and orderly progress has been a driving force for growth, even in countries that not so long ago seemed to have been permanently left behind. Now, in many respects, that trend has stalled and, in some places, it has even been reversed, but I believe that to be a temporary setback, not a permanent condition. The essential answer to the problems we currently face is not less globalisation, nor new national structures to separate and isolate economies, but stronger international structures to make globalisation work in harder times, as well as in easy times. Our urgent need is closer co-operation, continuing dialogue and an unwavering commitment to open commerce. We must not let temporary instability put the global process at risk.

In stormy economic weather, there are easy, but dangerous, shelters: a return to protectionism, the breakdown of co-operation, and the rise of beggar-thy-neighbour policies. That can only yield further worsening of the situation; it cannot lead to renewed growth. Let the House in a common spirit send out a clear message that protection anywhere is a threat to prosperity everywhere. Closing off national economies only increases national and international instability, and throughout the world, it is the poorest and most vulnerable members of society who suffer from financial crisis and stagnation. That is why we shall continue to work for a new round of trade liberalisation and better market access for our exporters of goods and services.

Photo of David Heath David Heath Shadow Spokesperson (Foreign and Commonwealth Affairs)

I wholly agree with the Secretary of State on trade liberalisation, but does he agree with me that free trade does not equate to the interests of American corporations? There must always be recognition of factors—social, environmental, and so on—that might mean that certain technologies are not appropriate to some countries. That protection must be available to those countries to use if they need to do so.

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

There is the flexibility to take those factors into account within the procedures laid down the by the World Trade Organisation, and we shall ensure, during the new round of discussions that starts later this year, that those factors can continue be taken into account.

I conclude on the subject of trade by making one point that is important in the light of recent events. I assure the House that we want improvements to be made to the mechanisms for settling disputes, so that we can resolve differences without recourse to damaging retaliation. It will be in the interests of all of us to be able to avoid the difficulties that we have encountered in recent months.

Photo of Owen Paterson Owen Paterson Conservative, North Shropshire

I welcome the Secretary of State's comments on the benefits of world free trade. Does he consider that the unhappy episode over bananas could have been avoided if Britain had been a party to the North American Free Trade Agreement?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

I do not agree, because it would have meant that all sorts of pressures would have been applied, which would not have been helpful to our efforts in respect of the banana regime.

This debate comes at a difficult time for the Conservative party. The modern Tory party is a family at war, sitting around their newly acquired kitchen table in a kitchen that has, yet again, been redecorated in an attempt to freshen up their image. The photograph of grandmother was dumped in the skip outside, but hastily retrieved by the head of the household when he faced a family rebellion. After the past 10 days, the message that the Leader of the Opposition needs to learn is clear: "If you can't stand the heat, you'd better get out of the kitchen."

Despite all the noises offstage, the Government will not be diverted from our task. We believe that economic efficiency and social justice are two sides of the same coin. We are creating the climate in which businesses can prosper, creating jobs and providing sound public finances. The coalition that gave us victory in 1997 is still strong: as a party we are united and as a Government we are delivering on our promises. Government carries with it great responsibilities and burdens of state, and we shall discharge those responsibilities on behalf of our people and our country. I commend the amendment to the House.

Photo of Paul Keetch Paul Keetch Liberal Democrat, Hereford 5:45 pm, 29th April 1999

There were times during the past hour and three quarters when I wondered whether I would get in before the winding-up speeches. I begin with a word of warning to the Secretary of State: he should be careful about attacking the Leader of the Opposition. Some of us in this place believe he is doing a fine job and would like to see him remain in his position. I think the people of this country certainly recognise the Leader of the Opposition for what he is.

I want to explore what the motion means in terms of industry, job losses, youth unemployment and the new deal. Before I do so, I must admit that I think some parts of the motion are a bit rich. Liberal Democrat Members remember how the previous Government wrote off more than 2.5 million jobs in manufacturing over 18 years, so we find the Conservatives new concern for the unemployed rather stomach-turning.

The motion describes some of the problems in industry, but it fails to mention several difficulties that we believe are intrinsic to British industry at present—poor productivity, low investment in research and development and low skills levels.

Let us look at a few facts. The United Kingdom produces less per person than most other major economies. Our productivity gap of 40 per cent. with the United States and more than 20 per cent. with France and Germany reflects a long-standing weakness in our economy. The United Kingdom invests less in research and development than our competitors. For example, the United States invests 50 per cent. more of its GDP in R and D than we do. The United States and Germany invest 40 per cent. more per worker in new capital equipment than the United Kingdom.

The skills gap in this country is fast becoming a yawning chasm. Some 22 per cent. of adults in the United Kingdom have poor literacy skills, which is twice as many as in Germany. Yet to listen to the Opposition, one would think that those problems began on 1 May 1997. The fact is that many of the weaknesses in the British economy date from the years of Tory mismanagement. While we are not totally happy with everything that the new Government are doing, we accept that they are trying to make a start.

Manufacturing industry is in recession and output is predicted to fall by between 1 per cent. and 1.5 per cent. in 1999. As a direct result, instead of remaining flat, unemployment is likely to rise by 250,000. In its latest press release published last Friday, the Trades Union Congress states: Britain is now a two speed two-nation economy. The slowdown in the coming year will further hit those areas with the greatest dependence on manufacturing. Manufacturing is moving into recession and the service area is continuing to expand. The TUC calls it a two-speed economy, but, in a debate last year, I called it a Jekyll and Hyde economy. London and the south-east are becoming more prosperous while the north east and the west midlands are suffering.

For example, unemployment has risen by 3.7 per cent. in the north east of England in the past six months and by 3.3 per cent. in the west midlands. That area has lost nearly 4,000 jobs, but London and the south-east have gained more than 7,000 jobs in the same period. It is not just the traditional heavy industry or the metal-bashing areas of those regions that have been affected; light industry and manufacturing is also being hurt. The Secretary of State and the Minister for Employment, Welfare to Work and Equal Opportunities will know that the Thorn Lighting plant in Hereford may close, with the loss of 348 jobs. I accept the support that the Secretary of State and the Minister have offered, but we cannot afford to lose that kind of industry in a rural constituency.

Mention has also been made this afternoon of Siemens. I am sure that many hon. Members on both sides of the House have examples of company closures in their constituencies, and that trend must not be allowed to continue.

In the Prime Minister's constituency, and in the constituencies of 105 other Members of Parliament, more than 30 per cent. of workers are employed in the manufacturing sector. According to the TUC study, "Jobs in Jeopardy", the right hon. Gentleman can expect economic hardship to increase in his constituency over the next 12 months. The Chancellor sometimes claims that those problems are due to the collapse of the global market and the failures of Asia, Russia or Latin America. However, the fact is that the United Kingdom exports more to the Netherlands than to those areas combined. The Treasury's own figures reveal that our key export markets are growing by a rate of nearly 6 per cent. a year, but the UK's take-up of that new business is barely 0.5 per cent. In our key export markets, therefore, British business is losing opportunities for growth.

The reasons for that are clearly the high value of sterling and high interest rates. The value of sterling is today 10 per cent. higher than it was when the Government came into office, and with interest rates still 2.5 per cent. higher than those in the rest of Europe, the extra cost of investment adds to our lack of competitiveness. The Government know what they have to do: they must now set a time scale for British entry into the single European currency, which will remove the burdens of an over-valued pound and high interest rates.

Photo of Mr George Stevenson Mr George Stevenson Labour, Stoke-on-Trent South

If, as I suspect, the hon. Gentleman is urging the Government to support immediate entry into the single currency, at what exchange rate does he think sterling should be locked in?

Photo of Paul Keetch Paul Keetch Liberal Democrat, Hereford

As the hon. Gentleman knows, we have to consider that matter very carefully, and I insist that the Treasury should now start to prepare for entry. Our concerns are that we have not started preparations and that we do not have the information to make the necessary assessments. That is why I and other hon. Members have called for a White Paper.

Photo of John Bercow John Bercow Conservative, Buckingham

The point to which the hon. Gentleman refers is absolutely fundamental to an understanding of the issues and a recommendation for policy action. Does he believe that Britain should enter the euro on the basis of exchange rate mechanism mid-rates, and if not, what is his alternative? Is he not aware that all the countries that have entered in the first wave have done so at ERM mid-rates, and a specific derogation would be required if we were to enter on a different basis? I hope that the hon. Gentleman understands these issues.

Photo of Paul Keetch Paul Keetch Liberal Democrat, Hereford

We are now almost two hours into the debate and only Front-Bench Members have made speeches, so I do not want to be diverted into a debate about the euro. I signed an early-day motion proposed by the hon. Member for Stone (Mr. Cash) which called for more information on the issue, and Liberal Democrat Members have criticised the Government, as we criticised the previous Government, for not producing information about the euro.

Photo of Owen Paterson Owen Paterson Conservative, North Shropshire

Will Liberal Democrat Members read the treaty of Amsterdam? If the hon. Gentleman reads article 118 and paragraph 4 of article 123, he will find that we are bound by the treaty to enter at the basket rate—which means the median rate, as my hon. Friend the Member for Buckingham (Mr. Bercow) said—and any derogation from that must be passed unanimously by all other existing members. We are therefore bound, at present, to enter at a rate of DM2.95 to £1 sterling, which would be catastrophic for the potters in Staffordshire.

Photo of Paul Keetch Paul Keetch Liberal Democrat, Hereford

I suppose that it is all my fault for mentioning the single European currency. I have now taken interventions from precisely half the Tory Back Benchers in the Chamber.

Photo of Paul Keetch Paul Keetch Liberal Democrat, Hereford

Indeed, two thirds. I assure the hon. Member for North Shropshire (Mr. Paterson) that if he sends me those articles, I will read them.

I return now to the Conservative motion on youth unemployment and the new deal. According to the Conservatives, the new deal has failed to reduce unemployment. The charge in the motion repeats that made on the radio this morning by the Conservative employment spokesman. We commissioned research on youth unemployment from the Library.

Photo of Tony McNulty Tony McNulty Labour, Harrow East

Will the hon. Gentleman do a bit on the euro?

Photo of Paul Keetch Paul Keetch Liberal Democrat, Hereford

Yes, I shall do a bit on the euro.

In response to the Conservative spokesman's comments this morning, I have to say that the Tories have got it wrong. It is true that unemployment among 18 to 24-year-olds who have been out of work for less than six months has risen by 10 per cent. since the general election. However, the new deal is for those who have been unemployed for longer than six months, and in that category, unemployment has fallen by over 58 per cent. since the general election.

Photo of Damian Green Damian Green Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Education)

The hon. Gentleman did not need to go to the Library; he could have read the unemployment figures when they came out last week. They reveal that the number of 18 to 24-year-olds who have been unemployed for between six and 12 months—they are pretty much the target for the new deal—has increased since the new deal was introduced last April. If the hon. Gentleman studies the figures and uses the Government's preferred unemployment rate, he will find that he is wrong in saying that the number of those unemployed for longer than six months has fallen.

Photo of Paul Keetch Paul Keetch Liberal Democrat, Hereford

Again, 1 refer to the Library's figures. I started by considering what had happened since the election. Before the hon. Gentleman intervened, I was about to say that between April 1998—when, as the hon. Gentleman rightly said, the new deal went national—and February 1999, the number of claimants aged between 18 and 24 halved. Youth unemployment is coming down.

Photo of Paul Keetch Paul Keetch Liberal Democrat, Hereford

No; I will not.

There may be some anxiety over the definition of youth, but even in the number of claimants aged 16 and 17, there has been a 3 per cent. fall in unemployment, and in those aged between 25 and 29 there has been a 19 per cent. fall in unemployment.

On the radio this morning, responding to the shadow Employment Secretary's views, the Minister said that they were just plain wrong. For once, I agree with the Minister about the Conservatives' views.

However, we do not believe that all in the new deal garden is rosy, and we have tried to make some constructive changes. We believe that too many people are leaving the gateway. It was expected that 40 per cent. might leave, but 93 per cent. are leaving. We want to know what is happening to the 29 per cent. of those who leave new deal for destinations unknown. We want to know why, although the planners expected 20 per cent. of those involved in the new deal to take the education and training option, more than double that percentage— 49 per cent.—are doing so. We also want to know why ethnic minorities seem to be getting a poor deal. However, only slight alterations need to be made.

Many of the problems that we have suggested may be occurring, arise from the scheme's introduction. It is too early to say that the new deal is working, but it is also too early to say that it is a failure.

In conclusion, industry is certainly failing, but for the Conservative party to suggest that it is the new Government's doing is ridiculous. The Tory party must take account of its responsibility for the underlying weaknesses in British industry. That is why the Liberal Democrats will oppose the motion.

Photo of Frank Field Frank Field Labour, Birkenhead 5:56 pm, 29th April 1999

There is an air of unreality about the debate, arising as it does from an Opposition motion decrying job losses.

I represent an area that has still to recover from the haemorrhage of job losses in the early 1980s. Thanks to the entrepreneurial skills of British industry—rarely the abilities of British Governments—the country as a whole now has more jobs than it had in 1979; but in areas that still depend heavily on manufacturing industry, such as the area that I have the privilege to represent, a massive job deficit persists, thanks to the way in which the Tories behaved in government, especially in relation to the exchange rate. Therefore it ill behoves them, when they face a Labour Government who can report an overall increase in jobs during their stewardship, to try to pass motions of censure.

In Birkenhead, we are still 2,000 full-time-jobs short compared with when the Tories came to power in 1979. Whereas there has been a massive increase in part-time jobs in the rest of the country, there has actually been a slight fall in the number of such jobs in Birkenhead.

When we talk about the new deal, we are talking about a Government who are trying to help people throughout the country, but especially in areas where it is very difficult indeed to get jobs.

I congratulate the Government on the new deal, on four counts. First, long-term unemployment has been abolished among those under 25. It might mean nothing to Conservative Members, but it means a great deal to my constituents that the era when it was enough merely to pay benefits and forget about people is over. That era of long-term unemployment has drawn to a close; on those grounds, I thank the Government.

Photo of Frank Field Frank Field Labour, Birkenhead

No. I think that there have been far too many interventions in the debate. I hope that the hon. Gentleman will make his own speech.

Secondly, I congratulate the Government on transforming what has been primarily a reactive welfare system into a proactive one. When the welfare state was established, the vast majority of people claiming benefit were pensioners, and it was totally proper that we focused on delivering benefits effectively. Now the vast majority of people drawing benefit are below retirement age. Merely paying benefit is simply not good enough. The new deal represents a significant shift from a reactive to a proactive welfare system. It is not good enough for the Opposition merely to talk about the number of people who have moved from the new deal into jobs, though that is significant. This programme is about changing the whole culture of welfare and people drawing welfare. I congratulate the Government on that count.

Thirdly, this Government—of any Government—have devised the most effective and humane way to counter benefit fraud. Previous Governments fired randomly at claimants. Some people were cheating and some were not. People were driven off and we did not know whether they should have been claiming benefit or not. We now have a system whereby people are offered a full-time option at the end of their gateway process. On average, about a third of claimants cease claiming when they have to take a full-time option.

It is clear that many of those claimants have jobs. In my constituency of Birkenhead, the figure rises to slightly more than 50 per cent. The Government have come up with what the electorate have been longing for: a system that genuinely tries to help those who want to work, but cannot, and, at the same time, deals effectively with those who are drawing benefit while working.

I congratulate the Government, fourthly, because, through new deal, genuine entrepreneurial skills are being developed by the benefit staff themselves. It is a real pleasure to talk to them about what they are doing, what they are achieving and how they are able to help. They take pride in the operation that they can now offer.

We have abolished long-term unemployment, as it was known, for the under-25s and we are moving from a passive to proactive welfare system. We are helping those who genuinely want work and the Government have devised the most effective way of countering fraud. Entrepreneurial skills are being developed in the public sector. On all those counts, I congratulate the Government.

In the few more minutes of the House's time that I want to take, I merely wish to make a plea about how I should like welfare-to-work mark 2 to develop. The Government are considering that issue and some announcements, which are seeing us into that second stage, have been made. These are my suggestions.

First, I am concerned, as we all are, about the number of people on welfare to work who move from the gateway into the subsidised job option. We know that making that move is the most effective way of getting a long-term job after the subsidised job is finished. The proportion of people on that option has fallen from about 50 per cent. to 15 per cent. Why is that? Have all the employers with jobs to offer already come forward, is there only a particular stock of jobs available under that option at any one time, and do we need to talk much more carefully to individual employers about why they do not want people from the dole queue or from welfare to work? I should like the Government to think seriously about that. I could develop some other ideas, but other hon. Members wish to speak.

Secondly, I want the Government to be much tougher on those who have already worked out how to get back on to benefit without taking the option. In the Wirral we know which doctors are signing people off sick for 13 weeks so that they can return to benefits afterwards. Although it is difficult to do that at the moment, can we have an assurance that people who have been on welfare to work and leave when they are offered a full-time option will be immediately offered that option whenever they return to the welfare rolls—within a year, for example? Such people should have to make that choice. They should not have the choice of spending six months unemployed and four months in the gateway before having to choose whether to go for the full-time option.

Thirdly, I make a plea to Ministers to think about shortening the gateway. Most claimants have four hours of interviews during the gateway. Why does it have to last four months? It had to at the beginning, because we were trying something new, but we are offering only five hours of interviews during four months. Could not we shorten the gateway? That would make welfare to work much more effective.

Fourthly, may I make a plea for us simply to give the whole budget to offices that are clearly developing entrepreneurial skills—including the benefit budget—so enabling them to run welfare-to-work schemes? Let me give two examples relating to the Birkenhead office. It cannot allow people on training schemes to apply for driving licences. I understand why that is not done on a national basis, but in Birkenhead there are jobs waiting to be taken by people with driving licences. If local offices had real control over their budgets, they would arrange courses specifically for people who could apply for known jobs.

This is my second example. There are, thank God, some unskilled jobs waiting to be filled in north Wales, but there is no easy transport to north Wales. An entrepreneurial manager wants to lay on a bus, which would be taken up later by someone else who found that profit could be derived from it, and we would be able to fill the vacancies from Birkenhead. We should begin to trust staff who show that they have real entrepreneurial skills in mark 2 of our welfare-to-work scheme.

Finally, let me make a plea on behalf of claimants who, having done everything in their power to make the scheme a success and having done all that is required of them, do not ultimately secure a job of any kind. Can we stop allowing them to languish for two months, as we do now, before introducing them to what they will consider to be no more than a treadmill? Can we think imaginatively in regard to mark 2? Can we link subsidies to individual workers, empowering them to go out and see whether they can find an employer when everyone else has failed to find an employer for them?

I congratulate my right hon. and hon. Friends on the welfare-to-work programme, which has proved remarkable in many ways. We could, of course, make some criticisms, but, in view of the significant advances that have been made, they would be carping criticisms. Given the success of mark 1, many of us are anxious to discuss constructively with the Government how mark 2 might develop: indeed, many of us cannot wait for that discussion to begin.

Photo of Owen Paterson Owen Paterson Conservative, North Shropshire 6:07 pm, 29th April 1999

One industry is being devastated by the Government's policies. The state of that industry underlines all that Conservative Members have said about the fact that the Government do not understand business, and do not understand the impact that their policies are already having throughout the country. I refer to the road haulage industry, which employs 500,000 drivers and another 500,000 staff in warehouses and offices.

In a debate on Tuesday this week, much was made of the fact that the fuel duty escalator was introduced by the last Government at 3 per cent. The haulier named in the now infamous KPMG report which, since last Wednesday's debate, the Government no longer mention—it was not referred to on Tuesday—has given me figures showing that in 1994 only Spain and Luxembourg had cheaper fuel than the United Kingdom. That is a startling contrast with the present situation. The United Kingdom now has easily the most expensive diesel in Europe. The difference is astonishing. Let us consider the cost of filling a 1,200-litre lorry with two tanks. The difference between the cost here and the cost in Luxembourg is £350.40; the figures for Belgium and France are £330 and £267.60 respectively.

Since last week's debate, the haulier named in that famous report has been taking steps to move his whole business to Luxembourg. During our debates, several senior members of the Government told us that the fuel duty did not really matter, and that vehicle excise duty did not matter, because we had lower business costs, lower insurance costs and lower corporation tax.

I shall show the House that the Government are completely wrong. The Deputy Prime Minister, who may not be the brightest, gave us figures during Prime Minister's questions showing that Belgium and Holland had business costs that were unaccountably £800,000 and £600,000 more expensive that ours. [Interruption.] I should be most grateful to the Minister if he would listen while I explain the difference.

Vehicle excise duty in Luxembourg is £226 as against £5,750 in this country. This man runs 90 trucks, so that is a £497,000 difference. He buys 4.5 million litres of diesel a year, and the difference on that is more than £1.3 million. The savings on fuel and VED by operating trucks in Luxembourg is £1,811,160.

Set against that is the savings on a driver paid £330 a week, his pension and national insurance contributions, and the insurance on the vehicle, which would give an advantage over Luxembourg of about £14.20 per week per driver. This man generously told me that he made a profit last year of £400,000, so the saving on corporation tax, which is 30 per cent. in this country and 33 per cent. in Luxembourg, is only £12,000.

The total United Kingdom saving is £78,456, giving this man the benefit of a £1,732,704 saving by moving his entire business to Luxembourg. If my figures are wrong, I should like the Minister to prove it. He should put in the Library the back-up figures for the Deputy Prime Minister's claim that cheaper social and running costs outweigh the disadvantages of more expensive VED and petrol duty.

It is sad that such a successful export business is moving abroad. The man was quite clear. He said that the Chief Secretary's comments in the debate the other night were stupid, and that they showed that the Government were not going to listen—"therefore I'm off".

As for the impact on other hauliers, I shall quote my constituent, Dave Yarwood from Maesbury. He said: Companies are in business to make a profit, nobody minds paying tax on profit. Indirect taxation however is making it impossible for some businesses to make a profit in the first place. Figures from the Library show a dramatic increase in the number of foreign-registered trucks leaving this country. In 1997, there were 597,000, and for the four quarters ending quarter three 1998 there were 690,000. That is an astonishing increase, and it is due to the benefits of cabotage, which as free traders we welcome. However, the Government have not taken on board the impact of cabotage. Foreign trucks with the benefit of cheaper VED and dramatically cheaper fuel can come to this country and will wipe out our hauliers. Our hauliers will go.

Photo of Mr George Stevenson Mr George Stevenson Labour, Stoke-on-Trent South

Will the hon. Gentleman remind the House which Government agreed to remove cabotage restrictions in the United Kingdom for road haulage?

Photo of Owen Paterson Owen Paterson Conservative, North Shropshire

The Conservative Government. I am a total supporter of cabotage, because I believe in free trade. Cabotage will work only if there is a level playing field. The Government have manacled our hauliers behind both ankles, so they cannot compete.

Photo of Claire Ward Claire Ward Labour, Watford

With his reference to a level playing field, is the hon. Gentleman suggesting that there should be tax harmonisation across Europe?

Photo of Owen Paterson Owen Paterson Conservative, North Shropshire

I am in favour of taxes being as low as possible in all countries. I salute the socialist Government in France. I have a cutting from Figaro of 29 September 1998, which says that the French Government introduced a rebate so that French truckers could compete with truckers in Luxembourg.

Photo of John Bercow John Bercow Conservative, Buckingham

Does my hon. Friend agree with me that it would be helpful to the debate if the hon. Member for Watford (Ms Ward) were to understand that we want lower taxes here? We do not think it our business to encourage other member states of the European Union to make their taxes higher. It is a blindingly obvious point, and I hope that the hon. Lady can grasp it.

Photo of Owen Paterson Owen Paterson Conservative, North Shropshire

I am grateful to my hon. Friend for making that point. However, as other hon. Members wish to speak, I shall move on to deal with another matter.

The Government also claim that the measure—by providing a rebate for converting engines to use ultra-low sulphur diesel, for example—will create great environmental benefits. However, it costs £4,000 to convert a euro 1 engine, and £3,500 to convert a euro 2 engine. It is therefore not surprising that very few hauliers are tempted by the Government's offer of a £1,000 rebate as compensation.

One haulier said: We have been given a £1,000 reduction per vehicle annually if we fit a particulate trap to reduce emissions. This will cost £2,500 per vehicle, is guaranteed for 12 months only, is unreliable and may not be compatible with our vehicles. It is not cost effective.

The measure is also not environmentally effective, as more crude oil has to be cracked to create ultra-low sulphur diesel than ordinary diesel. Worse still, Mobil CNG estimates that ultra-low sulphur diesel is 4 per cent. to 7 per cent. less efficient. A large haulier in Sheffield converted 130 38-tonne trucks and reported an 8 per cent. increase in fuel consumption, costing him £250,000 in the first year. It is yet another case of the Government not getting their facts right, not understanding how things work, and creating extra costs for a successful British business.

Photo of Mr Derek Foster Mr Derek Foster Chair, Employment Sub-committee

I agree with the hon. Gentleman's case on fuel. I think—as I said in my speech immediately after the Budget—that our Government made a big mistake in taking that action, which is also undermining our making work pay strategy for the working poor in my rural constituency. However, is this not an unreal debate? Successive Governments have perpetrated a deception upon the electorate—that it is possible to have superb public services and to reduce taxation. The truth is that the taxation burden has increased year after year—under the Thatcher Government, under the Major Government, and now under our own Government. Why do we not tell people the truth—that we cannot have good education and good health without paying for them? Why do we not get them to pay for those services by the most just means—by increasing personal taxation?

Photo of Owen Paterson Owen Paterson Conservative, North Shropshire

I am most grateful for that intervention by the right hon. Gentleman, who has made the most pertinent point—that the Government think that they have found a golden-egg laying goose that will not bite back. The Government are taking £36 billion from road users, but are reinvesting in roads a paltry £6 billion.

Photo of Claire Ward Claire Ward Labour, Watford

The hon. Gentleman mentioned golden eggs. Has he perhaps forgotten that the previous Government introduced the fuel duty escalator?

Photo of Owen Paterson Owen Paterson Conservative, North Shropshire

With deepest respect, had the hon. Lady been listening to my earlier remarks, she would know that I said that, at that time, only two other countries in Europe had lower diesel costs than ours and that the policy worked. Now, we have by far the most expensive diesel in Europe, but are not achieving environmental benefit because of it.

We are trying to achieve, based on 1990 figures, a 12.5 per cent. reduction in carbon emissions. According to the Library, the 1990 emissions total was 159 million tonnes, of which only 30 million tonnes were caused by road transport—of which only 16 per cent. came from freight. Therefore, eliminating the freight element would reduce carbon emissions by a maximum of only 5 million tonnes. The Government's policy does not make any environmental sense.

In our debates on the issue, the Government have also trumpeted their creation of a forum. We were told that the Government had listened, and understood that industry was in crisis, and that they had consequently instantly reacted. However, the facts paint a somewhat different picture. The forum has met only once, and under some duress. Three senior members with trucking businesses—the chairman of the Road Haulage Association, the president of the Freight Transport Association, and another senior haulier—were banned from the meeting. There was no agenda for the meeting, of which no minutes were published. No further meetings or agendas were planned. All we know is that, today, a meeting has been announced between civil servants and one of the senior members of a trade association. The Government do not care about industry. They were interested only in having the spin and catch-phrase that "a forum has been established".

When the Minister replies, will he let me know what the future programme for the forum is, and what the Government intend to do about an industry that has been brought to its knees? An uncompetitive transport industry affects every business in the country.

Photo of Gordon Marsden Gordon Marsden Labour, Blackpool South 6:20 pm, 29th April 1999

What a curious lot the Opposition are. Instead of concentrating their fire power sensibly, as their depleted numbers would suggest that they might, they have brought to the House a cumbersome portmanteau of a motion. In academic publishing in recent years it has been the custom to roll out titles in threes, to give them a sort of spurious quality that they would not otherwise possess. The title of the Opposition debate, citing job losses, the state of industry and the new deal, falls squarely into that category.

It is remarkable how much time the right hon. Member for Wokingham (Mr. Redwood) spent in working out his own equivalent of the Henry Root letters. The rest of his speech consisted of the amnesiacs' almanac of the Tory Government's failures over the 18 years before the present Government came to power.

It is interesting that the Tory motion recommends a change of policy. I suppose it is a start to discover that they at least have a policy to which they can recommend we change. In view of the events of the past week, the only problem is: which policy is that? Is it the policy of the shadow Chancellor, the right hon. Member for Horsham (Mr. Maude)? Is it the policy of the right hon. Member for Wokingham, the policy of the right hon. and learned Member for Folkestone and Hythe (Mr. Howard), or the policy of the hon. Member for Chingford and Woodford Green (Mr. Duncan Smith)?

During the debate, the Opposition have not told us whether the market will provide. Until they settle that conundrum, perhaps Tory central office had better update the old advertising slogan: "If you want to be vague, ask for Hague."

The three key areas of the debate are business, employment and the new deal. Under the previous Government, we were told that the market would provide. I ran a small business, employing eight people, for 12 years under that Government, and I have in my constituency about 1,500 small bed-and-breakfast establishments, hotels and guest houses, so I know that hundreds of such businesses went to the wall in those years under the previous Government's yo-yoing exchange rates and lack of organised economic policy.

The Conservatives gave us long-term interest rates 2 per cent. higher than those of Germany and France, and the worst share of world trade this century. In 1994, the gross product investment was only 15 per cent.—less than that in any other industrialised country. The present Government have introduced policies that lock in long-term stability at macro level. That is why we introduced operational independence for the Bank of England. We cannot abolish the business cycle, but we can reduce its amplitude. Let us contrast that with the monetarist-driven boom and bust of the late 1980s and early 1990s, when 1 million manufacturing jobs were lost. Today, inflation is close to the target of 2.5 per cent. and long-term interest rates are at their lowest for 40 years.

Micro policy reforms are also central to the Government's agenda. My right hon. Friend the Secretary of State for Trade and Industry spelt those out, as he has on many occasions. They involve education, training, access to capital and labour markets, product market competition, and investment in infrastructure and in science and technology. The Government realise that there is no reason not to invest in labour. Investing in labour is the most important thing, although the previous Government thought that tax breaks for capital were all that mattered.

Let us think about employment and manufacturing industry. In my constituency many people work for British Aerospace, a key employer involved with the Eurofighter. The Government have been particularly successful in that area. In 1998 they introduced a public-private partnership, with £123 million being spent on design and development of the wings of the A340 airliner. By February this year, the 2,000th airbus wing had been completed; 556 aircraft were ordered in 1998, and £39 billion worth of orders have been generated worldwide. At the beginning of this week, Airbus launched the A318 aircraft, with 109 orders—more than had originally been suggested.

The Government have done an enormous amount in the Budget for small businesses, including the new lop rate of corporation tax, the new Small Business Service to improve Government's approach to small businesses, the automated payroll service, and the extension of 40 per cent. first-year capital allowances for another year. Those are welcome and important measures.

The Opposition have been scornful about the new deal but even they have not dared to attack it directly.

Photo of Gordon Marsden Gordon Marsden Labour, Blackpool South

The hon. Gentleman may wish to chance his arm later in the debate. It is perhaps not surprising that the Opposition have been diffident about attacking the new deal, in view of the success that it has engendered. Given the Opposition's cynicism, it is surprising that they have not ventured their arm a bit more. They ran no fewer than 29 different employment and training schemes between 1979 and 1997. Those schemes still left the unemployment figures higher when the Conservatives left office, whereas the new deal is probably the most ambitious, concentrated and structured programme for the lifetime of a Government that has been put forward since the second world war.

Tory policies were designed to massage the jobless statistics and put people on schemes of little value. The unemployment unit of Youth Aid has described the way in which the Tories cynically encouraged many hundreds of thousands of unemployed people into economic inactivity and long-term reliance on breadline benefits. That should be contrasted with what we have done with the new deal. By Easter this year, 300,000 people had joined the new deal, including 250,000 young people. Nearly 60,000 young people are already in jobs and a further 40,000 are in other training and education options. In Blackpool, more than 200 people had left the gateway to start jobs by this Easter.

We saw many crocodile tears from the right hon. Member for Wokingham about manufacturing industry, but the new deal has also been of key importance in service industries. That is crucial in my constituency. Government initiatives to improve the quality and availability of training are crucial to competitiveness in the tourist industry. The flexibility of the new deal on seasonal employment and its training and employment options—I pay tribute to my right hon. Friend the Minister for his response to this issue—has been especially beneficial. The British Hospitality Association estimates that the new deal could create between 7,000 and 10,000 jobs in the tourism sector. In my constituency, a further education institute is gearing itself to become a centre of excellence for tourism-related qualifications. The good work that I have seen at Blackpool and Fylde college is a good example of that.

The April issue of Youth Aid's "Working Brief' gives a detailed comparison of the job figures and the labour trends. It states that the new deal figures enable us to identify that the progress of New Deal eligible young people into jobs from the Jobseeker's Allowance count has been stronger than that for either older long-term unemployed or than shorter-term unemployed people of whichever age.Furthermore, this strong progress into jobs has not been at the expense of the older, long-term unemployed, as had been feared.

I have described some of the specific, noticeable and measurable successes that we have already had with the new deal. The Conservatives have no answer to that. They have no answer to the criticisms that have been made of their previous policies for business and employment. We have been told several times this week, as they have got deeper and deeper into trouble, that their policies represent a seamless web with those of the great leader, but—in the 20th anniversary year of Thatcherism—that web has become hopelessly tangled and formless. It is like the cobwebs on the tables of Miss Havisham's wedding feast, but now the jilted bride is not Charlotte Rampling but she who would once be obeyed. It is eight years since the Conservatives did the dirty deed, but they still cannot decide whether they have come to praise Caesar or to bury her. They can try as much as they like this afternoon to run from the sterile legacy of Thatcherism, but they cannot hide from the statistics over which they presided and which we have referred to this afternoon. Those statistics show how unwise they were to table this motion in the first place.

Photo of Jeffrey M. Donaldson Jeffrey M. Donaldson Shadow Spokesperson (Trade and Industry) 6:30 pm, 29th April 1999

I shall be brief, as I know that we are reaching the end of the debate. I shall begin by discussing the new deal in Northern Ireland.

I have been worried about the closure of a number of the action for community employment schemes, which have benefited many of the deprived areas that have suffered as a result of 30 years of terrorist violence. However, I welcome today's announcement by the Under-Secretary of State, Northern Ireland Office, with responsibility for education and training. He has made available a funding package of £9.6 million to strengthen the delivery arrangements for the new deal in the Province and to underpin the transition from the ACE schemes to the new deal. I welcome that, both for my constituents and for people in many parts of Northern Ireland. There had been concerns about the inadequacies of the new deal arrangements in comparison with the very valuable community services provided by ACE schemes. I hope that the additional money will help the transition and that it will enable the valuable work done under many of the ACE schemes to continue under the new deal arrangements.

The available statistics cover only the period up to the end of January. They show that almost 9,000 young people in Northern Ireland had taken up the opportunities provided by the new deal scheme by that time, and I hope that many of them will go on to find long-term employment.

However, the problem in Northern Ireland is that the level of unemployment remains very high. The problem is especially acute in those parts of the Province that have suffered from a lack of investment. Attracting new industry is very high on the agenda when it comes to tackling unemployment in Northern Ireland. 1 encourage the Government to give even greater priority to the need to attract that investment.

In addition, I hope that the Government will provide significant and adequate support for local businesses. Most of the new jobs being provided in Northern Ireland are in small, indigenous businesses that want to expand but are finding it difficult to do so. Especially heavy is the impact of increasing transport costs, on which industry—and especially small business—in Northern Ireland is so dependent. I shall return to that problem in a moment.

Dependence on service-related industries in Northern Ireland is too high, which is why it is important, in the attempt to attract new industry, to bolster the manufacturing sector and make it even more competitive. There have been significant job losses in the industrial sector, not helped by the recent demise of Mackies, one of the largest and most renowned businesses in Belfast. I hope that something can be done to rescue that firm, especially given that it is located in a part of Belfast with very high unemployment.

Economic growth and manufacturing output in Northern Ireland have slowed in the past couple of years. It is important that the Government, in helping business to overcome its difficulties, recognise the damage that increased fuel duties do to industry. That is especially evident in a region such as Northern Ireland, where transport is so vital to the ability to compete in the wider market place. In Northern Ireland, £100 will purchase about 139 litres of diesel, compared with the 229 litres that it will buy in the Irish Republic, our nearest neighbour. That shows how difficult is the problem faced by road hauliers and industry generally in Northern Ireland.

I hope that the Government will do something to address that problem. Northern Ireland is the only part of the United Kingdom that has a land boundary with another European Union member state. We are working in a competitive environment, and crippling transport costs blunt our ability to compete. We will face job losses in the coming weeks, particularly in the haulage industry, unless the Government address spiralling fuel costs.

Let me turn to the impact of devolution on our ability to attract inward investment to all regions of the United Kingdom. My party is concerned that devolved Assemblies in Northern Ireland and Wales and a Parliament in Scotland may mean increased competition between the regions of the UK. That competition will affect not only the three regions with devolved assemblies; it will affect the English regions too.

The Minister and his colleagues are working to establish liaison between the regions on inward investment, and I should like to know what progress has been made. The last thing the UK needs is English, Welsh and Northern Ireland Assembly members and Ministers going to Europe and the rest of the world to compete with each other, spending British taxpayers' money as they try to win jobs for different regions.

That would be a desperate waste of resources, and I hope that the Minister will address liaison and co-operation between the regions of the UK. We are not against competitiveness, but money must not be wasted as we go after the same jobs for different regions of the UK.

Photo of Jonathan R Shaw Jonathan R Shaw Labour, Chatham and Aylesford 6:37 pm, 29th April 1999

I have three minutes, so shall make my comments brief. I want to offer two examples from my experience of working with young unemployed people who are among the most vulnerable members of our community—those who have left care.

I had some experience of the 29 failed employment programmes run by the previous Government. In one case that sticks vividly in my memory, we had worked for many months with a young person who wanted to develop a career in retail. We arranged for him to start on a Government-financed programme. It involved four days a week at work and one day a week in college. After three weeks, he gave up because all he had done was wash cars on a garage forecourt. He had not learned about customer care; he had not learned about stock control; he had not learned about marketing. He did not tell us what had gone wrong because he did not want to let down his carers or his social worker. The problem was that we had no staff to find out or monitor the quality of that placement, and that was often the case. There was no investment, so there is no comparison between that example and the new deal.

I recently met a young man who had been taken on by a construction company. He had been unemployed for more than two years. He had lost confidence and he was up to his neck in debt. Staff who had worked closely with the construction company were impressed by the support given. My right hon. Friend the Minister for Employment, Welfare to Work and Equal Opportunities knows all about the revolution that has happened among jobcentre staff in my constituency and how well they work with employers.

That young man asked me why new deal had not been brought in years ago. We all know the answer. What a contrast young people will see come the next general election. We have a minimum wage, a new deal and fairness at work. Compare that with £1 an hour, hire and fire and washing cars. What a difference between us and the Tories.

Photo of Damian Green Damian Green Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Education) 6:40 pm, 29th April 1999

It has been instructive to listen to most of the speeches from Labour Members this evening, starting with the Secretary of State, since many of them have wanted to talk about anything other than the Government's record on industry and employment. There are honourable exceptions, however, such as the right hon. Member for Birkenhead (Mr. Field) and my near neighbour in Kent, the hon. Member for Chatham and Aylesford (Mr. Shaw). Kentish Members are always good value. Characteristically, also, we have had from the Liberal Democrat Benches simply a feeble echo of some of the Government's less good arguments.

I will speak about the new deal because the Government's miserable industrial record has already been comprehensively demolished by my right hon. Friend the Member for Wokingham (Mr. Redwood) and, in the specific context of the road haulage industry, by my hon. Friend the Member for North Shropshire (Mr. Paterson) and the hon. Member for Lagan Valley (Mr. Donaldson).

There is a link between the two halves of this debate and it is betrayal. Just as the Government are betraying British manufacturing industry with higher taxes and regulations, so they are betraying the young unemployed with a crude, ineffective and expensive new deal programme.

The Minister and I have spent the day trading statistics. The House should beware of any new deal figures. There is a most instructive article in today's Financial Times which shows that the basis on which the new deal is calculated is bogus. The success that the Government claim for the new deal is those who go into unsubsidised jobs. An article that comes from a briefing from the Minister's own Department reveals that the category of those who have found jobs include people who got a job on their own initiative after being invited to the new deal interview but before the interview happened, those who got jobs at the interview but without real help and—this is a good one—those who have been working full-time and claiming fraudulently but have used the interview invitation to announce that they have just found work, as well as those for whom the new deal has proved a genuine success. The Department admits that it cannot split the figures into these different categories, so it just claims all those categories as successes for the new deal.

The Minister claims that youth unemployment has come and is coming down, and I can half agree with him. Youth unemployment has fallen consistently in the 1990s. I hope that he will agree with me why it has fallen: it is because the previous Government cut business taxes and business regulations and made Britain the best place for inward investment. The previous Conservative Government made it easy for businesses to create jobs. The result was that, between April 1993 and May 1997, unemployment among young people fell by 240,000. That is a significant figure, because the Government's target for the new deal job placements, assuming they can ever measure them correctly, is 250,000. That reveals that the Conservative Government achieved the target of creating 250,000 or so new jobs for young people without extracting billions of pounds in extra taxes from productive industry.

I would not want to say that the new deal is making no difference. During the last Conservative Government, the monthly average for young people moving off the unemployment count was 33,000. Since the new deal has been introduced, the figure has been just under 20,000. The new deal has made a difference: it means that fewer young people are moving off the unemployment count every month than did so under the Conservative Government.

Photo of Mr Ian Bruce Mr Ian Bruce Conservative, South Dorset

My hon. Friend will have heard me challenge the Secretary of State on the International Labour Organisation figures, according to which unemployment among young people has increased by 12,000. He prefers table 11, which shows the claimant count. According to it, over the past year, unemployment has decreased by 14,000, but it does not say that the 36,950 on non-employment options who have been taken off the claimant count need to be added in. In fact, unemployment, with that added back in, has increased by 22,000 under the claimant count figures, too.

Photo of Damian Green Damian Green Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Education)

That is a valid point. The Government say that their preferred measure of unemployment is that of the ILO, under which youth unemployment has gone up under the new deal. As my hon. Friend said, if we include the real figures under the claimant count—the figure that the Government suddenly prefer—it has gone up, too. Their argument is bogus.

I do not claim that fewer people are leaving the unemployment register entirely because of the new deal. It is mostly because the Government are making it more difficult to employ people. The point is that the new deal is not solving the problem. The Government are trying to deny failing to meet their basic pledge. We have had arguments about statistics, not least from the Liberal Democrats. In such circumstances, I always feel that, to get to the heart of the Government's policy, one should examine their pledge card. I see that they have a new one which announces flatly that youth unemployment has been halved with the new deal. That is simply and flatly untrue. General youth unemployment has risen since the new deal was introduced. The Government have already broken one of their five pledges. I am sure that the electorate will take note of that in next week's local elections and in all future elections.

There are more subtle ways in which the new deal is failing. It is not making young people more employable. Both parties want to make young people more employable. Training and education are central to the new deal philosophy, but what happens to those who take the training option? On today's figures, two thirds do not find a job at the end of it. They will stop coming if they do not do so. Today's new deal figures show that 34 per cent. of those who entered it went to destinations unknown to the Department. Even if they found jobs, the new deal was so useless that they could not be bothered to pick up the phone to tell their employment adviser, "Thanks for finding us a job."

More damningly, 13 per cent. have gone straight back on to welfare. With great respect to the right hon. Member for Birkenhead, this is not welfare to work; for too many young people, the new deal is welfare to welfare. By the end of February, of those on it the longest—the first cohort from January 1998—3 per cent. were still on the gateway, which is meant to last four months, and 12 per cent. were on follow-through. That means that they had been all the way around and back again. I have to tell the right hon. Gentleman that that is not abolishing long-term unemployment, but redefining it.

The Government know that business is becoming increasingly disillusioned. Allied Carpets pulled out of participation after recruiting only 30 people, whom it regarded as not suitable. Marks and Spencer took on only a third of the number that it had hoped for. Dixons sent a member of staff to train 200 personal advisers, but has so far recruited only 12 people through the new deal.

There is one great success for new deal recruitment. The most that any business has been able to find is 80 trainees, but the Employment Service has managed to find 289 specifically to administer the new deal. I submit that those are the only 289 positions that can be ascribed to it.

Young people are disillusioned. Last month, the Evening Standard quoted a new deal participant from Hackney, who said: They knew next to nothing about my field—they'd advise me what companies I should try by looking through the Yellow Pages …In the end I found a job myself and the company that took me on did so without having anything to do with the New Deal.

Photo of Claire Ward Claire Ward Labour, Watford

Will the hon. Gentleman give way?

Photo of Damian Green Damian Green Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Education)

I am, as ever, tempted by the hon. Lady, but, with only two minutes left, I must reject her on this occasion.

There is also the question of the cost per job. I calculate that it is £11,000; the Government claim that it is £1,000. The Minister and I can argue about that, so I shall turn to prose more elegant than that in my pamphlet, "The Four Failures of the New Deal", which is available from the Centre for Policy Studies. Matthew Parris makes the point better than I did. He made inquiries after I asked the Secretary of State about this and found that the £1,000 price tag represents the cost of helping the successful job-finder into the job—but takes no account of what is spent on those who did not get jobs. In other words, it is much more expensive, and others have made the same calculation.

Hon. Members have asked what we would do instead. We would have a less crude, more targeted programme aimed at areas of chronic high unemployment, particular groups in society and disadvantaged individuals. That would not only be a more intelligent, but a more compassionate way to spend public money. We do not measure our compassion by how much taxpayers' money we can waste on useless schemes.

The Minister will no doubt assume that he will be re-elected; I assume that he will not be. If he is able to, will he continue the new deal beyond 2002? If the answer is yes, how will he find the next £5 billion? The Government have not told us that yet.

The new deal is a perfect symbol of new Labour. It is overhyped, overpriced, overrated and it is underperforming. It is failing young people, failing business and failing the taxpayer. I urge hon. Members to vote in favour of this motion this evening to register a much-needed protest.

Photo of Andrew Smith Andrew Smith Minister of State (Department for Education and Employment) 6:50 pm, 29th April 1999

The hon. Member for Ashford (Mr. Green) chided us on who had spoken about what. I found it highly significant that it was not until he stood up to speak that any of his hon. Friends offered any criticism of the new deal. They are obviously no more convinced by the statistics that he has paraded all day than we are. The truth of the matter could hardly be better summarised than by what has happened to long-term youth unemployment in the hon. Gentleman's constituency in the past two years. It has fallen by 78 per cent.

The right hon. Member for Wokingham (Mr. Redwood) could not tell us whether he would abolish the minimum wage and whether he agreed with the shadow Chancellor that the Conservatives would put it on hold. He could not say whether they would abandon the new deal or whether they would end the operational independence of the Bank of England. He, too, omitted to mention the fall in long-term youth unemployment in his constituency in the past two years. He is not doing quite so well as the hon. Member for Ashford, but the long-term youth unemployment in his constituency fell by 59 per cent.

I welcome the supportive remarks made by the hon. Member for Hereford (Mr. Keetch) on what we are doing to tackle the skills and research challenge that Britain faces as a consequence of the Conservative years. I welcome, too, his measured remarks and his support for the new deal. I hope that he will not mind my chiding him by saying that I would have welcomed his support for the windfall tax, which paid for the new deal.

My right hon. Friend the Member for Birkenhead (Mr. Field) congratulated us on four counts on the new deal. I congratulate him on the role that he played in government in introducing the programme. As he said, it is challenging the culture of long-term unemployment. It represents a decisive shift to a proactive welfare state. It is a more effective and humane way of countering claimant fraud, and it is unleashing real enterprise and initiative among staff and other partners who are implementing the programme.

I shall certainly consider each of my right hon. Friend's suggestions seriously. We are already acting on the points that he mentioned. Rather than thinking of the new deal as a mark 1 or mark 2 of welfare reform, we see it as developing and improving all the time. My right hon. Friend argued that people who came back on to the programme within a year should go straight back on an option. I assure him that we are already considering the most appropriate form of follow-through support to ensure that those who really have tried to find work but have not done so receive the continuity of support that they need. We shall ensure that those who are trying to work the system do not get the sympathy from us for doing so that they got from the Conservative party when it was in government.

My right hon. Friend the Member for Birkenhead referred to shortening the gateway. Of course, we are already intensifying the gateway, not least with the £3.5 million announced in the Budget to provide more intensive support. That brings to £5 million the amount of money made available locally for innovation to improve the rate at which young people move through the gateway and into jobs.

My right hon. Friend argued for delegated budgets for local offices and referred explicitly to driving licences. I am pleased to assure him that I issued instructions this week for a much more permissive rule to be operated to allow more young people to get a driving licence through the new deal, where that can get them into a job.

Photo of John Bercow John Bercow Conservative, Buckingham

Does the right hon. Gentleman deny that the head of the Government's own skills task force, Chris Humphries, said in a recent letter to the Evening Standard[Interruption.]—This might be uncomfortable for the right hon. Gentleman, but that is tough. Chris Humphries said: Expectations that the Government raised are not being met. Does the right hon. Gentleman deny that that individual made that statement in a newspaper?

Photo of Andrew Smith Andrew Smith Minister of State (Department for Education and Employment)

I have never seen that comment in my life. However, the promises that we made before the general election are promises that are being kept. Our promises are being kept on jobs, on welfare reform and on building a strong and competitive economic base in place of the boom-and-bust failures that we saw during the years of Conservative government.

The hon. Member for North Shropshire (Mr. Paterson) spoke with great passion about the situation facing road hauliers. He asked that figures on the competitiveness of the industry be placed in the Library. I shall do what I can to ensure that that is done. He asked about the future programme for the forum. I understand that a further meeting will be held next month, at which I am sure the issues that he raised will be discussed. I shall ensure that a copy of Hansard is drawn to the attention of the forum.

My hon. Friend the Member for Blackpool, South (Mr. Marsden) summed up the matter when he said that the new deal was the most ambitious, concentrated and structured programme of help that has ever been available to young unemployed people in this country. With the figures announced today, we now have more than 61,000 young people in sustained jobs through the new deal and more than 58,000 young people taking up other training and work experience options—about 120,000 young people helped forward in their lives, thanks to the new deal. As my hon. Friend the Member for Chatham and Aylesford (Mr. Shaw) said, the new deal is a quality programme which is making a real difference in the quality of the lives of young people who have been neglected and ignored.

The hon. Member for Lagan Valley (Mr. Donaldson) spoke of the situation in Northern Ireland. I am pleased to reassure him that, a week ago, I met community and voluntary sector representatives from Northern Ireland to address the concerns that he raised. I welcome the support that he gave for today's announcement of extra funding help for the transition in Northern Ireland. We all know that Northern Ireland has been blighted for a long time by some of the worst unemployment in the country, and that has undoubtedly aggravated the sectarian conflict there. If the new deal and the Government's support for a strong economy and a competitive industry can help to play their part in resolving those sectarian differences and sustaining peace, that will be welcomed by the whole House.

We have heard no alternatives to the Government's policies from the official Opposition, but plenty of evidence that the Opposition's credibility is at rock bottom. As my hon. Friends have told us from their experiences in their constituencies, Labour's policies are working, and more of our constituents are working. That has happened because we have kept our promises—governing, as we promised, to equip Britain for a new world economy. The sound monetary framework that we have established, the tough decisions that we took on public finances, our cuts in corporation tax, our reforms to make work pay, the new deals, the raising of education standards and the investment in skills and science are all putting in place strong foundations for an enterprising and competitive economy, in which flexibility is combined with fairness.

Desperate though the Opposition are to find bad news, the truth is that we have more people in work than ever before. Since the general election, the ILO measure of unemployment has been down in every region. The claimant count has been down in every region since the general selection. Long-term unemployment is down in every region. Long-term youth unemployment is down in every region; we achieved lower long-term youth unemployment in 18 months than the Conservatives could manage in 18 years. Under the Tories, Britain had a post-war record for the number of people out of work; under Labour, there is an all-time record—

Photo of Patrick McLoughlin Patrick McLoughlin Opposition Deputy Chief Whip (Commons)

rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly, That the original words stand part of the Question:—

The House divided: Ayes 115, Noes 287.

Division No. 159][7 pm
AYES
Ainsworth, Peter (E Surrey)Faber, David
Amess, DavidFallon, Michael
Arbuthnot, Rt Hon JamesForth, Rt Hon Eric
Atkinson, Peter (Hexham)Fowler, Rt Hon Sir Norman
Baldry, TonyFox, Dr Liam
Bercow, JohnFraser, Christopher
Beresford, Sir PaulGale, Roger
Blunt, CrispinGarnier, Edward
Boswell, TimGibb, Nick
Bottomley, Peter (Worthing W)Gill, Christopher
Bottomley, Rt Hon Mrs VirginiaGorman, Mrs Teresa
Brady, GrahamGray, James
Brazier, JulianGreen, Damian
Brooke, Rt Hon PeterGrieve, Dominic
Browning, Mrs AngelaGummer, Rt Hon John
Bruce, Ian (S Dorset)Hamilton, Rt Hon Sir Archie
Burns, SimonHammond, Philip
Butterfill, JohnHayes, John
Cash, WilliamHeathcoat-Amory, Rt Hon David
Chope, ChristopherHogg, Rt Hon Douglas
Clappison, JamesHoram, John
Clark, Rt Hon Alan (Kensington)Howarth, Gerald (Aldershot)
Clark, Dr Michael (Rayleigh)Jackson, Robert (Wantage)
Clifton-Brown, GeoffreyJenkin, Bemard
Cormack, Sir PatrickKey, Robert
Cran, JamesKing, Rt Hon Tom (Bridgwater)
Davies, Quentin (Grantham)Kirkbride, Miss Julie
Davis, Rt Hon David (HaltempriceLaing, Mrs Eleanor
&Howden)Lait, Mrs Jacqui
Dorrell, Rt Hon StephenLansley, Andrew
Duncan, AlanLeigh, Edward
Duncan Smith, IainLetwin, Oliver
Emery, Rt Hon Sir PeterLewis, Dr Julian (New Forest E)
Lloyd, Rt Hon Sir Peter (Fareham)Spicer, Sir Michael
Loughton, TimSpring, Richard
Lyell, Rt Hon Sir NicholasSteen, Anthony
MacGregor, Rt Hon JohnSwayne, Desmond
McIntosh, Miss AnneSyms, Robert
MacKay, Rt Hon AndrewTapsell, Sir Peter
Maclean, Rt Hon DavidTaylor, John M (Solihull)
McLoughlin, PatrickTaylor, Sir Teddy
Madel, Sir DavidTrend, Michael
Malins, HumfreyViggers, Peter
Maude, Rt Hon FrancisWalter, Robert
May, Mrs TheresaWardle, Charles
Moss, MalcolmWaterson, Nigel
Nicholls, PatrickWhitney, Sir Raymond
Norman, ArchieWhittingdale, John
Paice, JamesWiddecombe, Rt Hon Miss Ann
Paterson, OwenWilkinson, John
Pickles, EricWilletts, David
Prior, DavidWinterton, Mrs Ann (Congleton)
Randall, JohnWinterton, Nicholas (Macclesfield)
Redwood, Rt Hon JohnWoodward, Shaun
Robathan, AndrewYeo, Tim
Roe, Mrs Marion (Broxbourne)Young, Rt Hon Sir George
Rowe, Andrew (Faversham)
Ruffley, DavidTellers for the Ayes:
Shepherd, RichardMr. Oliver Heald and
Simpson, Keith (Mid-Norfolk)Mr. Tim Collins.
NOES
Abbott, Ms DianeClarke, Charles (Norwich S)
Ainsworth, Robert(Cov'try NE)Clarke, Eric (Midlothian)
Allen, GrahamClarke, Rt Hon Tom (Coatbridge)
Anderson, Donald (Swansea E)Clelland, David
Anderson, Janet (Rossendale)Clwyd, Ann
Ashdown, Rt Hon PaddyCoaker, Vernon
Ashton, JoeCoffey, Ms Ann
Atkins, CharlotteCohen, Harry
Austin, JohnColeman, Iain
Barnes, HarryColman, Tony
Battle, JohnConnarty, Michael
Bayley, HughCooper, Yvette
Beard, NigelCorbett, Robin
Beckett, Rt Hon Mrs MargaretCorbyn, Jeremy
Bell, Martin (Tatton)Corston, Ms Jean
Bell, Stuart (Middlesbrough)Cotter, Brian
Benn, Rt Hon TonyCousins, Jim
Benton, JoeCranston, Ross
Bermingham, GeraldCrausby, David
Betts, CliveCryer, John(Hornchurch)
Blackman, LizCummings, John
Blears, Ms HazelCunningham, Jim(Cov'try S)
Blizzard, BobCurtis-Thomas, Mrs Claire
Boateng, PaulDalyell, Tam
Borrow, DavidDarling, Rt Hon Alistair
Bradley, Peter(The Wrekin)Darvill, Keith
Bradshaw, BenDavey, Valerie(Bristol W)
Brown, Rt Hon Nick (Newcastle E)Davidson, Ian
Buck, Ms KarenDavies, Rt Hon Denzil(Llanelli)
Burgon, ColinDavies, Geraint(Croydon C)
Burnett, JohnDawson, Hilton
Butler, Mrs ChristineDean, Mrs Janet
Byers, Rt Hon StephenDenham, John
Cable, Dr VincentDismore, Andrew
Caborn, Rt Hon RichardDobbin, Jim
Campbell, Alan(Tynemouth)Dobson, Rt Hon Frank
Campbell, Mrs Anne(C'bridge)Donohoe, Brian H
Campbell, Ronnie(Blyth V)Doran, Frank
Cann, JamieDrown, Ms Julia
Caplin, IvorDunwoody, Mrs Gwyneth
Casale, RogerEagle, Maria(L'pool Garston)
Caton, MartinEfford, Clive
Cawsey, IanEnnis, Jeff
Chapman, Ben(Wirral S)Fearn, Ronnie
Chaytor, DavidField, Rt Hon Frank
Clapham, MichaelFitzpatrick, Jim
Clark, Rt Hon Dr David (S Shields)Follett, Barbara
Foster, Rt Hon DerekMcDonagh, Siobhain
Foster, Michael Jabez (Hastings)McDonnell, John
Galloway, GeorgeMcIsaac, Shona
Gapes, MikeMcKenna, Mrs Rosemary
Gardiner, BarryMackinaly, Andrew
Gerrard, NeilMcNulty, Tony
Gibson, Dr IanMactaggart, Fiona
Gilroy, Mrs LindaMcWalter, Tony
Godsiff, RogerMahon, Mrs Alice
Goggins, PaulMallabar, Judy
Golding, Mrs LlinMandelson, Rt Hon Peter
Gordon, Mrs EileenMarsden, Gordon (Blackpool S)
Griffiths, Jane (Reading E)Marsden, Paul (Shrewsbury)
Griffiths, Win (Bridgend)Marshall, David (Shettleston)
Grocott, BruceMarshall-Andrews, Robert
Grogan, JohnMartlew, Eric
Hall, Mike (Weaver Vale)Maxton, John
Hall, Patrick (Bedford)Meacher, Rt Hon Michael
Harman, Rt Hon Ms HarrietMeale, Alan
Healey, JohnMichie, Bill (Shef'ld Heeley)
Heath, David (Somerton & Frome)Milburn, Rt Hon Alan
Henderson, Doug (Newcastle N)Miller, Andrew
Henderson, Ivan (Harwich)Moffatt, Laura
Hepburn, StephenMoran, Ms Margaret
Heppell, JohnMorgon, Ms Julie (Cardiff N)
Hesford, StephenMorley, Elliot
Hewitt, Ms PatriciaMorris, Ms Estelle (B'ham Yardley)
Hill, KeithMountford, Kali
Hinchliffe, DavidMudie, George
Hoey, KateMullin, Chris
Hood, JimmyMurphy, Denis (Wansbeck)
Hoon, GeoffreyO'Brien, Bill (Normanton)
Hope, PhilO'Brien, Mike, (N Warks)
Hopkins, KelvinO'Hara, Eddie
Howarth, George (Knowsley N)O'Neill, Martin
Hoyle, LindsayOrgan, Mrs Diana
Hughes, Kevin (Doncaster N)Palmer, Dr Nick
Humble, Mrs JoanPearson, Ian
Hutton, JohnPendry, Tom
Iddon, Dr BrianPerham, Ms Linda
Ingram, Rt Hon AdamPickthall, Colin
Jackson, Ms Glenda (Hampstead)Pike, Peter L
Jackson, Helen (Hillsborough)Plaskitt, James
Jenkins, BrianPollard, Kerry
Johnson, Alan (Hull W & Hessle)Pond, Chris
Jones, Barry (Alyn & Deeside)Pope, Greg
Jones, Helen (Warrington N)Pound, Stephen
Jones, Dr Lynne (Selly Oak)Prentice, Ms Bridget (Lewisham E)
Jones, Martyn (Clwyd S)Prentice, Gordon (Pendle)
Jowell, Rt Hon Ms TessaPrimarolo, Dawn
Keen, Alan (Feltham & Heston)Prosser, Gwyn
Keen, Ann (Brentford & Isleworth)Purchase, Ken
Keetch, PaulRadice, Giles
Kelly, Ms RuthRammell, Bill
Kemp, FraserRaynsford, Nick
Kennedy, Charles (Ross Skye)Reed Andrew (Loughborough)
Khabra, Piara SReid, Rt Hon Dr John (Hamilton N)
Kidney, DavidRendel,David
Kilfoyle, PeterRobinson, Geoffrey(Cov'try NW)
King, Ms Oona (Bethnal Green)Roche, Mrs Barbara
Kirkwood, ArchyRooker, Jeff
Kumar, Dr AshokRoss, Ernie(Dundee W
Lawrence, Ms JackieRowlands, Ted
Laxton, BobRoy, Frank
Lepper, DavidRuddock, Joan
Leslie, ChristopherRussell, Ms Christine (Chester)
Levitt, TomSalter, Martin
Lewis, Ivan (Bury S)Sarwar, Mohammad
Lewis, Terry (Worsley)Sawford, Phil
Linton, MartinSedgemore, Brian
Livingstone, KenShaw, Jonathan
Lloyd, Tony (Manchester C)Sheerman, Barry
Lock, DavidSheldon, Rt Hon Robert
McAvoy, ThomasShipley, Ms Debra
McCartney, Rt Hon IanSimpson, Alan (Nottingham S)
(Makerfield)Smith, Rt Hon Andrew (Oxford E)
Smith, Angela (Basildon)Timms, Stephen
Smith, Jacqui (Redditch)Tipping, Paddy
Smith, John (Glamorgan)Tonge, Dr Jenny
Smith, Llew (Blaenau Gwent)Turner, Dennis (Wolverh'ton SE)
Soley, CliveTurner, Dr George (NW Norfolk)
Spellar, JohnTwigg, Derek (Halton)
Squire, Ms RachelTwigg, Stephen (Enfield)
Starkey, Dr PhyllisVaz, Keith
Stevenson, GeorgeWard, Ms Claire
Stinchcombe, PaulWareing, Robert N
Stoate, Dr HowardWhitehead, Dr Alan
Stott, RogerWilliams, Alan W(E Carmarthen)
Strang, Rt Hon Dr GavinWillis, Phil
Straw, Rt Hon JackWills, Michael
Stuart, Ms GiselaWinnick, David
Stunell, AndrewWinterton, Ms Rosie (Doncaster C)
Sutcliffe, GerryWise, Audrey
Taylor, Rt Hon Mrs AnnWood, Mike
(Dewsbury)Worthington, Tony
Taylor, Matthew (Truro)Wyatt, Derek
Temple-Morris, PeterTellers for the Noes:
Thomas, Gareth (Clwyd W)Mr. Jim Dowd and
Thomas, Gareth R (Harrow W)Mr. David Jamieson.

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments):

The House divided: Ayes 257, Noes 123.

Division No. 160][7.13 pm
AYES
Abbott, Ms DianeClapham, Michael
Ainsworth, Robert (Cov'try NE)Clarke, Charles (Norwich S)
Allen, GrahamClarke, Rt Hon Tom (Coatbridge)
Anderson, Donald (Swansea E)Clelland, David
Anderson, Janet (Rossendale)Clwyd, Ann
Atkins, CharlotteCoaker, Vernon
Austin, JohnCoffey, Ms Ann
Barnes, HarryCohen, Harry
Battle, JohnColeman, Iain
Bayley, HughColman, Tony
Beard, NigelConnarty, Michael
Beckett, Rt Hon Mrs MargaretCooper, Yvette
Bell, Martin (Tatton)Corbett, Robin
Bell, Stuart (Middlesbrough)Corbyn, Jeremy
Benn, Rt Hon TonyCorston, Ms Jean
Benton, JoeCousins, Jim
Bermingham, GeraldCranston, Ross
Betts, CliveCrausby, David
Blackman, LizCryer, John (Hornchurch)
Blears, Ms HazelCunningham, Jim (Cov'try S)
Blizzard, BobCurtis-Thomas, Mrs Claire
Boateng, PaulDarling, Rt Hon Alistair
Borrow, DavidDarvill, Keith
Bradshaw, BenDavey, Valerie (Bristol W)
Brown, Rt Hon Nick (Newcastle E)Davidson, Ian
Buck, Ms KarenDavies, Geraint (Croydon C)
Burgon, ColinDawson, Hilton
Butler, Mrs ChristineDean, Mrs Janet
Byers, Rt Hon StephenDenham, John
Caborn, Rt Hon RichardDismore, Andrew
Campbell, Alan (Tynemouth)Dobbin, Jim
Campbell, Mrs Anne (C'bridge)Dobson, Rt Hon Frank
Campbell, Ronnie (Blyth V)Donohoe, Brian H
Cann, JamieDoran, Frank
Caplin, IvorDrown, Ms Julia
Casale, RogerEagle, Maria (L'pool Garston)
Caton, MartinEfford, Clive
Cawsey, IanEnnis, Jeff
Chapman, Ben (Wirral S)Field, Rt Hon Frank
Chaytor, DavidFitzpatrick, Jim
Follett, BarbaraMactaggart, Fiona
Foster, Rt Hon DerekMcWalter, Tony
Foster, Michael Jabez (Hastings)Mallaber, Judy
Galloway, GeorgeMandelson, Rt Hon Peter
Gapes, MikeMarsden, Gordon (Blackpool S)
Gardiner, BarryMarsden, Paul (Shrewsbury)
Gerrard, NeilMarshall, David (Shettleston)
Gibson, Dr IanMarshall-Andrews, Robert
Gilroy, Mrs LindaMartlew, Eric
Godsiff, RogerMaxton, John
Golding, Mrs LlinMeacher, Rt Hon Michael
Gordon, Mrs EileenMeale, Alan
Griffiths, Jane (Reading E)Michie, Bill (Shef'ld Heeley)
Griffiths, Win (Bridgend)Milburn, Rt Hon Alan
Grocott, BruceMiller, Andrew
Grogan, JohnMoffatt, Laura
Hall, Mike (Weaver Vale)Moran, Ms Margaret
Hall, Patrick (Bedford)Morgan, Ms Julie (Cardiff N)
Harman, Rt Hon Ms HarrietMorley, Elliot
Healey, JohnMorris, Ms Estelle (B'ham Yardley)
Henderson, Doug (Newcastle N)Mountford, Kali
Henderson, Ivan (Harwich)Mudie, George
Hepburn, StephenMullin, Chris
Heppell, JohnO'Brien, Bill (Normanton)
Hesford, StephenO'Brien, Mike (N Warks)
Hewitt, Ms PatriciaO'Hara, Eddie
Hill, KeithO'Neill, Martin
Hoey, KateOrgan, Mrs Diana
Hoon, GeoffreyPalmer, Dr Nick
Hope, PhilPearson, Ian
Hopkins, KelvinPendry, Tom
Howarth, George (Knowsley N)Perham, Ms Linda
Hoyle, LindsayPickthall, Colin
Hughes, Kevin (Doncaster N)Pike, Peter L
Humble, Mrs JoanPlaskitt, James
Hutton, JohnPollard, Kerry
Iddon, Dr BrianPond, Chris
Ingram, Rt Hon AdamPound, Stephen
Jackson, Ms Glenda (Hampstead)Prentice, Ms Bridget (Lewisham E)
Jackson, Helen (Hillsborough)Prentice, Gordon (Pendle)
Jenkins, BrianPrimarolo, Dawn
Johnson, Alan (Hull W & Hessle)Prosser, Gwyn
Jones, Barry (Alyn & Deeside)Purchase, Ken
Jones, Helen (Warrington N)Radice, Giles
Jones, Dr Lynne (Selly Oak)Rammell, Bill
Jones, Martyn (Clwyd S)Raynsford, Nick
Jowell, Rt Hon Ms TessaReed, Andrew (Loughborough)
Keen, Alan (Feltham & Heston)Reid, Rt Hon Dr John (Hamilton N)
Keen, Ann (Brentford & Isleworth)Robinson, Geoffrey (Cov'try NW)
Kelly, Ms RuthRoche, Mrs Barbara
Kemp, FraserRooker, Jeff
Khabra, Piara SRoss, Ernie (Dundee W)
Kidney, DavidRowlands, Ted
Kilfoyle, PeterRoy, Frank
King, Ms Oona (Bethnal Green)Ruddock, Joan
Kumar, Dr AshokRussell, Ms Christine (Chester)
Lawrence, Ms JackieSalter, Martin
Laxton, BobSarwar, Mohammad
Lepper, DavidSawford, Phil
Leslie, ChristopherSedgemore, Brian
Levitt, TomShaw, Jonathan
Lewis, Ivan (Bury S)Sheerman, Barry
Lewis, Terry (Worsley)Sheldon, Rt Hon Robert
Linton, MartinShipley, Ms Debra
Livingstone, KenSimpson, Alan (Nottingham S)
Lloyd, Tony (Manchester C)Smith, Rt Hon Andrew (Oxford E)
Lock, DavidSmith, Angela (Basildon)
McAvoy, ThomasSmith, Jacqui (Redditch)
McCartney, Rt Hon IanSmith, Llew (Blaenau Gwent)
(Makerfield)Soley, Clive
McDonagh, SiobhainSpellar, John
McDonnell, John Starkey, Dr Phyllis
McIsaac, ShonaStevenson, George
McKenna, Mrs RosemaryStoate, Dr Howard
Mackinlay, AndrewStott, Roger
McNulty, TonyStrang, Rt Hon Dr Gavin
Straw, Rt Hon JackVaz, Keith
Stuart, Ms GiselaWard, Ms Claire
Sutcliffe, GerryWareing, Robert N
Taylor, Rt Hon Mrs AnnWhitehead, Dr Alan
(Dewsbury)Williams, Alan W (E Carmarthen)
Taylor, Ms Dari (Stockton S)Willis, Michael
Temple-Morris, PeterWinnick, David
Thomas, Gareth (Clwyd W)Winterton, Ms Rosie (Doncaster C)
Thomas, Gareth R (Harrow W)Wise, Audrey
Timms, StephenWood, Mike
Tipping, PaddyWorthington, Tony
Turner, Dennis (Wolverh'ton SE)Eyatt, Derek
Turner, Dr George (NW Norfolk)Tellers for the Ayes:
Twigg, Derek (Halton)Mr. David Jamieson and
Twigg, Stephen (Enfield)Mr. Jim Dowd.
NOES
Ainsworth, Peter (E Surrey)Horam, John
Amess, DavidHowarth, Gerald (Aldershot)
Arbuthnot, Rt Hon JamesJackson, Robert(Wantage)
Ashdown, Rt Hon PaddyJenkin, Bernard
Atkinson, Peter (Hexham)Keetch, Paul
Baldry, TonyKennedy, Charles (Ross Skye)
Bercow, JohnKey, Robert
Beresford, Sir PaulKing, Rt Hon Tom (Bridgewater)
Blunt, CrispinKirkbride, Miss Julie
Boswell, TimKirkwook, Archy
Bottomley, Peter (Worthing W)Laing, Mrs Eleanor
Bottomley, Rt Hon Mrs VirginiaLait, Mrs Jacqui
Brady, GrahamLansley, Andrew
Brazier, JulianLeigh, Edward
Brooke, Rt Hon PeterLetwin, Oliver
Browning, Mrs AngelaLewis, Dr Julian (New Forest E)
Bruce, Ian (S Dorset)Lloyd, Rt Hon Sir Peter (Fareham)
Burnett, JohnLoughton, Tim
Burns, SimonLyell, Rt Hon Sir Nicholas
Butterfill, JohnMacGregor, Rt Hon John
Cable, Dr VincentMcIntosh, Miss Anne
Cash, WilliamMackay, Rt Hon Andrew
Chope, ChristopherMaclean, Rt Hon David
Clappison, JamesMc Loughlin, Patrick
Clark, Rt Hon Alan(Kensington)Madell, Sir David
Clark, Dr Michael (Rayleigh)Malins, Humfrey
Clifton-Brown, GeoffreyMaude, Rt Hon Francis
Cormack, Sir PatrickMay, Mrs Theresa
Cotter, BrianMoss, Malcolm,
Cran, JamesNicholls, Patrick
Davies, Quentin(Grantham)Norman, Archie
Davies, Rt Hon David (HaltempricePaice, James
& Howden)Paterson, Owen
Dorrell, Rt Hon StephenPickles, Eric
Duncan, AlanPrior, David
Duncan Smith, IainRandall, John
Emery, Rt Hon Sir PeterRedwood, Rt Hon John
Faber, DavidRendel, David
Fallon, MichaelRobathan, Andrew
Forth, Rt Hon EricRoe, Mrs Marion(Broxbourne)
Fowler, Rt Hon Sir NormanRuffley, David
Fox, Dr LiamShepherd, Richard
Fraser, ChristopherSimpson, Keith (Mid-Norfolk)
Gale, RogerSpicer, sir Michael
Garnier, EdwardSpring, Richard
Gibb, NickSteen, Anthony
Gill, ChristopherStunell, Andrew
Gorman, Mrs TeresaSwayne, Desmond
Gray, JamesSyms, Robert
Green, DamianTapsell, Sir Peter
Grieve, DominicTaylor, Matthew (Truro)
Gummer, Rt Hon JohnTonge, Dr Jenny
Hamilton, Rt Hon Sir ArchieTrend, Michael
Hammond, PhilipViggers, Peter
Hayes, JohnWalter, Robert
Heath, David (Somerton & Frome)Wardle, Charles
Heathcoat-Amory, Rt Hon DavidWaterson, Nigel
Hogg, Rt Hon DouglasWhitney, Sir Raymond
Whittingdale, JohnYeo, Tim
Widdecombe, Rt Hon Miss AnnYoung, Rt Hon Sir George
Wilkinson, John
Winterton, Mrs Ann (Congleton)Tellers for the Noes:
Winterton, Nicholas (Macclesfield)Mr. Oliver Heald and
Woodward, ShaunMr. Tim Collins.

Question accordingly agreed to.

MR. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved,That this House welcomes the actions of the Government to reverse the industrial decline and the destruction of jobs, not least for young people. that characterised the situation while the Opposition formed the Government; welcomes the creation of over 400,000 jobs since the last election; notes the contrast between this situation and that of the Tory slow-down of 1989 to 1993 when over a million manufacturing jobs were lost; welcomes the achievements of the New Deal and its contribution to the 35 per cent fall since January 1998 in the number of young people unemployed for six months or more; believes that the sound economic policies of this Government are a better way to support industrial success and job creation than the interest rates at 15 per cent, budget deficits soaring, high long-term interest rates and boom and bust economics that were the previous Government's policy; and welcomes the strategy set out in the Competitiveness White Paper for encouraging enterprise, investment and innovation as the right way forward for Britain.