Budget Resolutions and Economic Situation

Part of the debate – in the House of Commons at 7:45 pm on 14th April 2003.

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Photo of Mr Iain Luke Mr Iain Luke Labour, Dundee East 7:45 pm, 14th April 2003

I accept that point and will address it later in my speech. However, the hon. Gentleman's party's policy would create even further chaos. He believes in divorce from the United Kingdom. That would lead ultimately to job losses and an outward flow of investment.

The nature of this Budget is to consolidate the progress that we have made so far and to continue to foster, throughout Britain, economic strength and social justice. I welcome the Chancellor's commitment to encourage and help to harness the distinctive strengths of the nations and regions of this country, assisting them to rise to the challenge of making their skills, innovations and enterprise world class. There is a series of structural problems that Parliament will have to address, in conjunction with the Scottish Executive, to ensure that Scotland enjoys and shares in that wealth. One issue that the Chancellor should take up with his opposite number in the Scottish Parliament is that of doing away with Scottish Enterprise, and putting in place a much better and more interventive means of implementing Government policy—such as we had in the days of the old Scottish Development Agency, which could take an issue in its hands and resolve it. We also have to create cross-border institutions between this Parliament and the Holyrood Parliament, so that we can discuss structural issues and find ways to resolve them.

Hon. Members should rest assured that Scotland and Dundee are ready to play their part in creating a world-class innovative economy in the UK. As I have said, in Scotland things are getting better. However, I fully accept that things have yet to be done to ensure that Scotland, Dundee and all parts of the UK share in the general prosperity that is enjoyed in other, more affluent, areas of the country.

There has been much comment to the effect that this Budget introduces a series of standstill measures. Nothing could be further from the truth. In this Budget, the money to finance innovations in education, science and enterprise is measured to ensure that we are spending enough to ensure that the growth that we have created so far is maintained and improved on. It will expand our skills base and, as a result, increase our productivity and competitiveness. In that context, I welcome both the extra £3 billion being invested in the sciences and activity to aid research and the pioneering of new technology. Allowing Britain to lead the world in new discoveries means that we create new industries and new jobs.

It is also right that we should do much more to encourage universities to assist in that process—a cause that is close to the heart of my right hon. Friend the Secretary of State for Trade and Industry, and one of which I am well aware, given the crucial roles in the regeneration of Dundee and Tayside played by the two universities in my city.The university of Dundee leads the way in medical biotechnological research, an area referred to by my right hon. Friend in her introduction, and is tipped as the university most likely to discover the underlying causes of cancer. It is already a world beater in promoting cures and treatments to counter that illness.

The university of Abertay, Dundee, has also played a significant role in the regeneration of my city's economy by attracting so many students to its unique IT-based courses. The university is an acknowledged leader in the field of computer games technology and has played a prominent role in several DTI-sponsored visits to the far east and Japan.

Those two universities are a microcosm of the UK academic scene and show what can be done, and what potential there is, when academic research can be linked to the creation of new products, the promotion of industrial development and aiding urban and economic regeneration. As a Government, we need to ensure that all UK higher education establishments committed to research are funded fully and fairly. We should do away with the golden triangle of selective and prestigious universities that dominate research—a point made earlier in the debate and also by the principal of Abertay university when I spoke to him on Friday. Every academic institution should be committed to research and to the promotion of that research for the benefit of all.

Research into oil and gas extraction techniques would be of enormous benefit to Britain, and to Scotland, especially in the technically difficult and demanding North sea oilfields. Recently, Professor Kemp delivered a talk in the Palace on the extent of the life of North sea oil and gas. In response to a question from me, he openly admitted that not enough was being spent on promoting innovation to tackle the problems. He made the point, which was fully accepted by all who attended the meeting, that, as well as changing the price ratios, the life of those North sea fuels could be extended by ensuring that more was spent on innovation. I hope that the DTI Minister with responsibility for those matters will attend a meeting of the United Kingdom Offshore Operators Association all-party group to talk about the Government's proposals on such matters.

We need to do more for small businesses. I am a member of the all-party group on small businesses and recently initiated a debate on the contribution of UK small businesses to our economy. The Opposition show a lack of knowledge of the situation for small businesses, as we saw when Mr. Yeo, who opened the debate for the Opposition, skirted and avoided my question to him.

Last year, despite the downturn in the global economy, there was an increase of 14 per cent. in the number of small businesses created. That growth was shared north of the border, although not to the same extent. It is easier to create a small business in the UK than in Europe, and takes less time, because there is less regulation.

I liaise closely with the Federation of Small Businesses in Scotland. Last year, the federation conducted a survey in which concern was expressed that small businesses could not achieve and sustain real growth. They lacked easy access to investment capital, so I welcome the measures announced in the Budget that will pave the way for the creation of small business investment companies. Some people claim that those measures will not do very much, but I believe that, by making funds available up-front, they will take us some way along the road towards the creation of an environment in which small and medium-sized enterprises can achieve their full growth and potential, thus creating more jobs for the British economy.

The Budget and its merits have been talked down by the press. However, it is a milestone; it is a measurement of the progress that we are making in achieving a better Britain where social justice is firmly established through economic strength. Our success will lead to a further term in office for the Labour Government after the next general election. The British people, in their heart of hearts—whether those hearts be Conservative, Labour or Liberal, Scottish, Welsh, Irish or English—know and accept that this is the only way forward. It is the Labour way forward and the right way forward for Britain.