The Economy

Part of Council Tax Rebate – in the House of Commons at 6:50 pm on 31st March 2009.

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Photo of Lindsay Hoyle Lindsay Hoyle Labour, Chorley 6:50 pm, 31st March 2009

I totally agree with that, and I shall touch on the point that my hon. Friend makes about Wales.

Support such as I am outlining would enable employers to avoid immediate redundancies and to retain essential staff and skills, and if it were linked to training in the workplace, it would provide the added benefit that we would be best placed when we come out of the recession—we would not have lost the skills and we would not have missed out on training. This country has to be best placed, because when the dam bursts the opportunity will be there before us and we must ensure that our people are in place. We will not be able to go round the country saying, "Who has got this skill? Who has got that job? Come back to work here." That will not be good enough. We have to support these people now.

Such support would enable employers to avoid immediate redundancies and the scheme should also be about extra training, because long-term work force investment could be provided in this way. The TUC has estimated that, for a cost of £1.2 billion annually, excluding the training costs, up to 600,000 workers could be protected each year through such a supporting measure. The funding could be drawn from the ending of the VAT reduction, and there would be a considerable sum left over to target elsewhere. As I have said, we could maintain manufacturing, which should be the backbone of a successful economy in the future; we should not be reliant on the financial services. We have to get back to where we were and we have to learn from the mistakes that we have seen. The previous Government and this Government have fallen into the trap: they gave up on manufacturing when they should have been supporting it, investing and making sure that we were best placed. Let us not make those mistakes again. It is crucial that we get things right this time for the future of manufacturing.

Across Europe, Governments have recognised the benefits of such a scheme. We have already seen the support that has been given in, for example, Germany, France, Spain, the Netherlands and Italy. Closer to home, the Welsh Assembly Government introduced a wage subsidy scheme called ProAct at the beginning of the year; a scheme that took only two months to set up has become operational and now benefits many businesses and workers across Wales, and quite right too. If Wales can do it, so can we. Furthermore, the introduction of a short-time wage subsidy is supported by business leaders such as the Federation of Small Business, by major corporate organisations such as Corus and JCB, and by many trade unions; this is supported across industry and across the trade unions. We must make keeping viable businesses open and protecting jobs the priority if we are to come out of this recession in a stronger position. If we fail to do so, there is a danger that we will lose many of the much-needed skills that are vital to ensuring that our economy is the best. I urge the Government to introduce such a scheme without delay.

The second policy that is urgently needed is a change to the way in which statutory redundancy pay is calculated. I am sure that my right hon. Friend the Financial Secretary is aware of the aims of my Statutory Redundancy Pay (Amendment) Bill. Some 200-plus MPs have signed the early-day motion, and the Bill has had a Second Reading and I hope that it will now go into Committee. It is critical that the Government pick up this issue in the Budget. There is a real belief that it would make a difference, so I hope that the Government will not let the people of this country down. Let us reduce the two-year period to one, and let us be honest and stand by our manifesto pledge.

I also urge my right hon. Friend to reject the proposal for a minimum payment guarantee, floated by the CBI. There is a real danger that many workers would lose out as it would be lower than the current statutory cap.

Workers up and down the country are facing the threat of redundancy through no fault of their own. We need to do something to help them. Many hard-working people are looking forward to the Budget. People who have saved money and are dependent on those savings for an income are now being failed. We need a scheme that would provide a guaranteed minimum return for savers, through a national savings scheme. That would guarantee that those pensioners who have looked after their money and saved all their lives would get a return when they need it.

Such a scheme would bring investment into a bank, and that bank should be run by the Post Office. It could provide a guaranteed return to people who save with it, and it would ensure competition for the major banks. We own a bank—Northern Rock—and we should use that. The Royal Mail does not have a banking licence, so we should use the bank that we already own. We need to ensure that there are banking services in rural and urban areas, and we need a bank that will take on the likes of RBS, challenge them and show them what a bank should be. Our bank should look after businesses, its customers and its investors. Pensioners need to know that their money will be safe and protected. We should have a guaranteed minimum return on savers' money. We could fund that by reversing the VAT cut early. The cut has served its purpose, but it should now be reversed.

We are the party that should be standing by people. We should stand by businesses. We have lots of good ideas, so let use those ideas. Let us work together to formulate a future for our constituents and businesses. Manufacturing needs our help. Up and down the country people are losing their jobs. Nobody should have to lose their job when we can do something about it. My proposals would be a good way forward and protect manufacturing. Let us drive forward together and bring it on.

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