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"Germany is in a full-fledged recession, with unemployment the highest since the Weimar republic and with industrial production having fallen by over 3 per cent. in December alone."

How many of those who have watched the coverage of the United States presidential primary in New Hampshire can deny the problems of the United States economy, where the motor industry contracted by 8 per cent. last month? The Opposition make play of the losses made by Ford, but Ford in the United States lost £2.2 billion last year. Manufacturing production there fell by 1 per cent. last month.

Mr. Beaumont-Dark : I shall ask my hon. Friend and question similar to the one that I asked the hon. Member for Dagenham (Mr. Gould), who seemed shy to answer. If it is true that our economy is so bad and that this country really is in the knacker's yard, why do 60 per cent. of investors, who have to make a profit, come to this country? That is six times the number going to Germany and three times the number going to France. Would my right hon. and learned Friend rather trust an investor or those people who are aching for office? Who is likely to do the right thing?

Mr. Mellor : I am grateful to my hon. Friend for those relevant remarks. If one considers figures for international investment in the United Kingdom, one finds that, at constant 1990 prices, in the six years to 1989 there was nearly £8 billion of inward investment from the United States, culminating in an investment of more than £4 billion in 1989. What was the figure during the last full year of the last Labour Government? In 1978, it was £321 million. That is the difference. Consider the figures for Japan. In 1987, there was £657 million of investment from Japan ; in 1988, it was £768 million ; and, in 1989, it was £1.12 billion. What was the figure in the last year of the last Labour Government? In 1978, it was minus £10 million. That is the difference between our record and that of the Labour Government.

Mr. Geoffrey Robinson : Does the Minister accept that this country has been in uninterrupted recession for six quarters? No other major industrial economy has faced that situation. I agree that other economies are slowing down and perhaps going through recession, but that does not make it right that we have been in recession for a year and a half and have no prospect of coming out of it. That only reinforces the need to do something about it. What does he intend to do?

Mr. Mellor : The hon. Gentleman sounds as confused as when he was mismanaging Jaguar all those years ago. He is wrong. Australia, Canada and Sweden have all been in recession for longer. If he is interested, I will give him the figures. Since the beginning of 1990, only two of the 14 largest economies--Japan and Denmark--have never experienced a quarter on quarter fall. Six quarters for 14 economies amount to 84 movements and 34 of them have been downwards. That is a sign of the extent of international problems.

Mr. Gould : Since the hon. Gentleman is clearly a master of this part of his brief at any rate, can he tell us which of the countries to which he referred has enjoyed or suffered six successive quarters of officially defined recession?

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Mr. Mellor : The hon. Gentleman is such a master of his brief that he cannot even put the British position right. We have not had six successive quarters of falling growth. Growth did not fall in the third quarter of last year.

Mr. Gould : Answer the question.

Mr. Mellor : I have given the answer. I have told the hon. Gentleman that his premise is completely false. He should leave others to decide who is on top of their brief.

Mr. Foulkes rose --

Mr. Mellor : I shall not give way to the hon. Gentleman. The Opposition find themselves in the eminently discreditable position of having to talk down not only the efforts of the Government, but those of many other people in our economy who have performed well. It is not just we who object to that. Did the right hon. and learned Member for Monklands, East and the hon. Member for Dagenham see the speech made by Sir John Banham yesterday? He said : "incessant politicisation"

of the economic situation was causing the very lack of confidence that

"is at the root of the current recession We are building the right partnership for Government and industry."

Mr. Gould : Let us have the election.

Mr. Mellor : I think that the hon. Gentleman will get this election. If the speech that he made was a dry run for what he intends to say then, he has every reason to be worried about the outcome.

The climate for recovery has been established. Inflation is at 4.1 per cent., within a tenth of a percentage point of Germany's inflation rate. Producer prices are the lowest for a quarter of a century and interest rates have come down by 4.5 per cent. from their peak. Interest rates in this country have experienced seven downward movements, while German rates have gone up 4 per cent.

I notice that the right hon. and learned Member for Monklands, East has reverted to one of his more facile arguments, as he is again calling for a reduction in interest rates. He had gone off that argument for some time. The right hon. and learned Gentleman was extremely querulous about noise when he was speaking. It would be interesting to know if he now has an answer about interest rates. The right hon. and learned Gentleman may call for a reduction in interest rates, but is he aware that Cre dit Lyonnais has calculated that interest rates will increase by 4 per cent. under a Labour Government? The London Business School has said that a Labour Government would put up interest rates by up to 3 per cent. Kleinwort Benson has calculated that interest rates would rise by between 2 and 4 per cent. DKB bank and Nomura Research Institute have calculated that they would go up by 2 per cent. The right hon. and learned Gentleman may ignore those calculations, but the public will not. James Capel and Barclays de Zoete Wedd have said that they will increase by 1 per cent. UBS Phillips and Drew, Midland Montagu, Goldman Sachs and the Confederation of British Industry have all said that interest rates would rise under Labour. That is why the Labour party is not trusted. The right hon. and learned Gentleman's puerile response does him no credit.

Conditions for recovery exist, but the Labour party has no policies to improve them--it would make them worse.

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Let us consider what the Labour party proposes for the business community--the 28 ways in which it proposes to increase the burdens on business. Social audits would interfere with investment decisions. Labour would return to the trade unions the power of secondary picketing and remove from the courts the right to sequestrate the assets of trade unions.

How many people want to go back to the days when flying pickets held the nation to ransom? What does the right hon. and learned Member for Monklands, East say about the fact that, in 1991, 800,000 days were lost in industrial disputes whereas in 1979, 29 million days were lost? What has the Labour party learnt about the problems that can be caused by out of control trade unions? Some people put their mistakes behind them. The Labour party puts its mistakes into policy documents and seeks to give the kiss of life to ideas that were the kiss of death in the 1970s.

Mr. Ronnie Campbell (Blyth Valley) : The Government having decided to abolish wages councils, do they believe in a low wage economy for British people?

Mr. Mellor : The hon. Gentleman must bear in mind the fact that the consequences of the Labour alternative--the minimum wage--would massively increase unemployment. That is not just the view of Conservative Members but of leading figures in the trade unions. Only one newspaper supported Labour party policy on the minimum wage, and that was the Morning Star.

Mr. Campbell : On a point of order, Mr. Speaker. I asked the Minister a question and he has not given me an answer. Does he believe in a low wage economy for the British people? I have not had an answer to that question.

Mr. Speaker : It frequently happens.

Mr. Mellor : The hon. Member for Blyth Valley (Mr. Campbell) is well past his yell-by date. [ Hon. Members :-- "Answer."]

We had the commendation from Labour Front Bench spokesmen of the social charter, which would prevent Mr. Delors's greatest fear--that Britain would be a paradise for inward investment. That would worry Labour Members if they were rational. Just as the Labour party is trying to advocate the social charter, we learn from the Financial Times today that the Germans are proposing to move away from it. Talking about a package of measures designed to improve inward investment into Germany drawn up by the Economics Ministry, it said :

"The package is an attempt to meet the growing chorus of complaints from German industry that high wage and tax costs and an excessive burden of social and environmental spending are driving German and foreign investors alike away from the market."

What is happening is typical of Labour Members. They cannot tell the difference between a bandwagon and a sinking ship, and they are leaping on to the idea of the social charter just as people in Europe are beginning to realise that it does not work.

The Labour party has no serious answers on those issues. One simply gets bogus propositions, such as the recovery package that is supposed to cost £1 billion, £800 million of which is to be on training. Perhaps the right hon. and learned Member for Monklands, East can answer an important question. Is £800 million on training and an extra £200 million on other matters supposed to be able to

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transform an economy of £600 billion, with over £200 billion of public expenditure? The whole thing is risible and an insult to the intelligence of the British public.

It becomes even more of a nonsense when one considers that the Labour party proposes to pay all trainees on training schemes the minimum wage. So unless Labour is prepared to cut the number of trainees, out of that £800 million extra more than £600 million will have to go to top up the amount of money paid to trainees, with no benefit whatever. What is Labour's answer to that? If the right hon. and learned Member for Monklands, East will cease his selective reading of the Secretary of State's book, he might care to answer that question.

The right hon. and learned Gentleman, who is not having good week--even his hon. Friends are getting dissatisfied with him--will be thought to be clowning around when he goes before the public with a recovery package of £1 billion and it turns out that more than £600 million of it will be needed to top up the money going to existing trainees and will not add one to the number of people being trained. Mr. D. N. Campbell-Savours (Workington) rose--

Mr. Mellor : I will not give way to the hon. Gentleman, who has not been present for most of the debate.

Labour cannot even agree on whether the recovery package will be a priority. The deputy leader of the Labour party said that the recovery package would be paid for only when the recovery had taken place. I sometimes think that the right hon. Gentleman, who spends half his time as a novelist and half as a politician, is getting his roles confused. It is the novels he should be making up as he goes along, not the politics.

Mr. Dicks : Is my right hon. and learned Friend aware that the leader of the Labour party said recently on television that the recovery package would take place as a result of economic growth? In other words, if there is economic growth after four or five years, that is when Labour would introduce its recovery package.

Mr. Mellor : Exactly.

In the past two weeks, the right hon. and learned Member for Monklands, East, the hon. Members for Oldham, West (Mr. Meacher) and for Dunfermline, East (Mr. Brown), and the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) twice, have tried to answer the simple question whether that so -called recovery package, which is entirely bogus, will be introduced straight away, but they cannot agree among themselves. No wonder the right hon. and learned Member for Monklands, East had to acknowledge today what a muddle and a mess the Labour party is in. He had to admit that it is about to produce a document which sets out its spending plans and the tax implications of those. So the Labour party will not produce a document just yet.

Mr. David Blunkett (Sheffield, Brightside) : Will the Chief Secretary answer one simple question? When will his own recovery programme be implemented?

Mr. Mellor : Everyone in the forecasting community accepts--the Governor of the Bank of England said so yesterday--that there will be a recovery during the course of this year. That would not happen if there were the kind of programme that the Labour party wants to carry into effect. [ Hon. Members :-- "Answer the question."]

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If the right hon. and learned Member for Monklands, East has reached the conclusion, after the mess and confusion of the past few weeks, that he now needs to produce a document to say what Labour will spend and what that will cost in taxation, why does he not produce it now? Why must he wait?

I was interested to see a Labour party publication entitled "Woman Today" with a competition which says :

"Win a day in Parliament. All you have to do is say in no more than 100 words what you think the priorities of a Labour government should be".

So we know that we must wait until those good ladies have sent in their answers before the right hon. and learned Gentleman can produce his document. We really want to know not what people must do to win a day in Parliament but what they must do to win a dinner at Luigi's. Perhaps they must make Labour's tax plans add up.

No amount of bluster and continuous talking will allow the right hon. and learned Gentleman to escape from the fact that he cannot bring home the bacon for his hon. Friends, as a result of which they are mouthing their dissatisfaction to the press. They are prepared to put up with the orthodoxy so long as it looks as though it will deliver electoral victory.

Labour's tax plans do not convince. They would commend themselves only to the boxing promoter responsible for finding Mr. Frank Bruno's next opponent, because they are guaranteed to stand up for not more than three minutes. In every test for a credible alternative Government, the Labour party has failed to find a policy that remotely commends itself to anybody who believes in the recovery of this country.

The fact is that in recent months we have increased our exports to other European countries by 5 per cent., that for the third year running our share of world trade in manufactures has increased, and that we have a climate fully competitive with that anywhere else in the European Community. All that would be put at risk by the Labour party's tax-and- spend policies. Today the Opposition have had yet another opportunity to prove that they are fit for office, and they have taken yet another opportunity to prove that manifestly they are not.

Question put, That the original words stand part of the Question :--

The House divided : Ayes 211, Noes 311.

Division No. 87] [9.59 pm

AYES

Adams, Mrs Irene (Paisley, N.)

Alton, David

Anderson, Donald

Archer, Rt Hon Peter

Armstrong, Hilary

Ashley, Rt Hon Jack

Banks, Tony (Newham NW)

Barnes, Harry (Derbyshire NE)

Barnes, Mrs Rosie (Greenwich)

Barron, Kevin

Battle, John

Beckett, Margaret

Beith, A. J.

Bell, Stuart

Bellotti, David

Benn, Rt Hon Tony

Bennett, A. F. (D'nt'n & R'dish)

Benton, Joseph

Bermingham, Gerald

Bidwell, Sydney

Blair, Tony

Blunkett, David

Boateng, Paul

Bradley, Keith

Bray, Dr Jeremy

Brown, Nicholas (Newcastle E)

Caborn, Richard

Callaghan, Jim

Campbell, Menzies (Fife NE)

Campbell, Ron (Blyth Valley)

Campbell-Savours, D. N.

Canavan, Dennis

Carlile, Alex (Mont'g)

Carr, Michael

Clark, Dr David (S Shields)

Clelland, David

Clwyd, Mrs Ann

Cohen, Harry

Cook, Frank (Stockton N)

Cook, Robin (Livingston)

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Column 428

Corbett, Robin

Corbyn, Jeremy

Cousins, Jim

Cox, Tom

Crowther, Stan

Cryer, Bob

Cummings, John

Cunliffe, Lawrence

Cunningham, Dr John

Dalyell, Tam

Darling, Alistair

Davies, Rt Hon Denzil (Llanelli)

Davies, Ron (Caerphilly)

Davis, Terry (B'ham Hodge H'l)

Dewar, Donald

Dixon, Don

Dobson, Frank

Doran, Frank

Duffy, Sir A. E. P.

Dunnachie, Jimmy

Dunwoody, Hon Mrs Gwyneth

Eadie, Alexander

Edwards, Huw

Enright, Derek

Ewing, Harry (Falkirk E)

Ewing, Mrs Margaret (Moray)

Fatchett, Derek

Fearn, Ronald

Field, Frank (Birkenhead)

Fields, Terry (L'pool B G'n)

Fisher, Mark

Flannery, Martin

Flynn, Paul

Foot, Rt Hon Michael

Foster, Derek

Foulkes, George

Fraser, John

Fyfe, Maria

Galbraith, Sam

Galloway, George

Garrett, John (Norwich South)

Garrett, Ted (Wallsend)

Gilbert, Rt Hon Dr John

Godman, Dr Norman A.

Golding, Mrs Llin

Gordon, Mildred

Gould, Bryan

Grant, Bernie (Tottenham)

Griffiths, Nigel (Edinburgh S)

Grocott, Bruce

Hain, Peter

Hardy, Peter

Harman, Ms Harriet

Hattersley, Rt Hon Roy

Haynes, Frank

Heal, Mrs Sylvia

Healey, Rt Hon Denis

Henderson, Doug

Hinchliffe, David

Hoey, Kate (Vauxhall)

Hogg, N. (C'nauld & Kilsyth)

Hood, Jimmy

Howarth, George (Knowsley N)

Howells, Geraint

Howells, Dr. Kim (Pontypridd)

Hoyle, Doug

Hughes, Robert (Aberdeen N)

Hughes, Roy (Newport E)

Hughes, Simon (Southwark)

Ingram, Adam

Janner, Greville

Johnston, Sir Russell

Jones, Barry (Alyn & Deeside)

Jones, Ieuan (Ynys Mo n)

Jones, Martyn (Clwyd S W)

Kaufman, Rt Hon Gerald

Kilfoyle, Peter

Kinnock, Rt Hon Neil

Kirkwood, Archy

Kumar, Dr. Ashok

Lambie, David

Lamond, James

Leadbitter, Ted

Leighton, Ron

Lestor, Joan (Eccles)

Lewis, Terry

Litherland, Robert

Livingstone, Ken

Lofthouse, Geoffrey

Loyden, Eddie

McAllion, John

McFall, John

McKay, Allen (Barnsley West)

McLeish, Henry

Maclennan, Robert

McMaster, Gordon

McNamara, Kevin

Madden, Max

Mahon, Mrs Alice

Marek, Dr John

Marshall, Jim (Leicester S)

Martin, Michael J. (Springburn)

Martlew, Eric

Maxton, John

Meacher, Michael

Meale, Alan

Michael, Alun

Michie, Bill (Sheffield Heeley)

Michie, Mrs Ray (Arg'l & Bute)

Mitchell, Austin (G't Grimsby)

Moonie, Dr Lewis

Morgan, Rhodri

Morley, Elliot

Morris, Rt Hon A. (W'shawe)

Morris, Rt Hon J. (Aberavon)

Mowlam, Marjorie

Mullin, Chris

Murphy, Paul

Nellist, Dave

Oakes, Rt Hon Gordon

O'Brien, William

O'Hara, Edward

Orme, Rt Hon Stanley

Parry, Robert

Patchett, Terry

Powell, Ray (Ogmore)

Prescott, John

Primarolo, Dawn

Quin, Ms Joyce

Radice, Giles

Randall, Stuart

Redmond, Martin

Rees, Rt Hon Merlyn

Robertson, George

Robinson, Geoffrey

Rooker, Jeff

Rooney, Terence

Ross, Ernie (Dundee W)

Ruddock, Joan

Sheerman, Barry

Sheldon, Rt Hon Robert

Shore, Rt Hon Peter

Short, Clare

Skinner, Dennis

Smith, Andrew (Oxford E)

Smith, Rt Hon J. (Monk'ds E)

Smith, J. P. (Vale of Glam)

Snape, Peter

Soley, Clive

Spearing, Nigel

Steinberg, Gerry

Stott, Roger

Strang, Gavin

Straw, Jack

Thomas, Dr Dafydd Elis

Thompson, Jack (Wansbeck)

Turner, Dennis

Vaz, Keith

Walley, Joan

Wareing, Robert N.

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