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9.11 pm
Mr. Robert Ainsworth (Coventry, North-East): The hon. Member for Beaconsfield (Mr. Smith) talked about the 500,000 jobs that have been created since the trough of the recession. He compared that with the last recession. Whose recession was that? That was also the Tory party's recession. If one picks the starting date and the finishing date carefully for statistics, one can prove almost anything.
Not long after the Government took office they created a solid bottom level of unemployment of at least 2 million people out of work. There is now a wasted generation. The real tragedy is youth unemployment and the Budget does absolutely nothing to deal with that problem. Nationally, 650,000 people under the age of 25 are out of work. In the west midlands region alone, 66,000 people are out of work, and in the metropolitan area the number is over 24,000. In some inner-city estates, it is unusual for a young male to have a job. That has been the case for over 10 years since the first Tory recession that the hon. Member for Beaconsfield mentioned. In my opinion, the Budget did very little that will affect that situation.
The Chancellor usually gives the Budget a name, such as the Budget for jobs, the Budget for Britain and the Budget for investment. He did not seem to give a name to the Budget this time. We thought he might call it the Budget for the Tory party's survival, but according to the reaction of Tory Back Benchers it was not that. It must be the no-name Budget. If the right hon. and learned
Gentleman will not give it a name himself, we will. The Queen's Speech was the "smoking out the Opposition Queen's Speech" and the best we can do for the Budget is probably The Sun offering of the "cold kipper" Budget.
The Chancellor is trying to say that it is a prudent Budget, but is it? He has slashed some capital spending, and that is hardly prudent because it only builds up problems for the future.
Mr. Kenneth Clarke:
For information, we toyed with the idea of calling it a Budget for lasting prosperity, but the Opposition have given soundbites a bad name so I decided to drop the tradition.
Mr. Ainsworth:
The Chancellor would not have got away with "the Budget for lasting prosperity". The headlines would have called him into even more ridicule had he tried to hang that title on his offering.
The Chancellor slashed capital spending. That is irresponsible because it puts off problems until tomorrow. That is exactly what the Government are doing. They plan to cut capital spending on the NHS by 26.5 per cent. over the next five years.
Over time, the party of prudence has incurred a huge increase in debt. Government spokesmen have compared the debts of some Labour-run cities with those of third-world countries and derided them by saying that Birmingham or Coventry, for example, owe more than such and such a place. But the Red Book shows that this country pays £22 billion a year in debt interest, which is more than we spend on defence or law and order and three times what we spend on transport. It is incredible that the Conservative party tries to pretend that it is a party of prudence when it has inflicted pain on people while running up such debts. It is clearly not the party of prudence, as the Chancellor would have us believe.
The increase in petrol prices coupled with the increase in vehicle excise duty are the two measures in the Budget that are causing the most anger in the country. I understand the need to discourage the excessive use of cars, but if petrol prices and vehicle excise duty are to be increased well above the rate of inflation, poor motorists will be punished. The Government have decided to settle traffic and tax problems by driving poor motorists off the road. That simply cannot justified. We should try, over time, to move the burden of taxation from excise duty on to petrol duty so that people pay tax for using their cars, not for having access to a car. In some rural and inner-city areas, people want a car to make themselves economically viable and get themselves into the job market, yet the costs of insurance and vehicle excise duty do not allow them to become car owners.
Conservative Members hold up our car industry as an example of some kind of revival, but all that we have had is inward investment. Nowadays, our car industry, apart from small companies, is completely and absolutely owned by foreign companies. We should not boast about that. I do not knock inward investment as our country needs it badly for the jobs that it brings. But the United Kingdom, Spain and Portugal have had the inward investment in the car industry. Is that the league that we want to put our country into? We boast about inward investment by Samsung in another industry, but the two countries that Samsung has invested in are the United Kingdom and Slovakia. Is that the league that we want to be in?
I agree that we need investment from wherever it comes but, as Conservative Members know, the problem that we have had for a long time is that our indigenous companies have not invested at the rate that they should. To see how that problem developed, we must look at the decline that has taken place throughout this Government's term, back through the previous Labour Government's term to the 1960s. People think that it is a natural decline and that the number of jobs provided by the car industry will inevitably fall. Jaguar, which is in my constituency, is a relative success but, over a period, it has failed to increase the number of jobs that it provides. In 1959, it employed about 5,000 people; it now employs 6,500. Over the same period, BMW has grown from 6,000 employees to 75,000 and it has now bought out the Rover group with another 30,000 employees.
A couple of years ago, Conservative Members derided the German economy and its way of doing business. They said that we would overtake Germany and become the leading economy in Europe, and that we could not have social contracts and works councils because they would ruin the economy. However, those are exactly what have applied in Germany over that 30-year period. That is exactly what applied in BMW over those 30 years. The BMW works council played a significant role in the development of job opportunities and job creation over a long period, and the result has been a tenfold growth in the number of jobs.
We ought to see some investment and some work that helps the car industry, but as in so many other areas what we get is pretence. A short time ago the Department of Trade and Industry issued a press release about the work that is being done along with the Society of Motor Manufacturers and Traders in trying to assist the small businesses that form the supply sector of the car industry. Everybody knows that the growth in jobs will be in that sector and not in the front-line companies and that there will be a need for quality research.
When we look behind the boast about the work that is being done with the SMMT, we see that about 200 companies will be involved and that 12 experts in quality have been taken to Japan for quality training so that they can help those 200 supplier companies. There are 4,000 supplier companies in the car industry and the problem is that our suppliers need a huge improvement in quality to compete on the world market. We are playing games and pretending to deal with those problems.
The country needs a Government who are actively involved in tackling these problems and not a Government who are happy to see a constant 2 million people unemployed--
Madam Deputy Speaker (Dame Janet Fookes):
Order. [Interruption.] I am sorry, but the 10-minute rule is strictly enforced.
Mr. Nick Hawkins (Blackpool, South):
Unlike the hon. Member for Coventry, North-East (Mr. Ainsworth) I entirely welcome the Budget. The problem with hon. Members such as him is that they often attempt to rewrite history. The hon. Gentleman spoke about problems in the car industry in the west midlands and about the growth of BMW, and he compared the number of employees. But he entirely forgot to mention all the trade union militancy
I want to speak about the reaction of ordinary people to my right hon. and learned Friend the Chancellor's excellent Budget, and I shall start by quoting a clothing and footwear assistant who told the Financial Times that the Chancellor had listened to the small people and thought that it was brilliant news. Those who are responsible for creating jobs in Britain are the people in the CBI. Its director general welcomed the fact that the Government had broadly stuck to the prudent economic line that the CBI recommended. He said the CBI was pleased that the Chancellor appeared to have limited tax cuts to reductions in spending and that he had resisted the temptation to go for excessive tax cuts. That is the kind of welcome that I like to hear.
On BBC 2 a Mr. Len Stone said:
The Financial Times stated that the financial markets had to be convinced that the needed combination of tough spending control and economic growth would be delivered, provided that the Chancellor convinced them that he would be able to cut interest rates. I hope that the Financial Times is right about that because that too will help my constituents.
I am particularly pleased that my right hon. and learned Friend listened to submissions by me and by many of my hon. Friends about help for the elderly and especially for those who require now, or may require, long-term care. My constituency has the highest proportion of pensioners of any constituency and I was particularly pleased not only at the measures in the Budget but at the way in which they have been received. In particular, Sally Greengross, director general of Age Concern, is quoted in The Daily Telegraph as saying:
I was especially pleased that my right hon. and learned Friend dealt with the difficulty that existed in relation to employee share ownership schemes. As one who, for a long time before coming to the House, supported employee share ownership, the sharing of companies' successes and the involvement of employees in those successes, I was delighted that Gill Nott, chief executive of Proshare, said about my right hon. and learned Friend's measures:
I am especially concerned to ensure that there should be further help for the construction industry and I declare my interest as a consultant to the Building Employers Confederation. In that regard, there has been a broad welcome to the expansion of the private finance initiative. Sir John Banham, chairman of Tarmac, is quoted in the Independent as saying:
The chairman of Siebe, Mr. Barrie Stephens, is quoted in the Financial Times as saying:
I especially welcome the fact that three steps have been taken towards a 20p basic rate in income tax, which helps both the lower-paid and savers. It is crucial that the Government's economic strategy should benefit the thrifty, especially thrifty pensioners. Income tax cuts that my right hon. and learned Friend has introduced will benefit 26 million people. Now one quarter of all taxpayers pay tax at only 20p.
I am delighted that my right hon. and learned Friend has cracked down on fraud and waste, and that he has helped to provide more provision for schools, for law and order and for health, the same three priorities that I and many of my right hon. and hon. Friends had urged on him.
By contrast, Labour's sums do not add up. The hon. Member for Dunfermline, East (Mr. Brown) had five questions from myself and other hon. Members. He failed to answer a single one in his speech. He cannot answer them because his sums do not add up. Labour cannot oppose the 24p basic rate because it knows that that rate is popular. Its policies are as bankrupt as it would seek to make the country if it were ever unfortunate enough to be in power.
9.21 pm
"My job will be secure. The Budget is good for industry, steady growth and people will buy more vans, especially the contract fleet."
"Older people who are worried about paying for care will be delighted".
Jill Pitkeathley of the Carers National Association said:
"We are delighted that this will relieve the worries of many families".
It is rare that I quote with approval anything said by a general secretary-elect of Unison, but even Mr. Rodney Bickerstaffe was heard to say on BBC Radio 4:
"Anything that's going to help the elderly is going to be useful. It's a step in the right direction. So far as the poorest earners are concerned, there is something for them".
Even if Opposition Members do not recognise it, the country recognises that the Budget has been prudent, sensible and helpful.
"This is the best Budget for employee share ownership that we have seen in many years".
On public opinion, a Mr. Steve Spurling, a bank employee from Crawley, was quoted on BBC Radio 4 as saying about the Budget:
"I'm personally pleased with the overall package introduced covering a range of areas. It means to me about £20 a month which is a tangible sum, something I can actually get my hands on".
"The Chancellor is on the right track and the measures he has put in place provide the best prospects for the UK building industry".
In relation to the housing market, the chief executive of the Royal Institute of Chartered Surveyors is quoted in the Independent as saying:
"On the housing market, we are pleased that there has been no attempt at a quick fix. We have argued for some time that special help for housing will not work because the problem is not one of affordability but of confidence".
I agree with that and I am sure that my right hon. and learned Friend's Budget measures will bring back that confidence.
"I am very enthusiastic. The Government has looked at the economy dispassionately and sensibly and showed that they are good managers. It is a prudent and balanced Budget."
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