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6.11 pm
Mr. Barry Sheerman (Huddersfield): The powerful oration of the hon. Member for Carshalton and Wallington (Mr. Forman) on supply side economics and much else could have been his curtain-raiser before joining us on the Opposition Benches. The only part of his speech that rang a little hollow was his mock confidence that he will still sit on the Government Benches after the next election.
I agree with the hon. Gentleman that, too often in the House, we make speeches of the yah-boo variety, and even the best speeches contain an element of that to
maintain one's party and political credibility. When we accept the global dimensions of our problems, however, there is some convergence of party policy--although we do not like to admit that in public too often. It does us harm as Members to pretend that the Opposition are totally opposed to everything that the Government do and that the Government are opposed to every policy initiative that we take, and part of my speech will be on that theme. I intend to refer to a mixture of matters, some of which the hon. Gentleman might agree with, and others--some good party political stuff--that am I sure he will not.
There is no better example of our oppositionist debates in the House than our debates on the economy. That is not surprising, because the Government's handling of the economy is at the heart of our responsibilities as politicians. Our wealth-creating capacity and ability as a nation, both now and in the future, are central to our welfare. We must understand not only the present, but how economic policies have developed in this century--particularly in the modern era, post-1945.
It is our duty also to scrutinise the present and to see how current policies are affecting the lives of our constituents. But we would be dishonest if we did not also look at the way in which the economy might develop in the next 20 to 25 years. As politicians and Members of Parliament, we must look forward to 2020 and 2025 and try to see how wealth will be created in this country and how our constituents, and their children and grandchildren, will earn a living. That is our duty--to look at the past and learn lessons, fearlessly to scrutinise the present and to look carefully at how we can plan for the future.
Lord Healey, when he was Chancellor, said that the British economy was
That supertanker is on a much longer journey, on a much broader ocean, than my noble Friend realised when he made that statement, and it will take any incoming Labour Government a long time to reposition that supertanker and rechart its direction. We shall inherit the Government's policies of the past 16 years, and it will take some time to eliminate the poorer polices and modify those that we find acceptable.
We deceive our constituents and delude ourselves by pretending that there are fundamental differences between the parties when, in truth, there is sometimes a convergence of policy. Of the three major aspects of policy of the post-war Labour Government, the one dealing with the economy--promoting full employment and influenced by Keynesianism--was borrowed from the Liberals; Keynes was a noted Liberal, as we all know. Although Labour built the notion of a health service that was free and open to all, the welfare state policy was based on the Beveridge report--Beveridge was another Liberal. We could say ruefully that the only one of the three policies that genuinely came from Labour was that on public ownership, which came from Morrison. I leave the House to judge which of the policies Labour was most successful in pursuing. I shall come back to that subject in a moment.
We have heard much today about the performance of the British economy in terms of international rankings, and I do not want to be one of those saying that we have slipped from 13th to 18th in the world prosperity league--enough hon. Members have done so, and there is sufficent
evidence that there are worrying aspects of our economy's recent performance. The Chancellor of the Exchequer speaks as if the Government were responsible only for the past three or four years and, within that period, had no real responsibility for the worst recession that this country has had for 50 years. That was all part of the past; something for which the Government were not responsible.
Conservative Members display a strange logic when speaking on the subject. They all know that the British economy led the European economy into recession, but Minister after Minister--and many central office-fuelled Back Benchers--now says, "Aren't we doing well? The German economy is going down the tubes, the French economy is in trouble and the Spanish are struggling." Do they not realise that those countries are not only our competitors but our main customers? If they are heading for another recession. We may follow them into recession this time, and we shall all end up the poorer.I do not understand that logic. We are all in the economy together. I thought that Europe was about helping each other, trying to make sure that all our economies are supportive of each other--albeit in a competitive framework--and that we all survive better, as a wealthier part of the globe, as a consequence. That was why I was disappointed with the Chancellor's speech, which never aimed to get beneath the surface of the argument.
To everyone's surprise, the Government asked for this debate on the economy. In a major debate on the economy, it is not good enough for the Chancellor's speech to be a big puff for the latest chairman of the Conservative party's ambition to get a feel-good factor going. We all know that the Chancellor came to the House to proclaim that very soon, we shall never have had it so good. It was a long but not a thoughtful speech. I have heard him make good speeches, but today's was superficial, dwelt on the surface of things and will give his reputation little lustre.
To return to our responsibilities for scrutinising the economy, after a cool and serious appraisal of the past, present and future, the next step is to find ways of tackling our weaknesses and building on our strengths. We heard little of that from the Government. The way to do it is by spreading best practice and learning from our best competitors, wherever they are in the world. We cannot consider only one model, such as that which was always rammed down our throats when people said that we would never be as good as the Germans and that we must copy them or the Swedes. We must always seek the very best practices.
The competitive edge in the world has shifted from Europe to other countries; it has remained to a remarkable degree in the United States, which is still a very competitive, active and efficient economy. In the fashion for looking at the little tigers, the big tiger and other best practice, we sometimes neglect the economy across the Atlantic, which, by all criteria, is still doing pretty well.It is not without problems, but no economy is without those.
There is no excuse for not tackling the inability of our manufacturing industry to do better. I intervened on the Chancellor in the most worrying part of his speech, when he glossed over the period under Baroness Thatcher, when we lost so much of our manufacturing capacity. In analysing what we have to do now--not dwelling in the past, but asking how we get it right--one of the problems
for any politician is tackling the base from which we have to work. How big is our manufacturing sector? It is perilously close to, or just under, 20 per cent.--one fifth of our gross domestic product.
The Chief Secretary to the Treasury (Mr. William Waldegrave):
The hon. Gentleman is making an interesting and thoughtful speech. He told us to look across the Atlantic. It is wise not to forget that great economy and its success, but its proportion of manufacturing is comparable with ours. What lesson does he draw from that?
Mr. Sheerman:
The United States economy is very different from ours. Many commentators would say that we must consider the whole of north America rather than only the United States. I would lump Mexico and Canada in with the United States if I were making such a comparison. The right hon. Gentleman makes a fair point.
Let us dwell on the other problem with getting our manufacturing capacity right. From all the comparisons with our competitors, it is clear that we do not have not enough medium-sized companies. There was a period in the 1980s when many more small enterprises were starting. Worryingly, few of them--not nearly enough--grew into more substantial enterprises. Some of our competitors, such as Germany, have had a capacity to grow small companies into medium-sized ones and some of those into large ones. It is a question not only of a critical mass but of the quality of the critical mass. That is also an answer to the point made by the Chief Secretary. It is the nature as well as the size of the critical mass that counts.
I invite the Chief Secretary to come to the parts of the country, such as that which I represent in West Yorkshire, the west midlands or parts of Scotland, where manufacturing industry is still alive and well in one sense. He should talk to manufacturers who believe that if, for example, the engineering industry in the west midlands or West Yorkshire goes down any further, the critical mass will be below that which is necessary to be able to compete internationally. It will no longer be possible to set up firms in those regions with the confidence that is given by the supply chains and supply relationships that make businesses viable and competitive.
The inability to move nimbly from our industrial base has inhibited our industrial situation over the past few years. I direct Ministers to the important problem--which was picked up well in Hamish McRae's recent book "The World in 2020"--of Britain's inability nimbly to move to new skills. The Chancellor did not deal with our inability to create and maintain a highly skilled work force that is competitive at every level with other countries.
We must prepare ourselves for the new structures and ways of working. We have all seen the literature on that problem. More and more enterprises are moving from hierarchical structures, with bosses at the top sending commands down a long chain, to working as teams with many more technically and scientifically qualified workers. Most experts suggest that we are ill-equipped to deal with that. Only last week, a group of hon. Members heard John Neill from Unipart talking about how he started running his enterprise in Oxford, which both the
Chief Secretary and my hon. Friend the Member for Oxford, East (Mr. Smith) may know, with people with poor skills. Only by imaginative enterprise and management was he able to change dramatically the nature of those skills. Unipart is one of the few companies in this country that has reached such a level.
Time and again, we get our education priorities wrong and run education policies wrongly. After 17 years of Conservative government, we are still unable to deliver by the age of 16 competently trained and educated young people. The truth is that many of our schools fail our young people. If we fail to educate people before the age of 16, how much more expensive is it to repair the damage post-16? The priority must be to invest in our schools and high-quality teachers, and work with the profession as part of a team rather than as an alienated minority.
Secondly, there has been an amazing change in the further education sector. I was talking recently to the head of my local technical college, who explained that, under the new regime of funding from the Further Education Funding Council, the courses that are being threatened with funding cuts are the day release courses, those for training highly skilled people, the courses that used to supplement apprenticeships and the new apprenticeships to supplement so much of the skilled work force in engineering and many other industries. In the further education sector, the old technical colleges are the institutions that are most in danger.
We heard not one word from the Chancellor about how our universities can transform the British economy. I am one who believes that we are not nearly achieving our full potential--we are using only about 40 per cent. of the potential of higher education--and the full potential of the 100-plus universities to transform the regional economies and our national economy. At a time when we need that university input so much, we have hardly touched that potential.
Look at the successes of Professor Bhaticharia and the initiatives at Warwick, and at what has happened in Salford, as well as at the older universities such as Cambridge. Best practice shows how, in partnership with their local communities and with an entrepreneurial spirit, the universities can transform the British economy.In terms of knowledge-led innovation, the universities will be the secret of so much of our success. Our international competitors know that, so why have the Government consistently cut funding to higher education, which impacts on the quality of the work there?
To give a reasonably balanced view, I must admit that I welcome the fact that about 30 per cent. of the population now goes to university--when I and many other hon. Members went, the figure was only 3 per cent. That increase must be applauded, and I shall not gainsay that. Underlying that improvement, however, staff-student ratios, investment in equipment and buildings and the pay of the people whom we ask to teach and to do research in our universities are at such a poor level as to have a worrying effect on the future quality and effort of the sector.
How could the Chancellor not have alluded to that problem, when his Budget sliced another 7 per cent.off our university sector? I sympathised greatly with the vice-chancellors when they said that a capitation of£300 per student was the only response. Hon. Members on both sides of the House had better come to terms with
the fact that we must get the funding of higher education right. I know that the Opposition are working on it and trying to get it right. I must tell the Opposition Front Bench--I shall say it again in other circumstances--that we must make some pretty unpleasant decisions in the education funding world to get it right.
All the evidence shows that those who go through higher education get all the best things in life--they get more training once they have their degree, as well as a higher quality of life and higher salaries. If I were in charge--I am not, Mr. Deputy Speaker--I would put the money in at the other end, especially into skills training for the 14 to 19-year-olds. That is the age that seems to be so crucial to our performance as an economy.
Finally, I must mention the notion of a stakeholding economy--a concept that is dear to my heart, but which raises some interesting responses from Conservative Members every time I mention it. The Chancellor referred to that notion in passing and seemed to deride it, which seems strange when one considers its history. One does not have to go that far back--not back to the diggers and the levellers, who did talk about stakeholding in a very real way.
I was trying to track down where the notion came from. I thought that it was from the khaki election, just after the first world war, when Lloyd George, I think, said that three acres and a cow was every man's right--it was every man's right to have a stake in his country--which was stakeholding with a vengeance. I understand from the Library, however, that it goes back to 1885 and beyond, so it was not vintage Lloyd George.
In recent years, the concept of stakeholding has come, not from politicians, but from the corporate sector--from companies, managers and the heads of the most successful international corporations. It comes from people who say and have been saying for many years that, unless we have stakeholders in this enterprise, we shall not be able to compete with the international competition--the very best in the world--as we shall not be using the full potential of all our employees, including the employees of our suppliers, and of the other stakeholders.
Basically, there are five participants in the process. They are the employees, the managers, the shareholders, the supplying companies--the supply chain, which is made up of those who supply the larger companies, which then go on to supply someone else, is much underrated in this country--and the local community. All are important. Working together, they can assure the real efficiency of a company and an economy.
What is wrong with the Leader of the Opposition using a concept intelligently and realising that, just as we cannot have an internationally competitive company without stakeholding, we cannot have an internationally competitive country without it? Stakeholding makes us corporately and competitively efficient as an economy, but it also makes us efficient in terms of delivering the good things in life to our constituents and citizens. Surely it is worth exploring and working on that concept,and understanding it better. That is worth saying, and valuable.
What is wrong? Is it that the Prime Minister did not say it first? Is it that someone in Conservative central office or at No. 10 has been working on stakeholding for a long time and that, suddenly, the rug was pulled from under him? I suspect so because, on the one hand, the Prime
Minister says that it is a ridiculous notion, but on the other, he seems to applaud it. One never knows where he is coming from.
We had hardly got into the debate when there was some to-ing and fro-ing on the subject of Europe. Primarily,it was a debate within the Conservative party, rather than between the Government and the Opposition--our debates on Europe were sorted out a long time ago. That debate seems be continuing fervently and at a pretty high temperature among Conservative Members.
Let me make one final plea. Any discussion of the economy must include Europe. Many of us support Europe because we believe that it will benefit our constituents and Britain's economic health. We care about Europe, so we are often painted into a corner. However, the fact that we are positive about Europe does not mean that we applaud everything about it. Those of us who are pro-European are often called upon to defend the iniquitous common agricultural policy and the ghastly way in which Europe is executive-driven, with no proper legislative check by domestic national Parliaments or the European Parliament. Those deficiencies must be addressed.
I was encouraged by the Confederation of British Industry calling for an intelligent, rational dialogue in Europe, which, according to the director general, should be based on
"like a supertanker--it takes an awfully long time to turn it."
"logic and facts rather than emotion and slogans".
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