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The Chief Secretary to the Treasury (Mr. William Waldegrave): What was the PSBR average as a percentage of GDP under the last Labour Government?
Mr. Bayley: I do not have that figure with me, but I know that it went down.
Mr. Waldegrave: The average was 7 per cent. of GDP.
Mr. Bayley: We left Government in 1979 with borrowing as a percentage of GDP lower than we inherited from the Heath Government. The Conservative Government have increased borrowing in real terms. Of course borrowing has gone up and down--that is the nature of the economic cycle--but the Conservatives are claiming that the reason why the level of taxation under them has been higher every year than that levied by the Labour Government in 1979 is that borrowing is under control: that is a myth, and we need to dispel it today.
How are we to deal with this problem? The Government's secret agenda--which was spelt out in The Times today--seems to accept that the country is locked in an inevitable spiral of economic decline, that we are going to be overtaken by Indonesia, Brazil and Thailand, that there is nothing we can do about it and that we must respond by cutting welfare. That will create a two-nation Britain: the rich will pay more for insurance, for razor wire and for security for their property; the poor will become ever poorer, more desperate and more disadvantaged.
The Conservative policy follows the orthodoxy of Newt Gingrich's contract with America and it has now become the orthodoxy of young career civil servants in the Treasury. The Conservatives seem to have forgotten that Newt Gingrich's contract with America was a failure. He may still be the Speaker of the House, but he is marginalised and Dole lags in the polls. I refer to comment from the United States. E. J. Dionne from the Washington Post has recently written a book in which he says that America is on the threshold of a new progressive era because the contract with America simply did not work.
The No Turning Back group and many people in the Treasury are calling for privatisation of the welfare state. Former NHS chief executive Duncan Nichol, in his "Healthcare 2000" report, called for the NHS to contract to become a welfare service for the poor. We should not be surprised to hear that, as he now works for BUPA. The study was funded by the private sector and it is in his interests to argue for private welfare.
Mr. David Tredinnick (Bosworth):
When I was chosen as a parliamentary candidate for the constituency of Bosworth, I was told that the seat reflected opinions across England. I was told that it was a "swing" constituency and that I should monitor the statistics carefully. I have good reason to do that because, as the hon. Member for Oxford, East (Mr. Smith) will recall, the seat was originally held for the Labour party by the well-known former socialist Woodrow Wyatt. My predecessor Sir Adam Butler won the seat from him for the Conservatives and my hon. Friends will rejoice to hear that it is held by the Conservatives now with a 20,000 majority.
I pay tribute to the Trades Union Congress, which inspired my speech by sending me statistics reflecting the trends in middle England and in my constituency. My constituency is located geographically in the middle of England, on the boundary of the east and west midlands, on the county boundary of Leicestershire and Warwickshire, and two miles from High Cross, the Roman centre of England. The TUC wrote to tell me how the unemployment pattern has changed among my constituents aged under 20 and under 25.
Some 110 people aged under 20 are registered as unemployed in my constituency. I regret that fact. However, in 1991 the figure was 181. Therefore, we have seen a decrease of 71--a 40 per cent. reduction in the number of young unemployed. The unemployment figure for the under-25s is only slightly less impressive. It is now 430, but in 1991 it was 622--that is a reduction of more than 30 per cent.
The Government's economic policies have made it possible to reduce unemployment among the young. There has been a tremendous increase in inward investment in the part of the east midlands that I represent. We have heard about the Korean investments in south Wales, which I welcome. Investment in my area has been assisted by the Government's sensible policies and the approach adopted by my local council--which was controlled by the Conservatives until recently--over the years in encouraging companies to relocate to my area.
The economy of the east midlands has grown faster than the United Kingdom average. I would be concerned about that if I were a Labour Member of Parliament because, if the Labour party cannot win seats in the midlands at the next election, it will have little chance of forming a Government. The relatively low cost base in the east midlands makes it attractive to investors. I fear that, if a minimum wage were introduced, we would see a massive shedding of jobs in my constituency.
I am proud to represent a hosiery and knitwear constituency. Many of my constituents are employed in that industry, which has taken great steps forward in
recent years. It has always faced competition from cheap imports and very low labour rates abroad. If the Labour party were to come to power, I have no doubt that the minimum wage would prove immensely damaging to my constituents' prospects.
I was much entertained by the speech of the hon. Member for Brent, East (Mr. Livingstone)--I regret that he is no longer in his place. Having stood in the 1981 Greater London council election and observed his style of politics, I remember that his approach was not too different from that of Newt Gingrich--I recall leisure centres appearing in the Brent constituency before general elections. He made an appalling contribution to the governance and management of London. In view of his track record, it is astonishing that he should talk about the transformation of Britain under Labour.
The policies of my right hon. Friend the Prime Minister have improved the road network in Leicestershire, with the Leicester western bypass, the A5, and new junctions on the M1 and the M69. However, there is mounting pressure on industrial space. Finding companies to move to the area is not a problem in Hinckley: the problem is where to put them. The Government's economic policies have proved so successful that companies are flocking to the area. Bulldog Computers is located on four sites but it cannot find one single site. I urge the local councillors to address that issue. I hope that the battle for space will be resolved successfully.
Companies that produce machine tools and metal works are also doing very well. The hon. Member for Oxford, East will be interested to learn that some car dealers in my constituency are reporting a 40 per cent. increase in sales from last year. The MG is in great demand from Trinity Motors, which is the main Rover distributor. Perhaps the hon. Gentleman will cast his mind back to the days of Red Robbo at Longbridge. Will he stand at the Dispatch Box and say that the British motor industry was better off in those days? Of course he will not because he knows that our policies have transformed Britain's motor industry. We introduced the disciplines of Japanese construction and management and revitalised Rover, saved Aston Martin and injected new capital into Jaguar. The Conservative Government are responsible for improving the motor industry, and the hon. Gentleman should recognise that fact.
The hosiery and knitwear industry faces real problems with the introduction of new environmental standards which threaten some of the dye works in Hinckley. I have appealed to Severn Trent to review the huge costs that it proposes to impose on some manufacturers in my constituency. I hope that Severn Trent will resolve that matter so that small companies are not forced to pay £100,000 for their own treatment works.
We are now in our fifth year of growth. Gross domestic product is projected to grow by 2.5 per cent. in 1996. Personal incomes increased by 3 per cent. in 1995 and they will continue to rise rapidly. House prices are up 5 per cent. while mortgage rates are at their lowest level for 30 years. Inflation has been crushed. As my hon. Friend the Member for Wyre Forest (Mr. Coombs)--he is in the Chamber but not in his proper place; he is a man of many places and many parts--said, this country's macroeconomic policies are the best for 30 years. We now have a balanced economy, and the stability that is so vital to the future of Britain. That stability would, of course,
be destroyed by the Labour party, which already has 30 pledges in its manifesto which would involve higher spending.
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