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Mr. Smith: The hon. Gentleman overlooks the fact that the Government have taken a series of supply-side measures over the past 17 years which have improved the United Kingdom's competitive position. For example, the productivity gap in manufacturing between this country and Germany has been considerably eroded. I believe that we are now in a much stronger trading position than either Germany or France. Both those countries desperately need to take the kind of supply-side measures that our Government have taken if they are to restore their own competitiveness. We are in an extremely strong position, and I am very sorry that the Opposition see fit to complain constantly about our circumstances.
I congratulate my right hon. and learned Friend the Chancellor of the Exchequer. In the three years during which he has held his present office--I think that it is about three years--he has been one of the most successful Chancellors since the second world war. He has had to make some very difficult judgments, and he has got them right. As a result, we have arrived at a virtuous circle which few people would have predicted 15, 20 or 25 years ago.
People used to say that in circumstances such as these--circumstances in which there was a good rate of economic growth and consumer spending was forecast to increase by more than 4 per cent. in the ensuing year, as the hon. Member for Dudley, West said--there would be inflationary pressures in the system. I do not agree with the hon. Gentleman. I think that the Chancellor has it absolutely right. Of course we should not be complacent about inflation, but I believe that there is plenty of spare capacity in the economy and that we shall see continuing growth without inflation. That is a remarkable achievement by the Government.
I welcome the motion, and the Government's economic achievements. I hope that no sudden or fundamental changes will be made to their economic policy. I think that, if we continue our current policy, the benefits will gradually feed through to the consumer. As my hon. Friend the Member for Bosworth (Mr. Tredinnick) said, the housing market is picking up, and I think that the number of people with negative equity will start to decline.
I am sorry to say--because I am sometimes quite entertained by speeches made by the right hon. Member for Dunfermline, East--that the right hon. Gentleman's
speech was the worst that we have ever heard from him. It contained no humour, and nothing about economic policy. What a contrast it made with the speech of my right hon. Friend the Member for Wokingham (Mr. Redwood). It was an insult to the House. [Interruption.] The hon. Member for Rotherham (Mr. MacShane) cackles from a sedentary position, but the fact is that we heard constructive proposals from my right hon. Friend the Member for Wokingham, although we may not have agreed with every one of them. We did not hear a single constructive idea from the shadow Chancellor.
Mr. MacShane:
Is the hon. Gentleman prepared to apply the equivalent phrase to the Chancellor?
Mr. Smith:
I certainly am. I do not know where the hon. Gentleman has been, but I have said that I consider my right hon. and learned Friend to be one of the most successful Chancellors since the war. I mean that. I believe that his management of the economy has been greatly in the interests of the United Kingdom, and I am desperately worried by even the faintest prospect that the right hon. Member for Dunfermline, East might take over at the Treasury, because the record of past Labour Governments is so appalling.
The hon. Member for Dudley, West (Mr. Pearson) said that he was at school at the time. I wonder what happened to his pocket money in 1975. I wonder whether his father increased his pocket money by 25 per cent.--for that is what he would have had to give to maintain the purchasing power of the hon. Gentleman's pocket money. People forget that, but we shall soon be celebrating--if that is the right word--the arrival of Dr. Johannes Witteveen, the director of the International Monetary Fund. He had to come in to sort out the United Kingdom's finances.
Mr. Bayley:
My hon. Friend the Member for Dudley, West (Mr. Pearson) pointed out that the United Kingdom is currently 10th or 11th out of the 15 European Union countries in the inflation league. Would the hon. Gentleman care to tell us where the UK was placed under the last Labour Government?
Mr. Smith:
Bottom of the league. The Labour Government's inflation record was appalling, and I am astonished that the hon. Gentleman even mentions it. I remember it better than most. I came into the House in April 1977, at the height of Chancellor Healey's unpopularity, when inflation was rising for the second time and the miners in Ashfield were concerned about the amount of money that was being taken from them in income tax. The standard rate of income tax was 35 per cent. One of the present Government's most magnificent achievements was to reduce that to 24 per cent., which has made a considerable difference to incentives. People should not be allowed to forget the last Labour Government's appalling record on inflation, tax, spending and borrowing.
Mr. Barry Jones (Alyn and Deeside):
I am glad to follow the hon. Member for Beaconsfield (Mr. Smith), but I disagreed with his speech. Her Majesty's Government have had a bad time today, not because the Chancellor of the Exchequer gave the distinct impression that he was not in charge of his Department or because the right hon. Member for Wokingham (Mr. Redwood) made another bid to seize his party's intellectual leadership, but because Conservative Members looked divided.
The right hon. Member for Wokingham made an animated and seemingly spontaneous speech. He was listened to by Conservative Members as a leadership contender and as a rebel. He set out his stall and suddenly we had a debate. As we listened and watched, some of us thought that we had discerned the opening round of the imminent general election.
Whatever, my right hon. Friend the Member for Dunfermline, East (Mr. Brown), the shadow Chancellor, had a good time. He played the Chancellor like the angler plays his catch. By the time my right hon. Friend had finished with him, the Chancellor had resolved to return speedily to the Treasury so as to skin that anonymous grade 7 civil servant who had constructed such an explosive right-wing memorandum.
References have been made to investment in Wales and to the 6,000 Korean jobs coming our way. That investment coup is one of the greatest ever for Wales in the employment sector. It is a great credit to the Welsh Office, to Newport county borough and to the Welsh Development Agency. All in all, it is a great credit to the people of Wales. In the years ahead into the next century, in south-east Wales, there is likely to be an explosion of prosperity. I hope so. The recipe for that success will include expanded training capacity in south-east Wales, two River Severn bridges, an effective motorway system and two good go-ahead cities in Newport and in Cardiff. I emphasise also the availability of a co-operative, loyal and flexible labour force. I hope that the former steelworkers and coal miners from the eastern valleys get a fair crack of the whip when they seek the available jobs. After the torrent of redundancies that they have suffered, they deserve to do so.
May I make a plea for British Steel? What will the Government do? It is the third largest producer in the world. In 1994-95, it had revenues of £6.2 billion. It is now in the top 10 of Britain's best exporters, and everyone says that it is a lean and powerful industry. Hon. Members may know that 46 per cent. of its production is exported. Its European Union competitors, however, are not playing fair. Illegal subsidies are being paid. For example, the Belgian Government pump subsidies into a loss-making steelworks in Wallonia. My steelworkers at the Great Shotton steelworks seek a level playing field on which to compete with their EU rivals. After losing about 10,000 jobs in a short period, those steelworkers deserve that level playing field and more help from the Government.
In our country, 560,000 people under 25 years of age and 168,000 people under 20 years of age are unemployed. In my constituency, the figures are 621 and
189 respectively. I did not hear a scintilla of a proposal or policy from the Chancellor which would enable those groups of our fellow citizens to be given priority for work and for training, which was regrettable.
In that context, if I may make a strong constituency point, the proposed closure of the jobcentre in the largest town in my constituency is cruel nonsense. The Buckley jobcentre is a valued facility which is used by many hundreds of people each week. The town of Buckley is appalled at the proposal to close the jobcentre. The town council of Buckley is astonished that the proposal should have been made. We all think that the centre should remain open. We want Ministers to intervene and to instruct the Benefits Agency to think again. No closure should be the answer. We and the community that I represent believe that the closure proposal engenders only distrust and insecurity in a large community.
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