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Mr. Menzies Campbell (Fife, North-East): The right hon. Gentleman is obviously tryin to preach the virtues of consistency--that one should not do one thing and say another. How does he explain someone who sits in the Prime Minister's Cabinet and then stands against him for the leadership of his party?
Mr. Redwood: There was a contest, and it would have been unfortunate if there had been no candidates. I stepped in to help my right hon. Friend by offering him a candidate that he was able to beat.
The Gracious Speech rightly reminded us that big issues are coming up in Europe, which we need to settle with our partners on the continent. I welcome the tone and terms of the Speech on the European issue. It tells us that the Government wish to see a flexible, outward-looking, open Europe, which is a partnership of nations and not an over-governed, over-bureaucratised, over-taxed Europe of the kind that many socialists and some others on the continent would like to create.
I want to see the Government striding purposefully into the chambers of Europe to argue for a Europe that works, which has unemployment as its top issue and says that it must adopt policies that will get our young people and
our older people back to work. We must start to reduce the crisis levels of unemployment that characterise the economies of Spain, France and Italy. Almost one person in four are out of work in Spain, and for Italy and France the figure is one in eight.
It is even worse for those who are young and have little training. In Spain, four young people in 10 are out of work. Why? It is because of the policies that are being pursued by many of the politicians on the continent. They would be well advised to see what Britain is doing, to see how, in the past three to four years, we have started an economic recovery.
We have allowed exchange rates to find their right levels; brought interest rates down; allowed the economy to expand; and resumed tax cutting after an unfortunate intervention of tax increase and recession. We are showing them that, if a Government tax less, spend less, regulate less and trust markets, companies, families and individuals, progress can be made, and the crisis of mass unemployment can be avoided.
I welcome two recent statements by leading Government figures. The first was that of the Foreign Secretary, who is now warning our partners in western Europe that the single currency scheme is becoming a cause of division between the partners. Recently, there has been a diplomatic scrap between Germany and Italy over whether Italy might be allowed into the single currency. More recently, there has been another sharp diplomatic exchange between Spain and Italy over whether Italy, and/or Spain or neither will be allowed into the single currency.
The very idea that is meant to unify the European Community is beginning to tear it apart. We all know that many countries will not be able to qualify. Britain can surely warn our partners how damaging such attempts will be, and ask them instead to develop a real agenda, based on the needs of the people of western Europe: an agenda for jobs and less government, that puts people's interests, not those of politicians, first.
The second statement that I warmly applaud is that of the Prime Minister and the Chancellor of the Exchequer concerning the Maastricht treaty. The United Kingdom rightly put requirements into the treaty as preconditions for anyone entering a single currency. I am delighted that my right hon. Friends are now saying that we should stick to those requirements.
At the time, Britain thought that they were the minimum requirements, and would have liked more. We agreed them with our partners. Surely it is now up to our partners to agree with us that they must stick to the treaty. Those things were well meant at the time, and anything less than those requirements would endanger not only the economies of western Europe, but the scheme itself, as it would call into question the legality of the single currency that they wished to introduce.
We know that most countries will not meet the requirement that they should have borrowed only 60 per cent. of their national income. Britain, France and Luxembourg are the only countries that are sure to meet that requirement. Why are the other countries kidding themselves that, somehow, the requirement is not in the treaty, or that it does not mean what it says in the treaty? Why are they not trying to meet that requirement? Of course, they cannot meet it, because the recession is still too deep on the continent, and their economies are not
growing quickly enough, so they are short of tax revenue and have too many people on benefit. They need to go for growth, and to start to bring their deficits down by encouraging economic prosperity. Their current policies stand in the way.
The Gracious Speech and the Prime Minister's remarks referred to the state of economy and to the forthcoming Budget. I welcome the comment that one of the Budget's priorities will be to continue to reduce new borrowing. At this stage in our economic recovery, it is most important that some of the benefits of that recovery, in the form of higher tax revenues, are used to reduce the new borrowing that we need to make, and the Government are right to wish to be prudent.
I trust that, when the Government consider their public spending plans, they will find that there is scope to get by next year with a smaller increase than the current plans propose. I hope that there will be scope for tax reduction--the Prime Minister left open that possibility--as well as a reduction in the amount of borrowing that we would otherwise have to make.
Mr. Frank Cook (Stockton, North):
Do I take it that the right hon. Gentleman is suggesting that borrowing is justified to give tax rebates to the public?
Mr. Redwood:
I think that I said the opposite. I said that tax rebates should be balanced by reduced public spending plans, and that public spending should be reduced even more, so that it could contribute to lower borrowing. In addition, the economic recovery will contribute to lowering borrowing because, as our recovery continues, so more people go to work, pay taxes and no longer need benefits. That is the best possible way of reducing the deficit. We have been pursuing that policy in the past couple of years, and I look forward to more of the same.
In that connection, I should like to make a modest proposal to my right hon. and learned Friend the Chancellor of the Exchequer. I should like him to consider small businesses and their scope for creating more jobs. Many self-employed people find it difficult to take the step of employing the first employee in their growing business. Many decide to keep their business small. They do not want to face national insurance payments and paperwork and value added tax paperwork as they go through the VAT registration threshold and the pay-as-you-earn system on behalf of their employees.
There are about 3 million self-employed people in Britain. If we could persuade even 10 per cent. of them to take on their first employee, it would make a huge difference to the unemployment level.
I should like the Chancellor of the Exchequer to consider doubling the VAT threshold, so that small businesses could grow and take on that first employee without the hassle of all the VAT paperwork and expenditure. I should like him also to consider giving a national insurance holiday for a year or two for the first employee taken on by the entrepreneur running his own business, if that employee has been out of work for six months or more.
The tax costs would be modest. Some or many of the jobs generated would be additional, so there would be benefit savings. I have not conducted a detailed costing, but the scheme would be easily affordable within the sort
of sums that I have put to the Chancellor concerning public expenditure savings compared with plans, and the general scope of the budget deficit and the budget judgment.
We heard a strange speech from the Leader of the Opposition. He told us that the Government are fracturing our country. He should know about fracturing, because his policies and attitudes are likely to fracture the Labour party. Here is a man who has no single political principle within him, who will change his views as often as the opinion polls and the spin doctors tell him to do so.
Here is a man who is trying to lead his party against its basic instincts. People join the Labour party because they want to tax the rich more and to give more benefits to less well-off people. The Labour party leader now asks us to believe that that is no longer his view--or, therefore, his party's. But could he deliver that, given the nature of the party that he tries to lead?
Mr. Bruce Grocott (The Wrekin):
With the right hon. Gentleman making a virtue out of consistency, will he remind the House whether it is still his view of the Prime Minister and of the Government that the position is "No change, no chance"?
Mr. Grocott:
I will give the right hon. Gentleman a chance to think about that one, because he will need time to do so. Is that still his view, or has he changed to what Labour Members, who can spot his positioning on these issues, will regard as a position of "Next time may be my chance"?
Mr. Redwood:
Oh, dear. I stand by what I said last summer. One of the things I said was that we had to reduce taxes, or we would not have a chance of winning the election. I am pleased to say that my right hon. Friends did reduce taxes in the last Budget, and I live in hope that they will do a bit more in the next Budget, so our chances have definitely improved. We have shown people again that Conservatives want to cut taxes, and that, whenever possible and whenever it is prudent to do so, they will cut taxes.
The right hon. Member for Sedgefield made a great deal about education. As the Prime Minister reminded us, the right hon. Gentleman says that he has three priorities: education, education and education. What is stopping him, therefore, from leading his party to success in education? He and his party control most of the important education authorities. He has many Labour governors running the schools. We have voted substantial sums of money to those local authorities.
If they wish to, those authorities can increase the amount of money going to schools out of those huge budgets, and get rid of the people whom their education spokesman says are bad teachers. I believe that he said that there are 15,000 bad teachers. That is more than I would venture, but, if that is Labour's view, why are Labour authorities employing most of those 15,000 bad teachers, and why do they not do something about it?
If the right hon. Member for Sedgefield believes that we need higher standards of reading, writing and arithmetic, why are Labour-controlled and dominated education authorities and their primary schools standing
in the way of changing teaching methods, so that children can be taught to read, write and add up properly at an early age? Why did his party stand in the way of compulsory testing and the publication of results? The only way to make progress is for us to know how well or badly those children have done, and for the parents to know, so that they can make choices, influence the governing bodies and demand that action be taken in those schools.
As my right hon. Friend the Prime Minister made clear, there is a relationship between the amount of money spent on education and the results. The relationship is that, if we have a Labour authority, it spends more and does less well. I deduce from that not that we should take money away from Labour authorities, but that they have much to learn about how to run a decent school and a decent education authority.
If the Leader of the Opposition wants the nation to believe that he is a great leader who can deliver, I suggest that he starts right now--today--on education, with Labour-controlled education authorities. I offered the right hon. Gentleman that opportunity a little while ago, when I sent him a letter saying that I would like to write a letter jointly with him to education authorities in Labour-controlled areas. I set out the actions that I thought those authorities needed to take, to raise standards. The right hon. Gentleman did not even do me the courtesy of replying to my letter.
The House will be delighted to know that I boldly went ahead and sent such a letter over my own signature. I pointed out to Labour-controlled education authorities that their leader now says that he wants to raise standards. I offered them a series of proposals, and some of those authorities did me the courtesy of replying. I did not detect in those replies any inkling that those authorities had been under any influence from the Labour leader to raise their standards, or that there was an agreed agenda among Labour parliamentarians, councillors and candidates for raising standards. The right hon. Gentleman should look more carefully at putting his own house in order before lecturing the rest of us.
I understand that it is Labour policy now to demand a complete ban on handguns. When Labour submitted its evidence to the Cullen inquiry, why did that party go for a lesser ban than that which it is now recommending and which the Government are proposing? What changed? Could it be that the Leader of the Opposition is playing party politics? Could it be that he is showing that, if one leads by following opinion polls and focus groups that can quickly change their minds, one can be left stranded a few weeks or months later, when one thought there was firm ground. One can discover that action once thought bold is no longer bold by that test.
I grow a little tired of hearing that Labour is entirely united on the issue of Europe. I see a party in which dozens of right hon. and hon. Members would like to come out of the European Union altogether, and in which another group would like to plunge ever more deeply into a European Union, surrendering many of our powers of self-government.
I see around the shadow Cabinet table a huge divergence of views. Every time that I listen to or watch the right hon. Member for Livingston (Mr. Cook), I see a
man who does not want a single currency unless hell freezes over first. Every time I watch the shadow Chancellor, the right hon. Member for Dunfermline, East (Mr. Brown), I see a man who would like a single European currency tomorrow, preferably before he has any responsibility--which I think he will not get--for the British economy.
Between the two is this great leader who is not able to make up his mind whether he supports the Dunfermline view or the Livingston view--so he says one thing one day and something else another day. The Labour party is deeply divided over Europe, which is why Labour Members refuse to answer questions.
I have a piece of advice for the right hon. Member for Sedgefield. If he cannot make up his mind about a single European currency and wants to do so some time, never or later, why does he not the have the decency to do what the Conservative party is doing--offer the public the reassurance that, if a single currency were ever recommended, the people could decide first in a referendum? The right hon. Member for Sedgefield cannot even make up his mind whether that question would be tested in a referendum or a general election, or whether he could hold a referendum.
The right hon. Member for Dunfermline, East is an ambitious man, who believes that he should be the Chancellor of the Exchequer. He must be the first example in history of a man coveting the office of Chancellor because he wants to give away all that office's powers, responsibilities and duties. Perhaps the right hon. Gentleman believes that there is such a thing as a free lunch, and that it is his right to enjoy one every day at the Treasury, while economic decisions about our country are settled in Frankfurt.
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