| Previous Section | Index | Home Page |
10.8 am
Mr. Stephen Timms (East Ham): I congratulate my hon. Friend the Member for Hackney, North and Stoke Newington (Ms Abbott) on securing an important debate this morning. I also congratulate the hon. Member for Twickenham (Dr. Cable) on an excellent and well-argued speech. He is an economist by training and, until recently, by occupation, and the House will look forward to hearing more from him in the years ahead.
As my hon. Friend the Member for Hackney, North and Stoke Newington said, few--if any--decisions taken by the Chancellor of the Exchequer have been greeted with quite such acclaim as the decision to hand control of interest rates to the Bank of England. Press comment was enthusiastic. Will Hutton in The Guardian said that it was part of a process of modernising the British state. I noticed that he also said:
It is perhaps not surprising that the economic great and good welcomed the decision. However, not only Fleet street journalists were pleased. My hon. Friend the Member for Leigh (Mr. Cunliffe) mentioned industrialists in his area. I have lost count of the number of constituents in East Ham--very close to the constituency of my hon. Friend the Member for Hackney, North and Stoke Newington--who have expressed their delight at the new Government's performance. When I have asked what changes they have been pleased about, most have mentioned the decision on the Bank of England.
The decision has sparked enthusiasm across the country, because the message it sends is completely of a piece with the new Government's approach--characterised by boldness, implementing solutions that work in practice, and rejecting dogma.
The Government want to work in partnership with the nation's institutions, not go to war with them. They are committed to stability in place of the pursuit of short-lived booms that marked the previous Government's period of office. That is the popular view of my right hon. Friend the Chancellor's decision, and one of the key reasons why the immediate euphoria that followed the election has not yet started to recede. As we understand it, we have the most popular Government since polling records began, and this decision and the way in which it was made go a long way to explaining why.
Of course some have criticised the decision--not only my hon. Friend the Member for Hackney, North and Stoke Newington--but nobody should underestimate the importance to the Government of the wave of enthusiasm that we are enjoying, which is due in no small part to the one decision, and how it is helping them to achieve the programme on which we were all elected.
I am an avid reader of Tribune. An article in the current issue written by one of my hon. Friends describes the decision as
To be successful, do not the new Government have to consign to the dustbin the idea that large parts of the economy constitute our enemy? Such an idea can only be a recipe for the disastrous and debilitating strife that has so damaged Labour Governments in the past. We would fail if we went down that road again. We are on a different road now, and we shall succeed. We want partnership, not warfare. That is another reason why the nation is in such good heart.
The Commission on Public Policy and British Business, whose report "Promoting Prosperity: A Business Agenda for Britain" so enraged the then Deputy Prime Minister when it was launched in January, devotes one of its 10 chapters to macro-economic stability, which it describes as
The view that an omnipotent Chancellor could outplay the markets and, through fancy footwork on interest rates, produce consistently better results for the economy than the Bank of England, has surely been absolutely
discredited by history. What examples back that up? In her excellent speech--I pay tribute to her very effective work on the Treasury Committee over a long period--my hon. Friend the Member for Hackney, North and Stoke Newington pointed to the previous Chancellor. What is his legacy?
We all know where that is leading, because we have been there before: boom and bust. We do not need that; we need stability instead. That is why the Commission on Public Policy and British Business proposed that the Government should
Instability has crippled Labour Governments in the past, so that all their energy has been consumed in fighting one economic crisis after another. This Labour Government will be different. They will be able to concentrate on delivering our programme--the reason why we were elected--of putting young people back to work, and tackling the scourge of long-term unemployment head on.
On a practical level, my right hon. Friend the Chancellor's decision has brought us an immediate windfall, with long-term interest rates down by half of 1 per cent. in May compared with April, when, in Germany and the USA, they fell by only one tenth of 1 per cent. That is the kind of improvement in our performance that, when pursued consistently, systematically and with determination, can transform the prospects of our economy, of securing the investment that we need and of our constituents in Hackney, East Ham and across the country.
Mr. Ivor Caplin (Hove):
I am grateful for the opportunity to make my maiden speech. The House may be pleased to note that I did my apprenticeship on Monday, when I sat in the Chamber for six hours without being called. I had plenty of exercise jumping up and down.
This is a proud moment for me, and I thank the people of Hove and Portslade for giving me the great opportunity to serve as the town's first ever Labour Member of Parliament. I think that I am right in saying that, since the seat of Hove was created in 1950, I am the first new Member of Parliament to be elected at a general election rather than a by-election.
I thank my predecessor, Sir Timothy Sainsbury, for his hard work on behalf of people in my constituency. There is a remarkable coincidence concerning myself and
Sir Tim--and it is not that we are both grocers. He was elected on 8 November 1973 in a by-election following the unexpected death of Martin Maddan. At that by-election, the Liberal candidate was Des Wilson, who may be known to some hon. Members. The coincidence is that 8 November 1973 was my 15th birthday, which gives away my age.
After his retirement from the House, Sir Tim made a significant private donation to Hove museum, which will allow a collection of rare films to be made available to local people. In 1896, Hove was the birthplace of modern cinema, and the collection will be significant for the museum. Before Sir Tim's election, he had a career with a well-known supermarket. During his parliamentary career, he worked in many Departments. Indeed, I believe that he went on to deputise for the right hon. Member for Henley (Mr. Heseltine) during his illness. I place on record my thanks to Sir Tim Sainsbury.
My constituency epitomises the dramatic political change that has taken place. Such change occurred nowhere more so than in the south-east, where the economic and political complacency of the previous Government, coupled with new Labour's positive promise of new politics and a new start, had an enormous impact. I won in Hove because of the dramatic failure of the previous Government to deliver their promises on tax, crime and the economy. But the first sign of things to come was when Labour won the local elections in Hove in 1995. That election was significant, because it gave Hove and Portslade residents a new Labour council which had a two-year opportunity to prove that Labour could deliver what it promised. I was delighted to be the leader of that council until it merged with Brighton on 1 April 1997.
During those two years, we put in place plans to rehouse the residents of a decaying block of flats called Portland Gate. In partnership with others, we produced a new scheme for community housing in its place. The Minister of State, Departments of the Environment, Transport and the Regions, my hon. Friend the Member for North-West Durham (Ms Armstrong) helped me to start the demolition of Portland Gate recently, thus beginning a new era for social housing in that part of my constituency.
During the council's short term of office, we also cut the price of bus passes for Hove pensioners, as we pledged we would. My council was supportive of those pensioners, and they welcomed that support only to find that they then had to pay VAT on their heating and for cooking. That is a matter to which the pensioners in my constituency objected strongly, and they voted accordingly on 1 May.
Hove is a very special place, in which I live and have lived all my life. At the election, I pledged to continue to live in the constituency with my family, and that is what I intend to do.
Hove could be described as a good-looking town, with some fine buildings and open spaces. Indeed, I am sure that, were she in the Chair, Madam Speaker would agree, because she visited the town in the summer to commemorate one of our famous residents, the suffragette Victoria Liddiard. In Hove and Portslade, we also have many good businesses and local employers. It is also a commuter town, with many people, like me, travelling up and down to London each day.
Behind that facade, however, Hove suffers from high youth unemployment, and it has an elderly population who need to be supported. We also have our share of low-paid and low-skilled jobs. I am pleased that the new council is working hard in partnership with business to attract new employers to the area.
Although I am the Member for Hove, colleagues may have noticed that I have referred occasionally to my constituency as Hove and Portslade. Portslade is a unique area of my constituency, with an attractive village centre and a thriving street of shops. At the sea end lies the entrance to Shoreham port, the scene of angry protests just two years ago when the port took the ill-advised decision to export live animals.
Under the Labour Government, I look forward to working with our European partners to stamp out that cruel practice. I and my constituents are pleased to note that the strong leadership that Britain needs to show in Europe is already evident from the work of my right hon. Friend the Prime Minister and the Foreign Secretary.
I should like to follow the new convention apparent in other maiden speeches by mentioning the constituency football team. I have supported Brighton and Hove Albion since I was a boy. Many hon. Members may be aware of the problems that the club has faced and is still facing, largely as a result of the actions of the previous owner, Mr. Bill Archer, and his chief executive and a former Member, David Bellotti. Having said that, I offer my commiserations to the hon. Member for Hereford (Mr. Keetch), because our final day draw meant that the Albion stayed in the football league at Hereford's expense. If I were asked to choose between the last 20 minutes of that game and the tension of election night, there would be no contest.
I thank my hon. Friend the Member for Hackney, North and Stoke Newington (Ms Abbott) for initiating this morning's debate. Before 1 May, I had worked in the private sector for nearly 20 years. Indeed, for all that time I was employed by a financial services company, so I would like to think that I am able to say what businesses would like from Government to help them in their endeavours.
The most important factor for any business, large or small, is stability. I support without reservation the decision of my right hon. Friend the Chancellor of the Exchequer. I know from my postbag that many businesses in my constituency are solidly behind his decision. In my view, it will stop politicians such as the former Chancellor cutting interest rates just before a party conference so that he could go on stage to brag, and then putting them back up according to political whim. That is why the Bank of England's independence to set interest rates is important.
That decision has generated confidence in the business community. We have already noted in the six weeks since polling day that if there is confidence and stability, the market grows. That has happened because new Labour has shown that we can run the economy in the long term for all the people.
"Advocate Bank of England independence, and it's never long before"
Montagu
"Norman . . . is being used to scare us witless of the perils and dangers ahead."
As my hon. Friend demonstrated, Will Hutton was at least right about that. The Financial Times described the decision as "unequivocal good news"; The Economist said that it was "welcome and long overdue" and described it as a "political masterstroke".
"delivering policy to the enemy"
and
"a gesture which . . . conciliates only our enemies".
The decision also conciliates many people who are not our enemies; many who wanted a new Labour Government who would be radical and trustworthy, and who feel that that is what they have got. The new Government will not play fast and loose with people's money, and it would be a fatal error to believe that only our enemies would be anxious if it were otherwise.
"probably the most important aspect of the economic framework for most companies".
The article in the Tribune said that "stability is dead easy". Perhaps it is, but the previous Government conspicuously failed to achieve it, and the consequences were catastrophic: two disastrous recessions, consistently higher levels of inflation than our competitors. The pound in 1979 would be worth only 37p today. As the report on promoting prosperity pointed out, inflation has been not only high but, almost as bad, much more volatile than elsewhere. All that explains why we have been so conspicuously unsuccessful in attracting the investment we need for our factories, infrastructure and public services.
"London homes in biggest price rise for ten years"
said the Evening Standard on 11 April.
"Gazumping is back and estate agents are driving Porsches again"
said the same newspaper last week.
"give independence to the Bank of England to achieve the target through the control of interest rates"--
quite rightly making the point that the dangers of instability are particularly acute for a Labour Chancellor.
| Next Section
| Index | Home Page |