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Mr. Page: I agree with much of what the hon. Gentleman has said. However, does he accept that, the last time there was a devaluation, we started to fight our way back in volumes of sales and in growth of manufacturing exports and productivity? We did not look to devalue our way out of the crisis, as we had done time after time. Last time, it was different: we cracked the failings of the past and embarked upon a virtuous cycle. A Government reshuffle is imminent, and I hope that the hon. Gentleman's manufacturing expertise is recognised with a place on the Front Bench.

Mr. Sheerman: I shall respond not to the second but to the first point. The hon. Gentleman raises some interesting issues. I thought that he was arguing against an independent central bank. The fact of the matter is--let us not be party political about this--that Britain's record, under all parties, in handling its currency has been a disgrace. We got into trouble with high long-term interest rates because we did not have a bank and a currency that we could trust. Rather than take tough decisions on the economy, every Government devalued the currency. That was true of both major parties in government.

In the first few days of this Administration, the Chancellor took the bold and imaginative step of ending all that. He sought to ensure that we have a currency that

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people can trust. I remember visiting the Bank of England three or four years ago and I was amazed when the Governor, Eddie George, said, "Until we came out of the ERM, the Bank of England didn't have a vision statement; we just did what we did. Afterwards, we produced a vision statement that said that we should have a sound currency, low inflation and a climate in which business can thrive." I assume that the Bank of England has retained that vision statement.

Mr. Redwood: Does the hon. Gentleman agree that the technicians have won and the Bank has had its way on two occasions in the 20th century: first, in relation to the gold standard; and, secondly, in relation to ERM? Those moves ended in massive job losses and manufacturing haemorrhage. Is the hon. Gentleman at all concerned that the current experiment might end the same way?

Mr. Sheerman: When I hear the right hon. Gentleman speak, I am often reminded of my right hon. Friend the Member for Chesterfield (Mr. Benn), who is an expert at plucking two dates from history and making an historical case. That is the worst sort of historical analysis. The right hon. Gentleman is just like my right hon. Friend, although he does not write or speak so much about historical subjects. One cannot conduct an analysis in that way. We must analyse what has happened to our currency, and trust in that currency over a long period.

I have recently been described in several columns as a "parliamentary poodle"--I have never viewed myself in that way--but that is one decision that I believe is good for the economy. The vision statement of the Bank of England must be correct: businesses seek security. They want to know that they are operating in a stable environment. We have not had that in this country for a long time. Stability counts; it is crucial.

Sir David Madel: I have listened carefully to the hon. Gentleman's comments. There is no stability for industry if interest rates continue to rise when they should not. That does not do anything for industry.

Mr. Sheerman: I am not going to speak much longer, but I intervened on the right hon. Member for Wokingham on interest rates, for which I have figures back to 1950. We are still in a very low interest economy compared with most of the time under the Administrations of which he was part, when they reached 11, 13 and 14 per cent. The only time that interest rates have neared present levels was in the almighty recession of the early 1990s. The tragedy is that we have been a high-interest economy. That has been a tax all the time on my industrialists in Huddersfield and on our manufacturing sector.

We must achieve long-term low inflation and low interest. That is the secret. That is what Germany and the United States are better at. Looking at our motion, that is exactly what is crucial. It is sometimes tough and I feel terribly sorry about that. This morning, I was at John Brierley, a 100-year-old cotton spinning company in my constituency. It is finding it tough and I have every sympathy, but our motion is about securing our economy for the long term. Too many politicians in this country have been obsessed with the short term. The Tories do not like it because we have gone for the long term.

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Sometimes it hurts in the short term to get it right in the long term. That is why I shall support the Government in the Lobby and why I think overall that the pattern set now is right for British industry and manufacturing.

6.30 pm

Mr. Tim Boswell (Daventry): This is a serious issue which Members of Parliament do not treat at one remove. Many of us have personally experienced the consequences of six hikes in interest rates and the inconvenience of getting to work through tube strikes. Those of us who remember the winter of discontent--I often remind myself that not all of us now remember it, even in this place--look out on this rather drenched summer, for which I do not blame the Government, and see the signs of a strong and growing industrial El Nino effect, for which I do blame them. The debate has been eloquent in showing the widespread concern about manufacturing industry. That says a lot, even if our prescriptions differ on how to deal with it.

I and many other Conservative Members have a strong commitment to raising our competitiveness through better education and training, to the practice of good industrial relations and to the success of manufacturing industry. My right hon. Friend the Member for Wokingham (Mr. Redwood) and others deployed powerful arguments. Several of my right hon. and hon. Friends have distinguished records on the subject.

It is interesting that new Labour has been rather absent from the debate and unable to say how well things were going. [Interruption.] It appears to be getting its messages now. Whereas until recently new Labour has been in denial, the argument that it is all the fault of the last 18 years of Conservative government is rapidly running out of road. The time is coming when the Labour Government will have to stand up and be counted and be accountable for their actions in respect of manufacturing.

Mr. MacShane: Does the hon. Gentleman recall an Opposition day debate this Parliament that was so poorly attended by Conservative Back Benchers?

Mr. Boswell: I recall that many of my hon. Friends were here for the introduction of my right hon. Friend the Member for Wokingham. I have the impression that many others--not, of course, because of my contribution--are hurrying to the Chamber even now.

I want to talk not so much about manufacturing industry as about industrial relations. My right hon. Friend the Member for Wokingham made some telling points about the problems. The hon. Member for Eastleigh (Mr. Chidgey) referred extensively in his interesting speech to the problems of the engineering industry. He took the words out of my mouth on that, so I confine myself to noting that hon. Member for Rugby and Kenilworth (Mr. King) and I met the Minister for Science, Energy and Industry to discuss problems in the large power generation plant industry that affect employment in my constituency. Those are not the only problems.

In a letter to me enclosing its business survey, the Institute of Directors refers to

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    with an especially abrupt fall in the manufacturing industry. The 3Is barometer survey of business confidence is at its lowest level since 1992. "Office World" is often quoted by DTI Ministers. Its quarterly small business survey announces:

    "Warning signs from small businesses--Government's honeymoon over".

Professor Robert Blackburn heads the small business research centre at Kingston university. He concludes: "The signs are ominous."

The question before the House is what is the sensible action for a responsible Government at such a time. We understand that macro-economic management is difficult--as many hon. Members have conceded, it has been difficult for Governments of all colours--but what do we do about it, given that it is difficult? There are undoubted problems. Should not we be doing everything possible to avoid heaping greater burdens on industry? Such burdens might arise through taxation, additional regulation or industrial action frustrating management. The three together are increasingly adding up to a noxious brew.

The Chancellor of the Exchequer warns companies about their earnings record while imposing a cool £25 billion of extra taxation over the Parliament on business alone. The Monetary Policy Committee is in agonies trying to balance its inflation targets with the consequences for manufacturing industry in particular. Businesses and trade unions, well aware of the likely score, are trying to get their retaliation in first. That is well exemplified by the industrial strain in London Transport today.

On industrial strain, we had some revealing figures in the exchanges with the President of the Board of Trade. She is not here to answer the point, but she sought, somewhat disingenuously, to compare a series of figures about our record in the 1980s with figures that I gave on the Labour record in the 1970s. What is incontestable is that industrial relations are very much better than they were when the last Labour Government left office. That is well shown by the fact that, in 1979, 29 million days were lost; by 1994--the figures are little worse now--only 1 per cent. of that number were lost. I am delighted that we are on the verge of solving the industrial relations problem. The question is whether the Government's proposals help or hinder the process. In almost every respect, they are likely to make matters considerably worse.

Let us kick off with the minimum wage, which, as the Minister knows, has been extensively debated. At least we now have the report of the Low Pay Commission. There is the interesting question of the impact of the minimum wage on business costs. The commission estimates the direct impact at 0.6 per cent. To that must be added the entirely unquantified impact on differentials, which may not be too great because of the figure chosen, which has been further doctored down by the Chancellor because of the concern that he raised in his arguments with the DTI.

Be that as it may, the minimum wage is not the only leg of the stool, because we go on to "Fairness at Work", which the Minister, in fairness, sees as a major part of his proposals. We have had the recognition debate, and we found that the Confederation of British Industry had got its way on the 40 per cent. hurdle, but there had to be many concessions, and, even at 40 per cent., there is still plenty of leverage for those who want to make disputes to ensure that they happen.

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Perhaps more serious than the recognition figure is the impact of the unfair dismissal proposals. In particular, I draw the House's attention to the fact that it is likely to poke up the route of recourse through employment tribunal on grounds of unfair dismissal with no limit on damages, in comparison with a more legally based claim of wrongful dismissal, which is confined to the contract term.

Finally, there are several interesting and important issues relating to representation that the Government have not properly addressed. For example, it is even possible to allow for a disaffected employee to drag in the representative of one trade union when another trade union is recognised. That will increase the possibility of inter-union disputes like those of the 1970s, which we had thought we could now forget.

My first criticism of the change that is taking place is that it is all about litigation and using litigation for recourse, rather than being in line with the spirit of the all-party approved private Member's legislation to resolve disputes, wherever possible, by consensus, arbitration or agreement.

Secondly--as I warned the Minister of State--I was staggered when I engaged in correspondence with him and asked, innocently enough, what the compliance costs were of his proposals on "Fairness at Work", but, so far, answer have I none at all. We shall have to continue asking.

As if the minimum wage and "Fairness at Work" were not enough, there are several other measures in the pipeline. There is the implementation of the working time directive, which is supposed to be introduced on 1 October. There is a slight problem, in that the regulations have not been published. How can firms be expected to comply with, to implement or to prepare to implement regulations that are not yet in existence if they do not know what they are to contain?

Above and beyond that, there is the implementation of an avalanche of European directives, some arising out of the social chapter, including those relating to works councils, parental leave, and part-time working, and the revision of the assured rights directive. Together, those all lead in one direction: they offer rights without further responsibilities, impose further costs on business and, therefore, concomitantly reduce employment opportunities. Taken together, they are bad news for business.

Yesterday, I visited an important showcase for British industry, the Silverstone grand prix circuit, which is shared between my constituency and that of my hon. Friend the Member for Buckingham (Mr. Bercow), although mine contains the grandstand, the start, the finish and the pits. I mention it not only because it is a remarkable example of what this country can achieve through its inventiveness, but because it is an analogy for competition. There is a range of grand prix cars which, to my untutored eye, all look the same; they may be painted rather differently, but they all have multiple and complex names and they all go extremely fast--far faster than I would choose to go. The actual difference between them in terms of performance is only 1 or 2 per cent., but that is everything; that is what the whole industry is based on. If we want to be competitive, it is no good saying, "We can take a little rubbish from 'Fairness at Work' and a few extra costs in taxation," because those small things can silt up the whole process and choke it.

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The President of the Board of Trade, who has now rejoined us, is deemed to be irrelevant by some of her colleagues, so we can leave her out of the analogy. However, when I consider the position of the Prime Minister and the Chancellor of the Exchequer and which analogy I should apply to their attitude to British industry, I am drawn irresistibly to that of the oysters in "The Walrus and the Carpenter", or, to bring it up to date in new Labour speak, the plumber and the leaker, whichever is which. The House will recall that

as the House will remember, the reason was,

    "They'd eaten every one"

We do not believe that the situation of British industry and manufacturing industry is irredeemable. Tonight, we are trying to save the Government from the follies of their own policies. In an effort to do so, we have tabled our motion and we shall press it to a Division.

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