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Mr. Gerald Bermingham (St. Helens, South): Does the right hon. Gentleman agree that there is a difference in infrastructure, design, work and social patterns as between the American and the British way of life? They are totally different. Is he suggesting that we should adopt the American system for our way of life by supporting the McKinsey recommendations? Many of us disagree with McKinsey.
Mr. Redwood: I have much sympathy with the hon. Gentleman's view. I favour the British way of life, as hon. Members may know. There are obvious differences between the United States of America--a country which I admire greatly--and the United Kingdom, which has a long history and a much smaller geographical area. Some planning policies that may work in the USA would be offensive in the UK. The Secretary of State will walk all over that difficult balance if he tries both to defend McKinsey and to say that he will not implement quite a few of the report's important recommendations.
I should be very happy to give the Opposition's view on all these matters, but I think that I should hear the Government's view first. I have made it clear in my exchanges with the Secretary of State that I fully support the demand for more milk quota from Brussels. That would be a welcome removal of an important block on the food industry. I would want to hear more about the impact on the motor manufacturing industry if precipitate action were to be taken, because I am conscious of the great weakness of that industry at the moment, although I like the idea of a better deal for customers. I hope that the Secretary of State will have something useful to say about the balance of those problems, given that I trust that he, like me, wants a strong motor manufacturing industry, as well as strong distribution.
Mr. Michael Jack (Fylde):
Before my right hon. Friend leaves the topic of agriculture and food, will he tell me whether he agrees that the Government's agriculture policy has been a major contributor to the
Mr. Redwood:
My right hon. Friend is correct, but I must not stray too far from the DTI brief. I raised the subject of milk quotas because I assumed that the Secretary of State was still technically responsible for the productivity agenda, and, to some extent, for the food manufacturing industry. The recommendation that I mentioned is an important part of the McKinsey report, which in other contexts the right hon. Gentleman praises considerably.
The Secretary of State must tell us what he will do about the textile industry. Is he aware that Marks and Spencer is about to decide to obtain many fewer of its products from the United Kingdom? Has he seen the predictions of trade unions, and of other independent forecasting bodies, that at least 60,000 jobs will go? Is he aware of the dangers facing the motor car industry? When he was having discussions with the management at Rover and trying to blame the work force, did he appreciate that there was a serious threat to jobs at Rover, and that production could be moved outside the country unless he and his colleagues did something about the current situation?
Will the Secretary of State take advantage of today's debate to put the Post Office out of its misery, and tell us whether he will let it expand abroad? How will he square the difficulties with Treasury rules, if he is now ruling out a privatisation--which we would be happy to support, if it would be of any assistance to him?
The Secretary of State and his colleagues are in a fix. They know that everything that they are doing in regard to working time, the minimum wage and the social chapter is deeply regulatory, and is imposing more and more cost burdens on British business. Because they do not wish to admit that, they are trying to close down the whole subject of manufacturing, to tell people that it does not matter, and to suggest that the creation of more jobs in supermarkets is a fair exchange for the factory closures and job losses that they are now recording.
Mrs. Louise Ellman (Liverpool, Riverside):
Does the right hon. Gentleman intend to explain to the House why his Government left a legacy allowing only one region in the country to achieve gross domestic product per head that was at or above the average achieved by European regions? Will he also explain why he opposes the establishment of regional development agencies whose remit is to work with the private sector to invest in manufacturing and other industry, paying heed to local sensitivities and opportunities?
Mr. Redwood:
I seem to remember that we left this country in extremely robust economic health. If the hon. Lady cared to look at the comparisons in regard to recent exchange rates, she would see that we are a relatively rich country, in the world and within Europe. She and her right hon. and hon. Friends would discover that if they examined the euro scheme in a little more detail--a scheme that would entail our paying higher taxes to send
Mr. Christopher Leslie (Shipley):
While we are talking about the euro, which has many implications for manufacturing, will the right hon. Gentleman take this opportunity to agree with Michael Portillo, who says that the Conservative party should rule out joining the euro for ever?
Mr. Redwood:
I entirely agree with the leader of the Conservative party, who has made a series of superb speeches about the euro, saying that it is far too hazardous a project for this or the next Parliament, and who will lead our strong opposition to this dangerous notion. The hon. Gentleman is rather inexpert at tempting people further; he will have to learn a little more about the ways of the House.
The true plight of British manufacturing is made much worse by a Government who meddle, send bills, interfere and cost far too much. I have here a small selection of the documents that a business man must read before he is even allowed to practise in this country: "Insurance Contributions", "Statutory Sick Pay", "Statutory Maternity Pay", "The Rules Governing Cars", "Manual for Employers on National Insurance", "Small Firms Employing Staff" and "Employers' Further Guide to PAYE and NICs". A small business man would have to read, understand and comply with all that before being allowed to trade. On top of that, and I freely concede that we left quite a lot of burdens on business at the end of our period of government, we have £14 billion more in regulatory costs as a direct result of this Government's actions.
If the Secretary of State wants to know why British industry is suffering, he should just look around him and see what the Government are doing. If he wants to know where the true productivity problem is in Britain, it is in the Government. If he wants to know why British companies are dipping into loss and experiencing very hard times, it is because of the tax bill, the regulation bill, the interest rate bill and the sterling bill with which the Government have saddled them.
British manufacturing needs a break from this Government's wild ideas. It needs a lower cost base. The Government can deliver the lower cost base if they wish to. The fact that they do not wish to shows that they do not care about all those job losses already recorded and are going to do nothing to stop job losses to come.
The Government should heed the advice of the trade unions, which say that several hundred thousand manufacturing jobs are going to go. They should heed the business surveys that show confidence at a new low for this decade. They should heed the advice of all those business people who say that they cannot make things and sell them at a profit from a British base. They should heed the advice of all those foreign companies which, two or three years ago, thought that Britain was the best place in which to do business but which are now closing here first as world economic conditions deteriorate.
The Chancellor may live in fantasy forecast land and the Secretary of State may rather spend time in Rio than in Hartlepool, but we want some answers. We want to know what the Secretary of State will do, how he will respond to the McKinsey productivity challenge and how any of that would make it easier for British business.
4.20 pm
The Secretary of State for Trade and Industry (Mr. Peter Mandelson):
I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:
As we all know, Sir Clive is a first-rate business man and an excellent CBI chief, but he is not especially well known for his pro-Labour sympathies, so let me quote him in full:
"recognises that the last thing business wants is a return to the boom and bust policies of the past, with interest rates of 15 per cent., inflation above 10 per cent. and a budget deficit averaging £41 billion a year from 1992 to 1996; welcomes the Government's decisive action in taking politics out of interest rate decisions, a move which the Opposition clearly does not support; notes that employment is currently 400,000 higher than it was when the Government came into office, and that long-term interest rates are at their lowest for 35 years; welcomes the measures that the Government has taken to encourage enterprise, investment and innovation, and to help unemployed people into jobs; welcomes the McKinsey Report as an important contribution to the productivity debate and notes that, unlike its predecessor, this Government acted to increase competitive conditions through a new Competition Act; and condemns the Opposition for its own record in government, when manufacturing employment declined by 2¾ million and Britain went into deficit on manufacturing trade for the first time ever in peacetime."
Despite the fine words of the right hon. Member for Wokingham (Mr. Redwood), the Opposition have not chosen their timing well for this debate. It follows the announcement of the decision of the Bank of England to reduce interest rates further by 0.5 per cent., which was welcome news for British business, including those in manufacturing--a decision that came too late for the Opposition to decide on a different topic for their Opposition day today. It comes the day after BP announced the creation of thousands of jobs--however hard the right hon. Gentleman tries to discount those jobs--with its investment in Scotland and in Humberside, and it comes on the day when the Confederation of British Industry president, Sir Clive Thompson, buried--or should I say filled in--the Conservatives' so-called black hole in the public finances.
"I do not believe we have a government that is slack on public spending or cavalier with our money, whatever Francis Maude may claim about black holes."
Despite that discouragement from his erstwhile friends, the right hon. Gentleman is not to be held back in his mission to spread doom and disinformation about the economy. His speech contained more negatives than a photographer's studio. In his world, there are grey skies just around the corner, and every silver lining has a cloud. One almost expects his dispirited colleagues on the Back Benches to start swaying from side to side before breaking into a rendition of "Always Look On The Dark Side Of Life."
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