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Mr. Tom King: The right hon. Gentleman rightly says that he is here answering for the Government on the whole Budget. Obviously, everyone welcomes new jobs in any area; they would be as welcome in my constituency as they would be in his. But the right hon. Gentleman was asked for a judgment on the overall Budget, and that matter gives me concern. The figures appear to show that there will be a substantial increase in unemployment in manufacturing industry. The right hon. Gentleman is party to the Budget and the Budget sums. Is that correct?
Mr. Byers: Once again, it would have been nice had the right hon. Gentleman reflected on the fact that unemployment in his constituency is now down by more than 20 per cent. since the general election. The Budget brings good news for manufacturing. Substantial tax concessions have been introduced, specifically targeted at the manufacturing sector, and manufacturers want economic stability, not a return to the early 1990s and the
days of Tory boom and bust. I can remember those days. In north Tyneside, around my constituency, not just tens or hundreds of jobs, but thousands, were lost in basic manufacturing industry because of Tory boom and bust. My constituents do not forget that, and that is why they voted for a Labour candidate.
I am outlining the steps that we are taking to help the manufacturing sector. However, we need to be realistic, and there is no doubt that, as we face a global downturn, some sectors of industry will be affected. To overcome that difficult situation, we need economic stability, and we believe that we have created the framework for that.
Mr. David Chidgey (Eastleigh):
The right hon. Gentleman rightly says that tens of thousands of jobs were lost in manufacturing in the 1970s and 1980s, but he will also know that there has been a worldwide decline in manufacturing employment, and those jobs will not come back. The right hon. Gentleman is clearly trying to impress on us the number of jobs that have been created since the Labour party took office, but will he confirm that far too many of those jobs are less skilled than those that were lost--the jobs that do not come back?
Mr. Byers:
A mix of employment opportunities is being created. It is a dangerous game to denigrate certain types of employment because they are part time or flexible, because many people now like to have such employment. Many full-time employment opportunities are being created in manufacturing which are well paid and high tech. That is the reality. Today's announcement of 900 high-quality, well-paid manufacturing jobs being created by Peugeot is a good example of that. I would hope that Opposition Members, from whatever party, would welcome that approach.
Mr. Andrew Lansley (South Cambridgeshire)
rose--
Mr. Byers:
I have taken a number of interventions; I will give way in a few minutes, when I have made some progress.
The International Monetary Fund report published on Monday shows the extent to which impartial observers think that the economy is doing well. The IMF gave the economy a glowing bill of health and its report praised the United Kingdom's impressive economic performance in recent years and the Government's skilful management of the economy.
The IMF said that the private sector fundamentals were strong and that any slowdown in the economy would be short-lived. It gave credit to the new monetary policy framework for leading to timely and judicious changes in interest rates and welcomed the Government's basic welfare-to-work thrust as improving the work of the labour market. When the IMF had analysed the Government's approach to the economy, it strongly endorsed the attitudes that we have adopted.
As the Chancellor said yesterday, we understand that there will be difficulties, with a quarter of the world in recession and world growth being cut by half. We have to overcome those short-term difficulties and we believe that the steps that we have taken, which will be carried through by the Budget, will ensure that we can steer a course of stability. Conservative Members know that full well and that the economy is now in a strong position.
We need to build on that strength. In particular, that means that we must seize the opportunities provided by the knowledge-driven economy of the future. If we fail to do that, we will be left behind as a country and as a people.
Success in tomorrow's fast-moving world depends critically on how well we exploit our most valuable and distinctive assets--the knowledge and the talent of the British people. The first industrial revolution was based on investment in capital and machinery. The revolution that we are going through requires investment in human capital--in skills, in learning and in education. That commitment comes from the Government.
Here is a message for all industry: knowledge is increasingly important not just for new industries; it will affect old, traditional industries just as much. They must embrace the knowledge-driven economy. Some are doing so, but all the traditional sectors need to do so if they are to prosper.
Last December's White Paper on the knowledge-driven economy set out a model for industrial policy for the next century. First, we must invest in British capabilities--in particular, our world-class science and engineering base and our skills. Secondly, we must act as a catalyst to collaboration between businesses and between businesses and our important science base. Finally, we must promote greater competition--principally, by empowering consumers, but through regulation where necessary. That is why I said to the House earlier that we will fully implement the 75 commitments in the White Paper. An implementation plan, which will show clearly how we intend to deliver on those commitments, has been published today.
A more fundamental challenge faces us all and goes beyond government: how can we end the poverty of ambition in Britain, which has held us back for too long? In government, in business, in universities, in schools and throughout society, we must foster a new spirit. We must be prepared to seize opportunities to turn new ideas into successful products and services and be committed to constant innovation and improved performance. Yesterday's Budget was an important step on the road, introducing measures that will encourage the new spirit of enterprise.
Mr. Lansley:
A few moments ago, the right hon. Gentleman said that the Budget contained tax measures designed to help manufacturing. I am looking through the table of "Budget 99" measures. He will of course be aware, on behalf of manufacturing, of a further table in the Red Book listing a large number of additional measures, which were announced before "Budget 99"--in 1998 or earlier--and take effect after this Budget. I have found 14 measures that will increase taxes on business, totalling £2.8 billion for the year beginning 1 April 1999. So far, I have found three measures that will reduce tax by a total of £15 million. There is £2.8 billion in extra taxes and a reduction of £15 million, which is a pretty poor show.
Mr. Byers:
I would accept that a £15 million reduction is not good enough; we need to do better. If the hon. Gentleman looks through the Red Book and reads the
Mr. Lansley:
Will the right hon. Gentleman give way?
Mr. Byers:
No, I will not. The hon. Gentleman has had his chance. We have provided £325 million, which can be written off against investment in plant and machinery in the coming year. That is the reality, and it is a shame that he is not aware of it.
Other steps that will be introduced as a result of the Budget will make a real difference. For example, my right hon. Friend the Chancellor confirmed the reduction in the basic rate of corporation tax, ensuring that it will be reduced to 30 per cent. from April this year--down from 33 per cent. when we took office. That is the lowest rate of any major country in Europe and the lowest rate of any major industrialised country, including Japan and the United States.
Mr. Townend:
Will the right hon. Gentleman give way?
We are also cutting small companies tax to 20p in the pound--down from 23p when we took office--and, to promote even greater enterprise and investment, we announced a new starting rate for small businesses of10 per cent., which is the lowest ever starting rate. We calculate that 270,000 businesses stand to benefit from that reduction, and 85 per cent. of them employ fewer than 10 employees. That will make a huge difference.
Corporation tax rates of 10, 20 and 30 per cent.--guaranteed to be no higher in the lifetime of this Parliament--show how serious we are about encouraging business and ensuring that the United Kingdom is a good place in which to do business.
Mr. Redwood:
Will the right hon. Gentleman give way?
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