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9.26 pm
Kali Mountford (Colne Valley): You will notice, Mr. Deputy Speaker, that my voice has not the same vigour as usual. That will prevent me from responding in my customary style to the many comments made by hon. Members on both sides of the House during the debate and force me to focus on relatively few aspects of this wide-ranging Bill.
In the previous debates on the Budget, we had some discourse on the principles underlying it and what it was intended to do. Questions were asked about whether it was a Budget for jobs, for the family or for industry. I argued that it refocused priorities and gave greater support to families and children. Since then, I have pondered the question further and I still believe that the Budget epitomises the Government's policy of giving help to the people who need it most at the time when they are in most need, and recognises the needs of children in a way that previous Budgets simply have not. The sure start programme, the children's tax credit and the highest ever rise in child benefit are measures that target children in an unprecedented way.
The Budget is a Budget for stability. I commend my right hon. Friend the Chancellor's decisions so far on building stability in the public sector. I am impressed with the change from year-on-year public expenditure survey settlements, which were inefficient and ineffective. Expenditure in the public sector has now been refocused. Even more important, three-year forward planning has been introduced. The effect has been that extra money and revenue has been found for the Government's priorities of education, health, youth unemployment and crime. That refocusing has already enabled the Government almost completely to fulfil some of their main pledges, including class size and youth unemployment. Extra money for health is allowing the NHS to reform. The money has been used to abolish the internal market and cut waste. Those are all-important election pledges that need to be kept. The comprehensive spending review has enabled us to focus on them.
Health managers and local government officers have been telling me that the extra money is welcome and can be used on their local priorities, but three-year planning has had the most impact on some of their local decisions on how they spend cash as part of budget settlements. That has enabled them to make more sensible decisions. It has enabled them to focus their planning on services in local areas, using money more efficiently and effectively. That stability provides the ability to plan and to grow and we need it in the rest of the economy.
I come now to the rest of the economy, and in particular the textile industry. The labour force survey shows that 4,560 jobs in my constituency are dependent on the textile industry and I want to focus my remarks on how the Budget affects that industry. I take this opportunity to thank members of the Treasury team, especially my right
hon. Friend the Chancellor and my hon. Friend the Paymaster General, and the Trade and Industry team, especially my right hon. Friend the Secretary of State for Trade and Industry, for listening so carefully to my concerns about the textile industry and its ability to grow and sustain itself through what has been a difficult trading period.
If people could be bothered to go to the mills, they would find, as I did on my visits, that mills can be most old-fashioned. The labour force in a mill can be extremely old. Unlike many other industries, which tend to employ people in the 30 to 40 age group, the textile industry is heavily dependent on a work force aged over 40 and possibly over 50. It is hard to find anyone in their 20s employed in the textile industry.
Mr. St. Aubyn:
Will the hon. Lady give way?
Kali Mountford:
I fear that the state of my voice will make it difficult to continue to respond, so I have decided not to take interventions. I apologise to the hon. Gentleman.
Mr. St. Aubyn:
It would give the hon. Lady's voice a rest.
Kali Mountford:
It would give my voice a rest if I was not diverted. The hon. Gentleman must not try to divert me from my course.
Training is most important for the whole economy, but especially so for the textile industry, because there is a clear skills gap. I do not pretend that that gap can be met by the new deal alone, but I am sad to find that the textile industry has not taken all the opportunities available to employ younger people using the new deal programme, even though some mill owners have told me that they desperately want to employ younger people. Other measures are available to them--the Yorkshire task force for textiles has produced a training programme using the ability of the industry, local universities and colleges and bringing all that expertise together. It is a pity that some people in the textile industry do not even know that the task force exists, but I hope that they will realise that it does exist and that it can benefit them.
I hope that people will listen to the Transport and General Workers Union, which has produced a plan for textiles, part of which refers to the need to fill that skills gap. The Government's programme contains measures that will enable the industry to fill that gap. However, even if the gap were filled, there would still be more for the industry to do. There are huge gaps in investment in the textile industry, which typify the gaps in investment in a range of our other traditional industries. For example, during one of my visits to a local mill, I was shown a loom that had been there since 1947. That piece of machinery would have been better in a museum than in a modern industrial economy. It was pointed out to me that a machine of that calibre cost only £600, so it was very cheap. People knew the limits of the machine; they knew how many times they would have to repair it and what the costs would be, and they knew about its production run. In other words, they had become comfortable with that old-fashioned technology.
If ever there was an industry that needed investment, it must be the textile industry. For example, one entrepreneurial mill owner told me that he was trying to
invest in new machinery. He was looking at quite old second-hand machinery with newer technology and it cost about £2,500. Even that sort of expenditure formed a large part of his annual budget, as his turnover was relatively low. It is extremely difficult for him to find the extra money that is needed for big investments in high-tech, computer controlled and operated textiles machinery, especially looms. I have seen some highly imaginative machines, mostly from America, that can produce huge runs of high-quality material at low cost, but the investment that they require would completely wipe out an entrepreneur of the calibre of the man with whom I spoke. Small and medium-sized enterprises cannot afford to pay the price that a loom with that sort of technology can command.
What can we do? An entrepreneurial mill owner such as the man I describe can benefit from the measures contained in the Bill. The measures previously introduced by my right hon. Friend the Chancellor--especially the new 30 per cent. corporation tax rate and the capital gains tax changes in the previous Budget--have enabled that entrepreneur to invest in plant and machinery, but more needs to be done. Therefore, I am pleased by the introduction of the 10p corporation tax rate, which will help small and medium-scale entrepreneurs. I like to think that my right hon. Friend had the mill owner I am talking about in mind when he made that change--he certainly listened closely to me. Like my hon. Friend the Member for Dudley, South (Mr. Pearson), I welcome the extension of the 40 per cent. capital allowance for small and medium-sized enterprises to July 2000. I hope that it can be extended even further, because it would help the industry and the business that I am describing.
It might be hard to believe that the textile industry needs further research and development. To most people, woollens are woollens and knits are knits, and they have become accustomed to polycottons and other new fibres such as polyester, so they ask why new investment in textile research is needed. However, the competition in Europe and the demands of modern designers have ensured that it is no longer good enough to rest on our laurels and tell ourselves that the British textile industry has always produced the best woollen cloth in the world. Designers demand lighter-weight cloths with new designs and new weaves.
The relatively new mill owner to whom I spoke showed me some very imaginative designs. I was impressed by his imagination, his innovations and the style of material that he is able to produce, but he is unable to produce it in the right quantity to command the respect of the designers with whom he has to do business if he is to expand his business even further. He is dependent on fairly old-fashioned machinery and he cannot take his research and development programme further because of the constraints of operating within a small industry, so he cannot take advantage of the full scope of the European market for textiles.
Most of our textile trade goes to Europe--to Italy, France, Germany and Belgium. Companies in those countries are investing in high-tech machinery and, more significantly, in the new weaves of cloth and new types of fibre on whose development the growth of the industry depends. Although the textile industry is one of our more old-fashioned and traditional industries, it is an industry that needs to take on the challenge of change. The Budget and the Bill have the potential to enable the industry to take up that challenge.
At first glance, the tax credits for research and development might not appeal to textile manufacturers, but I would urge the entrepreneur I met to take advantage of that measure. If he does so, he will be able to compete on level terms with the Italian designers who are coming up with imaginative new yarns. I believe that he could benefit from the venture capital challenge. When banks do not want to take the risk of supporting a new small business and an unproven new fibre, that exciting measure can provide assistance. The £20 million for research and development, particularly in venture capital, could benefit that entrepreneur and enable his business to grow.
If businesses are to flourish, there must be economic stability. Several hon. Members asked what the Government mean by "economic stability" and equated the term with zero growth. Of course it does not mean that; it means having sure financial conditions that allow decisions to be taken for the future and enable businesses to invest with certainty, which must have an impact on the stability of the entire economy.
In the past 10 years, we have witnessed the slow decline and death of the textile industry in my area. Many jobs have been lost, and there are no mills remaining in parts of West Yorkshire that once depended heavily on the textile trade. That must lead to instability in local economies. My local economy has suffered serious instability in recent years and I want that trend to end. However, it must not be stopped by using old-fashioned interventionist measures that retain the same old jobs in the same old sectors.
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