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Mr. Redwood: My hon. Friend and many of my Back-Bench colleagues have consistently warned that

29 Apr 1999 : Column 540

even well-intentioned legislation can do grave damage. I am sure that the Government meant well by the minimum wage legislation but, unfortunately, it is not much good having wage protection if one loses one's job as a result. That is happening to too many workers.

Mr. Bill Rammell (Harlow): What possible logical consistency is there between the right hon. Gentleman's assertion that companies are transferring to France at the moment because of additional on-costs, and the argument that he usually uses--that we should resist further integration within the European Union because of other countries' uncompetitive situation with regard to social on-costs?

Mr. Redwood: Those are entirely consistent propositions. I am saying that, if we had stayed with the level of social on-costs under the Conservatives and the level of exchange rate that we then had, we would be more competitive. We were very competitive then. Investment came here; it did not go to the continent. During the past two years, we have warned that, if the pound were allowed to go too high and the euro too low, and if too many of the additional costs that continental countries already enjoyed were imported into this country, a point might come at which a switch-over would begin. We are now witnessing the start of that switch-over.

If the Government simply heap on more costs, more regulations and more taxes, the switch will get worse. There will be more closures. If they allow the pound to rise further and keep a high pound and high interest rates, more factories will close. More companies will move to the continent. That is the way it works.

The Secretary of State says that he believes in putting wealth creation before wealth distribution. I should like to see some evidence of that. He says that he has understood the free enterprise revolution launched successfully by the Conservatives in the 1980s, but he does not seem to have a clue how markets work, and he and his right hon. Friends seem to be amazed when Siemens pulls out of this country and sets up in Paris.

Indeed, I have the words of the previous Secretaryof State, the right hon. Member for Hartlepool (Mr. Mandelson), who, when I said that I feared that the closure of the Siemens plant on north Tyneside meant that business was being diverted elsewhere, said that it had nothing to do with conditions in Britain. He said that the Siemens management had cited the collapse of the world market in semiconductor products. He said that that was the only reason for the closure, and that one would not see that work, or work like it, being done elsewhere; the work had gone completely. Now, a different type of chip, which can be made in Britain, will be made near Paris, when the Secretary of State's local work force would love to have the chance to do so.

If the Secretary of State will not take my views seriously, I hope that he will take seriously the views that the local Amalgamated Engineering and Electrical Union official expressed when he said today:

and that Siemens should return and use the superb factory that it has. I hope that the Secretary of State will meet him and his friends and colleagues and try to do something about it at this late stage. There must be a change of policy, which might start to change the mind of industry about Britain.

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Our charge, this afternoon, is that the Government do not care about industry. They say that they do, but everything that they do makes industry's plight worse. They put interest rates up too high, making it too dear to borrow money to expand a business. They put the pound up and kept it up, making it too dear to export. They passed huge increases in business taxes, making it too dear to make things in Britain, taking money out of business that could have been used to create new jobs. They have heaped regulation on top of regulation, making it too dear to employ people in some places in Britain.

Mr. Christopher Leslie (Shipley): Such as?

Mr. Redwood: Hon. Members ask, "Such as?" The minimum wage, the working time directive and employment relations legislation are all increasing costs.

Mr. Barry Sheerman (Huddersfield): We have heard many accusations this afternoon, some of them totally unbelievable. I would love to see the right hon. Gentleman's diary, so that I could check which companies he talks to, because when I meet representatives of the leading companies, they all tell me that this is still the best country to invest in and to do business in, and that they like the environment that the Government have created.

The right hon. Gentleman is very slippery about many of these things, but will he answer one question? If the Conservatives ever returned to power, would they abolish the minimum wage?

Mr. Redwood: I have endlessly stated a very clear position. We oppose the national minimum wage. We urged the Government not to do it. We will set out the measures that we intend to repeal in the next Parliament when we launch our manifesto. I have also made it crystal clear that there are several ways of dealing with the damage to jobs done by the minimum wage. It could be repealed, or it could be frozen--one could limit the damage by not increasing it, instead of destroying more jobs.

What are the Government going to do about the minimum wage? Will they increase it by wages, by prices or not at all? Will they increase it annually, semi-annually or biannually?

Mr. Byers: Does the shadow Trade Secretary disagree with the shadow Chancellor that a Tory Government would put the minimum wage on hold?

Mr. Redwood: We have stated exactly the same policy--that we shall announce our clear intentions for the next Parliament on the eve of that Parliament, when we are fighting a general election about it. Both the shadow Chancellor and I opposed the introduction of the minimum wage and warned that it would do damage. We take no joy in seeing the damage that it is doing. We take no joy in seeing the fiddles that are limiting the damage--there are now lots of ways round it, because the legislation was so badly drafted. However, we must return to the attack today, when we see industry in chaos and crisis under the Government.

Judy Mallaber (Amber Valley): I believe that the right hon. Gentleman said that, if the Opposition ever got back

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into government, they would either repeal or freeze the minimum wage. Can he confirm that he is considering those two options only?

Mr. Redwood: No. I am considering a range of options, but I want to take the advice of the policy group that I am forming, and I wish to hear the views of business. Having listened, I will announce our policy at the time of the publication of the manifesto. However, we are in no doubt that the national minimum wage is damaging, and we strongly oppose it. We urge the Government to do something, even at this late stage, about the damage that they are creating.

Mr. Owen Paterson (North Shropshire): Labour Members do not seem to have a clue as to the damage that the minimum wage is doing to small rural businesses. I am in correspondence with a small accountant in the town of Ellesmere, who handles the accounts of small businesses, who has specifically asked me take up the problems that the minimum wage is bringing to those businesses, which cannot pass on the extra costs to their customers and will simply lay off their work force.

Mr. Redwood: I am grateful to my hon. Friend for his heartfelt advice, which reflects the advice that we are getting from all round the country through my hon. Friends and direct from British business.

When the Government are challenged about the factory closures that happen day after day, all that we are offered is a new spin. The hon. Member for Huddersfield (Mr. Sheerman) asked me which companies I talk to. Is he aware of the closures that have been announced by the Co-op, by Siemens and by Rover-BMW? Textiles, steel or cars--the story is the same in every industry: either mass sackings or complete factory closures.

Mr. Geraint Davies (Croydon, Central): Following on from the points that have been made about setting exchange rates and interest rates, can the right hon. Gentleman confirm that the official position of Her Majesty's Opposition is that the independence of the Bank of England will be abolished, as will the new deal? What is the probability of those policies changing next week in the light of a new statement by the Leader of the Opposition or his deputy?

Mr. Redwood: Labour Members really are rattled, if that is the best that they can do. Conservative Members have opposed each of the policies identified by the hon. Gentleman. We are the Opposition; it is our duty to say either that we can live with a policy, and perhaps be quiet about it, or that a policy is outrageous and we oppose it tooth and nail. We have opposed the policies that have been referred to today. That is our official position, and we think that the country would be better off without the minimum wage and without an independent central bank in its current shape.

Mr. Sheerman: On a point of order, Mr. Deputy Speaker. Labour Members appreciate that it is the job of Her Majesty's Opposition to oppose. If this is such a serious matter, will there be a better vote at 7 o'clock than there was at 4 o'clock, when--

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