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Mr. Murphy: My hon. Friend may say that, but it is not every day that I wish the England football team well. In its current predicament, my best wishes are appropriate.
The Government's White Paper "Targeting Excellence: Modernising Scotland's Schools" identified the need to encourage the involvement of young people in the world of enterprise. It stresses that we must invest in our youngsters to invest in our future. Much is being done, but I believe that more can be done. There are some good examples throughout the country and in my constituency.
The education for work initiative, piloted and supported by East Renfrewshire council and Renfrewshire Enterprise, has provided many opportunities for young people. I would be interested to hear whether hon. Members have had similar success with that initiative in their constituencies. The achievers international initiative is about setting up companies in schools so that young people can experience the spirit and responsibility of enterprise. St. Luke's and St. Ninian's schools are involved. I attended the launch at St. Ninian's. It set up a trading company for jewellery, exporting Charles Rennie Mackintosh jewellery to Nigeria and importing ethnic Nigerian jewellery. It did well and led to a thriving business in the school. Learning from that experience, 11 primary schools in my area have signed up to achievers international next year. I look forward to visiting primary schools to watch, listen and perhaps learn from young children aged 9 to 11 with the responsibility and opportunity to run their own company. That will be a liberating experience.
Under the education for work initiative, all senior pupils will be given a chance of work experience. There will be industry awareness days. Many schools in my constituency have been successful with the young enterprise initiative.
A key factor has been teacher placements in industry. I want continued Government support for that initiative. It is crucial that young people experience industry and enterprise, but it is imperative that teachers and, in some parts of the country, classroom assistants, get first-hand experience--if they do not have it already--of business and enterprise to pass on to pupils. We all pay tribute to the vast majority of teachers, who work diligently and hard. If we expect schools to become involved in the initiative to any great extent, we must support the teachers. I know that, in my authority, that is already happening. We expect nearly 4,000 teachers to be involved over the next three years.
I am keen on the agenda of encouraging young people to become involved in business and I am proud of the Government's efforts so far. The schools enterprise programme in Scotland operates under the banner "From Primary to PLC". Eighty per cent. of primary schools and 60 per cent. of high schools in Scotland are becoming involved. Seven of Scotland's universities offer modules in enterprise and entrepreneurship, regardless of faculty. They are trying to imbue the entrepreneurial ethic into our students. The programme has led to a 35 per cent. increase in the number of people interested in starting their own business in Scotland. It involves not only students with a marketing background, but engineers, social scientists and arts students.
So much is happening within this agenda. There is good news about what young people are doing, when given the opportunity. It is incumbent on any Government,
particularly this one, to provide the economic opportunity in the community and the business world by providing a stable economic environment. We have done much to achieve that nationally, but we must also provide support locally in community and youth groups and schools.
We talk about lifelong learning. Rightly, we are turning that slogan into a policy and, beyond that, into a reality. Lifelong learning does not mean only literacy and numeracy. We accept that the weakness has been that we did not encourage young people to become literate and numerate early enough. That is not a controversial point of view, and we are now building on that. If we are to deliver enterprise success in lifelong learning, we have to start early by involving primary and secondary schools and universities.
Mr. David Chidgey (Eastleigh):
The hon. Member for Eastwood (Mr. Murphy) gave us a thoughtful and detailed view of life in his constituency, for which I am sure we thank him.
I am pleased that we are having this debate. We spend much time in this Chamber passionately debating how much or how little we should spend on the great things in our society such as health, education, social support and welfare. Although we can argue at length about how much or how little we should tax and spend, we must first generate the revenue, however. We have to be able to raise taxes. I suggest that taxes should come from highly skilled and highly paid workers, and from highly successful and profitable businesses. There is not much point in arguing about how much, how little or how well we should distribute wealth unless we have first created it.
The Government's role in business is straightforward. It is not to impose the centralist command and control structures that have failed dramatically in other parts of world. Nor is it their role entirely to ignore business by taking a libertarian or laissez-faire view relying totally on market forces. Any Government who are serious about creating wealth must concentrate on the key areas in which they can create the right framework. We could start by looking at the skills gap, and the need for Government to help nourish and nurture the essential seedcorn of human resources. Government must consider investing in research and development, the green shoots of innovation for our industry and commerce. Most importantly, we need to support our growing companies--our small and medium-sized enterprises. We need to develop a climate in which expertise and enterprise can flourish. Only then will we start to reap the benefits of sustainable economic growth; we can then start to improve--perhaps beyond any conceivable measure--the investment that we need in health, education and social services.
As the trade and industry spokesman for the Liberal Democrats, I have the opportunity to meet many company managers in different types of organisation throughout the United Kingdom. There are many shining examples of successful enterprises in our aerospace and pharmaceutical industries--both are world-class industries. However, at the other end of the scale, there are many small firms--often employing
fewer than 50 people--tucked away in the corners of industrial estates, creating and producing advanced products. From seemingly small beginnings, those products are capturing world markets. However, the basic problem is that there are not enough of such enterprises to create wealth sufficient to sustain the level of economic growth that will meet the aspirations of the people whom we represent in all the corners of the kingdom.
To date, the Government's macro-economic policy has not been of particular help. In yesterday's Financial Times, it was reported that the United Kingdom's traded goods deficit widened from £1.91 billion in March of this year to £2.18 billion in April. The first quarter of this year is looking pretty disastrous. Further analysis of those figures reveals that, in April, the deficit in our trade with the European Union rose to £812 million. That is double the level at which it stood six months ago, and is the worst figure since August 1990.
In response to those figures, the chief economic adviser to the CBI said that those data highlighted one of the consequences of staying out of monetary union. She stated:
Mr. Butterfill:
Will the hon. Gentleman give way?
Mr. Chidgey:
I thought that that might raise some interest from the Conservative Benches. I am delighted to give way to the hon. Gentleman.
Mr. Butterfill:
Does the hon. Gentleman think that the euro, which has fallen by about 11 per cent. since it was launched at the beginning of this year, has been an example of successful monetary integration to date, or does EMU still have some progress to make?
Mr. Chidgey:
I know the hon. Gentleman well enough to realise that he makes a serious point, so I shall give him a serious answer. On reflection, I am sure that he will acknowledge that, over time, there are significant changes in currency exchange rates--one finds examples of that with the dollar and with sterling, both of which have moved in value by about 50 per cent. over a 20-year period. One has to consider the euro in a longer-term context. Yes, 11 per cent. is a significant change, but that is not a serious problem if we take a long-term view of the fluctuations in exchange rates.
As a further response to the hon. Gentleman's intervention, I point out that, since August 1996, the pound has risen by 23 per cent. on a trade-weighted basis. That has been a disaster for UK exporters. It is no good blaming that problem on the crises in the economies of Asia, Brazil and Russia. It is important to remember that the UK exports more to the Netherlands than to those three trade areas put together.
We should pay close attention to the Treasury's own forecasts of business opportunities for the UK. According to the Treasury's figures, opportunities to get more business for the UK in our key markets overseas are growing at 6 per cent. a year, yet the take-up of those business opportunities by UK businesses is growing at
only 0.5 per cent. That is most worrying; it illustrates the problems faced by our business and commerce. We are not grasping the opportunities that exist in our key, strong markets.
The Government have to take some of the blame for allowing the pound to rise to the levels to which it has risen during the past few years, and for the growing trade deficit that we are experiencing this year. However, we must be fair. The problem did not start with the Labour Government; it can also, in quite large measure, be laid at the door of the previous Conservative Administration. Figures produced by the Library in relation to trade deficits over the past 25 years show that, since 1974, our balance of trade has been in surplus for only seven years. That has resulted in a net deficit in trade that is in excess of £80 billion at current prices. If that is merely part of the economic cycle--as we often hear when we discuss trade deficits and surpluses in this place--25 years must be the longest trade cycle recorded in history. That legacy reflects the lack of understanding of previous Administrations, over a long period, of the importance of innovation and enterprise to our economy's ability to achieve sustainable growth. Long-running trade deficits underline the long-term ills of the UK economy, the long-term problems for UK trade and Britain's failure to match our competitors in innovation and enterprise.
In relation to the problem of innovation shortfall, an interesting survey was produced for the European Commission. I am sure that the Minister will have seen it. It is a survey of 12 countries in the European economic area entitled "Eurostat Statistics in Focus, Research and Development, No. 2/99--Community Innovation Survey 1997/98". I am sorry to be so pedantic, but I am sure that the Hansard reporters will want that in detail. The survey shows that the largest proportion of innovative enterprises is in manufacturing. It offers the following definition:
"Exchange rate volatility is the price you pay for being out of the euro."
That is a salient point in our continuing argument as to the benefits of EMU.
"An innovative enterprise has either introduced new or improved products on the market or introduced new processes during the last three years."
The survey found that large enterprises--those with more than 250 employees--were the most innovative. That illustrates the point that, although we realise that the engine for growth in our economy is the small to medium-sized enterprise--the smaller firm--such firms have huge problems in grasping opportunities to be innovative, to show enterprise and to succeed.
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