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Sir Teddy Taylor: Will the hon. Lady give way?
Mr. Bercow: Will the hon. Lady give way?
Liz Blackman: No, I will not. The hon. Gentlemen can make their own speeches.
I turn now to the supply side and to the skills that are vital to improved output and productivity. The game is a long one, and I have talked already about investment and the effects that our policies and resourcing strategies are having. However, I also welcome the significant training programmes that the Government are putting in place, and the policy on lifelong learning.
My constituency has a skills shortage that was identified many years ago. I am delighted with the Government's new deal policies, under which youth unemployment and long-term unemployment have each been cut by 65 per cent. My right hon. Friend the Chief Secretary visited my constituency not so long ago and met a new dealer who was 58 years of age. Between the ages of 50 and 57, he was out of work and he never thought that he would work again. However, he got on the pilot new deal 50-plus scheme, and is now a really valued employee of the firm for which he works. I welcome the additional proposals to roll out the new deal 50-plus scheme across the country. It should be recognised that every section of society has a contribution to make, and my constituent has certainly made his.
All the measures that I have mentioned, together with the enhanced working families tax credit and the lower marginal rates of tax and national insurance, help to
ensure that people are supported back into work. The 800,000 new jobs that have been created are testimony to that.
Liz Blackman: Finally, I want to say a few words about pensioners. My hon. Friend the Member for Barnsley, Central (Mr. Illsley) congratulated the Government and welcomed the measures in the Bill that are targeted at pensioners. Some are aimed at poorer pensioners but others--such as the winter fuel allowance--are more universal. I have had discussions with pensioners in my constituency, and a couple of other points arise out of the representations that they made. I believe that the measures that we have taken are absolutely right, but even with the new savings thresholds that have been introduced, those pensioners just above the minimum income guarantee who have modest savings will not get the same benefits as those on the minimum income guarantee. I want more to be done for them, but the Government recognise that and I know that they are consulting on introducing more pensioner credits for that particular group. That is absolutely right.
Finally, when the Government flagged up the priorities of education and health, the Opposition said that our proposed investment in public spending was reckless. They were wrong. They foretold recession during the Asian crisis, and they were wrong. Some Opposition Members now endorse an investment strategy in public services, but they also urge the minimum tax guarantee--exactly the combination that will take the country back to the dire recession of the late 1980s: it would lead to the same disaster.
A well-managed economy allows us to pursue economic success, productivity, better public services, and fairness. All those objectives are inextricably linked.
8.24 pm
Mr. Dafydd Wigley (Caernarfon): I shall not pick up the speech from the hon. Member for Erewash (Liz Blackman) in detail, but I agree with what she said about the Government's treatment of pensioners. That story was told very dramatically by the hon. Member for Barnsley, Central (Mr. Illsley), who is not in his place now. Some Labour Back Benchers are feeling very strongly the pressure being applied by pensioners. No doubt they will make known to the Government the dissatisfaction and unhappiness felt by pensioners at the weekend press reports about the Government abandoning the pensioner vote.
Where will that vote go? The Conservative party broke the link between pensions and earnings in 1981 and is unlikely to reap the harvest from pensioners. Clearly, my party will have to put up candidates throughout the United Kingdom.
During the Budget debate, I had the opportunity to touch on a number of issues. I described the effect on rural areas of increased petrol prices: I spoke about pensions, and I welcomed some of the provisions in the Budget, such as the policy for children. Today, therefore, I shall concentrate on three or four matters only.
Before I do so, however, I want to echo what some other hon. Members have said about the ridiculous size of the Bill. There are 558 pages, 150 clauses and
40 schedules. Schedule 6 alone covers 83 pages. It takes up about 4,000 lines and amounts to about 30,000 words. The Government say that that is not a problem, but it will be one in Committee: if only a minute is devoted to each line, consideration of the schedule would take up about 67 hours. Perhaps Labour Members want to spend their time in Committee like that, but I think that their enthusiasm will soon run dry.We must think also of the people who have to live with the consequences of the Bill. There is a need for some stability and simplicity in the legislation, so that people can get their lives on a more even keel.
The hon. Member for Erewash presented the novel idea that interest rates have no bearing on the value of the pound. I am afraid that I do not entirely share that view.
Liz Blackman: Will the right hon. Gentleman give way on that?
Mr. Wigley: No, the hon. Lady was not all that generous about giving way. I shall not be either.
The value of the pound is a central question, and the indications following the Budget are that the pressure on interest rates will be upwards. The hon. Member for Erewash may disagree, but I believe that that will cause the pound to strengthen. There is no doubt that a high pound is bad for the Welsh steel industry, which is facing a difficult time in the coming months, but it is bad too for the motor industry and for other industries throughout the country.
The high pound also has a devastating effect on farming. Imports are being sucked in, and it is impossible for our farmers to export goods. It is also very detrimental for tourism, an industry that is important to me and to many other hon. Members. The Government must deal with the problem and not just shrug it off and pass it over to the Bank of England.
The transfer to the Bank of England of responsibility for the level of the pound is all very well, but that responsibility ought to cover levels of employment as well as inflation. Both elements are important, and they should be dealt with side by side. I know that that conviction is shared by Labour Members, and perhaps by some in the Opposition parties.
Earlier in the debate, Labour Members boasted that public expenditure now takes up a smaller proportion of gross domestic product than in the past. I would like public expenditure to rise--on pensions, transport and housing, for example. Everyone knows that there is a need for money to be spent on renovating houses. I do not therefore consider falling public expenditure to be especially commendable.
However, the burden must be spread fairly throughout the community. Conservative Members continually refer to the wealth-creation sector of the economy, as if only businesses create wealth. Everybody who is in work is part of the wealth-creating sector of the economy. It is no use saying that people working in the national health service are not part of the productive wealth of the
economy because it is a service, so called--of course they are. They make it possible for other people to do their work.
Mr. Geraint Davies: Will the right hon. Gentleman give way?
Mr. Wigley: Let me finish my point first. A doctor in the private sector could be regarded as being in business and therefore wealth creating because he is paid out of profits, while a doctor in the public sector, who does not get paid in that way, could be regarded as a drain on the economy. That is clearly nonsense. We must consider the whole economy and everyone in it who is undertaking worthwhile work, whether it is productive or in the service sector, is part of that economy. It is not simply a question of the wealth-creating side of the economy in business, but of the whole economy, a fair burden of taxation and a fair level of expenditure on public services.
Mr. Geraint Davies: My point was that real increases in public expenditure can occur at the same time as a proportion of gross domestic product rises because the economy is growing. By how much does Plaid Cymru want to increase income tax so that public expenditure is increased to the desired rate?
Mr. Wigley: I will be coming on to that in a moment. However, I certainly would not have taken a penny off income tax at this time. That £2,600 million, or whatever such a move generates these days, would have been better used to help pensioners, transport and housing.
Mr. Bercow: The right hon. Gentleman talked about his desire for increased expenditure on housing. What assessment has he made of the effect of the change in the rules on the use of capital receipts from the sale of council houses on the size of interest repayments on local authority debt?
Mr. Wigley: That is one element, but a more fundamental question faces people who are waiting for renovation grants in the old industrial areas, not only in Wales, given the reduction in the money spent on housing by central Government. Obviously, there is an effect from the change mentioned by the hon. Gentleman in the funds that are available, but that is one among a number of elements which have undermined the rolling programme of house renovations. People in houses that are virtually unfit to live in may be waiting six, seven or 10 years, given the present level of expenditure, for renovation grants. They are often elderly people who do not, and will not, have the resources themselves. We need a new mechanism to bring finance into the housing sector, both public and private, to ensure that people have decent housing.
I shall turn briefly to regional policy. At the heart of what has been happening with interest rates and the higher level of the pound that has resulted has been the question of the differential heating up of the economy. There has been a problem in south-east England and no doubt in other parts of the country, such as south-east Wales. The economy in the Cardiff area may be heating up more than in other parts of Wales. That underlines the question of whether it is possible to have a mechanism, through
taxation of some other means, to stimulate economic development in slow areas and damp it down in areas that are overheating.There was an attempt to do that in the 1960s, although it was not altogether successful. However, it is worth revisiting some of the ideas, such as the regional employment premium and selective employment tax. I am not sure about the selective employment tax, because that ossified industries in one direction. [Interruption.] I see the Chief Secretary putting his thumb down.
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