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Manufacturing Industry
9. Miss Anne McIntosh (Vale of York): What representations he has received on the impact of his policies on the competitiveness of manufacturing industry; and if he will make a statement. [121379]
The Chief Secretary to the Treasury (Mr. Andrew Smith): Manufacturing industry makes a vital contribution to the economy. We are helping its competitiveness by creating the right economic climate of stability, low inflation and sound public finances, and through policies that help firms to innovate, to develop the skills of their work force and to grow.
Miss McIntosh: Does the Chief Secretary agree that the two most damaging measures for the competitiveness of British manufacturing industry are high interest rates and the high pound? Does he agree that they must be tackled, or does he agree with the Secretary of State for Northern Ireland that we should simply scrap the pound?
Mr. Smith: The hon. Lady is wrong. It is right that business has the confidence and the certainty to plan for the future, and it can do that with the platform of stability that we have created. We took the tough decisions on making the Bank of England independent and on imposing a fiscal and monetary framework that provides stability. We have avoided the penal levels of interest rates from which manufacturing industry suffered under
the Conservatives and that saw manufacturing output down by 18 per cent. in the early 1980s and down by 7 per cent. in the early 1990s--manufacturing output is actually now going up.We have acknowledged the competitive difficulties that some in manufacturing face. However, when Conservative Members emphasise that point, they are at risk of talking down British manufacturing industry and ignoring the fact that productivity is going up, that profitability has been at near record levels, that manufacturing output is going up, that exports have gone up 9 per cent. year on year--including a 6 per cent. in exports to the eurozone--and that manufacturing investment has been at historically high levels. Manufacturing has a good future with the policies for stability provided by this Government.
Mr. Robert Sheldon (Ashton-under-Lyne): I shall not bore my right hon. Friend with my views on the euro, but will he bear in mind the fact that in addition to the difficulties that some manufacturers face from a decline in exports, there are problems with cheaper imports--up to one third cheaper in some cases? Manufacturers may complain about losses of exports, but importers do not complain because they make the money. Will my right hon. Friend take this aspect of a serious problem into account? The fact that imports come in cheaply has to be paid for by our manufacturers.
Mr. Smith: The best way that we can help our manufacturers compete against imports is through the platform of economic stability that I have described and the extra measures that we have taken. In the Budget, we cut corporate taxes to their lowest-ever level and made permanent the 40 per cent. first-year capital allowances for small and medium-sized businesses. We also introduced the new research and development tax credit, which is worth £150 million a year, and the information technology allowances for small firms. We have provided £100 million to lever private finance into venture capital funds in the regions and £50 million for business clusters. The last thing that manufacturing businesses facing competition from abroad want is a return to the instability, boom and bust and short-termism that resulted from the Conservative party's attempt in government artificially to target a particular value for the pound.
Mr. Christopher Gill (Ludlow): Why do the Government not come clean and admit that Labour's poll tax on jobs will do nothing for the competitive position of British manufacturing industry? What advice would the Chief Secretary give to, for example, the managing director of the Lawson Mardon Star aluminium company in Bridgnorth in my constituency? It employs 600 people and it calculates that the net extra payment that it will
have to find for each and every one of those employees as a result of the climate change levy will be £1,000 per annum.
Mr. Smith: As my hon. Friend the Financial Secretary has already explained in answer to several questions, the climate change levy is fiscally neutral. Firms will benefit from the cut in the national insurance contributions that they will make. Moreover, not only is the levy fiscally neutral for the economy as a whole, but it is fiscally neutral within and between manufacturing and services.
National Debt
10. Mr. Desmond Browne (Kilmarnock and Loudoun): What his policy is on the management of the national debt. [121380]
The Economic Secretary to the Treasury (Miss Melanie Johnson): Our debt management policy, as set out in the debt management report published on Budget day, is to minimise the long-term cost of the Government's financing needs, taking into account risk. Thanks to the introduction of the new monetary and fiscal framework, the debt interest bill is projected to be £4 billion a year lower than when we took office from the Conservative party.
Mr. Browne: I thank my hon. Friend for that reply. In common with other Labour Members, may I welcome a debt management policy that will in the long term generate more resources every year for spending on our priorities, principally the reduction and elimination of child poverty?
In the absence of a helpful quotation from the shadow Chancellor of the Exchequer to illuminate my question, I draw my hon. Friend's attention to the advice of that other great economic analyst, the hon. Member for Banff and Buchan (Mr. Salmond). On Saturday, at the Scottish National party's conference, he said:
- Scotland should demand £2 billion--
- for investment in public services and infrastructure now."
Miss Johnson: Our policy is to manage the economy in a prudent fashion and gain the benefits of our prudence. The reduction of the national debt will bring benefits to the whole country and our aim is to reduce debt interest over the next few years and beyond. Of course, we inherited a £28 billion deficit from the Tories, under whom the national debt doubled. We have turned public finances around and made a massive investment in public services. I know that my hon. Friend will share my eagerness not to return to the Tory policies of boom and bust.
Business of the House
12.31 pm
Sir George Young (North-West Hampshire): Will the Leader of the House give the business for next week?
The President of the Council and Leader of the House of Commons (Mrs. Margaret Beckett): The business for next week will be as follows:
Monday 22 May--Consideration of a timetable motion relating to the Nuclear Safeguards Bill [Lords] and Sea Fishing Grants (Charges) Bill followed by their remaining stages.
Consideration of a timetable motion relating to the Royal Parks (Trading) Bill and Television Licences (Disclosure of Information) Bill followed by their remaining stages.
Tuesday 23 May--Second Reading of the Crown Prosecution Service Inspectorate Bill [Lords].
Second Reading of the Limited Liability Partnership Bill [Lords].
Motion relating to insurance for Members, including defrayment of the cost of defending defamation actions.
Motion relating to legal expenses incurred by the hon. Member for Mid-Worcestershire.
Wednesday 24 May--Opposition Day [11th Allotted Day]. Until about 7 o'clock there will be a debate entitled "The Government's Failure to Tackle Crime" followed by a debate on transport spending. Both debates will arise on Opposition motions.
Proceedings on the Powers of Criminal Courts (Sentencing) Bill [Lords], which is a consolidated measure.
Thursday 25 May--Consideration of any Lords amendments which may be received to the Electronic Communications Bill.
Motion on the Whitsun recess Adjournment debate.
The provisional business for the week after the Whitsun recess will include:
Monday 5 June--Consideration of any Lords Amendments which may be received to the Financial Services and Markets Bill.
Tuesday 6 June--Second Reading of the Police (Northern Ireland) Bill.
Friday 9 June--Private Members' Bills
I should like to take the opportunity to inform the House of business to be taken in Westminster Hall for when the House is sitting during June.
Thursday 1 June--The House will not be sitting.
Thursday 8 June--Debate on the fourth report from the Foreign Affairs Select Committee, from the session 1998-99, on Gibraltar.
Thursday 15 June--Debate on the role of the voluntary sector in our national life--recognising and promoting volunteering.
Thursday 22 June--Debate on the first report from the Education and Employment Select Committee, from the session 1999-2000, on school meals.
Thursday 29 June--Debate on the second report from the International Development Select Committee, from the session 1999-2000, on the future of sanctions.
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