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Mr. David Taylor: Not in Guildford.
Mr. St. Aubyn: Sadly, there was a price to be paid in a period of high unemployment.
Mr. St. Aubyn: Nevertheless, by the time we left office, nearly all that unemployment--[Interruption.]
Mr. Deputy Speaker: Order. I am sorry to interrupt the hon. Member, but the hon. Member for North-West Leicestershire (Mr. Taylor) should keep silent. I do not want continual sedentary comments.
Mr. St. Aubyn: I am grateful to you, Mr. Deputy Speaker, for reminding the House of its natural courtesies. I hope that I will now be heard more carefully by the hon. Gentleman, as this goes to the heart of the matter.
There will always be an economic cycle, but thanks to the previous Government's supply-side reforms, we can hope that the troughs will be fewer. Whether the peaks are more numerous depends on how much damage has
been done by the present Government's reforms, which have increased the burdens on business and will, in the long run, do little to help the performance of the economy.
Mr. St. Aubyn: I shall develop the point, if the hon. Gentleman will allow me. The excessive boom that occurred at the very end of the 1980s was not caused by cuts in taxation. The stimulus to the economy from the last Lawson Budget was only £4 billion. The devastating stimulus to the economy came from the withdrawal of capital that people had in their homes. They were spending between £10 billion and £20 billion a year of capital from their homes on current consumption.
Such spending is never sustainable. We learned that lesson. We learned how to control it, and during the previous Parliament there was virtually no equity withdrawal, as it is called, from the housing market. In the year just ending, however, we find that equity withdrawal is on the increase again. The Bank of England's latest figures suggest that there will be almost £5 billion of equity withdrawal this year. Next year we may get perilously close to the boom conditions of the late 1980s. [Interruption.]
I should like the Minister to answer a question, if he will pay attention for a moment. If there is an increase--[Interruption.] Will the Minister pay attention to the debate for a moment? If there is an increase in equity withdrawal in 2000-01, are the Government going to rely entirely on the actions of the Bank of England to constrain that equity withdrawal, or are they going to change the tax system? I hope that the Minister's officials, at least, picked up that question and will provide an answer before the end of tonight's debate.
The answer to the question will have a critical impact on whether we can sustain a boom without bust through this Parliament--let alone into the early years of the next century. The savings ratio is already collapsing--that much we know. As a result of that, the conditions of the late 1980s may well be around the corner. An imaginative response from Government could sustain growth, but judging by the actions of this Government, who time and again have attacked savings through their tax increases rather than supporting them, I very much doubt whether we are in the hands of people who know which way to push the tiller.
We have heard a great deal of talk about the independence of the Bank of England. As a member of the Standing Committee that considered the Bank of England Bill, I recall we were clear in our view that the Government had neither delivered Bank of England independence nor fulfilled the Maastricht criteria. They have offered the Bank of England pseudo-independence, not real independence.
What is independent and what is long-term about a situation in which the average tenure of any member of the Monetary Policy Committee is only 18 months? Members are appointed on a phased basis for three years, so at any moment their average term of tenure is only 18 months. We need members of any Monetary Policy Committee to have a far longer term of tenure if we are to have a genuinely independent Bank of England. Without that, all the Government's claims are spurious.
Moreover, the exchange rate policy is still very much in the domain of the Government. Within the framework in which the Bank of England has to work, the Government can use their exchange rate policy to oblige the Bank of England to make interest rate cuts or interest rate rises at will. Again, all the levers are there.
Finally, there is the famous section 19 of the Bank of England Act 1998, which allows the Treasury to take back unilaterally, for three-month periods in succession, with barely a reference to the House, the full control of monetary policy. That is not what we understand independence to mean. It is the sort of independence of mind practised by Labour Back Benchers. Sadly, it is only the appearance of independence, never the reality.
I fear that I do not hope for much from the Minister's speech. However, I hope that he has time to make it and that he will consider my points, and the obligation of all hon. Members to support a fair system of public expenditure both for the areas that he and his hon. Friends represent and for those that Conservative Members represent. Let us hope that that may be the ultimate outcome.
I am grateful to you, Mr. Deputy Speaker, for calling me as the last Opposition Back Bencher to speak in the House this millennium.
Mr. Deputy Speaker: I am grateful for the hon. Gentleman's words, although I thought that he might complete the millennium.
6.10 pm
Charlotte Atkins (Staffordshire, Moorlands): I am delighted to follow the hon. Member for Guildford (Mr. St. Aubyn) because I, too, would like to make a few comments about education.
Education has been a Government priority from the start. That means an extra £21 billion for education in the next three years. Although Staffordshire has problems with its standard spending assessment--and, as Treasury Ministers are present, I shall take the opportunity to echo the comments of my hon. Friend the Member for Stafford (Mr. Kidney) about the need to resolve the problem of unfair funding--I want to speak about my constituency and how capital moneys have brought real benefits to education in Staffordshire, Moorlands.
I shall cite a few examples. A new extension for a small, two-class rural school in Ilam has given teachers necessary space for small group work, which is essential for raising standards. For the first time, teachers will have a staff room, albeit only large enough for three chairs. However, at last they have a place where they can at least have a cup of tea on their own. I am pleased with the Government's commitment to rural schools. They are committed to keeping rural schools open and to increasing standards through the £40 million small schools support fund, which will ensure that small rural schools are no longer considered second class by local education authorities.
Moorside high school in Cellarhead in my constituency has new laboratories and design technology rooms. When I visited the school after the general election in May 1997, I was appalled by the facilities. The laboratories were out of the 1950s; they were not even big enough to take a full class. No self-respecting pupil--girl or boy--would have been encouraged to take up science as a career. That has
now changed, and thus created new opportunities for young people in a subject that is vital both to them and the nation. The headboy and the headgirl at that school are leading the way by taking up medical careers.Clough Hall high school is in the low-income area of Kidsgrove in Stoke-on-Trent. Led by a visionary head teacher, Mick Readman, the school has won technology school status and, with it, sponsorship from local firms, and a big financial boost from the Government. Those resources have to be shared in partnership with other local schools and the community. The system is not now one of winner take all, as it was under the previous Government.
The community benefits through after-school activities, and a boost to the local economy. A few weeks ago, ICL announced 500 new, permanent, highly skilled e-business jobs at its site in Kidsgrove, down the road from the school. ICL is one of the technology school's sponsors. It is no coincidence that those jobs appeared in Kidsgrove. In previous years, Kidsgrove would not have been the obvious choice for such new jobs. North Staffordshire had a poor record on the number of 16-year-olds who stayed on at school. The skills simply did not exist, and any jobs would have gone to outsiders, who commuted from nearby cities. Now, we can begin to rely on home-grown talent.
As a Government, we are trying to break the cycle of generational unemployment, under-achievement and educational failure. We want to eradicate child poverty, and we are achieving that in many ways, but education is one of the most important. Low educational attainment makes low pay and unemployment more likely. In 1997, people with no qualifications were twice as likely as those with level 2 qualifications and four times as likely as graduates to be unemployed. In the 1990s, people who stayed on at school after 16 had earnings 60 per cent. above those of people who left at 16. That gap has grown from 40 per cent. in the 1970s, which is why I am such an enthusiastic supporter of the investment in learning and skills councils. They will be responsible for all post-16 training and education. For the first time, we shall have a funding system that responds to the needs of learners rather than to institutions.
The hon. Member for Guildford mentioned the productivity rise in further education colleges, but what was the cost of achieving that? There is no support for students, and lecturers are parachuted in to teach their courses and leave. They are part-time, and have no real connection with their students. They cannot support them even though they are frequently the people who were failed by the school system under the previous Government. I am pleased that the learning and skills councils will look after those pupils who did not excel at school and were abandoned by the Conservatives. Many people did not have a good experience of school, but we need to develop the skills of all our population. We must have a knowledge-based economy in which we can rely on all our human capital and not only the small, highly qualified elite, with the rest left to their fate.
Have the Opposition learned anything from those developments in education? I fear not. They still cling to their competitive education model. They do not want co-operation between schools. They do not believe that schools can spread excellence, even though that is what we have seen with our beacon schools. They argue about class sizes but, when they were in power, they considered them to be irrelevant to raising standards even though
many Conservative Members bought smaller class sizes for their own children through the private sector. We are the Government of economic opportunity for all, but theirs is still the party of the privileged few.
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