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Mr. Phil Hope (Corby): The right hon. Gentleman quotes from various newspapers, but perhaps he should remind the House of the front page of today's edition of The Sun, which announces that it is supporting Labour at the next election.
Mr. Heathcoat-Amory: I conclude from that intervention that the hon. Gentleman is simply not interested in what is happening to the United Kingdom's productivity. He has nothing to say about that or about what people abroad who are contemplating investing in this country will now think of the Government, who have practically halved the productivity record of their predecessors. Along with the intervention made by the hon. Member for Chatham and Aylesford (Mr. Shaw), that is an eloquent testimony to the complete contempt with which the Labour party treats the real problem in this country: the production of wealth before it can be spent.
Mr. Michael Jack (Fylde): Clearly, the hon. Member for Corby (Mr. Hope) did not read the inside page of The Sun in which Trevor Kavanagh points out that the Chancellor enjoys spending other people's money and is a true socialist--a position that is rather different from that set out on the front page.
Mr. Heathcoat-Amory: My right hon. Friend has clearly been as assiduous as ever and has read the inside pages of The Sun as well as the headlines. The House will be grateful for that. I never get very far when I read it.
On productivity, I have mentioned the Government document entitled "Productivity in the UK: Progress towards a productive economy". It is a little late to be starting to make progress--the Government should have done so by now. We are grateful for the observations of the Trade and Industry Committee on this subject. During the past four years, a blizzard of White Papers, parliamentary statements and gimmicky measures have been introduced in Budgets, supposedly to try to raise our productivity gain. They have tried hard to do something, but what have they achieved? The Labour-dominated Committee observed that not only has very little been achieved, but we cannot measure what has been done. Its January report states:
- "The result is that it cannot be demonstrated that policies pursued over the past three years intended to narrow the productivity gap have had any measurable outcome."
- "The set of 'enterprise society' objectives, targets and measurements is a dog's breakfast."
- "It is an indictment of the department's ability to manage its own affairs that, having identified its failure, things should be getting worse rather than better."
- "The bleak truth is that we cannot tell whether some of the department's crucial objectives over the past three years, such as the promotion of enterprise, innovation and increased productivity, have been achieved".
Mr. Barry Gardiner (Brent, North): Will the right hon. Gentleman give way?
Mr. Heathcoat-Amory: I hope that the hon. Gentleman will forgive me, but I have been generous in giving way and I wish to conclude.
The Government inherited a strong, dynamic and competitive economy, but they undermine it with layer upon layer of new regulations and extra business taxes. They bind themselves to long-term public spending commitments that surpass any conceivable growth rate for the economy. They value spin over substance, and words over deeds. They thus betray the hopes on which they were elected and break the promises that they made to get elected. Such a Government will not survive the scrutiny and verdict of the next general election.
2.40 pm
The Secretary of State for Trade and Industry (Mr. Stephen Byers): Yesterday, the Chancellor presented a Budget for the future, to build a Britain of opportunity and prosperity for all. It combines wealth creation with social justice, and it supports hard-working people and their families. It invests in reform of our public services, but insists on results in return. It is a forward-looking Budget, which presents change as a bringer of opportunity, not a threat. It builds on the great strengths of the British people. The foundation for the Budget is economic stability; it was our first duty in government to establish that.
The Budget strikes a balance between prudent long-term investment and targeted tax cuts for hard-working people, pensioners and savers. It provides new opportunities and incentives for enterprise, and thus helps people with commitment to start and extend businesses. It makes work pay. Our economy is strong because of the decisions and choices that we have made.
For too long, the United Kingdom has suffered from violent swings of the economic cycle. Almost four years ago, we reformed the whole basis of economic policy making. We took tough decisions early to make the Bank of England independent, to establish a proper fiscal framework, and to repay the national debt. Consequently, inflation is now at a 30-year low, and is the lowest in
Europe. Long-term UK interest rates are at about their lowest for over 35 years, converging with those of Germany.Through the new deal, which is the most ambitious welfare-to-work programme in Britain, we have cut youth unemployment. One and a half years early, and at half the planned cost, we have exceeded our goal. Not 250,000, but 270,000 young people have now moved from welfare to work.
In total, 1,100,000 more people are in work now than four years ago. Britain has the lowest unemployment since 1975, the lowest long-term unemployment since 1979, and the lowest youth unemployment since 1975. Employment rates among women are the highest ever, and today, there are 1 million vacancies spread across the country.
That clearly demonstrates that the Government are working in the interests of all our people. The economy is enjoying its longest period of uninterrupted growth since the war. As well as huge improvements in the labour market and the economy, we have put public finances on a sound footing.
In the early 1990s, the national debt doubled. Consequently, we inherited an unacceptable level of debt in 1997. The tight fiscal stance we have adopted means that we have been able to repay some of the national debt. Last year, some £9 billion was repaid, and this year £34 billion is being repaid. As we cut the costs of failure, we are able to provide money for our real priorities and those of the British people.
In 1997, more was spent on debt interest repayments than on schools. We inherited that position. In 2001-02, we will spend £10 billion more on schools than on debt interest. That is not coincidence or luck. It has happened not by chance but through the deliberate choices that the Government have made. However, it can be sustained only if we hold firm to the financial disciplines that we have imposed, and run fiscal and monetary policy in tandem.
Our recent history shows all too clearly what can go wrong when risks are taken with the economy: businesses and people suffer.
Mr. Nick Gibb (Bognor Regis and Littlehampton): What will happen to interest payments from 2002-03 onwards, when the Government's net borrowing increases by £1 billion, and, successively, £10 billion, £11 billion and £12 billion? What will happen to the interest charges to the Exchequer in those years? Will they go up or down?
Mr. Byers: The figures are clearly stated in the Red Book. We are complying with the fiscal rules that we have established. We are therefore not taking risks with the economy. Yesterday's Budget was prudent. We will not do as the Conservative Government did in the late 1980s.
Let us consider Lord Lawson's Budgets. He had a strong economy, but what did he do with it? He cut taxes irresponsibly. Businesses and people paid the price in the early 1990s. Let us go back 10 years to February and March 1991. This week 10 years ago, inflation was more than 8 per cent; interest rates were more than 13 per cent. That is the Tory record of irresponsibility. Thousands of small business men and women were beginning to feel the consequences. There were more than 47,000 bankruptcies in 1991, and GDP fell by 1.5 per cent.
Businesses and millions of people suffered. At least 1 million hard-pressed home owners suffered negative equity. Approximately 250,000 homes were repossessed between 1990 and 1993. More than 1 million people lost their jobs in manufacturing in the early 1990s. That vicious circle trapped businesses and individuals. It was a traumatic period which must never be repeated.
Those are not just my views. Recently, I found on the internet the "Alan Duncan MP Westminster Zone", which I recommend to hon. Members. The website proclaims various publications and draws attention to "An End to Illusions". Some might say that that was an appropriate title. Of the late 1980s and early 1990s, when I believe a Conservative Government were in office, the book states:
- "In the late 1980s political leaders claimed that Britain was experiencing an economic miracle. The years of decline had come to an end. Instead the 1990s began with unprecedented debt, a deep recession and a credit squeeze that destroyed thousands of businesses and caused hundreds of thousands of repossessions."
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