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Mr. David Heathcoat-Amory (Wells): I wish to declare the interest recorded in the House of Commons Register of Members' Interests, which may be appropriate to the debate.
It is my great pleasure to congratulate hon. Members who have made maiden speeches this evening. They have been of a consistently high standard. I particularly congratulate my hon. Friend the Member for Epsom and Ewell (Chris Grayling). All hon. Members who made maiden speeches showed great knowledge of, and affection for, their constituencies, which is an important feature of our parliamentary system, with its single member constituencies. All of them will be a great credit to the House in the years ahead and in the debates that we shall have with them.
I also congratulate the Secretary of State for Trade and Industry on her well-deserved promotion, and her ever-growing army of junior Ministers. There are eight now, which must almost be a record. They will not take up the Front Bench entirely, because two of them are from the upper House. Nevertheless, they are collectively a formidable team, and we look forward to debating contentious and other issues with them.
A heavy responsibility lies with the Secretary of State for Trade and Industry and her colleagues. Her Department looks like taking on the role of balancing the expenditure ambitions of other Departments. It is perhaps no exaggeration to say that this Parliament will be dominated by public expenditure issues in respect of public services. That may be right and proper, but if public spending is to be the chief issue, it is important for the Department of Trade and Industry to ensure that that is balanced by an equal attention to the wealth-creating process. It is only from the taxes paid by businesses and their employees that we have any public services. Quite simply, without profits and tax there can be no welfare. All Governments must bear that eternal truth in mind.
We shall support the right hon. Lady and the Department in so far as they act to promote the success and enterprise of the economy. However, the signs so far are mixed and not altogether encouraging. The Chancellor gave his own version of the Queen's Speech. There was a time when Her Majesty laid out the Government's programme, but now that task is shared with the Chancellor of the Exchequer. The Chancellor showed that he may have learned something from his mistakes, and we shall support elements of the enterprise and competitiveness package in so far as they do the trick; but in other respects there was more familiar meddling from the Chancellor and the Treasury.
What was noticeable, I am afraid, was that the Department of Trade and Industry had again been reduced to playing second fiddle. It essentially had a walk-on part in the drawing up and promotion of that package. That was a persistent problem in the last Parliament. The DTI, under a succession of Secretaries of State, was unable or unwilling to stand up to the Treasury. That is why we had damaging and unnecessary taxes, such as the climate change levy, which is incredibly complex and utterly irrelevant to the task of combating global warming. It is why we had record fuel duties and why the whole British haulage industry was made uncompetitive. The DTI apparently did absolutely nothing to resist the Treasury's taxing ambitions in that respect. That is not to mention
IR35, the notorious tax change that has done, and continues to do, so much damage to the information technology sector.My friendly advice to the Secretary of State is that the DTI should have its own enterprise and growth package on its own terms, and that the Treasury should come in behind that. The package should include the opening issues on which mistakes were made in the last Parliament--and there is plenty of evidence of those mistakes. Today's debate has reminded us that since 1997 we have fallen from ninth to 19th place in the world competitiveness league, and that the productivity gap to which the Chancellor is fond of referring has, in fact, widened. That was not apparent from his speech, and it is certainly not apparent from any Treasury document; but a careful reading of the DTI annual report published in March reveals that, on the basis of both calculations of productivity--output per worker and output per hour--the gap has widened since 1997, in relation not just to the United States but to France and Germany.
Every Budget that we had in the last Parliament referred to productivity and the productivity gap, but the gap has widened rather than narrowed. Why should we believe the Government's new emphasis on productivity, and why should we think that it will be any more successful than what happened last time--especially when many of the same mistakes are being repeated?
For instance, within days of the general election the Government admitted that they had given in to the European Union over the information and consultation directive. It is precisely that sort of centralised, standardised, legalistic interference from firms and business that is so damaging, and has caused so many problems over the past four years. It has led to the persistent over-regulation described by my hon. Friend the Member for Sevenoaks (Mr. Fallon). I do not refer just to the individual items; this is a cumulative burden that adds to business costs and loses us competitiveness in world markets.
Of course, the Government opposed that directive. The last Secretary of State for Trade and Industry said in the House on 18 January:
- "The Government remain opposed to the directive".--[Official Report, 18 January 2001; Vol. 361, c.498.]
- "We want a dialogue based on trust and partnership, not legal obligations."
That is one more decision that would once have been made in the House of Commons by the Government. The hon. Member for Kingston and Surbiton (Mr. Davey) said that there was no democratic transfer in these matters. The decision on that proposal, which would have been made in the House by a Government, has now been transferred to the European Union and made on the basis of majority voting. Of course, that will increase: the Nice treaty extends majority voting. That has been spotted by the Irish. The Nice treaty is not primarily about enlargement. If it were, the budget and the common agricultural policy would have been tackled. The Irish spotted that it was about further centralisation. Therefore the warnings of my hon. Friend the Member for Rochford and Southend, East
(Sir T. Taylor) are valid. Even before the Nice treaty has come into effect, a consultation directive opposed by a Labour Government has been decided by the institutions of the European Union. That is why not just this country but the European Union as a whole is losing its way in global markets.
Mr. Harry Barnes (North-East Derbyshire): Will the right hon. Gentleman give way?
Mr. Heathcoat-Amory: I will not give way, if the hon. Gentleman will forgive me, because I wish to pick up on some other points from the debate.
One of the puzzles about the whole debate is why it is that the Chancellor and other Ministers talk glowingly about the United States success in enterprise and venture capital, yet converge on a different economic model promoted by the European Union. It is true that the Government have picked out items from the American experience, such as the proposal to apply criminal sanctions against business people guilty of anti-competitive behaviour, but, if they want to pick out certain items such as that, why do they not buy the full American package and realise that American entrepreneurial success is built on low regulation and low business taxation?
In short, the Government are in a muddle. That is dangerous when we consider how vulnerable the British economy is. We have a highly distorted economic backdrop. There is something approaching a boom in services, bank lending to the private sector is at near record levels, but the trading sector, particularly the manufacturing sector, is almost in recession. Competitiveness and productivity are down; we are running a record trade deficit; the savings ratio has collapsed; and our enormous public expenditure commitments go far beyond any anticipated growth in the economy. That is why we shall look critically at the enterprise Bill. We shall be constructive on bits of it that we approve of, but shall look critically at it to find out whether it will strengthen the sinews of the economy to see us through any economic downturn.
Perhaps when the Secretary of State replies, she could kindly answer one or two additional questions. Is she serious about the need to remove excessive regulation, which is an unnecessary burden to growth? It was in that area that the biggest gap opened between words and deeds in the previous Parliament.
On the euro, my hon. Friend the Member for Lichfield (Michael Fabricant) urged caution on the Government. In anticipating his words, the Government have already responded by telling others, "Cool it on the euro." If the Government are cooling it on the euro, should firms and businesses cool it on their conversion to the euro? In the previous Parliament, the Government urged businesses to use their own money to prepare to convert to the euro. If the Government are going cool on the whole project, is their message and instruction to firms to back pedal on the anticipated conversion costs? Can the Secretary of State confirm the £32 billion figure, which will be the cost to business on conversion? The Chancellor rubbished that figure from an authoritative source during the election. Have the Government a superior one?
My last specific question is on energy policy. The Government and, indeed, Europe as a whole have a hypocritical policy towards the United States. They
criticise the American presidency for renouncing the Kyoto accord, but meanwhile Europe as a whole has no long-term or even medium-term strategy to counter the increase in carbon dioxide emissions. With the decommissioning of nuclear power stations in the medium term, it is not only an opinion or a possibility but a certainty that our carbon dioxide emissions will increase. Why is Europe lecturing the United States about global warming when Europe collectively has no answer to the problem after 2010? Will the Secretary of State confirm that there is to be a comprehensive review of energy policy that will get to the bottom of that issue?Opposition Members will enter into the debate on public services with gusto. We agree that, as a country, we must be far more creative--this applies right across the political spectrum--about how to mobilise the means to supply the health, education and other requirements of the population. We shall tackle that subject with the same vigour with which we tackled the industrial and economic problems of the 1980s and 1990s. [Interruption.] Let us not forget--[Interruption.]
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