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Manufacturing (North-West)

11. Dr. John Pugh (Southport): What assessment he has made of trends in manufacturing output in the north-west since January 2001. [44509]

The Economic Secretary to the Treasury (Ruth Kelly): The Government's latest assessment of developments in the manufacturing sector, based on all relevant factors, was published in November's pre-Budget report. An updated assessment will be published in the forthcoming Budget on 17 April.

Manufacturing in the north-west, as in the rest of the United Kingdom, cannot have expected to remain immune from the sharp slowdown in the world economy last year. However, the leading indicators from business surveys suggest that a recovery in manufacturing is under way.

Dr. Pugh: With regard to the application of state aid rules to manufacturing in the north-west specifically, is the Treasury, in its monitoring role, satisfied that European rules are being applied in the same way throughout Europe? Will Ministers investigate any allegations from north-west manufacturers that they are not? Will they seek in the Budget to give the same support as their French and German counterparts give their regions?

Ruth Kelly: What we need is not more state aid, but state aid that is well directed and focused on helping manufacturing across the United Kingdom. That is why my right hon. Friend the Chancellor has been arguing so strongly in Brussels that we should have a system that tackles market failures and puts in place, for example, regional venture capital funds across the country that can support growing and thriving manufacturing businesses. That is the way forward, and we will continue to argue our case in Brussels. I am confident that we are making progress in this area.

Mrs. Louise Ellman (Liverpool, Riverside): What discussions are taking place between the Treasury and the Department of Trade and Industry about the future of Marconi, with particular reference to Liverpool? Does my hon. Friend realise that employment at Marconi in Liverpool has halved over the past year? Does she accept that were that plant to reduce further, it would be a blow not only to manufacturing but to the skills base in Liverpool and the north-west?

Ruth Kelly: As my hon. Friend knows, it is difficult for me to comment on the specific case, but the regional development agency is working with my hon. Friend and others with an interest in the problem. Manufacturing across the north-west and throughout the rest of the UK will have benefited significantly from the Government's tax cuts in the corporate sector. Corporate rates have been cut by 3 per cent; they are the lowest in the history of the United Kingdom and lower than those of any other industrialised country. We are also giving significant support to boost the manufacturing sector and I am confident that we will begin to see the fruits of a recovery in the manufacturing sector later this year.

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National Health Service

12. Tim Loughton (East Worthing and Shoreham): What assessment he has made of the cost-effectiveness of extra tax revenues being spent in the NHS. [44510]

The Paymaster General (Dawn Primarolo): These are matters for consideration by the Chancellor prior to the Budget and the spending review. The outcome of the Budget and spending review will be announced in due course.

Tim Loughton: That was a disappointing answer, but perhaps the Paymaster General can give me a fuller answer without reference to some of the desperate fantasy stories that her spin doctors have placed in The Mirror. Does she recall her Government's official answer that, in 1997, there were 196,700 managers in the NHS and 210,520 beds? Now, there are 224,030 managers and the number of beds has fallen below 200,000 for the first time—a ratio of 1.15 managers to beds, and a ratio that has widened most in the last year. Does she think that that is a cost-effective use of tax revenue in the NHS, and are we to be subjected to yet more of the same after next week's Budget

Dawn Primarolo: I recall from the reports that we have 28 more hospitals, more beds and, as my right hon. Friend the Secretary of State for Health has demonstrated, there have been improvements in the number of patients being treated and the time in which they are being treated. I recall that the hon. Gentleman is on record as supporting the use of charging and privatisation in the health service. I also recall that the Conservative party is determined first to undermine the health service and then to challenge it and introduce privatisation—[Interruption.]

Mr. Speaker: Order. The hon. Lady is out of order.

Mr. Edward Davey (Kingston and Surbiton): Has the Paymaster General seen the report on the front page of today's Financial Times that the Serious Fraud Office is investigating six pharmaceutical companies that might have defrauded the national health service of £400 million? Does she agree that this shows that there is great need for the NHS to improve the way in which drugs are procured and that there is great scope for savings to be made in the NHS drugs budget?

Dawn Primarolo: I have not seen the report to which the hon. Gentleman refers, but all abuse should be rooted out. If anything is going wrong, my right hon. Friend the Secretary of State has shown that we will address it.

Stamp Duty

16. Mr. David Kidney (Stafford): What assessment he has made of the impact of stamp duty on labour mobility. [44514]

The Financial Secretary to the Treasury (Mr. Paul Boateng): We keep all taxes under review, including stamp duty on property. The number of property transactions in 2001 was the second highest since 1989.

Mr. Kidney: The pace of house price inflation is so great that in some parts of the country jobs cannot be

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filled because people cannot afford to live in those areas. Does my right hon. Friend recognise that difficulty, and has any modelling work on stamp duty been done to see whether a different application of stamp duty would alleviate the problem?

Mr. Boateng: My hon. Friend makes an interesting point, which no doubt my right hon. Friend the Chancellor will hear as a Budget representation. We have sought to focus the cuts in stamp duty on areas in most need. We have exempted all transactions below £150,000 in 2,000 disadvantaged areas. That undoubtedly will encourage investment and help the very people about whom my hon. Friend rightly expresses concern.

Mr. Mark Field (Cities of London and Westminster): In relation to stamp duty in central London and the very high cost of property, what are the Minister's thoughts on how labour mobility, especially in public services, will be enhanced by the high level of stamp duty? The fact that it is introduced at particular thresholds means that it applies to a different level of housing tenure in London and the south-east than it does in other parts of the country.

Mr. Boateng: We took those issues into account when we set the levels. Some areas in London will undoubtedly benefit from the measures that we are taking in relation to stamp duty in disadvantaged areas. We have also taken an initiative on starter homes, and above all house purchasers have benefited from the fact that as a result of the policies adopted by this Government and the economic stability that is delivering more success, mortgage payments are at their lowest for many years. They are now running at £150 a month less than they were at their highest. That is a real achievement, which is down to the sound policies adopted by this Government, in stark contrast to the ones supported by the Conservatives.

Manufacturing (West Midlands)

17. Mr. James Plaskitt (Warwick and Leamington): If he will make a statement on support the Government are giving manufacturing companies in the west midlands. [44515]

The Financial Secretary to the Treasury (Mr. Paul Boateng): This Government are committed to the success of manufacturers in every region of the UK. The best support that Government can give is a stable macro- economic framework, giving firms the confidence to invest for the future. We have delivered low interest rates and low and stable inflation. We are better placed to deal with the downturn than any other economy in the developed world, and we are doing so.

Mr. Plaskitt: I thank my right hon. Friend for that answer. Many manufacturing companies in my constituency report improving trading conditions and order books filling up, but they also report difficulty in recruiting skilled people. What further measures can the

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Government take to help manufacturing address the skills shortage? That will be particularly important as general conditions for the industry improve.

Mr. Boateng: The issue is being dealt with by the proposals that we have announced in relation to skills,

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science and technology. It is also being dealt with as a result of the enhanced assistance now available for the regional development agencies. The position is looking good and firms will be able to benefit from the expected upturn as a result of the sound macro- and micro-economic policies on which the Government have embarked.

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