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18 Nov 2002 : Column 408—continued

Mr. Deputy Speaker (Sir Michael Lord): Order. Before I call the next hon. Member to speak, I remind the House that Mr. Speaker has placed a 12-minute limit on Back-Bench speeches and that it starts now.

Mr. Patrick McLoughlin (West Derbyshire): On a point of order, Mr. Deputy Speaker. Can you confirm that, under the new rules that have been passed by the House, when interventions are taken not only will the clock stop, but each hon. Member will get an extra minute, up to two interventions? The rules were debated just a few weeks ago. I raise the point of order so that everyone can be assured that they are in operation today.

Mr. Deputy Speaker: The hon. Gentleman is correct. For the first intervention, the clock will stop while the intervention is made and then a minute will be added to the time allowed for that speech. For the second intervention, the clock will stop again while the intervention is made and a second minute will be added to the time allowed for the speech. After those first two interventions, no allowance will be made either for the intervention or the response. I hope that that is clear and that I have not taken too long in explaining the position.

5.49 pm

Mr. John McFall (Dumbarton): Thank you, Mr. Deputy Speaker, for providing such clarity on that point.

The shadow Chancellor's speech could be described as a commitment-free zone. We are still waiting, although perhaps I should modify that a little. After the Tory conference, the entire shadow Cabinet went into a conclave. Its members emerged with one, perhaps unanimous, commitment: to attack their leader, day after day after day. I should like them to add other commitments to that one.

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I congratulate my right hon. Friend the Chancellor on his speech, and on highlighting the issues in the Queen's Speech that he considers important, and with which we empathise: economic stability, high and stable growth, the delivery of good public services, the international obligations that he and the Secretary of State for International Development have set in train, and Europe. We all agree that we are operating against a dismal global background. We are witnessing the first simultaneous downturn of the global economy in 30 years. Last year, Japan's economy retrenched by 0.5 per cent., Germany is suffering the threat of deflation, and the International Monetary Fund has recently estimated eurozone growth of 1 per cent. for next year.

The background is dismal, but last year the United Kingdom enjoyed 1.9 per cent. growth—the fastest growth of any G7 country. We must celebrate and rejoice at the fact that we have the lowest inflation for 30 years, and the lowest inflation in Europe. We also have the lowest unemployment for 25 years—lower than that of Japan, the United States and the eurozone. Many Labour party members remember when we marched against unemployment more than 10 years ago, when unemployment stood at 3 million. Now, we have the lowest unemployment for decades, which is a cause for celebration.

As the Chancellor said, we have reached this point not by accident, but by design. Ten years ago, full employment was just a dream. It became an aspiration and then a commitment; now, it is almost a reality. The House need not take Labour Members' word for it. As recently as last month, the economic correspondent of The Times, Anatole Kaletsky, said that the British people have a level of relative prosperity higher than

He continued by stating that Britain's Xeconomic fundamentals" are as strong

There are worries, however, such as pensions, the falling stock market and pay demands. On pensions, the issue of trust is extremely important. As a result of past actions, trust has been dented. In recent months, the Treasury Committee took evidence relating to the split capital investment trust industry. As its chairman, I have received many letters from people who, on approaching their local independent financial adviser or a fund managing company, were sold zeros as part of a split level capital trust investment. Those products were advertised as being safer than a Volvo. It was said that if people put their money into such investment funds, it would sleep more soundly than a baby. Some people told us that having invested #7,000 or #8,000 to look after their elderly parents a few years down the line, their investment had reduced to less than #25. That is a scandal. It has dented people's confidence in the financial market and the stock market, and that confidence needs to be restored.

I need not say too much about Equitable Life, because we know, all too sadly, about the scandal that has affected it. Last week, with-profits annuities for pensioners were cut by almost 20 per cent. People who have saved every week of their lives, thinking that they were going to receive a pension and that they were investing in a blue chip company, have suffered a 20 per cent. cut. The Government should look urgently at that matter.

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I firmly believe that the firefighters 40 per cent. pay demand is absurd and that we should refuse to entertain it, even though we should acknowledge the good work that firemen and women do. Incidentally, I should point out that women and ethnic minorities each account for only 1 per cent. of the fire service, so there is a long way to go in that regard. I am not condemning firefighters, but if we give in to the 40 per cent. demand, our current low level of debt—at 30 per cent., it is lower than that of the eurozone—will increase. If debt increases, borrowing will increase, and so will the cost of borrowing. As a result, public investment will decrease, the good investment in public services will be no more, and we will end up with a black hole. Money will go into a pit, and nothing will come out at the other end. Investment, standards and wages will suffer. It is for that reason that such demands must be resisted.

Mr. Simon Thomas (Ceredigion): There is a lack of women recruits to the fire service. The hon. Gentleman says that a 40 per cent. target is not feasible, yet a lot of women must be put off by the fact that so many firefighters do two jobs to pay their mortgage. Surely it would be better to reach a settlement, no matter what it costs, to achieve a modernised fire service that can attract women.

Mr. McFall: Perhaps the hon. Gentleman has been speaking to the Deputy Prime Minister, because the issue is indeed modernisation and ensuring that we get a change in practices. Negotiating the issue of modernisation might result in a better service, so I thank the hon. Gentleman for his intervention.

On the spending levels to which the Chancellor has committed himself, I note with interest that spending for September 2002 has risen by almost 14 per cent.—a move that I support. Such an increase is encouraging, as is the knowledge that the goal of quality public services is being delivered.

I agree entirely with the Chancellor that we should encourage enterprise, particularly in the disadvantaged areas that a number of Members represent. For every three jobs created in the best areas, only one is created in poorer areas. That results in reduced income for services in the poorer areas, reduced quality of life, and increased poverty. The best anti-poverty programme is to assist people in poorer areas in starting up their own businesses, but at the same time we must ensure that they have access to capital, advice and skills.

On the Chancellor's international obligations, one big issue is economic reform in Europe, which has not been delivered. The hon. Member for Epsom and Ewell (Chris Grayling) mentioned structural reform in Germany, and I agree with him. The problem with Germany—and with several other countries—is that it has not reformed structurally. The Treasury Committee visited Frankfurt last week—we also visited Paris—and it became obvious to us that the German economy needs a great deal of restructuring. That problem has yet to be tackled.

Chris Grayling: Does the hon. Gentleman believe that Germany has a further long-term problem, in that—as

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many economists now argue—it joined the euro at the wrong exchange rate? Of course, there is no way out of that.

Mr. McFall: I agree. Sotto voce, several German politicians told us that German interest rates ought to be lower.

The big issue in Europe is the common agricultural policy, which is in urgent need of reform. A typical family of four now pays #16 a week in taxes for higher food prices, when food prices should be lower. They are propping up a regime that has as its centrepiece overproduction and environmental degradation. That conflicts with the Chancellor's wider aim on the international stage of helping developing countries. The CAP undermines the livelihoods of millions of farmers in developing countries by dumping cheap food on those countries, while denying them export opportunities to the single largest market in the world. Developing countries are getting fed up with western countries saying, XYou liberalise while we subsidise." That has to change.

Despite World Trade Organisation commitments, agricultural support from the Organisation for Economic Co-operation and Development has risen from $300 billion to $330 billion in the past decade. That is five times the global aid budget, so the Chancellor's worthy aims, aspirations and actions on behalf of developing countries are being undercut.

Three quarters of the world's 1.2 billion extremely poor people live and work in rural areas. The average for developing countries is 50 per cent. of the work force in agriculture, and in some countries it is as high as 80 per cent. Women are particularly affected. Anyone who has been to developing countries knows the crucial role that women play not only in keeping families and society together but in the economic field. Agriculture plays a crucial part in reducing poverty, and I would like the Chancellor and others to put it high on their agenda.

We know that the WTO met at Doha last week. We should all bear it in mind that if all the trade barriers were cut by half, the world's income would rise by $400 billion, which is equivalent to adding an economy the size of Australia's to the global economy. It would liberalise and bring prosperity to people who are living in abject poverty. Quality of life would improve, and so would international stability. We cannot get away with a world in which we increasingly gather material resources to ourselves and deny them to the vast majority of the world population. Disorder and anarchy will surely flow from that. Our economic and our social objectives must be at one. I urge the Government to work towards both sets of objectives, to make this not only a more prosperous but a more peaceful world.

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