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18 Nov 2002 : Column 449—continued

Mr. Love: Will the hon. Gentleman give way?

Malcolm Bruce: I will not because we are anxious to ensure that as many hon. Members as possible get to speak.

It is important that the Government recognise that many of those businesses are hanging by a thread and that if the issues are not resolved soon, they will not be able to hang in there for much longer.

The oil and gas industry is very important in my part of Scotland. The Government produced tax proposals in the last Budget without consultation and without

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warning that have deeply damaged confidence in the industry. I know that the Government will be able to point to academic studies that bear out the claim that the package of measures will benefit investment in the established fields. It will if the royalties part of the package is delivered. The industry is getting increasingly irritated that the Government are giving assurances that royalties will be abolished but have not yet explained why they have not been abolished, or abolished them.

The Government should not underestimate the damage that has been done to the confidence of what is a mature province. The industry has many opportunities to deploy its investment elsewhere in the world. There is no incentive within the Government's tax regime to look for new, more marginal fields that will sustain the life of our province. There is a real danger, therefore, that potential oil and gas reserves will never be recovered from the North sea, if the existing regime continues in its current form. To my mind, that would be both a waste of resources and deeply damaging to an industry that is very important. It provides about a third of a million jobs and a very high proportion of UK industrial investment, which the Government continually treat as a milch-cow rather than a real industry that sustains jobs at home and exports abroad.

On the back of that, it is important to take on board the ridiculous state of the electricity market, which is having very serious repercussions. A questionable investment of #650 million in British Energy may yet be vetoed by the European Commission—a clear indication that the electricity market that the Government boast about simply is not functioning. If it is functioning, it is telling us that nuclear power is so expensive and dangerous that it should be taken out of capacity and off the market. Doing that overnight would present a range of practical and capacity problems, but we should not allow the market to be distorted.

Those of us who want a real commitment to expanding energy efficiency, particularly through investment in combined heat and power and in renewables, want a framework that makes some sense. At a meeting in my constituency on Amec's proposal for a very large wind farm, I made it clear that I support wind technology. I am pleased that one wind farm has been given the go-ahead in my constituency, but we should note that a large protest movement is already asking a question that those of us who support renewables are having difficulty answering. That question is, XIf we don't happen to like the look of these wind farms, can you explain to us what the benefit is to our rural community in accommodating them?"

We are talking about an international company that employs nobody from the area, sends letters from somewhere in deepest England and has no real understanding of, or connection with, what we are about. We get no rent for such farms, because Forest Enterprise is involved and the money will be taken outside the area. Indeed, there is no perceivable economic benefit. The Government should think very hard about structuring the development of renewable energy to ensure that the communities that play host also get a share of the economic benefit—for example, a royalty from the units of energy generated.

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As an MP for a Scottish constituency, I know that Scotland has committed itself to 40 per cent. renewable energy by 2020. The question that is being asked, however, is why should Scotland do it? What will Scotland get out of it? The UK will get the benefit of assistance in meeting its Kyoto objectives, but if all these investments are to be carried out by multinational companies with no significant base in Scotland simply to export electricity to England, it seems that no obvious benefit flows to the Scottish economy. I urge the Government to think hard about structuring the development of renewable energy in a way that gives the host communities a real economic stake in it.

I am also concerned about the overall condition of the privatised utilities. It is some 12 to 15 years since they were privatised, and we need to reassess how they are performing in a somewhat contradictory market. Nobody is suggesting that we could, should or would wish to unscramble privatisation. As somebody who served on the Bills that privatised gas and electricity, I can testify that we did not oppose those privatisations in principle. We did criticise the way that it was done, and we pointed out that there would be problems. Gas's privatisation as a monopoly immediately led to an inquiry by the then Monopolies and Mergers Commission. In the electricity industry, distortion of the market led to the collapse of coal industry and the dash for gas. That wasted a great deal of money—never mind the billions of pounds of support that has been given to try to massage the real cost of nuclear power.

Whether we are talking about electricity or telecommunications, a clear conflict exists between the objectives of private companies and their need to make a return for their shareholders, and the fact that they remain public utilities, providing vital services for which there needs to be a public policy delivery. Last week, the Minister and I attended a meeting on post offices. At the end of it, I mentioned my concern about broadband. There are businesses in my constituency that depend heavily on a regular daily postal delivery service—preferably early in the day. They are deeply concerned at the prospect of a two or three times a week service and of perhaps having to collect their own mail. They regard that as an unacceptable threat to the viability of their business. They could of course get round that by using modern technology—broadband technology—except that it is not available in rural areas. Indeed, huge irritation has been caused by advertising campaigns by British Telecom and others asking people to sign up, and explaining that broadband is cheaper, better and more efficient. However, if it is a rural postcode, such companies say, XAh, not only do we not serve your area, we have no plans to do so—unless you're prepared to go and find our customers for us." Ministers—I do not mean the Minister who is in the Chamber—say that they are talking to BT. Well, excuse me, BT is a private company but we are talking about a public service.

Many of us look to the Government either simply to require the providers to give a universal service or to help them to do so; I do not have a strong view about which would be best. When Hydro-Electric was set up in the 1940s, it was required to provide electricity to pretty well every property in Scotland, including the north and the highlands and islands, and it has done so

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substantially, and spread the cost among all the suppliers. That would be a reasonable way of delivering broadband, with only very marginal exceptions requiring to be paid for separately or excluded.

The electricity market is in a mess, and nothing in the Queen's Speech will help. The new electricity trading arrangements are not working, and now the British electricity trading and transmission arrangements are mooted. It is not the right moment to go to BETTA, when NETA is getting worse.

Other utilities are operating in a contradictory market, trying to make a return for their shareholders and operate as a private business while being asked to provide a service for the whole community, which they are conspicuously failing to do. The Government, in the Queen's Speech, seem unwilling to do anything about that.

8.36 pm

Laura Moffatt (Crawley): I am pleased to support the contents of the Queen's Speech. It is difficult for us to choose which aspect of the speech to speak on, because it is apparent that all its aspects are interdependent: for example, a safer community attracts business, and education and skills training are essential for a thriving economy. It is important to consider all those aspects when we discuss trade and industry and economic matters.

It is important for me to contribute as a south-east Member. It is all too easy to think that the south-east is comfortable and has plenty of jobs, and that we do not need help from the Chancellor's policies. I hope to demonstrate that it is extremely important that we look after the region's delicate economy.

My constituency is in Sussex, in a region that is our second highest contributor to gross domestic product, and Gatwick airport is at its heart. It is easy to understand the impact of 11 September. People from my constituency had to leave their jobs on 12 September, because they could no longer pack metal cutlery to go on the aircraft. The impact was real and painful. Sussex Enterprise has been very helpful. We were afraid that it would be a very difficult picture, and although we have not got back to the employment position of before 11 September, the impact has been far less than we feared.

The reason for that is stability. Companies have felt reasonably calm about the future, so they have not overreacted and laid people off in a zealous attempt to protect their own interests. The stability created by the Chancellor's policies had a very positive impact in limiting job losses. It is difficult for those who lost their jobs, but they are far fewer than we expected.

We in the south-east face many challenges. It is a lovely place in which to live, but that is difficult because the average house price is #140,000. Low interest rates give people the opportunity to get into the housing market, so that policy has had an important and positive impact on my constituency. I remember when massive interest rates meant that young people felt they had no opportunity to enter the housing market, and they had no sense of having a future in the south-east. It is important to ensure that our young people can participate in the economy of the south-east and do not

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feel that they have to leave to find job opportunities elsewhere because of the difficulties of living in the region.

There is long list of policies—not only those announced in the Queen's Speech, but those introduced throughout this Parliament and under the Labour Government—that make it possible for families in the south-east with relatively moderate or low incomes to survive and feel good about the contribution that they make to the economy. Let me outline some of the specific issues that face us.

Many hon. Members have heard their constituents say, XGoodness, there are so many empty offices around—why are you building offices when we could have housing?" In the south-east, it is vital to have a healthy portfolio of offices to allow companies to change and grow. In any one year, about 1.5 per cent. of our business community changes premises—not leaving Sussex, but moving within the Sussex economy. It is vital that we continue to support that community, so reform of planning will be essential to ensuring that we have a healthy and vibrant business property market that enables that growth to continue. Limiting growth in the south-east does not benefit anywhere else in the United Kingdom. We now know that to be true. Once, we thought that if we tried to redirect everybody elsewhere, everything would be fine, but the reality is that we must allow our positive and vibrant business communities to thrive and survive.

Let me describe how important policies and fiscal influences are to my community. In education, we have to tackle the skills gap to ensure that we have people who are fit to take up the jobs that we need done. It is not good enough to say that we in the south-east have lots of jobs and people will fill them. We must make sure that people are in a position to fill high-tech jobs, or that they can go to university and then fill the graduate jobs that are so important to us.

It is important to understand that policies such as sure start and good child care are economic policies. Women walk into my office in Crawley and say, XThank you very much. My child is now in a nursery, I have been to college and I now work at the airport." It is thrilling to be able to experience that sort of thing, and, to be frank, we would like more of the same.

The working families tax credit has transformed the lives of 10,000 families in Crawley, and I am sure that other hon. Members can say the same of their constituencies. On average, my local families receive #25 a week, which enables them to survive in an expensive part of the world. They have to pay more for housing and transport, so working families tax credit is crucial to them.

Investing in our health services ensures that people are able to live and work and be serviced by good public provision, such as hospitals. We in Crawley have had enormous investment: we await a decision on whether to have a new hospital or to have massive investment in our existing hospital. That sort of investment was unheard of before, but it is vital to our economic well-being.

In housing, ensuring that our local authorities are able to deal with the supply problem in the south-east and that we are able to provide decent, affordable housing are vital if people are to be able to remain in the south-east. The Government have also provided huge

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investment for transport—#12.5 million has been added to the #23 million scheme to allow people to move between Crawley and the airport. We have never before seen such investment.

This great family of policies contribute to our well-being. They are part of what is making this country a better place to live, and my constituents reflect that.

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