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18 Nov 2002 : Column 458continued
Mr. Jonathan Djanogly (Huntingdon): British business is hurting; of that there can be no doubt. The Chancellor spoke earlier of falling unemployment, but I found that grossly complacent. Thousands of jobs are going by the day in the City of London, in manufacturing, where 400,000 jobs have been lost since 1997, in the high tech and communications sectors, which have had the stuffing knocked out of themonly last week, 3,500 jobs went at Cable and Wirelessand in agriculture-related businesses, which are in desperate straits.
My hon. Friend the Member for North-East Bedfordshire (Alistair Burt) gave a good picture of the situation in the eastern region, which is also my region. Some 41 per cent. of companies are showing falling output, and there are declining new orders, reduced staff numbers and reduced capital expenditure. All those issues present a very serious picture that goes somewhat against the complacency shown by the Chancellor. How the situation changes in the public sector, where there are increasing head counts across the board. Not only are there more employees, but requests for wage increases of up to 40 per cent. are being made at a time when people in the private sector are worrying about whether they will have a salary at all.
We have a Government who are increasingly obsessed with micromanagement and intervention to equalise regulations to the lowest common denominator with our European neighbours. The result is that we are fast losing our competitive advantage in an increasingly world economy. We have fallen from ninth to 19th on the world competitiveness scoreboard and our share of world exports is falling, together with poor rates of productivity that are rapidly falling behind those of America, France and Germany.
Burying our heads in the sand and ignoring the impact of the global economy and possible deflation, with the introduction of endless new regulations, may keep the unions happy, but, as the 950 employees of Black and Decker who lost their jobs in the Prime Minister's constituency know, it is destroying our ability to compete. Where are those jobs now? They are in the Czech Republic, because we can simply no longer compete in terms of labour costs and taxes.
Rather than face up to the problem, what are the Government doing at the moment? They are delaying the inevitable by restricting the movement of goods and people from our new eastern European partners. In short, we try to make them less efficient to hide our own deficiencies. Yes, the economic slowdown is global, but the less flexible our markets become, the less we can adapt to international pressure. While the Chancellor equivocates over the euro, we are losing sight of the big picture.
I do not feel that the Government are advising people on the real implications of technology; of course, cheap travel and communications are the core components of globalisation. The fact is that the service sector is now every bit as much at risk as the manufacturing sector. Clerical jobs can be carried out at a massively lower cost in the east than in this country, which is why banks and other institutions are now transferring their operations abroad. One can set up a call centre in India and employ bright university graduates who speak perfect English at one fifth the cost of employees in this country. Indeed, I was delighted to see that the Department of Trade and Industry has significantly increased its staff numbers in China, not least because, at this rate, that is where most of our services sector and manufacturing could be located in five years' time.
If we are to survive as a serious business player and encourage more investment, we must act now to cut taxes on business and start excluding companies from regulationsespecially smaller growing firms. As the
The lack of engineering-based apprenticeships and the shortage of skilled staff is also of enormous concern. Employers in my constituency continuously mention that to me, and much more needs to be done. Two weeks ago, I visited a university to be told that it is cutting its engineering courses because of lack of demand and increasing its psychology courses. I think that that says it all.
Finally, I was disappointed not to see the long-awaited companies Bill in the Queen's Speech. British company law is in urgent need of reformI declare my interests as a corporate lawyerand after three years of consultation on this largely uncontentious issue, business wants the Bill and we should get on with it.
Mr. Jim Cunningham (Coventry, South): The Queen's Speech gives Back Benchers an opportunity to talk about things that we would to like to see in the Queen's Speech but which do not appear in it. That being so, we hope to see them in the pre-Budget statement. I hope that my right hon. and hon. Friends on the Government Front Bench will take note of what I have said.
Today, the shadow Chancellor of the Exchequer missed a golden opportunityit is only about a month since the Conservative party conferenceto tell us about the 20-odd new policies that the Conservative party has developed. He was repeatedly challenged, and I thought that we would hear something about the new policies. We did not. We waited in vain. Perhaps we shall hear something about them next week. I look forward to next week's debate. Let us see whether the right hon. and learned Member for Folkestone and Hythe (Mr. Howard) announces his party's new policies then.
It seemed that at the Conservative party conference those present were going through the process of telling the truth and admitting their guilt in the past. The chairman of the Conservative party talked about the arrogance of previous Tory Governments, as did the Leader of the Opposition, and said that Conservatives wanted to change their image. No one really knows where the shadow Chancellor stands on that. He did not declare himself. I do not know whether the right hon. and learned Gentleman wants to put me right on that. He has the opportunity to do so. I do not know whether he is at variance with the leadership of the Conservative party or whether he will tell us all about where he stands.
The Opposition talk about regulation. When the Conservative Government were in officeI was working in industry at the timewe had a heck of a lot of regulations. Opposition Members in glasshouses should not start throwing stones at Labour Members. However, I take the point that we should not overburden small businesses with regulations. We should think through carefully any regulations that we introduce.
The Opposition are in danger of talking the country into recession. It is suggested that my right hon. Friend the Chancellor of the Exchequer is approaching the economic situation in a disinterested or cavalier manner. When we used to say those sorts of things in Opposition, we were told that we were talking the country down. I hope that the Opposition's intentions and their economic strategies are not designed to do that. Indeed, we have heard about generating confidence. I am sure that confidence is not generated when the Opposition go down the road that they chose to take this evening.
We all remember the exchange rate mechanism shambles. I remember it in Coventry, where companies were going to the wall. We also remember high interest rates. I am sure that many Members will remember that they reached 22 per cent., with VAT at 17.5 per cent. Conservatives say that they represent the party of low taxes, but we remember when there were high taxes under a Conservative Government.
I shall move on to the positive rather than the negative in having a go at the Opposition. As I have said, I look forward to the pre-Budget debate. Anyone who has been a member of the Select Committee on Trade and Industry and has visited Washington will know, having talked to people in world trade organisations, that the two big difficulties will be the French or the Americans. The Americans use their defence budget for various development projects, and we should not lose sight of that. When British Governments try to negotiate on the same basis, they are told where to go. At the same time, there are concerns about third world debt and the closure of European markets to third world trade. I appreciate that the Prime Minister and the Chancellor have taken a lead on that, but I hope that we shall return to considering such subjects shortly. Again, that must be placed against the background of the lowest interest rates for a generation and probably longer. It was probably in the early 1960s or late 1950s when interest rates were last at 4 per cent.
We should be worried about Britain's manufacturing base. The west midlands manufacturing economy probably employs a quarter of our labour force. That is a hefty chunk, which will be affected if there is a recession in the area. As hon. Members know, in Coventry, and probably nationally, there have been job losses at Marconi, and we do not know whether the company will survive. We all want it to survive, and perhaps the Government can reach some conclusion about whether we can use broadband to help it.
Other household names in Coventry, such as Massey Ferguson, have suffered, and Rover recently had to be assisted, in some instances by the Government, but also by the sheer determination of the labour force. In the west midlands, we have a labour force that is second to none; it has the ability to adapt and the determination to succeed.
I welcome the Government's new manufacturing strategy, which is the first for 30 years. It should help, but there remains a need for inward investment. We need more investment in transport, which is the basis of the economy. Transport costs can also affect product costs.