House of Commons
Thursday 27 March 2003
The House met at half-past Eleven o'clock
PRAYERS
[Mr. Speaker in the Chair]
Oral Answers to Questions
TREASURY
The Chancellor of the Exchequer was asked—
Manufacturing Policy
1. Mr. Tony Lloyd (Manchester, Central): If he will make a statement on the impact of his Department's policy on manufacturing. [105150]
The Chief Secretary to the Treasury (Mr. Paul Boateng): Manufacturers globally are facing difficult times as the world economy slows. This Government remain committed to delivering a stable macro-economic environment, which will allow businesses to plan, invest and grow, while at the same time taking a range of measures to boost productivity, enterprise and skills.
Mr. Lloyd: Does my right hon. Friend recognise that the role of manufacturing industry is still massively more important for regions, for example, in the north of England, than it would be in the south-east? Of course, the present difficulties and problems that manufacturing industry is experiencing impact differentially in different parts of the country. I certainly give great praise to the Government for their policies on employment in relation to the manufacturing base, unlike the policies of the previous Government, which were devastating. Can we have a clear statement nevertheless that the future of manufacturing is fundamental to the future of the British economy and is central to the economic management proposed by the Government?
Mr. Boateng: My hon. Friend is absolutely right to stress the importance of manufacturing, in which he takes a great interest in the north-west. It has a vital role to play in the productivity drive that must be the key to prosperity, not only in his region but throughout the UK. He will therefore welcome the emphasis that we have put on the role of the regional development agencies, and the £991 million over three years that his north-west development agency has been given, which will enable it to continue its work with universities and
local businesses in enhancing local skills and improving productivity and competitiveness. It is on that that the success of his region and the United Kingdom depends.
Sir Nicholas Winterton (Macclesfield): Following the question of the hon. Member for Manchester, Central (Mr. Lloyd), the Chief Secretary will know my interest in manufacturing. I had a brief working lunch yesterday with a number of important representatives of UK industry who expressed concern about the amount of regulation coming from Government. Given the increase in national insurance contributions, and the huge increases in many parts of the country in business rates, will he accept that manufacturing industry is finding it very difficult to be competitive, and much of it is relocating abroad to the detriment of employment in this country?
Mr. Boateng: The hon. Gentleman makes his point about manufacturing and red tape. He will know, because I know that he studies these matters, that the Government have taken seriously the issue of red tape, and we have taken steps to deal with burdensome regulation. He will also be aware, not least because of the candour shown in this matter by the shadow Chancellor, who still maintains that labour market flexibility is the key, that this country has made progress in that area—that is never denied. He will also know that the best gift that we can give to manufacturing is a sound, stable macro-economic framework. That is what this Government have done and what his Government notably failed to do.
Mr. Derek Foster (Bishop Auckland): My right hon. Friend will know that in my constituency 50 per cent, of the jobs are in manufacturing. That gives us enormous strength when things are going well, but, over the last four years, there has been a continual leakage of jobs. I am enthusiastic about the exciting new futures that the Chancellor is laying out for regions such as the north-west and the north-east, but my constituents are saying, "We need some respite now." What will my right hon. Friends do about that?
Mr. Boateng: My right hon. Friend will recognise that in his region, looking across the sectors, unemployment has in fact been falling. New jobs have been created—1.4 million new jobs—since this Government came to office. That is never a cause for complacency, but what we can and will do is make sure that we invest in regional development agencies and that we put the encouragement and incentives in place with our research and development tax credits. All of those make a contribution to ensure that we not only keep jobs in regions such as his but that we create them, too. We are doing that with considerably greater success than Germany or France, and that is something that we should celebrate.
Mr. Mark Prisk (Hertford and Stortford): Despite the Chief Secretary's somewhat fanciful claims, in the real world, manufacturing companies are struggling to survive. Yesterday, for example, I spoke to a company in Buxton called Otter Controls, which has just announced the transfer of two production lines to Hungary, and, with them, 40 jobs. The reason that it
gives is the rising cost of Government regulations and taxes. Given that, why are the Government taking another £4.1 billion in national insurance from business next year? Does not he understand that this tax rise will either drive manufacturers out of business or out of Britain?
Mr. Boateng: In the hon. Gentleman's discussions with business, he will recognise that what businesses value is the macro-economic stability that this Government have brought to their management of the economy. What they value is the determination that the Government have demonstrated to put in place the framework for skills and research and development that is the best hope of industry across the piece. That is something that this Government have done and that his Government failed to do, and that is why we have created in our five years in office 30,000 more new jobs than they were ever able to do in their last five years in office. That is our record of success, compared with their record of failure.
Debt Relief (Africa)
2. Ms Bridget Prentice (Lewisham, East): What proposals G7 Finance Ministers have for debt relief in Africa. [105151]
The Chancellor of the Exchequer (Mr. Gordon Brown): At the 12 April meetings of the G7, the IMF and the World Bank, I plan to propose additional funding for the World Bank trust fund to finance African debt relief, call for special help for the post-conflict countries yet to enjoy debt relief, propose action to tackle vulture funds exploiting debt relief and push ahead with our initiative for an international finance facility that will offer additional African debt relief.
Ms Prentice: I am very grateful to my right hon. Friend for that response, but given changing world circumstances, is he still confident that we will be able to achieve the millennium development goals, such as giving every child a primary education, reducing paternal mortality rates and reducing the proportion of people living on less than a dollar a day by 2015?
Mr. Brown: When we came to power, only one country had the possibility of getting debt relief. Now, 26 countries are getting debt relief out of a possible 38. Almost all the other countries in Africa that are not getting debt relief are engaged in conflicts. We want to create a situation in which there is both an incentive for them to get out of conflict and special help for restructuring afterwards. This year, nine countries will complete their debt relief programmes. As a result of the actions that have been taken—I am pleased to say that they have had all-party support—it has been possible to release £62 billion of debt relief. That figure will rise to £100 billion if we can get the other countries in.
So the debt relief programme has moved forward, but I agree with my hon. Friend, who has taken an interest in these matters over a long period, that we will have to do more than provide debt relief if we are to meet the millennium development goals. It is precisely for those reasons that we have put forward the new proposal for an international finance facility that would release an
extra £50 billion of aid each year. That would allow us to meet the development targets—every child in primary education, a two thirds cut in infant mortality and a halving of poverty. I hope that there is all-party support for those objectives.
Mr. Andrew Mackay (Bracknell): While the whole House would support the Chancellor's effort to improve debt relief in Africa, does he agree that an exception should be made in the case of Zimbabwe due to the barbarous regime of Mugabe? Is he satisfied that his G7 partners are acting as he is in freezing the assets of the Mugabe regime and of those business men in Zimbabwe who are funding it?
Mr. Brown: The right hon. Gentleman will know that Zimbabwe is not one of the 38 countries and would not qualify for debt relief. It is not engaged in the programme, so no international resources going to the debt relief programme will go there. I hope that he will accept that assurance about Zimbabwe. It is, however, important to recognise that many countries surrounding Zimbabwe need our help and the debt relief—and that relief should be speedy.
Ms Julia Drown (South Swindon): Today, the Jubilee Debt Campaign and the Mothers Union went to Buckingham palace to present a petition of 121,000 signatures from across the Commonwealth. Some of the Africans who signed the petition could not write, but because they want their countries to have enough money to educate their children, they signed it with their thumb-prints. Will the G7 be moving beyond the existing heavily indebted poor countries initiative, which has linked sustainability criteria to the proportion of debt related to exports, and instead consider linking debt relief to the millennium development goals so that the goal of primary education for those people's children can be delivered?
Mr. Brown: I applaud the work that my hon. Friend does on the all-party committee and equally her delegation this morning taking mothers to raise the case of debt relief. She is absolutely right; we have to go beyond what is called HIPC2, and that involves topping up, as we call it, at the end of the process. Where countries complete the debt relief process, they get extra money to make up for the loss of export earnings from commodities. We will be pressing for that at the 12 April meetings in Washington. Equally, she is of course right that debt relief is only part of the process; we must open up trade and investment and ensure that we can meet the millennium development goals.
Mr. Roy Beggs (East Antrim): I welcome and fully support the Government's action to bring relief to the poorest countries in Africa and throughout the world. Will the Chancellor now congratulate the multinational companies that have forgiven debt in the poorest countries, and encourage others to follow their example?
Mr. Brown: I understand that two companies, Nestlé and Booker plc, have recently forgiven the debts they are owed in those countries, and I welcome their decision. However, we have an additional problem with
what are known as vulture funds: people are buying up the debts of the poorest countries and laying down conditions that it is very difficult for the international community to meet. I hope that all-party support will be given to our proposal of further action to give legal advice to countries hit by this problem, and a joint international approach to deal with creditors. It will be presented to the meeting in Washington on 12 April.
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