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14 Apr 2003 : Column 656—continued

Ms Hewitt: I am grateful to my hon. Friend for that comment. When I visited Daresbury, I saw at first hand the outstanding science and research that is conducted there. It is entirely due to the efforts of the RDA that we have been able to create such science and business partnerships in the north-west. We are backing the fourth generation light source in Daresbury and we recently announced the creation of a biotechnology incubator centre in Merseyside, with the support of the RDA and central Government.

Mr. Alex Salmond (Banff and Buchan): On the subject of regional development, will the Secretary of State comment on regional pay and the Chancellor's ambition for regional price indices to determine pay in the regions of England, Scotland and Wales in comparison with the much higher pay for police officers, nurses and firefighters in London and the south-east? Will she explain exactly how lower pay for key public sector workers will benefit the regions of England, Scotland and Wales?

Ms Hewitt: The hon. Gentleman is somewhat confused, as is so often the case. No one is proposing the

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abolition of national pay bargaining for the public services. The agreement in the Prison Service makes it amply clear that the necessary flexibility can exist in a nationally bargained pay framework to meet the problems of higher costs of living and specific skills shortages in different areas. Such local flexibility exists in the nationally bargained framework for the Prison Service and, of course, it is provided for in most of our public services through the London weighting. Indeed, I think that the hon. Gentleman wants Scottish weighting, so he should be supporting the greater flexibility to meet local needs, which we are proposing in the Budget.

Keith Vaz (Leicester, East): My right hon. Friend is right to commend the Budget's positive aspects, but she is a euro-enthusiast in the Cabinet. Has she had any further information from the Chancellor about the Treasury report that was widely leaked in the newspapers this morning? Does she know whether a decision has been made on that matter?

Ms Hewitt: My hon. Friend knows better than to believe everything that he reads in the newspapers. As the Chancellor said last week, we will make and announce our decision on the single currency in the first week of June.

There is more that we can do to build closer partnerships between science and business and to create the foundation for the new businesses and industries of the future. I have asked the chairman of the north-west science partnership, Sir Tom McKillop, to work with the other regional development agencies as they establish similar partnerships in every region.

Mr. David Laws (Yeovil): We understand that we may have to wait until the first week of June to hear the Government's decision on the five tests, but can the Secretary of State tell us whether the assessment has begun?

Ms Hewitt: As the Chancellor has said, the work on the five tests has been carried out in the Treasury. We will make our assessment and announce our decision by the first week of June.

I return to the issue of how we create strong foundations for regional and local economies. We need local businesses, trade unions, further education colleges and universities to work together far more effectively to respond to the need for employment and skills throughout our country. Thanks to our policies of steady economic growth, welfare reform and the new deal, we already have 1.5 million more people in work than six years ago; we have slashed long-term unemployment, and we have virtually eliminated it among young people.

There is more to do, however. Unemployment is far higher in the African-Caribbean community and in some of our Asian-British communities, and even graduates from those minority communities earn less than their white counterparts. Far too many people in their 50s and 60s with skills and experience to contribute to business and the economy are told that they are too

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old even to get an interview. Far too many women are still held back, undervalued, underpaid and unable in many cases to get the working hours that they need to give of their best at home and at work. Indeed, if women were starting businesses at the same rate as men, another 100,000 new businesses would be started every year.

We on this side of the House believe in equality as a matter of principle, but we also know that in a world of increasing competition, where companies and countries need every individual to contribute their abilities and skills, equality and economic success go hand in hand. That is not the Government telling business what to do; it is what business is telling the Government.

I recently visited one of our successful car plants in the west midlands. The managing director said, "Look around. This industry has always been dominated by white men, but the work force are not 90 per cent. white men and nor are the customers. If we in this company are going to be the best, we have to recruit and keep the best people, and that means attracting people from every part of the community." We will support and encourage that business and others like it to put policies for diversity and equality of opportunity at the heart of their strategy to create those high-performance workplaces that will make and keep them competitive in our increasingly competitive world.

Angela Eagle (Wallasey): I welcome my right hon. Friend's well-known commitment to equality. She has just made a case for simplifying equality and anti-discrimination laws by bringing them together in one new equality law that includes all the new definitions of discrimination. That would be easier for business to deal with. Is my right hon. Friend considering introducing such a Bill and a proactive duty to promote equality, like that in the Race Relations (Amendment) Act 2000?

Ms Hewitt: As my hon. Friend will be aware, we are currently consulting on the creation not of a single equality law, but of a single equality body, which will bring together the existing anti-discrimination and equality commissions and possibly make it far easier for businesses and other organisations to get the information and advice that they need.

As we spread opportunity and prosperity here in Britain, so, too, we must create opportunity and prosperity abroad.

Matthew Taylor (Truro and St. Austell): Before the Secretary of State moves on to the situation in the wider world, perhaps she could touch on one subject at home that she appears to have forgotten in her speech so far. If things are going so well in the British economy, why has business investment in this country collapsed further than it has in France, Germany, Italy, America and Japan? In fact, it is worse than in any other country in the Organisation for Economic Co-operation and Development with the exception of Iceland.

Ms Hewitt: The hon. Gentleman is ignoring the fact that business investment in Britain remains higher than it was in 1997 and higher than it was when it plunged under the Conservatives. At a time of great uncertainty, when export markets around the world are collapsing, businesses face difficulty in investing. Thanks to decades

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of boom and bust, this country has a long history of under-investment. We are creating the economic stability, sustained economic growth and low interest rates that will give business the incentive to invest and prepare for the upturn that will come.

Mr. Nicholas Soames (Mid-Sussex): Does not the right hon. Lady understand that her Government have taken about £50 billion in corporate taxes from productive and enterprising corporations? If one does that, one is bound to cut the amount that goes into those companies for investment, and that is precisely what she has done.

Ms Hewitt: We have cut the rate of corporation tax; it is lower than it has ever been in British history. Our reforms to capital gains tax give us a more favourable environment for entrepreneurial investment even than the United States. As I have explained, and as we set out in the Budget, we have put in place the incentives for investment and the low long-term interest rates that will help business to make the investment that is so badly needed in our country.

Mr. Peter Lilley (Hitchin and Harpenden): Will the Secretary of State spell out what steps she intends to take to ensure that British industry plays as prominent a role in the reconstruction of Iraq as our armed forces did in its liberation? She will recall that in the months prior to the liberation of Kuwait, I set up a task force, largely manned by business people, which operated in the Gulf and in Washington, lobbying to ensure that we obtained a fair share of the contracts. Mercifully, there was less destruction than we anticipated, but we obtained a larger share of contracts than we anticipated, not least in rebuilding the oil fields. We were able to publish a prospectus, setting out what Britain could do. Will the right hon. Lady spell out—

Mr. Deputy Speaker (Sir Michael Lord): Order. That was a very long intervention.

Ms Hewitt: I have already ensured that in awarding contracts, USAID, whose policy, I regret, ties American aid to contracts for American companies, will properly consider as partners British companies with great expertise. Only last week, Baroness Symons, the Minister for Trade and Investment, met British businesses that are interested and have the expertise to offer. An official from British Trade International is already in the middle east working with the Office for Reconstruction and Humanitarian Assistance to ensure that the expertise and experience of British companies is placed at the disposal of the Iraqi people as they start to rebuild their economy following Saddam Hussein. We are making sure that British business gets the backing it needs, but I hope that the right hon. Gentleman agrees that, rather than revert to that old and discredited policy of tying British Government aid to British contracts, we should back British companies to win based on the expertise and experience that they offer the Iraqi people.

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