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5.6 pm

Mr. Jim Cunningham (Coventry, South) (Lab): It is rather ironical that I follow the hon. Member for Stone (Mr. Cash), particularly considering what he has been

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saying about Europe and the constitution. We have to remind him that if he and the last Conservative Government had not signed up to Maastricht and the single market, perhaps some of the red tape that he has been referring to would not have appeared.

Although we have not seen the details of the pensions Bill, which my hon. Friend the Member for Coventry, North-West (Mr. Robinson) mentioned earlier, I certainly welcome the proposals, particularly for the setting up of a pension protection fund. Any time my hon. Friend or I asked to see the Secretary of State for Work and Pensions about the problems that we were experiencing in Coventry with the final payment schemes of companies such as Massey Ferguson and, to a certain extent, Rolls-Royce, my right hon. Friend and other Front-Bench colleagues were always prepared to see us and to meet delegations. Although it may be a little premature to say so, we seem to be going in the right direction. However, we certainly need to know more about how the fund will work and what the levies will be.

The other issue arising from occupational pensions and final payments funds is the fact that there should be more consultation, not only on the general nature of pension funds but in the particular case of an employer proposing to change a pension fund. At the moment there is no onus on employers to consult employees about any changes to the pension fund or about pension holidays. Anybody who knows anything about industry will remember that, from time to time, employers take pension holidays, and nobody can stop them. That creates considerable problems. We must remember that the previous Conservative Government did very little about such situations. In fact, they presided over one of the biggest scandals in history—the mis-selling of pensions. I do not have to go into the details of that for my colleagues; I am sure that we are all aware of that scandal.

Turning to fair trade and third-world debt, I am particularly glad that the Chancellor is saying that, by about 2006, Britain's share of help for the third world will rise to about £4.9 billion. That is a step in the right direction, but there has always been a concern in the west midlands about the problems that manufacturing experiences from time to time. I mentioned the Massey Ferguson pension scheme. Massey Ferguson has pulled up stumps and left Coventry. When any manufacturing jobs are lost, that has a knock-on effect on the small producers who supply the spare parts.

We recognise that the Government are trying to do a lot for manufacturing industry, but we must keep our eye on that area, especially in the west midlands, which has been considered the economic engine of the country.

The shadow Chancellor opened the debate with his new attack machine. I was trying to work out what we should call it. Should it be called the Pol Pot machine or the year zero machine? My hon. Friend the Member for Coventry, North-West touched on that. The Tories have created an interesting machine, but we have one of our own. I am sure my hon. Friends remember the 17 per cent. VAT on fuel under the Tories. Despite the campaigns that were waged, the Conservative Government did not listen. We had a battle in the House on a Friday morning about winter fuel payments, and I

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am sure that my hon. Friends remember that. Under the Tories, there were record interest rates, negative equity, the mis-selling of pensions, record unemployment, and the Horizon project, which the Opposition do not want to talk about. When I was on the Select Committee on Trade and Industry, it conducted an investigation into the Horizon project, which cost £0.5 billion and was probably responsible for some of the problems that we now have with computer systems. The Tories spent about £30 million trying to put it right.

Mr. Berry indicated assent.

Mr. Cunningham: My hon. Friend also took part in that inquiry. The Opposition talk about their attacking machine, but we have one as well.

I shall be a little more positive now, as I have said enough about the record of the Opposition in government. I shall take a measured look at our record. We have low inflation—we have probably had the lowest inflationary period in our history, despite what the Opposition say. That gives people confidence in the economy and a security that they have never had before. Anyone who has worked in industry has been subjected to the stop-go policies of Conservative Governments, when they could be threatened with redundancy. They know what that security means to the man and woman in the street. That is fundamental to people outside, and we should never lose sight of it.

More money is being spent on the health service and on education. More importantly, there has been an increase in the number of doctors and nurses to meet the needs of the health service. Much has been done to reduce waiting lists, but it is important to note that more people are being treated than ever before. I am sure that my hon. Friends remember the days when people were put on trolleys because they could not be given hospital beds, and when there was a record number of hospital closures. It is worth while reminding ourselves of the Tory record.

One of the most fundamental measures that the Government introduced was the minimum wage. We can all debate the level of the minimum wage, but I remember the case of a lady in Coventry who was paid £1 an hour and was not told her employment rights. We had a long battle with the job centre to get some action taken against the company involved. There was quite a bit about that in the Daily Mirror, which ran a campaign on the minimum wage.

We should again remember the Conservative Government's record. I like to jump in and out of this subject, just to remind them. What could have been worse than the poll tax? Need I say more? I was leader of Coventry city council during the poll tax years. People complain about high council tax charges, and some of them are too high, especially in Tory councils, but I can remember when Coventry city council's rate support grant was cut and its capital budget was capped. In effect, that meant that we could not carry out school or council house repairs. Therefore, although we have been in government for about six and a half years, we still have a long way to go to deal with the injustices and inequities of the Tories' 18 years in government.

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I say again that I welcome a number of measures in the Queen's Speech and a number of measures that the Chancellor has introduced in the past. I look forward to seeing the detail of the Government's pensions Bill.

5.15 pm

Mr. Archie Norman (Tunbridge Wells) (Con): I draw the attention of the House to my entry in the Register of Members' Interests.

It is a great pleasure to follow the hon. Member for Coventry, South (Mr. Cunningham), who made an interesting speech and some important points. I was sorry that he chose to introduce, perhaps uncharacteristically, a partisan note at the end of his remarks. It is interesting to note how often Labour Members refer to the poll tax, as if that is an important point about next year's public agenda. After all, the poll tax became extinct more than a decade ago. If that is the greatest criticism that they can level at Opposition policies, it is not very much.

My right hon. Friend the Member for Charnwood (Mr. Dorrell) said that the debate would be interesting to the outside world only if we were capable of standing back a bit from party politics, and I agree. Unfortunately, he made his remark after the Chancellor left the Chamber. The Chancellor's speech was very much the speech of a politician, of someone more interested in his interpretation of Opposition policies than in any rounded assessment of the state of the economy.

There are fundamental issues about the performance of the economy; I think that any rounded assessment would come to that conclusion. That is not necessarily a criticism of the Chancellor or of the Government's approach. The Government set out with a big project—to increase state spending on state-delivered service—in the belief that the quality of life for British people, our infrastructure, and hence our national competitiveness would improve as a result. That is a perfectly noble purpose, but the Government staked their reputation on their ability not to spend money but to deliver outcomes proportionate to the increase in spending.

That is the issue that my right hon. Friend the shadow Chancellor raised in his speech. It is not a partisan point that there are serious problems with public service productivity and public service delivery. After all, it is an issue that the Prime Minister himself has recognised. Given the major policy shift undertaken by the Government, that is the central issue that we should be debating and that the Queen's Speech should be addressing.

Mr. Geoffrey Robinson: Will the hon. Gentleman give way?

Mr. Norman: I am sorry. I am so short of time that I prefer not to, if the hon. Gentleman will forgive me.

The shadow Chancellor said that the solution is not more legislation, it is better administration. He is 100 per cent. right. That goes not just for public services but for the economy as a whole. Let us remember that public spending is rising to 40 per cent. of GDP. It accounts directly for about one fifth of all employment and indirectly for even more, so it is a substantial part of the total. If we fail to deliver productivity growth in the

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public sector, it will be extremely difficult to improve the competitiveness of the economy overall, regardless of the state of the national infrastructure.

It is not just a question of wastage, surplus overheads, the burgeoning number of administrators in the health service or the Department of Trade and Industry. The importance of the bureaucrats and administrators is that they speak of a set of values and a style of leadership. If in the DTI, the Department of Health or the Home Office the number of administrators is growing by the day, it is hardly surprising if people on the front line are not motivated to deliver improvement in performance and to look for ways of saving money.

According the Office for National Statistics—these are not my statistics—from 1995 to 2003 there has been a 48 per cent. increase in public spending for a 15 per cent. increase in output. There is controversy about how we evaluate public sector output but, on any measure, we are looking at dire performance on productivity improvement compared with anything one would expect in the private sector. In the NHS alone, most measures suggest that for an increase of about 21 per cent. in spending over the last three years, we have had an increase in output of approximately 1 to 2 per cent. There may have been qualitative improvements beyond that, but there is a huge deficit in performance that would be unacceptable in any commercial environment.

It is no defence for the Chancellor to give a great list of achievements; after spending that amount of money, there should be achievements. The question is whether those achievements are proportionate to the money that has been spent, and whether the public sector is improving the quality of delivery at the same rate as one would expect had the same amount of money been spent in any other sphere of life. According to the ONS, we have seen negative productivity growth in the public sector in the last three years. That is a serious problem for both sides of the House and for the economy as a whole.

We are putting more and more money and employment—70,000 to 90,000 people a year—into the least productive, worst managed, most trade unionised and most sclerotic part of the economy, which spends the least on research and development of any single sector: the public sector. That is the difficulty with which we are struggling, and the Queen's Speech needs to address it.

What is the Government's agenda when faced with this central and structural problem in their policy? The answer appears to be to produce more Soviet-style proliferation of public targets and to do nothing to address the problems of public sector management. The chairman of a well respected NHS trust told me a couple of weeks ago that the problem with the Government was that they thought not that the Soviet Union was wrong, but that it did not try hard enough. [Interruption.] Those are not my words. One might think that they are exaggerated or ridiculous, but that is what leading public servants are saying about the Government. People who work for the Government—not me—believe that that is the way the Government are working.

The Centre for Policy Studies produced an excellent document recently called "Managing not to manage" and pointed out that the life expectancy of a chief executive of an NHS trust is now only 700 days. In other

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words, we are losing talent in the service because people are so fed up with the way they are managed and by the support they receive from the Government. A MORI survey last year said that two thirds of NHS chief executives were absolutely fed up with the number of targets that they were expected to pursue and felt that that cast doubt on their interest in continuing to serve in the national health service.

These are serious issues and the situation will get worse unless we start to support more effective management and leadership in the public service. The position of the Conservative party is not a question as to whether we should be spending more on public services. It is about how that money is spent and whether we are spending it in such a way that the delivery produces a better quality of life, better outcomes and better customer service for the people of this country.

To reinforce this point, there are aspects of the public services that are improving, and we can point to instances of remarkable improvement, restructuring and growth in productivity. One example is Ordnance Survey, an outstanding institution—potentially a world leader—that has transformed its business over the past two or three years. The British Library is another outstanding world resource by any standards, and it is now employing new technology to good effect. The Royal Mail, led by my former colleague Allan Leighton, is restructuring at a fantastic rate; that is, of course, controversial in some quarters, but it is undoubtedly delivering big productivity gains.

Importantly, it is not just that these institutions are unusual, but that they are led in every case by high quality private sector leadership and people who have come in from outside. The institutions compete, and individuals can make a choice outside their circles; the public have a choice in terms of library services, Ordnance Survey or the Royal Mail, and there is an incentive to perform. The public also have an incentive to make the right choice. And of course, these are institutions that are comparatively immune to the day-to-day interference of politics and politicians. Political interference and targeting represent an absolute corrosion of public services. They detract from the esteem of those who work within them, and diminish the attraction for capable men and women of achievement from outside to come in and provide the management that those services deserve.

The things that we should look for from the Queen's Speech in the year ahead are measures to distance the partisan political process from the delivery of public services, and to provide the capacity to attract and motivate men and women—

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