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Mr. Salmond: I accept that the subject is serious, but I hope that the hon. Gentleman will not leave us hanging: did she get the pay rise?
Mr. Webb: We are still in negotiation.
The example highlights the absurdity of the position. Although I only employ staff who are discerning about financial matters, and my researcher will obviously reject the loan, the ready availability of such loans underlines the problem.
My hon. Friend the Member for Twickenham suggested a 10-point plan for tackling personal debt. I shall not go through it in detail—hon. Members have already heard it—but I emphasise a few simple suggestions. Every year, the Government publish an assessment of the sustainability of Government debt. What about the sustainability of personal debt? Should
not the debt bubble form part of the annual assessment? My hon. Friend suggested a curb on the tidal wave of unsolicited credit promotion and attaching some sort of credit health warning to offers such as that which I have described. That is a pretty good idea. He suggests that we should stop penalties for people who pay back their debts early. People who currently pay their debts early can effectively be fined for doing so.The Budget should have dealt with such issues, which affect the long-term structure of the economy, but it did not. The Chancellor produced a rabbit from a hat instead of serious reform of local taxation. There was no action on the unfairness of the tax system overall, and a failure to tackle the fundamental imbalances of the economy. Liberal Democrats were, to say the least, disappointed with the Budget.
2.15 pm
Mr. Martin O'Neill (Ochil) (Lab): I was unfortunately absent for the Chancellor's statement because I was in south-east Asia with the Select Committee on Trade and Industry. We all know that organising such events takes time and their dates tend to be set in concrete, so it is difficult to avoid missing occasions such as the Budget statement. From reading the debates and anticipating what would happen, it is fair to say that the Government got the expected response from those who support us, and expressions of frustration from those who oppose us because the Chancellor delivered so much of what he promised.
It is interesting to go abroad and talk to people about one's country's economy when the annual health check or MOT that constitutes the Budget is published. We visited Malaysia, Thailand and Singapore—the tiger economies, the sharpness of whose claws has been honed and which are now back in business in a big way. It was interesting to note that their agendas are similar to ours in several respects. They attempt to control public spending and use the money as wisely and effectively as possible. They spend money on knowledge-based industries and are committed to science. In this country, that is evidenced by the commendable agreement that the Chancellor reached with the Secretary of State for Education and Skills.
Mr. John Hayes (South Holland and The Deepings) (Con): Such prudent spending of public money depends on its effectiveness being measured. It depends on a test of productivity. Does the hon. Gentleman acknowledge that that is singularly lacking in the Chancellor's analysis? The Chancellor made many statements about input but few about output. Surely it is productivity that really counts—bang for the bucks, one might say.
Mr. O'Neill: One of the problems that the Government experienced was that, at least for the first two years, they did not spend nearly as much as we would have liked because they set themselves the priority of getting public finances under control. Since then, we have begun to spend more money. As has already been said, the performance and outputs in, for example, the health service are beginning to show consequent improvements. There have been considerable advances in primary education but the
secondary sector and some aspects of higher education have yet to experience them. The jury is still out on several aspects of public expenditure and we have to work at greater efficiency. No Labour Member would deny that that was one of our priorities. Indeed, 10 years ago, when John Smith died and we were assessing his career, we remembered that one of the points that he repeatedly made was that economic efficiency and social justice must go hand in hand. They are two sides of the one coin, he said. Creating wealth in order that we can spend it on desirable and necessary social improvements is only part of it. The other part is ensuring, as we are doing, that we invest heavily over the next decade in science, science education and the application of science. That is the only way in which we can make the quantum leap from the kind of economy that we have now to the kind that we need to sustain ourselves.I find no echo of that among Conservative Members. There is not much in the shadow Chancellor's controlled spending plans to encourage knowledge-based industries or to achieve improvements in areas that require substantial advances if we are to ensure that the economic growth that we have already achieved is sustained.
Mr. Hayes: The hon. Gentleman is right to say that economic success is the prerequisite of delivering social justice. A prosperous society can invest in improving the lot of all its people, but I hope that he is not suggesting that social justice, for which I share his enthusiasm, needs to be measured in economic terms. Social justice is about delivering far nobler objectives.
Mr. O'Neill: A number of my constituents are happy when social justice includes a bit of economic assistance and advance. When we had 20 per cent. unemployment in my constituency, it was a far less happy place than now, when unemployment is between 4 and 5 per cent. Labour Members argue that we cannot have economic efficiency unless we have a socially just society in which the divisions and difficulties are diminished. It is perhaps part of the fragility of some of the Asian economies that insufficient attention has been given to the move towards a more socially just society. It is clear that they are making tremendous advances in areas such as the development of the biotech industry, in respect of which we are in as good a position as any other country apart from the United States, and in a better position than most. That applies in a number of IT sectors as well, but we need more of that.
Equally, we need to ensure that, when we spend money on training, it does not merely get people into apprenticeships. One thing that Professor Porter identified in his studies is the need to look at the fact that, once people have tradesmen's qualifications and have completed the apprenticeships, there needs to be subsequent improvement in those skills across the work force. That is not happening. We are getting people out of university into what remains of manufacturing but we are not getting sufficient numbers of people trained beyond the basic requirements to do the job. If we are going to have the kind of investment that we want in new equipment and machinery, we have to have skilled, trained people who are capable of using it.
That is one of the areas to which the Government will have to give more attention. We are making the necessary start and improving the position but we have to go further. We have continually and constantly to replenish the capabilities of the work force to meet the new challenges. It is through that that we will get quality improvements, and that is as applicable in the public services as in the private sector. If we are going to put new equipment, new scanners and new forms of clinical working into hospitals, we have to ensure that there are people there who are capable of utilising that equipment. If we are going to put computer systems into the Department for Work and Pensions, we have to ensure that they are the right ones and that people use them.
If one thing is evident, it is that across the United States and indeed in some parts of Britain, the introduction of computerisation to clerical working has resulted in massive increases in productivity. Indeed, it could be argued that the improvement in the American economy is in no small way due to the introduction of sophisticated IT systems. Not all of them work first time but they work eventually and, when they do, they make fantastic improvements, which can be seen not just in the output per worker but in the reduction in the need for many workers.
An incredible amount of worthwhile, important work is undertaken by low-paid civil servants. None the less, it is drudgery. It would be better if we could get them out of that drudgery into jobs that could better utilise their capabilities. I have no great problem with the reduction in the numbers of people that we are seeking in areas of the civil service. However, I want to ensure that that is done sensibly. I take the point that the hon. Member for Havant (Mr. Willetts) made about the need for proper systems, so that arrangements are in place and people can leave in a decent and orderly fashion. I am confident that, in most instances, those people will be able to secure employment elsewhere. The shift of resources from the public to the private will create the kind of job opportunities that those people will be able to pick up. However, I am a wee bit worried when I hear the old story that it will be all right, turnover will take care of it and there will be no compulsory redundancies. There is always a downside to no compulsory redundancies: we find that there are square pegs in round holes and that they are there merely because they are there.
Often, one finds that, when people hear that their jobs are going to go, the ambitious and effective ones leave and others hang on until the last minute because, perhaps correctly, they anticipate being able to secure reasonable redundancy arrangements, although I cannot imagine that the civil service redundancy arrangements will be particularly generous. I would like to think that they will be better than the state minimum but I am not sure that they will be much in excess of that.
There is no easy way of reducing staffing, but there is a danger in believing that if we do not make it compulsory it will be all right. We have seen in too many areas that the wrong people stay and sometimes the better people leave early. There is a danger there, but Ministers have raised the issue openly and transparently. Let us face it—there is a long way to go before the figures are achieved. I am happy that, with good will, we can deal with that issue. At the same time, the civil servants who perhaps need less attention paid to
them than they have received already are those in Customs and Excise who have been suggesting the strip stamp scheme.I represent a constituency in which, sadly, whisky is no longer produced. For many years, we distilled grain whisky there, which hon. Members will know is the rather less sexy constituent of a blend. It is actually not that potable without malt alongside it. I have had it and it is not the best alcoholic experience I have ever had. I think that one can say that grain whisky involved more of a chemical process. It is like vodka and other such drinks. One can produce it pretty easily in what is akin to a chemical plant.
In my area, we no longer distil but we produce virtually 60 per cent. of all the bottles into which the Scotch goes. About 65 per cent. of the whisky in cask storage in Scotland is in my constituency, so I have more than a passing interest in the matter. I also have the Diageo laboratories and a number of fascinating attendant parts of the whisky process. They depend on a healthy Scotch whisky industry, as do many workers across Scotland. At present, I am not convinced that the rejection of the Scotch Whisky Association's proposals is necessarily the best way of dealing with the leakage of duty from the warehouses. That is a serious problem: it is as if people were opening the bottles and pouring the whisky away, although they are not doing that but selling the bottles in dodgy places. There must be far greater security. The proposals put forward by the Scotch Whisky Association identified that issue and sought to deal with it by trying to create a more secure system for the warehousing of bottles.
Although the whisky industry is dominated by big players, it is also quite fragmented. Many bottling operations are conducted by firms that might not at the moment have the security facilities in place for the storing of strips, or that are perhaps not equipped to have the strips put on the bottles in the first place. I know that it has been suggested that money will be available, and one can only hope that it will be sufficient to fund the scheme, but I have my doubts. I do not think that there will be the backing that is needed.
What disturbs me is that the Chancellor, quite reasonably, issued a challenge to the industry in the autumn statement. The industry has come up with a scheme that has intrinsic attractions: it could be implemented relatively quickly, savings could be made quickly and it could be tested even before the Government's scheme is in place. It would have been more sensible for the Government to accept the Scotch Whisky Association's offer, to scrutinise its proposal and to screw it down. Even if they had made it as damn difficult as possible for that proposal to be introduced, they should nevertheless have given it a chance, and perhaps delayed the stamp scheme for another year.
I recognise that there is a problem that must be addressed, but the whisky industry's option should have been considered more seriously than it has been. It was rejected rather more quickly than I should have wished. I am not wedded to the association's proposals, nor do I necessarily think that we must never have strips, but if we do not need them, let us not have them. Another year's delay would have given both sides in this argument the chance to address the issues.
I am disappointed, because a good rapport had been established. The Chief Secretary to the Treasury was instrumental in rejecting the strip scheme in a previous Parliament, so I am sorry that there has been a change in attitude, and particularly sorry that my right hon. Friend has handled the matter as he has. I thought that he handled it previously with considerable tact and diplomacy. He has been listening to people—this is the point with which I started—whose evidence to the Select Committee on Scottish Affairs was, to say the least, of unimpressive quality. I chair a Select Committee, and I know that when a Committee uses the word "unimpressive", it is usually talking about something that is awful with several other adjectives in front of it—although I put it no more strongly than that. My right hon. Friend has been sold a pup if he has accepted some of the evidence put before the Scottish Affairs Committee, and I hope that he will re-examine the issue between now and the introduction of the Finance Bill. I do not think that anyone was impressed by the strength of the arguments that certain people put before the Committee, and I would like to think that, as the reasonable man that he is, he might look at the matter again.
That is a relatively small complaint in the context of what has been—[Interruption.] The hon. Member for Banff and Buchan (Mr. Salmond) has nothing else to complain about in the Budget. That is the truth of the matter, although if he contributes later, I shall read his comments with interest.
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