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Paul Farrelly (Newcastle-under-Lyme) (Lab): I wish to touch on three subjects that are fundamental to the Government's objective of building a stronger economy and an even fairer society—employment, training and opportunity for all. I also want to make some remarks about Britain's economic stability, because we have heard some wild and outrageous attacks on the competence and record of my right hon. Friend the Chancellor, not least from the shadow Chancellor, who is not in his place.
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The House has already been reminded that the right hon. Gentleman was such an embarrassment to the Conservatives at the last election that he had to go into hiding. What was his offence? He had accidentally blurted out the truth about £20 billion of cuts—a lower level of cuts than he now promises openly under the party's new regime.

Mr. Prisk: Did not the Gershon report recommend a reduction in expenditure of £20 billion?

Paul Farrelly: We will have to wait for the Gershon report and we will all welcome debate on the James report when it is published.

The Opposition need a history lesson on economic competence that stretches further back than the one that my right hon. Friend the Chancellor has already given them today. That is just as well, because this debate falls on an anniversary well worth remembering for my constituents. It is 20 years to the month that post-war unemployment peaked in Newcastle-under-Lyme. Today, after seven years of growth and stability under this Government, the number of people looking for work in my constituency stands at just over 700. Twenty years ago, the dole queue was longer by 4,500 people—six and a half times more people. That is a fair measure of how much outlook and opportunity have changed under a Labour Government.

Twenty years ago, north Staffordshire's oldest pottery firm had just bitten the dust. Elijah Cotton founded his firm in 1758, a year before Josiah Wedgwood started out on his own. However, Cotton's descendants lasted barely a year under Margaret Thatcher. We should remember that that industry was more than decimated as Geoffrey Howe unleashed raw, uneducated monetarism on this country.

Mr. Peter Atkinson: Is the hon. Gentleman saying that, had there been a Labour Government 20 years ago, that pottery factory would still be open and that men would still be working in the coal mines in his constituency?

Paul Farrelly: I shall come on to the beneficial inheritance of oil, especially for the Conservative Government. To set the record straight, under Labour, from 1976 until the 1979 general election, unemployment fell. It continued to fall until just a few months into the Tory Government, from which point it rose, rose and rose again.

My right hon. Friend the Chancellor is fond of quoting the 15 per cent. level to which interest rates shot up during the second recession that the Tories unleashed on this country much later, in the 1990s. Today, as we know, rates are still below 5 per cent. Then, however, there was a worse bogey figure with which to scare the wee bairn: during the first savage downturn under Thatcher, rates reached 17 per cent. Sterling soared and yet more industry fell. By the time the monetarist experiment was killed off, quietly, during the Falklands war, one in six families in my area—north Staffordshire—had been hit by redundancy. There was no respite, however. Far from it. In 1985, the biggest
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mine in my area, Wolstanton—our super-pit, which we visited when I was at school there and which had the deepest shafts in western Europe—closed for good.

Let us compare that legacy with the current record. We have never had lower unemployment; we have never had more employment and regeneration. The unemployment figure for the whole country is 836,000—nearly half the total in 1997, when it was 1.6 million. Since 1997, the figure has fallen steadily. Under the Tories, when the Wolstanton pit closed, unemployment broke through the 3 million barrier for the first, but far from the last, time.

Early on, the Tories' record made a mockery of their infamous slogan, "Labour isn't working". Our record shows that people are working, businesses are working and Britain is working. Labour certainly is working.

As we heard earlier in the debate, we are educating and training, too, and what a record of Conservative failure we are trying to reverse on that score. Before the Tories got into power all those years ago, skills in the pottery industry in my area were supervised by the ceramics training board and pay negotiations were industry wide, but under the Tories there was no such thing as society. They swept all that away and it was every man for himself.

Members may not believe this, but at the Michelin factory in Stoke-on-Trent all those years ago, apprentices were given free milk, lunch tokens and sun-lamp sessions to keep them healthy. Remember what the Tories did to apprenticeships—they disappeared. I am not asking for the return of the sun-bed sessions—[Hon. Members: "Oh, go on."] Some Front Benchers already benefit from them.

Over the past seven years, my right hon. Friend the Chancellor has been doing his level best to reverse that legacy of neglect in education, skills and training. When I made my maiden speech, I called for the pilot schemes for the education maintenance allowance to be extended to my town and nationwide. They have been extended. In Stoke-on-Trent, next-door to my constituency, the EMA has already led to more children from poorer backgrounds staying in education and training after the age of 16. In my constituency, our version—the Newcastle achievement scheme—is having similar positive effects that everyone can measure. Conservative cuts would, of course, sweep all those opportunities away.

In my area, the Ceramic Resource Centre, a partnership between the Ceramic and Allied Trades Union—the potteries trade union—the DTI and our regional development agency, is helping workers to retrain and find new jobs. It also helps to preserve valuable industrial skills that would otherwise be lost. Tory and—I am sorry to say—Liberal Democrat cuts would sweep that away, too.

In Newcastle, the new deal has helped nearly 2,000 people into work. Of those, more than 1,200 have permanent jobs as a result. As we have already heard, the Tories and the Lib Dems would scrap the new deal. The Chancellor has done all that while presiding over the longest sustained period of economic growth for two centuries. There has been no savage boom and bust, unlike the early '80s, the late '80s and the early '90s under the Tories and yet, despite that, and despite their record, they have the nerve to cast aspersions on our
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competence, on the Chancellor's prudence and on his golden rule. Conveniently their memories fail them again.

Today, we should remember that we are not living in what should have been the heydays of the '80s and '90s, when the Government enjoyed a twin set of riches—booming tax receipts from North sea oil and untold billions from privatisation. Labour did not enjoy them in the 1970s either, when the country, like the international economy, was suffering oil shocks and when we were investing for the future in the North sea. Now, of course, we are having to prepare for a post-oil and gas economy too. But what did the Tories do with their one-off riches? Did they invest in education and skills? Did they invest in public services and the country's infrastructure? No. They blew it and threw it away.

I remember well—I was working for The Observer at the time—all the gloomy faces on the Tory Benches when the Government announced that they had raised £22.5 billion from the sale of the third generation of mobile telephone licences. That was worth three privatised BPs, five British Gases, two whole British Telecoms—worth as much, indeed, as was raised from the sale of the electricity, gas and water industries all put together under the Thatcher and Major Governments. And of course, unlike their sell-offs, it was not a botched sale below value. Great care was taken. Bidders went through a carefully crafted auction of 150 rounds. My right hon. and hon. Friends immersed themselves in the intricacies of game theory.

Now compare that care, competence and prudence with what went on before. I remember the privatisation of the National Bus Company in 1986. I remember it very well because I was working in the City at the time, with Barclays De Zoete Wedd, the bank charged with its sale. [Interruption.] I am not afraid to admit it. No sooner had Nicholas Ridley chopped the buses up into 90-odd pieces than the patchwork quilt was zipping itself up again as the first companies privatised started buying the rest, as we warned the Government that they would.

The Conservative Government ignored our advice too on insisting on clawbacks of the profit on the future sale of companies, which was standard procedure in the private sector. They ignored it, and what happened? Ten years later, they were at it again, breaking up British Rail, wrecking an industry, selling state assets at a discount to profiteers. They did not listen and they did not learn because they did not care. And here is the nub. How did they treat the money? Did they, like the Chancellor, treat it as a one-off to pay off debt, as any prudent household—in Grantham, for example—might be expected to do? No. Conservative Governments treated it as negative public expenditure. No wonder then, when the silver ran out, that the public finances were in such a mess. The Chancellor need take no lessons in competence and no lecturing from the Tories on his golden rule or his golden record.

I think that it was the last Chancellor but one, Mr. Norman Lamont, who said, quite callously, that high unemployment was a price worth paying for low inflation. Now we have record low inflation and record low unemployment. Of course, Lord Lamont's repertoire also includes the infamous, "Je ne regret rien", which he sang in his bath both before and after the
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pound was unceremoniously dumped out of the exchange rate mechanism. I gathered with others around the Reuters screen when I was working for Reuters, just as the Chancellor and the Prime Minister gathered around the Reuters screen at No. 10, and I remember that, when the interest rates had gone from 10 to 15 per cent., that was not the limit of it because overnight money rates trying to keep money in this country were reaching 70 per cent.—a far bigger bogey figure.

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