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19 May 2005 : Column 283

Orders of the Day

Debate on the Address

[Third Day]

Order read for resuming adjourned debate on Question [17  May],

Question again proposed.

Industry and the Environment

11.10 am

The Secretary of State for Trade and Industry (Alan Johnson): It is a delight to open the debate on the Gracious Speech this morning, and to debate industry and the environment together. Those agendas have sometimes been seen as conflicting, but it has become increasingly clear that they must advance together. Business needs to be greener, and greens need to be more business-oriented, because only through innovation and sustainable development can we ensure that society meets the major challenge of our times—tackling climate change.

The prerequisite for industrial success is the strong and stable economy that our country currently enjoys. Our long-term interest rates are around their lowest levels since the 1960s and we are enjoying the longest sustained growth in gross domestic product on record, the longest period of sustained low inflation for 40 years and the highest employment levels in our history. We have narrowed the productivity gap with other leading economies in sectors such as computer, legal, technical and advertising services and we are now, for the first time in generations, as productive as Germany and have overtaken France to become the fourth largest economy in the world. With 2.2 million more people in work since 1997, our employment rate is higher than that of any other G7 country. We have 300,000 more businesses than in 1997, with new companies starting at the rate of more than a thousand every day. Our science base is strong, because we have reversed decades of under-investment. In short, Britain has never worked so productively, created so much wealth and generated so many jobs as in today's enterprising and innovative economy.

All that has not happened through serendipity. It has happened because our workers and businesses have excelled within a supportive economic framework set by this Government, including an independent Bank of England, tough fiscal rules and help for those outside the labour market through the new deal. As a result, Britain has become one of the most favourable environments for starting and growing a business.

Mr. Henry Bellingham (North-West Norfolk) (Con): I congratulate the Secretary of State on his appointment. Does he recall that, when he was a
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Minister of State, I had the pleasure of shadowing him for a while, and on several occasions, he said that the UK's opt-out from the working time directive was not negotiable? Is that still the case, and what does he say to his socialist Members of the European Parliament who voted to give up that opt-out?

Alan Johnson: It is still the case that we are determined to maintain the opt-out, and we believe that we have the best situation, because workers in this country have protection and cannot be forced to work beyond 48 hours, but if they choose to work more hours, they should be allowed to do so. The hon. Gentleman should not tempt me to talk about MEPs. I do not know whether he has seen the letter in The Daily Telegraph this morning headed, "Please don't let me elect the new Tory leader." It is from Roger Helmer, Conservative MEP for Lutterworth in Lincolnshire. He says:

So we are not the only party with problems with European representation.

As I was saying, the situation that I was describing did not come about through serendipity; but because of our businesses and workers, and because of the economic framework that we established. We have enjoyed eight years of economic prosperity, but whereas, in the past, overall material success was secured at the expense of greater equality and workplace protection, this Government have coupled industrial success with the introduction of decent civilised minimum standards for employees. Through the 1980s boom, the best-off saw decent pay rises but the poorest faced living standards that were frozen. In recent years, it is incomes at the bottom end that have grown the fastest. The Government have lifted 700,000 children out of relative poverty and have reduced relative pensioner poverty by a quarter, showing that we have not only increased the incomes of the poorest and most vulnerable but helped them to narrow the gap with the better-off.

John Bercow (Buckingham) (Con): I do not dispute what the right hon. Gentleman has just said. However, may I invite him, in the name of social progress and joined-up government, to consider the alternative view? Notwithstanding what the Government have done to help people at the bottom of the scale, it remains the fact that the poorest fifth of the population are now paying in tax overall a larger share of their income than any other group. Will he have a word with his right hon. Friend the Chancellor on that point?

Alan Johnson: We have taken millions of low-paid workers out of tax altogether. As a result, statistics show that the poorest paid have increased their earnings by 10 per cent. as against 4 per cent. at the richer end. Dealing with relative poverty is always more difficult than dealing with absolute poverty, because everyone is gaining from the prosperity of the country. Of course, tax is an element of that, which is why the working tax credit, the family tax credit and the child tax credit have been such important parts of our policy.

In 1997, there was no protection for vulnerable workers from exploitative rates of pay. We introduced the national minimum wage against fierce and sustained
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opposition in the House and dire warnings of impending job losses. In 1997, a father could see his child born in the evening, but be compelled to go to work the next morning. We introduced paid paternity leave for the first time for British workers. In 1997, a person could be sacked simply because of their sexual orientation. We introduced protection from discrimination in the workplace. In 1997, workers could be made to work for seven days a week every week with no paid holiday. We have given employees four weeks' paid leave guaranteed, and will ensure that bank holidays are not counted against that entitlement.

Andrew Miller (Ellesmere Port and Neston) (Lab): Will my right hon. Friend join me in welcoming the recently announced increase in the minimum wage and the fact that it has stopped the exploitation of people? Will he point out to the House how many people protected by the minimum wage are women?

Alan Johnson: I certainly accept my hon. Friend's congratulations. The minimum wage was introduced with great deftness. The Low Pay Commission ensured that its introduction did not lead to a loss of jobs in vulnerable industries, and as a result we have been able to bring the minimum wage up to £5.05 this October and £5.35 next October. Against all the dire predictions and warnings, we ensured that the minimum wage was introduced, and we can still say that people not only have rights at work, but have work to go to where they can exercise those rights. That is a crucial element of our approach.

We introduced the right to membership of a trade union, and equal treatment for part-time employees and those on fixed-term contracts. We have increased paid maternity leave from 18 weeks in 1997 to 26 weeks, with 39 weeks to follow in relation to the Bill announced in the Gracious Speech. We have almost doubled the rate of statutory maternity pay from £60 in 1997 to £106 today.

We have slashed the qualifying period for additional maternity leave from two years to six months, benefiting 350,000 mothers every year. We have given parents of young and disabled children the right to request flexible working. In 2003, adoptive parents, who received no help whatever despite the fact that society is seeking to take children out of institutions and place them with families, became entitled to the same maternity and paternity leave as natural parents.

Mr. Geoffrey Clifton-Brown (Cotswold) (Con): I, too, congratulate the Secretary of State on his new job. He will be aware of the recent employment skills survey, which showed that 10 per cent. of our work force—2.4 million people—lack the basic skills that they need to do their job. With the Rover crisis very present in all our minds, what are the Government going to do to help the people who do not have those basic skills, and what are they going to do to retrain the people who will lose their jobs as a result of the Rover crisis?

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