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Mr. David Willetts (Havant) (Con): I draw the House's attention to my entry in the Register of Member's Interests.

I welcome the Secretary of State to his new Department. In fact, I congratulate him on one of the more memorable entrances to a new Department in Whitehall. He will be hard pressed to do anything quite as dramatic as he did in his first week in a great Department, whose origins are lost in the mist of time but may perhaps go back to a week last Friday.

Last week began with an announcement from No. 10 of a new Department for Productivity, Energy and Industry. That, it was said, was the strategic title, and it was created so that the new Department would be "refocused and reinvigorated". We all know that language. It is authentic John Birt. It is Birt-speak. I must say that I prefer Prescott-speak. The Deputy Prime Minister puts things so much better; as he said during the general election:

Perhaps the Secretary of State agrees with him.

By the end of last week, the Secretary of State had a fiasco on his hands: nobody could take the new title of his Department seriously. The Institute of Directors described it as a circus. The Secretary of State, to his credit, announced a climbdown: it had all been a dreadful error. It ended up where all the best errors end up—in the marvellous corrections column of The Guardian on Saturday, alongside miscellaneous misprints and mistakes. The Guardian carried a correction reading:

So there we have it: from grand strategy to the misprint section of The Guardian in less than seven days. That is what the Secretary of State has delivered.

What was the Secretary of State up to during the week in which his Department was the Department with the name that we have now all forgotten? Perhaps he spent his time trying to produce a decent acronym for the new Department. The Department of Productivity, Energy and Industry, or DOPEI? No, it could not be that. The Department of Industry, Productivity and Energy, or DIPE? No, it could not be that. There were others, with which I shall not detain the House, other than to say that the whole episode was an almighty cock-up.

Meanwhile, at the same time as this Whitehall farce was going on, something much more significant was going on in Brussels. The European Parliament voted
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against our opt-out from the working time directive. This recognises the right of individuals—consenting adults—to work for more than 48 hours a week if they wish. Two million British workers take advantage of that right, which was secured by a Conservative Government.

The Secretary of State says that he recognises the need for the opt-out and the danger of what the European Parliament has voted for, but if he believes that this is so dangerous, he should have been on the phone morning, noon and night to try to prevent his own Members of the European Parliament from voting to get rid of the opt-out. So, was he on the phone trying to persuade them? If not, why not? If he did try to persuade them, why on earth was he so unsuccessful? Not a single Labour MEP voted to support the Government's position of protecting the opt-out. Is it not an indication of a Government who, so soon after their election victory, are already losing their authority if they cannot get a single Labour MEP to vote for the Prime Minister's official position?

Conservative Members believe that there is a legitimate and important role for the Department. It should be strengthening the supply side of the British economy. The Government talk proudly—we heard this again from the Secretary of State today—of the macro-economic stability that our country has enjoyed since 1992, but that is not the end of the story, as surely it should be macro-economic stability with a purpose. What we need is some vision and bravery, showing what we can do to make the British economy more successful and more competitive.

That should be something that all of us on both sides of the House work towards, but I must say to the Secretary of State that his speech was appallingly complacent about the state of the real economy: it is hurting out there and there are significant economic problems. Those of us who have been returned once more as Members of Parliament and those who are newly arrived with, we hope, four or five years ahead of them as Members of the House should remember the business people, the workers and the retailers who are worried about their future and can have no such confidence in what the future holds for them.

Andrew Miller : The hon. Gentleman is aware that my constituency is a significant manufacturing centre. As such, recent investments have benefited from regional selective assistance. Is it still his party's position that it wants to scrap RSA, or was the language used in the election about Rover just language of convenience for electoral gain?

Mr. Willetts: I shall be reviewing all our policies affecting the Department of Trade and Industry, and we want public money to be spent efficiently and effectively. The hon. Gentleman talks about his manufacturing constituency. I, too, represent a manufacturing constituency, and I remind him and the House that we have just seen the biggest slump in manufacturing output for a decade. It fell by 1.6 per cent. in March, so what we have seen here, as elsewhere, is evidence of the problems facing the British economy. We have a fall in manufacturing output, record trade deficits and a
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Chancellor who, we heard at the CBI dinner earlier this week, is already preparing his alibis for British economic performance not being what he forecast.

Sir Nicholas Winterton (Macclesfield) (Con): My hon. Friend refers to manufacturing. The fall that he highlights is both accurate and depressing, but will he turn his attention to the deep concern felt in the retail sector, where there has been a dramatic slump? What is his view on that?

Mr. Willetts: My hon. Friend is right. The statistics across the piece show an economic slowdown, and it was conspicuous that, at the CBI on Tuesday, the Chancellor failed to endorse his own pre-election forecasts for the growth of the British economy.

Mr. Adrian Bailey (West Bromwich, West) (Lab/Co-op): The hon. Gentleman spoke about the biggest drop in manufacturing for a decade. Obviously, that takes us back to a period of Conservative government. Will he acknowledge that, in the early 1990s—1992, I think—there was a 5 per cent. drop in manufacturing output, directly as a result of his Government's policies?

Mr. Willetts: If one looks at manufacturing and manufacturing employment overall, one sees that, under this Government since 1997, the number of manufacturing jobs has fallen by much more than during the previous period. The figure is an easily memorable 999,000, which indicates the scale of the problem.

Let me turn to the heart of the problem of our economic performance. We need to tackle the challenge of raising Britain's productivity. I was pleased by the reference to productivity that appeared, briefly, in the title of the Department. Let me remind the Secretary of State of some of the targets that the Government have set for productivity and their performance against those targets.

The public service agreements of July 2000 included a commitment to improve UK competitiveness

Two years later, in July 2002, there was a commitment to

As recently as July 2004, there was a commitment to demonstrate further progress by 2008—they always slip the target date back a bit—on the Government's long-term objective of raising the rate of UK productivity growth.

That is what the Government said, but what has happened? In the first seven and a half years of the Labour Government, output per worker grew at an average rate of 1.69 per cent. In the previous seven and a half years, under the Conservatives, it grew at an annual average rate of 2.36 per cent. Performance has deteriorated. During the first seven and a half years of the Labour Government, output per hour grew at an average rate of 2.1 per cent. During the equivalent period under the Conservatives output per hour grew at an average annual rate of 2.33 per cent. We are not seeing progress or the achievement of the targets that
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this Government set themselves; far from it. Sadly, we are seeing a decline in performance compared with previous periods.

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