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Stephen Hesford (Wirral, West) (Lab):
The hon. Gentleman's memory is selective. What were the figures for productivity between 1980 and 1982, when there was
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a recession, and between 1988 and 1992, when there was a further recession? Those were the circumstances with which my hon. Friend the Member for Normanton (Ed Balls) and others had to grapple to ensure that we did not return to those days.
Mr. Stuart: As the hon. Gentleman knows, as this country went from a socialist basket case in 1979 to the most powerful economy in Europe in 1997, there were difficult decisions to be made. The British people were involved in times of great sacrifice, including depressions and high interest rates. The overall balance was, of course, the transformation—Labour Members know this full well—of this country's economic base between 1979 and 1997.
This Government inherited the strongest economy in Europe—[Interruption.] Well, I do not know whether Labour Members have any interest in manufacturing but it has, historically at least, been important to this country. In the last four years of the Conservative Government, manufacturing employment increased by some 200,000. Since Labour came to power, manufacturing employment has fallen by 1.1 million.
Ed Balls: Will the hon. Gentleman give way?
Mr. Stuart: I am delighted to give way to the hon. Gentleman, who will be able to explain why this Labour Government have destroyed manufacturing jobs, whereas under the previous Conservative Government such jobs were increasing.
Ed Balls: There are so many different points that one could make that it is difficult to know where to start, but this is only an intervention. Between 1980 and 1982, manufacturing employment fell, not by 1.1 million but by 3 million, as a result of the deepest recession since the second world war. That was then followed between 1990 and 1992 by the longest recession since the second world war. We can trade statistics, but does the hon. Gentleman agree that, in retrospect, it was a mistake for the Conservative party to vote against Bank of England independence in 1997?
Mr. Stuart: I entirely and happily agree that the independence of the Bank of England was a good thing. However, the hon. Gentleman has failed to recognise the transformation that I have described. He is more knowledgeable on matters economic than most of us, but he is still too grudging to acknowledge that. I have noticed that almost every one of his contributions in the House seems to be a partisan attack on an Opposition party.
The House would benefit from the hon. Gentleman's intellect and—as I know privately—charm, if he used them constructively to deal with the world as it is and not as a partisan punch ball. Any fair-minded or neutral person would recognise my description of the background when the Government came to power.
In my constituency, the number of people employed in manufacturing in the last three years of the last Conservative Government increased by 3,000; since the Labour Government came to power, those jobs have reduced by 1,600. That is a lot of families whose jobs have been destroyed. By undermining manufacturing, the Government have helped to undermine the future prosperity of the country.
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Earlier I mentioned some figures that showed the contrast between 1997 and the present, but they are worth repeating. In 1997, when the Chancellor came to power, inflation was lower than it is at present—contrary to the impression one might receive when listening to Labour Members. The rate of inflation in 1997 was 1.8 per cent., compared with 2.1 per cent. in 2005. Real GDP growth in 1997 was 3.2 per cent., compared with 1.8 per cent. at present.
Mr. Stuart: I hope that the hon. Gentleman is about to acknowledge the strength of the economy in 1997 and the turnaround that had taken place. It would be a step forward if some honesty started to appear in the speeches of Labour Members.
Stephen Hesford: The hon. Gentleman is generous in giving way. It is not so much 1997 that I want to talk about, but the accuracy of the figures that he is coming out with. Is he comparing like with like? The two inflation figures that he has given were calculated on a different basis.
Mr. Stuart: I am taking the figures from Government statistics, so I could not possibly say whether they had been manipulated—whether appropriately or not. Perhaps the hon. Gentleman has a better idea about that, especially as so many of the statistics produced by his right hon. Friend the Chancellor have so often proved elastic—shall we say?—in their derivation.
Mr. Russell Brown: During the Budget debates in 1997, the right hon. Member for Wokingham (Mr. Redwood) came very close indeed to admitting that when the Conservatives left power the economy was on the verge of overheating.
Mr. Stuart: It is extraordinary to have a speech from nine years ago in which someone almost said something mentioned as strong evidence against the case being put. That perfectly encapsulates the weakness of the arguments of Labour Members. If that is the strongest question they can put, they have no case at all.
Mr. Stuart: I have been generous and I will give way to the hon. Gentleman in due course, but I want to make some progress, and it is certainly clear from the intervention of the hon. Member for Dumfries and Galloway (Mr. Brown) that no progress will quickly be made by giving way to Labour Members, who will not accept the most basic facts about the economy.
Mr. Stuart: Well, I will give way to the persistent hon. Gentleman.
Ed Balls:
May I clarify the situation? My hon. Friend the Member for Dumfries and Galloway (Mr. Brown) is
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right: in 1997, while inflation was low, the problem with the economy was that it was growing too strongly. When the Labour Government came to power, Treasury forecasts predicted inflation moving above 4 per cent. over the next year. The hon. Member for Beverley and Holderness (Mr. Stuart) may remember that in the six months before the change of Government, the then Chancellor of the Exchequer had constantly ignored advice from the Governor of the Bank of England that interest rates needed to rise. The change of Government and Bank of England independence actually restored stability to an overheating and dangerously inflationary economy.
Mr. Stuart: The hon. Gentleman makes a unique argument in the House against the last Conservative Government—that growth was too great. Growth was great in 1997, and growth, particularly in productivity, has fallen off since. He will have written many essays on the importance of productivity as the key determinant of the future prosperity of this nation, but he has failed to come back at all on the Government's productivity record. I would particularly enjoy an intervention on that subject.
Ed Balls: I am extremely happy to come back on that specific point. The figures set out clearly in the Red Book and in the document to which the hon. Gentleman refers show that, over this economic cycle, the productivity growth rate has been higher than in the previous economic cycle, when the Conservative Government were in power. Those are not just the Government's figures; the National Audit Office has audited the trend rate of growth. Under this Government, the trend rate of growth in the economy, based on rising employment and productivity growth, has gone up. So I am afraid that the facts are the opposite of what the hon. Gentleman implies.
Mr. Stuart: I am afraid that no light was thrown by that intervention on the fact that productivity has not been growing under this Government. Interestingly, that brings me to my next point, which relates to the figures produced by the Chancellor. I welcome something else in yesterday's Budget: the fact that the gathering of national statistics will be put on a truly independent basis. Opposition Members have been saying for many years since the Chancellor came to power that, unfortunately, the public no longer trusted the figures that he provided.
Yesterday's debate on the Budget threw up, in a powerful speech by my hon. Friend the Member for Tunbridge Wells (Greg Clark)—the main points of which are well worth repeating, given that the Chancellor's key aide is here—the fact that John Oughton, the head of the Office of Government Commerce, which is the main watchdog to ensure that procurement is carried out properly in government, was asked at a sitting of the Public Accounts Committee:
"As I understand it, the process of collating this information involved the Treasury ringing round departments asking what savings they could offer up in time to be mentioned in the Budget with no checks at all."
That was in the context of coming up with the £2 billion in Gershon savings that the Chancellor mentioned last
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year. When that question was put to the head of the OGC, he replied:
That is a damning condemnation of the way that the Chancellor of the Exchequer is prepared to manipulate figures to come up with whatever is required to provide him with a political platform. This year Sir John Bourn, the Comptroller and Auditor General and head of the National Audit Office, offered to check the figures, and my hon. Friend told us yesterday:
"Once again, the numbers that the Chancellor presented as definitive Gershon savings have not been signed off by the National Audit Office."—[Official Report, 22 March 2006; Vol. 444, c. 371.]
In that context I, along with other Opposition Members, welcome the prospect of a proper, independent national statistics service in future.
Yesterday's Budget speech was over an hour long, but the Chancellor did not mention the NHS even once. Could that be because when there is a problem the Chancellor distances himself as fast as he can? Is there is problem in the NHS today? Absolutely. The Chancellor of the Exchequer, who has been the road block to reform—the man who said before they came to power that a Labour Government would be wise spenders, not big spenders—has splurged spending on the NHS without proper reform. That is why people ask, "How has all this money been spent with so little to show for it?" The number of NHS administrators has increased by 66 per cent., whereas the number of doctors and nurses has increased at a fraction of that percentage. The Prime Minister's own policy unit said in 2004 that health service productivity had fallen by 20 per cent. since the Labour Government came to power.
At the heart of what is wrong with the Government is the fact that all we ever hear from them, in the context of the Budget or anything else, is a reiteration of their spending levels. No one is in doubt about the level of spending; what is in doubt is whether that spending has been wise. It has been big, but it has not been wise.
I looked at the chapter on improving productivity in the Red Book. One acronym did not appear at all in that chapter, or in the Chancellor's speech: NHS. The Red Book had nothing to say about improving productivity in the NHS. However, there is a chapter called "Understanding Productivity"—a useful section for the Chancellor of the Exchequer, after so many years of failing to promote it in the private or the public sector—in "Productivity in the UK 6". We find that, despite its being said that productivity is the main determinate, the truth is that while spending has doubled, productivity on the standard measures in the NHS has fallen. Page 22 of "Productivity in the UK 6"—this is where we have to look to find the truth of what has gone on in our NHS—states:
"Estimates using National Accounts measures showed an average fall of between 0.6 per cent. and 1.3 per cent. a year over the period 1995–2004."
Spending on the NHS has doubled. The number of bureaucrats and administrators has been increased by 66 per cent., yet productivity in the NHS—the supposed show piece of this Labour Government—has fallen.
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That is why, across the country, thousands of health workers have already received notice that they will lose their jobs and thousands more are waiting to be told that. A financial deficit afflicts the national health service because of Labour's mismanagement and failure of understanding. I hope that the Minister who responds later will deal head on with the issue of productivity in the NHS and what can be done to turn round the lamentable record so far, so that the record sums that have gone into the NHS can show through in an improvement in treatment.
I already feel as though I have tried your patience, Mr. Deputy Speaker, but I would like to finish on the subject of the environment. The Chancellor's raids on pensions and the undermining of the security of hard-working people in old age has been disgraceful, and the failure to produce honest statistics has been equally shabby, but the Chancellor has been a complete and utter disgrace on the environment. There has been a failure to deliver on the promises that were made before the Government came to power and, at every step—every Budget—it has been the Chancellor who has failed to deliver the mechanisms by which the country could change from a policy of growing emissions to one of cutting them.
The global leadership that the leader of the Labour party is so keen to spout worldwide is not matched by any kind of improvement at home. The masking effort carried out by Labour Members in using the climate change levy as the sole test of any politician's environmental credentials is false. We have the climate change levy and we have a Labour Government—and under that Government emissions have risen. To be posing as in any way environmentally friendly while emissions have risen is nothing short of disgraceful.
Be it on pensions, productivity, or honesty and statistics, the Government have failed. On the environment, and on the long-term future of the country and of the world, perhaps they will be seen by many to have failed most of all.
4.4 pm
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