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6.45 pm

The Minister of State, Northern Ireland Office (Mr. David Hanson): May I say what a constructive debate we have had? There is a rare and bold spirit of optimism in the House this afternoon.

All my life, Northern Ireland has meant pain and suffering. All my adult life, Northern Ireland has
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meant bombs, bullets, death and destruction. Those have been the images for people not just in Northern Ireland but throughout Great Britain and the world. My hon. Friend the Member for Weaver Vale (Mr. Hall) gave us a stark reminder that that pain and suffering was not just confined to Northern Ireland but has spread throughout the United Kingdom and the world. Soldiers from my constituency have died serving their country in Northern Ireland. All my life, devolution has been a stop-start process, with Parliament buildings lying empty, Members elected to do jobs that they could not do, and Members of Parliament and Assembly Members not fulfilling their tasks.

In the Northern Ireland that I have come to know over the two years for which I have had the honour of having this post, those painful legacies still exist, and the difficult challenges of the past still reverberate. The experiences of those such as the hon. Members for South Antrim (Dr. McCrea) and for Lancaster and Wyre (Mr. Wallace) are still living memories for people, every day of the week, and every week of the year. But the Northern Ireland that I have come to know is also one that yearns for peace, prosperity and a stable future for all its people. The generosity of spirit and outlook that I and my ministerial colleagues have experienced, and the wish for local politics to work, through the difficult decisions that we have had to take, have kept us in touch with the true aspirations of the people of Northern Ireland. The economic promise, friendship and tourism, and the cities of Londonderry and Belfast, which are on the move, are products of the peace brought by hard-won bargaining and stances on all sides, and by brave actions by brave politicians on all sides.

As right hon. and hon. Members have recognised throughout today, this has been a historic week for Northern Ireland. I pay particular tribute to the right hon. Member for North Antrim (Rev. Ian Paisley) and, as Members have done, to the Member for Belfast, West (Mr. Adams), for working together to take on the challenges of the future, while not failing to recognise the difficulties of the past, or the fundamental differences in their political outlooks.

The right hon. Member for North Antrim referred to a star of hope. We now have that hope in Northern Ireland, but I and my right hon. and hon. Friends wish and believe that the Bill will see not just hope for future, but the beginning of a new dawn for the people of Northern Ireland, in which the past is not forgotten but individuals can work together for the good of all in Northern Ireland and for a strong future, and in which their traditions and loyalties, whether to the Crown or to a united Ireland, are recognised, but they work together, in peace and prosperity, for the people of Northern Ireland. At last, Northern Ireland will see local politicians from all sides exercise their mandates to represent fully the people who elected them into
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government on 7 March. My right hon. Friend the Secretary of State, all direct rule Ministers and I are acutely aware that we do not have electoral roots or community contacts in Northern Ireland. We have not been able to work as local politicians could in Northern Ireland.

Mr. Laurence Robertson (Tewkesbury) (Con): The Minister will be aware that an awful lot of important legislation has been passed through statutory instruments in the House. Now that we have a clear agreement between the parties—so strong an agreement that the Government are prepared to move the immovable deadline—will he guarantee that no further such statutory instruments will be introduced?

Mr. Hanson: I would very much like to give that guarantee, but I cannot for the simple reason that legislation might be required in the next few weeks, through the usual channels of this House. There will be matters in respect of which we will have to undertake legislation, but I shall give the following commitment. As my right hon. Friend Secretary of State said earlier, we, as direct rule Ministers, want to act in partnership with the Member for Belfast, West and the right hon. Member for North Antrim in looking at the programme for government over the next few weeks and months until 8 May. We want to work with them in order to have local democracy. We want to give them support and help, and we will do so.

Today is an historic day for the people of Northern Ireland. It brings together the right hon. Member for North Antrim and the Member for Belfast, West in moving towards a positive future for all the people of Northern Ireland. That will give them the opportunity to ensure that in future the children of Northern Ireland do not experience the pain and difficult times that have been experienced in the past. We will work with local politicians to make this a success, and—

It being three hours after the commencement of proceedings on the Business of the House: Northern Ireland (St. Andrews Agreement) (No. 2) Bill motion, Madam Deputy Speaker put the Question already proposed from the Chair, pursuant to Order [this day].

Bill read a Second time.

Bill immediately considered in Committee of the whole House, pursuant to Order [this day].

[Sylvia Heal in the Chair]

The Chairman put forthwith the Questions necessary for the conclusion of proceedings in Committee, pursuant to Order [this day].

Clauses 1 and 2 ordered to stand part of the Bill.

Bill reported, without amendment.

Motion made, and Question put forthwith, pursuant to Order [this day], That the Bill be now read the Third time.

Question agreed to.

Bill read the Third time, and passed.

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Orders of the Day

Order read for resuming adjourne d debate on Question [21 March].


Question again proposed.

Budget Resolutions and Economic Situation

6.53 pm

The Secretary of State for Trade and Industry (Mr. Alistair Darling): This is the last day of the debate on the Budget proposed last week by my right hon. Friend the Chancellor. I want to focus on the Budget as it affects business in this country, because we live in a time of massive and rapid economic change that will affect each and every one of us as individuals, and which brings new challenges for British businesses and for our economy. This budget will help us to meet those challenges. It encourages investment to build Britain’s long-term future. There are measures to help us deal with the consequences of the economic changes to the world climate, as well as measures to increase prosperity.

The Chancellor was able to achieve that against a background of a strong and stable economy, which is enjoying the longest period of stability on record. We expect the economy to grow with historically low mortgage and interest rates—just half those of the 1980s and 1990s. If we are to compete in the new global economy, we need to invest. We need to invest in transport and other infrastructure, and in education and skills and science, and we must also ensure that we have a flexible and highly skilled work force.

For businesses, we need to create the right environment to encourage innovation and a tax structure that encourages investment and research and development. Ten years ago, we had the lowest level of investment of the G7 countries, but now, alongside North America, we have the G7’s fastest growing business investment. It has risen in real terms by 48 per cent. since 1997. In the last quarter of 2006, total business investment rose by 4.5 per cent. and manufacturing investment by 3 per cent. Compared with 2005, total business investment rose by 13.5 per cent. and exports of goods and services are also up.

Britain is seen as a good place to do business. We are well placed in respect of ease of doing business. We also have a worldwide reputation in many areas, such
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as pharmaceuticals; almost 20 per cent. of prescription medicines are developed in the United Kingdom. It is not only the new industries that are doing well; established industries are doing well, too. The automotive industry has had its problems, but it produced more than 1.5 million vehicles last year, almost reaching the number of vehicles that were produced in the 1970s, which is regarded as the heyday of British car, van and lorry manufacturing. There is a new model of Mini, and Nissan has the most productive plant in Europe. There are many other examples that show that the British car industry is doing well. The names might be different from those of 30 years ago, but the success is noteworthy.

The aerospace industry has a turnover of £22 billion, and the Department of Trade and Industry supports research and development— £153 million in the last year. There has also been success in that industry. I hope that, with the award of new work on carbon technology in relation to Airbus, there will continue to be developments in that sector.

In new hi-tech sectors, the UK environmental industries are growing at 10 per cent. a year, providing a total of 100,000 jobs in the next 10 years, and our bioscience industry is the second biggest in the world after that in the US. British industry is doing well in those sectors, as it is in nanoscience and nanotechnology research, where our academic standing is world class. That needs to be converted into commercial success, as those are the areas in which we will have to compete in the future.

Mr. Graham Stuart (Beverley and Holderness) (Con): The Secretary of State is giving us a list describing the golden uplands of Labour economic management, but will he explain why there has been a decrease in the number of people employed in manufacturing since Labour came to power? In the past four years of the Conservative Government, 200,000 more people were employed in manufacturing, so there has been a collapse under this Government.

Mr. Darling: The hon. Gentleman carefully picked a few years of the 18 years that the Conservatives were in power, because of course if he had cared to look across the entire 18 years he would have seen that there were substantial job losses in manufacturing. It is the case that, for a long time now, structural changes have been taking place in our economy, and that has been happening in other economies as well. There has been a move away from manufacturing towards the service industry. For example, our financial services industry is indisputably a world leader, and it has grown massively since the 1980s.

However, manufacturing still represents about 14 per cent. of our gross domestic product, and I gave some examples of where we are doing very well. We have a good story to tell in engineering generally, and in aerospace, the automotive industry and other areas there is good-quality employment. I mentioned that manufacturing output was also up.

I think that Members in all parts of the House acknowledge that there have been substantial structural changes in our economy. That should not unduly worry us. It is important that we have a balance—that there is a mix. Manufacturing is very important: to coin a
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phrase, manufacturing matters. However, it is also important that we are able to exploit our service industries, which do well in various parts of the world. When I visit countries such as China and India, people recognise that we have something in the City of London and our financial services industry that other parts of the world do not have. So manufacturing does matter, but what is also important is the strength of the economy overall. On any view, what we see today bears comparison with what we saw in 1993, or in 1983, for that matter.

Mr. David Gauke (South-West Hertfordshire) (Con): Earlier this week, the economist Bridget Rosewell presented the Treasury Select Committee with evidence suggesting that the vast majority of the new jobs created since 1997 are in the public sector. Does the Secretary of State agree?

Mr. Darling: There are new jobs in the public sector. Indeed, it is a matter of some pride that there are more teachers, doctors and nurses—that makes a difference. Such spending has not been supported by the Conservatives these past 10 years, although they do give the impression at every Prime Minister’s Question Time that they would like even more spending on health and education, for example. Other sectors, such as the financial services industry, have expanded dramatically in the past 10 years, and not just in London but in other centres such as Leeds and Edinburgh, part of which I represent.

Sir Robert Smith (West Aberdeenshire and Kincardine) (LD): Given the Secretary of State’s experience with the Pilot taskforce, he will know that a lot of manufacturing investment comes from the North sea oil and gas industry, and that many manufacturing employers in my constituency support that industry. Is it not therefore vital—not only for those jobs but for the long-term income of the Treasury—that we have a tax regime that does not frighten off investors, and which maximises the long-term attractiveness of the North sea, so that we can maximise the gain in terms of our energy and employment needs?

Mr. Darling: I agree with the hon. Gentleman and, as he knows, I am making a point of chairing the six-monthly meetings with the oil supply industry because it is very important that we have a regime that encourages investment. Two interesting things are happening in the North sea. Some of the forecasts of those who said that the tax changes that we announced at the end of 2005 would be bad for the industry were not borne out. Investment is up, and a very healthy list of people are applying for the last round of licences to explore. We are also working closely with the industry in examining the possibility of extracting oil west of Shetland, where the waters present extreme difficulties, as the hon. Gentleman knows; however, there is a lot of oil there.

When we announced the changes to which I referred, we said that the North sea oil taxation regime would remain for the rest of this Parliament. The industry asked us about that as recently as last November, and when I met Pilot, it said that, whatever else happened, it wanted a stable regime. I appreciate that, as of last
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week, one or two people appear to have decided that that is not what they meant when they said they wanted the regime to stay the same. We recognise the importance of North sea oil, and allowances in that industry are different from the rest of the corporation tax regime, but I believe that the North sea regime is stable and right.

What is worrying is that the revenues from North sea oil are down dramatically; indeed, they will be down about £4 billion, on average, over the next few years. For the Scottish National party, which has predicated so much on North sea oil, that is extremely worrying. A lot of the money that it has already “spent” simply will not be there.

Sir Robert Smith: I thank the Secretary of State for giving way again. Does he recognise that a lot of that extra investment came about because of a very high oil price throughout the world? The gas price is now dropping, which is obviously benefiting users. However, when oil is extracted, gas is often extracted at the same time, so the North sea price is effectively dropping. The Chancellor made it clear that the original tax increase was predicated on the very high prices around the world. Given that gas prices are falling, costs are rising dramatically and fields are getting smaller—moreover, the projected forward investment from the industry appears lower—the Government have to be careful not to kill the goose that lays the golden egg.

Mr. Darling: The current North sea oil price is not so very different from 12 months ago. We have made it clear over the past 10 years that we would of course look at the North sea oil tax regime. It is thought that there might be only 30 years-worth of oil and gas left in the North sea, but in order to maintain security of supply in this country it is in our interests that we do everything that we possibly can to continue to extract oil and gas. Last week’s announcement is not going to change but, through the hon. Gentleman, the industry will doubtless want to look at the response document that the Treasury published on the same day, and which examined the very issues that he has set out.

The North sea oil and gas industry has existed for the past 36 years and, as I have said, we will do everything that we can to encourage it, but it is also important to look to the future, which is why we have doubled the science and technology budget since 1997. Indeed, more than half the Department of Trade and Industry’s budget now goes towards science and technology. Last week’s Budget provided a further rise in science spending—from £3.4 billion this year to £4.9 billion by 2010-11. That is in addition to more spending for the Department for Education and Skills, particularly on universities.

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