I agree. Many Members have visited China and India and I am sure that each and every one of themno matter where in the Chamber they sitwas struck by how fast the economies of those countries were growing. There is a thirst for education and knowledge in China and India and, as I said, they want to compete at the top end of the market, not on low costs and low expectations. They want to do the same things as us. Time is not on our side, which is why it is so important not only to maintain investment in
education but to make the changes that we need to improve and increase our skills standard. I absolutely agree with my right hon. Friend about that.
The foundation for all those things is a strong and stable economy. Stability matters for individuals because it keeps interest and mortgage rates down; it also means that we can maintain high employment and that we do not return to the double-digit inflation of the past. Stability matters for the country, too; it is necessary for the economy to grow. That is why, as I have said time and again, we shall take no risks with stability. What risks stability is getting into a position of making promises that cannot be afforded. That will result either in increased taxes elsewhere or, more likely, increased borrowing, which puts pressure on interest rates. That is the last thing we need, especially at this time of international uncertainty.
Our economy will grow this year. We and commentators believe that it will grow the fastest of all the developed countries. Inflation is around target. Of course, inflation is half what it was in the 1980s and 1990s. Employment is at records levels, and unemployment is at historically very low levels. So the difference between now and 10 or 15 years ago is that we now have a strong and stable economy, and that stability has allowed us to deal with the Asian economic slow-down in the 1990s and the problems in America in the early part of this decade. That stability, too, will enable us to deal with the current international uncertainty, which started in the American housing market and has now spread around the worldincluding here in Britain, of course.
Chris Bryant: I am grateful to the Chancellor; he is being very generous in giving way this afternoon. He has said two important things: first, the long-term stability of the economy is important; and secondly, we need to be a high value-added economy rather than a bargain-basement economy. However, to ensure both of those things, do we not need to ensure that we have a far more robust means of protecting our intellectual property rights, because that is where Britain will make its money in the future?
Mr. Darling: I agree, and the Prime Minister commissioned a report by Gowers last year that made a number of proposals. Not only is it important that we protect international property rights here, but it is crucial that we ensure that countries such as India and China make sure that they have corresponding rules. Great improvements have been made in both those countries. I hope to visit China in the new year, and I am quite sure that, in the year or so since I was last there, strides have been made, but if we are to achieve the breaking down of barriers to trade and greater exchange of goods and knowledge, we must ensure that intellectual property is protected.
I said just a few moments ago that I would say something about Northern Rock. I shall preface my remarks by saying that I made a statement to the House on 11 October. I subsequently appeared before the Treasury Committee at a hearing, half of which was devoted to Northern Rock, and I shall continue to keep the House informed as and when there are
developments. The Select Committee is due to complete its report in January, and I told the Select Committee a few weeks ago that, thereafter, I intend to publish proposals to reform some of the present arrangements in the regulatory system. However, I want to say a couple of things today, since the matter was raised by the shadow Chancellor.
The information in todays newspapers appears to have come from advisers to Northern Rock; it is not the Governments policy. I can tell the House that we will very shortly issue a statement of the principles that will govern our approach to any bid to acquire Northern Rock, and when we do that, we will make them public. We shall of course be doing that because, owing to the support offered by the Bank of England and the guarantee made available to the depositors, the Government have a very real interest, and anyone seeking to acquire Northern Rock or any part of it would want to know where the Government stand. I want to make that absolutely clear. I will make sure that, as and when there are developments, I will report to the House, by either written or oral statement, as seems appropriate, because it is important that I keep the House fully informed.
Mr. John Maples (Stratford-on-Avon) (Con): I do not know whether the Chancellor is about to leave the subject of Northern RockI apologise if he is about to deal with thisbut I wonder whether the Governments guarantee of Northern Rocks liabilities extends to the £11 billion of medium-term notes, which have maturities of up to six years and are held almost exclusively by professional investors and traded in public markets, where they could easily have been left to trade at a discount. I believe that those notes are covered by the Governments guarantee. Is that true? If so, why?
Mr. Darling: The terms of the guarantee have been published. I wrote to the Chairmen of the Treasury Committee and of the Public Accounts Committee to set out the terms, which are intended to protect the depositors and are deliberately precise. The House will recall that the objective in my issuing the guarantee was to put it beyond doubt that, for people who were worried about their money in Northern Rock, the money was there and available if they wanted to withdraw it, and I thought it necessary to issue that guarantee to clarify the matter.
As I told the Treasury Committee, Northern Rock is owned by its shareholders. Their directors are accountable to them. We have allowed the directors a breathing space to decide on the strategic options for Northern Rock. That is what they are doing, and it is best that they be allowed to do that, because it is in everyones interest that we try to find a satisfactory solution.
It is in the interests of the stability of our financial system and of Northern Rock that it gets this breathing space, so that it can take the right strategic options for
the future, because an awful lot of people depend on those judgments, particularly in the north-east of England.
Dr. Cable: Of course the Chancellor is quite right that the directors are legally responsible for the company, but why was it impossible, as a condition of the Government loan, to remove the management who had led the bank into its current disastrous position?
Mr. Darling: In some ways, the hon. Gentleman answers his own question: the company is owned by its shareholders, and they appoint the directors; the Government do not do that. Quite clearly, it is in all our interests to try to reach an orderly resolution of this matter, and that it what I intend to do, because it is important that that happens.
Mr. George Osborne: Clearly, one of the issues that is being aired in this debate is the nature of the facility that has been offered to Northern Rock and, indeed, how much longer that facility might exist. It could exist for several years if the investment bank that is advising Northern Rock is to be believed. Would it not help matters if the Chancellor now published the letter that he received from the Governor of the Bank of England and which the Governor told the Select Committee he was happy to see published? What possible reason could the Chancellor have in holding back a letter from the Governor, who is happy to see it made public?
Mr. Darling: I explained my reasons to the Treasury Committee, when I was asked that question quite specifically. I told the Committee that I received two letters: one from the Governor and another from the chairman of the Financial Services Authority, who takes a rather different view from the Governor. I have said that I am not saying that those letters can never be published, but I must have regard to the fact that I want to make it possible for the chairman and the Governor to write to me in terms that give me full and frank advice. It is not in the public interest to publish those letters. That is my judgment, and I stand by it.
I wish to deal with another point that the hon. Gentleman touched on in his speech. One of his colleagues issued a rather misleading press release in relation to Government support. I told the Treasury Committee that the facilities are being offered to Northern Rock. We have said that we want proposals to come back from Northern Rock by the end of January or the beginning of February. It is not true to say that we have said that the facilities would definitely come to an end at that stage. We have said that the facilities are there, but that we must reach a situation in the next few weeks where it is clear what will happen to Northern Rock. I was asked that question by the Treasury Committee, and I gave the reply in that context. I am sure that the hon. Gentleman will be keen to clarify the press release that his colleague issued earlier today.
Mr. Colin Breed (South-East Cornwall) (LD):
The Chancellor has made an important announcement that he will make a statement of principles. Should not the situation trigger the suspension of shares in Northern Rock, bearing in mind that they have been up and down after almost every announcement so far, with
people saying that they will take over the management or the business? That is a most important statement. Is it not essential that the shares in Northern Rock should be suspended?
Mr. Darling: No, I do not think so. That is a logical extension of the Governments position from the start. I will keep the House informed in relation to Northern Rock, but it is important that we turn our attention to the central legislation in the Queens Speech.
As I was saying earlier, if we are to rise to the competitive challenge that we now face, it is important, among other things, that we continue to deliver more jobs. We must therefore increase the number of university graduates, and we need higher and higher skills. It is worth bearing in mind that although every year Britain adds about 75,000 engineers and computer scientists, India and China add half a million. We turn out 250,000 graduates, but India and China now graduate 4 million, more than all of Europe and America.
Today, the economy has 9 million highly skilled jobs; we should bear in mind that by 2020 it will need 14 million. Furthermore, of todays 3.4 million unskilled jobs, fewer than 600,000 will be needed by that year. That alone should make every Member see the need to invest in our education and skills. The education and skills Bill in the Gracious Speech will increase for the first time in 30 years the time that people are expected to stay in education, and will benefit 2 million young people. It will also give those who missed out the first time the opportunity to catch up and improve their education.
Furthermore, a draft Bill will propose the reform of apprenticeships as we head towards our commitment to ensure that every young person who wants to continue their learning while in work can do so. Half a million people will be in apprenticeships by 2020. That will be a step change in what we are doing in education, and I hope that the Conservative party will support the Bill. We will wait and see.
Surely there should be agreement between us on the number of people who ought to be going to university and on the need to increase skills in this country. However, so far there has been precious little evidence of such support. My old sparring partner and fellow picket line attendee, the hon. Member for Surrey Heath, is not here; he has gone off to another picket line for all I know. He has been extremely critical of the measures to enable people to stay on in education and of the diplomas that my right hon. Friend the Secretary of State for Children, Schools and Families introduced a few weeks ago. We are entitled to ask why the Conservatives will not support us on those key measures, which are so important to our countrys future.
Chris Grayling: Does the Chancellor agree with the former Secretary of State for Work and Pensions and Home Secretary, the right hon. Member for Sheffield, Brightside (Mr. Blunkett)? Last week, he said on Any Questions?:
I am against the idea of suggesting that deeply damaged men and women could somehow be fined and it would make them go into education and training. I think its cloud cuckoo land.
Mr. Darling: Making sure that people stay in education to ensure that they have the necessary skills and qualifications would achieve something that we all agree is necessary: dealing with the generation of people who are not in education or employment, but could be with the right skills and support. That is important.
Let me turn to another matter on which the Conservatives had absolutely nothing to say. If we are to meet the challenges, we need to improve our infrastructure, make sure that our forms of energy are more secure and greener, and put in place other measuresfor example, increasing the housing supply. Yet there has been absolutely nothing from the Conservatives on those issues.
For example, the Crossrail Bill, which is now going through another place, will introduce the largest transport project in Britain, certainly since the channel tunnel. That is in addition to our doubling transport investment and providing transport spending over a 10-year period. The energy Bill will allow us to meet our obligations on renewables, put in place carbon capture and storage measures and introduce the new nuclear power stations, if the Governments consultation decides that we should proceed in that way.
Those are examples of how we are planning for the future. That is also the case for housing: we are building 3 million more homes. Members rightly stand up and say that their constituents are having difficulty in getting housing; well, a substantial part of the answer must be to build more housing. Where do the Conservatives stand on those issues?
Mr. Binley: No, but I will ask the Chancellor about his statement that the Crossrail Bill will involve a massive investment. We have already seen it rise from about £6 billion to a massive £16 billion in just 18 months. What is the Chancellors view of how much Crossrail will have cost by the time we have built it? What will the investment have amounted to then?
Mr. Darling: I grant to the hon. Gentleman that it would have been much better if Crossrail had been built in the 1990s, before the Conservative Government scuppered it. Had they not, it would have been open and running. By its very nature, Crossrail is an expensive project. My right hon. Friend the Secretary of State for Transport and others are working hard to get the costs down. However, it is important that the project is put in place, just as it is important that we have the energy and the housing and regeneration Bills.
There is one further measure on which the Conservative party is all over the place in policy terms: the planning reform Bill. We will not get new transport
infrastructure, the energy supplies that we need or large-scale housing unless we reform the planning system. Yet the Conservatives have absolutely nothing to say about thatno wonder, when we look at their policy on energy. What is that policy? Did the shadow business and enterprise spokesman state it when he said that he did not think that we were doing enough to get more nuclear power stations, or was the policy set out when the leader of the Conservative party said that nuclear should be only a last resort?
Surely one must prefer the statement from the right hon. Member for Witney (Mr. Cameron), who is leader of the party after all. Yet how can a policy that does not say whether a party is for or against nuclear power be justified? Whatever side people take, they have to have a view on such an issue. It is pressing and urgent, yet the Conservative party is completely incapable of addressing it because it does not know where it stands.
Mr. Redwood: I was going to help the Chancellor with a useful suggestion. I have proposed that the Government should immediately hold a competition between all the low-carbon and no-carbon technologies to see whichor what mix of themwould be cheapest and best. In that way, we could make an informed decision.
Earlier this year, we set out our proposals in the energy White Paper. We are clear that there needs to be a mixwith consultation, of course, on whether nuclear ought to be part of it. I have made my position on that clear on a number of occasions.
As I said earlier, one of my major criticisms of the shadow Chancellors contribution is that he completely omitted to mention the two big challenges that we face: child poverty, which we discussed earlier, and climate change. Let me say this on the need to eradicate poverty and get more people into work. We know that the Conservative party was against the new deal and that it has a visceral dislike of tax credits and some of the other measures that we have put in place to help people. Yet on the issue of getting people off incapacity benefit and into work, it seems to be saying that it will abandon the steps that we are taking and instead place all our hopes on doing it on a voluntary basis.