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Yet again, the then leader of the Conservative party’s fundamental economic analysis was proven wrong. He cited examples that strayed into social policy, and I suggest to the Opposition that that is always unwise in their response to a Budget. He cited the chief constable of Nottinghamshire saying that police could not cope anymore. It just so happens that, being a Nottinghamshire MP, I have the Nottinghamshire crime statistics. Let us guess what happened in the year after the 2005 Budget: crime across Nottinghamshire came down, and that has continued to happen year on year. So even the attempt to use third-party support has backfired, which allows me to repeat that it is
important that the Opposition stick to the economics and look at why there has been such a fundamental flaw in their economic analysis after every Budget.
Mr. Simon: I am not clear—I do not know whether my hon. Friend can enlighten me—whether the Conservatives make those consistent, frequent, fundamental and basic errors of analysis in good faith, because they are not very good at sums or analysis, or whether they are quite cynical, opportunistic people who say things for their own political purposes in the most cynical way. It is quite important to know.
John Mann: I am sure that the Conservatives will want to respond from the Front Bench in their winding-up speech to state which it is. In 2006, they said that Britain could not compete in the global economy, but our economic position was competitive and did not worsen in the subsequent year, and the right hon. Member for Witney (Mr. Cameron) made by far the shortest speech on record by a Leader of the Opposition.
Mr. Crabb: Will the hon. Gentleman give way?
John Mann: No, let me inform the hon. Gentleman about the last Budget, when there was a major step change. I have now analysed all the speeches made by Leaders of the Opposition since 1997, and they have all been wrong on economic grounds, with a bit of social policy thrown in. Things were totally different in 2007, when they turned to a series of personal attacks. The economic analysis disappeared, presumably because, having looked back, they found that it was repeatedly wrong, but they got a bit carried away with the rhetoric, despite the fact that the speech was prepared. It was suggested that Britain was doing particularly badly in relation to France, the United States and Serbia and that we were about to run out of money. Again, since the Budget, we have not run out of money. I have not had the opportunity to look at the Serbian economy, but I am sure that the Conservative spokesperson will give us an analysis of how we have done in the past six months compared with Serbia, which was cited by the Leader of the Opposition in his official response to the Budget. We described previous leaders as “boom and bust”, but it is more like “doom and gloom” now, because that is what they have projected after each Budget in the past 10 years.
Under the Tories, I set up and ran a business with my family. In those years, there were major problems, but now we have stability and consistent growth. Recently, we have been exceeding growth projections. Interest rates are stable and low, exchange rates and inflation are stable and average earnings are on a nice upward spiral but consistent. A small business such as ours required such a situation during the Major years, but we did not have it; it makes a difference to people wanting to make an investment.
I shall cite the judgments of some independent analysts, most made within the past two or three days, although the first is about three weeks old. Jodie Tiller of CIBC World Markets said that growth was stronger than expected and mentioned
“stronger-than-expected retail sales”.
That is contemporary, current commentary. This weekend, the headline of the International Herald Tribune was “British economy powers ahead”. That is
the American view of the British economy this weekend. George Buckley of Deutsche Bank is upbeat about the British economy. GDP growth for the last quarter has been 3.3 per cent., rather than the projected 3.1 per cent., which Howard Archer of Global Insight describes as “impressively resilient”. Yet yesterday the financial press was saying that investment confidence was low in Germany and that for the US economy there was a bleak outlook with low consumer morale.
I put it to the House that through having a stable economic projection year on year and not meddling with the boom and bust tendencies of previous Labour and Conservative Governments, the Government have allowed British business, small and large, to get ahead and do well. That is why we are more resilient to any short-term downturn than our main competitors. The situation leaves the Opposition rather exposed, because they have to say something at Budget time. What they ought to say is, “Thank you for the success that you have had. We have differences in our spending priorities and we want to debate those genuinely.” They should be honest and say, “We accept that the British economy is booming, although we would use the proceeds of growth differently.” That would be a legitimate debate. Instead, the Conservatives embarrass themselves by projecting doom and gloom every year and getting it wrong.
Justine Greening (Putney) (Con) Will the hon. Gentleman give way?
John Mann: No; I have three more points to make before I wind up.
John Mann: The hon. Lady will have a chance to respond.
My first point is to those on my own Front Bench and is about labour market flexibility. On my analysis, we are about to get over the legacy of the Thatcher years, although it is still there in the figures reflecting the large number of people in their late 50s on incapacity benefit in constituencies such as mine. They were struck off the unemployment records in the ’80s, as the Tory Government made them redundant from industries such as mining, shipbuilding and others.
The fact that we are getting over that is good for the economy. However, I hope that the Treasury will seriously analyse an issue that we have not got on top of: drug dependency. There will be a financial cost if we do not return drug-dependent people—who are, on average, young—to work. The Government have a good and improving track record on getting people who have been on drugs out of crime. However, we must concentrate resources on what we need to do to get more such people back into work. The Treasury should take a lead, with economic modelling on the cost savings that would come from that. My own projections suggest that if we do not do so, the cost to the British economy over the next 40 years will be in the hundreds of billions of pounds, because a relatively young group of drug addicts are often not in work and claiming benefits and will do for a significant period of time.
The British Chambers of Commerce recognised that capital gains tax taper relief for small business was a benefit to business brought in by a Labour Government, not a Tory Government. I hope that the measured way in which it put its case, unlike others, will lead to its getting proper access to Treasury Ministers to discuss its views.
In the coalfield communities, there is a big legacy issue in which we move beyond economic success to aspiration. The coalfield taskforce, which was established in 1998 by the then Deputy Prime Minister, has done brilliant work in creating jobs, as my hon. Friend the Member for Bolsover (Mr. Skinner) outlined in Prime Minister’s Question Time. We now need a taskforce to tackle aspiration and entrepreneurship in those communities. Generations in those communities have always had work provided for them. They now have jobs available that they did not have 10 years ago. In the next five years, the Treasury should take the lead in creating that aspiration and entrepreneurship, and the means to develop it, for the coalfields taskforce.
5.46 pm
Mr. Stephen Crabb (Preseli Pembrokeshire) (Con): I should like to offer some remarks about an issue that is of crucial importance to our economic stability and success in the decades ahead and which has been referred to several times in the debate—namely, energy security. Like the No. 53 bus, after a decade of waiting for a policy three Bills have come along at once—the Planning Reform Bill, the Energy Bill and the Climate Change Bill—all of which are intended to provide solutions to the major energy security questions of our time. In the 10 years of this Government, energy policy has been in a state of near-continuous review. We have had White Papers, Green Papers and dozens of smaller consultation papers. We had a position on nuclear power outlined in the 2003 Green Paper that was subsequently reversed last year in a display of boldness by the previous Prime Minister, although he did it in such a cack-handed way that he ended up being dragged through the High Court by Greenpeace.
Meanwhile, during the past 10 years the world has moved on. Oil is now trading at about $90 a barrel, driven in part by the fast-growing, energy-hungry economies of China and India. North sea oil and gas production has fallen into sharp decline, and the fiscal regime governing exploration, production and decommissioning of fields in the North sea is not attracting sufficient investment to maximise production in these mature fields. That was alluded to by the hon. Member for West Aberdeenshire and Kincardine (Sir Robert Smith), who is not in his place.
Throughout the past decade, the UK has moved from being a net exporter of energy to a net importer of energy. That will accelerate in the years ahead and increasingly hit our balance of payments. Our nuclear industry has also been underperforming. Last year, there was a decrease of more than 7 per cent. in electricity production from nuclear sources as a result of the high level of outages due to repairs and maintenance. In the past 10 years, we have become even more reliant on imported coal—the dirtiest hydrocarbon source for electricity generation—from South Africa, Australia and South America.
In terms of our contribution to tackling climate change, which is an integral and important part of the debate on energy security, performance in the past 10 years has been uninspiring, to say the least.
Madam Deputy Speaker: Order. I hesitate to bring the hon. Gentleman to order, but if he looks at today’s Order Paper he will see that we are discussing an amendment tabled by the Leader of the Opposition that covers several areas but is to do with the economy and welfare rather than energy policy. Perhaps he could bear that in mind in making his observations.
Mr. Crabb: I apologise, Madam Deputy Speaker. The issue has been referred to in the opening speeches from both Front Benches, and it is a vital part of the debate about the economic performance of our country.
Madam Deputy Speaker: Order. It is fine if the hon. Gentleman is about to relate his remarks to the subject as it might affect the economy. A reference is acceptable, but this is not a debate entirely about energy policy, important as that might be.
Mr. Crabb: I am grateful for that clarification, Madam Deputy Speaker.
One way in which the economy of my constituency has been affected by energy developments in the past few years is the construction of two huge liquefied natural gas import terminals in Pembrokeshire. Those will be a vital part of the energy infrastructure required to ensure that our lights are kept on in the years ahead. Those projects have helped to eradicate male unemployment.
Chris Ruane: Under a Labour Government.
Mr. Crabb: The hon. Member for somewhere in north Wales says that that was due to a Labour Government. People in the industry with real knowledge about the issues say that those projects, like other gas import projects such as the Langeled pipeline and the LNG project in the Isle of Grain, were brought forth as a result of Britain’s liberalised gas markets. Price signals and other market information provided the context within which the private sector could bring about huge investment decisions. It is not just down to the Labour Government, but to markets working efficiently.
Mr. Simon: To clarify what the hon. Gentleman thinks that my hon. Friend the Member for Vale of Clwyd (Chris Ruane) said from a sedentary position, the hon. Gentleman seems to have massively misunderstood the extent to which a Labour Government is the opposite of a market solution. In the past decade in this country, a Labour Government with concerns for social justice, child poverty and all sorts of socially progressive things at their core have delivered outcomes using the mechanisms of the market. That is why employment in the energy sector in his constituency is so much higher than it was under the Tory Government, when it was so much lower, even though they supposedly understood how markets worked.
Mr. Crabb: I hear the hon. Gentleman’s point.
With regard to the link between energy and the economy, gas development is the only bright spot in the past 10 years of energy policy development in this country. The energy industry and the private sector are waiting for some bold decisions to be made about where our energy will come from in the next 10, 20, 30 or 40 years. That is vital to the economic future of our country. Big decisions need to be made. There were three Bills in Her Majesty’s Gracious Speech that seek to address such factors.
Adam Price (Carmarthen, East and Dinefwr) (PC): Notwithstanding the direct employment benefits to the hon. Gentleman’s constituency of the LNG pipeline—he and I have very different views on its wider benefits—what ideas does the Conservative party have to regenerate the wider economy in Pembrokeshire, which has some of the lowest wages in the United Kingdom? We cannot build more and more pipelines. What ideas does the Conservative party have on regional economic policy?
Mr. Crabb: My constituency, which is not too dissimilar to that of the hon. Gentleman, relies a lot on micro-business, and the small and medium business sector. If he had been present earlier during the debate and listened to some of the speeches by Conservative Members, he would have heard excellent ideas on how we strengthen that vital backbone of our economy, such as changes to the fiscal regime and investment in skills to ensure a ready supply of skilled workers for the small business sector. Those issues are vital. His constituency and mine have both seen drops in headline rates of unemployment during the past 10 years—the Opposition will not deny that—but in our constituencies, and throughout the country, there are still serious problems, with a growing number of young people not entering education, employment or training, and a stubbornly high rate of people on sickness and incapacity benefit. We need to tackle those areas.
In west Wales, the rural economy in some sectors is being kept going by imported foreign labour. In the hon. Gentleman’s constituency and mine, foreign labour is keeping a lot of rural businesses, such as care homes, nursing homes, farms and poultry businesses, ticking over. Now that is not a sustainable solution. As I said earlier, the phenomenon of many highly motivated people coming in from eastern Europe, often with a strong work ethic, has let our Government off the hook in tackling those serious problems.
Adam Price: The hon. Gentleman is right to raise the effect of migrant labour, which depresses wages in some parts of the country that already suffer low wages. Does he support the TUC’s campaign to extend the remit of the Gangmasters Licensing Authority to cover other sectors such as construction, manufacturing and retail so that we can have fair pay for all workers in those sectors, too?
Mr. Crabb: I am not sure whether I agree with the hon. Gentleman’s point that foreign labour depresses wages. If he talks to some of the businesses in west Wales to which I have spoken, they will tell him that they pay exactly what they would pay an indigenous Welsh person. The problem is that indigenous people with such skills are not there. If he visited the energy projects in west Wales, he would see a lot of foreign labour, working for exactly the same rates and on the same terms and conditions as the Welsh lads there.
Julia Goldsworthy: I want to make a similar point to that of the hon. Member for Carmarthen, East and Dinefwr (Adam Price). Does the hon. Gentleman support the extension of the gangmasters legislation to construction and care homes, when it would make an impact on protection for those migrant workers?
Mr. Crabb: Given that two hon. Members have made the point, I should examine that important policy recommendation. I shall do that.
It is an exciting and challenging time for our country. Two different narratives have been presented by the two sides of the House about economic performance. Much revisionism is going on, perhaps on both sides, too. However, there are major challenges ahead, not least in energy security, as I began to outline at the start of my speech, but also in tackling skills and ensuring that we can compete in an increasingly globalised world.
The powerhouse economies of India and China have been mentioned. Unless we improve the skills of our work force, make the necessary investment in higher education and stop closing down science departments in British universities, we will not produce the skilled work force that we need to compete with those economies.
5.57 pm
Ms Sally Keeble (Northampton, North) (Lab): It is a pleasure to speak in the debate on the most important issue for my constituency. The hon. Member for Preseli Pembrokeshire (Mr. Crabb) mentioned revisionism and I would like to revise some of the figures that the hon. Member for Peterborough (Mr. Jackson) cited. He said that unemployment in his constituency had increased and that it had one of the highest unemployment rates in the country. According to the latest statistics in the report that the Library produced, unemployment in Peterborough has decreased by 22.4 per cent. and currently stands at 4.6 per cent., which is close to the figure for my constituency. The hon. Gentleman muddled that figure with the position of those not in education, employment or training. I shall deal with that later, but he should congratulate the Labour Government on the outstanding impact of their economic policies on reducing unemployment in his constituency.
Indeed, the economy’s strong performance, thanks to the Government, has been of the greatest benefit to my constituency. During the debate, several hon. Members referred to Northern Rock. One of the factors that came out in the interesting Select Committee hearings is, perhaps surprisingly, the lack of panic that all the authorities displayed about the impact of Northern Rock and the credit crunch generally on the UK economy, and the prospects of a repeat. The enormous stability in the economy and especially the strength of the banking sector were cited as having made it possible to manage our way through a difficult period. The great stability on the macro level has, therefore, also been important on the micro level. In my constituency, unemployment has decreased by a third while the Government have been in office, but we have had historically high participation in the economy, with a huge work ethic.
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