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As I look around the House, I am very much aware of the fact that Members will have just come back from tough election campaigns, where candidates will have
been getting stuck into each other in order to get elected, yet in Wyre Forest the campaign could not have been more gentlemanly. It steadfastly adhered to a political version of the Queensbury rules, and that is entirely due to the nature of my predecessor, Dr Richard Taylor. Richard was famously elected as an independent in 2001, trying to save Kidderminster hospital from down-scaling and the closure of the accident and emergency department. Although he may not have achieved everything that he and his party set out to do all those years ago, his political achievements have become a byword for people power. The term the "Kidderminster effect" is now used to describe political curiosities, and he is already described in modern political textbooks as an example of how the traditional party system can be broken when constituents feel strongly enough about a specific local issue. While Richard's local achievements may not have been as huge as hoped for in 2001, he has proved two things for modern politics: that Governments ignore the views of the electorate on local issues at their peril, and that when it comes to important local issues, people are a lot more politically minded than we imagine.
Richard follows in a long line of interesting politicians in Wyre Forest, including former Conservative Prime Minister Stanley Baldwin and the hugely charismatic Gerald Nabarro, but Wyre Forest also has many other interesting sons, including the 17th-century Puritan preacher Richard Baxter, who set up his ministry in Kidderminster in 1641. Also from Kidderminster was Sir Rowland Hill, the inventor of the modern postal system-someone whose legacy Members are reminded of every day as they collect their post bags from the House of Commons post office. More recently, and no doubt of interest to Members who grew up in the '60s and '70s, Led Zeppelin front man Robert Plant is still an active member of the local community.
Comprising the three towns of Kidderminster, Stourport-on-Severn and Bewdley, as well as the outlying rural communities, Wyre Forest is a community that is both historical and fascinating. Straddling the river Severn, its earlier history is based on trade along the river. The town of Bewdley used to be an important trading port, part of which is mentioned in the Domesday Book, while the main town received borough status from Edward IV in 1472. This, of course, is the town that Stanley Baldwin lived in and from which he chose his title: Earl Baldwin of Bewdley. Downstream from Bewdley lies the Georgian town of Stourport-on-Severn, created as a port where the river Stour joins the Severn, but made much more prosperous by the building of the Staffordshire and Worcestershire canal. The canal basins and locks now form a stunning central focus for the town.
The biggest town in Wyre Forest is Kidderminster. Also mentioned in the Domesday Book, Kidderminster was granted a borough charter in 1636 by King Charles I-a former, and unfortunate, visitor to this House. Kidderminster is, of course, known for its carpet industry, which was started by the Brinton family in 1785. This has been the main driver for the local economy until recent times, and indeed there are still a number of successful carpet manufacturers based in Kidderminster and Stourport. So significant to the local economy was-and to a lesser extent still is-the carpet industry,
that the local newspaper, The Shuttle, was named after the shuttle that forms an integral part of the looms used in the weaving of carpets.
The modern economy is more diverse, however, with manufacturing ranging from design and building the undercarriage for heavy earth-moving equipment to-slightly surprisingly for land-locked Worcestershire-the manufacture of luxury ocean-going yachts, and from forging parts for motor car components to the cutting-edge design and manufacture of rocket motors.
Taking advantage of the outstanding local beauty and our fascinating local history is the impressive local tourism industry, which includes both the West Midlands safari park and one of Europe's finest heritage steam railways, the Severn Valley railway. Both represent significant tourist draws for the west midlands, and provide important diversions for my three children.
More recently, Wyre Forest has undertaken a comprehensive review of all the schools in the district, as a result of which the former three-tier system has changed to a two-tier system. That process has included a major rebuild and investment from Worcestershire county council. Worcestershire is a wave 6a Building Schools for the Future authority, and the proposals are to rebuild four of our secondary schools: Stourport high school; Wolverley Church of England secondary school; Baxter business and enterprise college; and King Charles I school. The proposals also include the provision of a new special school for two to 19-year-olds and the refurbishment of Bewdley school and sixth-form centre. The BSF programme has been signed off this year by the Treasury, so although I have no reason to believe that the rebuild will not go ahead as planned, I cannot understate the importance that this investment will have in Wyre Forest, where there is a need to deal with issues relating to certain pockets of local deprivation. These areas will benefit immeasurably from this investment.
On the wider issue of per pupil funding, Wyre Forest, as part of the Worcestershire education authority area, suffers from being near the bottom of the per pupil funding league table. That means that a school the same size as Kidderminster's Baxter college would receive more than £3 million per year more to do the same job if it were located down the road from here, in Tower Hamlets. Of course we recognise the increased costs associated with being in the centre of London, but are they really that much higher? I hope that the proposed pupil premium for disadvantaged pupils will help to redress the imbalance, but I seek a move towards a fairer funding formula for Worcestershire schools.
I was keen to speak in this debate on Europe because I feel that we can learn many positive things from our European partners, including lessons from Sweden on school provision. I am frequently asked where I stand on the issue of Europe, and my answer is that I am neither a Europhile nor a Europhobe, but a Euro-realist: I feel that we are where we are on Europe. As someone newly elected to Parliament, I deplore the creeping nature of legislation that comes not from this place but from Brussels. I welcome the coalition's proposed referendum lock, and I will always stand firm against joining the euro.
When I consider whether we should be in or out of Europe, my first instinct is to examine how it will affect the people of Wyre Forest, and whether my constituency would be better off if we came out of Europe. I remain
open-minded and could be persuaded otherwise, but my instinct is that Wyre Forest's economy stands a far better chance in the future if we stay in Europe, taking advantage of the trading opportunities available, which we talked about earlier.
I look forward to serving the good people of Wyre Forest not just in this place but locally in the community, where I intend to spend my time working with the business community, trying to attract more opportunities locally and tackling low local wages and rising unemployment. The man of the moment back in 2001, when the hospital was threatened, was always going to be a doctor, but in 2010, when we have rising unemployment and a doubtful economic outlook, I look forward to using my experience of business, investment and economics to work hard for the people of Wyre Forest to tackle the crucial issues facing us all.
Ms Gisela Stuart (Birmingham, Edgbaston) (Lab): It is a great pleasure to follow the maiden speech of the hon. Member for Wyre Forest (Mark Garnier), not least because I still fondly remember having a photograph taken in 1997 with David Lock, the then Labour Member for Wyre Forest. We all had red balloons and we travelled down to Westminster together. I am glad to say that, apart from David Lock, all of those in the photograph are still in the House. I wish the hon. Gentleman well. I am sure that people in his local carpet industry would have had one or two things to say if it had been forced to "go metric" on the weaving shuttles; I am sure that he will have one or two particular points that he wishes to bring to the House.
I wanted to speak today because Europe is facing a political and economic crisis which, although it has been brewing for a considerable time, is, in some ways, being denied both here and abroad. It is a political elite that is in denial, and in some sense that does not surprise me, because I still bear the scars of spending 18 months in Brussels attempting to write a European constitution. The democratic mandate was ignored then, too, and a political elite essentially rode roughshod over the wishes of the electorate.
Frankly, no party here has much to be proud of on the issue of referendums, nor do the Governments in the countries across Europe whose people said no when asked-and were simply ignored, as happened in Holland and France. Ireland's people were simply asked twice; they were asked until they came up with the right answer. So there is something wrong going on in the house of Europe, and at the moment, that shows itself in terms of economics and the single currency.
Those who have warned against some of the problems of the single currency take little pleasure in being tempted to say, "I told you so". People need to face up to what is happening at the moment, because this is not a question of one member of the eurozone having a financial crisis from which they can simply be bailed out. A bail-out is not the answer to the problem, nor is it in the current treaty provisions. The central issue in Greece is not associated with the pubic finances, although those are a problem. The real question is what happens when a country in the current monetary union loses competitiveness and cannot regain it. In essence, we are asking Greece to implement what amounts to two thirds of a traditional
IMF package, which usually involves raising taxes and cutting public expenditure. However, the third and crucial element that always comes with recovery is depreciation of the currency, and that adjustment is not happening.
What the European monetary union calls "internal depreciation" has to replace a currency depreciation, but that is nothing other than a polite phrase for debt deflation. The programme currently recommended for Greece will crush output and increase both unemployment and private sector default. It will reduce Government revenues still further, and make public sector default and national bankruptcy even more likely.
Some people in countries such as Germany think that every country in Europe should behave like the Germans. As someone born in that country, I think that that is a perfectly reasonable expectation-but it is not the answer, as we cannot answer our economic problems by requiring every country to run a trade surplus. To be fair to Germany, it got out of its own economic crisis of the late 1990s and the first years of this century only at the expense of some of the other countries in the EMU.
So what are we going to do? Two solutions offer themselves. One is to transfer funds from countries with a current account surplus-in effect, those in the German bloc-but that assumes that a one-off payment is the answer. It is not. What is really required are year-on-year transfers, equivalent to what West Germany paid to the old East Germany. Let us be clear about this, however. Just for Greece, such a year-on-year transfer would amount to something like €35 billion to €40 billion a year. If we were talking about the default for Spain and Portugal, we would be looking at something like €100 billion a year, and that would wreck not only the German economy but its public finances as well.
Michael Connarty: I hope that my hon. Friend does not mind me intervening, but it seems that, having put down a set of rails, she is going to go all the way along until she crashes. Is there not a possibility that the fundamental flaws lie in how the failed economies acted? For example, Spain and Portugal put money into infrastructure and not education, with the result that people left school and built houses instead of educating themselves and creating a new economy. In Greece, the question centres on how much of the tax take that is due has been paid. Should we not concentrate on changing those economies so that they are stronger? Should we not use the 2020 strategy to rebuild growing economies, and not just bail them out?
Ms Stuart: That is a perfectly fair point, but there are two problems. The first goes back to the claim that we would have trade surpluses if only every country were like Germany, but things do not work that way. The second problem is how such a strategy would be policed.
There is a third difficulty, too. Every successful single currency requires significant transfers from the centre to deal with asymmetric economic shocks, and those transfers would be of the order of between 20% and 30% of the overall tax take. In Europe, that would require a European economic and political Government. The approach could not work in any other way, because we cannot expect countries to behave like that in the absence of any mechanisms for policing or transfer that would compensate them for their loss of competitiveness.
The problem in Greece is that it could become competitive again by devaluing its currency, but it is not allowed to do so. As a result, the approach outlined by my hon. Friend the Member for Linlithgow and East Falkirk (Michael Connarty) does not address the problem.
The second solution is a massive devaluation of the euro-a devaluation that some people say would have to amount to something like 50 cents against the dollar. A small devaluation would not be enough for Greece, and a large devaluation would be disastrous for the other countries in the EMU. For a country like Germany, a small devaluation would help competiveness, but a large devaluation would lead to incredibly high inflation that would ruin the economy again.
Again, what should we do? There is a least bad solution, although it is not a happy one. People argue that Greece should leave the euro, but I think that the least bad solution would be for the German bloc to leave the euro. That would, in a sense, allow for competitiveness to develop. Germany's banks would still have to recapitalise, but it would be less costly to do this directly than it would be to do it indirectly by trying to rescue Greece.
The simple truth is that neither the eurozone countries nor any countries around the eurozone will get out of this mess without some very serious decisions being made, and there will be consequences for us all. As I understand it, the Prime Minister says that it is in Britain's interests for there to be a stable and strong euro. If he says that out of diplomatic politeness, I understand and accept that, but with the current structure there is no way that he can have a stable euro and a strong euro. It will be weak in its basic economic fundamentals, and that is what has been wrong with something that was driven by political will but underpinned by excessively bad economics. The euro has always been a political project, and people keep assuming that given sufficient determination by the politicians, this structure will work. But it is fundamentally flawed.
It is then argued that the answer is more central control from Brussels, with its already incredible intrusion into countries' sovereignty. Look at what has been happening to Greece, and what has been happening to Spanish Ministers and what they were told to do. Essentially, Brussels is now running Greece as if it were a protectorate. Is that the answer? I do not think it is. I do not think it is acceptable. That is the real difficulty-that nobody is facing up to the fact that the structure is so fundamentally economically flawed that it will not work.
That is why, when the Foreign Secretary and the Prime Minister go for the first time to European Union meetings in their new roles, I urge them to stop using phrases such as "having to protect our negotiating capital." I think they have to face the fact that that is simply a polite phrase for not being prepared to say no when on occasions you need to say no. Again I have seen it, and the Foreign Secretary himself acknowledged that once people join the Government again, the tones get slightly softened. When a problem arises, the Brits will, as always, within a few hours say, "I'm sure there's
a way through this," encouraged by our very able diplomats-who, I remind the House, are always in government, irrespective of which side of the House hon. Members are sitting, so it is in their interests to find these rather smooth solutions.
We are coming to a point where, to get out of serious economic difficulties, Britain will have, on occasions, to say no. When it comes to threats to our financial industries and our financial sector, it is no good protecting our negotiating capital. It is time to say no, just as the French would say no if we attacked their wine industry, or the Germans if we attacked their car industry. The price that will have to be paid if we do not become competitive again, if we do not protect our own currency, will not be paid by Members in the House, or by the Commission in Brussels. The political elite and the nomenklatura are always protected. The price will be paid by the old and the young, by the people who have no jobs, the people who lose their savings and the people who lose their pensions. The political elite have not been prepared to listen to them. It has been driving through a political project that was underpinned by bad economics. I hope that the people on the Government Benches will now show that when in government, they are able to act with the mettle that they pretended to have when they were in opposition.
I am delighted to rise to speak today as the new Member for Brighton, Kemptown, the sixth in the 60 years that the seat has existed. Brighton, Kemptown, as we know, is very close to Europe, and I have to tell the House that in 1514 the French invaded the town of Brighton at the time and razed it to the ground. I am not surprised that even 500 years later, many of my constituents are still suspicious of our relationship with Europe.
Tradition dictates that I should thank my predecessor, Des Turner of the Labour party. For 13 years, he was the MP for Brighton, Kemptown, and I have to say that he did a good job. He worked hard and was an excellent constituency MP. In this House, his experience as a scientist was put very much to use, and I hope, as a mathematician, that I might follow him in that regard.
I should also like to pay tribute to his predecessor-not Dennis Hobden, who was the first Labour MP in Sussex, having won by seven votes, nor David James, the man who pursued the Loch Ness monster, but Sir Andrew Bowden, the MP for Brighton, Kemptown, from 1970 to 1997, a friend of mine and an excellent constituency MP.
Let me tell hon. Members about Brighton, Kemptown. It is without doubt one of the best seaside destinations not only in this country, but in Europe. It attracts 8 million visitors and many conferences. Many of us in this House will have enjoyed the hospitality that Brighton has to offer. The constituency runs from the Palace pier to Peacehaven, and from Moulsecoomb to the marina. It is, in my opinion, the best part of Brighton and Hove city, and the best part of East Sussex. Whitehawk has had human inhabitants for thousands of years. My hon. Friend the Member for Wyre Forest (Mark Garnier)
mentioned the Domesday Book; Brighton appears in it, and there is a fantastic Norman church in the village of Ovingdean. I have mentioned the French invaders, so we will move on.
Brighton has a large lesbian, gay, bisexual, and transgender community, and I am proud and honoured to have the opportunity to represent it and the constituency in Parliament. It has a race course and the leafy suburbs of Woodingdean, Rottingdean, Saltdean, Telscombe Cliffs, and Peacehaven. It has older people and younger people. It has two universities. It has a hospital-designed, incidentally, by Charles Barry, the architect of the building in which we stand. It has a grade II listed lido in Saltdean, and one of the largest marinas in Europe, which I very much hope will remain a marina.
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