HC Deb 22 July 1996 vol 282 cc7-8
6. Mr. Touhig

To ask the Deputy Prime Minister what assessment he has made of the effectiveness of the competitiveness unit in his Department. [36751]

Mr. Willetts

As the recent competitiveness White Paper showed, we are doing well in world growth league tables, and our productivity is improving strongly. The best evidence of our success is our record of attracting inward investment—most recently, the Lucky Goldstar plans to invest £1.7 billion in manufacturing in Newport—the largest single inward investment ever in Europe.

Mr. Touhig

The OECD's latest employment study warned that low pay and the lack of a highly skilled work force are combining to constrain our economic competitiveness. What are the Government doing about that?

Mr. Willetts

Our competitiveness White Paper shows that we have one of the lowest unemployment rates in Europe. In addition, within the Group of Seven we moved up from the fifth or sixth place on growth rates that we occupied in the sad days of the last Labour Government to third place in the 1980s. If the hon. Gentleman studies the White Paper, he will find the answer to his questions.

Mr. Nigel Evans

Does my hon. Friend agree that low pay is not the problem with Britain, but that no pay, through increased unemployment, would be the problem if we proceeded down the road to ruin with the social chapter, minimum wage and 48-hour directive that would be heaped upon us if the Labour party were elected to power?

Mr. Willetts

The pay of the average production line worker in this country compares very favourably with the pay that the equivalent worker would take home in Germany, France and Spain. The difference is that in Britain we have kept a grip on the extra costs imposed by Government, whereas in Germany, France and Spain, because of the social chapter, the extra costs imposed by Government are much higher. That is why Britain has lower unemployment.

Mr. Caborn

In view of what the Minister said about the OECD and the White Paper—which drew heavily on statistics from the OECD—does he agree with the OECD's statement that there is a link between our declining national competitiveness and the growth in wage inequality and job insecurity?

Mr. Willetts

I do not accept that there has been any decline in national competitiveness. The evidence assembled in successive competitiveness White Papers shows precisely that there has been a clear improvement in our position on growth per head compared with other advanced western countries. Of course, one in three of all those leaving school now go on to higher education, as against one in eight under the last Labour Government, which is significant evidence of how educational standards are improving.