HC Deb 01 December 1997 vol 302 cc81-128
Mr. Deputy Speaker (Mr. Michael J. Martin)

I must inform the House that Madam Speaker has selected the amendment in the name of the Prime Minister.

7.15 pm
Mr. John Redwood (Wokingham)

I beg to move, That this House regrets the damage to business and jobs represented by the actions and inactions of this Government; condemns the broken promises to the coal industry, the lack of clarity over ministerial duties, the persistent tax raids on business and the threats posed by new legislation; and urges the President of the Board of Trade to set out a clear energy, competition and business policy that is in the interests of British companies.

Labour is bad for business. So far, the Government have overtaxed and over-regulated business. They now threaten it with much damaging legislation. The Department of Trade and Industry, under the President of the Board of Trade, meddles, muddles and prevaricates on every issue. What a pleasure it is to see the right hon. Lady for once in her place. I have waited many a long week for the opportunity to debate, at last, something with her.

While the DTI meddles, the Treasury goes stealthily about its business, taking money away from the successful and the hard-working.

I love that work of fiction, the Labour party manifesto. I remind the House of what it said about taxations: New Labour will establish a new trust on tax with the British people. I am delighted that Labour used the words "new trust", because lots of trusts have been set up by Labour Members and Ministers. Some of them, we are told, do not avoid taxes. They are in Jersey and Guernsey for the sake of the sea air.

The manifesto continues—

Mr. Deputy Speaker

Order. I hope that the right hon. Gentleman will not stray from the motion before us.

Mr. Redwood

Perish the thought. I wish to talk about taxation as one of the principal burdens on business.

The Labour manifesto says: The principles that will underpin our tax policy are clear: to encourage employment … to promote savings and investment". It goes on to say that new Labour is not about high taxes.

Mr. Andrew Miller (Ellesmere Port and Neston)

While the right hon. Gentleman is referring to manifestos, I ask him to cast his mind back to his own manifesto when he ran for the Tory party leadership. The words "trade and industry" did not appear in his manifesto. Why should we take him seriously tonight?

Mr. Redwood

The hon. Gentleman should listen to my powerful case about the way in which the Government are letting down business. He might like to remember that, before I came to the House, I chaired an industrial company and was a director of a merchant bank. I had substantial commercial and industrial interests in those days, which gave me considerable experience. When I became a Minister, I gave them all up.

Mr. David Hanson (Delyn)

I note that the right hon. Gentleman mentioned the tax policy in the Labour party manifesto. Does he agree with the Labour party's proposed cut in corporation tax? Will he vote against it?

Mr. Redwood

As I shall demonstrate, the Labour party is not proposing to reduce the corporation tax burden on companies in the next four years; it is proposing a swingeing increase in corporation tax during this Parliament. I am surprised that the hon. Gentleman has not done his homework on the Budget arithmetic, as he walked straight into that one in a rather unfortunate way. I suggest that he sends it back to the spin doctor for rewriting.

The glorious summer of Conservative economic success that Labour inherited is quickly being made winter by the Government. The business trees are bring stripped of their leaves and buds in the hurricane of measures coming before us. The Chancellor plunders and blunders on in the name of converging with high-unemployment continental Europe. The Government should listen. My hon. Friends know that this is true. The outgoing Conservative Government forecast total taxes this year of £282,100 million. Labour told us that there was no need to change Conservative tax and spending plans, apart from introducing the windfall tax. I am sure that Labour Members said that in debates that took place during the general election.

Last week, in the Budget forecast made by the Chancellor of the Exchequer, we were told that we would pay £10,100 million more this year in taxation than that set out in the Conservative plans. A massive back-door smash-and-grab raid has been carried out in just seven months, and much of the ensuing burden will fall on the business community.

Worse is to come. Next year, the country will be expected to pay £12,500 million more than it would have paid under the outgoing Conservative plans for that year. Over the next four years, business will be required to pay five years' worth of corporation tax. That is an increase of almost £2,000 million a year. Meanwhile, business will also be paying the pensions tax, the utilities tax, the telephone tax and the renewable energy tax while bracing itself for more taxes on the business motorist, on lorry transport, on sand and gravel extraction, on oil production and on much else besides.

At this point in the economic cycle, with a lot of money around and with job shortages in the most prosperous parts of the country, the Government should be encouraging savings and investment. Savings reduce the spending and inflation pressures on individuals, while investment would expand our capacity to make the goods that people want. After all, that was the promise included in the Labour party's manifesto.

Instead, the Government are penalising both savings and investment. Pension savings are taxed and tax-exempt special savings accounts and personal equity plans are to be abolished. Industrial businesses are to see their cash flows reduced by the avaricious Treasury, which will cut the moneys that they have available to spend on new equipment.

Meanwhile, there have been five interest rate rises from the party that said that it would keep interest rates as low as possible. The art of the possible is not a good one for the new Labour Government. It is no wonder that the interest rate rises were needed when the Chancellor of the Exchequer was so busy taxing savings. The right hon. Gentleman had to mop up the money in another way.

As a result, exporters face an uphill struggle. It is difficult exporting anything at current exchange rates. Industry is locked in a vice of higher interest rates and a higher value of sterling. It appears that the Minister of State, the hon. Member for Makerfield (Mr. McCartney), thinks that it is a good idea to yawn at this point. The hon. Gentleman should talk to British businesses, which are suffering as a result of the measures to which I have referred. He might learn a great deal if he talked to some real business men instead of being locked into his Department worrying about the next spin doctor attack.

Last Friday, I visited an exporter at Milton Keynes. He told me that, to stay in foreign markets, 70 per cent. of the components that he had to use were imported. Two years ago, 90 per cent. of his components were British.

I visited a textile plant recently. I was told that it was operating at half-capacity for want of overseas orders. The Government do not care and they do not know what to do. They merely press on with their high interest rates and a high-value sterling policy.

We have already read that United States investors may pull the plug on our electricity industry following the utilities tax and the regulatory threats that the President of the Board of Trade is making. Labour Members will learn that one company's grant is another company's tax increase and that taxing the successful is not the best way to produce growth in the economy and to increase employment.

Most businesses are suffering, but a favoured few do a little better from the Government. For example, BP has been granted a new 1,200 MW gas power station without any explanation. When did Labour drop its policy of saying, "No new gas power stations"? Rolls-Royce in Derby has been quickly granted £100 million of launch aid. I am delighted that the constituency of the President of the Board of Trade is to be looked after, but may we know what representations the right hon. Lady made and whether other companies will receive equal treatment?

Formula one, with 8,000 jobs at risk, is qualifying for help. It has policy reversed in its favour while the coal industry, with 50,000 jobs at risk, has policy changed against its interests. May we know what has happened to the six-point plan of the right hon. Member for Livingston (Mr. Cook)—when he was in opposition—to save the industry?

Mr. Gordon Prentice (Pendle)

My right hon. Friend the President of the Board of Trade did not take the decision to award Rolls-Royce not £100 million in launch aid, but £200 million. I have a Rolls-Royce plant in my constituency, and I know for a fact that my right hon. Friend had nothing to do with the decision to which the right hon. Gentleman referred.

Mr. Redwood

I did not allege that the right hon. Lady took the decision. I know that she would not do that. I said that I wa nted to know what representations she would have made as a constituency Member, and whether other companies would receive the same treatment and opportunity as the company concerned. I welcome the success of that Derby business, but we in the House must ensure that things are fairly and properly done, and the Government have not been following fair and proper process in all too many cases.

Mr. Laurence Robertson (Tewkesbury)

Does my right hon. Friend agree that the Government seem to be extremely sensitive on this issue? When I tabled a question to ask why the grant was given, the President of the Board of Trade replied that she had not been involved in the grant. That did not answer the question. Was not the right hon. Lady over-defensive before an allegation was even made?

Mr. Redwood

My hon. Friend is right. As Ministers are so secretive about all their doings, it is only natural that they become jumpy when we ask questions. If they were more open, they would avoid many more problems. The more secretive they are, the more suspicions build up and the more questions we shall table.

Those who want to know why we are worried about process could well study the question of formula one. We are told that the £1 million given by Mr. Ecclestone to Labour was unconnected with Mr. Ecclestone seeing the Prime Minister. We are told that that was not why the Prime Minister personally intervened to break a manifesto promise to save some jobs.

I contrast that position with that of the coal industry, which I think has not given £1 million to Labour. Its representatives have found it extremely difficult to see the Prime Minister. We now see Labour breaking its pre-election promises on better treatment for the coal industry and destroying jobs.

Perhaps the President of the Board of Trade would like to explain why two industries are treated in such a way. Let us have a system whereby anyone with a reasonable grievance may get to see the responsible Minister or Prime Minister, whoever may be dealing with the matter, without any suggestion of any impropriety occurring. We need a fair and open system. I had to intervene on the Minister without Portfolio in a television programme, to enable representatives of sports other than formula one to see the Prime Minister, who had not been able to see him on the formula one issue.

We are fortunate in having a Department of Trade and Industry memorandum in circulation, which speaks volumes about the Government's way of handling the coal industry issue and many others, which I am sure are the subject of similar memorandums. The memorandum does not tell us anything about what the President of the Board of Trade could do to save the coal industry. Instead, it tells us how the right hon. Lady could handle the presentation of the impending disaster under her policy.

The memorandum takes as given the depressing idea that the entire coal industry will be shut down within the next 10 years. It then goes on to propose how the media might be persuaded that that is a good idea. To do that would take more than an army of the finest spin consultants in the land. The Government will discover the painful way that there are some things that even spinning cannot make palatable.

The memorandum tells the President of the Board of Trade: There is an expectation that deep mined coal will effectively end within ten years unless the government intervenes to protect it by changing its environmental and energy policies. I look forward to hearing the right hon. Lady's remarks on that view of herself and her Department.

Instead of discussing how policies might be changed to help the industry, the memorandum then discusses how the existing bad policies can be presented to the public and press as inevitable. The idea is ventured that a low-profile reaction could work. It is proposed that the argument be left to the generators and mining companies. We are told: We have also found these arguments on commercial negotiations between companies useful when declining bids for ministerial interviews, so preventing the 'we asked the minister to appear but he declined' statement. That is not the only way in which Ministers have refused interviews or have refused to debate this and other subjects.

Mr. Geraint Davies (Croydon, Central)

Is it not the case that under the previous Government, the coal industry was emasculated, decimated and destroyed? As Secretary of State for Wales, the right hon. Gentleman did nothing to defend Welsh jobs. Is it not a disgrace that he has the audacity to come to the House and to make such suggestions?

Mr. Redwood

That is another failure by the spin doctors; the hon. Gentleman should do his homework. He would then discover that I fought hard to allow the miners and the employees of the Tower colliery to buy their pit. I, like them, thought that they could make a success of it. I am pleased to say that, through their efforts, that is exactly what they did. I confess that I intervened in the Department of Trade and Industry to ensure that they had that opportunity, and I am proud of having done so. It is a lot more than the President of the Board of Trade has done for the industry since she has been in her post.

Fortunately, the newspapers are much wiser than the DTI gives them credit for being. They have seen that the Government have options and have some responsibility. It is a pity that the BBC played into the hands of the DTI's cynical media manipulation. It turned down the coal story for the "Today" programme when I first offered it last Monday. It then failed to ask the President of the Board of Trade a single question on this most important of issues when she was interviewed at an exhibition for the "The World at One" later in the week.

All that the President of the Board of Trade has managed to do while the coal controversy has raged is to go to a caravan exhibition and to mislead the public about my views. Instead of telling us what she would do for the coal industry—she has been as quiet as the grave on that—she claimed in the interview that I was hostile to caravans and the caravan industry. I insist today that she apologises to the House for misleading people in that way. There is no quotation, no comment and no shred of evidence to show that I am hostile to caravans and the caravan industry. I wish to put that firmly on the record.

There is, however, plenty of evidence to show that I think that the President of the Board of Trade has spent a little too much time in her caravan this summer; that was the point of my criticism. I do not begrudge her a good holiday—I had one myself—but I think that she should have spent more time in her office sorting out the problems of business that the Government are creating and producing an energy policy with more chance of working.

From the wonderful memorandum, it is clear that the DTI strongly believed that, if it briefed a few journalists, they would write "what we say". If only. That breathtaking cynicism was compounded one page further on by the comment: Since the government could be portrayed as driving the nails in the coal industry's coffin, these points deliberately do not highlight the government's environmental targets for Kyoto. Of course they do not, because the famous hard choices that the Prime Minister has said we have to make have been ducked. The Government have not resolved the question whether it is more important to stop burning coal for environmental reasons or to encourage the burning of coal for energy policy and mining reasons. Today, the President of the Board of Trade must not be allowed out of the House without explaining how she will resolve that dilemma and without setting out an energy policy.

While the right hon. Lady is about it, will she now complete the review of electricity prices urgently? Does she know that the coal industry's case is that it can generate more power at a lower cost than the new gas stations if she comes to the right conclusion in her review? Why will she not tell us what her policy is on those new gas power stations? Is the BP station to be the only big one permitted, or will she license more from the 27 applications sitting on her desk? If so, how many more mines will have to close? When does she expect to stop importing electricity from France? Every extra megawatt imported means more British jobs lost.

The President of the Board of Trade has plenty of options. Instead of spending her days thinking about how to duck interviews and debates, she should start doing some real work on the issues facing the miners.

Mr. David Prior (North Norfolk)

Would my right hon. Friend be surprised to know that one of the largest users of electricity in this country cites one of the reasons for increases in the market price of electricity as being that generators are treating the windfall tax as a business cost and recovering it through their prices?

Mr. Redwood

My hon. Friend makes an extremely powerful point, and I am grateful to him. The windfall tax is, indeed, a cost that gets passed on, and it is another reason why the Government's energy policy is in such a mess.

The President of the Board of Trade also owes the House an explanation of why she misled us on more than one occasion concerning the shareholding of her ministerial colleagues. On 4 July, the right hon. Lady told us that the Minister for Trade and Competitiveness in Europe, Lord Simon, had undertaken not to trade his holdings in BP before January 1998. Subsequently, we were told that Lord Simon planned to sell them this summer. On 4 July, she told us—

Mr. Deputy Speaker

Order. Is the right hon. Gentleman saying that the President of the Board of Trade deliberately withheld information from the House?

Mr. Redwood

I am going on to make my case and to offer two possible explanations.

Mr. Deputy Speaker

The right hon. Gentleman must assure me that there is no suggestion that there was deliberate withholding of information by the right hon. Lady.

Mr. Redwood

I need your guidance, Mr. Deputy Speaker. I believe that the right hon. Lady answered questions wrongly. Either she did that because she was misinformed or she did it because she wished to mislead us—

Mr. Deputy Speaker

Order. The right hon. Gentleman must withdraw his remark. The right hon. Lady is not guilty of misleading the House, as far as I know. The right hon. Gentleman must not make that suggestion.

Mr. Redwood

I accept your guidance, Mr. Deputy Speaker. I thought, however, that I had asked a perfectly civil question. I think that the right hon. Lady owes us an explanation of why she told us certain things and we then discovered that something else happened. It is a convention of the House—

Mr. Hanson

On a point of order, Mr. Deputy Speaker. Can you tell the House what the shareholding of Lord Simon has to do with burdens on business?

Mr. Deputy Speaker

I cannot tell the hon. Gentleman that.

Mr. Redwood

If the hon. Member for Delyn (Mr. Hanson) checks the motion, he will see that it is widely enough couched to include the important matter of how Ministers take decisions and which decisions they are allowed to take. We have had great difficulty in finding out from the President of the Board of Trade and her right hon. and hon. Friends what they are and are not allowed to do. We should like some simple, straight answers to our questions.

Mr. Dale Campbell-Savours (Workington)

What about the right hon. Gentleman's wife?

Mr. Redwood

I am happy to take on the hon. Gentleman. Does he want to intervene? He asked about my wife; I shall tell him. My wife works for British Airways. I told everyone that when I first entered a Department of State. I said that I wanted nothing to do with anything concerning British Airways because of that, although the rules at the time did not require that degree of caution. Wives and husbands were not mentioned in the rules at the time. I told people in advance; I am asking for the same courtesy from these Ministers.

Why cannot Ministers tell us in advance what their interests are and what they can and cannot do? Why are they so touchy and so secretive? Of course, people will be suspicious until the President of the Board of Trade stands at the Dispatch Box and tells us what Ministers can and cannot do and how they have protected themselves from any allegation of a conflict of interest. This is a serious matter, and the right hon. Lady should tell us now why her answers did not work out as she thought they would and how she came either to be misinformed or to misinform the House.

The Government are no better at working out competition policy than at working out their energy policy. The President of the Board of Trade has proposed a radical change. Now that she is told of the problems of this policy, she is trying to wash her hands of it. The new Competition Bill will leave open the question whether the pub-brewer tie is legal or whether pubs will have to close. It will leave unanswered the question whether retail price maintenance is to go, damaging or closing many a community pharmacy. It leaves it unclear whether recommended prices for books and newspapers are acceptable. Many big and small businesses are faced with large legal bills as they check that out, and they are then faced with a couple of years or more of uncertainty. The President of the Board of Trade has decided, on reflection, not to answer, but to palm the problem off to her new quango, the Competition Authority. Labour is bad for business.

The Newspaper Society said: The Society endorses the concern which has been widely expressed by the business community in general about the 'chilling effect' of the prohibition approach to competition law. The Article 86 prohibition will have the combined effect of deterring legitimate business activities. In other words, the society thinks that it is very bad news. The Community Pharmacy Group said that the Competition Bill poses a threat to the long term survival of community pharmacies". Many hon. Members represent such pharmacies and want them to continue, not to be threatened by legislation.

The Brewers and Licensed Retailers Association said that if the beer tie is banned—and there is uncertainty about whether that is the intention—it would close thousands of pubs and destroy tens of thousands of jobs". Tonight, we need to know more about the Government's intention on company taxation and tax reliefs. The Chancellor stated clearly before he gained office: A Labour Chancellor will not permit tax reliefs to millionaires in offshore tax havens. We need to know the truth—my right hon. Friend the shadow Chancellor has tabled some questions today to get at the truth—of the Guernsey trust and how the Paymaster General will benefit from it. Why was it not declared earlier? Will the President of the Board of Trade tell us whether it is now Government policy to encourage Jersey and Guernsey trusts, or whether it is still their policy to take measures against them in a future Budget, to prevent people taking advantage of them?

We have no worries about people using Jersey and Guernsey trusts for sensible tax management, and we made no moves against those devices when in office. However, we do have worries about Ministers saying in their personal lives that such devices are fine, but signing up to the Chancellor's view in public that they are not. It is time that this humbug was sorted out and we should be told how the tension will be resolved.

Mr. John Wilkinson (Ruislip-Northwood)

Why have Ministers of the Crown and other right hon. and hon. Members routinely declared in the Register of Members' Interests things such as pubs, woodland, farms and other things to which they have title, which they own or from which they benefit, yet the Paymaster General does not declare the Orion trust? I find that extraordinarily strange.

Mr. Redwood

It is a question that I hope the Government will be answering, because it is important to get at the seeming tension between some members of the Government's attitude in private and the stated public position, which does not seem to have been reversed so far, that Jersey and Guernsey trusts are not a good idea because of the tax losses that can, but do not always, occur to UK residents or UK companies.

The President of the Board of Trade still enjoys a blind trust arrangement, while all her Cabinet colleagues wound them up when they joined the Government—how wise they were. I see nothing wrong with a blind trust in principle for a Back Bencher or a political party, but it is difficult to see why a Minister should need one. The President has all the officials in the Department of Trade and Industry to give her advice on specific and general Government matters and she, like the rest of us, has a parliamentary allowance for her constituency affairs.

Has she read "Questions of Procedure for Ministers"? Does she agree that there are dangers for a Minister in a blind trust arrangement, when the Minister is in such a sensitive Department? I believe that her husband knows who the donors are; how can she be sure that she does not find out inadvertently who they are? Would it not be in her own interest and for her own protection for the trust to be wound up?

Mr. Deputy Speaker


Mr. Campbell-Savours


Mr. Deputy Speaker

Order. Let me speak, please; I do not speak that often. The right hon. Member for Wokingham (Mr. Redwood) seems to be getting into the realms of conflict of interest, which has nothing to do with the motion.

Mr. Campbell-Savours

You have just made a ruling, Mr. Deputy Speaker, and to the extent that the right hon. Member for Wokingham (Mr. Redwood) was able to make a statement, I think that I might be able to intervene and ask a question. A Mr. David Steene gave £20,000 to the leadership campaign of the Leader of the Opposition. Mr. David Steene was the managing director of a company called J and J Securities, which is a subsidiary of the City Mortgage Corporation, which—

Mr. Deputy Speaker

Order. The hon. Gentleman should know better. We are definitely straying from the motion and getting into personalities, which I do not want to do. We must return to the motion, and that goes for both sides of the House.

Mr. Redwood

I am grateful again for your advice, Mr. Deputy Speaker. The hon. Member for Workington (Mr. Campbell-Savours) does not seem to have accepted the distinction that I am making between the rules that apply to Ministers who are, rightly, subject to tighter rules than others and who are governed by "Questions of Procedure for Ministers" and its replacement, and the rules that apply to others. We are interested in making sure that the rules are not only obeyed but seen to be obeyed. I do not know why Labour Members are so sensitive when we ask questions about that. Assuming that all is well, the Government have only to say so and all will be fine.

I am interested in the views of Henry Drucker, a senior Labour fund raiser in 1995, who has recently written of the relationship between business and Government. He said: One has to wonder why people give to a blind trust when they could give—as Ecclestone did—to the party.

Mr. Campbell-Savours

On a point of order, Mr. Deputy Speaker. With respect, it is rather curious that I should be blocked for raising a matter that is relevant to competition policy and loan interest on mortgages charged by a London shark who gives to the Tory party, while the right hon. Gentleman is allowed to continue talking about something that has absolutely nothing to do with the debate in any way, shape or form. It seems to me that I am in order and he is out of order, yet—

Mr. Deputy Speaker

Order. I said that the hon. Gentleman was out of order; I also told the right hon. Gentleman that he was out of order and must return to the motion.

Mr. Redwood

I am very happy to do that. The hon. Gentleman seems unaware of the crucial difference between a Leader-elect of the Opposition and a Minister.

The President of the Board of Trade has one important new duty. She would perhaps say that it is to help British business, but I fear that it might not be—she sits on the "Abolish the Pound" committee with the Minister for Trade and Competitiveness in Europe. I wonder how easy it has been for the right hon. Lady to complete her U-turn on that important matter. In 1980, she said: none of the arguments for staying in the EEC can be sustained. Much more recently, in 1990, she described as pathetic the idea that we would lose all influence if we were outside the Common Market. Now she wishes to abolish the pound.

I hope that she will tonight explain to the business community why it should commit its moneys to this project when the Chancellor's manifesto for it is so flimsy, and how she has been able to show such flexibility of view in moving from outright hostility to the Common Market, let alone the single market and the single currency, to being in favour of it in principle and working closely with her colleagues on that committee, but rather secretively so far, to abolish this currency of ours. I hope that she will spare us some time over the next few months to debate the issue.

I am told that the right hon. Lady would welcome a public debate on whether we should abolish the pound, and I tonight offer my services to debate against her in any reasonable place and at any reasonable time. I am sure that any radio or television station would be interested, and I should be happy to join her. I look forward to her tabling a suitable motion. I make this offer because I have heard that she commented, in another context, that she would value such a debate, which is why I am sure she will find the time. Business might be better informed if she and I could have a sensible debate. She could have the pleasure of setting out why she wishes to abolish the pound, and I could set out the reasons why at this stage, at this exchange rate and on current terms, it would be damaging to business.

Mr. Nicholas Winterton (Macclesfield)

On the euro and the single currency, does my right hon. Friend agree that, if we lose control of our currency, we lose control of our economy, and if we lose control of our economy, we lose control of our country? Bearing in mind the fact that our interests in the United Kingdom are not always those of the rest of Europe, would not we be surrendering any right or ability to influence policy in respect of the UK's interests?

Mr. Redwood

The principal objection that our party shares is that we cannot have a successful single currency until all economies are performing as if they were one. We Conservatives do not foresee such circumstances. My hon. Friend is right. All the time that the economies are not performing in line or as one, we need separate economic policies in order to steer them in the right direction, in the national interest.

I entirely agree with my hon. Friend that, given that our economy performed under Conservative management so much better than France and Germany's—a trend that is carrying on for a bit even under this Government, before their problems catch up with them—it would be very foolish to rush into a premature currency union. We would lose the right to set our own interest rates, we would lose the ability to influence our own exchange rate and we would lose all the other things that are necessary to secure the prosperity of the British people.

Mr. Miller

Like the exchange rate mechanism.

Mr. Redwood

I should have thought that the hon. Gentleman and his party would want to apologise for that. My party has apologised for it. The Labour party recommended the ERM, supported it, never criticised it and never said that we should come out of it. Will the Labour party now join us in apologising to the British people over that issue?

Mr. Miller

While we are on monetary union, was it the right hon. Gentleman who said in 1995 that monetary union would "break Europe asunder"? Is that still his view, and is it the united view of the Conservative party?

Mr. Redwood

I said that monetary union could break the economies of western Europe if people entered it on the wrong terms and the wrong basis. I still believe that that is true. Yes, my right hon. and hon. Friends agree with me. If we have a bungled monetary union, when the economies are not working together, which is what is on offer at the moment, it will be very damaging to economies entering it.

Mr. Gordon Prentice

Before the Minister leaves the point—

Mr. Redwood

"The Minister"—I am grateful. I give way.

Mr. Prentice

Is the right hon. Gentleman against the euro in principle? Is there a constitutional bar to joining a single currency, or is he just being pragmatic? In year 10, if he were in a position to influence events, might he recommend that Britain ditched the pound?

Mr. Redwood

I am against, for this and the next Parliament, the substantial sacrifice of sovereignty that the single currency entails, because we do not see economic benefits flowing from it and the conditions are not right. We would not therefore recommend to the British people the sacrifice of sovereignty that it entails.

Mr. Prentice

indicated dissent

Mr. Redwood

The hon. Gentleman is disappointed because I have given a good answer, which he cannot exploit.

The DTI and the Department of the Environment, Transport and the Regions are locked in mortal battle for power and influence over regional policy. When the coal strategy went wrong, the Prime Minister called on the Minister for the Regions, Regeneration and Planning and the Minister for the Environment to find an answer. Where, I wonder, was the President of the Board of Trade and why was the Minister for Science, Energy and Industry, who is notably absent from this debate, overruled and given new bosses? When jobs were at risk in the motor industry, the Prime Minister and the Minister for Public Health decided to sort it out in their inimitable fashion.

There remains a row over who should control regional grants. The President of the Board of Trade is in dispute with her colleagues in Scotland and Wales over how to run grants to inward investors. We are being told both that she is in overall charge of the policy and that Wales and Scotland retain their freedom of manoeuvre. Both those propositions cannot be right. It is part of new Labour spin that we have one proposition on one day and a different one the next day, to keep the media interested. Meanwhile, as the row goes on, the United Kingdom is the loser. I predict that, over the next year, inward investment will decline as a result of the muddle that the Government are creating.

At the DTI, the season of mists has moved on to the winter of dark fogs. We cannot be told which Ministers are on duty over a holiday period or when Ministers are taking a break. Worse still, we cannot be told which specific issues which Ministers can and cannot handle. The British people elected this Government because some of them thought that they would be open and honest in their dealings and because the Labour party said that it had no need to raise taxes apart from the utilities tax. The British people have been sorely cheated. They have already been taxed an extra £10 billion.

As for openness, the long delay in telling us about a Minister's £2 million-worth of shares in BP was just the beginning. A BP gas station was given a licence ahead of 27 others, without proper explanation and against previous party policy. A grant of £200 million was given to Rolls-Royce in the constituency of the President of the Board of Trade, when scope for it in the budget was not clear. There was a U-turn on formula one without other sports with an interest being consulted. The Minister for Competition and Consumer Affairs was taken off inquiries on Travel Trade, ICI and P and O because of shareholdings and prejudices that he revealed.

The Minister for Competition and Consumer Affairs (Mr. Nigel Griffiths)

indicated dissent.

Mr. Redwood

If the hon. Gentleman would like to tell me why he was taken off those inquiries, I should be delighted to give him the Floor.

Despite the taxpayer paying for more than 500 political advisers at a cost of £2.6 million, the President of the Board of Trade is still operating a blind trust in order to give her more staff.

Mr. Ian Bruce (South Dorset)

My right hon. Friend has been remiss in not mentioning the minimum wage. Last week, I went to hear a Minister tell lawyers about the minimum wage, only to find that a civil servant had been sent. Does not such Government unwillingness to get up in public occur all the time these days?

Mr. Redwood

My hon. Friend is right. I reassure him that my hon. Friend the Member for Sevenoaks (Mr. Fallon) will be referring to the minimum wage, so that we cover that vital issue as well.

Mr. John Bercow (Buckingham)

Far be it from me to stop my right hon. Friend when he is in full and spectacular flow, but does he think that, in failing to secure general exemptions from the national minimum wage, the Minister without Portfolio has been utterly humiliated by the President of the Board of Trade, to the detriment of British industry and commerce?

Mr. Redwood

That seems to be the current position, but I warn my hon. Friend that the Minister without Portfolio has considerable guile. The President of the Board of Trade should watch out for a counter-attack. The hon. Gentleman has ways of influencing members of the Government.

Every one of the matters that I have mentioned has had to be dragged out of the Government. We have been misled, and there have been misrepresentations. We still do not know which Ministers handle which matters. The Government are as open as a locked safe, with the combination known to only a few who have privileged access. They make a mockery of democracy and the House. They prove that Labour is bad for business.

7.57 pm
The President of the Board of Trade and Secretary of State for Trade and Industry (Mrs. Margaret Beckett)

I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof: 'welcomes the speedy action taken by Her Majesty's Government to foster an environment in which business can flourish, with macro-economic stability, low rates of corporation tax, a clear new competition policy, and a review of utility regulation; contrasts this with the boom and bust policies of the previous administration which led to the collapse of thousands of firms and unemployment for millions; and welcomes Her Majesty's Government's partnership with business to improve UK competitiveness.

The title of this debate—although one would not have thought so from the speech of the right hon. Member for Wokingham (Mr. Redwood)—is "Burdens on Business". Of course, the biggest of burden on British business was lifted on 1 May.

I congratulate the right hon. Member for Wokingham on his recent success in being named Front Bench questioner of the year—and against such stiff competition. I agree with the judges: I think that he is doing a magnificent job—for us, that is. He is not, of course, doing it quite unaided: the Conservative party's record in government is a big help. The reputation that it has cherished and built up over the decades—the claim to be the only party with which British business can work to advance Britain's interests—is vanishing before our very eyes. The right hon. Gentleman is making a unique and, from my point of view, hugely valuable contribution. It is not all due to his approach or his manners—although they help. It is the way in which he repudiates, even scorns, the experience and opinions of much of British business—and even of my predecessors in office from his own party.

The right hon. Member for Wokingham has repudiated the need for reform of competition law, which was so much common ground as to be uncontroversial before he came along and which has been widely demanded by British business. He has rejected as unnecessary and damaging the new approach to spectrum management, which was also previously uncontroversial, supported by the vast bulk of those consulted and included in the very manifesto on which he and others fought the general election.

Mr. Bercow


Mrs. Beckett

Does the hon. Gentleman wish to repudiate that policy?

Mr. Bercow

I am sure that the right hon. Lady, with her long experience in the House, recognises that it is her duty to answer questions rather than to ask them. She refers to the views of business and claims to respect those views. Will she therefore ensure that small businesses are exempted from the minimum wage out of deference to the judgment of the Federation of Small Businesses and the Forum of Private Business—yes or no?

Mrs. Beckett

No. We have made it clear from the beginning that the minimum wage will apply across British business, and that remains the case. I see that the hon. Gentleman has adopted from the right hon. Member for Wokingham the policy of asking questions to which the answers are already plain.

We have all noticed the visible yearning of the right hon. Member for Wokingham to see our relationship with our European partners based not on a mutual respect which is healthy, but on a knee-jerk opposition which is actively hostile.

Mr. Ian Bruce

Will the right hon. Lady give way on that point?

Mrs. Beckett

I shall come back to the subject, so I hope that the hon. Gentleman will forgive me if I make some progress.

The problem of the right hon. Member for Wokingham is that in almost every way he is living in the past. His behaviour towards my team—here and in the other place—has been spiteful as well as silly, but its underlying purpose seems to be to demonstrate, as the Conservative party repeatedly tried to do before the election, that somehow Labour cannot govern and that Labour Front Benchers just cannot be Ministers. Forget it—it is too late, it is over; we are the Government, and most people still think that we are doing a better job.

The right hon. Member for Wokingham still rejects any action by the Government as automatically being a burden on business—even when business is calling for such action—just as his party did before the last election. He normally churns out the same stuff about the burdens of the social chapter or the minimum wage, but today he was so intent on personal unpleasantness that he forgot about them. He repeats one of the Conservatives' biggest mistakes—openly to put the interests of their party before the interests of their country.

For example, the right hon. Member for Wokingham put out a press release during the week of the motor show calling on me to announce forthwith the award of a substantial grant to Ford to build a new car here. The project was so much in its infancy that no decision of any kind had been made—not even an application by Ford to seek support. Lest we think the right hon. Gentleman merely incompetent rather than crassly irresponsible, he suggested that the grant should be higher because of the policies of this Government. Whose interests were served by such second guessing of negotiations and by such a raising of the stakes? Not Britain's.

In fact, the right hon. Member for Wokingham takes the tactic further. Just as he and his colleagues put party before country, so his behaviour and statements clearly put his own leadership bid before the interests of his party. His motto seems to be, "Never mind the quality, feel the width". So one day he condemns my hon Friend the Minister for Science, Energy and Industry for pursuing the interests of industry to the detriment of those of the environment. The next day the right hon. Gentleman condemns my hon Friend for putting the interests of the environment ahead of those of industry.

The right hon. Member for Wokingham is a kind of political catherine wheel, frantically hurling off sparks in all directions. It is fast, it is noisy and it contributes nothing but a little light entertainment.

Mr. Nigel Griffiths

And we are going to ban them.

Mrs. Beckett

I thank my hon. Friend for that helpful sedentary intervention.

Mr. Redwood

Comparing me to a catherine wheel is the nicest thing that the right hon. Lady has said about me all day. However, she has missed the point of my press releases. The point is simple: there is a possible conflict between environmental imperatives and the needs of British industry. I have not told her how the balance should be struck, but I am asking her again today to tell the nation how it will be struck. The specific issue is whether more coal or more gas power stations will be used regularly. That is a good test of whether the Government are greener or more industrial.

Mrs. Beckett

I shall come to the issue of energy policy in a few moments. If the right hon. Gentleman feels then that I have not answered his question adequately, he may return to it. I do not disagree with absolutely every word in the Opposition motion. It urges a clear energy, competition and business policy, which I agree that we need. Such a policy certainly was not part of our inheritance from the previous Government. Baroness Thatcher, the former Prime Minister, told us that manufacturing did not matter.

Mr. Bercow


Mrs. Beckett

That is not rubbish and I have heard many Conservative Members regret the former Prime Minister's statement, including one whom I will not name but he knows who he is. Under the right hon. Member for Henley (Mr. Heseltine), we were supposed to get intervention before breakfast, tea and dinner. Under my predecessor, we never knew what to expect and we do not know now. Such a clear policy was not apparently in the Conservative manifesto, because the right hon. Member for Wokingham says that it was not much good. We can agree on that. A clear policy apparently does not involve more competitive markets—the right hon. Gentleman opposes change—and it certainly does not involve the United Kingdom being at the heart of Europe.

The motion accuses me—as the right hon. Gentleman repeatedly does—of inaction. On what basis? First, he cited the delay in announcing a decision on the P and O merger. It might have suited him to have an earlier announcement, without co-operation from and agreement with the European Union as the other regulatory authority, but it would not have been in the interests of the company or of the work force. In fact, Lord Sterling, the company chairman, said that the decision was "worth waiting for".

Today, the right hon. Member for Wokingham calls my work on the issue "sloppy", because I did not cap freight prices. However, the Monopolies and Mergers Commission found no competition issues in freight, so I could not have acted unless I stopped the whole merger. Is that what the right hon. Gentleman wants? He is always bragging about his experience as a competition Minister at the Department of Trade and Industry, so why did he not know that I could not act? Is he sloppy, or just incompetent?

The right hon. Member for Wokingham attacked me for doing nothing to prepare industry for the millennium bug, when in fact we continued the programme that we inherited from his Government. As it happens, we were already planning to step up that programme and announced the move forward to Action 2000, chaired by Don Cruickshank, as soon as we were able to publish that information. Last week, my right hon. Friend the Prime Minister set up a Cabinet committee, which I shall chair, to pursue the issue.

Mr. Ian Bruce

We all acknowledge the difficulties of tackling the millennium bug in the time available, but will the right hon. Lady acknowledge that the Government have slipped on the targets that were set for the civil service? Why has she appointed Don Cruickshank to that post when the Government ignored him when he wrote to them about the Wireless Telegraphy Bill and said that it should protect the consumer?

Mrs. Beckett

That has nothing to do with Action 2000. It is an interesting point and the hon. Gentleman will no doubt pursue it in Committee, but it has no relevance to the point that I was making.

The right hon. Member for Wokingham complains constantly—he did so again tonight—about my parliamentary record. He attacked me for not speaking in the debate on the Wireless Telegraphy Bill, but it is commonplace for other Ministers to handle more minor legislation without a Cabinet colleague. The hon. Member for Solihull (Mr. Taylor), the former Minister for Competition and Consumer Affairs, did so last year, and the right hon. Member for Wokingham did so himself as a Minister of State.

The right hon. Member for Wokingham keeps saying, somewhat stridently, that he has had the chance to question me only three times in four months and has had no opportunity to debate. Diddums! It is called being in opposition. Did the right hon. Gentleman not notice when in government that parliamentary questions happen only once a month? The rules have not been changed to penalise him. Incidentally, a shorter time has elapsed between the two most recent Trade and Industry Question Times in this Parliament than in a similar period in 1992. As for debates, between May and November this year there were no general industry debates in Government time, as the right hon. Gentleman rightly said—nor were there in the same period in May to November 1992.

The right hon. Gentleman has sought to make much of my unavoidable absence at our recent Question Time, claiming that I went to Australia to avoid his questioning. I did enjoy it. As he knows perfectly well, because I gave him advance notice, I went in fulfilment of an engagement made by my Conservative predecessor to promote British business—the culmination of a year's worth of activity—to open jointly with the Premier of Victoria the biggest trade fair that Britain has ever staged in Australia. More than 400 United Kingdom companies competed to take part and 90 did so, many of them small and medium-sized enterprises. No one regrets more than I the unforeseen clash with my duties in this House, which I have never neglected, but to suggest that I should let all those companies down smacks more of the right hon. Gentleman's conceit than of common sense. Incidentally, that visit was one of three major overseas visits that I have undertaken since May.

The right hon. Gentleman also alleges that I do not answer questions and letters. Up to the end of July, he had asked 46 questions about the personal finances, behaviour and duties of Ministers, compared with 28 about the entire area of science, industrial, and energy policy. Up to today, he has just about managed to even the score. Yet all those questions and his extensive correspondence—six letters about the personal finances of my noble Friend Lord Simon, eight letters about the financial consequences of personal tragedy in the family of my hon. Friend the Minister for Competition and Consumer Affairs—have been answered, albeit not to his satisfaction.

You know the feeling, Mr. Deputy Speaker. Sooner or later, every hon. Member has one of those correspondents who writes or telephones every second or third day. They always say you have not answered their questions, no matter how hard you try. They always say that they are going to take it up with higher authority or they take it to the press. We all get them. You just do not expect it to be the shadow Secretary of State.

Most recently, the right hon. Gentleman accused me of inaction about coal. The Conservative party's only energy policy was to close half Britain's coalfields and leave the other half to wither on the vine, having removed all the levers of Government policy. The Conservatives left the coal industry freewheeling downhill like a car without brakes or steering and now they stand at the side of the road shouting to us to stop the runaway vehicle. We found an energy playing field massively tilted against coal and in seven short months we have levelled that playing field, tilted by the Conservative Government over more than seven years.

Inaction and broken promises were the hallmark of the Administration we replaced. Nearly 10 years were spent discussing the reform of competition law. They even got as far as a draft Bill, which we would not have opposed, but they just never got around to doing it. Some may applaud and some oppose my decisions on merger policy, but no one but the right hon. Gentleman has ever suggested that they are not clear. In fact, a recent article in The Daily Telegraph said: competition she said, and competition she meant".

The Opposition prepared the legislation on spectrum pricing, but they never found time for that, either. Users and industry believe almost universally that our proposals, far from being a burden on business, will make for sensible spectrum management.

In the two years during which I shadowed this Department, no major piece of legislation came to this House. This Government have overseen the introduction of eight bills in seven months, including the Wireless Telegraphy Bill, the Competition Bill and the Fossil Fuel Levy Bill. We are also backing four private Members' Bills—the Employment Rights (Dispute Resolution) Bill, the Fireworks Bill, the Public Interest Disclosure Bill and the Weights and Measures (Beer and Cider) Bill—and we have just published the National Minimum Wage Bill. We have published a report from the business and Government export forum and we have already taken the steps called for by exporters to recast trade support policy.

We are undertaking consultation on a fair payments Bill at the request of small businesses and in the new year we shall be publishing a White Paper on fairness at work and a Green Paper for consultation on utility regulation.

We are preparing proposals to give the Post Office commercial freedom and we are working in partnership with business under the umbrella of Competitiveness UK to prepare a White Paper on competitiveness next year.

We are forcing the pace on getting issues of competitiveness and employability on to the agenda of the European Union and again seeking to ensure the participation of and a voice for business representatives from across the EU.

Mr.Oliver Letwin (West Dorset)

The right hon. Lady mentioned that the Government are preparing a paper on the Post Office. Can she tell the House what her hon. Friend the Minister of State failed to tell the Select Committee on Trade and Industry recently—whether the Post Office will have the capacity, as a normal company would, to give its stockholders dividends rather than being subject to a negative external financing limit?

Mrs. Beckett

My hon. Friend the Minister of State tells me that he was not asked that, but in any case I can assure the hon. Gentleman that we shall be happy to discuss those issues with him at length when our proposals for the Post Office are published.

Moreover, all that activity—not inactivity—has its underlying themes. Strong markets, modern companies, looking to the future—those are the themes that bind all the activities of my Department to the pursuit of competitiveness, and against which we shall measure the worth and relevance of our activities.

First, on strong markets, I am absolutely clear that a strong competition policy is fundamental to competitiveness. That is why one of this Government's earliest actions was to find parliamentary time for a Competition Bill, which will replace an outdated regime with a modern, effective system. A competition law that creates a more transparent and consistent regime will be a big improvement on the slow-moving and ineffective structures that we have today and will benefit all firms, large and small. Our review of regulation for the utilities is driven by the same desire to see more transparency and consistency in regulation.

The second pillar is modern companies. Only modern companies can address modern challenges. We need modern companies succeeding in new markets with new products—companies that innovate and compete on our strengths in design, science and ideas. It is not a sustainable strategy to compete on price alone. In the increasingly global marketplace, firms need to compete on quality in all its dimensions.

Our third theme is the need to look to the future. What we as the Government do today will make a real difference to the industries and citizens of the future. It is clear that we must embrace the industries of the future and, in particular, we must deal with the specific needs of smaller firms—hence our proposals to enhance the work of business links and drive them, too, towards higher quality: hence our decision to take forward the work of the foresight groups.

Outside my own Department, the Government as a whole are attacking those issues on which business has sought action for so long—and under our predecessors sought in vain—such as the pursuit of economic and policy stability and of policies to set the right framework for the long term, an attack on skill shortages and on the neglect of infrastructure, and action to tackle tax avoidance, to simplify and to cut corporation tax and to offer temporary capital allowances to small business. Those are just a few among the 10 tax cuts that this Government have made.[Interruption.] No doubt the hon. Member for Aldershot (Mr. Howarth) is about to welcome them.

Mr. Gerald Howarth (Aldershot)

No, I am not. I am rising to invite the President of the Board of Trade to tell us a little more about the foresight action programme. She said that the Government are taking the matter forward, but she made no proposal regarding the grave concern of the Society of British Aerospace Companies that the investment under past Conservative Governments, which has led to the £5 billion of inward income into this country arising out of exports, will dry up because Government investment is not being made available. What is the right hon. Lady doing on the foresight action programme in regard to the aerospace industry?

Mrs. Beckett

That does not arise from the foresight action programme. The Government have not yet made any announcement on proposals from the aerospace industry.

Mr. Redwood

I enjoyed the right hon. Lady's point about correspondence. I have a little advice for her: if she does not want so many letters, all that she has to do is to answer a few questions—then we shall not need to ask so many. I have a question now. The right hon. Lady has tried to present the case that the Government are cutting taxes on business. The Conservative forecast is that the measures announced so far will cost British business £25 billion extra over the lifetime of this Parliament. Does the right hon. Lady agree? What impact will that have on jobs, investment and new ideas?

Mrs. Beckett

I have not had a chance to study the precise figure cited by the right hon. Gentleman, but if it were true it would be the first time ever. I have had long experience of shadowing the Treasury team: previous figures promulgated by the Conservative party were never accurate and I see no reason to suppose that they ever will be.

We have made 10 tax cuts, none of which the Conservative party has either recognised or welcomed. We may take some steps about which the business community may have reservations—all Governments do—but we shall always listen and strive to ease those concerns if we can.

Before the general election, our extensive consultation revealed a business desire for economic and policy stability, for investment in skills and infrastructure, for a constructive attitude to Europe, and for a partnership in which Government and business each play their separate but complementary role to advance the interests of our country. That is what business wants from Government, and all the right hon. Gentleman's sound and fury cannot disguise the fact that that is what they are getting.

In government, the Conservative party displayed to the full their arrogance, incompetence and dishonesty. In opposition, they seem to have learnt nothing and forgotten nothing. That is what put them where they are today and that is what will keep them there.

Mr. Deputy Speaker (Mr. Michael Lord)

I call Mr. David Ruffley.

Mr. David Ruffley (Bury St. Edmunds)

I had not stood up, Mr. Deputy Speaker.

Mr. Deputy Speaker

As the hon. Gentleman is not prepared, I call Mr. John Bercow.

8.21 pm
Mr. John Bercow (Buckingham)

Thank you, Mr. Deputy Speaker, for calling me when I was not expecting it.

I richly enjoyed the invective of the President of the Board of Trade, but in all candour it was downmarket drivel. I very much hope that, after due practice and several rehearsals, she will be capable of producing something better for the consumption of the House. She slavishly adhered to a prepared text and gave not the slightest indication that she had seen or read it in advance, let alone written a word of it.

I want to focus on what I shall call the triple torture of British industry and commerce, but first I shall give way to my hon. Friend the Member for South Dorset (Mr. Bruce), as he seems extremely eager to intervene.

Mr. Ian Bruce

My hon. Friend listens to speeches much more attentively than I do, but I thought that we heard a list of what business wanted. Did not the Secretary of State say that a high pound was one of the complaints of business? Or has she not been listening to business at all?

Mr. Bercow

There was not the slightest evidence that she had listened to the representations of business on the subject. The most curious feature of her oration was when she listed with glowing pride a series of measures that she and the Government had introduced. She did that to justify the claim that she was working for British business. If she had been so courteous as to take my intervention, I would have asked her whether she thinks that size of Government and quantity of legislation are equivalent to quality of administration.

What makes the President of the Board of Trade think that having many laws, issuing many guidelines and making many speeches about commercial and industrial policy is what small or large business wants? It wants a climate in which it can thrive and prosper, but the Department is delivering no such thing.

I want to focus on the triple torture of British industry and commerce: the minimum wage; the European employment chapter, to which the Government have naively signed up; and the strikers' charter. I shall deal, as lain Macleod would have said, briefly but with relish, with each of the three.

First, I want to deal with the national minimum wage. I use the word national advisedly. The Government published the Bill last Thursday, and the glimmer of hope that had existed in the House and among the business community—that good sense might have prevailed over dogma—was extinguished.

We all know about the deep and alarming split within the Government. The President of the Board of Trade—a left-wing firebrand and adherent of old-fashioned socialist ideology, steeped in the religion of bashing business—wanted a national minimum wage with no exemptions by region, by sector, or for small companies. The Minister without Portfolio took a different view. Far be it from me to accuse him of having objections based on principle. The word principle has not yet featured in his lexicon. He objected simply because good sense had occurred to him.

The Minister without Portfolio recognised that, without widespread exemptions, an horrific toll of unemployment would result. No doubt he had observed that in his region—the north-east—on the basis of a 50 per cent. restoration of differentials, a national minimum wage would eliminate 78,316 jobs. No doubt he charitably pointed out to the President of the Board of Trade that, on the same basis, in her region—the east midlands—88,037 jobs would be lost.

The Minister without Portfolio sought, in kindly fashion, to steer the President of the Board of Trade away from the path of madness to a course of sanity. She rebuffed and spurned him and neglected his entreaties, choosing instead to proceed with the outstandingly foolish policy of a national minimum wage.

In her brief, scripted speech, the President of the Board of Trade appeared unconscious of her self-contradiction. She told us with great pride that the Government listened to business. Immediately, and entirely logically, I inquired whether she recognised the views of small business organisations on the national minimum wage and would defer to their wish for general exemptions for small companies. With equal pride, she immediately said no. The great listener to business ignores business's views if they happen in any way to diverge from her stated intention and the dogma that informs it.

The national minimum wage will be a calamity. I do not expect the President of the Board of Trade to accept that from me or from my right hon. Friend the shadow President of the Board of Trade, and I understand that she is sore and writhing from the wounds inflicted by my right hon. Friend—although I urge her to respond with marginally greater grace in future—but I challenge her to accept it from other sources, including the Confederation of British Industry.

Mr. Frank Doran (Aberdeen, Central)

Is the hon. Gentleman aware that yesterday Stan Mendham of the Federation of Small Businesses said that the FSB now accepted the principle of the minimum wage and was anxious to work with the Government? He has not mentioned that.

Mr. Bercow

I am interested to hear that. I have had discussions with the Federation of Small Businesses and its position remains absolutely clear: it is against a national minimum wage, but now that it is to be introduced it will seek to minimise its impact. That is simply good business sense. The federation would rather that the minimum wage had never come on the agenda in the first place.

The CBI reckons that a national minimum wage could cost British business £4.5 billion, the Institute of Directors has dismissed it as a crazy notion and the Employment Policy Institute, no less, a left-of-centre organisation, condemned the policy, saying that small firms would come under severe pressure to survive if the plan went ahead unamended. That is the reality of the matter—as distinct from the distorted interpretation of the hon. Member for Aberdeen, Central (Mr. Doran).

Mrs. Teresa Gorman (Billericay)

Is it not the case that small firms are not universally payers of low wages and the ladder upon which very many unskilled and young people get their first opportunity of a job? It is those groups, which the Labour party makes such a fuss about helping, that will be damaged by the minimum wage policy.

Mr. Bercow

My hon. Friend is entirely correct. The President of the Board of Trade is proposing to kick the ladder away from those who might have had the chance to get their feet upon its first rungs. That is disgraceful. It is an exploitation of her position in favour of the strong and to the detriment of the weak. She is culpable and she will be held responsible in due course.

It is regrettable that the head of the Low Pay Commission, Professor George Bain, has said that he believes that jobs will be lost, but wonders whether it is rather a good thing that those jobs will be lost. It is all very well for him, in his ivory tower, unconcerned by the impact on him—for there will be none—to say that other people's jobs can safely be destroyed; he will not bear the burden and he will not pick up the bill.

In May 1996, under the previous Government, the Department of Trade and Industry published an estimate of 1 million job losses on the strength of the half restoration of differentials. Curiously, the President of the Board of Trade has been struck down by silence. Very rarely is she reticent—on this occasion she has been. The Department of Trade and Industry has had since 1 May to issue its own prognosis of the effect of a national minimum wage, but it has studiously avoided doing so. If the right hon. Lady disagrees with our prediction, we would be fascinated to hear hers.

The truth is that a national minimum wage will not create jobs, but destroy them. It will not improve competitiveness, but erode it. It will not strengthen our economy, but weaken it. Why do not the Government say what they think the effect will be upon jobs? Is it again a case of, "Can't say, won't say"? Of one fact we are certain; British industry and commerce will have to pay for the ideological folly of this Administration.

Mr. David Borrow (South Ribble)

Is the hon. Gentleman aware that, at its most recent conference, the Federation of Small Businesses voted in favour of a sensibly negotiated minimum wage? Is the hon. Gentleman also aware, as I am from speaking to small businesses, that many would welcome a minimum wage because that would stop their being undercut by rogue firms that seek to pay poverty wages? Those small firms want to employ well-trained work forces and pay them a decent wage.

Mr. Bercow

I am sorry to say that the hon. Gentleman would not secure a post as a researcher in this place because his research is deficient. The simple fact is that the Federation of Small Businesses is opposed to a statutory minimum wage. If the hon. Gentleman is not aware of that important fact, frankly it is high time that he became so.

I should like to move on from the subject of the national minimum wage about which one can tell that Labour Members are deeply embarrassed—witness the departure from the Chamber of the Minister of State. [Interruption.] I am happy to see that he has returned.

I should like now to focus on the subject of the European employment chapter. Under that chapter, we shall move in the direction of a common European employment policy. We are now told under that chapter that it is a matter of common concern which employment policies member states in the European Union pursue. It is said that they must respect that fact in the formulation of policies.

Qualified majority voting will lead to the production of guidelines for employment policies to be pursued by member states. In case the President of the Board of Trade is in any doubt about the potency of that arrangement, she ought to be aware that we are told that those guidelines shall direct employment policy. Note the use of the word "shall", not "might", "could", "would" or "should". The great and the good, the motley collection of the European Parliament, the Economic and Monetary Affairs and Industrial Policy Committee, the Committee of the Regions and the Employment and Social Affairs Committee will favour us with their wisdom on the policies to be pursued throughout the Community.

If the right hon. Lady is so naive as to suppose that for ever and a day those will be entirely matters of voluntary persuasion by the European Union, frankly she needs to think again. She must recognise that over the years the tendency of the Community has been to pursue policies initially by an attempt at persuasion and, ultimately, by a resort to coercion. That is the track record. If the President of the Board of Trade thinks that different principles will apply in this case, she ought to explain what they are and why the situation will not be a re-run of past disasters and betrayals.

Mr. Wilkinson

My hon. Friend is making a cogent case about the dangers of the employment chapter to which the Government have signed up by virtue of the Amsterdam treaty. Would he care to turn his attention even wider, to the question of structural funds? Is it not the case that far from securing influence in the councils of the European Union, Her Majesty's Government are likely to lose grade 1 status for the highlands and islands of Scotland and for Northern Ireland as recipients of structural funds? Furthermore, while we are being disadvantaged, more and more British taxpayers' money is being dispersed to other parts of the European Union. In other words, their employment is being aided whereas ours is being gravely disadvantaged.

Mr. Bercow

My hon. Friend is entirely correct. What is more, that trend will be exacerbated if the policies of this Administration are pursued. If we go into a single European currency and if, as a consequence of so doing, unemployment in parts of Europe increases, so will our contribution to the cohesion funds. We will not be the beneficiaries of those increased payments. Transfer payments to other member states in the European Union will be enormous, and the British taxpayer will pick up the bill.

Dr. Alan Whitehead (Southampton, Test)

Could the hon. Gentleman possibly remind us who signed the Single European Act and what consequences it had for the British economy? Were there any provisions in it for the regulation of employment in Europe?

Mr. Bercow

Unfortunately the hon. Gentleman is getting rather confused about different treaties. He is entirely correct that the Conservative Administration signed the Single European Act. Its principal provisions, as I would have hoped the hon. Gentleman is conscious, were to do with completion of the single market. For that purpose, we accepted some qualified majority voting. The employment chapter to which I am referring is a feature of the treaty of Amsterdam. If the hon. Gentleman is able to propel his mind forward 11 years, that would greatly aid our debate.

Dr. Whitehead


Mr. Bercow

I shall not give way to the hon. Gentleman again, for the simple reason that I know that other hon. Members wish to speak in the debate, and I am about to make my final point about the strikers' charter.

There is a pernicious provision that the Government are about to set in train of which the country should be aware and which all right-minded people should condemn: the provision for the recognition of trade unions. What is intended by the Government will be deeply damaging to British business. They say in their proposals that 50 per cent. of the relevant work force, although that is not defined, will suffice for the recognition of trade unions and their entitlement to be granted the status of official bargaining agents on behalf of the work force. That can spread like a contagion right across British industry and commerce.

I do not suggest that it is the intention to return to the dark days of the winter of discontent of the late 1970s, but that could be the outcome. We could return to those grim days, when the streets went unswept, the sick went untended and the dead went unburied. [Interruption.] It is all very well for uninformed right hon. and hon. Members on the Labour Benches to sneer. Their responsibility is to provide a foolproof guarantee that that will not be the outcome of the legislation that the President of the Board of Trade is to introduce to the House. Unless and until they are able to provide that categorical assurance, a policy of silence, not sneering, would be more appropriate.

Mr. Borrow

Will the hon. Gentleman give way?

Mr. Bercow

I shall not give way as I am coming to a conclusion—I am sure the hon. Gentleman will be greatly reassured by that.

What the Government have in mind is greater trade union power—power that did not exist even in the days when Michael Foot was Employment Secretary. As a result, we are faced with an enormous threat of industrial unrest. If that is what the Government intend, they should admit it; if they do not wish it, they have a responsibility to take steps to avert it.

I shall now observe a self-denying ordinance as I am anxious to hear my hon. Friends' speeches. I am also waiting to learn whether one Labour Member can provide half an answer to some of the questions posed by my right hon. Friend the Member for Wokingham (Mr. Redwood) in his opening speech.

8.40 pm
Mr. George Stevenson (Stoke-on-Trent, South)

This is an extremely important debate. Anyone who has listened to the Opposition contributions, especially to that of the right hon. Member for Wokingham (Mr. Redwood), will have been left with the clear impression that the Conservatives are seeking to rerun the past. Listening to their contributions so far, it is difficult to avoid the conclusion that the only arguments that they have advanced are the stale, old ones that we heard during the election campaign, which the Conservatives lost.

The Conservatives lost the election for many reasons, but one of them was because business lost confidence in them owing to the actions that they took during their 18 years in power. Unless the contributions from Conservative Members improve during the rest of the debate, I do not expect that they will regain that confidence.

It was a pity that of the 45 minutes or so that the right hon. Member for Wokingham spoke, 30 minutes was spent on a personal diatribe. We heard such earth-shattering revelations as the fact that he was worried about why my right hon. Friend the President of the Board of Trade had not agreed to support the Ford motor company, when that company had not even asked for any such support. The other earth-shattering revelation that seemed, for 30 minutes, to form the basis of the right hon. Gentleman's speech involved him wondering why my right hon. Friend the President of the Board of Trade had spent some of her holiday in her caravan. The businesses in my constituency are not worried about that and I suspect that they will not be impressed by what we have heard from the Conservative Benches.

If the arguments advanced in this debate were about Government policy, how relevant that was and how it would affect business, that would be perfectly legitimate; it would be right and proper. But a reference to Europe had to be dragged out of the right hon. Member for Wokingham by one of his hon. Friends mentioning the exchange rate mechanism. In view of that, Labour Members are entitled to be suspicious about why, in a speech of 45 minutes, the right hon. Gentleman never mentioned the biggest burden imposed on industry in 1992, when the previous Government's policy ignominiously and incompetently collapsed.

We may argue about the effect of that collapse on industry and I am prepared to debate that legitimate point. But if we are talking about Government credibility, is it not strange that the right hon. Gentleman, speaking on behalf of Conservative Members, never mentioned the total and fundamental collapse of his Government's policy in 1992? What are we to read into that? Is he ashamed of it? The party has apologised for joining the ERM, but is he ashamed of it? He never mentioned the subject, which had to be dragged out of him by one of his hon. Friends.

Mr. Howard Flight (Arundel and South Downs)

May I suggest to you that, rather than being a huge problem, it was the greatest boon to industry when the United Kingdom left the ERM?

Mr. Stevenson

So, what you are saying is that another ignominious collapse of Government policy is good for British policy. Is that what you are arguing?

Mr. Deputy Speaker

Order. Both hon. Members are referring to me. I am not responsible for these matters.

Mr. Stevenson

I apologise to you, Mr. Deputy Speaker, but it is interventions of that nature that mean that we sometimes slip up over parliamentary protocol—

Mr. Deputy Speaker

Order. May I make a general point to the House? The conventions exist precisely so that we do not lose our tempers and get carried away.

Mr. Stevenson

I am extremely grateful, Mr. Deputy Speaker.

The ignominious policy of the previous Government, which we now seem to be being urged to repeat—we shall not—came after two of the worst recessions that this country has ever witnessed.

There was no reference in the speech of the right hon. Member for Wokingham to the other burden on business inflicted by 18 years of the previous Government's rule: their complete and utter isolation in Europe. Time after time, businesses in my constituency asked me why the then Government did not put forward what they wanted to hear in a positive fashion and why the Government were, instead, left completely isolated. Business representatives asked me, "Don't the Government know that they are not working in our interests, but against them?" That argument fell on stony ground with the previous Government. For 18 years that massive burden was imposed on industry.

I accept that the previous Government did not have a policy of imposing burdens on the coal industry; their policy was to destroy it. They did not need to put unnecessary burdens on the coal industry because they wanted to see it destroyed; they certainly achieved that very effectively in my constituency. Future generations in this country will scarcely believe that any Government could have embarked on such a policy.

Another important area of business involves small and medium businesses. My experience—and I suspect that it is shared by many Members of the House—is that small and medium businesses have given a clear message. They are worried about the business rate that was imposed by the previous Government. In my constituency it went up 30 per cent. in less than three years. Businesses are worried about late payment, about investment and about a chronic lack of skills, which I think was referred to by the hon. Member for Billericay (Mrs. Gorman). They are also worried about the burden of regulation. I shall briefly refer to each of those issues.

The uniform business rate was imposed by the previous Government because they were not prepared, in any way, shape or form, to trust local authorities. They thought that Whitehall knew best the consequences that have been suffered by businesses in my area and elsewhere.

Mrs. Gorman

Is the hon. Gentleman not aware that the reason the previous Government introduced the uniform business rate was that Labour councils all over the country were doubling or trebling business rates year by year and using them as a milch cow to fund the introduction of their extravagant general policies?

Mr. Stevenson

I am prepared to debate that point with the hon. Lady at any time she chooses, but I would say now that her general comment would not stand up to scrutiny. What she describes was certainly not the case in my local authority area—I have had the figures checked. Increases in business rates have far outstripped increases in general rates.

Mr. Borrow

Does my hon. Friend agree that, had the previous Tory Government not neglected the quinquennial revaluation of business properties, the disparity between different regions of the United Kingdom would not have grown to the extent that, in 1990, many of the points raised about high business rates became true? It was the Conservative Government's failure to address the problem through revaluation and the fact that comments made by the right hon. Member for Henley (Mr. Heseltine) stopped the revaluation in 1979 that created many of the problems.

Mr. Stevenson

My hon. Friend is obviously correct, and I am grateful for that intervention.

Late payment is another burden on businesses. They say that they are not getting paid quick enough and that something needs to be done about the problem. Why did the previous Government do nothing? If they were so interested in lifting the burdens on businesses, especially small businesses, why did they ignore the problem for 18 years?

Mr. Andrew Lansley (South Cambridgeshire)

The hon. Gentleman asks a question and I may be able to provide an answer. I was at the Association of British Chambers of Commerce at the time and I well recall that, in 1988, the then Secretary of State for Employment conducted a consultation on statutory interest on late payments. Industry, for which I spoke, said that it did not want it, just as industry is now saying that it is the wrong way to proceed.

Mr. Stevenson

That is more a comment on the effectiveness of the previous Government's consultation processes than a statement of the truth of the matter. All hon. Members, with the possible exception of the hon. Member for South Cambridgeshire (Mr. Lansley), would accept without much equivocation that late payment is a real problem for small businesses. Why did the previous Government not act? Why did they ignore the problem throughout their period in office? The Labour Government will act to lift that burden from small businesses.

Skills are extremely important to businesses, especially small businesses. It would be useful for Conservative Members to look at the 1995 report from the European Union Court of Auditors. It makes interesting reading: it contains an entire section on training programmes for small and medium businesses and one section refers particularly the previous Government. Why did the court refer to the previous Government? The report states clearly that less than 1 per cent. of the programmes available to support training for small and medium businesses in the United Kingdom had been implemented by the previous Government—less than 1 per cent. The hon. Member for South Cambridgeshire is an expert on research, but some of us Labour Members have done our research as well, and the figures are damning.

European Union objective 4 funding relates to submissions for retraining those who need new skills to re-enter the job market. That is an essential activity, but in 1995–96 there was not a single bid from the previous Government—not one. When I questioned that in European Standing Committee B, I was told by the Conservative Minister that there was no need for such retraining programmes—a staggering reply. When we talk about burdens on business we should consider the previous Government's record—lamentable, not by accident but by design. The Conservative Government did not believe in public intervention in training and retraining and certainly did not believe that such intervention should come from the European Union.

Deregulation is fine in respect of burdensome regulations that are unnecessary, out of date or counterproductive. There is general consensus that we want to see such regulations out of the way, so we support the Select Committee on Deregulation that was set up by the right hon. Member for Henley in 1994. However, there are two problems with that Committee: first, although it abolished between 800 and 900 regulations, between 1994 and the time they left office the previous Government introduced 10,000 regulations. That cannot have fulfilled the objectives of the exercise. It is no good Conservative Members shaking their heads—it is true; the figures derive from answers to parliamentary questions. Secondly, as I understand it, the Committee does not contain representatives from small and medium businesses—what a lamentable omission from such an important activity.

Conservative contributions to the debate have tried to rerun the stale, lost arguments that were put forward during the general election. We have heard nothing positive from the Conservatives, whereas the Labour agenda is about skills, investment, economic stability, sustainable growth and a Government who, in complete contrast to the Conservatives, are determined to work in partnership with business.

8.56 pm
Mr. David Chidgey (Eastleigh)

I came to the debate with feelings of curiosity and disbelief. I was curious because Conservative Members did not take the opportunity to apologise to the House for the damage that their policies caused to business and jobs when they were in office; and I experienced a sense of disbelief when I saw that they had failed to recognise the verdict of the voters who, having suffered the consequences of their policies, threw them out of office and inflicted the heaviest defeat on the Conservative party since 1906. What does it take before they get the message? What we heard instead was 45 minutes of auto-rant, which is hardly entertaining and certainly not interesting.

Just look at the record left us by the Tory party. In the 1990s under the Tories the national debt more than doubled. It took 300 years to accumulate a national debt of £160 billion. It took the Tories five years to more than double it, to £350 billion. Under the Tories, public sector debt per income taxpayer rose from less than £7,000 to more than £13,000. An independent report by Coopers and Lybrand, a well respected firm, stated that high borrowing and the rundown of state assets had left the public sector technically bankrupt. In 1989, the public sector had a net worth of £243 billion; by 1995, the Tories had reduced it to £36 billion. If they had stayed in office, it would now be zero.

Despite selling off public assets and screwing down public investment, the Tories failed to reduce public-sector borrowing. Let us look at their record on taxation: 22 tax rises since 1992, the biggest ever peacetime increase. The Library has calculated that the average family would need a cut in income tax of over 6p in the pound just to get back to where they were in 1992 at the time of the general election.

Of course, the Tory average family is not average at all. The definition of a family used in Conservative statistics is a family with two children under the age of 11, a male earner on full-time average wages and a non-working wife. That applies to fewer than 2 per cent. of all families. What about all the rest?

Under the Conservatives, the poorest became worse off than ever, and the gap between rich and poor widened. Consider the record on unemployment. The Conservative motion this evening mentions damage to jobs, but unemployment under the Tories rose from 1.26 million in 1979 to more than 2 million in the last Parliament. Consider, too, the damage Conservative policies have done to business and industry. In the year before the Tories left office, investment in manufacturing was lower in real terms than in 1970, a quarter of a century before. Investment in the UK was the fourth lowest in the EU as a percentage of GDP. When they left office, inflation was the third highest in the EU, and short-term interest rates were the second highest—only Greece's were higher.

So on public debt, taxation, poverty and unemployment, investment, inflation and interest rates the Tories' record is one of failure. No wonder the right hon. Member for Wokingham (Mr. Redwood) adopted the slogan, "No change, no chance". No wonder, either, that the public took his sound advice and voted his party out of office.

Only now do we hear the hint of an apology—not in the House but in an interview reported in the Sunday Times this weekend. I am pleased to see the hon. Member for Chesham and Amersham (Mrs. Gillan) in her place; I do not like to speak ill of the absent. She reportedly told the Federation of Small Businesses: Mea culpa, we did not get it right in all areas". That prompts the question—how many areas were there left to get it wrong in? Admitting that the Conservative Government did not respond to the needs of small firms, she went on to say: We did not listen but perhaps we did not always receive the right message". The killer point came next: There will be little policy coming from the Conservative Party in these initial stages, as is understandable, because we got it wrong. I am still waiting to hear a formal apology—

Mrs. Gorman

The hon. Gentleman paints an appalling picture of the alleged state in which we left the economy. What does he make of the fact that 40 per cent. of all Japanese investment overseas is placed in Britain; that German motor car manufacturers have moved here because of our better labour relations and stable currency; and that even the French are moving their high-tech industries across the channel—

Mr. Chidgey

Yes, I have got the message. I had always thought the hon. Lady was a Eurosceptic, yet now she seems to welcome the benefits of our membership of the EU. She might care to ponder why United Kingdom finance is never seen to be invested in this country—it is always being invested elsewhere.

Given the damning Conservative record of destruction to businesses and jobs, the lack of a policy from the party of the hon. Member for Chesham and Amersham will not be missed, in the House or anywhere else. Now we have an opportunity to repair the damage and reverse the broken promises—

Mr. Bercow

Will the hon. Gentleman give way?

Mr. Chidgey

I think the hon. Gentleman has already entertained the House enough for one night with a lengthy speech and several interventions. I am sure that other hon. Members would welcome the chance to make short speeches in the little time that is left.

There is certainly an urgent need to lighten the load on business and to shift taxation away from employment. We need to simplify bureaucracy and encourage the growth of small to medium firms by promoting competition.

As the hon. Member for Stoke-on-Trent, South (Mr. Stevenson) said, there is an urgent need to tackle the growing skills shortage. If we do not do so, there will be inflationary pressure on wages and the drives for greater efficiency and for greater productivity will be held back. The skills shortage can be tackled only by investment in education and training.

Above all, there is an urgent need to provide proper support for business, to prepare it for the conversion of information technology for the year 2000.

I shall now discuss taxation. We need to simplify taxation by standardising employers' national insurance contributions. We need to consider switching taxes from employment to the consumption of finite resources of fossil fuels. I urge the Government to examine again the idea of raising the threshold for VAT for small and medium enterprises.

The Liberal Democrats welcome the long-overdue Competition Bill. It is time to tackle the anti-competitive practices that are still rife in the economy. We should look again at the recent mergers of international accountants, reducing competition by decreasing their number from seven major firms to five, and the apparently planned merger of two of the major clearing banks, which will reduce competition by decreasing their number from five to three.

Mr. Lansley

I understand the hon. Gentleman to be suggesting that there should be a large-scale energy tax—[Interruption.]

Mr. Chidgey

There is so much coughing from the Front Bench that I cannot hear.

Mr. Lansley

The hon. Gentleman seems to be suggesting a large-scale energy tax. How would such an energy tax be implemented without undermining the competitiveness of many industries for which energy is an important input cost?

Mr. Chidgey

I take the point. I have tried not to go into too much detail because I appreciate that time is short. We believe that tax should be switched from the good things—employment—to the things that consume our finite energy resources. The latter form of tax is commonly called the carbon tax. The whole thrust of that taxation policy is that it is a neutral tax. When national insurance contributions are cut, taxation is switched from employment to the use of finite energy resources. [Interruption.] If the hon. Gentleman will excuse me, I must press on, because otherwise we shall not hear the valuable contribution from the hon. Member for Sevenoaks (Mr. Fallon) later.

This week, it was reported that electricians had ignored the recommendations of their union and rejected a 30 per cent. increase over three years, because there is an incredible shortage of skilled technicians in the construction industry, which provides a bargaining tool. We must overcome the skills shortage if we are not to create wage instability.

Employers in my constituency tell me that they are worried, not about the minimum wage, but about the shortage of skilled labour. Key workers are being poached by rivals offering higher wages, fuelling the wages spiral, increasing costs and reducing competitiveness. That is a legacy of decades of under-investment in education and training. It is time to stop the rot. We cannot meet this country's skills needs unless we broaden the base of those entering higher education and training.

The increase in student numbers can come only from the families who, for too long, have been excluded from higher education and vocational training. The Government are sending out the wrong message by introducing tuition fees for students. Already there are signs that university applications for the next academic year are dropping dramatically.

It is time to break down the barriers of training for those seeking to improve their skills and for those whose low skills have led to long-term unemployment. Welfare to work can become a reality only if it does not deny access to quality skills training because the individual is deemed to be no longer available for work. We must break the treadmill that means that a person cannot sign up for decent skills training because, if they do so, they lose their unemployment benefit because they are not available for work. The aim must be for that person to gain the skills that will get them out of unemployment and into decent work, which will enable them to contribute to society by earning wages and by paying income tax.

All—not just some—young people should have the right to education and vocational training. If we are to bridge the skills gap, if we are to turn the country round by creating a highly skilled work force that adds value to our economy, we cannot ignore the seedcorn of our young people. That is why the Liberal Democrats are committed to everyone under the age of 18 having the right to two days a week education or quality vocational training.

I want finally to discuss the millennium bug. It is now crystal clear that, as the millennium approaches, solving the problem of the computer time bomb will be expensive and will cause severe disruption to many firms. A survey of more than 1,000 firms about to be published by PA Consultants shows that 50 per cent. do not even have a millennium programme in place. About half the manpower that industry and commerce will need to deal with the problem will have to come from specialist consultants—but there are not enough information technology consultants to go around. At the very least, firms face a huge hike in the cost of IT support. Small firms face a disaster; even the largest face huge problems.

It is estimated that companies representing one third of our gross domestic product will not complete the conversion on time, so 29 per cent. of our GDP is at risk. The Government must start to take the problem seriously. Smooth words from spin doctors are not enough while the head of Action 2000 can afford to spend only one day a week at his desk.

While it is clear that the Opposition motion serves only to highlight their lamentable performance in Government and to confirm how thoroughly they deserved to be thrown out of office, the new Government have yet to convince us that they are taking the actions and pursuing the policies that are vital to this country's recovery. They have been given a mandate based on promise and expectation; the country has the right to demand that they deliver.

9.11 pm
Mr. Geraint Davies (Croydon, Central)

I want to respond to the right hon. Member for Wokingham—Mr. Deadwood, as he is known—

Mr. Deputy Speaker


Mr. Davies

I am sorry that the right hon. Gentleman—

Mr. Deputy Speaker

Order. The hon. Gentleman must sit down. Will he please refer to hon. Members in the correct way?

Mr. Davies

I want to respond to the right hon. Member for Wokingham (Mr. Redwood). I will not make any jokes about him, other than to say that he seemed to think of himself as old king coal, Arthur's friend. After 18 years of Conservative rule under which the coal industry was destroyed, it was a bit rich to hear the shadow Minister standing on his hind legs talking as though he was the champion of coal. He suddenly asserted that gas was more expensive than coal—a basic insight which, apparently, he did not have when he was a Minister in the previous Government.

The right hon. Gentleman spent half his time making various smears about Ministers, responding to the simple fact that his wife worked for British Airways when he was a Minister at the Department of Trade and Industry and British Airways was doing all sorts of things. However, those are not the issues in the debate.

The debate is about the simple fact that the economic legacy of the previous Administration is an appalling mess. We are falling down the skills league. We inherited £410 billion of debt, escalating at an enormous rate and costing us almost £30 billion a year in interest charges. Interest rates and inflation rates went through the hurly burly of boom and bust, hitting 16, 17 and 18 per cent. We had multi-million unemployment, more repossessions than during the highland clearances and two recessions that stripped the heart out of manufacturing. At the same time, small businesses went bust at an unprecedented rate. The legacy was one of hopelessness.

It was a great victory for Britain when the new Labour Government were elected. If the shambles of the Conservative party were running Britain, what sort of future would we have? We would have a myopic approach to a new Europe—a Canute-type Conservatism in which the Opposition dismiss the prospect of monetary union, which is inevitable.

The right hon. Member for Wokingham asked us to join him in apologising to Britain's people for the farce over the exchange rate mechanism. We will not join the Opposition in any apology for the despicable mess that was their legacy.

The official Opposition profess the economics of isolationism, of little England and of chip shop England in an emergent Europe. That is not the future for this country. The Opposition cannot even decide among themselves. The views of the old and new Opposition Front-Bench team diverge massively on the convergence criteria. Contrast that—because that is what the motion is about—with the new Labour Government, who heralded a new era of macro-stability with that bold and courageous move by the Chancellor of the Exchequer.

Mr. Lansley

In the light of the hon. Gentleman's remarks, how does he explain the Government's own figures, which suggest that growth of 3.5per cent. in 1997 is to be turned into growth of about 2.5 per cent. next year and 1.75 per cent. the year after? It is hardly a new era.

Mr. Davies

We have been in government for only seven months and already we are seeing the first blossoms of economic success, with employment growing. The single move by the Chancellor to delegate responsibility for setting interest rates to the Bank of England reduced overnight the cost of borrowing on gilts by 0.29 per cent. In the first year, that will save the taxpayer £50 million and, as those bonds mature, the saving will be about £750 million per year to the taxpayer. That is just one move.

Mr. Tim Loughton (East Worthing and Shoreham)

Will the hon. Gentleman give way?

Mr. Davies

I will give way later.

We have the lowest corporation tax in Europe: the second major reduction was announced last week. It is good for business and for Britain.

Several hon. Members


Mr. Davies

I am provoking a lot of Conservative Members now. I have to take one intervention.

Mr. Letwin

Is the hon. Gentleman aware of the cash flow effects of the Government's change in corporation tax? Does he deny the analysis that the change will cost the whole of British industry about £2 billion?

Mr. Davies

As always, the Government have the long-term interest of business in mind. I am of course aware of the position in relation to cash flow management in the next few years, but, in sharp contrast with the previous Government, we are looking towards the long term.

We have embarked on the new deal, funded by a one-off levy. Business likes that. In Croydon, a major economic engine for south London, we are already persuading the business community to take on the idea of the new deal, which gives new people new opportunities for new business success. Much play was made by the hon. Member for Buckingham (Mr. Bercow) about small business.

Mr. Campbell-Savours

Who is Buckingham?

Mr. Davies

It is that chap over there. My hon. Friend probably does not know him. He is not very famous.

Small business can take on the long-term unemployed at a reduction of £75 a week for the over-25s, or £60 a week for the under-25s. That is a major reduction in labour costs. It enables small business to make one-off, critical mass growth, and a breakthrough in terms of size and prosperity. That is why the proposal has been welcomed so widely.

The advent of regional development agencies is cherished by the business community. Only the other evening, I was having dinner with senior members of the Confederation of British Industry in London. [HON. MEMBERS: "Oh."] I know that Conservative Members were not invited, but that is a sign of the times. Those CBI representatives welcomed the new, planned, coherent approach to economic development on a regional basis, and the Labour party's initiatives.

Mr. Philip Hammond (Runnymede and Weybridge)

Did the hon. Gentleman have an opportunity, during that dinner with senior members of the CBI, to discuss their outright opposition to the minimum wage?

Mr. Davies

No, I did not. We were too busy talking about the need for British business to prepare for economic and monetary union, which the Conservatives completely overlooked. It was pointed out to me at that dinner that having the old Tories still in power, arguing among themselves, would have been a hopeless catastrophe for businesses trying to prepare for the emerging Europe. The minimum wage did not feature in the discussions, partly because it is not a serious issue for the main players in the CBI. The idea of the minimum wage is to encourage skilling, added value and productivity. In a modern economy, our ambition is not to become the new China.

Moving on to more serious points than those raised by the hon. Member for Runnymede and Weybridge (Mr. Hammond), the new Labour Government have inherited an economy characterised by millions of people on the dole, unable to pay tax, and the rest paying higher taxes simply to keep people on the dole.

Now there is a new opportunities culture. We are giving thousands and thousands of people a new opportunity to add value to the economy, to contribute and to become stakeholders. That new deal, that welfare to work, that investment in macro-economic stability, with help for small and medium-sized enterprises and all economic stakeholders in a planned and strategic way marks the rebirth of a new Britain for a new millennium. The name of the game is partnership. We are the friend of business, and prosperity is on the way.

9.21 pm
Mr. David Ruffley (Bury St. Edmunds)

The motion refers to action and inaction on the part of Ministers. My hon. Friend the Member for Buckingham (Mr. Bercow) gave a distinguished explanation of the Government's damaging actions on wider union powers, a statutory minimum wage and the social chapter. I should like to draw attention to the inaction of Ministers on the important subject of business rates.

I am disappointed that the Minister for Small Firms, Trade and Industry is not here, because she was very vocal before and during the election campaign in her alleged support for small business. Not a week went by at any of the main London business forums without a visit from her, talking about how she would reduce the burden on small businesses. She spent a lot of time talking a great game. That has been proved to be full of hollow words.

Let us examine the pledge on business rates that the Labour party has broken. We all know why business rates are important. They comprise a large proportion of the turnover and profit of many small businesses in my part of Suffolk as elsewhere. That is why the Labour manifesto said: we will make no change to the present system…without full consultation with business. A press release on 25 July said that Labour would take a look at Government finance and business rates, consulting with business fully about returning the business rate to local control. I have news for Labour Members. Local chambers of trade in my part of East Anglia have not had one piece of paper from the Government on the reform of business rates and how the burden of business rates may be reduced. You have said that you would consult, but you have patently failed to do so. In failing to consult, Labour has broken yet another pledge.

Let us examine the burden that local businesses face. It is clear that small businesses face a disproportionate burden as a result of business rates. The Government have said that they will do something about it, but are failing to do so. The Conservatives had a concrete proposal to give businesses a tax-free allowance for the first £1,000 of rateable value. That was in our manifesto. We had concrete proposals that the Government have not even attempted to follow. You have not consulted when you said that you would.

Mr. Deputy Speaker

Order. It ought to be possible for hon. Members to remember for a little while what I said.

Mr. Ruffley

The Government have singularly failed to live up to their manifesto pledges since 1 May.

Many small businesses in my part of Suffolk are particularly concerned about the Government's commitment to remove the universal council tax cap in due course. Their manifesto says absolutely nothing about a capping mechanism in respect of business rates.

In the absence of any details on that important subject from any Ministers in any Department, particularly the Minister for Small Firms, Trade and Industry, there is a great deal of speculation, which is worrying the small business community, particularly in the provinces. In particular, it is worried about the gossip and the spin that is being applied by Government advisers to the effect that the local business rate, if returned to council control, would be linked to domestic council tax levels.

That is what Ministers' advisers are putting around. That is not a great comfort to local businesses, because they know that, if local businesses are tied to local council tax levels, there is only one way in which business rates can go—up. A report, which I am sure is right, shows that an increase of up to 10 per cent. in domestic council tax is winging its way to council tax payers in the next financial year.

Mr. Borrow

Does the hon. Gentleman accept that many businesses foresee a return to a closer relationship and partnership with local government, but would welcome a link between a local business rate and the council tax, so that any increase for council tax payers is matched by the increase for business rate payers rather than divorcing one from the other, as that would risk local government increasing the council tax by a different percentage from that applied to the business rate? Or is he saying that a central, nationalised business rate should remain?

Mr. Ruffley

I wish that such erudition on the subject of local government finance was shown by Government Front Benchers. They say nothing on this subject, which is precisely why local business men complain to me about an absence of consultation and understanding.

The whole basis on which local council tax business rate setting is returned to local authorities, and the linking of it to the domestic council tax, will inevitably shift the gearing downwards. As we all know, at present a 5 per cent. increase in council tax will have an upward impact of only 1 per cent. on local authority budgets. At the moment, that provides a disincentive for local politicians to jack up rates. The change that the Government propose would reduce the gearing, making it very much more attractive to raise local finance—not just the domestic council tax, but local business rate tax. That is what the Government's manifesto proposals mean.

Mr. Loughton

I was entirely confused by what the hon. Member for South Ribble (Mr. Borrow) said. He missed one fundamental point. One reason why businesses would not, perhaps, welcome a return to the link with local rates is that business men do not get a vote. Businesses have no power or authority over local authorities, whereas local voters do. That is the fundamental difference.

Mr. Ruffley

I thank my hon. Friend for that valuable and important contribution.

The logic of the Government's proposals is bad for business. The inaction of Ministers and Departments is a disgrace. They have made promises and failed to keep them. The Government's inaction is something which local businesses will not take lightly.

Mr. Geraint Davies

Will the hon. Gentleman give way?

Mr. Ruffley

As I am bringing my remarks to an end, I shall not give way.

The motion goes to the core of Ministers' inaction, which is damaging jobs and business and leading especially to uncertainty in the small business sector.

9.29 pm
Mr. Michael Fallon (Sevenoaks)

We have had a useful debate. What a contrast is to be drawn between the contributions of my hon. Friends and those of the two Labour Members. My hon. Friend the Member for Buckingham (Mr. Bercow), in an eloquent speech, highlighted the fallacy of the case for the minimum wage. My hon. Friend the Member for Bury St. Edmunds (Mr. Ruffley) reminded the Government of their complete inactivity on the business rate.

The contributions of Labour Members reflected old Labour in all its manifestations. We heard from the hon. Members for Stoke-on-Trent, South (Mr. Stevenson) and for Croydon, Central (Mr. Davies).

In seven lean months, the Government's business policy has become clear. There are favours for their friends—for example, special treatment for formula one and a huge new gas-fired power plant for BP while for the rest there are higher taxes. There is more regulation for everyone. In business, the Government are partisan, expensive and burdensome. I shall focus especially on the burdens that are being imposed by the Government.

Before I refer to the burdens, what has happened to deregulation? The Conservative Government produced about 30 deregulation orders a year. I checked, and in the past seven months the Labour Government have produced only one such order. They have made it easier to deduct trade union subscriptions from employees' pay without written authorisation.

What has happened to the deregulation task force? The answer is that it has been renamed. It is now the better regulation task force. Even so, it seems to have sunk without trace in the Cabinet Office bureaucracy. It has become the Humphrey of Government quangos. We have not heard from it and we have seen no proposals from it. That gives the lie to the Labour party's promises before the general election that it would continue with the process of deregulation.

New burdens are being imposed. British business faces a wave of new legislation. There will be an increase in rules, bureaucracy and costs on a scale not seen since the mid-1970s. The President of the Board of Trade boasted about the weight of legislation that she would inflict on business. The right hon. Lady took responsibility for 10 Bills this evening, including the Wireless Telegraphy Bill, the Fossil Fuel Levy Bill and a Competition Bill, proposing draconian new powers of search and entry and retrospective fines of up to 10 per cent. turnover. These proposals have been opposed in detail by all major employers' operations.

There is the National Minimum Wage Bill, which will increase the cost of labour for not only low-paying businesses but all businesses. That is why employers' organisations such as the Engineering Employers Federation oppose it. That is not because member companies pay badly but because of the impact that the Bill will have on differential pay rates. The Bill will interfere with the freedom of employers to reward performance and skills. It will also price younger people out of jobs.

Mr. Russell Brown (Dumfries)

Will the hon. Gentleman give way?

Mr. Fallon

I shall not give way, because there is very little time.

A week ago, the Prime Minister prayed in aid the minimum wage in the United States of America. In the USA, however, small firms are exempted. Firms with a turnover of less than $500,000 are exempted. Seasonal workers are exempted. A catalogue of other workers are also exempted. After the National Minimum Wage Bill, there will be further legislation on compulsory union recognition, on the right to statutory interests and on strikers' rights, as my hon. Friend the Member for Buckingham reminded us.

The biggest and heaviest burden of all comes in the form of the social chapter. It is proposed that we should have European works councils which are expensive, bureaucratic and unnecessary. They are welcomed by one trade union leader, who said: It is tempting to see European works councils as a threat to trade union organisation. But that would be a recipe for inactivity. Our objective should be to do what the German trade unions do and take over these works councils in multinational companies. That was Mr. Dromey just two years ago.

That directive is followed by the parental leave directive. The Department of Trade and Industry estimates the cost of the directive at £200 million a year for British business. That is a burden on business. There is also the part-time and temporary workers directive which gives new statutory and contractual rights to part-time workers. There is the sex discrimination and—

Mr. Ian Bruce

On a point of order, Madam Speaker. I am sorry to disturb the peroration by my hon. Friend the Member for Sevenoaks (Mr. Fallon). Have you been informed, Madam Speaker, that the President of the Board of Trade will not be here? My hon. Friend is presenting a damning indictment of the right hon. Lady's speech, yet she is not here to hear it; nor is—

Madam Speaker

Order. The Government have collective responsibility. The Minister of State is present on the Front Bench waiting to respond.

Mr. Fallon

Further measures are proposed on sex discrimination and sexual harassment which not only run directly counter to the principle of United Kingdom civil law that people bringing a claim must prove their case, but flatly contradict Labour's Sex Discrimination Act 1975.

Mr. Stevenson

Will the hon. Gentleman give way?

Mr. Fallon

No, because I do not have time.

Another proposal is for national works councils. Firms with as few as 50 employees will now face the same statutory obligations as the multinationals because proposals introduced under the social chapter will be subject to qualified majority voting. We read that, when the idea was first mooted last June, Downing street said: We are not in favour of new regulation in this area. By November, we read that the Prime Minister has been urging European Union leaders to refrain from using the social chapter to pass new laws that could intlict more red tape on business. That is what happens if one gives away vetoes. This country ends up begging its fellow European leaders not to legislate against it.

We put that point to the Prime Minister at Question Time, but he did not answer it. Happily, the question was then put to the President of the Board of Trade, not in the House, but by Mr. John Humphrys in "On The Record" on Sunday 9 November. He pushed the right hon. Lady on the point that if she wanted exemptions for small firms from the national works council directive, she would not be able to secure them. Mr. Humphrys said: You will resist but you can't actually stop it happening. The right hon. Lady answered with what may be a summary of her industrial policy. She said: Well, er, we shall see how things go. The Government do not have an answer.

The Government do, however, pay attention to some industries. As my right hon. Friend the Member for Wokingham (Mr. Redwood) explained, formula one gets attention. The Prime Minister and his children attend Silverstone, Bernie puts in a million and somehow, there is immediate access to Ministers.There are fewer jobs in formula one than there are in the coalfields, but the miners have not yet been to No. 10. The miners' leaders have not yet been to see the Minister for Science, Energy and Industry, but they have been to see us. The reason is that Ministers have broken their promises on preventing gas-fired generation.

Ministers are happy to preside over the disintegration of the coal industry—indeed, they have accelerated closures with the additional money they have taken out of the power industry. They have £250 million from National Power, £200 million from PowerGen and £100 million from Eastern Electricity, precisely the companies which are negotiating with the coalfields and precisely the companies which are buying coal from our collieries. Coal is not in safe hands.

Where has the President of the Board of Trade been over the past few weeks? We read that coal policy is now in the hands of the Deputy Prime Minister, a Minister with responsibility for the environment, a Minister with responsibility for the regions or the Minister without Portfolio—everywhere except in the hands of the President of the Board of Trade. She does not have a coal policy, but we know where she was last week. She was opening the caravan show at Earl's Court. Caravans are quite a metaphor for this Government—they are slow moving, they sway from side to side and they block the way ahead.

What about the Minister for Science, Energy and Industry, who is the Minister with responsibility for coal? Where was he last week when all the meetings were taking place in Downing street? He has not even attended this debate. I can tell my hon. Friends that we tracked him down last week. The headlines read, "Battle Acts to Stop Bad Hair Days". He was promising not help for the coalfields but a government-funded study of problems with products used in hairdressing". He said that his proposals represent a genuine package of positive steps that will help to engender confidence in this important sector of the economy". He is the Minister for blow waves.

I have to tell Ministers that we have rumbled their business policy—it is formula one, it is caravans, it is hairdressing. We have been raising the issues that matter to British business—competition policy, costs, the minimum wage and the new wave of 10 Bills of which the President of the Board of Trade boasts and which will impose new costs right across the British business sector.

The Labour party claimed to favour stability when it consulted business before the election, but it now boasts about introducing 10 new Bills, thus creating a wave of uncertainty and instability right across industry. The Government claim to have cut business taxes; instead, they have increased them in every sector. By introducing the windfall tax and increasing corporation tax and taxes on the technology industries, they have increased the burden on British business.

Finally, and most outrageous of all, the Government claim, laughably, to be business's friend, but their policies have already been rejected in detail by business. The national minimum wage is opposed by employers' organisations, the windfall tax has been opposed, and the proposals for statutory recognition have been opposed. It is nonsense to say that Labour supports British business. In the past seven months, it has done everything possible to undermine the inheritance that we bequeathed them.


The Minister of State, Department of Trade and Industry (Mr. Ian McCartney)

The hon. Member for Sevenoaks (Mr. Fallon) has been out of politics for five years, and his speech showed it. He is the same old Tory with the same old story. He has nothing new to say, so he simply attacks. He attacks the right of home workers to be paid 50p an hour. He supports the principle and concept of low pay, but opposes the right of workers whose children fall ill to take time off to visit them in hospital. He opposes the right of 2 million low-paid workers to have paid holidays for the first time in their life. He is opposed to employers and employees sitting down in works councils to discuss matters of interest and agreement—despite the fact that, when the Tory Government opted out, employers opted in.

What else does the hon. Member for Sevenoaks oppose? He opposes fairness at work and the right of individuals to be treated fairly by their employers. He is still opposed to people being protected from being forced to work 60, 70 or 80 hours a week, despite the fact that, in government, the Tories lost a European Court decision, which said that they were acting illegally in preventing people from being protected from working unsocial hours. That is the sum total of what the Tories have learnt—or not—since 2 May.

What about the hon. Member for Buckingham (Mr. Bercow), the mouthpiece of Jonathan Aitken? He learned his trade—no more, no less—supporting or promoting Jonathan Aitken. He spent 45 minutes in the House denying other hon. Members the opportunity to speak positively on how we need to take the United Kingdom economy forward. When it came down to it, the hon. Gentleman had only one simple thing to say: he believes in poverty pay. His simple premise is no pay or low pay. At the end of 45 minutes of diatribe, he showed himself for all he is: a person who defends the few against the many in the workplace who have been undermined by low pay for the past 30 years.

Mr. Ian Bruce

Will the hon. Gentleman give way?

Mr. McCartney

Sit down.

What an apologist the hon. Member for Bury St. Edmunds (Mr. Ruffley) is for a Tory Government who, for 18 years, hammered small business rates. He came to the debate to attack a Labour Government, despite that—



Mr. McCartney

Wait a minute.

All that the hon. Member for Bury St. Edmunds had to do was to apologise for 18 years of Tory government, during which the Conservatives undermined small businesses.

Only yesterday, in The Sunday Times, the hon. Member for Chesham and Amersham (Mrs. Gillan) apologised—or attempted to—for how the Tories treated small businesses during 18 years of government. It is too late to apologise. Tens of thousands of businesses have gone out of business, and gone with them are valuable jobs in local communities. The hon. Lady said that the Government have done nothing for business and taxation. We have been in power for about 220 days. The Tories were in power for 18 years—during which there were 22 tax rises, two recessions and 3 million people unemployed. That was their record.

What have we done in the first seven months? We abolished advance corporation tax, reduced VAT on fuel and power from 8 percent. to 5 per cent., reduced VAT for approved insulation schemes, cut corporation tax from 33 percent. to 30 percent., cut small companies corporation tax by 2 percent.—

Mr. Bruce


Madam Speaker

Order. Is the Minister giving way?

Mr. McCartney


Madam Speaker

That being the case, the hon. Member for South Dorset (Mr. Bruce) should resume his seat.


We introduced a 10p increase in capital allowances for small firms, reduced vehicle excise duty for low-emission lorries, reduced the gas levy, increased tax allowances for film production and simplified gilt interest. Goodness, I am tired out—and that is only in the first seven months of a Labour Government.

What did we find when we came to power on 2 May? We found the social and economic effects of two recessions and record bankruptcies. We found that 250,000 companies had been forced to the wall since 1979 and a business had gone bust every three minutes of every working day since 1992. The Conservative party was not a party of business; it was a party of funny business. The Tories fiddled while the economy burned. They protected Asil Nadir when tens of thousands of small businesses went to the wall because of their economic incompetence.

In one in five working-age households in Britain, no one works. What was the Tories' answer? They fiddled the figures. A generation of young people and older workers were abandoned to the dole queue and social exclusion. The Tories created a sweatshop capital of Europe instead of an enterprise capital of Europe. They introduced a hire-and-fire culture: if someone was not willing to work for £1 or £1.20 an hour, there was always somebody else among the 3 million on the dole queue who would. Low pay or no pay was the Tories' cry. They created fat-cattery and took extra jobs themselves. Part-time Members of Parliament had two, three, four, five and even six directorships—because they claimed that they could not live on a Member of Parliament's salary—but they forced a million people in Britain to live on less than £2.50 an hour. Those are the double standards and hypocrisy of the Opposition.

The Tories raised interest rates to record levels. There was a recession in the construction industry and record low investment. Under the Tories, we had a record low share of world trade. They put up taxes for small businesses and increased regulation when they promised to cut it. Then they refused to help small and medium-sized enterprises that were crippled by late payments. The former Deputy Prime Minister boasted that that was how to do business. He said that he became a multi-millionaire by screwing small businesses into the ground. His attitude was, "I succeeded—to hell with them." That is what the Tories did in 18 years, and then they left us £350 billion of debt—£6,000 for every citizen in the United Kingdom. The Tories were not economists: they were spivs and Arthur Daleys.

On 2 May, we took power and set about modernising this country. We are committed to strong, open and fair markets; economic and social renewal; partnership replacing conflict; and modern companies building a new country and a new Europe. Those are the consequences of the first seven months of a Labour Government. This Government believe in partnership and a valued role for employees and their trade unions. We are committed to the aims, roles and shared values of business. We support improved company cultures; performance and skill enhancement; the development of personal potential; the retention of skills and talent; the development of new skills and talent; investing in the work force; investing in research and development; the provision of minimum standards in the workplace; and training adaptable workers for flexible working environments. That is the difference between us and the Tories. What a contrast.

The right hon. Member for Wokingham (Mr. Redwood), the former Secretary of State for Wales, is the wannabe of British politics. He said, "I wannabe the leader of the Tory party," but when he first tried, he got 27 per cent. of the vote of the parliamentary party. He lost, but he tried again. He got 16 per cent. of the vote. After his performance tonight, I doubt that he would even get off the starting line. [Interruption.] The right hon. Gentleman does not want to be reminded of the shambles for which he and his colleagues were responsible over the past 18 years. The Labour Government have tried to start the process of change.

What does the Tory party find obnoxious about a Government policy which, in partnership with industry, will ensure positive effects in the labour market? We shall reject negative proposals that will hinder employment. We shall expand the mobility of the labour market by investing in skills. The problem under the Tories was that they refused to invest in skills. As a consequence, as the hon. Member for Eastleigh (Mr. Chidgey) pointed out, this country suffers from a skill shortage. This Government will invest in skills and opportunity.

This Government introduced a £3.5 billion Budget that will be the biggest investment in skills and opportunity that this country has ever seen. Some 250,000 people will be taken off the dole and given an opportunity, and £200 million will be invested in giving single parents employment opportunities. The Tories simply sneer. They do not give a damn. They are unconcerned about the future of young people in Britain. The Tories sneer at investment of £3.5 billion, but employers do not sneer. Record numbers of employers are joining the new deal to ensure, when it is introduced in January next year, that it will be the most successful job creation programme in this country's history.

Why do the Opposition oppose employers sitting down with their employees and this Government, to work out new policies to sustain small and medium-sized enterprises? Why are the Opposition so opposed to partnership? They believe simply in conflict, when this country needs a sense of stability and economic commitment—for people to be able to find work throughout their working lives and to do the jobs on offer. Why is it that the Conservatives just cannot find the capacity—

Mr. Bercow

On a point of order, Madam Speaker. I ask for your guidance. Is it in order for a Minister at the Dispatch Box who has referred to an hon. Member to refuse to take an intervention from that Member?

Madam Speaker

It is possible for any hon. Member to do that. The Member who has the Floor has discretion as to whether to give way. The Minister seems to be in full flow, and he is not going to give way.

Mr. McCartney

In the past 10 years, Conservative Members have always thought that they could put me off by shouting at me, even when they were on Government Benches. Some day, they will learn their lesson. There is no possibility of Opposition Members putting me off, on any subject at any time, and they should learn that. Nor will I ever give way to right hon. and hon. Members who preach double standards and hypocrisy in this House. The hon. Member for Buckingham had three quarters of an hour to put his case, and he failed abysmally. I will not give way to him, when Labour Members who should have been able to speak were not allowed to. In fact, this is a first. I have never known an Opposition to filibuster their own motion as much as Conservative Members have done, but they did.

The former Secretary of State for Wales—I have to keep saying former Secretary of State, because I just love it—has become the No. 1 stalker of Ministers. He can be seen early in the morning at the back of the Department of Trade and Industry, scraping around in the bins looking for something that will get him a quick headline. I am getting a little concerned for him as the winter weather comes on. May I suggest this to him? Do not hang around the back, but come in the front. We shall give him a cup of tea and, as we have always done since day one of this Government, we shall answer every question that he puts to us.

Mr. Ian Bruce

On a point of order, Madam Speaker. I know that the Minister would not want to mislead the House. I have just checked the record of the Doorkeeper, and my hon. Friend the Member for Buckingham (Mr. Bercow) spoke for 20 minutes. Clearly, the Minister cannot count that far. If he thinks that 20 minutes is 45, he should not be in that office.

Madam Speaker

The hon. Member for Buckingham (Mr. Bercow) spoke for 20 minutes. I have it here. I also know how many points of order the hon. Member for South Dorset (Mr. Bruce) has raised—too many.

Mr. McCartney

To return to the issues at stake, Opposition Members spent a great deal of time on their favourite subject—attacking Europe. As we reach the close of the debate, perhaps I can help them. We are considering a new directive, protecting endangered species living out of their natural habitats. What could be more relevant to Conservative Members who, on 1 May, were driven out of Scotland and out of Wales, and were recently driven out of Winchester? To make things a little easier for themselves, they drove themselves out of Leominster.

The Opposition spokesman, the hon. Member for Sevenoaks, said that the Conservatives were the party of business. I can remember the Moms Minor—The Austin Morris. Last week, the Tories created a new model, the Temple-Morris. No matter how hard one tries to steer it, it just will not turn right, and neither will we.

We reject the Opposition motion. We ask hon. Members to vote for modernisation, renewal and partnership. Let us rebuild this country and give young people job opportunities. Let us get the long-term unemployed off the dole. Let us work in partnership with business to invest in training and education, research and development. Let us give Britain a major voice in Europe.

What people need in Europe is a Labour Government committed to employability, getting unemployment down and improving social justice, so that everyone has an opportunity to participate. We won the general election on the basis that we were the party of the many and the Tories were the party of the few. Today's debate showed that in spades. We remain the party of the many, and they remain the party of the few.

Mr. James Arbuthnot (North-East Hampshire)

rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly, That the original words stand part of the Question:—

The House divided: Ayes 129, Noes 326.

Division No 102] [9.59 pm
Ainsworth, Peter (E Surrey) Fallon, Michael
Amess, David Flight, Howard
Arbuthnot, James Forth, Rt Hon Eric
Atkinson, Peter (Hexham) Fox, Dr Liam
Baldry, Tony Gale, Roger
Bercow, John Garnier, Edward
Beresford, Sir Paul Gibb, Nick
Blunt, Crispin Gill, Christopher
Body, Sir Richard Gillan, Mrs Cheryl
Boswell, Tim Gorman, Mrs Teresa
Bottomley, Peter (Worthing W) Gray, James
Bottomley, Rt Hon Mrs Virginia Green, Damian
Brady, Graham Greenway, John
Brazier, Julian Grieve, Dominic
Browning, Mrs Angela Hague, Rt Hon William
Bruce, Ian (S Dorset) Hamilton, Rt Hon Sir Archie
Burns, Simon Hammond, Philip
Butterfill, John Hawkins, Nick
Cash, William Heath, Rt Hon Sir Edward
Chope, Christopher Heathcoat-Amory, Rt Hon David
Clark, Rt Hon Alan (Kensington) Heseltine, Rt Hon Michael
Clarke, Rt Hon Kenneth (Rushcliffe) Hogg, Rt Hon Douglas
Horam, John
Collins, Tim Howard, Rt Hon Michael
Cormack, Sir Patrick Howarth, Gerald (Aldershot)
Cran, James Hunter, Andrew
Curry, Rt Hon David Jenkin, Bernard
Davies, Quentin (Grantham) Johnson Smith, Rt Hon Sir Geoffrey
Davis, Rt Hon David (Haltemprice)
Day, Stephen Key, Robert
Dorrell, Rt Hon Stephen King, Rt Hon Tom (Bridgwater)
Duncan, Alan Kirkbride, Miss Julie
Emery, Rt Hon Sir Peter Laing, Mrs Eleanor
Evans, Nigel Lait, Mrs Jacqui
Faber, David Lansley, Andrew
Fabricant, Michael Letwin, Oliver
Lewis, Dr Julian (New Forest E) Shepherd, Richard
Lidington, David Simpson, Keith (Mid-Norfolk)
Lilley, Rt Hon Peter Soames, Nicholas
Lloyd, Rt Hon Sir Peter (Fareham) Spelman, Mrs Caroline
Loughton, Tim Spicer, Sir Michael
Luff, Peter Spring, Richard
Lyell, Rt Hon Sir Nicholas Steen, Anthony
MacGregor, Rt Hon John Streeter, Gary
MacKay, Andrew Swayne, Desmond
Maclean, Rt Hon David Syms, Robert
McLoughlin, Patrick Tapsell, Sir Peter
Madel, Sir David Taylor, Ian (Esher & Walton)
Malins, Humfrey Taylor, Sir Teddy
Maples, John Tredinnick, David
Maude, Rt Hon Francis Tyrie, Andrew
Mawhinney, Rt Hon Sir Brian Viggers, Peter
May, Mrs Theresa Walter, Robert
Moss, Malcolm Waterson, Nigel
Ottaway, Richard Wells, Bowen
Paice, James Whitney, Sir Raymond
Whittingdale, John
Paterson, Owen Widdecombe, Rt Hon Miss Ann
Prior, David Wilkinson, John
Randall, John Willetts, David
Redwood, Rt Hon John Winterton, Mrs Ann (Congleton)
Robathan, Andrew Winterton, Nicholas (Macclesfield)
Robertson, Laurence (Tewk'b'ry) Yeo, Tim
Roe, Mrs Marion (Broxbourne) Young, Rt Hon Sir George
Rowe, Andrew (Faversham)
Ruffley, David Tellers for the Ayes:
St Aubyn, Nick Mr. John M. Taylor and
Sayeed, Jonathan Mr. Oliver Heald.
Abbott, Ms Diane Campbell, Mrs Anne (C'bridge)
Adams, Mrs Irene (Paisley N) Campbell, Menzies (NE Fife)
Ainsworth, Robert (Cov'try NE) Campbell-Savours, Dale
Alexander, Douglas Cann, Jamie
Allan, Richard Caplin, Ivor
Allen, Graham Casale, Roger
Anderson, Donald (Swansea E) Caton, Martin
Armstrong, Ms Hilary Chapman, Ben (Wirral S)
Ashton, Joe Chaytor, David
Atkins, Charlotte Chidgey, David
Ballard, Mrs Jackie Chisholm, Malcolm
Banks, Tony Clapham, Michael
Barron, Kevin Clark, Rt Hon Dr David (S Shields)
Bayley, Hugh Clark, Dr Lynda (Edinburgh Pentlands)
Beard, Nigel
Beckett, Rt Hon Mrs Margaret Clark, Paul (Gillingham)
Begg, Miss Anne Clarke, Charles (Norwich S)
Beith, Rt Hon A J Clarke, Eric (Midlothian)
Benn, Rt Hon Tony Clarke, Rt Hon Tom (Coatbridge)
Bennett, Andrew F Clelland, David
Benton, Joe Clwyd, Ann
Berry, Roger Coaker, Vernon
Best, Harold Coffey, Ms Ann
Betts, Clive Coleman, Iain
Blears, Ms Hazel Colman, Tony
Blizzard, Bob Connarty, Michael
Blunkett, Rt Hon David Cook, Frank (Stockton N)
Boateng, Paul Cooper, Yvette
Borrow, David Corbett, Robin:
Bradley, Keith (Withington) Cotter, Brian
Bradshaw, Ben Cousins, Jim
Brand, Dr Peter Cranston, Ross
Breed, Colin Crausby, David
Brinton, Mrs Helen Cryer, John (Hornchurch)
Brown, Rt Hon Nick (Newcastle E) Cummings, John
Brown, Russell (Dumfries) Cunningham, Rt Hon Dr John (Copeland)
Bruce, Malcolm (Gordon)
Burden, Richard Cunningham, Jim (Cov'try S)
Butler, Mrs Christine Dafis, Cynog
Byers, Stephen Dalyell, Tam
Caborn, Richard Darting, Rt Hon Alistair
Campbell, Alan (Tynemouth) Davey, Edward (Kingston)
Davey, Valerie (Bristol W) Johnson, Alan (Hull W & Hessle)
Davidson, Ian Johnson, Miss Melanie (Welwyn Hatfield)
Davies, Rt Hon Denzil (Llanelli)
Davies, Geraint (Croydon C) Jones, Mrs Fiona (Newark)
Dawson, Hilton Jones, Helen (Warrington N)
Dean, Mrs Janet Jones, Jon Owen (Cardiff C)
Dobbin, Jim Jones, Martyn (Clwyd S)
Donohoe, Brian H Jowell, Ms Tessa
Doran, Frank Kaufman, Rt Hon Gerald
Dunwoody, Mrs Gwyneth Keeble, Ms Sally
Eagle, Angela (Wallasey) Keen, Alan (Feltham & Heston)
Eagle, Maria (L'pool Garston) Keen, Ann (Brentford & Isleworth)
Edwards, Huw Kelly, Ms Ruth
Ellman, Mrs Louise Kemp, Fraser
Ennis, Jeff Kennedy, Charles (Ross Skye)
Fatchett, Derek Kennedy, Jane (Wavertree)
Fearn, Ronnie Khabra, Piara S
Field, Rt Hon Frank Kilfoyle, Peter
Fisher, Mark King, Andy (Rugby & Kenilworth)
Fitzpatrick, Jim King, Ms Oona (Bethnal Green)
Flint, Caroline Kumar, Dr Ashok
Follett, Barbara Ladyman, Dr Stephen
Foster, Rt Hon Derek Lawrence, Ms Jackie
Foster, Michael Jabez (Hastings) Laxton, Bob
Foster, Michael J (Worcester) Leslie, Christopher
Foulkes, George Levitt, Tom
Gapes, Mike Lewis, Terry (Worsley)
Gardiner, Barry Linton, Martin
George, Bruce (Walsall S) Llwyd, Elfyn
Gerrard, Neil Love, Andrew
Gibson, Dr Ian McAllion, John
Gilroy, Mrs Linda McAvoy, Thomas
Godsiff, Roger McCabe, Steve
Gordon, Mrs Eileen McCafferty, Ms Chris
Gorrie, Donald McCartney, Ian (Makerfield)
Grant, Bernie McDonagh, Siobhain
Griffiths, Jane (Reading E) Macdonald, Calum
Griffiths, Nigel (Edinburgh S) McDonnell, John
Griffiths, Win (Bridgend) McFall, John
Grocott, Bruce Mclsaac, Shona
Grogan, John MacShane, Denis
Gunnell, John Mactaggart, Fiona
Hall, Mike (Weaver Vale) McWalter, Tony
Hall, Patrick (Bedford) McWilliam, John
Hanson, David Mahon, Mrs Alice
Harris, Dr Evan Mallaber, Judy
Harvey, Nick Mandelson, Peter
Heal, Mrs Sylvia Marek, Dr John
Healey, John Marsden, Gordon (Blackpool S)
Henderson, Doug (Newcastle N) Marshall-Andrews, Robert
Henderson, Ivan (Harwich) Martlew, Eric
Hepburn, Stephen Maxton, John
Heppell, John Meale, Alan
Hesford, Stephen Michael, Alun
Hill, Keith Michie, Bill (Shef'ld Heeley)
Hodge, Ms Margaret Michie, Mrs Ray (Argyll & Bute)
Hoey, Kate Milburn, Alan
Hood, Jimmy Miller, Andrew
Hoon, Geoffrey Mitchell, Austin
Hope, Phil Moffatt, Laura
Hopkins, Kelvin Moonie, Dr Lewis
Howarth, Alan (Newport E) Moran, Ms Margaret
Howarth, George (Knowsley N) Morgan, Ms Julie (Cardiff N)
Howells, Dr Kim Morgan, Rhodri (Cardiff W)
Hoyle, Lindsay Moriey, Elliot
Hughes, Kevin (Doncaster N) Morris, Ms Estelle (B'ham Yardley)
Humble, Mrs Joan Morris, Rt Hon John (Aberavon)
Hurst, Alan Mudie, George
Hutton, John Mullin, Chris
Iddon, Dr Brian Murphy, Denis (Wansbeck)
Illsley, Eric Murphy, Jim (Eastwood)
Ingram, Adam Norris, Dan
Jackson, Ms Glenda (Hampstead) O'Brien, Mike (N Warks)
Jackson, Helen (Hillsborough) Olner, Bill
O'Neill, Martin Southworth, Ms Helen
Öpik, Lembit Spellar, John
Organ, Mrs Diana Squire, Ms Rachel
Osborne, Ms Sandra Starkey, Dr Phyllis
Palmer, Dr Nick Steinberg, Gerry
Pearson, Ian Stevenson, George
Pendry, Tom Stewart, David (Inverness E)
Pickthall, Colin Stewart, Ian (Eccles)
Pike, Peter L Stinchcombe, Paul
Pollard, Kerry Stoate, Dr Howard
Pope, Greg Strang, Rt Hon Dr Gavin
Pound, Stephen Stringer, Graham
Powell, Sir Raymond Stunell, Andrew
Prentice, Ms Bridget (Lewisham E) Sutcliffe, Gerry
Prentice, Gordon (Pendle) Taylor, Rt Hon Mrs Ann (Dewsbury)
Prescott, Rt Hon John
Primarolo, Dawn Thomas, Gareth (Clwyd W)
Purchase, Ken Timms, Stephen
Quin, Ms Joyce Tipping, Paddy
Radice, Giles Todd, Mark
Rapson, Syd Touhig, Don
Raynsford, Nick Trickett, Jon
Reed, Andrew (Loughborough) Truswell, Paul
Reid, Dr John (Hamilton N) Turner, Dennis (Wolverh'ton SE)
Rendel, David Turner, Desmond (Kemptown)
Roche, Mrs Barbara Turner, Dr George (NW Norfolk)
Rogers, Allan Twigg, Derek (Halton)
Rooker, Jeff Twigg, Stephen (Enfield)
Tyler, Paul
Rooney, Terry Wallace, James
Ross, Ernie (Dundee W) Ward, Ms Claire
Rowlands, Ted Wareing, Robert N
Ruane, Chris Watts, David
Russell, Bob (Colchester) Webb, Steve
Ryan, Ms Joan Whitehead, Dr Alan
Salter, Martin Williams, Rt Hon Alan (Swansea W)
Sanders, Adrian
Savidge, Malcolm Williams, Alan W (E Carmarthen)
Sawford, Phil Williams, Mrs Betty (Conwy)
Sedgemore, Brian Willis, Phil
Shaw, Jonathan Wills, Michael
Sheerman, Barry Winterton, Ms Rosie (Doncaster C)
Sheldon, Rt Hon Robert Wise, Audrey
Simpson, Alan (Nottingham S) Wood, Mike
Singh, Marsha Woolas, Phil
Skinner, Dennis Wright, Anthony D (Gt Yarmouth)
Smith, Rt Hon Andrew (Oxford E) Wright, Dr Tony (Cannock)
Smith, Rt Hon Chris (Islington S) Wyatt, Derek
Smith, Jacqui (Redditch)
Smith, John (Glamorgan) Tellers for the Noes:
Smith, Llew (Blaenau Gwent) Mr. Jim Dowd and
Soley, Clive Mr. David Jamieson.

Question accordingly negatived.

Question, That the proposed words be there added,put forthwith, pursuant to Standing Order No. 31 (Questions on amendments), and agreed to.

MADAM SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved, That this House welcomes the speedy action taken by Her Majesty's Government to foster an environment in which business can flourish, with macro-economic stability, low rates of corporation tax, a clear new competition policy, and a review of utility regulation; contrasts this with the boom and bust policies of the previous administration which led to the collapse of thousands of firms and unemployment for millions; and welcomes Her Majesty's Government's partnership with business to improve UK competitiveness.