Engagements (Hansard, 4 November 1998)

§ Q1. Mr. Brian H. Donohoe (Cunninghame, South)
If he will list his official engagements for Wednesday 4 November.

§ The Prime Minister (Mr. Tony Blair)
This morning, I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.

§ Mr. Donohoe
Although I welcome the commitment given by the Chancellor of the Exchequer in his statement yesterday to increased investment in key areas of our economy, may I put a specific question to my right hon. Friend? Can he give a specific date for the signing of the contract for the new air traffic control centre in Scotland?

§ The Prime Minister
I know of my hon. Friend's long-standing interest in this matter and the strength with which he has put it forward because of its importance to his constituency. I cannot give definite commitments as negotiations are continuing, but I understand that final plans are due to be submitted to the Government by the end of November and that, subject to agreeing and finalising the details, the aim is to start construction by mid-1999. That will be good news for Scotland, as much of the construction will be locally sourced.

§ Mr. William Hague (Richmond, Yorks)
The Economist's survey of independent forecasts for next year puts Britain at the bottom of the growth league for the whole western world. Why does the Prime Minister think that that is so?

§ The Prime Minister
It is for precisely the same reasons that it puts us ahead for this year and in three years' time—that is, as a result of the economic cycle. All the forecasts put us ahead for this year and in the future. It is for the same reason that forecasts have been downgraded, for example, for the United States of America—people would not call that a weak economy. The single most important thing that we can do is hold firm to the course of economic stability; the worst thing that we could do is follow the Conservative policy of slashing public spending and reversing Bank of England independence.

§ Mr. Hague
Does the Prime Minister not think that the fact that those surveys put us at the bottom of the growth league for the whole western world has something to do with the 17 tax rises by the Chancellor, the failure to tackle welfare spending, the tax on savings and pensions, higher-than-necessary interest rates, and the extra £40 billion of business regulations and taxes loaded on to the businesses of this country? If the Prime Minister wants to repeat what he said about forecasts in three years' time, is he aware that, since the Chancellor announced his policies in the summer, independent forecasters have 863 downgraded growth for this country more than for any other country in Europe and America? Is that meant to be a coincidence?

§ The Prime Minister
No. It simply is not right either. As a matter of fact, growth forecasts throughout the world have been downgraded. The International Monetary Fund has downgraded world growth. The European Union has downgraded growth forecasts for the EU. Every country is in the same position.
I could do no better than to quote the words of the director general of the CBI. He said: I don't think this downturn was essentially made in Downing Street. Certainly there is no danger at the moment to believe that we will have recession like in 1991. There are several features of our economic policy which are in a much sounder position than they were in 1990.

§ Mr. Hague
Why does the Prime Minister not listen to the west midlands chairman of the CBI, who said— [Interruption.] It is interesting how the Government like to laugh at business people in the front line of our economy and take the word of people who sit in offices instead. The chairman said: We are in for a hard and rocky time. Why did the Prime Minister not look at the CBI survey that showed business confidence at the lowest for 18 years, or the Item Club that says that 0.5 million manufacturing jobs will go? In the mean time, the Chancellor says, "Do nothing. Worry about nothing. Publish fantasy forecasts." Has not the Chancellor failed to make the hard choices that would allow the full 1 per cent. cut in interest rates that this country needs?
Is the Prime Minister going to look at the actual figures for growth forecasts—maybe we will get him to read them—the survey of all independent forecasts, which shows this country's growth going down faster than any other country's? He can have a look at it after Question Time. Was not yesterday a massive missed opportunity to reverse the blunders of the past 18 months and to do something to save people's jobs and businesses?

§ The Prime Minister
The short answer to that is no, I do not agree with the right hon. Gentleman at all. As for his claim that we were laughing at the director general of the CBI in the west midlands, let me tell him that we were actually laughing at the right hon. Gentleman. The reason for that is very simple. Everyone knows, as indeed the Chancellor said yesterday, that there is no denial of short-term difficulty, and no diversion from long-term strength. Of course we are forecasting a slowdown in economic growth and that slowdown is being mirrored literally throughout the world. The question is: what is the best way to get us through this economic slowdown. We say that it is to hold firm to Bank of England independence, the £40 billion spending on health and education and the extra spending on infrastructure. We say that it is to keep in place the new deal and the working families tax credit. The shadow Chancellor yesterday pinned his colours firmly to the mast. The Conservatives are now in favour of scrapping Bank of England independence, cancelling the spending next year and 864 cancelling the new deal and working families tax credit. If any of those things are wrong, let the Leader of the Opposition get up and say so now—[Interruption.]

§ Madam Speaker
Order. We are carrying on.

§ Mr. Robert Sheldon (Ashton-under-Lyne)
Will my right hon. Friend consider announcing the Government's intention to join the economic and monetary union, without setting a date? Would that not help to underpin the Chancellor of the Exchequer's Budget? Would that not reduce interest rates, reduce the level of the pound, improve investment and lead to that rarest of economic phenomena—a free lunch?

§ The Prime Minister
I do not agree that there is a free lunch in this set of circumstances. We have made it clear what the policy is. It was set out by the Chancellor last year. It was repeated both by the Secretary of State for Trade and Industry and the Chancellor a few days ago.
That is the right policy for us: to make it clear that the economic circumstances are those of sustainable economic convergence and clear and unambiguous economic benefits. But we would be wise to steer between either saying that we will join irrespective of the economic conditions, or taking the position of the Conservative party, saying that we will never join and we will have a negative, destructive position towards Europe—[Interruption.] I am sorry if I have that Conservative party policy wrong as well, but it is difficult to keep up with it nowadays.

§ Mr. Paddy Ashdown (Yeovil)
The Prime Minister says that the Government's policy on the single currency is clear, but on Monday the Trade Secretary described when we would join the single currency and on Tuesday the Cabinet enforcer rushed round saying that we should wait and see if we join the single currency. Which is the Government's policy?

§ The Prime Minister
Both the Trade Secretary and the Chancellor of the Duchy of Lancaster outlined the position entirely correctly. To join, the circumstances must be right. Those circumstances are that there is sustainable economic convergence and the economic benefits are clear and unambiguous. The right hon. Gentleman's policy is to join irrespective of convergence and of whether the economic benefits are clear and unambiguous. He shakes his head. He has the chance to ask another question. If his view is that he would join only when the economic benefits are clear and unambiguous, he supports our policy.

§ Mr. Ashdown
The Prime Minister must answer for his policy. Let me remind him that one of his Cabinet Ministers has said "when" and another has said "if. They cannot both be right. When will the Government realise that this is the most important decision facing our country? The Government cannot abandon leadership in favour of a policy of nods and winks. For as long as they do, the Cabinet will remain confused, the country will remain without a lead and British industry will continue to suffer.

§ The Prime Minister
Let me repeat: to join, the circumstances must be right. We do not believe in joining 865 irrespective of the economic circumstances. Those circumstances are that there must be sustainable economic convergence and the economic benefits must be clear and unambiguous. That is a plain and sensible policy. It steers between the extremes of the Liberal Democrats saying that they will join irrespective of the economic circumstances and the Conservatives saying that they will not join irrespective of the economic circumstances. In this case, I think that the third way is right.

§ Q2. Mr. Jim Murphy (Eastwood)
My right hon. Friend is aware that, for years, many hard-working families have been stuck in a poverty trap. Those hard-working families will benefit from the working families tax credit, the disabled persons tax credit and the record increase in child benefit. Will he give a clear undertaking that his Government will continue the search for policies that reward hard-working families and in so doing will ignore the protests of the Conservatives, who, while in government, did so little for the families most in need?

§ The Prime Minister
We shall hold firm to the policies on the new deal and the working families tax credit. There could be nothing more crazy or disastrous in economic policy than to cancel both those items at the moment, because we would be withdrawing support in the new deal at the time of an economic slowdown and we would be preventing low-income families from getting the help and incentives that they need to get into work. I assure my hon. Friend that we shall resist Conservative calls to cancel the new deal and the working families tax credit. They make that case not on economic grounds, but for ideological reasons. The Conservative party is moving further and further to the right, but that is not where the British people are.

§ Q3. Mr. Jonathan Sayeed (Mid-Bedfordshire)
With an ailing president, a corrupt economy and an unpaid military, Russia is in dire need of generous international financial assistance. I believe that it is in all our interests to provide it. We fear that terrorists and rogue states may gain access to Russia's weapons of mass destruction—its nuclear, chemical and biological weapons—and use them or threaten to use them against us. Why does not the international community negotiate to purchase some of Russia's weapons of mass destruction, perhaps using the aid budget, and arrange for them to be destroyed under international supervision on Russian soil?

§ The Prime Minister
I agree with the general anxiety expressed by the hon. Gentleman, but I do not agree with his proposals. We have already shown strongly that we are ready to support Russian reform efforts. The International Monetary Fund has made it clear that it will do so, provided the economic reforms that we have asked for are put in place, otherwise there is a danger of simply putting good money after bad.
We and our partners are already assisting Russian disarmament. The United Kingdom has, for example, supplied specialised equipment for transporting nuclear warheads for destruction. We are leading international efforts to retrain redundant military officers for civilian life. We are encouraging Russia to ratify START 2 and move on with negotiations for START 3—the strategic arms reduction talks. There are many practical difficulties 866 in buying up warheads; so, together with Russia and our other international partners, we are exploring ways in which to reduce the potential dangers posed by the stockpiles of weapons of mass destruction. That is a better way to proceed.

§ Mr. Ivan Henderson (Harwich)
Will my right hon. Friend assure me that no Labour Government would wait 18 years before listening to the people?

§ The Prime Minister
We listened to the people very successfully before the election, and we must carry on doing so.

§ Q4. Sir Paul Beresford (Mole Valley)
Many extremely able business men in my area are deeply worried. They have many questions because they find the answers that the Prime Minister has given to date to be implausible. I should like to ask just one on their behalf. On one hand, the Prime Minister has downgraded his growth predictions—Treasury predictions are lower, and some of the others that we hear of are lower still—yet on the other hand, the Chancellor is saying that tax revenues for next year will remain the same. At the very least, there is a dichotomy. Will the Prime Minister clarify it?

§ The Prime Minister
The growth prediction for this year, on which revenues are based, has not been downgraded. It is the growth prediction for next year that has been downgraded. There is a perfectly simple answer to the hon. Gentleman's question. Most business men, including ones in his constituency, would prefer us to abandon any notion of policies that will lead to boom and bust, such as reversing Bank of England independence. Above all, they want to avoid the 7 per cent. drop in manufacturing output that we had under the Conservatives, and the boom-and-bust policies that gave us double-digit interest rates for four years—four years of interest rates of more than 10 per cent.—and interest rates of 15 per cent. for more than one year. That is the policy that we must avoid.

§ Mr. Michael J. Foster (Worcester)
Does my right hon. Friend agree that the Government's approach to the single currency is good for business and good for Britain? Does he also agree with a constituent of mine, Mr. Neil Bucktin, who wrote: The Conservative Party no longer wishes to face the future … it is hardly surprising if businessmen turn their attention to Labour"? Mr. Bucktin is chairman of Worcester Conservative Association.

§ The Prime Minister
I am in favour of as broad an alliance as possible, as my hon. Friend knows. I would add that, as my right hon. Friend the Chancellor emphasised on Monday, it is important to make preparations so that British business is in the position to handle the advent of the euro, because it will be affected by it. When we came into office, we found no serious preparation had been made by the Conservative party when in government. The worst thing that we can do is stick our heads in the sand, ostrich-like, which is the Conservative party's position.

§ Q5. Mr. Damian Green (Ashford)
The Prime Minister will be aware that, in another place this 867 afternoon, there will be a vote on whether next year's European elections will operate under the completely undemocratic closed list system that he prefers, or under a preferable open list system, which gives voters some choice. Indeed, I hear talk that he and his colleagues are so worried about the result that Liberal Democrat peers are being invited to vote against their party's policy and in favour of the Government's. Why does the Prime Minister object so much to giving voters choice and the freedom to express individual views on whom they want to send to the European Parliament? Will he admit that, for him, when it comes to competition between open democracy and central control, democracy loses every time?

§ The Prime Minister
One of the great advantages of having the Home Secretary sitting near me is that he can inform me that the closed list system was pioneered by the previous Government in Northern Ireland.

§ Q6. Mr. David Borrow (South Ribble)
Business leaders at the CBI conference in Birmingham this week expressed support for the Government's policy of preparing the economy for possible United Kingdom entry into the single European currency. They also expressed support for the Government's spending plans, and felt that they were sustainable and that cuts in public spending were not required. In view of the policies put forward by the Conservative party on both those issues, does my right hon. Friend agree that it will be many years before that party regains the confidence of UK business?

§ The Prime Minister
It is important that we hold to the plans for the £40 billion investment in our schools and hospitals precisely because it is the right investment for the future of the country, and because, in economic terms, this is the right time to make that investment. As for the social security spending, the vast bulk of the increase is accounted for by uprating pensions in line with prices, and by uprating child benefit; I assume that the Conservatives now oppose doing both. The shadow Secretary of State for Social Security has told us that he opposes the working families tax credit—

§ Mr. Iain Duncan Smith (Chingford and Woodford Green)
Keep family credit.

§ The Prime Minister
The hon. Gentleman says that we should keep family credit. The opposition make policy as they go along—[Interruption.] Even if they are not listening to the people, at least they are listening to me. That is an advance, I feel.

§ Mr. Duncan Smith
We created family credit.

§ The Prime Minister
The hon. Gentleman says he is in favour of family credit, yet the vast bulk of the remainder of social security spending is the old family credit. He says that he opposes the new working families tax credit, which gives better help to low-income families. What a ridiculous economic policy to have.

§ Mr. William Hague (Richmond, Yorks)
Last week, the Prime Minister said that, when the Jenkins report was published, he would be able to say whether he would meet 868 his commitment to have a referendum in this Parliament. Now that the report has been published, is the answer yes or no?

§ The Prime Minister
The answer is as set out by the Home Secretary last week. As for the timing, it has always been envisaged that it would be before the next election. That remains an option, but obviously, in the light of the specific nature of the Jenkins recommendation, as the new system cannot be introduced until the election after next, that remains an option too.

§ Mr. Hague
What is wrong with yes or no? Let me remind the Prime Minister what he said last week, when I asked him whether he was still committed to a referendum in this Parliament. He said: We have made it clear that we will state our position when the Jenkins committee reports tomorrow."—[Official Report, 28 October 1998; Vol. 318, c. 329.] Now he still does not have a position. Is that not because the Jenkins commission served up a dog's breakfast for the voters of this country? As the Prime Minister is fond of quoting the Home Secretary, I remind him that the Home Secretary said last week that the recommendations were much more complicated than the Government had expected. Does he agree with his Home Secretary about that?

§ The Prime Minister
What I actually said to the right hon. Gentleman was to wait and see what the specific recommendation was. It could have been for a system that could have been introduced at the next election, but as a matter of fact the report recommended a system that cannot be introduced until after the next election. That is why I have set out the policy. It is perfectly clear. If the right hon. Gentleman does not agree with it, that is up to him.

§ Mr. Hague
The Prime Minister wants the country to have a preferential voting system, but he cannot state a preference between yes and no. He has now avoided two simple questions, one of which was only whether he agreed with the comments that the Home Secretary made last week. He cannot say anything with any meaning on the subject because half his Cabinet and half his party disagree with the proposal. We can understand the attractions for him of a voting system that would get rid of a lot of them, but he has the Chancellor's economic policies to do that; he does not need the Jenkins commission. Why does he not now abandon the ludicrous nonsense of trying to gerrymander our voting system?

§ The Prime Minister
I notice that the right hon. Gentleman is rather happier talking about that than about the economy. The Tories' position is clear: they do not want a discussion, they do not want a debate, they do not want any change—but they are always against constitutional change. They were against devolution in Scotland and Wales; now they are in favour. They were against a freedom of information Act, and against reforming the House of Lords. I am more open minded. I prefer to let a debate happen.

§ Mr. Harry Barnes (North-East Derbyshire)
Does the Prime Minister agree that decommissioning of weapons in Northern Ireland is not the same as surrender? 869 It occurred with terrorist groups in El Salvador and in the Lebanon in 1991. Should not there now be a timetable— the sooner, the better—so that we get rid of weapons in Northern Ireland?

§ The Prime Minister
I would like decommissioning to start immediately. That has been the position of the Government all the way through, and remains the position. I hope that we can find a way through the current impasse which ensures that everybody has the confidence of knowing that, when they are engaged in negotiations about the future in Northern Ireland and, in particular, when they are engaged in matters to do with the government of Northern Ireland, they can be sure that those with whom they are negotiating and discussing those issues have given up violence for good.

§ Q7. Mr. Richard Livsey (Brecon and Radnorshire)
Will the Prime Minister use his good offices and his friendship with the new German Chancellor, Gerhard—[Interruption.]

§ Madam Speaker
Order. Mr. Skinner, order.

§ Mr. Livsey
I knew that he was connected with banking—Gerhard Schroder.
Will the Prime Minister do everything that he can to lift the ban on British beef exports? Did he raise that subject with Mr. Schroder on Monday, when they met? Is he aware that the European Union Standing Veterinary Committee today voted in favour of the date-based scheme, but by an insufficient majority? Will he proceed to ban the beef war and, indeed, sign the armistice soon, before Christmas?

§ The Prime Minister
I am pleased that the hon. Gentleman is on first-name terms with the German Chancellor. I certainly raised BSE with him. There is not a single Prime Minister, Minister, head of state or Head of Government anywhere in the European Union who does not get the full lecture on BSE, every time that I see any of them. On the BSE position, we had a simple majority of states in favour of lifting the ban. That is important, because it means that, if we hold that majority when we come to the Council of Ministers meeting, the Commission proposal, which, obviously, we support, goes forward.
We hope to do even better than that, but there is a lot of hard negotiating to do. Today's simple majority in our favour, although not enough to achieve a conclusion today, is a big step forward. We have to do an awful lot now, in terms of the measures that my right hon. Friend the Minister of Agriculture, Fisheries and Food is discussing with the farming industry and within the European Union, to help our farmers through the next few months.

§ Q8. Shona McIsaac (Cleethorpes)
Will my right hon. Friend sort out a mathematical conundrum for me? I have a report from my local newspaper in which the Tories claim that waiting lists at Grimsby hospital have increased, yet the hospital has confirmed that the decrease is more than 1,300. Will he send his congratulations to the hospital on that marvellous achievement, and send the Tories to numeracy classes?

§ The Prime Minister
I am happy to do at least the first of those. Waiting lists are coming down, in my hon. 870 Friend's area and in other areas, too. They were rising, year upon year, under the Conservatives. If we had proceeded with the Conservative plans to cancel the extra investment—the £40 billion in schools and hospitals—waiting lists would be even worse. There is only one party in whose hands the national health service is safe, and it is the labour party.

§ Q9. Mr. Andrew George (St. Ives)
Does the Prime Minister agree that the multilateral agreement on investment, if resurrected by the World Trade Organisation, would be nothing more than a solution without a problem? Does he believe that his friend in France, Mr. Jospin, was right or wrong to withdraw French Government support from the MAI?

§ The Prime Minister
We have made it clear that we support achieving agreement. I do not agree with the hon. Gentleman that the MAI is a solution without a problem. All these measures are part of trying to break down barriers to trade between countries. This country is a trading nation, and it is in our interest to have trade that is as free and open as possible. I would have thought that that was in the best traditions of the Liberal party.

§ Ms Linda Perham (Ilford, North)
Will my right hon. Friend welcome the Wye Plantation agreement on the middle east and congratulate all the parties involved? As he knows, the problem with the Oslo accords has been getting the backing of the people for the agreement. Will he and our European Union partners do their best to assist the process and ensure that there is a lasting peace in the region?

§ The Prime Minister
I am happy to congratulate President Clinton and all those who were involved in negotiating the Wye memorandum. We will do all in our power to support the agreement. We will be discussing options for European Union action at the General Affairs Council on 9 November. Certainly, as far as the EU is concerned, we stand ready to play our part. The agreement was a tremendous achievement and it is important that the memorandum gets the support of as many countries as possible. I have already discussed it with Chairman Arafat and Prime Minister Netanyahu and I look forward to doing so again.

§ Q10. Mr. Tim Collins (Westmorland and Lonsdale)
If global factors were the reason for cutting the growth forecast for 1999, what global factors justify increasing the forecast for 2000?

§ The Prime Minister
Precisely because—if the hon. Gentleman had bothered to research his question more closely he would have known-all forecasts are for a slowdown next year and a pick-up in growth later. The reason is that, because of the global financial crisis, there is an effect in Asia and 25 per cent. of the world is in recession, but, in time, recovery will happen. Therefore, it is important to steer the course of stability that we have outlined, and not to engage in the panic-stricken policies of the Conservative party, which would reduce the possibility of lower long-term interest rates by scrapping the independence of the Bank of England and cancel the investment that we have made. At some point in time, it would be interesting to have a coherent economic policy from a coherent Opposition.