HC Deb 25 November 1998 vol 321 cc210-304 3.39 pm
The Secretary of State for Trade and Industry (Mr. Peter Mandelson)

This Queen's Speech has one overriding theme—modernisation. We are modernising the country, its system of government, its public sector and the economy. We are modernising education, the health service, the welfare system, the relationship between Government and business, and the fight against crime. That is precisely the programme for which the British people voted. The change that they wanted is the change that they are getting from a changed Labour party.

Any attempt seriously to challenge or pick apart what the Government are doing was conspicuous by its absence from the Leader of the Opposition's speech yesterday, which, by the way, I thought was better than a sixth-form debating society speech—it was more an after-dinner speech.

I am sure that the right hon. Member for Wokingham (Mr. Redwood), the shadow Trade and Industry Secretary, would agree with me about that. He fancies himself as the more substantial, cerebral, worldly and charismatic leader—the Newt Gingrich of the Conservative party. I can hear him up at the Dispatch Box—the Press Gallery full, the fanatical cry of the true believers behind him—as he tears into the Government's intellectual inconsistencies and ideological inexactitudes.

Alas, it was not to be. The man who made it to the Dispatch Box was not the pretender but the leader himself, of whom the right hon. Gentleman once said: I've had more interesting conversations with a bathroom sponge.

Mr. John Redwood (Wokingham)

Will the right hon. Gentleman immediately withdraw that preposterous comment, which I never made? Will he accept that I thought that the Leader of the Opposition gave a superb speech yesterday, which tore the Government to shreds? The right hon. Gentleman should heed my right hon. Friend's message.

Mr. Mandelson

I think that the right hon. Gentleman has thrown in the towel already. He should not allow himself to be goaded so easily. On hearing the result of the Conservative party leadership election, he said that the worst of all six candidates had been chosen.

Mr. Redwood


Mr. Mandelson

A denial?

Mr. Redwood

That was another misstatement by the right hon. Gentleman.

Mr. Mandelson

What a way to speak of one's leader. We certainly would not get away with it in our party—the men in the dark would not stand for it.

What, after the rhetoric was finished, was left of the bathroom sponge? In my view, there was very little. The Conservatives cannot oppose the investment and reform in schools. They do not dare oppose the money for and change to the national health service. They would not know where to start in presenting an alternative to welfare reform and, in the fight against crime, they are precisely nowhere.

That is not surprising from a party that, in 18 long years, talked a good game but travelled backwards. It has now decided to win back the political middle ground by lurching further to the right. In the process, it has offered no new ideas, no shred of analysis and no proposals to modernise Britain—nothing, zero, zilch. While the Government modernise, they sloganise.

The Government will stick to their guns. We will not be deflected—however many battalions of hereditary peers are thrown in our way—from our programme to strengthen democracy, to create opportunity and higher living standards and to bring about improvement for the many and not the few.

The Government's legislative programme for this Session is founded on the twin themes of modernisation and fairness. Labour's first Session in government for 18 years saw an unprecedented programme of legislation—47 Acts of Parliament in 18 months. My Department has been at the heart of that effort.

What a contrast with the previous Administration. In the two Sessions before the election in May last year, the Department of Trade and Industry took through just two programmed Bills—just two. In the Session that has just gone, we put five Acts on to the statute book.

The Competition Act 1998 will finally reform a competition regime that was widely regarded as out of date, toothless and badly in need of a rethink. We did that—the Tories promised to do so, but delivered nothing. Now, of course, the right hon. Member for Wokingham claims that he never supported that reform anyway. How comforting that must be to business—to know that all the time he was representing their interests as the Minister responsible for competition, he never actually believed in it.

The National Minimum Wage Act 1998 is a key part of the Government's commitment to fairness and decent minimum standards. The Wireless Telegraphy Act 1998 will encourage the efficient use of an increasingly scarce resource which will be vital to our drive to build a business environment that fosters innovation and encourages enterprise in the information age. The Fossil Fuel Levy Act 1998 is a clear commitment to the promotion of renewable energy sources. Last but not least, the Late Payment of Commercial Debts Act 1998 establishes the principle that small firms cannot and should not be bullied by larger competitors. Five Acts were initiated from my Department, Madam Speaker, compared to none at all from the Conservative Government in the Session before the election.

Our commitment to legislation which is based on modernisation and fairness will continue in the coming Session. First, we will aim to modernise employee relations so as to promote partnership at work and underpin a flexible and efficient labour market. What is clear to everyone bar the Conservative party is that workplaces where there is mutual respect and minimum standards of protection, safety and consultation, work better and more productively.

If businesses are to be competitive, to innovate and to anticipate their customers' needs, they need the wholehearted commitment of their employees. That commitment will be given by people who feel that they are treated reasonably and fairly. That underpins our proposed legislation.

We will introduce a forward-looking Bill to modernise our framework of employment law. The Bill will honour all the commitments that we gave in the White Paper which we published earlier this year. It will address family-friendly employment practices, to reflect the fact that the labour market is changing and needs more, not less, flexibility to enable men and women to cope with home and work; it will provide new rights for individuals at work, including greater protection against unfair dismissal; and establish a new statutory procedure for the recognition of trade unions.

We have listened carefully to all the responses to the White Paper, and they have helped us to develop and to refine the detail; to fill in the gaps; to ensure that the proposals will work well and strike a fair balance; and, yes, to give reassurance, where justified, to employers who are understandably concerned about the impact of the proposed legislation on their businesses.

Let me make this further point, too. Our measures are well judged for our country's needs. Others in Europe may have their own views on what is appropriate for their domestic needs. In this matter of collective rights and workplace relations, where there are wide differences of practice between member states, subsidiarity is important—that means each acting according to his own need and his own willingness to sign up. I would like all in the European Union to respect that principle in employment and social legislation.

Mr. Christopher Gill (Ludlow)


Mr. John Bercow (Buckingham)


Mr. Mandelson

The second item of proposed legislation being prepared by my Department goes to the heart of Britain's economic future—the harnessing of the internet to business, and the contribution that electronic commerce will make to our competitiveness. Electronic commerce is radically changing the nature of individual businesses, markets and entire economies. However, most of our laws—in the United Kingdom and elsewhere—were designed to regulate the trade in physical goods. The countries that first succeed in adapting their legal and regulatory environment to the requirements of electronic commerce will achieve all the advantages of the first mover. We must be the trail-blazers, at the front of the pack.

There is a hugely important leadership role for my Department in partnership with the private sector. It must become nothing short of a national crusade for Britain to become world leaders in internet business and in generating electronic profits. That is why the Government have set the ambitious goal of creating in the United Kingdom the best environment in the world for electronic trading by 2002.

The White Paper on competitiveness, which I shall publish shortly, will set out our strategy for achieving that. At its heart will be legislation to ensure that businesses and consumers have the same confidence in electronic transactions as they do in pen-and-paper agreements.

Mr. John Hayes (South Holland and The Deepings)

Will the Secretary of State give way?

Mr. Mandelson


Those exciting developments are part of the fast evolving knowledge economy. With ever greater computing power and more connected, more international networks, the result is global competition on a vast scale, with low barriers to market entry and mind-boggling innovation.

Mr. Bercow

Will the Secretary of State give way?

Mr. Mandelson


For the weak and uncompetitive in our economy, for those who are unwilling to change, this revolution will pose a threat. Only for the competitive and strong, for those who are open to new ideas, it presents a major opportunity.

Mr. Hayes

Will the Secretary of State give way?

Mr. Mandelson


Mr. Owen Paterson (North Shropshire)

On a point of order, Madam Speaker.

Madam Speaker

I fear that it will be a point of frustration.

Mr. Paterson

Correct, Madam Speaker. I have been in the House only 18 months, but I understand that it is the convention that one does not interrupt a ministerial statement but that one is allowed to ask to intervene during a debate. Is this a statement or a debate?

Madam Speaker

This is undoubtedly a debate, but of course it is for the Minister or whoever has the Floor to determine whether to accept an intervention. That is not a matter for the Chair.

Mr. Mandelson

It is for all the reasons that I have given that we put so much stress on raising companies' competitiveness. To create and safeguard the employment that we need, we must ensure that the weak in our economy become the strong. Let us be clear: the knowledge revolution is not a revolution of an elite of knowledge-based services or high-tech businesses. It applies to such businesses, of course, but it applies to all businesses: to large and small; to manufacturing and services in all parts of the country.

Some question the relevance of the knowledge economy to manufacturing, but they forget about design, product control, market creation, marketing itself and best practice management, all of which require knowledge workers. To take an example that is topical this afternoon, farming is still one of the most manual of industries, but many modern tractors are mobile offices, and some even have satellite location devices installed.

The truth is that competitive advantage increasingly depends on knowledge: on new ideas for new products. Better use of knowledge means designing products that better suit customers' needs, creating less pollution, higher profits and more rewarding jobs.[Interruption.]

Mr. Bercow


Mr. Paterson


Mr. Mandelson

It does not surprise me that Opposition Front Benchers have no interest in the future of the economy. They are chattering among themselves. To give them the chance to recover their posture, I shall give way, not to the hon. Member for Buckingham (Mr. Bercow) but to the hon. Member for North Shropshire (Mr. Paterson), who is wearing a more highly coloured tie.

Mr. Paterson

I am touched by the compliment to my tie, but I wish to bring the Secretary of State back to the subject of the debate—trade and industry. Why do countries that have pursued the employment policies pushed through by his Government have levels of unemployment two or three times higher than those of this country, which is enjoying the benefits of the policies of the previous Government?

Mr. Mandelson

The hon. Gentleman must realise that we have no intention of introducing any legislation that presents a burden on business and reduces the competitiveness of British firms. Our aim in employment legislation is simply to increase flexibility in our labour market and also—I am sorry it is an alien concept to Conservative Members—to introduce an element of fairness and minimum standards of safety and protection for people who work in this country. I do not expect the hon. Gentleman to support that, given what he believes in and the party to which he belongs, but that is what we believe in and what we intend to do.

Mr. Bercow


Mr. Graham Brady (Altrincham and Sale, West)


Mr. Mandelson

I shall give way to the hon. Member for Altrincham and Sale, West (Mr. Brady).

Mr. Brady

I am grateful to the Secretary of State for giving way to me. My hon. Friend the Member for Buckingham (Mr. Bercow) is performing a service for other Opposition Members who wish to intervene.

The Secretary of State suggested that he has no intention of adding costs to industry, which bemused Conservative Members. Has he read the submission by the Engineering Employers Federation to the Department of Trade and Industry about the enormous complexity of the regulations on the national minimum wage, and does he accept that there is a problem?

Mr. Mandelson

I do not know what the problem is to which the hon. Gentleman refers. The Confederation of British Industry has made it clear that it is content with the way in which the Government have introduced the national minimum wage, and it has co-operated with us throughout. The CBI and others are now considering the draft regulations that we have published which will cover the implementation and enforcement of the national minimum wage. We look forward to hearing everyone's views in the consultation, and I assure the hon. Gentleman and the House that every comment and observation submitted to my Department about those regulations will be carefully considered.

Mr. Bercow


Mr. Barry Sheerman (Huddersfield)


Mr. Mandelson

I give way to my hon. Friend.

Mr. Sheerman

The Opposition have brought the Engineering Employers Federation into the debate, but those of us who regularly meet its representatives hear what they say about the inheritance of 18 years of failure to educate and train people in the new technologies. That is the real burden that our industry faces, especially engineering. It faces the lack of modern apprenticeships and not enough well-trained workers. That deficiency in skill levels is undermining our performance and it is an inheritance from that lot—the Conservatives—who have nothing to boast about.

Mr. Mandelson

Yes, and every business and employers' organisation I talk to knows that we have to make up for the lost time under the previous Administration. Those businesses and employers organisations have a profound understanding of where our economy is going and the challenges posed to every business by the creation of a knowledge-driven economy.

Mr. Bercow


Mr. Phil Willis (Harrogate and Knaresborough)


Mr. Mandelson

I shall give way to the hon. Member for Harrogate and Knaresborough (Mr. Willis).

Mr. Willis

I am grateful to the Secretary of State for giving way and for bringing into the debate some of the real issues, one of which is the knowledge capital that we need for the next millennium. Why did not the Government include in the Gracious Speech a Bill to cover lifelong learning, especially as they published a Green Paper about it in the previous Session? Such a Bill should be at the heart of the Government's intentions for the development of human capital, and would address the point made by the hon. Member for Huddersfield (Mr. Sheerman).

Mr. Mandelson

The very important initiative that was heralded by the lifelong learning Green Paper is already up and running. It has already been established that the headquarters of the university for industry will be in Sheffield. That represents an extremely important step forward for the knowledge capital to which the hon. Gentleman is referring. It creates huge opportunities for many millions of people in this country.

We need only look at the sources of competitiveness and lower costs that come from the development of the knowledge-driven economy. For example, General Motors saved $1.5 million on painting costs through the better use of information, and the General Electric Lighting company secured a 30 per cent. cut in procurement labour costs through internet purchasing.

In common with companies, countries need to stay ahead of the game or they will be replaced by new entrants.

Mr. Barry Jones (Alyn and Deeside)

Will my right hon. Friend give way?

Mr. Mandelson

If my hon. Friend will allow me, I wish to make some more progress.

The forthcoming White Paper will set out how the Government plan to help build a knowledge-driven economy, to put the future on Britain's side and to reverse this country's economic decline of the past 20 years or more. It will set out what we are doing to enhance the capability of business, how we plan to help businesses to collaborate with each other to compete and to collaborate with others in the public sector and in education, and how competitive markets should drive innovation and enterprise.

Caroline Flint (Don Valley)

Will my right hon. Friend give way?

Mr. Mandelson

Let me make some more progress.

We have strengths on which to build in this country. We have a world-class science base, we have enterprising people—many with the right skills, but others willing to acquire them—and we have a strong digital infrastructure.

The Government are playing their part, with £1.4 billion additional funding in science announced in the comprehensive spending review, a programme of investment in education that is one of the largest committed by any Government anywhere and a programme to build up the skills of those starting new and innovative businesses. I set Business Links a challenge to support 10,000 such businesses a year by 2002. We are developing more imaginative ways of financing growth businesses and new measures to spread the adoption of digital technologies by small and medium-sized firms.

To underpin all those measures, we need a culture change to support enterprise, to applaud success and to remove the stigma of honest failure. Here again, the Government must give a stronger lead, and I shall be announcing measures to address that aspect, too.

This is not about Government telling business what to do. It is important that we lead through our own activities, in particular by working towards the Prime Minister's target that 25 per cent. of Government services should be available electronically by 2002. I stress that the greatest contribution the Government can make to enterprise is by ensuring that open and transparent markets provide the spur to business to innovate and become competitive. That is a key role and responsibility of the Department of Trade and Industry. We must ensure that all our policies—across the board—promote innovation and risk-taking, and help build the knowledge-driven economy in which enterprise flourishes.

When I spoke of the knowledge-driven economy and the importance of electronic commerce in our previous debate, the right hon. Member for Wokingham, the shadow spokesman, shouted, "Rubbish" and, "Claptrap." That is not surprising from someone who inhabits Planet Zog and remains blissfully unaware of the conditions and challenges facing business in the real world. I believe that he is wrong. In fact, he is more than wrong; he is being quite stupid. He refuses to see the opportunity that the information age and the knowledge-driven economy present to reverse the long years of decline that the Tories did nothing to prevent.

We are not going to take chances with Britain's future.

Mr. Barry Jones

Will my right hon. Friend please give way?

Mr. Mandelson

In advance of the White Paper—

Hon. Members

Give way.

Mr. Jones

Will my right hon. Friend please give way?

Mr. Mandelson

I will give way soon if my hon. Friend will allow me to continue for the moment.

In advance of the White Paper, I can announce the Prime Minister's decision to appoint a high-ranking digital envoy—[Laughter.] See how the Tories laugh. They are locked somewhere in the last century and they have not the faintest idea of what is happening in the real economy, and not one idea or one shred of analysis to support the sort of economy that we must create.

Mr. Bercow

Will the right hon. Gentleman give way?

Mr. Mandelson

Locked in the past, locked in the past, locked in the past.

The Prime Minister is absolutely right to appoint a person to help prepare Britain for and to lead us into the digital future. That individual will speak for the United Kingdom in the international arena, will promote the United Kingdom as a global hub for electronic commerce business and investment, and will drive forward the cross-Government strategy for electronic commerce that I shall set out in the forthcoming White Paper. The advertisement for the new post will be in next week's press, but the shadow Secretary of State need not apply, as he seems far from looking to the future. We want someone who can look to the future, not someone who prefers to play politics with the nation's future and to talk down our economic prospects, as the right hon. Gentleman persistently does.

Mr. Barry Jones

I appreciate my right hon. Friend's cogent speech, and I enjoy his teasing of his shadow. May I tell him, however, of the sense of dread in the British steel industry? The problem appears to be the dumping of steel products from the far east, which is putting many of our largest steel works at a great disadvantage. Can the Government intervene to urge the European Commission to do something about such dumping?

Mr. Mandelson

My hon. Friend raises an issue that is of great concern to the steel industry and its employees. I recently met Sir Brian Moffat, the chairman of British Steel, and the executive heads of the British Iron and Steel Producers Association. I learned at first hand the extremely difficult trading conditions that they face, and I heard the allegations that have been made of unfair trading and dumping by some countries. I have invited them to submit details to the Department of Trade and Industry, and to the competent body—the Commission of the European Union. It is for others to submit such details and allegations, but I shall ensure that allegations are properly examined, and that where action can and should be taken, everything will be done to ensure that it is.

I want to return to what the Opposition have said in the past. They have not said it today, but the shadow Secretary of State will no doubt remedy that fact when he rises to trot out the same tired phrases warning of economic catastrophe and disaster.

Mr. Bercow

Will the Secretary of State give way?

Mr. Paterson

Will the Secretary of State give way?

Mr. Mandelson

I have given way once already to the hon. Member for North Shropshire, and I do not think that he should come back for a second go.

The shadow Secretary of State will accuse the Government not only of selling out the British economy, but of fiddling the figures and of making up the productivity gap, which, in fact, as everyone knows and as every independent commentator acknowledges, separates us from our competitors.[Interruption.] It is amazing how quickly after leaving office the Conservatives have ceased to resemble a governing party, and how hard they find it to muster the credibility needed by any half-decent official Opposition. Nowhere—

Mr. Bercow


Mr. Mandelson

The hon. Gentleman may want to intervene later, because I was about to say that nowhere is that lack of credibility more demonstrated by the Opposition than in relation to Europe. The European Union gives the United Kingdom access to a market of 370 million consumers—it is by far our largest market. That is why, even though we will not be joining the economic and monetary union on 1 January, we are determined to work towards its successful introduction. Should it be in our economic interests to do so, and should Parliament and the people give their assent, we have made it clear that we believe that Britain should join. The Opposition are in a terrible mess.

Mr. Stephen Dorrell (Charnwood)

The Secretary of State is dealing with an issue that is important for this country's future economic performance: the relationship between this country and Europe. The question for the Government is whether it is their policy to create convergence between this country and the member states of the euro. If not, do they believe that convergence circumstances could come about without that being their explicit policy?

Mr. Mandelson

It is certainly the case that one cannot create convergence between economies artificially by means of contrived accounting. There must be real convergence. Most people would agree that objective circumstances are leading us towards convergence and, indeed, the economic policies and strategies that the Government are pursuing are assisting that process. I have not the faintest idea whether that is welcome to the right hon. Gentleman, because he has adopted a number of positions on the single currency and it is Wednesday today, so I do not know what position he may be holding.

Mr. David Chidgey (Eastleigh)

Perhaps we could draw the debate back to the Government's position on the euro. I believe that I am right in saying that the right hon. Gentleman said that, when it was in Britain's economic interests to join, it would be the Government's policy to recommend that process. Will he advise the House of any scenario in which he felt it might not be in Britain's economic interests to join the euro?

Mr. Mandelson

If the convergence of our economies has not been achieved and if, in our opinion, the objective economic circumstances and the necessary structural reforms and flexibilities that need to exist throughout the economies of Europe have not yet been achieved. We have to fulfil all those tests. Those are important questions for us to answer, and answer them we will, but not now; we will do so in due course, when the economic circumstances arise and when it is in our economic interests to do so. In the meantime, we will do what any half-intelligent Government would do, which is to prepare for the eventuality of our entry to the single currency so that, if and when we are in a position to enter it, we can put that choice to Parliament and the British people, who can then take that decision to go in. For us to do so successfully, British business must have prepared beforehand.

Mr. Geraint Davies (Croydon, Central)

While I agree with the Government's policy, does my right hon. Friend agree with the 114 leading business men representing 20 FTSE companies, who put their names to a statement in the Financial Times on Monday and who said that the best policy for Britain would be one based on the assumption that we will join the single currency? The reverse would be that, if we proceed on the assumption that we will not join, there will be massive disinvestment in British industry.

Mr. Mandelson

We have to take very seriously the views of British business and, in particular, the views of those business people who signed the advertisement and made that statement, because they are operating not in the pursuit of some right-wing political ideology but in the interests of their business, and therefore the economic interests of this country. I talk to business men a lot—both to the mildly pro-Europe and the mildly anti. What unites them is their complete bewilderment and bemusement at the mess that the Opposition are in on the subject. We have only to listen to them on the subject. Some in the Conservative party say, "No single currency for 10 years." Others say, "Not in our lifetime." Given the average age of Conservative association members, I do not know which is the more Euro-sceptic position.

Mr. Bercow

Will the right hon. Gentleman give way?

Mr. Mandelson


I want to be clear about this, too, and I emphasise it: if economic and monetary union is to be successful, there must be a flexible, competitive Europe and comprehensive structural reform in Europe's labour, product and capital markets. That is an absolutely indispensable condition for EMU to be launched successfully and on a sustainable basis. That is what we argued in our presidency, and it is what we shall continue to fight for through the processes agreed at the Cardiff summit.

I welcome the wide support across Europe for that agenda of structural reform, which has been voiced by Chancellor Schröder; Massimo D'Alema, the new Italian Prime Minister; and Dominique Strauss-Kahn in France. That unity of view, and that degree of consensus about the need for structural reform—economic reform—in Europe if the single currency is to be a success, is the most striking feature of the current political scene.

Caroline Flint

My right hon. Friend may be aware that there is a lobby of Parliament today by textile workers. In relation to textiles and his argument about Europe, will his Department consider encouraging innovation in our small and medium textile enterprises? Italy, for example, supports its textiles and clothing industry. This country has 350,000 workers in that industry, but many are in small and medium enterprises which need the thrust of the Government to support innovation and competition. I hope that we can learn something from our European neighbours.

Mr. Mandelson

I could not agree more with my hon. Friend about the importance and the potential of that industry. I am glad to tell the House that my hon. Friend the Minister for Energy and Industry only yesterday met representatives of the employers and of the trade unions, all of whom share that strong commitment to the future of the textiles industry. My Department stands by to assist them in all their efforts and to do everything that it can to make sure that the industry has a successful and prosperous future.

When we took office, we apparently inherited a golden economic legacy. [HON. MEMBERS: "Hear, hear."] Conservative Members never tire of cheering that. They tell us that they left us a Ferrari of an economy—some Ferrari.

Mr. Redwood

Will the right hon. Gentleman give way?

Mr. Mandelson

The Conservatives had put the economy up on blocks, stuck it in reverse and taken a large number of miles off the clock.

Mr. Redwood

I am grateful to the right hon. Gentleman for giving way. In 1995, BMW-Rover said that Britain was the best place, bar none, in Europe for investment in the motor industry. When the Conservatives left office, the investment was proceeding and the company was profitable. Why is it now losing heavily? Why is there a crisis at Longbridge? Have not the Government's mistakes caused that?

Mr. Mandelson

The right hon. Gentleman may not have noticed that the Government do not own or run Rover; Rover owns and runs Rover, and that is how it will remain. I am sorry about what has happened to Rover, because it is an excellent company with great potential, but its slide in relative productivity did not start on 2 May 1997. It has its roots in lack of strategic grip and poor management decision making. Management decision making should have got on top of the situation a long time ago, before it created the difficult circumstances and conditions that now face the company.

I am glad that management and work force at Rover are now joined in a firm commitment to achieve changes and restructuring in the company to make sure that it has a future. The Government have stood by and helped to facilitate those important discussions within Rover, and we shall continue to do so. We shall give whatever support it is sensible and appropriate for us to give to ensure that those changes take place.

Mr. Bercow

Will the Minister give way?

Mr. Mandelson

Well, I—[HON. MEMBERS: "No."] I give the casting vote to the Speaker, who has given me the nod.

Mr. Bercow

I am most grateful to the right hon. Gentleman for reluctantly giving way.

If the Minister is as concerned about competitiveness and regulation as he claimed earlier in his speech, why did he have the brass neck, on 4 November, to dismiss the CBI's estimate of an annual cost of £200 million for the parental leave directive as "a tiny fraction" of business costs? Why was he unaware that his Department had produced an alternative estimate of £55 million a year? Why was he so palpably ignorant of the matters for which he is ministerially responsible to this House?

Mr. Mandelson

That is a very important question, and it was well worth waiting for. I do not dismiss £200 million lightly, without coupling it with the observation—as I did—that employers and their representatives in Europe joined hands with trade union representatives in agreeing that the measures be adopted.

Mr. Bercow

indicated dissent.

Mr. Mandelson

I am sorry if the hon. Gentleman cannot agree, but that is his Euro-sceptic privilege. He agrees with nothing that comes within a million miles of the European Commission. An agreed measure was proposed, and this country would do well to implement it.

The right hon. Member for Wokingham is doubtless about to leap to his feet to disown the previous Government's record in office, as he spent our last debate doing, and say, "Not my fault, guy. All the others' doing. I was nowhere near the clot when the decisions were taken." I do not know what the right hon. Member for Huntingdon (Mr. Major), who is lurking on the Back Benches ready to intervene, will have to say about that. Incidentally, the entire House will join me in offering him our sincere congratulations on his new honour.

I for one am sick of the Tories disowning their record: macro-economic instability; a relentless cycle of boom and bust, which cost a million jobs every time they had to slam on the brakes; a huge productivity gap; a real performance shortfall, with no statistical fiddle, as the right hon. Member for Wokingham asserts; and a culture of social exclusion, with millions throughout the land cast aside with no skills, education, jobs or hope. Those people had a vote, and they used it at the last election. We started immediately to put things back together again.

I do not pretend that all is rosy in the economy. Anyone with half an eye on the world economy, a quarter of which is now experiencing recession, knows that all is not rosy. However, despite the Asian crisis, Britain's exports to Europe and the United States continue to grow in both value and volume. Employment rose by 124,000 in the three months to September, and we continue to attract record inward investment. This week, the Economist intelligence unit—not Millbank—announced that we remain one of the most favourable locations for investment in the world. The right hon. Gentleman may be interested to know that it cited, in particular, Labour Britain's business-friendly climate, the sophistication of our capital markets and the fact that our labour market will remain one of the most flexible in the world as the reasons for our continuing to be a number one target for inward investment.

We have made it clear in the legislative plans announced in the Gracious Speech that this country's future depends on realising the potential of our people. It is no longer acceptable to write off one third of the population through sheer neglect. They deserve better. We began to provide that on 2 May 1997, and we shall continue to do so in the coming Session.

4.25 pm
Mr. John Redwood (Wokingham)

We are thrice blessed in this debate. We are blessed with the presence of the Minister of State, the hon. Member for Makerfield (Mr. McCartney), who is listening attentively.The Spectator named him a parliamentarian of the year in the award ceremony earlier today. I am sure that we all want to congratulate him. He may need our commiserations, because I understand that he is the "Minister to Watch". Some Ministers who are watched too closely never recover from the experience, but it is perhaps the Secretary of State who should watch out, because the Minister of State has shown himself to be a formidable performer over the years.

Our second blessing is the participation of my hon. Friend the Member for Buckingham (Mr. Bercow). I am not surprised that the Secretary of State was so reluctant to take his interventions, because he won the award of "Back Bencher to Watch". I have been watching him for a long time, and I like what I see. He is not afraid to tell the truth and to threaten the Government.[Interruption.] Before Labour Members get too excited, I should point out that they were part of the conspiracy to close my hon. Friend down in this important debate. They knew that he would put the Secretary of State on the spot, so they had to give him some cover and protection.

Our third blessing is that we are honoured with the presence of the Secretary of State, on his most recent visit from cyberspace. He delivered a virtual speech. I wondered whether the parade of platitudes would ever end, and whether he would mention British industry. We had to drag it out of him by interventions and questions. He even seemed tired of his own monotonous tone of voice. It was a dreadful performance from the Secretary of State, and it will not go unnoticed in the industrial heartlands of this country.

The Minister for Energy and Industry (Mr. John Battle)

It says here.

Mr. Redwood

The Minister of State believes that my remarks are scripted. How could they possibly be scripted when I am responding to the debate from notes I made during the Secretary of State's speech, so that I do him no conceivable injustice? When I have finished with this sheet, the Minister is welcome to inspect it to see that I came, I listened and I discovered that the speech was sadly lacking in any substance, any hope for British industry or any sign that the Secretary of State understands why British manufacturers are struggling.

The shadow Minister of State, my hon. Friend the Member for Daventry (Mr. Boswell), said in a debate the other day that what we see of the Government's attitude to manufacturing industry is four soundbites and a funeral."—[Official Report, 10 November 1998; Vol. 319, c. 197.] Once again, the Secretary of State came to the House to perform the last rites. So worried is he about the state of manufacturing industry, that he can get through an entire script—although not all the interventions—without mentioning British manufacturing or British industry. There was no mention of the textile workers on a lobby, and no mention of the plight of British steel.[Interruption.] I just said that there were interventions on these matters, but there was no mention in the Secretary of State's text of the textile and steel industries, and his only reference to the motor car industry was an attempted joke at the expense of the previous Government.

The Secretary of State does not care about basic manufacturing industry, about closures or about the damage that his policies are doing. He said that the Opposition have no policies to modernise Britain. That is grossly unfair. In the area over which the Secretary of State and I spar, the Opposition are coming up with imaginative ideas that could make a difference and improve life. Why is the Secretary of State still unable to say whether he will introduce competition into the water industry? We have set out a way of doing that. That important monopoly industry needs the competitive challenge. If he is so keen on competition, why will he not answer our question, and why will he not back our plan?

When will the right hon. Gentleman respond to our plans for the Post Office? Why must we wait for month after month, with our Post Office unable to compete properly because its hands are tied behind its back by the Secretary of State's lack of a policy? When will his right hon. Friend the Secretary of State for the Environment, Transport and the Regions produce policies aimed at raising significant private finance for the tube system, which desperately needs new investment and has been starved of cash by this miserable Government?

Yvette Cooper (Pontefract and Castleford)

While the right hon. Gentleman is talking about policy, perhaps he can clear up a key policy issue that greatly concerns British industry.

Yesterday, the right hon. Gentleman shook his head vigorously when the Prime Minister suggested that his party wanted to reverse Bank of England independence. Perhaps he will clear up that point of principle now. Does he support the deputy leader of his party, who said that interest rate decisions should be made by the Chancellor and not by the Bank of England?

Mr. Redwood

I shook my head at the Prime Minister's pathetic performance in response to the formidable performance of my right hon. Friend the Leader of the Opposition—although their respective performances did not surprise me.

I have been very clear about my position, the position of my right hon. Friend the Leader of the Opposition and the position of all members of the shadow Cabinet in regard to the Bank of England. We opposed granting it independence. We said that that would be very damaging, and we were right: so far, it has proved very damaging to British business. In 2001 or thereabouts, when we have a general election, we will tell the hon. Lady and her colleagues what is the right policy for 2002. She can read nothing into that answer, except that the Opposition have been right so far. They have opposed the independence of the Bank of England vigorously, because so far it has been wrong. But of course we shall look carefully at the situation in 2001, when there will be so many things to put right that we shall have to choose which to put right first.

Mr. Dale Campbell-Savours (Workington)

Perhaps I can raise another sensitive little subject. If the euro were to succeed, and if the European countries benefited generally from its introduction, would the Conservative party go into the next general election on the basis of wholesale opposition and refusal to join the currency?

Mr. Redwood

There is no way in which a case for the success of the euro can be proved by the time of the next election. The euro notes and coin will not even be in circulation by that time. We are saying that we should not rush in. We should see the euro through at least a complete economic cycle. We must see the whole scheme up and running—and that means the notes and coin as well as the bank accounts and the invoicing, which will go ahead on a random basis from the beginning of January next year, depending on the choice of agents and companies on the continent.

The hon. Gentleman is right in supposing that the Conservative party will go proudly into the next election saying no to the euro for the following Parliament, because it would be too risky for the United Kingdom—for her businesses and her democracy—to join the scheme on such a time scale. I only wish that the Labour party had the courage to put the matter to the British people now. We would love to fight the referendum now: the Conservatives would achieve a spectacular result, and British business could then be relieved of its uncertainty. The Government should understand that that uncertainty is caused by their ridiculous policy. They say that they wish to join the European currency—

Mr. Bercow

Will my right hon. Friend give way?

Mr. Mandelson

Give way.

Mr. Redwood

The Secretary of State will know that, unlike him, I am going to give way at any minute, but I am making an important point. The Government should know that the uncertainty is of their making. Business does not know whether to spend £10 billion or £15 billion on preparing for the euro as our currency—because the Government say that in principle they want it—or whether to take our advice, and decide that the Government will not win the election or the referendum and that it is therefore better to save the money. That is the uncertainty that the Government are creating for business.

Mr. Bercow

I am grateful to my right hon. Friend for his characteristically generous remarks a few moments ago.

Does my right hon. Friend not think it extraordinary that, for all his ostensible enthusiasm for the United States economy, the Secretary of State, when challenged before the Trade and Industry Select Committee on 4 November about the merits of sunset regulation in the United States—whereby regulations lapse automatically after a period if they are not considered useful—said that he did not know what that meant?

Mr. Deputy Speaker (Mr. Michael J. Martin)


Mr. Bercow

Does my right hon. Friend accept that, even at this late stage, he can educate the Secretary of State?

Mr. Deputy Speaker

Order. When I get to my feet, the hon. Gentleman must sit down.

Mr. Bercow

I have finished.

Mr. Deputy Speaker

I know that the hon. Gentleman has finished, because I have finished him. His interventions are far too long.

Mr. Redwood

My hon. Friend the Member for Buckingham made a very powerful point. It is amazing that a Secretary of State who speaks the language of deregulation has no idea what a sunset regulation might be. It shows that he is not thinking the language of deregulation into action. The first thing that one learns when deregulating is to ensure that no regulation can last too long, and that a positive act must renew it if it can be demonstrated that it continues to be required.

The Secretary of State spent most of his speech on the subject of electronic commerce. He dared to say that the Opposition do not understand the importance of it, and implied that we do not wish the industry well. He should know that I come from the Thames valley, which is at the forefront of electronic commerce. I am extremely proud of my constituents' achievements in companies there. I can tell the Secretary of State this for nothing: they know a great deal more about electronic commerce than he ever will. They are already running very dramatic, profitable and successful businesses using electronic commerce, and the last thing they want from him is messy, meddlesome regulation which could make their task more difficult. He would be well advised to be careful before his regulation intrudes into a very successful and growing part of the British economy.

Mr. Mandelson

Will the right hon. Gentleman clear up something for me? He talks about messy, meddling intervention. Why, therefore, was it the Conservative party's policy when in office to introduce legislation on mandatory licensing?

Mr. Redwood

The form of that licensing did not result in preventing people from doing things that they wished to do, or restricting their action. It was put out to consultation. The issue before us is whether it is a good idea for the Secretary of State to press on with legislation which many in the industry think is half-baked, not thought through and potentially damaging.

Mr. Mandelson


Mr. Redwood

I will give way when I have finished my point. The Secretary of State should know that the advice that I have taken so far from the industry is that the Bill is in search of a policy—as always with this DTI—and that the ideas so far are different from those of the previous Conservative Administration and would be damaging.

Mr. Mandelson

The proposed electronic commerce Bill will introduce a voluntary licensing regime for bodies providing electronic signature and confidentiality services. What is the Opposition's policy? Is it to stick with the unpopular policy that they had in government, or to support ours? Which is it?

Mr. Redwood

Our policy now is to be very careful about any legislation in this area and to be very critical of proposals that we think will emerge in the Bill. The Secretary of State is not in a position today to tell the House how he intends to regulate inscription and signature. I am very suspicious of him finding a way of doing so with any success. Assuming that he will not, I assure him that we shall oppose the legislation. Does he wish to intervene to clarify what he will do?

Mr. Mandelson

I just do not understand this. Where and when did this conversion take place, and for what reason? The previous Government proposed a policy of statutorily backed mandatory licensing. Why has the right hon. Gentleman changed his view?

Mr. Redwood

I do not seem to remember supporting that proposition at the time—[Interruption.] We have consulted widely on these matters. Trying to legislate successfully in the area would be hazardous. We shall be very critical of any Government proposal which we think could be damaging. I am quite sure that those who worked on the proposals under the previous Government would be very happy to explain what they had in mind, and will be free to table amendments in Committee to try to make the Bill more to our joint liking. According to my industry sources, the Government's proposals are a long way from the previous Government's original ideas and would be very damaging—[Interruption.]

Mr. Deputy Speaker

Order. The House must come to order.

Mr. Redwood


Fiona Mactaggart (Slough)

Will the right hon. Gentleman give way?

Mr. Redwood

indicated assent.

Fiona Mactaggart

Does the right hon. Gentleman accept that businesses in the Thames valley might think from what he is saying that he is putting a higher priority on a petty attempt to put down the Secretary of State than on their future profitability? When I talk to them, I certainly expect that to be their interpretation of his remarks.

Mr. Redwood

I do not think that the hon. Lady understands the matter, either. I have consulted on the issue with businesses in and just outside my constituency, and have promised to represent their views. On both encryption and signature, they are very worried that even a permissive, voluntary system could damage their commercial interests.[Interruption.] The Secretary of State is not interested in the issue. He is making that quite clear by his juvenile sedentary interventions.

I assure the Secretary of State that the Opposition are very concerned that we must have the best possible climate in all senses—tax, regulation and general economic performance—for the success of the electronic commerce industry.

I assure the Secretary of State also that I am well aware that we are one of the world leaders in the industry. There are some things that we can learn from the United States, and some things that it can learn from us. There is work to be done on that. However, I am not yet satisfied that the measures that he will propose will help the cause of electronic commerce in Britain. He must allow me to reserve my scepticism until he can make a better case and tell us what he intends to do on the issues, with specific answers to specific questions.

Mr. Chidgey

Before the right hon. Gentleman leaves the point, will he tell us whether, in the previous Government, on third-party confidentiality of encryption, he was ever a supporter of the concept that GCHQ should be the third party?

Mr. Redwood

I never expressed a view on that matter, which is very ancient history. It would be much better if the House concentrated on debating the present and the future rather than what might or might not have been said or done some years ago under the previous Government.

The Queen's Speech fails to deal with the pressing problems of British industry and commerce. It proposes taking power away from people and giving it to politicians. It puts Labour politicians first and people last. The public are not clamouring for reform of the House of Lords but demanding more jobs, and better schools and hospitals.

The Queen's Speech does absolutely nothing to stop the collapse in manufacturing industry that we are witnessing daily. There is nothing in it to prevent a single factory closure. Worst of all, under this Secretary of State, it threatens to undo much of the good that was done to United Kingdom industrial relations in the 1980s and 1990s.

We fear that the Queen's Speech will take us back to the bad old days, back to the bad old ways. I pay tribute to both Conservative Prime Ministers in the previous Government, one of whom is in the Chamber, for their success in changing the industrial relations climate and industrial relations law.[Interruption.] Yes, I warmly congratulate my right hon. Friend the Member for Huntingdon (Mr. Major) on his recent honour, which is a fitting tribute to, among other things, the contribution that the Conservative Government made to industrial peace and harmony—something which Labour could never achieve in its days in office in the 1970s.

Labour's Euro-election system is designed to take the power to choose a candidate from people and to give it to politicians. Labour's trade union changes are designed to take the power of choice from individual workers and to give it to trade union leaders. Labour's grammar school proposals are designed to take the power of choice from parents and pupils attending those schools—a power from which, in various capacities, many of us have benefited over the years. Labour's transport policy allows Ministers to circulate in ministerial cars in style, leaving the rest of us to hire taxis and to gridlock.

The Opposition offers a better vision of the future than the miserable vision on offer in the Queen's Speech. Our vision goes with the grain of human nature. It is one that trusts people to make more of their own choices, and strengthens rather than undermines people's democratic rights.

People are being let down by the Government's merciless assault on manufacturing. High interest rates, high sterling, high taxes and greater regulation are all making their impact felt. Day after day, we see job loss after job loss. Day after day, we see factory closure after factory closure—usually in the constituencies of Labour members.

Mr. Geraint Davies

The right hon. Gentleman mentioned high exchange rates. How would he control them? Does he agree with Oskar Lafontaine, the German Finance Minister, that there should be currency target zones? If not, how would he control exchange rates? Would he set the Monetary Policy Committee two targets, one for prices and one for exchange rates? If so, how would he overcome the conflicts inherent in those targets?

Mr. Redwood

When there was a Conservative Chancellor of the Exchequer prepared to take responsibility for these matters, he took the exchange rate into account when forming interest rate judgments—and did a rather better job for manufacturing in the mid-1990s before we lost office than the Labour Government are able to do through their independent central bank. I know which of those business would rather have at the moment. My advice to the Monetary Policy Committee and the Chancellor is to take into account the impact that the current mix of high taxes, high exchange rate and high interest rates is having on manufacturing, because it is clearly doing an enormous amount of damage.

During the past seven days, 1,000 jobs have gone at BTR Siebe and 268 at William Baird, and 1,600 are going at British Steel. What do the Government say in the Queen's Speech is the answer—that we should abolish hereditary peers in the House of Lords just in case they might be a voice for manufacturing.[Interruption.] Labour Members obviously do not like any disagreement with Government policy and the pager message. That is why they want to get rid of independent voices in the House of Lords. But they still cannot tell us what they will replace them with, because they do not want any independent voices in the House of Lords. When the other place has finished standing up for our right to choose a candidate in an election, I hope that it will stand up for the right of manufacturers to have a decent deal from this Government.

Mr. Christopher Leslie (Shipley)

In the interests of industry at large, does the right hon. Gentleman believe that we should retain hereditary peers in the House of Lords?

Mr. Redwood

The Opposition have made it clear that the Government should not get rid of one part of the House of Lords until they have something better to put in its place. We would be happy to listen to what the Government have to say about a better solution. If they came up with one, I dare say we would welcome it. In the meantime, we are holding our own inquiry into the matter, which will run in parallel with the royal commission. It is nonsense to get rid of a chunk of the House of Lords before the royal commission has reported on how that can best be organised.

Since we last debated the crisis in manufacturing a few weeks ago, 600 jobs have gone at Ionica, 225 at Desmond and Sons, 100 at Sally Ferries, 300 at British Gas, 90 at ICI, 80 at Coopers Tools and 70 at Umbro—I could go on with a much longer list. A job goes every 10 minutes, but still the Secretary of State will do nothing. He will not even debate the issue in the House when we give him the opportunity to do so.

Yvette Cooper

If the right hon. Gentleman cares so much about job losses and unemployment, why does he want to abolish the new deal?

Mr. Redwood

Because it is not working. The Conservative Government got far more young people into work and back to work under a sensible economic policy and without a new deal, at much less cost to the public purse, than the Government are doing at some cost to the public purse. The hon. Lady claims to know about Treasury affairs. Perhaps, unlike the Secretary of State, she has read the minutes of the MPC meetings over recent months. If she has, she will have noted that it was fears about the minimum wage and the increase in public spending that led to interest rates staying higher for longer than manufacturing could afford. She should be urging lower public spending, which is what our view on the new deal would achieve.

Yvette Cooper

While the right hon. Gentleman is on the subject of interest rates, is he aware that, if they rose to the 15 per cent. level that they were under his Government, that would cost British business an extra £28 billion? Is that the sort of interest rate setting policy to which he wants us to return?

Mr. Redwood

The Opposition do not want interest rates at that level. If the hon. Lady had been listening, she would know that my right hon. Friend the Leader of the Opposition and others have been urging lower rates, not higher. She may wish to reflect on the fact that, when interest rates were that high, Britain was in the exchange rate mechanism—a policy which those on her Front Bench supported to the rafters. It was the only economic policy we followed that the Labour party supported, and it supported it fully. It has never apologised, to this day, for the mistake it made in that particular case.[Laughter.] I do not know why Labour Members are laughing. They well know that not all Conservatives wanted the problems that occurred in the early 1990s, and they well know that my right hon. Friend the Leader of the Opposition has made a suitable apology, as I have often reminded the House.

What do the Government do about all the job losses? They make the problem worse by making it more expensive to make goods in Britain—£2,300 million extra each year for the working time regulations; £2,900 million a year extra for the minimum wage; and now trade union laws that will make it more difficult and costly to make goods in Britain.

Before Labour Members think that they have a clever point to make about my right hon. Friend the Member for Huntingdon, let me put a point to the Secretary of State. My right hon. Friend cared deeply about jobs in Britain, and one of things he did in Europe was to make sure that we had the right not to go into damaging social chapter measures, which are now coming in, thick and fast, under the Labour Government. I applaud what my right hon. Friend did, because he did it in the best interests of Britain. It worked: a lot of investors came here in the mid-1990s, thanking him for keeping us out of those damaging regulations. Now, we are being dragged in.

Why did the Secretary of State not keep us out of the social chapter, and instead judge each measure on its merits? He told us today that conditions vary around the European Union and that some countries need different labour measures from others. I agree. Why did he not keep the power, which my right hon. Friend protected, to choose separate labour measures for this country?

Dr. Phyllis Starkey (Milton Keynes, South-West)

Will the right hon. Gentleman explain how he can reconcile his opposition to giving employment rights to part-time workers, who are mostly women, with his party's apparent support for the family?

Mr. Redwood

We think that the best support one can give the family is to have a labour market that works—one that makes it more likely that one or both of the parents can get a job if that is their choice or their need. We are extremely worried about the accumulation of too many burdens which, far from helping the people who most need help—those who have the fewest skills, or those who have been out of work for a long time—will make it more difficult for them to get the jobs that they need. That is not a family-friendly policy, but economic illiteracy of the first order.

Dr. Starkey

Will the right hon. Gentleman give way?

Mr. Redwood

The hon. Lady's point did not succeed the first time, and I doubt that it will fare better the second time.

With all those regulations coming in, it is no wonder that so many companies are giving up and taking their business elsewhere. The Secretary of State should take note of the warnings from Marks and Spencer. After decades of buying British and backing British manufacturers, the company has concluded that it must buy a lot more abroad in order to stay in the marketplace. That has happened under the Labour Government—Marks and Spencer did not do it under the Government of my right hon. Friend the Member for Huntingdon. It is a direct threat to the jobs of the textile workers who came to lobby the House today. What is the Secretary of State going to do about it? Does he not see that it is because he has made it too dear to make things in Britain that Marks and Spencer has come to that sad judgment?

If the Secretary of State wants further evidence, this morning we read in an excellent article in The Daily Telegraph that Rolls-Royce Engines will move its production to the United States of America if the Government inflict any more costly burdens on employment from Brussels. That is a stark warning from a senior industrialist who is not a Euro-sceptic fanatic of the sort the Secretary of State likes to deride, but a serious business man who runs a big, competitive and successful international enterprise and who is now issuing a warning to the Secretary of State, to the Government and to the whole European Union that they are getting it wrong and that they are going to destroy jobs.

Mr. Mandelson

It would be as well to state for the record what Sir Ralph said. He said: The last thing we want is the on-costs associated with the social costs of Europe, but I don't see any sign of its happening and the current government is not going down that path.

Mr. Redwood

The Government are going down that path. They are in no position to resist it, because the Secretary of State, the Prime Minister and their right hon. Friends have given away the UK's power to make our own decisions—[Interruption.] There is nothing they can do, so the threat is real—[Interruption.]

Mr. Deputy Speaker

Order. The hon. Member for Workington (Mr. Campbell-Savours) must be quiet in the Chamber.

Mr. Redwood

I am grateful to you, Mr. Deputy Speaker.

Mr. Dale Campbell-Savours

On a point of order, Mr. Deputy Speaker. What protection does the gentleman from Rolls-Royce have against a direct misquote from an Opposition spokesman? How can he answer that?

Mr. Deputy Speaker

I do not think that it was a misquote. There has been a contribution, which was rebutted by the Secretary of State in an intervention. That is what debate is all about—people put an argument and others rebut it. It is not expected that hon. Members should, while seated, throw arguments across the Chamber.

Mr. Redwood

I am grateful for your wise judgment, Mr. Deputy Speaker. I find it odd that the hon. Member for Workington (Mr. Campbell-Savours) had to raise that as a point of order, when I have given way to all those who want me to give way and would be happy to debate that point with him.

Mr. Tim Collins (Westmorland and Lonsdale)


Mr. Redwood

I shall give way to my hon. Friend in just a moment.

The position is clear. The story is for all to see in The Daily Telegraph today. The Secretary of State has offered a further quotation, but the fact remains that the Government cannot resist the very threat that the gentleman in question mentioned, because they have thrown away our power of independent government in that respect.

Mr. Collins

On the subject of Rolls-Royce, would my right hon. Friend care to respond to the fact that Rolls-Royce briefed me and a number of other hon. Gentlemen about its grave concern that the Secretary of State is contemplating eliminating CARAD—the civil aviation research and demonstration scheme—the research programme on which aerospace, Britain's most important manufacturing industry, depends?

Mr. Redwood

The House is grateful to my hon. Friend for that worrying intelligence. I hope that the Minister who replies to the debate will answer that question, as it greatly concerns one of Britain's most successful industries. Even the Secretary of State would agree that it has done a pretty good job over recent years, although he is a hard taskmaster when it comes to awarding any plaudits to managers or employees in British industry.

What will it take to make the Government listen? Many of the most important people in the debate agree that, if we want more jobs, we must make it cheaper, not dearer, to employ people. One important figure in the debate said: Lowering labour costs forms one of the main methods of making entrepreneurial activity attractive again … I favour lowering labour costs, particularly for lower skilled people at the bottom end of the scale. Labour Members are quiet because they are hoping that I was quoting Baroness Thatcher or my right hon. Friend the Leader of the Opposition, but I have to disappoint them. It was Gerhard Schröder, Germany's new Chancellor. He went on to say: Similar methods are needed to adapt working time … In fifteen years' time only half of those employed in the German economy will benefit from a secure, full time job". Gerhard Schröder predicts that, the more protection there is for the favoured ones in big companies, the less protection and the less success there will be for everyone else. That is exactly our worry about the current trend of Government policy and European policy generally. In other words, Gerhard Schröder is saying that, at exactly the same time as Britain is making it dearer to employ people and imposing more regulations making it less flexible, Germany knows that she needs to go in entirely the opposite direction.

I have another interesting quote from a little nearer home. A self-appointed luminary here in the United Kingdom tells us: Jobs for life are gone, nine to five working is no longer the norm. No amount of social regulation can protect jobs in an economy that becomes uncompetitive. Labour Back Benchers had better steel themselves for two pieces of bad news about that quote. First, I have some sympathy with it, and secondly, of course, it comes from the pen of the Secretary of State for Trade and Industry. If he believes that Britain has to be more competitive, why is he doing so much to undermine our competitiveness?

If the Secretary of State agrees with Gerhard Schröder about needing to make it cheaper and easier to employ people, why has Labour decided to make it so much dearer? If he is telling us the truth when he says: We do not want to second guess markets or substitute for management decisions"— another snappy quote from the right hon. Gentleman—why is he busily doing just that with minimum wages, new trade union proposals and many more regulations? Does he realise that people on low wages will soon realise that they have been cheated as well? The idea of the minimum wage is not to boost their living standards, which would be a noble idea, but to cut their benefit top-ups, as is clear from the way in which the measure was introduced.

Has the Secretary of State seen last month's massive trade deficit in manufactured goods reported in today's announcement? Labour has at last broken new economic records, having achieved the largest ever single month's trade deficit in goods—it is a monumental example of their monumental incompetence. If we make it too dear to make things in Britain, naturally we will all sell less abroad and buy more from overseas. It is a sure sign that Labour is not working and that Labour is bad for business.

The Opposition say that we should give manufacturing a break, free it from regulations and reduce the taxes. It is no good saying that it should be easier and cheaper to make things in Britain, but do nothing about it; the Government should do a U-turn before it is too late to save manufacturing jobs and factories and free business to compete and succeed.

The Secretary of State is, of course, in a perpetual spin. First he tells us that Brazil is such an important market that he must go there twice in the same year. Then he decides that he must cancel the trip. After months of telling us that the visit was crucial, he now tells us that it was an unnecessary hangover from his predecessor's regime. If that is so, why did he not cancel it when he first took up his job? That would have minimised the embarrassment to Britain. How much business is at risk from the cancellation of the trip?

Mr. Mandelson

May I explain? It was arranged only last Wednesday that Trade and Industry questions would take place slap bang in the middle of the visit. Of course I had to cancel; if I had not, I would not have been here to answer the right hon. Gentleman's questions.

Mr. Redwood

I find it touching that the right hon. Gentleman takes his duties to the House so seriously. However, it is in the Government's power to choose the schedule for questions; I would have been amenable to any proposal to move questions to another day to accommodate the Secretary of State's important trade trip to Brazil. We need to know what meetings he had to cancel and what business is at risk, as we had been told that the trip represented a very necessary expenditure of public money.

Such rudeness to an overseas country is perhaps not surprising given the Government's appalling record in promoting British exports—they have thrown away millions of pounds of orders from Chile by their cack-handed handling of the Pinochet case. Like the Foreign Secretary, the right hon. Gentleman is a walking disaster when it comes to diplomacy in Britain's commercial interest. On his most recent visit to Brazil, he sparked an unfortunate political row when he criticised the Workers party.

The right hon. Gentleman has, of course, insulted many others, including the horny-handed sons of toil, as he calls them, in his constituency. He has also condemned most of his Cabinet colleagues as cowards. Looking at today's press, I think that the charge of cowardice would be more fairly levelled at him than at many of those with whom he tries to work.

The Guardian today reports that it has been told by sources close to the right hon. Gentleman that the Confederation of British Industry has been rebuffed over the fairness at work Bill. We are told authoritatively that the Bill will represent a decisive shift of direction in favour of the trade unions. Meanwhile, The Times is told equally authoritatively that the Secretary of State has angered unions by considering employers' demands to water down elements of the White Paper". The master of spin is caught red-handed—or is it blue-handed? A newspaper that inclines to the unions is told that he is the friend of the full trade union monty, whereas a newspaper with unhappy memories of trade union activity is told that he is a friend of business, valiantly trying to stifle the baser instincts of his predecessor and some of his colleagues.

Is not the House owed some straight talking? I remember the Secretary of State's promise: "No more spin, honest." Is he backing the unions or the CBI? In a debate with me on television today, the Minister of State, the hon. Member for Makerfield, was unable to answer, as he still had not had his instructions from the Secretary of State. A Bill is to be introduced, but we still do not know who has won and what the decision will be on crucial issues.

Will there be automatic trade union recognition if 50 per cent. or more of the work force in a firm or place of employment are already members of the union? If so, that will be, as I assumed, a victory for the trade unions. Will he raise or abolish the ceiling on unfair dismissal compensation? He seems to say yes—at last, after all the spinning, an honest nod from the Secretary of State, saying that the unions have won after all. What a surprise.

The Secretary of State must be dizzy from so much spinning, but eventually the spinning must stop. He must decide not only those issues, but how the minimum wage legislation will work and how the competition mess—a Bill in search of a policy—will be sorted out. He must also sort out the Post Office, energy policy and all the other things heaped on his desk that he seems unable to determine.

The right hon. Gentleman prides himself on being a man of great influence on the press. For the most part, he has little need to worry about unfriendly stories. He can call proprietors and editors—with a few brave exceptions—and have a journalist dealt with if a story is not to his liking.

The Secretary of State should remember that the issue before the British people at the next election will not be who has been the best spin master, but what is the reality. They will know the reality—whether we have more strikes or fewer and more manufacturing jobs or fewer, and whether people are investing here in new factories or closing factories down. They will have rumbled the Secretary of State, however good the spin. Today, the spin has gone horribly wrong, because he has been caught, through his agents, saying different things to different audiences about the same subject.[Interruption.] Does the hon. Member for Croydon, Central (Mr. Davies) wish to intervene? Obviously not. He thought better of it, because he realises that the Secretary of State cannot be defended.

The Secretary of State should remember Wapping. He should remember the damage that union action did to the newspaper industry. He should remember the terrible scenes of unions set against management. He should remember worker set against worker, and the picket lines and strife that characterised the bad old days of the 1970s and early 1980s before the Conservative Government reformed industrial relations. We do not want to see that again, and we fear that disrupting the settlement that we left the Government could bring back those dreadful old ways.

Now, the Secretary of State has decided to gum up the works in the exciting world of the internet and electronic communications. Perhaps he is so worried that the new media will not be on clean feed from Millbank tower that he wants to legislate to make sure that he can crack all their codes. Clearly, he wants to know what is going on in this new world. As I have explained, we have strong reservations about giving the Secretary of State this power, and about the wisdom of trying to freeze the technology while it is developing so rapidly. We are worried that the Secretary of State's wish to legislate on signatures and authority is a back-door way for the Government to damage our freedom.

I wonder whether the Secretary of State is in the mood to answer one more question. Has he decided that he has to ditch Labour's pre-election policy on this very issue? Before the election, Labour said: Attempts to control the use of encryption technology are worrying in principle, unworkable in practice and damaging to the long term economic value of the information networks. Labour went on to say, in an unusually vivid phrase, that there was no fundamental difference between an encrypted file and a locked safe. Exactly, Mr. Deputy Speaker.

Would Houdini like to get out of that one? Is that not a dramatic change of policy? Is not the truth that the Secretary of Stare is so ashamed of what is going on in manufacturing that he wishes to claim the credit for internet and cyberspace technology, and has decided that the only way to do that is to put through a Bill? Now, having decided that he must try to invent something to go in the Bill, he has latched on to what Governments always latch on to in these circumstances—the wish to regulate, control and interfere in people's private business.

The Secretary of State is in grave danger of running up against all those who believe in freedom and liberty in our country—people who are very worried about this dramatic 180 deg U-turn on this crucial policy by the Labour Administration.

The new Government in Germany are waking up to the problems of their social models at exactly the same time as the British Government are bringing in the old German model to this country. The new Chancellor of Germany has stated: More than 4 million people out of work and their families are paying the price of insufficient economic flexibility. Meanwhile, the British Government claim that Europe is coming our way.

The Government say that there will not be more or higher taxes, but that there will be more flexible labour markets. They say that getting people back to work across Europe is the new number one priority. Yet everything we see from their deliberations in Europe is pointing in the other direction. According to Mr. Santer—who should know—the Government have signed up to more and higher taxes from Brussels.

As recently as 1997, the Government signed up to a document which said: tax measures which provide for a significantly lower effective level of taxation, including zero taxation, than those levels which generally apply in the Member State in question are to be regarded as potentially harmful and therefore covered by this code … Member States commit themselves to re-examining their existing laws and established practices, having regard to the principle underlying the code … Member States will amend such laws and practices as necessary". I agree that that is not as clearly drafted as we might like, but it means in effect that the Government have signed up to higher taxation in the name of banning so-called unfair taxation. There it is, lock on the door, in a Commission document, clearly understood by Mr. Santer, who has translated it into better English than the original document.

The new European document, to which the Europeans signed up only last month, goes even further. It says: We welcome the political agreement reached among Member States on the fiscal packages as a first step in the right direction. EMU will intensify the potential for tax competition. Therefore, further efforts have to be undertaken to avoid harmful tax competition among the Member States. That is crystal clear: unfair tax competition is having lower taxes than one's neighbours. Britain had lower taxes, thanks to the two previous Prime Ministers. As a result, we have considerably lower unemployment than on the continent, which is another welcome divergence engineered by Conservative Ministers.

Labour wants to destroy both competitive advantages at a stroke, with a policy that drives up manufacturing unemployment and takes away some of our business tax advantages. The Government say maybe to another savings tax from Europe and to more VAT.[Laughter.]

Government Back Benchers find this so uncomfortable that they are behaving in a silly way. They well know that the Government have blown it on common taxation and they do not know how to defend the position, so they will not intervene or contribute to the debate, but merely try to disrupt it in a rather juvenile way.

The Government say maybe to more VAT. Indeed, the directive proposed in June says: the objective of this Directive, which is that of the effective taxation of savings income within the Community, cannot be sufficiently realised by the Member States and can therefore be better achieved by the Community. The proposal is to negotiate on that directive to create a uniform and high savings tax throughout Europe, which will damage savers and especially the City of London.

The Government say that they are out to modernise this country. They should have said that they are out to demolish it. They claimed that they would keep Scotland in the Union, but devolution is threatening that Union. They said that devolution would crush Scottish nationalism overnight, but it has given it a great new strength. They claimed that they wanted a strong Parliament, but they are out to abolish the second Chamber in all but name, because it dared to disagree, and they like to stifle debate in this Chamber whenever possible.

The Government told the Liberals that they would be important if they went on to Labour pagers, but Labour Back Benchers could have told them that it does not quite work like that. They claimed that they would transfer power to people, but they are taking it away from them. They said that they would stand up for Britain in Europe, but they have sold us out in Europe on taxation and labour market regulation. They said that they would encourage manufacturing, but they are closing it down. They said that they believed in freedom of information, but in practice they believe in secrecy.

I see that the Secretary of State does not believe that he should listen to these important charges against the Government. He knows that they have broken yet another crucial promise on freedom of information.

Far from modernising our democracy, the Government are undermining it, boosting Scottish nationalism and fuelling a false English patriotism. They are trying to do to Parliament what Guy Fawkes was prevented from doing. Their constitutional gunpowder is exploding dangerously. They are doing untold damage. Conservative Members will fight for the industry that we want to protect, for the democracy that we love and for the country that we serve.

5.14 pm
Ms Harriet Harman (Camberwell and Peckham)


The Secretary of State for Education and Employment (Mr. David Blunkett)

On a point of order, Mr. Deputy Speaker. I apologise for interrupting my right hon. Friend. In view of Madam Speaker's specific request this afternoon, I have cancelled my arrangements and I will wind up the debate. I thought that it was courteous to let the House know that.

Mr. Deputy Speaker

Thank you. Harriet Harman.

Ms Harman

During the speech of the right hon. Member for Wokingham (Mr. Redwood), my hon. Friends began to form a lobby to beg my right hon. Friend the Secretary of State to bring in the working time directive and extend it straight away to the right hon. Gentleman's speeches.

Having returned to the Back Benches after 14 years on the Front Benches, I should like to return to an issue that I raised when I was first a Back Bencher and have pursued and been committed to ever since—family-friendly employment, which, I am delighted to say, the Government have included in their legislative plans. I firmly believe that that is one of the most important and modernising parts of the Government's legislative programme.

Under "Fairness at Work", parents will, for the first time, have the legal right to take time off work when their children need them. The right to family leave is of immense practical and symbolic importance to millions of parents and their children. It is vital for the growing number of women who juggle their responsibilities at work with their responsibilities towards their children. It is also an important signal that the Government recognise that a growing number of fathers want to be there when their child is born and to play a greater part in caring for their children, as well as working to provide for them. Above all, it is important for children, because it recognises that they need their parents' time, as well as seemingly vast quantities of their money.

There are times when a child needs his or her parent, and when only a parent will do. The world of work has changed, and so have families. The legislation recognises that. Britain's competitiveness, about which my right hon. Friend the Secretary of State spoke so passionately, depends on its work force, half of whom are now women.

Women work because they want to. They now have educational qualifications that are equal to men's. They have a contribution to make to the world of work, and they have the custody of half of what my right hon. Friend described as this country's knowledge capital.

Women work because they need to. Nearly half the children in this country depend on the woman's earnings as well as the man's, and nearly half the mothers with children under five are now working.

Women also work because we need them to. There is not an industry or a service in any sector of the economy that would survive without women's work. Many women work to set an example to their children that life is about work and not merely about depending on benefits. That is especially important for the 2 million children who are being brought up by a lone mother.

Women's work is not optional: it is an integral part of our modern economy. Women are here to stay as part of our work force. As well as being indispensable to the modern world of work, they remain indispensable to their children. It is still mothers who shoulder most of the responsibility for children and nearly all the responsibility for domestic tasks, although fathers are getting more involved in the care of their children, which is a welcome trend that is set to continue.

The Government will continue to modernise public policy to catch up with the changing world at work and the changing life of families. The Government are introducing a national child care strategy to ensure high-quality affordable child care for all who want it, helping children to flourish and ensuring that their parents can work without worry. The Government established the new deal for lone parents, recognising for the first time that jobcentres should help mothers who want to work even if they are not registered as unemployed.

The Government are introducing the minimum wage and the working families tax credit so that fathers do not have to work all hours to make ends meet and thereby discover that they are exiled from the lives of their own children and their home.

The legal right to family leave takes another step forward. It joins together many different parts of the Government's modernising agenda. It is a substantial and practical part of our determination to be a family friendly Government and to put families and parenting at the heart of our policy. It is an important part, too, of our welfare-to-work policy, especially for women. It is part of our rights and responsibilities agenda for fathers.

Mr. Willis

The right hon. Lady is making a passionate case for family-friendly legislation. Does she agree that one of the great omissions from the Queen's Speech is a Bill to reform the Child Support Agency, a great abomination which still exists and which undermines family values?

Ms Harman

I made a statement in the House earlier this year saying that we will introduce reforms of the Child Support Agency, but it is important to consult and get it right. That is why it is right to have a pre-legislative stage and to consult, especially with the Select Committee, to ensure that we get right the difficult but important area of fathers' continuing responsibilities to provide financially for their children even though they no longer live with them. We need a fair balance among fathers, their new families, lone mothers, the children and the taxpayer. I urge the hon. Gentleman not to worry on that score, because the Government will take that agenda forward.

Family leave is part of the new agenda of flexibility in the labour market, with changing working patterns demanded by both employers and employees. It is also an important and practical way to help carers. I wish to make four suggestions to the Government about family leave: they should consult business; they should monitor the implementation of family leave; they should pay for some of it; and they should include carers.

First, when it comes to consultation, my right hon. Friend the Secretary of State for Trade and Industry will discover that many businesses are light years ahead of the Government and public policy on the issue of family leave. I urge him to learn, as I am sure he will, from their experience, to listen to their advice and to build on their good practice. Organisations such as Opportunity 2000 and many individual employers will offer help and advice.

I suggest, too, that my right hon. Friend listens to those who have cared about this issue and campaigned on it for many years, including organisations such as the Maternity Alliance, New Ways to Work and the Women's TUC. They know the subject inside out and will advise and support the Government. However, I urge my right hon. Friend not to take any notice of employers who fail to recognise that the world has changed. They want to employ women, and their businesses depend on women, but they refuse to recognise that their work force has changed and their work patterns must also change.

Secondly, I urge my right hon. Friend the Secretary of State to consider carefully the experience of the United States of America in introducing family leave. In 1993, the first piece of legislation that President Clinton signed on taking office was the Family and Medical Leave Act. Before its introduction, it was controversial, and business had grave concerns that it might affect competitiveness. Instead of legislating and leaving everyone to get on with it, the American Government set up a family and medical leave commission to monitor how the new law was working, to give out information to spread good practice, and to report back to Congress two years later. In 1996, the commission reported to Congress that the Act had had no harmful effects on competitiveness but had had a beneficial effect on families.

Thirdly, I ask the Government to consider paying for family leave, at least for low-income families. If we do not pay for family leave for lone mothers, the danger is that they will leave their jobs and go back on to income support when their families need them. The importance of the new deal for lone parents is to help mothers off benefit and into work, but we need to help them stay there and to discharge their responsibilities to their children. If we do not pay for family leave for low-income families, they might feel that they cannot afford to take it—but low-income families need fathers' and mothers' time just like other families. Alternatively, parents may take family leave but face reduced income when the children are young and need that income most.

Welfare to work, the minimum wage and the working families tax credit are all policies designed to improve the income of working families with young children. Sir Donald Acheson's report on public health, which will be published tomorrow, will identify the need to ensure the highest possible income for families with young children. I suggest that we pay for family leave, or at least some of it, as a tax credit for families on low incomes who are already eligible for the working families tax credit.

Mr. Terry Rooney (Bradford, North)

My right hon. Friend knows of my deep personal interest in this subject. Does she agree that it would be consistent with the child care allowance in the working families tax credit to make a payment to those who want to stay in work, as well as those entering work?

Ms Harman

A tax credit for family leave would sit well with the working families tax credit and the child care tax credit. I pay tribute to my hon. Friend the Member for Bradford, North (Mr. Rooney) for his long-standing campaign on the issue, which arose—I hope he will not mind my telling the House—from the fact that his father asked for time off work when his wife was having a child. He was not allowed time off, but took it anyway to care for his children: he was then sacked and was unemployed for two years. The law remains the same to this day, and that is why it is right to change it in legislation that will be introduced under the Queen's speech.

Mrs. Teresa Gorman (Billericay)

I am listening carefully to the right hon. Lady's speech. Before she leaves the impression that all employers are ogres and all employees are wonderful people, may I pray in aid a great supporter of the Labour party, Carmen Calill? She was a rampaging feminist in her younger years and became the editor of Virago and then HarperCollins. She once described to me the almost impossible situation she faced in employing many women. She had to let them go from key roles for long periods and could not replace them, because she had to keep their jobs open. The right hon. Lady extols the virtues of more legislation that would restrict employers, but can she explain how she expects employers to cope with the practical aspects of all those wonderful ideas?

Ms Harman

The practical implementation should follow extensive consultation with employers, including those who have implemented family-friendly employment for years. We should draw on the experience of the Americans, who went from no family leave to full family leave with no effects on competitiveness.

Fourthly, I suggest that the Government should ensure that time off work is available for those caring for young children and also for those caring for elderly or disabled relatives, as in the United States. As our population ages, more and more people—mostly women, but a growing number of men—try to combine paid work with their caring responsibilities. We want and need them to be able to do both. The Government are taking a radical and modernising step by introducing for the first time a legal right to family leave. I warmly congratulate them.

5.28 pm
Mr. John Major (Huntingdon)

I can tell the right hon. Member for Camberwell and Peckham (Ms Harman) that returning to the Back Benches has its charms. I speak with some experience, and I hope that she also learns to love the experience. Back Benchers need not be unthinking lobby fodder, and I hope that the right hon. Lady will join the army of Back Benchers who have a proper role to play in ensuring that the Executive always reflects parliamentary opinion first and foremost.

Let me say at the outset that I approve of some of the policies that the Government have followed in the past 18 months and propose to introduce. That is not surprising, as some of them were policies that I followed. Others are similar to policies that I was following, but have been redesigned a little.

Let us ease aside from the belief that there is a sharp difference on every issue between the Government and the Opposition parties. That is not so. It is the Opposition's role to concentrate on the points on which we disagree, but there are some areas of agreement. The fact that there is agreement on some issues is one of the strengths of this parliamentary system.

This is in many ways a rather unusual Queen's Speech, particularly for the second year of a Parliament, in that its theme is difficult to discern. The Secretary of State bravely suggested that it was modernisation and fairness, and who could disagree with the principle of the right sort of modernisation and fairness? Nobody asks for the reverse. However, we must consider whether the Queen's Speech contains the hard-backed policies that will achieve that in an advantageous way. That is a point with which many Opposition Members might disagree.

The Secretary of State made some intriguing remarks, often off script and occasionally in response to interventions, either proper or from a sedentary position. He said one or two things with which I agree strongly. He spoke about collective rights within the European Union, but said that there are different practices in some countries. He clearly meant the different historical, industrial and commercial practices, many of which we find in the United Kingdom. Unless I misheard him, he spoke warmly of the principle of subsidiarity, which I had the privilege of enshrining in the Maastricht treaty some years ago. I strongly agree with him about that.

However, the Secretary of State touched on weaker ground, on which I notice that he did not take an intervention. Although I agree with the principle of subsidiarity and with the fact that we are different in some respects, the fact that the Prime Minister agreed to the social chapter in Amsterdam shows clearly that almost everything in the social chapter is determined by qualified majority voting, not by unanimity.

That means that, even though the Secretary of State may oppose it, it is entirely possible, indeed probable, that legislation will be passed in the European Union that our Government would not pass for the reasons that the Secretary of State set out, but that he would not be able to block. It is the practice in other European countries, it is enshrined in the broad principles of the social chapter, and it will be decided by qualified majority voting.

Yvette Cooper

Will the right hon. Gentleman give way?

Mr. Major

Let me make some more progress.

I welcome the Secretary of State for Education and Employment back to the House. I am sure that he made the right decision to return. I hope that when, the right hon. Gentleman replies to the debate, he will explain how the Government propose to protect Britain from legislation of which they do not approve, but which would otherwise be imposed on us by qualified majority voting under the agreement made by the Prime Minister in Amsterdam.

Mr. Mandelson

If he does not mind my saying so, the right hon. Gentleman is being very defeatist. Surely, when one is in the councils of Europe, it is possible to use the power of persuasion to convert people to one's point of view. That is much more effective than standing on the sidelines bellowing at people through a megaphone. For example, over the past 18 months, we have achieved a darn sight more on the ban on British beef by having our arguments listened to and through the power of persuasion than the right hon. Gentleman's party achieved on most issues during 18 years in office.

Mr. Major

The right hon. Gentleman's idea of political persuasion is to bend someone's arm behind their back.

If what the Secretary of State said is true, perhaps he can explain why the Chancellor of the Exchequer is not a member of the Committee considering the euro. Despite the fact that sterling is one of the great currencies of Europe and that our European colleagues want sterling to enter at some stage—as do the Government—the Chancellor of the Exchequer is not welcome at the meetings. The Government still say that persuasion works. In reality, one can persuade from time to time. I persuaded our European partners to give us the opt-out on a single currency that the Government now use. I note that I received no acknowledgement of, or gratitude for, that. Of course, it is possible to persuade sometimes, but often it is not.

The Secretary of State spoke earlier about not accepting legislation that we do not wish to accept. I remind him that he has signed up to an agreement under which he may not be able to prevent damaging legislation.

Mr. Paul Keetch (Hereford)

Will the right hon. Gentleman give way?

Mr. Major

If the hon. Gentleman does not mind, I should like to make some progress.

The Secretary of State spoke about convergence and the euro. Of course, what he said is right. Of course, it must not be artificial. He gave the impression that my right hon. Friend the Member for Charnwood (Mr. Dorrell), who asked a question, was talking about artificiality. Europe has spent the past few years seeking to converge the real elements of its economy. Many in Europe have done so. They have taken significant decisions on public expenditure and taxation in order to seek convergence.

The right hon. Gentleman did not deal—the Government will have to deal with this one day—with how we are to avoid the convergence of taxation, if we are to proceed with the euro. The Chancellor says that he will not accept the convergence of taxation, and I agree with him. I will stand shoulder to shoulder with the Chancellor on the question of not accepting the convergence of taxation, and throwing away the advantages of a relatively low-tax United Kingdom economy, because that is one of the reasons for the inward investment and the relative prosperity that we have gained over other countries in recent years. However, we need to know exactly what the Government intend to say about that. I understand the difficulties, but the Government will need to be clear soon.

The Secretary of State said, intriguingly, that we shall join the euro when it is in our interests to do so. That seemed familiar to me. I seem to remember hearing that somewhere before. In fact, I seem to remember uttering that expression. It was about the time when the present Prime Minister was accusing me of not being clear about whether we would join the euro. However, if he will forgive me putting it this way, I notice that the Prime Minister, who accused me of sitting on the fence, is now seated squarely on the adjacent spike. That is a wise place for him to be, but he might acknowledge—it would make for a more graceful occasion if he did—that the policy that he criticised before was a wise one that he, equally wisely, is following now.

Let me deal with something that underlies all the ambitions of the Government and the Opposition for the well-being of this country. Many of the artificial arguments that we have across the Chamber are arguments not about ends but about means. For example, the big argument about the social chapter is not about whether workers should have better rights. The Government believe that the social chapter is right and that it enshrines more rights for workers. Our argument is not that we do not wish workers to have rights, but that we feel that, as a result of the social chapter, other workers may not get jobs that they should have. Let us deal with the reality of the substantive debate between us. There is no disagreement on objectives.

The economy is crucial to whether those objectives can be met. So much depends upon that. A wise former Chancellor of the Exchequer said that money is the root of all progress. Given how often the £40 billion is mentioned, we can see that that is undoubtedly the case.

What is the Chancellor's forecast for the next three years? In 1999, it is 1 to 1.5 per cent., a year later it is 2.25 to 2.75 per cent. and a year after that, by a remarkable geometric progression, it is 2.75 to 3.25 per cent. Forecasting is very difficult. Let us make it clear that the Chancellor does not do the forecasts personally. It is very difficult for the statisticians who do the forecasts and, to be frank, they are more often wrong than right, both in the Treasury and almost everywhere else. I am sure that, on this occasion, the forecasts presented by the Chancellor—I do not know whether they were the forecasts given to him—are wrong. If that is so, there are difficulties ahead for a wide range of policies to which the Government are committed.

I suspect that the Prime Minister is less certain than the Chancellor about the forecasts. The Prime Minister's speech at the Lord Mayor's banquet was very different in tone from the Chancellor's statement to the House. The difference was striking. The Chancellor was cocky, confident and certain of his forecasts and the Prime Minister was warning us of difficult times. I believe that the Prime Minister was wiser to be cautious than the Chancellor was to be confident.

We are told regularly that the Prime Minister and the Chancellor are two souls in the same political body. We are usually told that when they have just disagreed, when their spin doctors have just disagreed or when they have contradicted one another. We are told that they work together, and I am sure that they do so, if only to keep a close eye on what each other is doing.

The Chancellor's forecasts are crucial, so let us consider them. I have made the point that forecasts may be wrong, but the increasing trend of view among businesses and others who have made later forecasts is that we shall not have growth of between 1 and 1.5 per cent. next year. Growth will be substantially below 1 per cent., perhaps at 0.5 per cent. or conceivably even lower, although I doubt that we shall go into recession, except perhaps technically and briefly.

In the second year, the Chancellor forecasts growth of 2.25 to 2.75 per cent. I can only assume that, as part of the new deal's job creation programme, Mary Poppins has become a Treasury forecaster, and that, for year 3, she has been replaced by Hans Christian Andersen with the fairy-tale proposition that we shall have between 2.75 and 3.25 per cent. growth.

The forecasts defy logic. The rest of the world is dipping, and growth is being cut. Growth is being cut in our markets at a time when, although it has dipped a little, sterling is still strong and presenting difficulties in export markets. Sterling is strong and our markets are diminishing, but, as the world cuts its growth forecasts, we, remarkably, will grow at an accelerating rate year upon year. What has the Chancellor of the Exchequer been taking? What hallucinatory forecasts drift past him as he prepares to come before the House?

The truth about the economy is that it is slowing. The underlying economy is very strong. We must be in no doubt about that: we are not in deep difficulties. However, the economy is slowing for several reasons. Inflation is low, essentially because—although the Secretary of State will not wish to hear it—the previous Government took unpopular measures that the Government opposed when they were in opposition and that, for a time at least, have put inflation in repose. Inflation is never dead, but it is lying low for the time being. Interest rates will fall a little further, as they should because the economy is pretty slow and pretty flat. That is the good news.

The rest of the news is perhaps less good. Borrowing will grow, or taxes will rise, or there will be a combination of laxer borrowing and higher taxation. Growth will continue to fall. How far it will fall, we cannot be certain, but it will be way below the Chancellor's forecasts. It will fall for two reasons. The first is beyond the Chancellor's control. There is a slowdown around the world, and we cannot insulate ourselves against that. When markets slow down, we slow down. We cannot blame the Chancellor for what is happening around the world. Like all his predecessors, he must deal with that problem, but it is not his fault, except to the extent that we have limited influence for collective action through the G7.

However, there are also domestic mistakes. The Chancellor has made a series of mistakes, such as the 17 tax rises, many of which were mean-spirited. The tax rises on pensions, on investment and on savings were unwise from the point of view of the economy. Fiscally, they were good for the Treasury, but they were bad for the real economy of which the Secretary of State spoke earlier.

There will be a price to pay for those tax rises. The best that the Chancellor can hope for is that the Government forecasts will be proved foolish over a long period. The worst that may face him is that there will be a shock somewhere else in the world. It may be China devaluing, or the yen sinking further, or—heaven forbid—another collapse of some sort in south-east Asia, or something unexpected of which none of us has thought. One more such item will mean a significant further slowing of the world economy, and the Chancellor cannot protect us from that. Yet he left no leeway a few weeks ago in the confident forecasts of growth and expenditure that he led the House to expect.

Yvette Cooper

Does the right hon. Gentleman think that the Government should have sustained the £28 billion deficit with which his Government left us, or should we have continued to pursue the fiscal policies of his Government, which broke the golden rule every year and doubled the national debt?

Mr. Major

The hon. Lady is relatively new to the House, but I must say to her, "Come off it." Does she seriously think that the £20 billion that was boasted in the Queen's Speech to have come off the deficit suddenly and miraculously appeared on 2 May 1997? Was that the result of the delayed impact of corporation tax coming in as a result of policies put in place by the previous Government, and of the profits yielded by those policies? Of course it was the latter. There are lags in yield, and if the hon. Lady does not understand that, I hope that others do. It was ludicrous to claim credit in the Gracious Speech for £20 billion off the fiscal deficit in the first year.

Yvette Cooper


Mr. Campbell-Savours


Mr. Major

The hon. Gentleman is an old hand who has been in Workington since before the flood. He knows that the hon. Lady is talking nonsense, and I know that he will talk nonsense, too, so I shall let him do so later and will get on with my speech now.

Mr. Campbell-Savours


Mr. Major

Oh, all right then.

Mr. Campbell-Savours

It seems that the right hon. Member for Wokingham (Mr. Redwood) disagrees with the right hon. Member for Huntingdon (Mr. Major). On 10 November, he said: Yes, we got it wrong in the early 1990s … Yes, we have apologised."—[0fficial Report, 10 November 1998; Vol. 319, c. 148.] The right hon. Member for Wokingham is always dissociating himself from the policies of his former Prime Minister. How does the right hon. Member for Huntingdon feel about being disowned time and time again?

Mr. Major

The hon. Member for Pontefract and Castleford (Yvette Cooper) was actually talking about the deficit over the previous year, but my right hon. Friend the Member for Wokingham (Mr. Redwood) does, indeed, often remind me of my mistakes.

The Chancellor cannot run the economy on the slogan that he has used during the past few months. He says there will be an end to short-termism. Of course we want that, but it is odd that the Chancellor who wants to end short-termism should, in his very first Budget, have made an attack on investment with taxation. That is a very odd way to end short-termism. Perhaps it will surprise the Chancellor to hear that short-termism ended in the 1980s with the supply side changes that he opposed. It ended in the 1990s with our painful efforts—which he by and large opposed—to get inflation down. Short-termism ended then when politically unpopular decisions were taken to put the economy on an even keel. Whenever he is cornered, the Chancellor recites a mantra. He says, "We will end boom and bust." It is at least half true—he is ending the boom. We must hope that he does not lead us into bust too soon.

I want to touch on one glaring omission from the Queen's Speech. I do not mean the lack of an integrated transport policy, which has so embarrassed the Deputy Prime Minister, although I hope that the right hon. Gentleman enjoyed his lunch today when he had the privilege of presenting the parliamentarian of the year award to the Leader of the Opposition, my right hon. Friend the Member for Richmond, Yorks (Mr. Hague). It is not often that a corpse meets his assassin of the day before in order to present him with an award for the assassination. I hope that it was an enjoyable occasion, and I am very sorry that I missed it. I can see that the Secretary of State is very sorry that he missed it as well.

Mr. Mandelson

indicated assent.

Mr. Major

It must have been a remarkable occasion.

I do not want to talk about that omission from the Queen's Speech, or even about the freedom of information Bill, which has returned to the political womb, to re-emerge at some later stage. Instead, I refer to something that worries the Prime Minister as well as myself. The Prime Minister may be surprised to learn that we share a similar view, and that I am prepared to join him, but I judge him on what he has said recently rather than on his policies. Soon, we shall have a Scottish Assembly in Edinburgh, with tax-raising powers. The House knows that I think that that is a mistake, but that argument is past. We must deal with the reality that there will be an election next summer, followed by an Assembly.

The House will have, at some stage, to deal with problems consequential on the setting up of that Assembly. The Queen's Speech contains a range of constitutional measures that will cause future problems, although, in the interests of brevity, I shall not list those problems. However, there was nothing to deal with one problem which, if it is honest with itself, the House knows to have been created by the establishment of the Scottish Assembly.

The Scottish Parliament will put the Union at risk unless we are careful and skilful. When I warned of that some time ago, up to and during the election, I was much scoffed at by Labour Members and some members of Opposition parties, but the Prime Minister now accepts the danger, or there would be no reason for him to make speeches about our having a battle for Britain, oblivious though he may be to the fact that the only reason that we are having to fight that battle is the policy that he put in place and the nature of the Scottish Assembly that he has established.

The Government were warned, and they scoffed and jeered at the warnings. The truth is now there to haunt them, but that is history. I shall not worry too much about the haunting of the Prime Minister and those on the Treasury Bench. What is more important is this: where is the action to deal with the problem and where are the policies to encourage the newly established Scottish Assembly not to bid for independence and to realise that it would do better to stay joined at the hip as part of the United Kingdom in the Union that has served all of the United Kingdom so well for nearly 300 years?

Where are the policies to cope with what every hon. Member knows in his or her heart is the manifest absurdity of Scottish Members with no control over health, education and transport in their constituencies voting down here on health, transport and education in Hartlepool, Huntingdon, Peckham and elsewhere? We know that that is a problem and that it will cause conflict. Since we realise that, why on earth, given the majority that the Government have, do they not consider that constitutional problem before it becomes a running sore between this House and the Edinburgh Assembly?

The Secretary of State for Scotland has been saying for years that Scotland should have a Parliament. Now, he is saying in lectures that England should not have one. I am a Unionist and I agree with the Secretary of State that I do not want a separate English Parliament, although I observe the manifest absurdity of that right hon. Gentleman saying so. The difference between him and me is that I told the Scots of that problem before and during the general election, while he and his colleagues told them what was convenient for the Labour party during the election, with no concern for or understanding of the problem that would be created after it.

This is the Government's mess and it will not go away. They have created it and they need to correct the imbalance that they have created—through, not an English Parliament, but an English dimension to a United Kingdom Parliament—before it is too late and it causes too much bitterness. That is urgent. They should begin to discuss with my right hon. Friends how we might deal with that problem. I do not want my party to stand to one side and scoff at and mock the troubles that the Government are facing, because there are bigger issues at stake the constitutional position of the United Kingdom.

If Scotland were to break away—I do not expect that to be imminent, but it might do so in five or 10 years—will the Secretary of State say whether we would be stronger or weaker in Europe to stand up for our position there? He knows that we would be weaker. Would we be more or less likely to retain our seat on the Security Council? He knows that we would be less likely to do so. Would we be likely to retain our position in the Group of Seven, and would we have enhanced or lesser power if our country were seen to be breaking up? He knows that it would be lesser power.

At this stage in this Parliament, this year, with the Government's majority and our support, they could have dealt with that constitutional issue, that problem, which exists now. Instead, they have introduced a range of constitutional tinkering, which will create fresh problems, which will emerge if they get their way on other constitutional issues in Parliament during the rest of this Session. I bitterly regret the fact that the Government have chosen not to examine and deal with that issue before a sore becomes an ailment that is not readily curable.

Today, our main subjects are trade and industry and education and employment. We are offered a consultation document on teaching—another smack of firm consultation—which may well be worth while, but sounds like a fig leaf. I hope that the Secretary of State for Education and Employment will have more to say about that later. Given the way in which the question has been framed and the ballot arranged, we can look forward to what looks to be a vindictive, slow destruction of grammar schools without the Government having the courage to take direct abolition through the House. Yet again, part of the famous £40 billion will be reannounced—this time to repair schools, something that will be welcome if it turns out to be there and actually happens. Frankly, we have also had absurd policies for industry which will add to—

Mr. Blunkett

I am sorry to intrude on what is undoubtedly an excellent speech, but I think that the right hon. Gentleman implied that the Government were lying by suggesting that we were investing the resources that have been announced today in capital over the next three years. Given the spirit of the right hon. Gentleman's speech, I should like him to clarify what he meant by that.

Mr. Major

Of course I was not suggesting that the Government were lying. I meant that the £40 billion has been announced before, and that whether it will be there depends on the performance of the economy. I have spent much of my speech arguing that that performance may not be as good as the Government had supposed in their estimates, and that it may not yield the resources that they therefore expect. At that stage, the Government will have to cut expenditure, increase borrowing, raise taxes or do something else. My remark was made in that spirit. I was not suggesting that the Government were engaged in an outright deception—heaven forfend that such a thing should happen.

The policies for industry are absurd. They will add to regulation and to costs and increase the powers of trade unions in a way which will make neither them nor the employers happy—a remarkable double whammy—

Yvette Cooper


Mr. Major

If the hon. Lady will forgive me, I shall not give way.

The Government have been fortunate so far. They have had the longest honeymoon in recorded history. They inherited a strong economy and they are now weakening it; they inherited falling unemployment—sadly, I fear that that is soon to increase—and a growing economy. Partly, but only partly, as a result of their measures, the economy is beginning to slow down. Despite the brilliance of the hype—it has been brilliant hype—it is a miserable performance, and the easy time for the Government is coming to an end. They are about to begin to collide with reality. I see the look of shock crossing the face of the Secretary of State for Trade and Industry at the belief that reality might have the impertinence to come up and tap him on the shoulder. Given the way in which the world economy is going, it may not merely tap him—unless he is very lucky, it will grip him by the throat.

The Government are about to come face to face with reality and, unless they are very fortunate or skilful, they will find that the promises that they have set out will not be easily met. I fear that they will find that many of those policies will not operate as they had hoped either for them—something with which I do not much concern myself—or for the country as a whole, something with which I do concern myself. They need to look afresh both at their economic prospects as they frame policies, for no one wants promises that turn out to be impossible to meet, and, equally importantly, they must re-examine yet again and with care the option of removing—before it becomes too serious—the constitutional Scottish problem that will arise. In that, I hope that they will both seek and receive the assistance of the Opposition.

5.58 pm
Mr. Roger Berry (Kingswood)

I want to deal with one proposal in the Queen's Speech that has not attracted much attention so far, but which will affect the lives of millions of citizens. Interestingly, it is a proposal that has already been supported by the other place several times, and one that has the support of the Leader of the Opposition, as I was surprised to discover yesterday. I am referring to the Government's proposal to legislate to set up a disability rights commission. Clearly that Bill will go a long way with support from the other place and the Leader of the Opposition, and it deserves to do so.

The House should warmly welcome the proposal, which would go a long way to implement the Government's commitment to ensure comprehensive and enforceable civil rights for disabled people. It will certainly be warmly welcomed by the 8 million disabled people who face discrimination in this country—people who are denied their basic rights to work, to learn, to travel, and even to vote.

It is no exaggeration, therefore, to say that yesterday was an historic day for disabled people, their organisations and their supporters. For the first time, disabled people are to have a statutory body to fight their corner. I am pleased that the Equal Opportunities Commission has been doing its work for many years, and we also have the Commission for Racial Equality. Northern Ireland has the Fair Employment Commission. But we in this country are yet to have a commission to ensure that disabled people are guaranteed their rights.

The disability rights commission should be welcomed primarily because disabled people will have a statutory body to ensure that they have redress if they are treated unfairly or unreasonably in the eyes of the law, but it will also be of great assistance to those who are required to abide by the law. There will be detailed advice for employers and service providers on how to make any necessary changes so that they can benefit from the skills of disabled people and from their custom.

The Government should also be warmly congratulated on the way they consulted before introducing the proposal to set up the disability rights commission. They have accepted the recommendations of the disability rights task force almost to the letter. This is one of those rare occasions on which a Government have consulted on a proposal and brought people together—in this case not only disabled people, but employers, local government, trade unions, the public sector and the private sector, under the aegis of the task force—to prepare a package based on consensus that they will then implement.

In that context, I pay tribute to the Minister for Arts, my hon. Friend the Member for Newport, East (Mr. Howarth), who, as Under-Secretary of State for Education and Employment, set up the task force and produced the White Paper, which was published in July. His commitment to civil rights for disabled people—over many years and from both sides of the House—deserves our recognition.

Let us not forget that disabled people and their organisations have campaigned for comprehensive civil rights for many years, and that hon. Members campaigned for many years in support of them. The first civil rights Bill, which was introduced as a private Member's Bill by my noble Friend Lord Ashley in 1983, provided for a commission. Since then, a commission has been considered an integral part of achieving civil rights by all hon. Members who have sought to legislate through a private Member's Bill, particularly my noble Friend Lord Morris and my hon. Friend the Member for North-East Derbyshire (Mr. Barnes). As secretary of the all-party disablement group, I also acknowledge that hon. Members of all political parties have been part of that campaign.

I welcome the fact that the Conservative Opposition now support a disability rights commission. That was not always the case, of course; indeed, until four years ago, the then Conservative Government were totally opposed to legislation of any kind to secure equal rights for disabled people, and were prepared to go to extraordinary lengths to stop such legislation.

That said, I am usually prepared to let bygones be bygones. In politics, there is not much mileage in bearing grudges, and I try not to do it. I would not have said anything else about the past if it had not been for the remarks in yesterday's debate by the right hon. Member for Richmond, Yorks (Mr. Hague), the Leader of the Opposition.

I had to check Hansard this morning, because I could not believe that I had heard the right hon. Gentleman say: We will support the creation of a disability rights commission … I hope that the commission will ensure that the … disability rights legislation, which I took through the House, is properly enforced".—[Official Report, 24 November 1998; Vol. 321, c. 16–17.] I am occasionally surprised at comments made in this Chamber—we all are. Some of us are surprised most of the time, but when I heard those words, I could scarcely contain myself. I asked myself whether this could possibly be the same Member of Parliament who, as Minister for Social Security and Disabled People in the previous Administration, vehemently opposed a disability rights commission on every occasion. With regret, I have to inform the House that the right hon. Gentleman is that same gentleman.

I spent an enjoyable couple of hours this morning going through the Official Report of the debates on Second Reading, in Standing Committee and on Report for the Disability Discrimination Act 1995. There is a mountain of quotations from the right hon. Gentleman fundamentally opposing the notion of a disability rights commission. I shall simply select one at random—there are so many, it is difficult to know where to begin.

In Standing Committee, the right hon. Gentleman said: The assumption that there has to be a commission to tackle the problems that we know exist is flawed. He went on: The issue of a commission has become an article of faith, but I ask the Committee and people outside Parliament to understand that there is more than one way to approach the problem."—[Official Report, Standing Committee E, 23 February 1995; c. 389–390.] The then Government's approach to the problem was to set up not a disability rights commission, but the National Disability Council, whose remit was to advise the Government.

It was therefore particularly unfortunate for the previous Administration that the NDC annual report—which was produced after not two or three years of operation, but one—recommended that a disability rights commission be set up. It virtually said, "Please abolish us, and set up a commission."

David Grayson, the admirable chair of that organisation, said in his foreword: there should be a body with the specific capacity to help disabled people to enforce their rights". The NDC said that because it recognised after one year's work that there was not such a body, and that the NDC itself certainly was not a body of that sort. The NDC called on the Government to attach "an early priority" to legislating for comprehensive and enforceable civil rights.

I warmly welcome the commitment in the Queen's Speech to set up a disability rights commission. The White Paper published in July made a number of points; I shall not take up the House's time by repeating them all, but I shall echo a few, which are absolutely essential to the efficient functioning of the disability rights commission.

The commission's mission must be to work towards the elimination of discrimination against disabled people. That, above all, is its prime task. It should advise the Government on the legislation that is necessary to move from the Disability Discrimination Act 1995 to full, comprehensive and enforceable civil rights. In that sense, the disability rights commission will be an extremely important vehicle in assisting the Government to fulfil the final part of their commitment.

The commission should encourage good practice by employers and by service providers, because this is not simply a matter of legislation and of threatening to take people to court.

Everybody knows that the most effective anti-discrimination legislation is legislation that is rarely used in the sense of taking people to a tribunal or to court. If the legislation and the institutions that back it up are good enough, conciliation and advice can deal with the problems. Naturally, there must be a final right to prosecute if the law is broken, but it is extremely important that one of the key objectives of the disability rights commission should be to encourage good practice among employers and service providers, and to make arrangements for conciliation. It should also be able to assist individuals to enforce their rights not only under the Disability Discrimination Act but under the Human Rights Act 1998.

All that requires adequate funding. I am not jumping on to my usual hobby horse. That is the recommendation of the National Disability Council, which points out that sufficient resources must exist if the commission is to do its job properly. It is a crucial issue. The Equal Opportunities Commission has a budget of some £7 million a year, and the Commission for Racial Equality has a budget of some £11 million a year. The disability rights commission will require more than the CRE's £11 million if it is to fulfil its responsibilities.

Let us not forget that, like the CRE, the commission will undertake awareness-raising activities, but those will include awareness of impairments, barriers to disabled people's participation and how to overcome them, and the provisions of relevant legislation. It will have to ensure full accessibility to information, of advocacy and support. It will have to advise on reasonable adjustment, as defined in the Disability Discrimination Act. It will also have to support individuals who take cases to court under the Human Rights Act. Those are substantial duties, and the new commission's funding must be adequate to reflect them.

The establishment of the commission will be a major step towards comprehensive and enforceable civil rights. I hope that, at an early date, it will assist in achieving three other objectives that are part of that agenda: first, small firms should not be exempt from civil rights legislation; secondly, we should define disability to include all those who experience disability discrimination; and, thirdly, we should include transport and education within the framework of anti-discrimination legislation. We have none of those provisions at present.

I am sure that the vast majority of hon. Members welcome the proposal. It is a significant step towards implementing the Government's commitment to securing comprehensive civil rights for disabled people. It should be welcomed with enthusiasm: it is long overdue.

6.13 pm
Mr. David Chidgey (Eastleigh)

I shall limit my remarks, because other hon. Members wish to speak.

Governments are often criticised for making pronouncements that are long on rhetoric but short on content. The Queen's Speech is a departure from that norm—it is pretty short on rhetoric, but even shorter on policies that will be successful in tackling trade and industry problems. It makes it clear that the Government will continue with economic policies designed to build stability for the long term", and that the Government's central economic objectives are high and stable levels of economic growth and employment". Nobody would disagree with those laudable aims, but what and where are the policies designed to achieve them?

The latest trade figures show that we are now running a trade deficit of £2.5 billion, the largest ever. Our trade gap with both our European Union partners and non-EU nations is widening, and it has little to do with the Asian crisis. Where are the proposals to support British industry and reduce bureaucracy in business? Where are the proposals to maintain inward investment? Although Britain has done incredibly well in attracting inward investment, it is important to continue to attract it.

Most importantly, where are the proposals to provide investment in human capital? We have heard a great deal this afternoon, particularly from the Secretary of State, about the importance of a knowledge-based economy. I could not agree more, but where is the investment in human resources to provide for that? I find such proposals somewhat wanting.

Our manufacturing industry is at its lowest ebb, yet the Secretary of State and the Chancellor complacently stick to the line that the economy is not heading for recession. Nobody said it was, but industry certainly is. Just seven days ago, a Treasury survey of 44 independent economic forecasters predicted recession in the manufacturing industry next year. While the Chancellor continues to claim that manufacturing industry will avoid recession next year, the Treasury survey shows that an average drop of 1.1 per cent. in manufacturing output is expected. However, the Treasury still claims that growth in industry will be plus or minus 0.25 per cent.—in other words, zero.

That variance between forecasters and the Treasury is unprecedented, and it is time that the Government faced up to the severe problems confronting industry—particularly the burden of high interest rates and of an unstable and uncompetitive exchange rate. Unless the Government act, as many as 400,000 manufacturing jobs could be lost in the next two years because of the recession in manufacturing industry.

It simply not acceptable for the Government to wash their hands of the crisis in manufacturing and blame it on the collapse of Asian economies and the global market. For a start, that is simply not true. Today's trade figures reveal that exports to the European Union from this country are collapsing. That has nothing remotely to do with Asia. We trade more with the Netherlands than with the whole of south-east Asia, Latin America and Russia put together.

The Government's pre-Budget report clearly showed that the UK's principal export markets are growing. Tables A2 and A5 in the report show growth of 7 per cent., yet UK exports sales to our key markets are growing by only 4 per cent. That has nothing to do with the collapse of the Asian economies or stresses and strains on the global market, but is entirely down to a lack of action by the Government to make UK industry more competitive.

The Queen's Speech should have addressed two key issues: first, what will the Government do to ease the way for British business to compete in the global market; and, secondly, what will the Government do to ensure that our work force is equipped with the training and skills that are vital to a knowledge-based economy?

The Government are still prevaricating on Britain's entry into European monetary union. It would take just one simple declaration of interest and an indicative programme to make interest rates immediately fall and exchange rates stabilise, and industry would be revitalised at a stroke. The Prime Minister knows that. Indeed, he is on record as praising the call by more than 100 leading business people for a firmer commitment to join the single currency. He has presumably read what the chairman of Unilever said: Business does not want to see Britain relegated to the status of a quaint offshore trading post, steadily marginalised from its main market". That is how business thinks, but the Gracious Speech merely continues the line that we will join when it is in Britain's best interest. I asked the Secretary of State whether he could envisage a scenario in which joining would not be in Britain's best interest, and answer came there none.

The Queen's Speech tells us that there will be measures on competition and on investment in improving skills. Why are the Government not taking a lead on competition by introducing proposals to give the Post Office greater commercial freedom? How long must we wait? Unless the Post Office is given the freedom to invest internationally and to operate commercially, it will lose its place in the global market. Time is fast running out. The forecasters tell us that, within the next two years, there will be no place in the global market for the Post Office.

If the Government intend to address competition, why have they increased taxes on business at twice the rate of the reductions that they so proudly proclaim? Why have they not made some effort to reduce regulations on business?

On 10 November 1998, at column 201 of Hansard, the Minister for Small Firms, Trade and Industry claimed that the previous Government had introduced 10,000 new regulations. There is a great danger of small and medium-sized enterprises being crippled by bureaucracy, yet the Government's vaunted deregulation unit attached to the Cabinet shows all the symptoms of becoming a farce. It was asked a few weeks ago how many deregulation measures have been introduced. The answer was, "We can't find any." It has been established for a year, and so far it cannot find any deregulation measures—not one.

The Government not only have failed to reduce regulation on business, but are intent on adding Euro-bureaucracy to the burden. Britain enjoys some of the lowest employment costs in Europe, which are, on average, about a third of those of most of our competitors. That helps to offset the disadvantages of low productivity. However, that will all change if the party of European socialists has its way.

Under the Government's presidency of the European Union last year, the document entitled "Economic Reform in the Framework of EMU"—commonly called the new European way—was drafted. The right hon. Member for Wokingham (Mr. Redwood) made the interesting point that, if we follow the philosophy set out in that document, we will be on the road to tax harmonisation.

Europe finds it anti-competitive that Britain has some of the lowest employment costs in the world. I cannot see the logic of following that philosophy, but, on Sunday, along with the other Finance Ministers of Europe, the Chancellor of the Exchequer agreed to that document—he may have signed it. Where does the Secretary of State for Trade and Industry stand if such a measure is at the heart of Government philosophy?

The Queen's Speech should have contained measures for improving skills. It is appalling that there are 7 million people in this country with no formal qualifications. Investment in vocational training is failing to deliver. National vocational qualifications are a good idea, and I support them. They measure skills that people have, as well as the knowledge they are gaining. However, the recent disturbing results show that there is a 40 per cent. drop-out rate at NVQ level 2, which is the threshold to gaining the higher technical skills our economy lacks.

The problem is that, although the Government recognise the distinction between investment and capital and revenue costs, they do not accept that expenditure on human resources and human capital is essential for a knowledge-based society. Instead, such expenditure is seen as a revenue cost, and is continually squeezed. We have inadequate resources for education and for training, yet that is the most important investment that this country can make. My hon. Friend the Member for Bath (Mr. Foster) hopes to have the opportunity to deal with that issue.

The Queen's Speech does not contain the policies that manufacturing industry needs. It does not contain measures to free business from the strangulation of red tape. It does not do enough to provide investment to achieve the high skills we need for a knowledge-based society. We must go much further down that road before I can be convinced that the Queen's Speech addresses these issues.

6.25 pm
Mr. Jim Fitzpatrick (Poplar and Canning Town)

I am grateful, Mr. Deputy Speaker, for being called to speak in the debate. I shall refer specifically to the Government's proposals on fairness at work. That should be no surprise, as I am a member of the Graphical, Paper and Media Union parliamentary group, and as a former senior lay official of the Fire Brigades Union, I would be expected to be interested in trade union law.

There has been much speculation about what will be in and what will be omitted from the forthcoming Bill on fairness at work, which is expected to begin to redress the imbalance created by the legislation introduced by Conservative Governments between 1979 and 1997. It is generally accepted that they moved employment legislation beyond fairness to create a clear bias which could be used to advantage unscrupulous employers.

The main thrust of our legislation will not present problems for reasonable companies that treat their staff with respect and dignity, but may cause difficulties for organisations that disregard their employees and do not consider that staff should be entitled to a view. Such organisations represent but a small minority of employers.

It is important to say that this legislation is not about giving power back to union barons, but about creating a framework of fairness for people in the workplace. The Prime Minister has said: even after the changes we propose, Britain will have the most lightly regulated labour market of any leading economy in the world. It is important to bear those words in mind when we consider the efforts that some employer organisations have made to dilute the proposals published in the White Paper, some of which had been agreed.

The Bill will deal with individual employee rights. It is only right that the upper limit on awards for unfair dismissal should be abolished. Contrary to the view of the right hon. Member for Wokingham, I believe that reasonable compensation should be paid if an independent tribunal is persuaded that an individual has been deprived of his livelihood unfairly. The tribunal should decide how much compensation is appropriate. A £12,000 limit is potentially unreasonable and unfair. I am pleased that the Secretary of State nodded his agreement that such a provision will be in the Bill.

To allow employers to pressurise new staff to sign waiver clauses on unfair dismissal and on redundancy protection is wrong and should be outlawed. Employees are usually in a weak position when applying for work, and they can easily be persuaded to sign away basic legal rights when pressed by unscrupulous employers.

There seems to be general acceptance of the Government's proposals to reduce the qualifying period for unfair dismissal from two years to one. I believe that there is a strong case for all qualifying periods to be abolished. Workers pay tax and insurance, and are contractually bound from day one of employment. They should also be entitled to full employment protection from day one.

One aspect of the White Paper which did not attract enough attention was the promotion of family-friendly policies. It is a matter of some pride that our Government are proposing policies such as the extension of statutory maternity leave and the introduction of parental leave. Those changes will promote the family in a realistic and practical way. Those rights should be statutory, or we will disadvantage good employers who are keen to look after their staff.

On automatic union recognition, we should be looking for a procedure that is simple and less likely to cause tensions in the workplace. Many complicated formulae have been suggested: 50 per cent. plus one, which is the most straightforward; 50 per cent. plus one, plus 12 months' employment; 50 per cent. plus one, plus 12 months' employment. plus a ballot; 50 per cent. plus one, plus 12 months' employment, plus a ballot, plus individually signed forms requesting collective representation. Surely, if 50 per cent. plus one member of a work force are members of trade unions, that should indicate that the majority of staff seek representation, and recognition should therefore be automatic. Any other formula will only give employers who do not want to recognise trade unions in the first place legal loopholes to exploit, to delay and thus to frustrate.

Employers apparently accept that there should be a right to representation in disciplinary cases, but not in regard to grievances. That seems anomalous. The only reason would appear to be the fact that disciplinary action is initiated by the employer, whereas grievance proceedings are initiated by the employee. Extending trade union representation to grievance hearings is hardly radical, given that most workplaces surveyed recently had such procedures, while only a few did not allow individuals to be represented. Surely, if someone has a problem, the company involved will want it to be solved, and a trained trade union official is more likely to be able to assist in the process. Harassment at work—for example, bullying, racism or sexism—is a sensitive issue. Most employers want such matters to be dealt with through acknowledged procedures, by people who know what they are doing. Trained trade union representatives can help in such sensitive situations.

The Government intend to exclude a quarter of the working population from union recognition because they work in firms employing fewer than 20 people. If those employees have no access to trade union advice and grievance representation, that will have a negative impact on them.

As has been stated by Mr. John Monks, general secretary of the Trades Union Congress—I hope that we all share his view; certainly all Labour Members do—many of the proposed measures are designed to minimise disruption in the workplace. Fair, stable and orderly industrial relations are the goal, and the proposed fairness at work legislation will help to achieve it.

6.32 pm
Mrs. Teresa Gorman (Billericay)

The Secretary of State for Trade and Industry made great play of his concern about, and even approval of, "honest failure" in the workplace. Having considered the measures proposed in the Queen's Speech—as well as those that the Labour party has already said it intends to produce—I put it to the right hon. Gentleman that there will be much more failure in the business world because of the burdens that the Government are heaping on the business man and woman.

Let us be clear about one thing: businesses do not exist to provide social services. Social services result from the decisions of politicians, and politicians should be prepared to administer them at their own expense—at the expense of the taxpayer—rather than expecting proprietors of firms, especially small firms, to take on an added burden of work.

It should also be acknowledged that firms do not exist to promote happy families. A reasonable case could be made for the view that the Government have some interest in that, because of the social consequences that flow from unhappy families; nevertheless, it is not the purpose of a business man running a company, large or small. Businesses exist to make profits: only by doing so can they provide the jobs that we all want people to have, and pay their taxes. Ultimately, all the tax that Government receive comes from the profits of business and commerce. Firms can do what is required of them only by concentrating on running their business, rather than running Government social policies, family-friendly policies or trade union-friendly policies.

Charlotte Atkins (Staffordshire, Moorlands)

Will the hon. Lady give way?

Mrs. Gorman

No, I will not. I want to be brief, because others wish to speak.

The purpose of a business is to make profits, and to run its own affairs. I find it chilling that so much of the legislation proposed in the Queen's Speech takes us back to the past, giving trade unions much more power and authority in the workplace and meaning that taxation must inevitably increase to cope with, for example, the working time directive, increased maternity leave and increased holiday time. All that will add to the cost of running a business, and, most important, will add to the paperwork and intervention that the business community will have to administer.

For instance, Labour intends to introduce new family credit arrangements, which will mean much more administration for employers. Those arrangements will involve people earning about £39,000 a year—presumably, well over half the work force. Some large organisations may well cope, because they can put up more reserves from their profits.

According to the managing director of Fiat in the United Kingdom, although larger corporations can probably cope with the legislation, smaller firms are in "a very difficult position". He says that they are minnows compared to union professionals", who will be given much more power and authority in the workplace through the re-establishment of their right to form and operate trade unions, regardless of whether employers want that to happen.

We lived through all this in the 1970s, when there was chaos in the workplace. There were strikes of monumental proportions almost every other week, which were extremely destructive of our economy. Only the Conservative Government's action in bringing some sense into that chaos produced the tranquillity that we now enjoy in the workplace and take for granted, but which will end as a result of the Government's proposals.

Two female Opposition Members found that quite amusing, but we currently live in a world in which we no longer experience major national strikes. Perhaps they do not recall those days, but I do. I ran a company then, and it was hell.

Charlotte Atkins

Will the hon. Lady give way?

Mrs. Gorman

I will, briefly.

Charlotte Atkins

Surely what has replaced the alleged abuse by trade unions is fear in the workplace. Would the hon. Lady condone the actions of one of my local textile firms, which requires, at 24 hours' notice, all staff to be available from 6 am until 10 or 11 pm? Will that not completely destroy family life?

Mrs. Gorman

The hon. Lady makes a point that I took up earlier. The concept of what families do with themselves is not one for which employers are primarily responsible. If people are losing their jobs, in the hon. Lady's constituency or anywhere else, they must thank the Government for the policies that they are operating—in particular, the policies involving more regulation, which are making our businesses less competitive. Even companies such as Marks and Spencer, which has a reputation for compassion, tell us that they cannot compete in the circumstances that the Government have created.

The hon. Lady should ask her question of her own Front Benchers. The situation did not arise under the previous Government, for the simple reason that there was flexibility in the workplace. People could find jobs when an old industry died and new industries were established. That is the answer to unemployment, rather than trying to pressurise the employer to accept more responsibility.

Of all the measures that the Government are proposing, many of which will be extremely damaging to industry, I shall refer to two. One is the working time directive, under which—allegedly—individuals cannot be asked to work for more than 48 hours a week. Many Labour Members may say, "Jolly good job, too; don't let employers grind the faces of the poor." The directive will cause great problems for the Royal Mail, for example, which employs thousands of people, because its staff often work more than 48 hours a week in order to process an irregular source of material. Apparently, the post does not arrive evenly over a seven-day period. A 48-hour maximum may sound wonderful on paper, but it will interfere with the natural working patterns of large as well as small firms, the health service and other major industries.

The other item that should be mentioned in this debate is the Government proposal to remove the cap on compensation that is awarded in industrial tribunals. Such tribunals are one of the most discouraging elements of regulation with which small firms must cope. Not only do small business men have to take time off and pay for lawyers to put their case: they must find the compensation. In proposing to remove the cap, the Labour party could quite easily turn small firms into what the Secretary of State described as honest failures.

The cumulative effect of the new measures that the Government are proposing will add enormously to burdens on employers—not just small employers—and will inevitably contribute to an increase in unemployment. I am sure that Labour Members will do their very best to compensate people with higher welfare benefits, but that is not what people want. People want jobs in flourishing firms. If we are to encourage our small firms to grow and allow our large firms to survive in a competitive international market, we must stop imposing extra burdens on them.

Not surprisingly, all Labour Members who have spoken have welcomed the increasing burdens—whether they be an extension of trade union rights, an increase in time off, an extension of public holidays or a rise in the amount of compensation or damages that can be awarded against a business. Every one of those changes will make jobs more difficult to come by.

As for things such as the new deal, which Government Members trumpet whenever they get the opportunity, we all know that Government intervention—whether Conservative or Labour—in business activity invariably leads to a reduction in the amount of time, energy and money a firm is able to spend on producing a profit. Without that, without the creation of jobs and without encouraging small businesses and new entrepreneurs, jobs will be lost, which will not be replaced by artificial schemes that the Government concoct.

I realise that the Opposition think that all the measures are socially desirable, and even likely to improve—

Mr. David Jamieson (Lord Commissioner to the Treasury)

The hon. Lady is a member of the Opposition.

Mrs. Gorman

I accept the hon. Gentleman's reprimand of my slight confusion. It is very difficult to believe that the sensible measures that we introduced will not be continued under this Administration.

All the proposed measures will have a harmful effect in the workplace. People will not thank the Government for introducing regulations, which ostensibly will be sold to them as an improvement in protection, when they find that they no longer have jobs.

6.45 pm
Dr. Brian Iddon (Bolton, South-East)

A major delegation from the textile industry lobbied Parliament today. Hundreds of people joined us from all over the country, and members of the industry and employees made speeches. That is not the first time that they have lobbied this Parliament; several months ago, representatives from the regions came down to London. Such action shows the anxiety felt in Britain's textile industry. I welcomed the Secretary of State's statement that a meeting had taken place yesterday with the employers. I hope that some good will come from it.

I did not, however, welcome the statement of the shadow Secretary of State, who seems, all of a sudden, to be pretending to show concern for the textile industry. Those of us who represent towns such as Bolton, where the textile industry is very strong and important to its economy, remember decline and decline during 18 years of Tory government. Whenever Parliament was lobbied when the Tories were in power, all we ever heard was that they would not support lame ducks. When leading industries which are important to the economies of Italy, Germany, Japan and many other countries got themselves into temporary difficulty for whatever reason, why did their Governments deem it important to support them?

We know that the textile industry has been in decline for a long time. I shall address issues concerning that in a moment. I remind Opposition Members that, in the north-west, where the textile industry is so strong, their policies have resulted in being able to count Conservative Members for the region on only one hand. When I go to the "NorthWestminster" regional television studios, I find it humorous that those working there wonder which of the four or five Conservative Members to invite on the programme the following week. They might even consider dressing them up in different uniforms so that they look different when they appear on television.

Mr. Brady

I should like to put it on record that I am always happy to do that. Indeed, dressing up in different uniforms may even help the textile industry.

Dr. Iddon

I look forward to seeing the hon. Member for Ribble Valley (Mr. Evans), opposite whom I always appear to sit on the programme, dressed up in another costume. I wonder who he will appear as.

To be serious, the town of Bolton has a strong history in the textile movement. It was the cradle of the industrial revolution in textiles, where Crompton invented the mule, where Arkwright lived and worked for a while, and where the first mill to use the new industrial textile system—St. Helena—was built. I am pleased to say that it has been preserved, and still stands today.

If one visits a town such as Bolton today, one will not be able to count so many smoking chimneys. In fact, my constituent, Fred Dibnah, said to me in his garden the other day, "Will you tell the Minister for the Environment that I've done more good for the environment than he'll ever do in the whole of his time in Westminster?" That is probably true. From the west Pennine moors overlooking Bolton, one can see scores of textile mills. Thankfully, many of them still manufacture textiles, although others have switched to alternative industries. Such textile mills are valuable to our town and to Britain.

Let us look at the facts. Britain annually spends £25 billion on textiles. Although we export £8 billion of textiles, regrettably, we import £12 billion-worth. That £4 billion trade deficit could easily be balanced by demand in Britain. Those who lobbied the House today are asking, "Why on earth don't we start manufacturing the types of item that we import in huge volumes?" The question is very difficult to answer, whether we are talking about televisions, clothing, curtains, or anything else.

The fact is that, in the north-west, 62,000 jobs—12 per cent. of its manufacturing employment—rely on textiles. Across Britain, 370,000 employees are involved in the industry. However, many of those people are currently either facing redundancy or working short time. Let us consider the situation of a textile worker who, month after month, works one week on and then one week off. What happens when that worker goes to see the Department of Social Security? I assure the House that, because of that work pattern, it is very difficult for that worker to gain approval for his or her application for the jobseeker's allowance. Many workers end up living for two weeks on the wages that they earn in one week, as it is almost impossible for them to get benefits out of the DSS.

Employees in the industry would be the first to admit that the strength of the pound has been a cause of their problems. However, they will also say—I have listened today to three major speeches by union leaders—that the strong pound has not been the primary problem. If that were so, why has the textile industry continued to decline over many years?

Employees in the industry tell us that lack of investment and a subsequent productivity decline has been one of the major causes of problems in the textile industry—and in all British industry. Europe's production record in the textile industry is 30 per cent. better than ours. That gap, if analysed, speaks volumes.

In 1964, when I left university, I considered going into the textile industry. I applied for a job, and was shown around a factory in Cheshire. I saw machinery that was built before the war. The people there admired the machinery and said, "Look what it's doing!" It was printing curtaining on both sides simultaneously, and producing an excellent product. However, even in 1964, the machine was not producing the product fast enough to stay ahead in the industry. Time and again, that has been the history of the United Kingdom textile industry. It has never thought about investing in state-of-the-art machinery, which is not only available but produced in the United Kingdom. We invent, produce and export such machinery, but we do not use it.

Some British industries use state-of-the-art machinery, but not nearly enough; it is about time that they—especially the textile industry—did. It is much easier, however, for textile managers to uproot machinery, export it, employ cheaper labour, and export those textiles back to the United Kingdom. That is criminal, because it makes our people suffer, many of whom have been made unemployed. Once upon a time, far more than 370,000 people were employed in the UK textile industry.

The condition of buildings is another factor in the industry's decline. We subsidise Japanese companies to come to various parts of the United Kingdom, and put them on green-field sites close to motorways to produce microchips. Why on earth do we allow our textile industry, which operates in a very competitive sector, to continue trying to produce in clapped-out mills which are often seven storeys high?

I live next to one such example, Falcon mill, in the Halliwell part of Bolton. It is very costly to take goods up seven floors and then to bring them back down again. Moreover, I dare anyone to try to negotiate round very large transporters in the narrow streets of the old industrial parts of Bolton. It is about time that the textile industry not only invested in new machinery but got itself into modern productive plant, which one can find across Italy and in many parts of Germany.

There has been little training and retraining in our textile industry, and I implore training and enterprise councils to pay more attention to that industry. If we are to invest in new plant and new machinery, we must have the new skills to operate the machinery, but TECs have not paid sufficient attention to that problem. I welcome the establishment of the National Textiles Training Organisation, which has not yet received the recognition that it deserves.

Finally, Mr. Mayor—Mr. Deputy Speaker; I apologise—

Mr. Deputy Speaker (Sir Alan Haselhurst)

Order. I think that the hon. Gentleman has forgotten where he is.

Dr. Iddon

Yes, Mr. Deputy Speaker; I thought that I was in the council chamber in Bolton. I apologise.

Britain can no longer produce bulk cotton or wool as raw materials. However—unlike other countries, at least so far—we are good at adding value to certain raw materials. We are very good at producing high-quality, high-value products that the rest of the world enjoys importing.

I should give a brief plug for the Bolton Institute, which provides a superb training centre for those working in the textile industry and is very good at developing fire-retardant textiles. Around the world, disasters on mass transport, and in hotels, cinemas and nightclubs, have demonstrated the desperate need for textiles and other building materials to be flame-retardant. The Bolton Institute has a very fine research group that is leading the world in inventing new ways of stopping fabrics—including everyday clothing—catching fire.

I compliment London Fashion Week, which has provided a showcase for British designers to show the world what they do. It is also helping London to catch on as one of the world's major fashion centres. Britain has some excellent schools for designers and for those working in all aspects of marketing. Sadly, however, many of our designers are still leaving Britain to live and work in France and Italy, among other places. We must not only train such skilled and innovative people but keep them here in Britain.

I do not write off the textile industry. Some very skilled people work in the industry, and some very fine inventions are waiting to be marketed around the world. I hope that the Government will accept the challenge, run with it and put British textiles back at the top around the world.

6.59 pm
Mr. Ieuan Wyn Jones (Ynys Môn)

I am grateful for the opportunity to speak—I hope briefly—in the debate on the Queen's Speech, which contains many measures that Plaid Cymru Members will want to support. Removal of the right of hereditary peers to vote in the other place is one such measure, and modernisation of local government is another.

I congratulate the hon. Member for Bolton, South-East (Dr. Iddon) on saying that he supports elected mayors, at least for parts of England. We also very much welcome the proposal to legislate on the Disability Rights Commission. Of course, there will be measures that we will want to scrutinise very carefully, especially those on welfare reform in so far as they impact on the disabled, the long-term sick and the frail elderly. We want to ensure that they are not penalised in any way.

The Queen's Speech heralded one of the major constitutional changes that this House has debated for generations, and probably this century. I listened with some care to the words of the former Prime Minister, the right hon. Member for Huntingdon (Mr. Major), who passionately believes that those constitutional changes are wrong. Obviously, I approach the topic from a different point of view.

I know that the right hon. Gentleman holds his belief passionately, but I passionately believe that it is right that the people of Wales, of Scotland and of Northern Ireland should be allowed the responsibility—as in the referendum—to consider ways to promote their own affairs within their own territories. If people vote for such a change, the House should encourage them to ensure that it is not only implemented, but actually works.

That is one reason why I want to mention a couple of facts that I believe will assist the Welsh Assembly to ensure that when it is established in six months time it will work well. All of us, whatever side of the debate we were on during the referendum in Wales, now want the Assembly to work. The primary responsibility of everyone elected to the body is to ensure that it works. Once the constitutional framework is in place, it must be allowed the flexibility to deal with various issues. For example, it needs the flexibility to develop innovative, practical and deliverable policies across all the policy areas that are devolved to it.

My great disappointment is that the Queen's Speech did not deal with those specific issues. I shall give two brief examples; the first is training. As hon. Members from both sides of the House have said, one major problem is the multiplicity of organisations that deal with training. They may not be responsible for training in the strategic sense, but are responsible for its delivery. There is a great deal of confusion in the minds of employers, trade unions, young people, those who wish to return to work, those who are in work and those who need to be upskilled about the appropriate organisation to approach.

One of the difficulties in Wales is that the training and enterprise councils have a patchy record. Some have done some good work, but others have fallen far short of the standards we expect. If the Assembly, not having legislative powers, is to deal with the problem, it needs the power to abolish TECs, if it so chooses, and to investigate other ways in which training can be delivered. Plaid Cymru wants the House to recognise that that flexibility is necessary. It is why we wanted the Queen's Speech to include a short Bill to allow the Welsh Assembly that freedom.

As tonight's debate covers training-related issues, I want the House to consider a number of ways in which we could improve training throughout the whole of the United Kingdom. First, we should establish a new type of audit of skill needs and training outcomes. We need to broaden the existing skill needs research and ensure that it is done consistently. We should also audit the sort of training people receive and its relevance to current market needs. One of the problems is that many young people feel either that the training is inappropriate for them or that it is not suitable for the needs of the market in which they must work and live.

Secondly, we must make full use of the enhanced Welsh Development Agency's market intelligence to forecast emerging skill needs. One problem with our existing training provision is that it often tries to deal with current problems—with people currently out of work—rather than anticipating the skill needs of the new millennium.

Mr. Hayes

I am reluctant to interrupt the hon. Gentleman's flow, as he is making an extremely considered case. He referred to training for redundant or outdated skills. Does he agree that we need to build into the system training for adaptability—the ability to anticipate and accept change and then deal with it? That is certainly what employers say to me, and it is what I have found from my business experience. We need young people to be flexible and adaptable, and the sort of training that the hon. Gentleman wants can be built into the system.

Mr. Jones

I would not disagree with the thrust of the hon. Gentleman's remarks. However, it is not only employers who believe that that is necessary—although I accept that they do—but many trade unionists. Indeed, many young people believe that that is necessary, as do many of those currently involved in the delivery of inflexible training.

My final point is that training should be reintegrated into mainstream education, while allowing scope for specialist training, especially in niche markets or cutting-edge technology. There will be a need for specialist training provision. In what is becoming a very competitive area, it is necessary to integrate education and training rather better than we do at present. It is essential that we develop proposals and have a continuing programme of upskilling as part of the lifelong learning project.

Another area where the Assembly would need greater flexibility—although it is not the subject of tonight's debate—is health, which I wish to mention briefly. I declare an interest, as I am a member of the Royal College of Nursing parliamentary panel. The Assembly should be given the opportunity to be much more flexible in the way that it approaches health provision. I served on the Standing Committee of the Bill that set up NHS trusts in 1989. I have always believed that they were unnecessary, and a wasteful way of using national health resources, and that they created unnecessary bureaucracy and duplication of management.

The Bill that will result from the Queen's Speech needs—on the premise that it will begin to dismantle the internal market in health—to go substantially further. I want the Assembly to be given the power, if it so wishes, to dismantle and abolish NHS trusts. All that is proposed for the Assembly is the power, if it so wishes, to reconfigure trusts. Frankly, that is simply tinkering with the problem, and we need to go substantially further. The Assembly should have the flexibility to look at the whole of the health area, rather than being restricted by legislative difficulties.

When we examine the proposal to dismantle general practitioner fundholding and put local health groups in its place, we must ensure that that does not simply compound the problem through duplication of management. We should ensure that the reform does not create another tier of bureaucracy, one which does not enable us to deliver better health care in the long term. I am not saying that I am opposed to the idea, but I want to see how it is to be put into practice before giving it our firm backing.

Finally, I have two more brief points relating to health. First, I want more development of community hospitals, so that we have better integration between community hospitals, GP practices and community services. I believe that we can enhance the provision of health care in rural areas in particular, many of which are far away from district general hospitals. The provision of a more comprehensive community hospital service could bring immediate and substantial benefits.

My second and final point on health is that we are facing a massive problem with the recruitment of nurses and doctors. Time after time, under the previous Administration, we heard about an explosion in the number of managers in the health services and a reduction in the number of front-line nurses and doctors. The Royal College of Nursing has carried out an important survey, which shows that many of our hospitals are suffering recruitment problems. For example, Wales urgently needs at least 500 more nurses and 200 more midwives. Acute hospital trusts have vacancies that they cannot fill, not because they lack the resources, but because of insufficient nurses to fill the posts.

I ask the Government to give the National Assembly for Wales the flexibility to address the important matters of training and health. In so doing, they would give the Assembly a head start and ensure that, when it is established, it can do a proper job of work.

7.12 pm
Ann Keen (Brentford and Isleworth)

I welcome all the Queen's Speech, but I shall focus my remarks on the fairness at work White Paper and legislation. I am vice-chair of the parliamentary trade union group and secretary to my own union group here—the General, Municipal, Boilermakers and Allied Trades Union, or GMB. The House would therefore expect me to take an interest in trade union and employment issues.

In recent discussions with Paul Kenny, London regional secretary to the GMB, we talked about whether any changes had occurred since the White Paper was issued in July. He replied that it was obvious that companies now wanted to talk, having realised that legislation was coming through. They were asking the GMB what benefits it could bring to their company, and what sort of relationship they could expect with the unions if talks started. That marks a different approach by the trade unions than the one described by the hon. Member for Billericay (Mrs. Gorman), who is no longer in the Chamber. It is about co-operation, partnership and talking; it has already started and it is accelerating.

If that relationship is absent, and if open discussion does not occur, the result is the situation that we are on the eve of changing. An example can be seen in a company that I have mentioned in previous debates—Noons, in the constituency of my hon. Friend the Member for Ealing, Southall (Mr. Khabra), in which constituents of mine are employed.

For a year up to the publication of the White Paper, the company had been engaged in a bitter battle with its work force. More than 500 people work in the company, which prepares Asian food for large supermarkets. The bitterness was entrenched and there was no talking—an old-style approach. The company had challenged the union representatives, there was intimidation and an extremely stressful environment. Now—tomorrow, I believe—an agreement is to be signed. The parties are talking, and a positive future beckons for that company. Congratulations should go to both sides, because it is only when both sides agree to talks that good results can be achieved.

However, some of my other constituents, whom I met recently, are not so lucky. They work in the London casinos, which are not usually perceived as a bedrock of trade unionism. The casinos wage a war of words, and there are constant legal challenges, conflicts and recourse to industrial tribunals. The whole approach emphasises the differences. I want my Government to include in their fairness at work legislation a small and simple procedure to ensure that bad bosses have no room for manoeuvre—no room to use expensive delaying tactics and legal challenges when a ballot has taken place and democratic procedures followed. I hope that the Government will address that problem in the Bill.

I am sorry that the hon. Member for Billericay is not here to hear my comments on family-friendly policies, because such policies are crucial to the future stability of the work force. If employers do not take care of the work force, how can they expect the loyalty and commitment from their employees on which many small businesses rely?

Like the hon. Member for Ynys Môn (Mr. Jones), I want to talk about the health service from an employment perspective. I am a member of the Select Committee on Health, which is examining recruitment and retention of staff. We know that part of the problem with retention of staff relates to employment practices in the national health service.

The NHS is the largest employer in Europe. I hope that we now have a Government who will look at employment practices within the NHS, and that all staff, across the spectrum, will be entitled to family-friendly policies. That is not only a slogan. My profession is nursing, and I know of many occasions when part-time work has been asked for, but not given. The attitude encountered is that of the old school: "I work full time, I started my shift at 7.30 am, I did not have child care, so you can do it too." The problem is that staff are not doing it, and they are not staying. At last we have a Government who are working in partnership with the health service and saying that, if staff are to stay in a difficult job, they must be cared for.

When the chief executive of my local hospital, John de Braux of the West Middlesex University Hospital NHS trust, was asked recently about problems with the millennium bug, he said that, until the Labour Government were elected in 1997, there had been no investment in his hospital for more than 25 years, so he was happy with the equipment being up to date and able to cope with the millennium bug; however, he remained extremely concerned about staffing levels. The staff who were on duty that night or that week were not his sole concern; he also had to take into account their domestic circumstances.

Many nurses are married to ambulance workers, and ambulance workers sometimes marry fire officers. That can lead to complex problems of the type facing Mr. de Braux—who is to look after the children and so enable his staff to come on duty? I had not previously considered such problems, and I am telling as many of my colleagues as possible that it is something that they should examine in the context of their local area. Family-friendly policies are crucial.

Trade unions are now encouraged to work in partnership. The Government are right to promote such an approach, and they should be congratulated on doing so. However, we need to consider how to protect vulnerable people at work—people working in small units, subject to bad bosses who still look for loopholes that will enable them to avoid trade union recognition, and having to ensure that working conditions are adequate. So I urge the Government to look at the Bill to see whether procedures can operate in that way. It is the only way in which everyone can work together. Working together with the trade union movement is a positive approach to the next century.

7.20 pm
Mr. Howard Flight (Arundel and South Downs)

I should like to talk about trade, industry and employment from the point of view of someone responsible for a company employing some 450 people around the world. In the private sector, survival is about covering one's costs with a margin. Government action and legislation that add to those costs directly affect employees.

The Government's objectives, as expressed in the Queen's Speech, are to achieve high and stable levels of growth and employment and to improve productivity through measures addressing competition, investment and entrepreneurship. We all share those objectives. Governments will always engage in propaganda and are entitled to do so, but I am concerned that the present Government believe that the policies that they have been pursuing and advocating will achieve their objectives. That is not the perception of those of us who live in the real world.

I shall concentrate on small business. In his Budget speech, the Chancellor had much to say about the Government's support for and encouragement of small business and entrepreneurs, although I have found no such references in the Queen's Speech. I perceive that the Government are doing grave damage to small business. They are listening to the chairmen in big business, who lead easy lives, rather than paying attention to the problems that their measures are causing small business. My hon. Friend the Member for Billericay (Mrs. Gorman) has already made some of the points: I shall highlight one issue in particular.

During the summer—I think it was 10 September—a national insurance regulation was slipped through that imposes a massive tax on small business: the very business that the Chancellor said he was trying to encourage. When small companies are set up, entrepreneurs have shares in them. Now, if those businesses start to succeed and, under typical buy-out ratchets, the shares convert from one class to another, they face a substantial tax. Next year they will pay 12.2 per cent. in national insurance. Typically, 30 per cent. of the equity of a company may be affected. Although no one will have realised any money, some businesses will be hit by a massive tax of some 5 per cent. of their market value.

Still to come is a similar tax. When a business is floated to raise money, and the options that entrepreneurs may own need to be sold as part of the issue, there will be a tax of 12.2 per cent. on their value. How on earth can the Government say that such measures are supportive of entrepreneurs and small businesses?

I could cite other measures that will be equally damaging to small businesses. The working families tax credit, to which others have referred, will place a massive burden on under-resourced small businesses. Trade union negotiations represent yet another burden on businesses with 20 employees, as will the costs of extended maternity leave. Those and other very nice measures are desirable in principle, but will not keep a small business afloat. Small businesses cannot have people disappearing all the time.

In the financial services sector, quite unfairly in some cases, two measures will drive small independent financial intermediaries out of business. Many consider that a desirable objective. It will no longer be possible for many small businesses to compete and to comply adequately with rising regulation and bureaucracy.

First, I should like to know why the Queen's Speech contained no reference to the assertions by the Chancellor of the Exchequer. Was it all just hot air? Secondly, I should like the Government to do what the Chancellor claims they are doing, and not to damage small business.

The Government promise to improve levels of growth and employment. I agree with my right hon. Friend the Member for Huntingdon (Mr. Major), who asked whether the Government were aware of what is going on. The Organisation for Economic Co-operation and Development, which is a conservative organisation that does not support any one political party, has warned that the United Kingdom will be lucky to achieve 0.8 per cent. growth next year and 1.5 per cent. growth in 2000. It warns that unemployment here will rise by 500,000 during 1999–2000, and that Government debt will be £36 billion over what has been forecast.

The Confederation of British Industry—a great friend of the Labour Government and not exactly an organ of the Opposition—has found the lowest level of business confidence in the United Kingdom since 1980. It predicts a sharp downturn, with considerable risk of outright recession. Consumer confidence is declining, and the level of consumer spending on credit cards is at its lowest since records began in 1993. New orders are at their lowest since 1991, and exports are at their weakest since records first began in 1977. Ours is hardly an economy that will achieve nice growth and in which employment will increase; it is likely to decrease substantially.

Others have referred to the economic background. The Government have introduced £40 billion-worth of extra costs and taxes on businesses, and plan to spend an extra £37 billion on social security. The extra taxes and regulatory costs on businesses are equivalent to £1,500 per job.

It is interesting to step back and look at continental Europe and America over the past 25 years. The US economy, which does not have overdone employment laws but an open labour market, has created some 40 million new jobs in the past 25 years. Continental Europe, which has restrictions and regulations—all in a good cause—towards which our Government are now moving with increasing enthusiasm, has lost 15 million jobs in the past 30 years. That is a pretty clear demonstration that increased employment costs that make it more difficult for small businesses price people out of work.

Mr. Chris Pond (Gravesham)

Is the hon. Gentleman aware that, over the period to which he refers, although net employment growth in the United Kingdom was 3 per cent.—it subsequently declined—it was 11 per cent. in Germany, 18 per cent. in Italy and 6 per cent. in France? On the whole, continental Europe did rather better than the United Kingdom, despite the deregulation policies that he supports.

Mr. Flight

With the greatest respect, I dispute the hon. Gentleman's figures. The other day, I saw with some astonishment that the number of people employed in Germany was 29 million out of a population of 80 million, whereas the number of people employed in this country was 27 million out of a population of nearly 60 million. I do not know from what base the hon. Gentleman calculates the growth rate in Germany, but more people are out of work in Germany than has been the case since before the second world war, whereas this country has the lowest unemployment rate of any economy in Europe.

I do not think that anyone in the business world is taken in by the fairness at work agenda. Fairness at work—a silly euphemism—is about settling the account with the trade unions and moving in line with European employment regulations, or, rather, job-destroying regulations. In horticulture, for example, which employs 30,000 people, the directive on part-time workers will destroy many jobs; the industry cannot afford to provide all those who, under prior arrangements, work fewer than 20 hours a week, with the contracts, terms and benefits of full-time employment. The directive will mean that large numbers of employees, especially females who want part-time employment, will lose their jobs.

The fairness at work Bill will enforce trade union recognition. As the CBI has pointed out, good employee relations should be built on trust, which is not best fostered when trade unions have imposed collective bargaining on an employer. On smaller industries, the CBI has said that the removal of the cap on unfair dismissal compensation will drive many people out of business. I know from direct experience of employers' concerns about the liabilities that may arise when someone is not suitable for a job. It can be two years before one knows whether an employee will fit in, especially in a highly skilled job, and there is now a major deterrent to employing anyone in such a post.

The Government have undergone a sudden conversion to the McKinsey report, although they do not refer to its main points on lower productivity. The fact that the many people in this country who have been employed in lower-paid jobs would be unemployed in continental Europe must be put into the equation if the productivity figures are to be comparable.

As my right hon. Friend the Member for Huntingdon said, the state of the economy is partly the Government's fault and partly a result of what is happening in the rest of the world, but the Government's actions will lead to declining levels of growth and to 500,000 fewer people in employment. The third way—guff, as far as I can see—is a reversion to Labour's bad old ways. It is about higher taxes and higher Government spending, especially on social security. The Government are restoring the economically damaging trade union process that was shown not to work in the 1970s—the laws were often impossible to enforce.

Entrepreneurs are becoming demoralised, and are once again leaving the country in droves. The future will not be successful unless small companies and new businesses prosper, as the American experience over the past 10 years has shown. I know from my own business that the only tangible result of the working time directive is the need for additional clerical staff to keep records of the hours that everyone works. What a waste of time. People who work in business are keen for their businesses to succeed, and are more than happy to work whatever hours are necessary, but they have to carry out unnecessary bureaucratic tasks to comply with yet more Government regulations.

I see nothing in the Queen's Speech that is positive for trade, industry or employment; indeed, I see a great deal that is negative. In the current global climate, much more should have been positive.

7.35 pm
Mr. Chris Pond (Gravesham)

Like other hon. Members, I want to speak about the fairness at work agenda and family-friendly employment policies, to which the hon. Member for Arundel and South Downs (Mr. Flight) referred. I want particularly to deal with parental or family leave, which I believe will have a significant impact on a large section of the population. I pay tribute to my right hon. Friend the Member for Camberwell and Peckham (Ms Harman), who made a powerful speech based on her long commitment to these issues—I am pleased to support much of what she said.

Family-friendly policies were the subject of light-hearted criticism from the hon. Members for Arundel and South Downs and for Billericay (Mrs. Gorman). The hon. Lady said that business did not exist to create happy families, but does she believe that people exist to create a healthy balance sheet in business? I suggest to her—I am sorry that she is no longer in the Chamber—that there should be a partnership between families and business; the most effective and prosperous businesses are those that invest heavily in, and regard as their most important asset, the people who work for them.

Mr. Brady

Will the hon. Gentleman give way?

Mr. Pond

I want to make a little progress, but I shall give way later.

An extension of parental—as opposed to maternity or paternity—leave would have a significant impact. One in five people are parents of a child under five; indeed, I understand that one in eight hon. Members are parents of a child under five. None of us can pretend that the Palace of Westminster leads the way in promoting family-friendly policies. Any institution that begins its main business an hour before schools close and continues until an hour at which even the most recalcitrant child should be fast asleep in bed cannot describe itself as family-friendly.

I do not complain about that. I have a five-year-old child but, like so many other hon. Members with young children, I find that the Whips are flexible and accommodating when it is necessary to put home before work. Attitudes in the House have changed to some extent. In 1979, the then Member of Parliament for Leicester, West promoted a private Member's Bill to introduce seven days' paternity leave. It was described by Conservative Members as grotesque, absurd and an incitement to a population explosion.

I had thought that those attitudes had changed, until I heard the shadow Secretary of State describe such proposals as economic illiteracy. Indeed, I must correct the hon. Member for Billericay. She said that the working families tax credit could be paid to people with salaries of up to £38,000 a year and so would cover up to half the population. That example applies only to those families with five children under the age of 11, and I do not think that even the hon. Lady believes that such families constitute half the population.

I was fortunate that, when my child was born, I worked for an organisation—the Low Pay Unit—which took family-friendly policies seriously. The weeks that I was able to spend with my daughter at the beginning of her life formed a bond between us which will be long-term, enduring and sustainable. In thinking about reforming the Child Support Agency, perhaps we need to think also about ways in which we could encourage that commitment by fathers to their children at an early stage—which may make institutions such as the CSA less necessary.

It is sad that many relationships between adults break down and end in separation or divorce, but the relationship between a parent and a child should never end, under any circumstances. The policies proposed by the Government to promote family or parental leave will assist in the process, and I fully support the Government.

The measure will not just assist fathers. In Europe and America, 55 to 60 per cent. of working women supply half or more of the family's household income—those figures are from the International Labour Organisation. In just over 10 years' time, the ILO tells us, 80 per cent. of all women in industrialised countries will be working outside the home throughout their child-bearing years. The Government's welfare-to-work strategy is intended to promote further opportunities for people to work if they wish to do so—even when they are parents.

If the employment responsibilities within the household are to be more equally shared, so too should the parenting responsibilities. That is why the policies are so important. At present, many fathers find it difficult to be actively involved in their children's lives. The average working week for fathers is 20 hours longer than for working mothers, and four hours longer than for other employed men. More seriously, men's working hours tend to increase when a new child comes into the family. At the very time when it might be argued that a father's role is so important, many feel that they have no choice but to work longer hours to meet the additional costs of that new mouth to feed. That is bad for children and for their families.

The Family Policies Study Centre tells us that the culture of long working hours may pose a threat to the stability of family life, and a major survey has shown that one in four fathers work more than 50 hours a week and that their absence had a detrimental effect on joint family activities.

The hon. Member for Arundel and South Downs may be sceptical about the working time directive, but I wonder what he would say to the person who, not so long ago, wrote to the Low Pay Unit to say that she was expected to work 112 hours a week, night work, for £150 before tax. That is not a matter of choice. Very often, it is a matter of someone saying, "Either you work these hours or you have no job."

The current situation is bad for children and families, but it is also bad for the economy and society. A MORI survey, commissioned by the Daycare Trust, found that three quarters of employers believed that there was a business case for family friendly employment policies.

Mr. Brady

The hon. Gentleman has helpfully come back to the point on which I first wished to intervene—the argument that there is a business case for the measures. I am sympathetic to that argument, and many business men would agree that one can run a more effective and productive work force by being generous and accommodating to employees. Surely that is an argument against legislating in those areas. If productivity can be improved and businesses can improve their performance, one does not need to legislate to force such proposals on them.

Mr. Pond

The hon. Gentleman's point underlines something that I was about to say. The chairman and chief executive officer of Xerox agrees with both of us that family-friendly working practices are a "powerful business tool." That was what he told a conference in September, and he added that, as a result, workers are more efficient, productive and satisfied in the job. The difficulty is that, if such matters are left solely to voluntary arrangements—as the Federation of Small Businesses has pointed out—firms will be at a disadvantage in terms of the recruitment and retention of staff. The large firms which can afford to get the competitive advantage of looking after their staff well will do so, and there will be a further squeezing out of the small firms sector.

Mr. Brady

Will the hon. Gentleman give way?

Mr. Pond

No, I wish to make a little more progress. I am sure that I will return to the point in a few moments, and I may allow the hon. Gentleman to intervene again.

The current situation is bad for society as a whole, and inadequate fathering has an impact on a child's social development—as reflected in juvenile crime, marital break-up and stress. The House should take seriously the wish of 80 per cent. of eight to 15-year-old children who want to spend more time with their fathers. I am pleased that, as a result of the proposals, they will be able to do that.

To be effective and equitable, parental leave should be paid—as is the case in most other EU countries. I am pleased that the Government are considering the introduction of paid paternity leave, as confirmed by a written answer in Hansard on 11 June.

I believe that the principle should be extended to family or parental leave generally. Many employees have a contractual entitlement to such leave. Even when no payment exists, higher-paid employees may well decide—and often do—that they need to take time off around the birth of their child. For low-paid employees, that is not an option—unless parental or family leave is paid. Half of families with children under five say that they are only just making ends meet. They cannot afford to take time off, even though that may be the right thing for their children at the time. For that reason, the arrival of a child may result in those fathers working longer hours, rather than fewer.

As my right hon. Friend the Member for Camberwell and Peckham asked, what is a responsible parent to do in those circumstances? When a new child comes into a household, most would say that it is the role of both parents to be involved. However, a responsible parent on a low wage without paid parental leave may decide that the most responsible thing to do is to work even longer hours—even if that means that they are not available—to supplement the family income at a time when that is necessary.

The small firms sector has made it clear that it does not find difficulties with the proposals, despite what Opposition Members have suggested. At the launch of the parental leave campaign organised by New Ways to Work, the Federation of Small Businesses said that payment for parental leave would not be a difficulty for small firms, assuming that it was reimbursed easily to overcome possible cash-flow problems.

Parental leave is a feasible policy that will certainly benefit families and children, and society as a whole. I believe also that it makes good business sense. I warmly welcome the proposals in the Queen's Speech, and I look forward to seeing them brought into legislation.

7.48 pm
Mr. Graham Brady (Altrincham and Sale, West)

I am pleased to follow the hon. Member for Gravesham (Mr. Pond), as it gives me an opportunity to point out a profound illogicality in his remarks. He said that there was a business case for the proposals, and seemed to suggest that there was a business case only for large companies which would gain a competitive advantage. However, he went on to say that small businesses would be disadvantaged. If there is an advantage for a business—large or small—surely small business will embrace the proposal as well, and will not suffer a competitive disadvantage.

The hon. Member for Bolton, South-East (Dr. Iddon) may not always remember where he is, but he always remembers what he believes. There is no doubt about his passion for representing the interests of Bolton and the north-west. Sadly, he invariably reaches the wrong conclusions about how the best interests of that city and our region can be pressed forward most effectively. The great prosperity of Manchester and the area that he and I are privileged to represent was built through free markets: it was built through enterprise, not through the socialist regulation that the Government have foreshadowed in the Queen's Speech.

It is a great and refreshing thing, though, to hear a Labour Member setting out an honest set of beliefs, in stark contrast with what we hear from Ministers, who get themselves tied up in trying to justify some of their proposals in a rather illogical fashion. The Secretary of State for Trade and Industry may have betrayed the reasons for that, as well as the low regard that he has for many of his Cabinet colleagues, when he described the Government as half-intelligent—although that may have been flattery.

The fatal flaw in the Government's economic and business policy is that they are making it progressively more costly to produce goods in this country as compared with competitor countries throughout the world. It is bizarre to hear Ministers repeatedly talking about their belief in greater labour market flexibility, precisely when they are decreasing that flexibility. That will cause a progressively worse problem for British business at a time when world and domestic economic trends suggest it is likely to be least able to cope with added burdens.

It never fails to amaze me how the Government use a word to mean the exact opposite of what the rest of us understand by it. That appears to be the case with the word "flexibility". The game was given away to me when I went to Brussels with the Employment Committee and we had a meeting with Padraig Flynn, the Social Affairs Commissioner, who, just after the Prime Minister had come back from the so-called jobs summit, said to me, "Oh, no. We are not talking about flexibility but about positive flexibility." I apologise to hon. Members for my poor impersonation, and perhaps I should apologise to the Commissioner, too.

Mr. Flynn said that the agenda of the European Union, with which he believed the Government were entirely in accord, was not about creating greater flexibility, as any normal commentator or outside observer would understand it, but about something entirely different, called positive flexibility, which in fact meant the opposite. When I asked the Social Affairs Commissioner which country he thought had the most flexible labour market at the moment, he said Denmark, not the United Kingdom.

A few days ago, I put the same question to the Secretary of State for Trade and Industry, who gave an even more remarkable reply, saying that the United Kingdom had the most flexible labour market. It is odd that the right hon. Gentleman seeks to take credit for that, when the whole thrust of his policy will make our labour market less flexible.

The Government would be wise to consider the great Conservative achievement of the past 20 years in freeing up the British economy, making it more flexible and competitive, and allowing a more responsive employment market to develop. Those things can be destroyed overnight, but they are very difficult and time-consuming to put in place.

That was brought home to me last week when I had the privilege of addressing a seminar in Bonn, where the British Council's hospitality was adequate, but not exotic. One of the other speakers, a German economist from the Kiel institute for world economics, presented some very interesting findings, in particular a comparison between the UK and west German employment markets. He was careful to remove the effect of reunification from the comparative figures.

That economist's graphs showed that the decline in manufacturing employment in both the United Kingdom and west Germany had followed a broadly similar trend, but that in the former that had not led to a constant trend increase of unemployment as it had in the latter. The inescapable conclusion is that the more flexible, freer labour market, and the more dynamic economy built up in this country by Conservative Governments, can deliver higher levels of employment and is the fundamental reason why our unemployment is at only half the level that prevails in Germany.

It is a great cause for concern that the direction of European Union policy may make things much worse. The Social Affairs Commissioner clearly has an agenda of raising social and employment costs, and members of the Government, along with their socialist colleagues in Europe, have signed up to increased labour costs and reduced flexibility. The programme has serious potential consequences for the UK economy.

In line with frequent comments from the German Government, the head of customs and revenue in the European Union stressed in the Evening Standard today that the single currency will be the engine driving taxation issues. It is becoming increasingly plain to everyone outside the Government that achieving and maintaining convergence in a single currency area will have numerous implications, with harmonised social, employment and taxation regulations and law. It is time that the Government recognised that and stopped risking leaving the British public to make decisions in the dark.

We do not yet know what will be proposed in detail, after a protracted debate in the national newspapers between the left wing of the Labour party and the trade unions on the one hand, and the Secretary of State for Trade and Industry and the Confederation of British Industry on the other. He appears to be trying to please both the unions and the CBI.

We do not know exactly what the final fairness at work proposals will be, but it is certain that they will increase costs on businesses and make it less efficient to run them in the United Kingdom, with a damaging effect on employment. That was perhaps recognised by the Secretary of State in his opening remarks, when his only proposal to help enterprise was to remove the stigma of business failure. Perhaps he was quietly recognising that his one achievement on enterprise and business will be to oversee the closure of far more businesses, with far more people put out of work.

Today, we have read that we had the highest ever trade deficit this month: £2.5 billion. That will be made worse as the cost of producing goods here increases relative to the cost elsewhere. The new deal programme is vastly expensive and has only one distinction: that it has completely arrested the decline in unemployment in the target groups, and possibly even turned it around.

It is a remarkable fact that, in April to July 1997, 27,000 18 to 24-year-olds who had been unemployed for six months or more came out of unemployment, whereas, in January to April 1998, unemployment in that age group increased by 1,226, and in April to July 1998—the first quarter when the new deal was effective—only 2,500 came out of unemployment.

The figures showing whether employability is being enhanced are perhaps more damning still. The likelihood of 18 to 24-year-olds remaining unemployed for nine months if they have already been unemployed for six months is increasing. In July 1997, the likelihood of still being unemployed after nine months was 60 per cent: in July this year the figure had risen to 64 per cent.

The Government promised to put young unemployed people back into work, but they have failed. The Government said that their new deal programme would increase employability. That is difficult to define, and therefore to judge, but the figures are beginning to make it clear that the Government are also failing at that.

The new deal programme will not even compensate for the massive increased costs to business that the Government have created. It will not compensate for the cost of the minimum wage or of the working time directive. Perhaps more important—I made my point about the Engineering Employers Federation's submission earlier in an intervention in the speech by the Secretary of State for Trade and Industry—the new deal programme will not compensate for the enormous burden of regulation and record-keeping that the Government's proposals will force on to business.

I turn to the Government's achievements, or rather failures, in education. Education is vital for the well-being and development of our children, as well as for our economic success. I am sure all hon. Members would agree that this country has not had the strongest educational record, and that has been true for some time.

Ms Candy Atherton (Falmouth and Camborne)

For 18 years.

Mr. Brady

It is longer than that since this country had the best performance in education, which we would all like to see. The hon. Lady and her party would be wise to seek to improve what is failing, rather than to break down what is succeeding. I represent an area with some of the best schools in the country, certainly in Greater Manchester, where we have a selective education system, with good grammar schools and good secondary modern schools. I am concerned that one of the Government's priorities was to introduce a programme to destroy good schools rather than to improve bad ones. That is also the case in the foolish and wilful destruction of the grant-maintained schools, which have achieved so much already and could have achieved so much more in raising standards in education.

My hon. Friend the Member for Maidenhead (Mrs. May) and I both had the pleasure of serving in Committee on the School Standards and Framework Act 1998, as did the hon. Member for Plymouth, Devonport (Mr. Jamieson), who cannot say so, even from a sedentary position. I am happy to give him credit for the many hours that we enjoyed in Committee.

Mr. Don Foster (Bath)


Mr. Brady

How could I forget the hon. Member for Bath (Mr. Foster)?

In the debates on class sizes in Committee, we raised several concerns that what started as a laudable objective could go horribly wrong for schools and for the Government. I take no pleasure in the fact that many of those concerns have already started to come back to us in constituency mail. Some schools are concerned that their budgets will be hit; others fear that they will lose members of staff because their rolls are falling; yet others think that they will lose teaching assistants as a result of the Government's policy. The Government's record to date is woeful, and suggests that they will reduce educational attainment rather than improve it. The Queen's Speech contained no proposal of any consequence to address those problems or to try to raise the standard of the Government's performance in education.

The Queen's Speech foreshadowed increased costs for business. Its proposals will put more people out of work, make it harder for Britain to compete in the world and fail to provide any new hope to children for a better standard of education to improve our performance in the future.

8.4 pm

Ms Candy Atherton (Falmouth and Camborne)

My speech welcoming the Queen's Speech was going to be much longer, but the speeches by my hon. Friend the Member for Gravesham (Mr. Pond) and by my right hon. Friend the Member for Camberwell and Peckham (Ms Harman) have allowed me to shorten my contribution. Both spoke about children and the effect of work on the family.

As a member of the Select Committee on Education and Employment, I have an especial interest in our plans to develop the new deal, and it is appropriate to talk about that, given the speech by the hon. Member for Altrincham and Sale, West (Mr. Brady). I also wish to talk about employability and fairness at work. I pay tribute to the members of the employment service in Cornwall, who have worked hard to become a beacon as pathfinders for the new deal for 18 to 24-year-olds and as pilots for the 25-plus group. I welcome today's publication of the new deal document for the under-25s, which illustrates the innovation that the Government and the employment service are putting into developing the new deal.

Cornwall especially will build innovatively on existing programmes. For example, one project will enable older workers with experience in declining industries to use their experience in growth industries. Another project has been successful in helping workers to transfer into woodland management and timber processing. In a part of the country such as Cornwall, which has lost tin mines, where farming has been in decline and fishing has had its problems, new opportunities through the new deal are to be welcomed.

I was privileged to serve on the Committee that considered the National Minimum Wage Bill. When I am a lot older than I am now, one of my favourite memories of Parliament will be the faces of Conservative Members as they realised that they faced all-night sittings of the Committee because Labour Members were determined to force through the national minimum wage. The Conservatives realised that they were going to be there all night and into the afternoon, because we were committed to our manifesto commitment to get rid of poverty wages. I was proud to be part of introducing that historic measure to provide fair wages for a fair day's work. Let me warn the Conservatives that we shall not let them get away with holding up our Bills in this Session, either.

I look forward to the fairness at work legislation. As a Cornish Member, I am glad that it will address various issues. Take South West Water—actually, somebody: please take South West Water. It has the highest bills and the lowest performance indicators in the country, not to mention some diabolical plans that it has implemented or intends to implement in my constituency. On top of everything, South West Water has de-recognised Unison. Despite the support of the overwhelming majority of workers for the union, the company refused point blank to recognise it.

The fairness at work legislation will remedy that situation. It cannot be right, when the majority of workers wish to be members of a union, that a large employer, such as South West Water, can refuse to recognise it. That unfairness needs to be addressed.

I hope that we shall also see an end to the blacklisting of union members. Hon. Members will not need reminding of the appalling treatment that many people have suffered at the hands of the Economic League and others. The end of that situation will be welcomed throughout the country.

Much in the Queen's Speech will be welcomed by women. My right hon. and hon. Friends have discussed parental leave, which will give mothers and fathers individual rights, not transferable between them. I can think of few more family-friendly policies than that. Parents will be able to use their leave to attend school events, provide child care, or simply bond with their child. I hope that Opposition Members will reflect and support that proposal. Conservative Members talk of the cost to industry, but imagine the savings to industry if fewer family breakdowns occurred. Policies that support parents in raising their children should be supported even by some of the ayatollahs on the Conservative Benches.

As a Cornish Member, I welcome the news that there will be reform of structural funds. We in Cornwall look forward to the new year, when final areas are to be announced. With the lowest gross domestic product in the country, we look forward to some good news in 1999.

I very much support the Queen's Speech. Apart from the obvious big battles that stretch before us, such as reform of the House of Lords—something that I particularly welcome—it is clear that Bills that focus on fairness at work, for example, will improve the lives of men and women throughout the country. That will build a stronger partnership between workers and employers, provide necessary protection and lead to new ways of working.

8.11 pm
Mr. Don Foster (Bath)

We have had a fascinating debate so far, and one enlivened with some powerful speeches. I refer particularly to the contribution of the hon. Member for Gravesham (Mr. Pond). I wish to place it on record how much I agree with every one of his remarks. It is appropriate also to refer to the hon. Member for Kingswood (Mr. Berry), who spent a large part of his speech praising others who have worked hard on disability rights. It would be inappropriate for the debate to conclude without reference to the significant effort that he has put into forcing through disability rights. I put on record, from the Liberal Democrat Benches, our support for the work that the hon. Gentleman has done.

Predominantly, the debate has been about trade and industry matters. However, it is billed as a debate that is intended also to cover education and employment. I hope that the House will not object if I use the few minutes that are available to me to pick up one or two issues relating to those subjects.

I am sure that the House will be aware that I would have liked many education and employment issues to be set out in the Gracious Speech. For example, I would have liked to see a Bill relating to lifelong learning. The Government have made some good progress in that direction, but they have so far failed to acknowledge the vital importance of a strategic planning framework for lifelong learning. A Bill would be very important.

I would have liked to see a Bill taking forward further developments in early-years education. We know that the Government have committed themselves—the Labour party did so in its manifesto—to developing high-quality early years education for three-year-olds as well as for four-year-olds. However, unfortunately, despite the questions submitted to the Department, we still have not received from it a commitment on when the extension will take place. Legislation to bring forward that extension, while at the same time adding to the Government's proposals for early-years education, would be important.

I would like to see an agreement on both sides of the House that there is a need to have a specific key stage for the early years, perhaps to be called a foundation key stage. It seems odd that, while both sides of the House have recognised that the early years in education are the most important, and although we have key stages 1, 2, 3 and 4, we do not have a specific key stage for that phase.

I would have liked to see other proposed pieces of education and employment legislation in the Queen's Speech, perhaps those covering all aspects of employment. I would have liked also to see proposals for age discrimination legislation going further than the Government's current plans to have a non-statutory, non-binding code of practice. I would have been pleased to see specific statutory legislation proposed in that regard.

It seems from the Queen's Speech that there is to be no new legislation for education. In a sense, I am expressing disappointment, because I have said that I would like to see references to certain pieces of proposed legislation. In another sense, I confess to some relief. I have been in the House since 1992 and, during every year since then, I have served on Committees considering one, and more often two, major pieces of education legislation. That is my personal relief, and no doubt the Secretary of State shares it. We are delighted to see the right hon. Gentleman in his place this evening. I know that he has a busy schedule. He may have had to make some difficult changes so as to be with us this evening. I suspect that he may not be pleased about that, but that he is pleased that there is not to be specific new education legislation.

I suggest to the Secretary of State and to the House that there is an additional benefit in there being no new education legislation. There has been a tendency on the Government's part to be rather quick to grab the headlines with some good, innovative and exciting education measures, many of which that we support, without having necessarily worked out all the details.

The hon. Member for Altrincham and Sale, West (Mr. Brady) referred to legislation on class sizes, which is a good example. Most hon. Members would support the Government's intention to reduce class sizes. Indeed, many of us would like them to go further and reduce class sizes for key stage 2 as well, and in due course reduce class sizes, at least for the practical subjects, in secondary schools. However, there is no doubt that previous legislation has been rushed through and that many of the details were not sorted out in time.

Bits of sticking plaster have been placed on top of sticking plaster. The sums of money that were originally intended to be sufficient to cover the costs of reducing class sizes were demonstrated clearly to be inadequate, and more money has had to be found.

There is also the problem—there are many other examples—of admission policy. Despite the new admission guidance brought out recently by the Department, many parents still believe that it is important for them to get their child into the reception class of a school even though they do not want their child to go to it—perhaps because it is an overcrowded reception class—merely to guarantee a place at the statutory school starting age. To solve this problem, the Government have offered what I believe to be the ludicrous proposition that reception classes can leave a place open. Under the current local management of schools formulae, that will not work. What school would leave a place open and lose the money associated with it?

The House will know that my party did not support the introduction of student tuition fees. There were problems in the early days involving gap-year students. Later on, and very recently, there have been problems associated with the analysis of parental income of non-United Kingdom European Union students.

I have given some examples of where details have not been worked out. I suggest to the Government, and particularly to the Secretary of State, three specific areas where they could use the year ahead of us to get some of the details right. I choose the areas of target setting, the bidding process and issues relating to the new deal.

There is no doubt that the Government are right to believe that target setting can be a key tool in levering up standards. We support them in that. However, the issue is whether the targets that are being set are the right ones. I suggest that the Government, by rushing through their proposals, have not arrived at the right target. I refer to the literacy and numeracy targets for key stage 2. The Secretary of State has expressed himself as deeply concerned about literacy and numeracy standards, and rightly so. The right hon. Gentleman has therefore set what he claims to be tough targets. They are so tough that, if 80 per cent. of pupils do not reach level 4 in key stage 2 in literacy, and 75 per cent. do not reach it in numeracy by 2002, he will resign. Those, he claims, are tough targets.

I truly believe that there is no question but that those targets will be met, not only in time but, I suspect, a year ahead of time. In my view, they are not tough targets. Instead, they are politically expedient targets. More important, there is a fallacy within this target-setting agenda, for the simple reason that the Government have rightly expressed their desire to remove social exclusion. The Chancellor of the Exchequer promised at the Labour party conference that the Government would abolish social exclusion as we understand it. Yet, if targets are set so that 80 per cent. of children have to reach a particular level while the other 20 per cent. have no target, there is no incentive for teachers to work to ensure that the children at the bottom end of the ability range, who have no chance of hitting the target, will have their standards raised. That is a real problem. It almost takes us back to the horrid days of the old 11-plus exam.

There is an urgent need for a rethink of target-setting procedures so that there are targets for those at the bottom end of the ability range. The latest evidence from the Department's own figures shows that the results of children at the bottom end of the ability range simply are not moving upward, although the results of the remainder are moving pleasingly. There is a growing gap between the successful and the unsuccessful. That is evidence of growing social exclusion, not of its removal.

My second point relates to the bidding process. The Government have made additional money available for education, and we have said that we are pleased by that. We have campaigned for it for a long time. My concern is the mechanism that is being used to ensure that the money gets to the right place. Often the additional money must be bid for. Since the Government came to office, more than 16,000 bids have been produced by local education authorities. A lot of detailed work and effort has gone into those bids, but more than 10,000 have failed. Roughly speaking, there is a two-thirds chance that a bid will fail despite all the effort. That does not result in high-quality education for all, as the Prime Minister promised. It provides high-quality education for some.

Mr. Blunkett

I shall endeavour to answer the hon. Gentleman's other points in my winding-up speech, but I want to make it clear that the resources allocated today make it highly likely that work done on drawing up plans and putting together proposals and prioritisations will be successful. Those who have plans to replace rooms and boilers, to make window frames tight and to ensure that there is an environment in which to teach will receive the resources to fulfil the plans. Without prioritisation, it would be impossible for a school, a local authority or the church authorities to be able to order work sensibly.

Mr. Foster

I am grateful to the Secretary of State for that. However, a large number of bids are still outstanding. The Secretary of State has announced additional money for repair and maintenance of school buildings, but the success rate of bids to date in that area has been just 25 per cent., with 75 per cent. of bids failing. There are also huge variations across the country. In Oxfordshire, only 10 per cent. of bids have been successful. The London borough of Ealing is even worse, with only 8 per cent. of bids succeeding. I hope that the bidding process can be re-examined.

Finally, the new deal is another area in which the Government need to do much more detailed work. The Government appear not even to have done their homework on making arrangements to collect the information necessary if we are to judge the new deal. Other hon. Members have already said that we do not know whether the new deal is improving employability, a factor that is clearly crucial. In recent weeks, I have asked the Government for information about the new deal, but they were unable to tell me how many subsidised vacancies there were, the size of the companies taking on new deal trainees, the courses that people were taking on the full-time education and training option, or the providers of those courses. Nor could they tell me anything about the progress of ex-offenders, other than the number who joined the scheme early.

Perhaps my biggest concern is that the new deal seems not to provide information even on where people are going. The latest figures show that the destination of 9,500 individuals on the new deal is totally unknown. The Government are failing even to collect data, never mind getting all the detail right. The fact that we have no education legislation this year gives the Government a real opportunity to get the details right. I hope that they will take the opportunity to move education and employment forward in a way that the country desperately needs. If the Government are prepared to do that, the Liberal Democrats are more than willing to offer them support.

8.25 pm
Mr. David Crausby (Bolton, North-East)

Before I came to the House last year, I spent 30 years in the engineering industry. I started work at 16 as an apprentice, and I joined hundreds of workers in walking to work in the early hours each morning. That was a real world. The hon. Member for Arundel and South Downs (Mr. Flight) is no longer in his place, but he talked about the real world. Well, that was a real world, and I valued it.

Unfortunately, that world was devastated in the early 1980s by the monetarists in the Conservative party. It has become a disappearing world. If I walked to work early these days, treading the same streets I trod then, all I would see would be the milkman, and even he is becoming increasingly rare. The industrial world that I knew and loved has declined massively, and Britain is a much poorer place for it. The decline has been not just economic, but social and cultural. Generations of industrial and engineering workers and employers provided not only manufactured goods, but employment and wealth for whole communities.

For 28 of my years in industry, I was an elected trade union representative. I witnessed a decline in industrial relations, just as I watched our industrial base disappear down the plughole. It does not really matter what came first, or who was to blame for the decline of management-employee relationships. As in all wars, there were no winners, just casualties. Anyone who has a real understanding of, or a genuine concern for, good industrial relations should understand that collective interests involve everyone. That must include the interests of both employers and employees. Responsible trade unionists with any experience soon recognise that the best wages and conditions in the world are pretty pointless if the company went out of business last week. Good shop stewards are well trained shop stewards.

Too often, the problem is that employers do not discuss their problems with their employees. When they do, they often exaggerate, or they do not reveal the full picture. Good employer-employee relationships, like good marriages, should be based on mutual trust and honesty. That is why partnership is so important if we are to succeed as any sort of industrial nation.

The "Fairness at Work" White Paper is a good and encouraging example of how trade unions and business can work together to deliver a document that represents almost all points of view. It has clearly walked a difficult tightrope, and we are bound to hear criticism of it from all sides. If that were not the case, it would probably have failed to strike an honourable balance. The proposals in the White Paper should remain undiluted, as they are balanced proposals that should succeed.

We will still have the most lightly regulated labour market of any leading industrial economy, but what is wrong with that if we get our regulation right?

As for the working time directive—an over-hyped problem—during all the 28 years that I represented employees in industry, not one individual complained to me about the amount of overtime that he or she was being forced to do by an employer. Employees often argued about how much overtime their employers were delivering. The truth is that most employees want to work, and they want to work lots of hours. If employers cannot organise that sensibly with their employees, they are bound to fail in business.

What is important is that the proposals offer the biggest advance in employee rights for a generation, which is not surprising, because the previous Government took us so far in the other direction and built up so much animosity among workers that we almost tore our industrial economy apart in the end. As a result of that legislation, we ended up where we are today. It was not a Labour Government who decimated industry, but a Conservative Government, who so regulated the trade unions that they drove us to a complete lack of co-operation.

Much fuss has been made about the recognition proposals contained in the White Paper "Fairness at Work". Some old-fashioned and misguided employers have attempted to weaken the proposals to the point where they become almost sterile. Progressive employers do not need legislation, and that is a fact. They see the absolute value of recognition.

Therefore, we must resist the industrial dinosaurs, because all that is proposed is recognition, which in any civilised society is just good manners. If we do not recognise each other's existence, how can we communicate at all? Recognition alone does not deliver anything, that is the truth of the matter. Only through sensible negotiations and good relationships can we make real progress. To do so, we must recognise each other. To develop any relationship in any walk of life, we must at least recognise each other. If we cannot do so, we are surely doomed as a modern, progressive economy.

Much in the White Paper disappoints me. I do not intend to go into the list, as it has been dealt with, but I am thinking particularly of the one-year qualifying period for unfair dismissal protection. If a dismissal is unfair, why should it matter when it happens?

In my early trade union days, the majority of those in the trade union movement did not want unfair dismissal tribunals. They preferred to deal with such dismissals through industrial action. They argued that the courts should be kept out of the trade union scene. That seems a pretty old-fashioned view now. At every opportunity, we should be seeking ways to deliver rights to individual workers, rather than cause disruption. I cannot understand those people who oppose not only the trade union movement but the rights of individuals to take a dismissal to a tribunal. That seems contradictory.

On the other hand, the White Paper suggests some progressive changes—particularly the requirement to hand over to employers the names of those who will be taking part in a strike ballot, and allowing dismissed strikers to claim for unfair dismissal. In this modern world, anything less smacks of intimidation.

Of course, there has to be much more negotiation, and a great deal more has to be said by each side. That is the nature of the trade unions and those negotiating on the employer's side. However, it must not become a question of victory for either side, as the right hon. Member for Wokingham (Mr. Redwood) suggested. It is not a question of victory, or of whose side the Government are on. They are on the side of the interests of the British people. We should not make the mistake that the previous Government made, because they took us into more conflict and dissatisfaction. That is why I urge the Government to stay with the White Paper as it stands.

8.35 pm
Mr. John Hayes (South Holland and The Deepings)

I have waited to make my contribution to this debate mindful of the diminishing number of my colleagues. I do not know whether they have been deterred from attending by my impending oratory, or perhaps by the demagoguery of the hon. Member for Falmouth and Camborne (Ms Atherton) or even the contribution of the hon. Member for Bath (Mr. Foster). Notwithstanding that fact, I intend to concentrate on two aspects of the Gracious Speech—disabilities and education—partly because they are two subjects that I know something about. I learned before coming to this place that it is best in life—and certainly in Westminster—not to speak about matters of which one knows little.

Would that the Secretary of State for Trade and Industry had learned that lesson. Those of us who have made our living in information technology and who have worked in the field for some years were astounded by some of his pontificating on that subject—for example, speaking of electronic commerce as something of a revolution around the corner, when many companies, including mine, have been engaged in it for some considerable time—even some time before I came to the House.

The notion that business is not already being done by means of the internet and other forms of technology is at best naive. The idea of a digital envoy, speeding his way around the country spreading good news, and presumably good will, everywhere is little more than a gimmick. Good practice in information systems and high technology exists in all parts of the country. We do not need some envoy to tell us exactly how to spread such good practice. So I urge the Secretary of State not simply to parrot words on matters of which he seems to have little comprehension.

On a more positive note, I turn to the comments of the hon. Member for Kingswood (Mr. Berry). The hon. Member for Bath anticipated my remarks to some extent, by paying tribute to the good work that the hon. Gentleman has done. I speak as the very junior new joint chairman of the all-party disablement group. The hon. Member for Kingswood speaks with altogether more authority as the well-respected and senior secretary.

I listened carefully to what the hon. Member had to say on disablement. He will welcome the acceptance, welcome and support that my right hon. Friend the Leader of the Opposition gave the disability rights commission. The hon. Gentleman was a little churlish about my right hon. Friend, who was a well-respected Minister for the disabled. I think that the hon. Gentleman would agree that my right hon. Friend was genuine in welcoming the commission yesterday.

My right hon. Friend said that we need to examine the detail of the proposal, and I shall make two observations—not objections—about that detail. First, we must not ignore the most neglected disabled people. It is easy to think of the disabled as a generic group—easy, but misleading. The needs of people with different disabilities vary widely, and the chronically sick disabled are often the forgotten element within that group.

That point has been made by Sense in respect of deaf-blind people, and it is also true of multiple sclerosis sufferers, who are often not heard because they are chronically sick. Some disabled people—perhaps those with spinal injuries who have made good recoveries from accidents—are able to live good lives and to speak loudly, forcefully and persuasively in defence of disabled interests. They are usually the people we encounter representing the disabled. That is understandable, and I make no criticism of them, but the chronically sick disabled can easily be forgotten. We must ensure in the work of the commission that that is not the case in future.

My second observation is that disabled people do not live by rights alone. I should declare an interest, as I have a disability. It is important that we do not tie the treatment of the disabled—especially the financial support for disabled people—wholly and solely to work. Careless statements from Ministers have caused considerable disquiet, some offence and a great deal of trepidation among disabled people, because there has been a suggestion that people can be full members of society only if they work.

We must give every disabled person the opportunity to work, and we must pave their way to fulfilling that opportunity, but we must never forget that a significant number of disabled people—because of the nature of their disability, their age or other circumstances—do not work and never will. They must never be treated as second class, even within the family of disabled people. Having used the word "family" after saying that disabled people are not a generic group, I have perhaps contradicted myself a little, but I am sure that the House will forgive me for that.

Those are my two observations on that subject, and I very much want to associate myself with the remarks of the hon. Member for Kingswood.

The most prominent feature of the Gracious Speech is not what is in it, but what is left out. That is especially true of education. The hon. Member for Bath said that that is good news—later, I shall deal with initiative fatigue, which is felt by most schools and teachers throughout the country—but it is not entirely good news, because it is indicative of lack of vision.

There is little evidence in the Gracious Speech of any holistic view of social progress or of economic success, and there is certainly no clearly defined view of the national interest, or even of man in society. I can almost hear my hon. Friend the Member for Havant (Mr. Willetts) saying, "Well, what do you expect? If there is no such thing philosophically as a single view or a big idea, why expect it to be in the Speech?" In my view, however, public policy, at this stage in a Government's progress, should have some sense of purpose, unity and symmetry about it. I see none of that in the Gracious Speech.

The Prime Minister is fond of calling that joined-up government, but the only thing that was joined up in the words that we have heard from Ministers tonight was the suggestion that all these policies are linked by the common word "modernisation". The Secretary of State for Trade and Industry might have used the word "modernity". I have to tell him that the worship of modernity is not only divisive in itself, but not implicitly symptomatic of a coherent view of the present, let alone the future. It is not enough to say that, just because something is modern or new, it is therefore good, and that it hangs together with other measures in the national interest or for the common good.

That is true in a number of particular policy areas. In education, for example, there are many holes in the Gracious Speech. The absence of legislation relating to lifelong learning and early years has been mentioned, and yesterday my right hon. Friend the Leader of the Opposition talked about the gap in respect of the expansion of popular schools and the sharing of good practice. Those are legitimate criticisms of the Government's approach to education.

We have heard a little about the problems of the class size proposals, and how their implementation is leading to unanticipated difficulties for the Government. Perhaps it was for that reason that they were reluctant to introduce still more changes.

Surely, though, there should have been in the Gracious Speech evidence of commitment to sharing good practice—from specialist schools and beacon schools, for example. These questions need to be asked: what responsibility do beacon schools have to export their excellence and innovation? Where are the targets, not only in terms of the school, but for the spreading—the fountaining down, to use a popular term, or, in more egalitarian vein, the fountaining out—of that good practice? I had hoped to see some mention of that.

Where are the plans to allow the benefits of investment in special schools to be felt across the whole sector? I have some experience in that area, and know that there is little evidence that investment is benefiting neighbouring or feeder schools. Although there are some isolated examples of good practice in this respect, there is little suggestion that schools are benefiting universally as a result of that significant private and public sector investment.

I should have thought that some improvement would also be made in respect of targets and measurement. The previous Government changed the education agenda by measuring output, not input. When I first became a member of a local education authority, most of the measurements were those of input, such as spending and pupil-teacher ratios. The current consensus is that we need to measure empirically what schools deliver. Given that the previous Government laid that foundation, one might have expected this Government to take up the baton and to refine and improve those means of measurement. One might have expected them to look more carefully at measuring value added.

If schools are to be financially rewarded, and teachers' salaries are to be based on clearly defined targets and proper measurement, we must be sure what we are measuring. We need to identify excellent schools and teachers who out-perform their catchment area and do exceptionally well despite the fact that they start with few inherent advantages. Equally, we must carefully scrutinise the schools in leafy suburbs that under-perform.

We can do that only through empirical measurement of value added. I commend to the House the work of Sheffield university and the work done in Scotland, some of which was started some seven years ago, so it is well established. There is a lot of evidence on how measurement of value added can be achieved. Some good local authorities, both Labour and Conservative, have already gone down that road, yet the Government seem reluctant to propose a consolidated national programme.

The Government also seem unable to make proposals in respect of the best use of technology. We heard a great deal about the digital envoy and the impact on industry of information technology and high technology, but we heard little about the effective use of the internet in schools or higher and further education. The effectiveness of all that is extremely patchy.

The Government have spoken about training teachers in IT. The Minister twitches. Although positive steps have been taken, I assure him that the effective use of the internet and information technology in schools is extremely patchy. It needs to be pulled together urgently if a great deal of money is not to be wasted on inappropriate hardware and software.

The Minister for Trade (Mr. Brian Wilson)

The hon. Gentleman draws attention to my twitching, so I might as well exercise it further. What he describes is an inheritance; it has not been created over the past 18 months. He need tell no one on the Government Benches that IT and computer provision in schools is highly patchy. Last year, I visited a school in my constituency which had one computer that was younger than the 16-year-olds using it. People voted for a Labour Government precisely because they wanted every school in the country to be equipped to the best standards.

Mr. Hayes

The Minister misunderstands the problem. It is a question not of acquisition but of effective use. It is not a question of the number of computers on desks, but of how they impact on teaching and learning, how effectively they are integrated into delivery of the curriculum, and what impact they have on the relationship between the teacher and the taught. Some schools with few computers use them effectively, while others have invested heavily in hardware without matching it with training, software and support. Computers lie idle and have no impact on teaching.

It is not as simple as saying that we must spread the jam around the whole country and hope for the best. I want the Government to take a lead in using that investment more effectively. All I am saying, hopefully in a reasoned and moderate way, is that, if we are to spend money on computers, we should ensure that they make a real difference to children. One had hoped for a little more from the Queen's Speech on that issue.

Some of the initiatives that have been announced and implemented in the past year—I referred to initiative fatigue—were well intentioned but half baked. I do not want to debate the past—I would not be allowed to, anyway—but schools in my constituency were already doing much of what was in the literacy hour initiative. Whether that should have been universally applied—as it has been—is debatable.

Many teachers understandably and legitimately resent the fact that their creativity, flair, imagination and ability to innovate is being restricted by an increasingly prescriptive Government, who define what they do, how they teach, how much time they should allocate for homework, and when they should stand at the blackboard and when they should not. We must allow our teachers the flexibility and scope to deliver an effective education using their flair and creativity.

The absence of a thoughtful and considered programme is a cause more of sorrow than of anger. There is a lack of strategy, vision and long-term planning. We are told that there will be consultation on teaching. We must be careful that that does not become another excuse and opportunity for knocking teachers. Although the Queen's Speech refers to raising teachers' status and profile, there is a real concern that they will not welcome further consultation that will do nothing for their status, and might diminish it still further.

If education is the bridge to self-improvement and personal fulfilment, it deserves priority. Much is said about the priority that the Government have given it, but there are huge holes in the legislative programme in the Queen's Speech in respect of education. Those holes cannot be filled by this Government, but may be filled by a future Conservative Government.

8.52 pm
Ms Margaret Moran (Luton, South)

I make no apology for returning to the subject of trade and industry. Having sat here throughout the contributions of Conservative Members, I have heard great lamentations and gnashing of teeth. In their view, the Queen's Speech lacks legislation for industry, enterprise or jobs. It is noteworthy that they have not proposed any alternative policies. They have also signally failed to address one of the crucial issues in the Queen's Speech—electronic commerce, which will be fundamental to the future prospects of our industry.

The hon. Member for South Holland and The Deepings (Mr. Hayes) gave the impression that electronic commerce has already been achieved. His and his hon. Friends' references to it were extremely depressing because they showed that they do not understand its' importance to the future of our industry. The right hon. Member for Wokingham (Mr. Redwood) showed that his party's contribution to the debate on electronic commerce is confused and contradictory. He berated the Government over their intention to introduce voluntary licences for encryption, and revealed that his party's policy is for mandatory arrangements. That is utter nonsense.

Perhaps Conservative Members are embarrassed about the fact that, after all those years in government and despite the framework of telecommunications that they put in place, they never delivered the widespread access to innovation and advanced telecommunication services that they promised.

What the Opposition failed to discuss tonight is an important element of the Queen's Speech, which has been welcomed by the Confederation of British Industry. The secure electronic commerce Bill will perform the crucial function of updating to encourage worldwide trading, and will improve competitiveness by enabling the United Kingdom to compete in the digital marketplace.

The aim of the Bill is to overcome some of the key factors that have impeded confidence in electronic commerce. It will improve business confidence by establishing voluntary licensing arrangements for bodies offering electronic signature and confidentiality services to the public. The Bill will also introduce voluntary licensing arrangements for bodies offering electronic signatures to the public, to ensure that minimum standards of quality and service are met.

Signatures meeting those standards will, for the first time, have legal status. The Bill will also sweep away the restrictions that insist on the use of paper transactions, and will tackle concerns about law enforcement powers in the face of increasing criminal and terrorist use of encryption.

Lest the Opposition think that measures creating an environment in which electronic commerce can develop are not important to the country's competitiveness—as they have implied this evening—I shall remind them of the scale of internet and electronic business in Britain.

The United Kingdom has the fifth largest information technology industry, worth £45 billion, and it is estimated that, in commerce alone, it will be worth £500 billion within five years. Surely that is worthy of more scrutiny or debate than has been offered by Opposition Members today. The World Economic Forum certainly recognised its importance. Its survey found that 20 per cent. of firms believed that electronic commerce would fundamentally reshape the way in which they did business, and that a further 59 per cent. believed that it would lead to significant changes in their business.

Electronic commerce has been growing for many years. It links companies to suppliers and financial institutions, and business to Government. The United Kingdom has an exceptionally strong base from which to develop electronic commerce as it becomes a significant proportion of global gross domestic product.

As has been said in many debates, we are on the cusp of a quiet revolution, in which electronic commerce will play a significant role in a new commercial world; but harnessing the immense potential offered by electronic commerce to create wealth and jobs means that we must rapidly establish agreed ground rules giving buyers and sellers confidence and trust to use the new technology.

Although the prime economic drive for electronic commerce may currently lie with business-to-business transactions, it is clear that consumers—whether ordering books via the internet or using it for home shopping—must also benefit. They, like business, must be able to take advantage of the potential ease and reduced cost of transactions that the Bill will deliver. Consumers must have confidence in the new system. The need to address concerns about security of transactions, privacy and consumer redress will be crucial to the development of electronic commerce.

The Bill begins to tackle some of the issues by ensuring that messages can be signed electronically, so that a user can check who has signed a message and be confident that it has not been tampered with. Consumers will also have the assurance of confidentiality. For the first time, electronic signatures will have the force of law, and electronic transactions such as the pilot carried out in Luton recently by the National Westminster bank, offering intelligent forms for self-employed business people, will have legal standing.

The creation of such a framework is welcome. I am especially pleased that the Government have recognised that electronic commerce is a key element of competitiveness for small and medium enterprises. Notwithstanding comments by Opposition Members, the Government believe in such enterprises. That is why we have the lowest-ever rate of corporation tax, and why we have introduced incentives for small businesses to invest. It is no use Opposition Members shaking their heads. The Budget increased incentives for small and medium enterprises and has radically enhanced their productivity and prospects.

As I said in a recent Adjournment debate on competitiveness and small businesses, however, it is clear from my experience in my constituency that the importance and opportunities of electronic commerce to the sector's competitiveness must be more widely known. I am aware of the information society initiative for businesses and its emphasis on small businesses, but not many small businesses that I visited in Luton seemed to know of it. That is borne out by research conducted by the Bedfordshire chamber of commerce, which found that Luton and Bedfordshire small businesses use IT equipment but feel that they are not making optimum use of it. It was depressing to be told on a recent visit to a company of 80 employees that its only technology was an ancient computer for the payroll, and that the director was proud of knowing nothing about new technology.

We must make greater effort to get the message across to small and medium enterprises that the future is in electronic commerce. For small businesses, electronic commerce can overcome numerous barriers to competitiveness. Location and size can become irrelevant; all companies have the same global reach. Electronic commerce can also help suppliers to identify consumer needs more exactly. It will speed processes, giving a greater competitive edge, and cut out the middle man, thereby reducing the costs of small businesses and their clients.

Our small businesses have much to learn from their counterparts in Canada, which I visited recently. There, electronic commerce is well developed and integrated into every aspect of business life, from the large to the micro, from systems to design to new production methods. We can learn from the Industry Canada strategy, which recognises that electronic commerce is but one vital element for creating a knowledge-based economy.

Our strategy must therefore be to build trust in the digital economy, building business and consumer confidence. We must, as we will do in the Bill, clarify marketplace rules, remove barriers to the use of e-commerce and update our legal rules. We must strengthen our information infrastructure to support the growth of e-commerce, and, crucially, realise opportunities for jobs and growth by developing skills and leadership in new technologies, which we know is desperately needed.

I recognise that many such issues can be tackled only on a global basis because electronic commerce introduces the borderless world. That is why I welcome the agreement reached recently by my hon. Friend the Minister for Small Firms, Trade and Industry on her visit to Ottawa and in discussions with the Organisation for Economic Co-operation and Development. The agreement was particularly welcomed because it broke new ground and opened up opportunities to ensure that the benefits of electronic commerce are reaped by all—be they business, employees or consumers.

The Bill is not just to be welcomed; it lays the foundations for UK primacy in electronic commerce. Crucially, the Bill signals our determination to harness the power of electronic commerce in order to create economic growth and jobs. For UK industry to be competitive, we must ensure that we create the best environment in which to trade electronically. That is just what we are doing. We must also ensure that we are building on an economy that is based on knowledge, creativity and skills. That is why many of the elements in the Queen's Speech refer to creating a knowledge-based society and economy. In order to ensure that we take maximum advantage of the new opportunities that are offered by the information age, we need those joined-up policies and skills to develop our prominence in the world of e-commerce.

I very much welcome today's statement by my right hon. Friend the Secretary of State for Trade and Industry, which will create a digital envoy to be the champion of the new information age. My right hon. Friend's action will ensure that the United Kingdom plays a leading role in the new world of electronic commerce and that the Government's commitment to modernising our trade and industry is fulfilled. Such action stands in sharp contrast to some of the prehistoric views on trade and industry matters held by Conservative Members.

9.5 pm

Mr. David Willetts (Havant)

I welcome the Secretary of State for Education and Employment to the debate, and am grateful to him for changing his mind and attending it. I appreciate that he has done so at some personal inconvenience. Opposition Members will be very happy to hear his speech, not least because he has no education legislation in the Queen's Speech. Sadly, without substantial education legislation, we may not see quite so much of him in the House or have quite so many opportunities to debate with him.

Tomorrow, we are all, of course, speaking at Harrogate, at the conference of the Association of Colleges. I do not know how the Secretary of State will—

Mr. Blunkett

Need a lift?

Mr. Willetts

That is very kind, but I have already been offered a lift by the hon. Member for Bath (Mr. Foster). If the Secretary of State wants to join us, he will be very welcome. However, we are setting off at the end of the debate, as we are speaking rather earlier than he is.

As I said, I am grateful to the Secretary of State for speaking in our debate, which takes place against the background of a very sober economic climate—although one would not think so after hearing the speech, at the beginning of this debate, by the Secretary of State for Trade and Industry, or yesterday's speech by the Prime Minister. The Prime Minister seemed to be keener on waging class war against hereditary peers than he was on dealing with the economic difficulties facing the United Kingdom.

For six years, unemployment has been on a downward trend. Sadly, the trend seems to be coming to an end. We have just had the unprecedented experience of both unemployment measures—the survey measure and the claimant count measure—beginning to rise. But the Government do not seem to realise that we face a looming problem of rising unemployment. Ministers seem to deny that there is any problem. Instead, we hear what my right hon. Friend the shadow Chancellor describes as "fantasy forecasts".

Today, in a very fine speech, the former Prime Minister, my right hon. Friend the Member for Huntingdon (Mr. Major) very clearly made the point that the Treasury's growth forecasts are incredible. No serious outside forecaster believes the Treasury's predictions for economic growth. Months after the international financial crisis began, we have a Treasury economic forecast that, by 2001–02, the British economy will be bigger and better than the Treasury predicted it would be before the international crisis.

No other advanced western country lives in the fantasy world of expecting that its growth rate will be even better than before the crisis. The Treasury seems to be doing so by accepting that there will be some slowdown in the next 18 months, and simply adding back into the second 18 months any output lost in the past 18 months. It is not responsible and reputable forecasting, it is no basis on which the Government should take decisions on management of the economy, and it is no basis on which a responsible Government should be deciding their fiscal policies.

The reasonable, responsible and realistic assessment came only a few days ago, in a report from the Organisation for Economic Co-operation and Development. The report stated that, on its definition, unemployment will increase from 6.5 per cent. to 8 per cent., which means that, in the next two years, unemployment will increase by 500,000 people. That is a serious challenge for the British economy, and something that Ministers should be taking seriously—but they are not.

Today, all we have heard in speeches and interventions by Labour Members was a type of night out for old Labour—celebrating fairness at work proposals and increased power for trade unions, but saying absolutely nothing about what they think should be done to deal with the looming jobs crisis. We know what Ministers claim is the solution—the new deal, but that is a monumental irrelevance. It targets a very large amount of money on a very small proportion of unemployed people. The Government are biased entirely in favour of the young unemployed, and are doing nothing to help the long-term unemployed. There are twice as many long-term unemployed, yet they receive one fifth of the new deal budget that goes to the young unemployed, so they receive one tenth of the spend.

Meanwhile, what do we know from the evaluations that are already coming through? The hon. Member for Bath referred to them briefly, but the evidence is pretty clear. Thirty per cent. of people who leave the new deal simply disappear; the Government have no knowledge what happens to them. Another 10 per cent. move on to another benefit, so 40 per cent. for a start do not seem to be gaining anything from the new deal.

I asked the Library to calculate what had happened to young people who had been unemployed for six months in April 1997, and young people who had been unemployed for six months in April 1998. Three months later, what did we find? A higher percentage were still unemployed in July 1998 than in July 1997. That is a warning that the new deal will not deal with the jobs crisis.

I hope that the Secretary of State, when he speaks about the new deal, as I hope he will, will agree that there is a simple and stark measure of success—one that might interest the Chancellor of the Exchequer, who has, after all, claimed that the new deal will save money overall. Let us have figures for the total number of subsidised jobs that new dealers enter, the total number of unsubsidised jobs that new dealers enter and the total spending on the new deal. What we will find is that, with the new deal, the cost per job—

The Minister for Employment, Welfare to Work and Equal Opportunities (Mr. Andrew Smith)

We have the figures.

Mr. Willetts

I am pleased that the Minister has the figures. We also have the figures at the Centre for Policy Studies. Tomorrow morning, my hon. Friend the Member for Ashford (Mr. Green) will publish something that has done the calculation. It shows that the new deal is infinitely more expensive than any other training scheme that has been introduced. Sadly, the returns for the young people that it is supposed help are very modest.

It is not just young people who are losing; employers are increasingly frustrated, as we saw in the letter to Sir Peter Davis, chairman of the new deal task force, from the director general of the British Chambers of Commerce, Chris Humphries. He said that its members' concerns now arise because very few, or in some cases, no young people have been referred to them. Many companies report that they have also had little or no contact from the Employment Service, and so a severe lack of information is magnifying their confusion and leading to significant disillusionment. That is the experience that employers have of the new deal and it is dispiriting.

What the Government should do is announce that they will suspend the implementation of the job-destroying regulations which will hit British businesses in the next 18 months. That would be a serious and considered response to the threat of rising unemployment, because those measures are extremely expensive.

The double tragedy is that the cost of the working time directive, the working families tax credit and the Government's other regulations is not translated into a benefit that flows through to people who earn low pay. The cost is largely accounted for by the administrative costs that employers have to take on board to comply with the record-keeping requirements of all the different regulations. That money does not help anyone.

Therefore, I hope that the Secretary of State will comment on the performance of the new deal, and perhaps explain to the vast majority of unemployed people who are not eligible for the new deal why, at the same time, his Department is closing job clubs and stripping training and enterprise councils of funds that they intended to use for projects to help, for example, with the retraining of people who have lost their jobs.

Ms Atherton

May I issue an invitation to the hon. Gentleman to visit Employment Service offices in my constituency, in Penryn in Cornwall? There, he can see for himself the innovative and far-reaching implications of the new deal. Let him meet the young people who have got a job for the first time. Let him talk to the people and the companies who have told me that the new deal is the best thing that they have had from any Government in many years. Let him come to Curnow Shipping, which has taken on young people, trained them and given them permanent jobs within the company. I challenge him to come.

Mr. Willetts

I am happy to visit all parts of the country to debate the new deal, but let me tell the hon. Lady what is happening in the real world. Let me tell her about Hackney, where 1,877 young unemployed people have joined the new deal, and 12 have a job; or about Stockport, where 406 young unemployed people have joined the new deal, and nine have a job; or about West Lothian, where 277 young unemployed people have joined the new deal, and 10 have a job. That is the reality of the new deal throughout the country.

From the unemployment crisis now facing this country, let me turn to the other aspect of the Secretary of State's responsibilities—the education system and our schools. When I visit schools around the country, the message from teachers and head teachers is the same. Only the other week, that message was vividly expressed to me by one head, who said, "The only way that I can possibly hope to meet the Secretary of State's agenda on standards is by ignoring most of the letters that I am sent by him and his Department. If I actually tried to comply with all the regulations, instructions and directives that I am sent by the Department for Education and Employment, it would be absolutely impossible to focus on raising standards in literacy and numeracy."

It is literacy and numeracy that the Secretary of State says he really cares about, and I believe him; but he is in the absurd position of distracting teachers with his flow of initiatives from the very things that he cares most about. That is the abiding complaint one hears from teachers and head teachers around the country.

I hope that the Secretary of State will consider stemming the flow of instructions, regulations and directives that he sends out from his Department. Only the other day, on television, I debated the subject with the Under-Secretary of State for Education and Employment, the hon. Member for Norwich, South (Mr. Clarke), whom I see in his place. He admitted that, in his view, the Department had been sending out too many pieces of paper to schools and local education authorities. I welcome that admission. Now that the Government have recognised that they have made a serious mistake, we look to them to do something about it. I hope that the Secretary of State will make an announcement in that respect this evening.

The problem is not only paperwork. The hon. Member for Bath made a pertinent point in this respect, and we all saw the disturbing evidence in The Times Educational Supplement the other week. The problem is also the fragmentation of budgetary responsibility. If, instead of handing over an aggregate grant to an LEA and a total budget to a school and trusting the head teachers' and teachers' professional judgment, what is distributed is a large number of penny packets, each associated with some specific initiative which gets the Secretary of State on the "Today" programme and 24 hours-worth of headlines, all that does is make it more difficult for a head teacher sensibly to plan his own priorities in his own school.

Mr. Blunkett

Perhaps the hon. Gentleman will tell me whether the £48 million—£2,000 per school—for books is the sort of initiative of which he is thinking; or does he have in mind the new deal for schools, which now amounts, in grant and not in credit approval, to £1.5 billion?

Mr. Jamieson

Tell us about that.

Mr. Willetts

The hon. Gentleman says "Tell us about that," but we have been hearing about it since July last year and it had another outing today. We are all familiar with it, because we have been hearing about it for 15 months.

Mr. Blunkett

It is important that the shadow Secretary of State for Education and Employment should be able to refer to a calendar or to events that have taken place, rather than to ones that he has made up. When, either in July last year or over the past 18 months, have we heard about £1.5 billion for the new deal, given that £500 million of that was announced only this morning?

Mr. Willetts

I am referring to the statement in the House on 2 July 1997 in which the Chancellor of the Exchequer gave the figures for new deal expenditure on school capital. I am speaking from memory, but I recall that it was a £1.2 billion programme that sounded suspiciously like the capital under the new deal that the Secretary of State announced again today.

I am happy to tackle the Secretary of State's direct question. Yes, if a head decides that perhaps the priority for his school is not to spend money on the loos, but to employ a maths teacher, who are we to stand in his way? Individual heads are best placed to decide the priorities of their schools. Instead of having a clear total budget that they can spend in the way they think best, head teachers are increasingly having to submit bid after bid for individual and often relatively small sums of money, each associated with some new initiative launched by the Secretary of State. Every time the right hon. Gentleman gets his 48 hours of headlines, he undermines the professional judgment and authority of individual head teachers. I should warn him that they are increasingly frustrated and irritated by that process.

Head teachers are also irritated by the sheer distraction. Despite claims that the Government are interested in standards, not frameworks, many schools have to put so much effort into changing their status and their legal position in order to meet the requirements of the Secretary of State. Tragically, grant-maintained schools are losing some of the freedoms that we gave them and, most recently, grammar schools are being distracted by the Secretary of State's campaign against them.

We agree with the statement: The 160 grammar schools that there are, let them remain. Those are the words of the Prime Minister in an interview with ITV on 3 April 1997. We ask only that the Secretary of State endorses what his right hon. Friend has said. However, it is clear that, every time the Prime Minister makes such statements, the Secretary of State takes the opportunity of the detailed regulations on grammar school ballots, which nobody at No. 10 will be able to scrutinise, to smuggle in as much bias as he can to make life difficult for grammar schools.

Mr. Bercow

As my right hon. Friend knows, grammar schools are of the highest importance. The Royal Latin grammar school is testimony to their success [Interruption.] Despite the sedentary chuntering and laughter on the Government Back Benches, does my right hon. Friend agree that it is extremely disturbing that schedule 4 of the regulations that the Secretary of State has commended to the House enable him to declare the result of a ballot null and void if he considers that the content, tone or presentation of the arguments is not reasonable? Who is to determine what is reasonable in that context?

Mr. Willetts

There was an intriguing story about that in the Financial Times. It looked like another desperate attempt by No.10 to haul back the policy—some briefing with the message, "Don't worry, we'll try to use some of these powers to stop grammar schools disappearing after all." My hon. Friend—the Back Bencher to watch as we must now call him after the Spectator parliamentarian awards—is absolutely right.

We should look at the question that the Secretary of State will put into grammar school ballots. He is not going to ask a straightforward question such as, "Do you want to keep local grammar schools?", which goes straight to the nub of the issue. Instead, he wants to ask, "Are you in favour of a the introduction of a non-selective system of education in local schools?" We learn from an interesting experiment carried out by the Sunday Express last weekend that, if we ask the question in Government gobbledegook, we get a very different answer from the one to a straightforward question that makes it clear that people are voting on whether or not their grammar schools will survive.

The real criticism of the Secretary of State throughout the world of education is that he believes that education should be run by him sitting in the Department sending out instructions to all the LEAs, which in turn send them out to more than 4,000 schools. They then all write the plans for which he is asking—at the last count there were 17—and submit them to the LEAs, which debate them with the schools, revise them and submit them to him. He sits like some old-fashioned industrialist running the nation's schools from Whitehall. No organisation believes that that is the way in which it can enter the 21st century—it is an attack on teachers' professional judgments and standards, and the Secretary of State will anyway find his task impossible.

We should be relieved that there is no education legislation this year. I am sure that, if the right hon. Gentleman had secured any legislation, it would have been regressive, interventionist, heavy-handed and nannying. We hope that he will reflect on the contradiction between his apparent commitment to raising standards and his behaviour in office.

9.26 pm
The Secretary of State for Education and Employment (Mr. David Blunkett)

Dear me. It has been a long day for us all, and I do not intend to prolong it into the early hours of the morning. It behoves me first to congratulate a number of my hon. Friends on their contributions to today's debate.

My hon. Friend the Member for Kingswood (Mr. Berry) has campaigned for people's rights for as many years as I can remember. The appearance in the Queen's Speech of the proposals for the disability rights commission is a tribute to him and to all the people he listed who have made contributions over the years. Much still needs to be done; this is another brick in the wall rather than the construction of the building. However, we are well under way, which we would not be if the Leader of the Opposition had had his way—as has been pointed out, on 23 February 1995, he opposed the establishment of a disability rights commission.

I thank my right hon. Friend the Member for Camberwell and Peckham (Ms Harman) and my hon. Friends the Members for Gravesham (Mr. Pond) and for Falmouth and Camborne (Ms Atherton) for what they have said on the important subject of improving rights at work. They showed how positive policies by employers can transform not only individuals' life chances but their contributions to this country's economic well-being. I pay particular tribute to my right hon. Friend for her considerable work on the matter over the years.

I believe that the tribute to campaigners lies in the new sure start programme, in the proposals on child care, in the doubling of nursery places for three-year-olds and in the fairness at work Bill, which together make it possible to provide for children and their parents in a positive, radical and modern way. The House has a great deal to be proud of in what has already been achieved in the past 18 months.

I also thank my other hon. Friends for their contributions, including my hon. Friends the Members for Luton, South (Ms Moran), for Brentford and Isleworth (Ann Keen), for Bolton, South-East (Dr. Iddon) and for Bolton, North-East (Mr. Crausby).

The debate has been of varying parts. The shadow Secretary of State for Trade and Industry was not sure whether he was in favour of what the Conservatives had previously stood for, and he was totally unsure whether he was in favour of what they currently stand for. He rigorously denounced what he was against in past Conservative party policy but he could not say what he was in favour of in current Conservative party policy—no wonder, as the Conservatives do not have any policies and are ashamed of the bits that they think they have. There is a sort of trial by denial in the Conservative party, which is very difficult for Labour Members not to view with equanimity.

The previous Prime Minister, the right hon. Member for Huntingdon (Mr. Major) has decently sent his apologies for not attending the wind-up. I do not know how many other Conservatives have sent their apologies but, given the nature of the debate, one would have thought that more than seven or eight would have turned up.

Mr. John Healey (Wentworth)

There are seven.

Mr. Blunkett

There are seven—numeracy is alive and well. Seven have turned up, including, I think, four on the Back Benches. A number of them are clearly here in spirit, if not in person.

The speech by the right hon. Member for Huntingdon made the Leader of the Opposition's speech look immature and feeble. The previous Prime Minister made it clear that the right hon. Member for Wokingham (Mr. Redwood) was going to spend most of his political life denying that he had anything to do with past policy. When the previous Prime Minister referred to mistakes, I thought that he was referring entirely to the placement of the right hon. Member for Wokingham in his Cabinet.

Enough of levity mixed with sadness. This evening, we should take head-on some of the silliness that has emerged from Conservative Members. It is difficult to treat seriously anything that the hon. Member for Billericay (Mrs. Gorman) says in this House, although she sends me entertaining notes from time to time—normally written on the back of letters I have sent her. Her passing references to the new deal—and everything else—as a sign that we do not want to make families happy seemed to me to be very sad. We in new Labour are totally in favour of happiness, and we will engage in it as often as we can.

Mr. Willetts

Set a target.

Mr. Blunkett

I thought of that, but I decided that it would be unwise to threaten to resign if we did not reach it. We have every intention not only of making people happy, but of making them productive, capable of taking a job and employable, and of ensuring that, in doing so, they can hold their families together.

There was a time when the Conservative party was in favour of the family—when the party believed in supporting and reinforcing families, and in helping them stay together. Apparently, that is not the case any more if that involves family-friendly working practices, or us—that is, the community—helping each other in measures such as the sure start programme. Such measures are always condemned by Conservative Members as bureaucratic or interventionist, or for spending money that they would cut. We all know that, if they had the chance, the Conservatives would cut the £40 billion on education and health. They would cut out the new deal, which the shadow Secretary of State for Education and Employment described tonight as monumentally irrelevant.

The new deal is not monumentally irrelevant to the 160,000 young men and women who have entered it, nor to the 38,000 who have been placed in a job—70 per cent. of them in an unsubsidised job. That is the answer to the spurious nonsense that the new deal has nothing to do with employability or preparing young people for the world of work. It is certain that giving young people the opportunity to gain a qualification is a sight more preparation for employability than the 29 makeweight schemes that the previous Government invented during their 18 years in office.

One only needs to talk to young people such as David Habachi, who said that, when the new deal was working, he was working. That is true. It is true for those who already have a job, for those who are on the full-time education option and for those on the environmental and voluntary service option. It is giving young people real hope for the first time in generations. To denigrate it is not only cynical—it is a disgrace.

I welcome that small group of Conservative Members of Parliament who have joined us in trying to make the scheme a success, and who have contacted their local Employment Service and engaged with their jobcentres—as many of my right hon. and hon. Friends have done. The easiest thing in the world—as the right hon. Member for Wokingham displayed this afternoon—is to declare that one is against everything. That is what the Opposition are doing. They are not saying that there may be problems and they want to help to sort them out. They are not making contact with employers and then putting them in contact with us.

Every employer who has contacted my right hon. Friend the Minister for Employment, Welfare to Work and Equal Opportunities or me has automatically been put in touch with the Employment Service, and we have sorted out their problems. W. H. Smith told me two weeks ago about the vacancies that it had. We immediately connected the vacancies with the jobcentres. We are doing a first-rate job to ensure that many young people will have a job between now and Christmas, in order to have an income for Christmas.

The answer to the silly survey by the Centre for Policy Studies is that it can pretend that the programme costs £11,000 a job only if it adds up all the sums that go in without adding all the earnings, the reduction in benefit, and the tax and national insurance that will be paid by those who get a job. Being prepared for getting a job and having a qualification to enable one to hold a job down is the whole point of the new deal.

Mr. Willetts

Does the Secretary of State endorse the Chancellor's original proposition that the new deal will end up being self-financing?

Mr. Blunkett

When young people have been in a job for a number of years and secured earnings, they will have refinanced the investment. That is the basis of investing in state education and of the whole existence of the Employment Service and the jobcentres throughout the country.

Job clubs are supplied where unemployment requires such action, and as unemployment has dropped and employment has increased by 400,000 since the general election, we have been able, not to cut the Employment Service, but to reinvest: through the new deal, we have allocated £3.5 billion more to putting people into work and preparing them for jobs, which is what our policies are all about.

Conservative Members have attacked the new deal and shown a cynical disregard for what it means for young people to have a job. This evening, we have heard sneering of the kind that the Leader of the Opposition indulged in yesterday. The shadow Secretary of State for Trade and Industry even expressed the belief—I think that I am quoting him correctly—that Members of the House of Lords are the voice of manufacturing industry. Well, there we have it.

I shall think about that staggering revelation on my way to Harrogate. I would have taken up the kind offer to travel with the shadow Secretary of State for Education and Employment and the hon. Member for Bath (Mr. Foster), but they will be travelling on the right side of the road and I want to travel on the left.

Mr. Don Foster


Mr. Blunkett

After that appeal from the hon. Gentleman, I withdraw the allegation against him, in the spirit of unity and—

Mr. Foster


Mr. Blunkett

Of course. I was struggling to find the word.

Like the hon. Member for Bath, I am totally committed to lifelong learning, and to act on that we need, not legislation, but positive proposals and investment. We are working to develop that. We hope to unite the funding agencies and the providers, so that the training and enterprise councils, the Higher Education Funding Council and all those working in and providing resources for adult learning are co-operating to enable people to renew their education.

Mr. Foster

I am grateful to the Secretary of State for withdrawing his scurrilous accusation about where I would drive on the road. Does he agree that people are not working in partnership and that there is real competition in delivering important aspects of lifelong learning? For example, the TECs are competing with the further education colleges. We desperately need some form of clear strategic planning framework for lifelong learning. That cannot be given centrally. Perhaps the right hon. Gentleman would be prepared to consider a regional planning framework.

Mr. Blunkett

I accept that undue competition has been destructive to delivering education and getting people to work together. We will take steps to ensure that that is overcome and we already have, through the Further Education Funding Council, regional facilities that need to be adapted and expanded. We need to work with the regional development agencies to pull together lifelong learning and skills provision to meet the challenges.

The Government's record in the past 18 months bears scrutiny. We now have the highest number of people in employment since records began. We have the lowest level of unemployment for 18 years. We have reduced by more than a quarter the number of young people out of work, and we have ensured that we have, for the first time in many years, a strategy for the development of skills under the task force chaired by Chris Humphries.

We have a programme with the national training organisations—there are now more than 60—to get industry, commerce and services to work with trade unions, even though they might not have spoken to each other for years, with the training and enterprise councils and with the Government in a partnership approach.

I know that "partnership" is a dirty word to the Conservatives, but partnership is the only way in which we will be able to progress to the future. The fairness at work legislation will be crucial to ensuring that people can use their energy and time to work in unison, to pick up a phrase from my hon. Friend the Member for Falmouth and Camborne, and to getting people to treat each other with decency.

The enormous challenge of welfare to work has been lost in today's debate. Our proposals for welfare to work in this Session will develop the idea of the single gateway to work and the support that can be given by the new deal advisers, whose role has been imaginatively developed. I pay tribute to my right hon. Friend the Minister for Employment, Welfare to Work and Equal Opportunities, who has worked assiduously on this subject and who will have made a signal contribution to ensuring that single parents, men and women with a disability and those who have been long-term unemployed get support when they need it. My right hon. Friend will have helped to ensure that we have rigour as well as care and support, so that people know that they will get something for something, not something for nothing. We will do that in a positive way that renews hope.

My right hon. Friend the Member for Camberwell and Peckham talked earlier of the example that needed to be set by mothers to show their young children that the world of work existed. That is true of all parents. We need to ensure that no more children, when asked what they want to do when they grow up, give an answer about their benefit cheque. My hon. Friend the Member for Bristol, East (Ms Corston) can confirm that that has happened.

We must ensure that children understand that the world of work is open to them. That is why we are against education systems that deny people that opportunity. We are not beleaguering the education profession with initiatives that they do not want, but we are investing large sums of money for which the profession has cried out for years.

We have announced today proposals to spend £5.4 billion, £2.5 billion of which is new money. Unfortunately, it is not new to the BBC, which has decided that any spending that was announced in July as £19 billion of additional resources over the next three years is no longer newsworthy because it is not new. That is an interesting response. If it had been applied to public expenditure survey proposals in the past, nobody would ever make new spending announcements because the details were all in the three-year public expenditure survey proposals. What a load of silly nonsense that is, as anyone with an ounce of sense knows.

Those who really will know the difference when it comes to whether it is old money or new will be the thousands of schools that have had money invested in them. Six thousand schools already are in that position. I went to Parliament Hill girls school this morning, which has a new roof, a new science and domestic science block and the ability to do the job better.

When we announce our proposals for reshaping the teaching profession, they will not be confined to rewarding the high performance of good teachers, important though that is. Our proposals will be about transforming the education service for the 21st century. That will mean an environment fit to teach in, support through teaching assistance and the sort of training that the Tories never gave to teachers. There was no initial teacher training curriculum until we came into government. There was no comprehensive programme for in-service training. There will be, and indeed, there is already under the Labour Government. We shall do the job properly.

If it is thought that a literacy hour that places emphasis on phonics, grammar and spelling is an interference, those who take that view do not believe in giving every child in every school the chance that he or she deserves. I tempt the shadow Secretary of State, the hon. Member for Havant (Mr. Willetts), to his feet again to tell me whether he believes in phonics, grammar and spelling as intrinsic elements of teaching primary school children to be able to read and write. I shall be happy to give way to the hon. Gentleman.

Mr. Willetts

Of course the evidence is that phonics is a very effective way of teaching children to read. We believe also in a statement that we used to hear from the Secretary of State—something called intervention in inverse proportion to success. Teachers who are already teaching literacy very successfully are irritated that the literacy hour often has disoriented, distracted and changed their effective teaching methods when it should have been focused on the areas where there was a problem.

Mr. Blunkett

The hon. Gentleman has done exactly the opposite. We listened to teachers, who at the beginning of September were sceptical, and who are now converted. We listened to those who thought that they had done everything they could, but have discovered that there was something else that they could have done. There is added value. If teachers are gaining higher results, we do not say, "Completely transform your teaching methods." If 90, 95 or 100 per cent. of children at key stage 2 are reaching level 4, we are not saying to the teachers concerned, "Drop what you are doing." However, that is not happening. When we came into office, 40 per cent. of our young people were not achieving level 4. That is the problem.

Across the country now—with the materials and with £60 million-worth of in-service training—children are beginning to reach that level. I want again and again, publicly as well as in the House, to ensure that Conservative Members are pinned down on whether they believe in teaching phonics. That is what the literacy hour is all about. Every time Conservative Members deny the literacy hour they deny, the best way of teaching, as developed by the national literacy centres which my predecessor established. The right hon. Member for South-West Norfolk (Mrs. Shephard) said that, if she had had the money, she would have spread the practice throughout the country. Well, we have put in the money and the resources, and we are putting in the teaching.

I want to deal with one other calumny, and that is the obsession that some in the country have—leader writers, journalists and a great many people who send their children to private school—not with 7 million children and their education, not with 24,000 schools, but with the issue of grammar schools. I want to place on the record the nonsense that has been written over the past two weeks. I do not intend to keep raising the matter publicly because we have something better to do, which is to raise standards for all our children rather than be obsessed only with a few.

I put it on the record again, for the umpteenth time since July 1995 when we published our proposals for parents to choose, that we are not abolishing any schools. We are not abolishing good schools. We are talking about allowing parents—the audacity, the sheer cheek—to decide whether they want to change the admissions policy for a particular school. We are setting a threshold before parents can have a ballot. Incidentally, the criticisms launched this evening about the way in which the Secretary of State can intervene if a ballot has been wrongly conducted are based entirely on the grant-maintained model introduced by the Conservatives.

The Tories do not understand the ballot paper, which will say that parents of a registered pupil attending a school which sends children to a named grammar school are entitled to vote in a ballot held in accordance with the Education (Grammar School Ballot) Regulations 1998. The ballot will determine whether or not the grammar school continues to select pupils on entry through examination by academic achievement—for example, using an 11-plus exam—or whether admission arrangements should be introduced that will admit pupils of all abilities. It asks whether the parents are in favour of the school introducing arrangements that admit children of all abilities. That is all that the ballot paper will say.

From reading The Daily Telegraph, the Daily Mail and even The Sun, it would seem that we committed some dastardly act of secretly hiding matters from parents who obviously, according to those who attacked us, are not intelligent enough to know that a grammar school that is called a grammar school is a grammar school, or who will not understand a ballot paper that asks them to decide whether they want the school to continue with an 11-plus examination. It is an insult to suggest that parents will not understand. Furthermore, the critics suggest that they should be forgiven for not wanting to change the admissions policies of those 160 schools, in perpetuity.

Mr. Willetts


Mr. Blunkett

I shall give way, because we might as well have the matter out. It is a suitable time of night for dealing with it.

Mr. Willetts

Perhaps those parents believed the Prime Minister when he said of the 160 grammar schools that there are, "Let them remain." Does the Secretary of State agree with that statement by the Prime Minister?

Mr. Blunkett

It is important to make it clear, because I have heard both a parent and a head teacher suggesting otherwise on Radio 4's "Today" programme, that we do not propose to close the schools.

Mr. Damian Green (Ashford)

Yes, you do.

Mr. Blunkett

No, we do not. We are doing one simple thing. We are not ruling from Westminster on admissions policies. We are not asking local education authorities to rule. We are not asking the schools to determine matters. We are asking the people who have a direct interest in whether their child enters a school whether they want to keep the current admissions policy.

Mr. Brady

Will the right hon. Gentleman give way?

Mr. Blunkett

Of course. We might as well have an education lesson, even though we are perilously close to 10 o'clock.

Mr. Brady

In the borough of Trafford, we need few lessons in education from the right hon. Gentleman or his party. The borough achieves top 10 results for GCSEs, and last year it had the best A-level results in the country. That position was achieved by grammar schools and secondary modern schools in my constituency and in the rest of the borough.

I want to pick up the Secretary of State on his clearly inaccurate statement that only parents with a direct personal interest would take part in a ballot. Let me tell him that parents in Stretford or Old Trafford have no interest in the future of a grammar school in Altrincham or Sale. They do not send their children there, and they have no direct interest.

Mr. Blunkett

I may be wrong, but I think that the hon. Gentleman is referring to the fact that some people in Trafford borough send their children to comprehensive schools because they have no choice of a grammar school in the area because there is a straight 11-plus. I think that that is the hon. Gentleman's message.

Mr. Brady

Can I make the message clear?

Mr. Blunkett

No, I have to wind up.

The truth is that the people who should decide are those who have an interest. Those people are parents within the area involved. Anyone who thought that we would allow a system of admissions to atrophy in perpetuity would have to be daft. No one in their right mind would ever do that.

We have found a sensible system of dealing with a difficult problem and we will ensure that no grammar school has to fear anything. They do not have to fear letting children into a school. If anything was wrong with what happened when the 11-plus was abolished throughout the country, it was that we did not raise the standard of the old secondary schools to that of the grammar schools—it was not the children entering, but the change in policy. A school that fears a child entry because he or she does not appear at that moment to be bright enough or has a special need, cannot face with us the challenge of the 21st century. What we want is for every child, in every school, in every part of the country to get a decent education, and, above all, to know that they will get a job.

Debate adjourned.—[Mr. Pope.]

Debate to be resumed tomorrow.