Engagements (Hansard, 21 October 1998)

§ Q1. Mr. Don Touhig (Islwyn)
If he will list his official engagements for Wednesday 21 October.

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

§ Mr. Touhig
May I tell my right hon. Friend that the people who sent me to this House warmly welcome the extra £40 billion promised for health and education? They see it as an investment in their future. Will he make it clear that cutting spending on schools and hospitals is the Tory way? It is not our way.

§ The Prime Minister
My hon. Friend is right. The £40 billion for our schools and hospitals will not just ensure that we can get waiting lists and class sizes down and improve standards in the health service and our schools; it is also an investment in this country's future. The worst thing we could do would be to take the Tory way and cut that spending next year.

§ Mr. William Hague (Richmond, Yorks)
After a summer in which one job has been lost every 10 minutes, 1271 manufacturing has been taken to the brink of recession, agriculture has been deep in recession and the Chancellor has had to admit that his central economic forecasts are seriously wrong, will the Prime Minister tell the Chancellor to come to the Dispatch Box and explain how he got us into this mess and how he is going to get us out of it?

§ The Prime Minister
I note that the right hon. Gentleman claims that a job is being lost every 10 minutes in the United Kingdom. Since May last year, when the Government were elected, employment has increased by 373,000 in 537 days. That is one new job every two minutes. The right hon. Gentleman will know that the Chancellor will make his pre-Budget report within the next two weeks, and he will give that at the appropriate time.

§ Mr. Hague
What a statement of extraordinary complacency from a Member of Parliament in whose own constituency 600 jobs were cut a few weeks ago. In July, when we last had Question Time, the Prime Minister told us that his forecasts were absolutely prudent. The Social Security Secretary, at the same time, told a Select Committee that people had said, "No, you are being too prudent; you are being too cautious." By August, the Education and Employment Secretary was saying that the economy was on a knife edge. By early October, the Chancellor was saying that his forecasts were seriously wrong.
Given that the Government's assumptions have proved so seriously wrong, does the Prime Minister think that the Government have any share of the responsibility for what has happened, or is it all somebody else's fault?

§ The Prime Minister
No. I shall give the right hon. Gentleman the figures for the north-east. He is quite wrong. Unemployment in the north-east has fallen since the Government came to power, and employment has risen. On any basis, not merely will we meet the fiscal rules that the Chancellor has set out, but borrowing will be less under this Government than in any year under the Conservative Government of whom the right hon. Gentleman was a member.

§ Mr. Hague
If the Prime Minister thinks that there is not a serious economic problem, he is not living in the real world. He is not listening to businesses across the country, which have been telling the Government about the situation. All along, the Government's attitude has been to blame the managers, the workers, the investors and the Bank of England. This morning, we even had the Trade and Industry Secretary—who is gaff-prone now that he has to speak for himself—telling the workers at Rover to sharpen up their act. I think that the workers at Rover would tell the Prime Minister, the Chancellor and the Trade and Industry Secretary, none of whom have ever worked in a business in their lives, that they must sharpen up their act.
Given that the Prime Minister, who is also the First Lord of the Treasury, will not bring the Chancellor the Dispatch Box, does he agree with the Bank of England's report, which said that some of the reasons for higher 1272 inflation and higher interest rates were the Government's spending decisions in July? Does he think that the Bank of England got that right?

§ The Prime Minister
I have made it clear that the Government's spending proposals—£40 billion extra on our schools and hospitals and investment in the country's transport infrastructure—are right. I take it from what the right hon. Gentleman says that he would cancel that spending. If the Conservatives' response to the economic situation is that they would cancel that spending on schools and hospitals, they are wrong economically and wrong socially, and they will pay a very heavy price politically.

§ Mr. Hague
It is not an adequate response to these questions simply to attack the Opposition. It is not an adequate response for people in the midlands who went to work this morning knowing that they were in danger of losing their jobs for the Prime Minister to tell the parliamentary Labour party this morning that the economic difficulties would be a political opportunity for the Labour party—that is how he regards the situation.
Has not the Prime Minister put the Bank of England in an impossible position? The Chancellor has his foot on the accelerator while telling the Governor of the Bank of England to put his foot on the brake. As the hon. Member for Bolsover (Mr. Skinner) pointed out, the Governor of the Bank of England says that the policy amounts to sacrificing jobs in the north to deal with the inflation problems that the Government have exacerbated. Is that the Government's policy? If not, what do they intend to do about the situation?

§ The Prime Minister
Borrowing is lower under this Government than it was under the Conservative Government. When we came to office, we cut the budget deficit from the £28 billion we inherited to less than £8 billion. Employment has risen by almost 400,000, and unemployment has fallen.
As for the car industry, there is a problem at Rover Longbridge. We will work with management, unions and others to try to deal with it. However, it is mainly a problem of productivity, and we must tackle that if we are to make our industry competitive. If the right hon. Gentleman wants a balanced picture of what is happening in the car industry, I can tell him that Rover at Cowley is expanding jobs, Vauxhall has just announced an extra 1,000 new jobs, Jaguar is announcing an extra 1,300 new jobs, and there are more jobs at Honda, more jobs at Toyota and more jobs at Nissan. I can also give him the figures on car production for the past six months, which has risen by 4.5 per cent. Exports for the same period have risen by more than 8 per cent. I agree that there is a problem at Rover Longbridge and that we must tackle it, but it is not helped by the idiotic hysteria that the right hon. Gentleman has just exhibited.

§ Mr. Hague
Not for the first time, we have a Labour Prime Minister who says, "What crisis?" He is not remotely in touch with how it feels for businesses, small businesses and farms across the country. Is not the truth that the Prime Minister inherited a golden legacy, and in 18 months he has squandered it? The last Labour Government had a winter of discontent. This Labour Government have had a summer of complacency, and are 1273 now facing an autumn of rising unemployment. Is it not the case that jobs are being lost, investment is being cut and factories are being closed on a far greater scale than need have happened were it not for the policies of this Prime Minister and this Chancellor?

§ The Prime Minister
No. Let me give the right hon. Gentleman the facts relating to the week that has just ended. In actual fact, although it is true that around the country about 5,000 job losses have been announced, 15,000 extra jobs have also been announced. It is important to balance the picture.
When we came to office, we inherited a national debt that had doubled. We are reducing that national debt. We inherited borrowing that was out of control; we brought it under control. Yes, giving the Bank of England independence was a difficult decision, but it is right in the long term. That is why long-term interest rates are at their lowest for 30 years.
Interest rates are now coming down from 7.5 per cent. Everyone will remember that they were at 15 per cent. for a year or more under the last Conservative Government. That is the choice—the choice between boom and bust under the Conservatives, and long-term strength and stability with us. I believe that, in the long term, the country will choose the course that is right for it.

§ Mr. Tom Clarke (Coatbridge and Chryston)
Following the Prime Minister's visit to New York last month and the subsequent meeting of the International Monetary Fund and the World bank, is it not right to continue to focus on the problems of developing countries during the current global crisis? Has the Prime Minister had an opportunity to read Friday's report of the United Nations Development Programme, showing that 1.5 billion people in the developing world are earning less than a dollar a day? Will the Prime Minister make dealing with those problems a priority, so that the poorest people in the poorest countries, who have been the major casualties of our global difficulties, can be given the attention that they deserve?

§ The Prime Minister
Of course the difficulties involved in the world financial crisis have made a difference to developing as well as developed countries. The International Monetary Fund has now halved its world growth forecast for next year. But I know that my right hon. Friend will recognise the work that has been done by the Chancellor of the Exchequer for developing nations, both in terms of debt relief and in terms of constructing a new World bank facility to help them.
Ultimately, with the right financial and political systems, those nations can grow, and the benefit of their growth, and their escape from the heavy burden of debt, will be felt by the developed world as well as by developing countries themselves. That is why we have always felt, when investing money in aid and development, that, if that investment is properly targeted, it is in the mutual self-interest of both the developing and the developed world.

§ Mr. Paddy Ashdown (Yeovil)
Beneath all the sound and fury and the Government's flawed economic forecasts, are not these the human facts? Whatever the situation may have been in the past, most observers now 1274 believe that some 300,000 manufacturing jobs are in jeopardy, and one of our greatest industries—agriculture—is now experiencing its deepest crisis for 50 years. Will the Prime Minister at least start by acknowledging those facts?

§ The Prime Minister
As I did acknowledge in respect of Rover Longbridge, I readily acknowledge this in respect of the farming industry. Certain parts of manufacturing industry have been either very dependent on exports from Asia, or have been troubled by the strength of the pound. Yes, they are in a difficult position; but I believe that the long-term policies that we are pursuing—which ensure low inflation, stable growth and action on education, investment, skills and technology to deal with productivity problems—are our best option. The farming industry has a particular problem. That particular problem—the problem of BSE—we inherited, but I am hopeful that we can bring about relief for the farming industry over the next few months.

§ Mr. Ashdown
Instead of indulging in the blame game, the Prime Minister could do three things now. Will the Government consider them? First, the right hon. Gentleman could tackle our exchange rate problem by making a clear commitment to the single currency. Secondly, he could end the policy of seeking to control growth just through higher interest rates. Thirdly, he could ensure that our farmers in Britain enjoy the same financial package and advantages as every other fanner in Europe. Three things: will he do them?

§ The Prime Minister
I cannot promise to do that, I am sorry to tell the right hon. Gentleman. First, in relation to the euro, as I have said many times, the worst reason for joining is short-term exchange rate issues. I simply point out to him that the exchange rate is now below the level that we inherited last May.
As for farming incomes and subsidy, we do put an enormous amount of subsidy into the farming industry, but the problem is that there has been a collapse world wide in beef, lamb and pork prices, and of course it has affected our industries as well. We and the Minister of Agriculture, Fisheries and Food are looking at what can be done to help our industry; but in respect of the rest of Europe, I do not believe that we should emulate its agriculture policies. We should be working to reform the CAP in the interests of all the consumers.

§ Dr. David Clark (South Shields)
We in the north are delighted by the net increase in jobs that we have had since the general election, but we did inherit a legacy of the highest unemployment of any region in the United Kingdom. Does my right hon. Friend understand the anger and offence that have been caused in the north-east of England by the statement by the Governor of the Bank of England that the high unemployment in the north-east is a price worth paying for low inflation in the south? That is grossly offensive. Will the Prime Minister take the opportunity this afternoon to make it clear that that is not the policy of our Government?

§ The Prime Minister
It certainly is not the policy of the Government. Although Eddie George is perfectly able to look after himself, if we look at his remarks in context, he was not saying that. He was simply saying that we had 1275 to set interest rate policy for the whole of an economy, not merely any one region—that we could not, in other words, differentiate interest rates in different parts of the economy.
Again, my right hon. Friend will know not just that, since this Government came to power, we have reduced unemployment and raised employment, but that the new deal, which is bringing new hope to many of the young and long-term unemployed, is working particularly well in the north-east. The help for some of the most deprived communities in the new scheme that has been announced by the Deputy Prime Minister will also help. It will take us time to repair the damage of the Conservative years, but we are making a start on it.

§ Q2. Mr. David Maclean (Penrith and The Border)
With jobs being destroyed across Britain at the rate of one every 10 minutes because of a recession made worse by bungling in Downing street, and with our British countryside dying because of the Government's neglect, will the Prime Minister stop trying to blame it on other people or pretend it is not happening, and do something about it now?

§ The Prime Minister
I am sorry to trouble the right hon. Gentleman with the facts, but the facts are, as I say, that employment has risen since this Government came to power, and unemployment has fallen. In respect of both his region and other regions of the country, more jobs are being created.
Of course, as we have said, the economic difficulties we face, in part as a result of world conditions, are faced by countries around the world. What is important, however, is that we have the right spending and the right monetary policy. The right hon. Gentleman's party is now committed to reversing Bank of England independence. That would be a terrible mistake for the interests of the country. [Interruption.] The Tories shake their heads. Will they shake their heads at this—that they are opposed to our extra spending next year? [Interruption.] The Conservative party says that it opposes all the spending in general, but it applauds it all in particular. It wants inflation taken out of the system, but without Bank of England independence—although it now says that it will retain it. The great black hole is the space where the Conservative party's brain used to be.

§ Mr. Richard Burden (Birmingham, Northfield)
My right hon. Friend will understand my concern at the report circulating about Rover Group and how unsettling that is, not just for my constituents in Longbridge, but for all those thousands of jobs that depend on Rover in the midlands and elsewhere.
Does my right hon. Friend agree that, while Rover is facing difficulties at the moment, that has to be set against the launch of a new model at the motor show this week and the millions of pounds worth of investment that has already been put in? Does he further agree that, if the difficulties are faced, Rover plants, including Longbridge, can have a bright future; and that the role of Government and politicians is to help the management and work force to reach the agreements that are necessary to face those challenges? That is surely better than, like the Conservative party, standing in some pretty fragile glasshouses and throwing stones.

§ The Prime Minister
Quite correct. As my hon. Friend rightly said, the balance of the situation is that Rover, for 1276 example, is expanding at Cowley, and that it has tremendous opportunities at Longbridge as well. I greatly hope that the new R30 model will come to Longbridge. However, the important thing is that management and unions sit down and work out how they can raise productivity, as needed for the long term. The Government's role is to help in any way that we can, but also to recognise honestly that, ultimately, the future lies in the hands of the management and work force together. With the right partnership, I believe that it can be done.

§ Q3. Rev. Martin Smyth (Belfast, South)
As the House congratulates my right hon. Friend the Member for Upper Bann (Mr. Trimble) and the hon. Member for Foyle (Mr. Hume) on being the first British parliamentarians in 39 years to receive the Nobel peace prize, will the Prime Minister accept that real peace will develop only when his written commitments made to the people of Northern Ireland before the referendum are delivered, and that real peace surely includes the decommissioning of terrorist weaponry and cells?

§ The Prime Minister
Of course that is right. We want decommissioning to happen as quickly as possible. Under the agreement, decommissioning is due to be completed within the two-year period. I therefore entirely agree that the agreement—the whole of the agreement—has to be properly implemented. I agree also with the hon. Gentleman's comments on his right hon. Friend. The award of the Nobel peace prize to him and to the leader of the Social Democratic and Labour party in Northern Ireland is a tremendous vote of confidence in the future of the whole of the Northern Ireland community.

§ Mr. Andrew Reed (Loughborough)
The Prime Minister talks about tough choices. May I suggest to him—and ask whether he agrees with the House—that the easiest choice that he will have in the next few months will be whether to abolish the hereditary peers down the Corridor? Does he accept that he would receive massive support from Labour Members in making that simple and easy choice?

§ The Prime Minister
I notice that the Conservative party is now entirely opposed to any step to abolish hereditary peers—apparently on the grounds that hereditary peers are a representative cross-section of the British people. I have done a little work on that. Of the 750 hereditary peers, only two are black or Asian, only 16 are women, and 45 per cent. went to Eton. I think that that is a representative section of the British community that the House of Lords could do without.