§ 2. Mr. Peter Brooke (Cities of London and Westminster)What increases in manufacturing and service industry productivity were secured in the calendar years (a) 1997, (b) 1998 and (c) 1999. [112213]
§ The Chancellor of the Exchequer (Mr. Gordon Brown)The service sector grew in those years respectively by 2.1 per cent., 1.7 per cent. and 0.7 per cent. The manufacturing sector grew by 0.7 per cent., minus 0.6 per cent. and 3.6 per cent. Whole-economy productivity growth including manufacturing and services per employee was 1.5 per cent., 1 per cent. and 1 per cent. Because whole-economy productivity during the 1980s and 1990s remained below that in the United States of America, France and Germany, we have instituted long-term measures for improvements in productivity—monetary and fiscal stability, a new competition policy matching innovative capital markets with a more favourable tax environment, and making Britain a skills centre for Europe with measures including labour market reforms.
§ Mr. BrookeSince the Chief Secretary to the Treasury told me at Treasury questions last month that no one could be complacent about the figures, what would it take for the Chief Secretary to become actively dissatisfied?
§ Mr. BrownI am the Chancellor, not the Chief Secretary, but, like my right hon. Friend, I was appalled by the Conservative Government's failure to improve productivity during the 1980s and 1990s. The Conservatives failed to institute a new competition policy that would mean lower prices and greater efficiency. We have created an independent Competition Commission, which, I believe, the right hon. Gentleman would support. We have instituted labour market reforms, emphasising skills that are desperately needed in the economy but which the Conservatives failed to provide. At the same time, we have instituted measures that mean that investment in the 1173 economy is now 14.5 per cent.—a proportion of gross domestic product far above anything that the Conservatives achieved over 20 years.
§ Mr. Dale Campbell-Savours (Workington)With productivity in mind, does my right hon. Friend regard sterling as competitive?
§ Mr. BrownI have made it clear that we understand manufacturers and exporters worries about sterling. In relation to the dollar, sterling has remained virtually unchanged over several years, but developments in the euro area have created difficulties for exporters. However, exporters and manufacturers to whom I have talked most fear a return to the policies adopted by the Conservatives—the policies that brought stop-go and boom and bust.
Let us not forget that the shadow Chancellor was at the Treasury when, in the recession of the early 1990s, 2 million jobs were lost in the British economy. While he was at the Department of Employment, unemployment—on the claimant count—never fell below 2.3 million; it is now 1.1 million. Youth unemployment during the right hon. Gentleman's spell there was 300,000; and it is now 50,000. We favour creating jobs; the right hon. Gentleman was the Minister for unemployment.
§ Sir Peter Tapsell (Louth and Horncastle)Does the Chancellor accept that any increases in productivity that British industry is likely to achieve will be insufficient to overcome the problem of an overvalued exchange rate, which is itself largely caused by our high interest rate policy?
§ Mr. BrownThe hon. Gentleman should look at the figures: manufacturing productivity is rising by 3.6 per cent. He should congratulate the manufacturing sector of the economy on its response to what is happening. Equally, he should look at the amount of business investment in the economy, which is more than £100 billion, and has risen from the maximum of slightly more than 12 per cent. of gross domestic product under the Conservatives to more than 14 per cent. under Labour. We are making the long-term changes that will give higher productivity in the economy. The Conservatives had 20 years to do so, and they failed.
§ Mr. Barry Jones (Alyn and Deeside)Does my right hon. Friend agree that the steel industry is the most productive manufacturing industry in our country at present? However, it is encountering tough problems because of the high value of the pound. The steel workers at Shotton, who in 1980 suffered Europe's biggest redundancy, are anxious—as are those in other steel plants throughout Wales—about a statement by Corus, the new steel company, that no job and no plant is safe. The steel workers know that the strength of the pound and the merger are putting pressure on jobs. My right hon. Friend helped over the climate levy for the steel industry—in the same positive way, what he might do to enable the export of steel?
§ Mr. BrownI am grateful to my right hon. Friend, who is a constant supporter of the steel industry in his constituency and throughout the country. I, too, have talked to representatives of the steel workers union and 1174 shall continue to hold discussions with them. I appreciate the problems that the exchange rate has given them. They have told me that they do not want to return to boom and bust—as happened under the Conservatives. Not only are there more jobs in Wales as a result of action taken by this Government, but there are now 800,000 more jobs throughout the whole economy. More people are in work than ever before as a result of stability and the measures in the new deal. The stop-go policies of the Opposition and their opposition to the new deal put that at risk.