HC Deb 18 May 2000 vol 350 cc452-4
8. Dr. Stephen Ladyman (South Thanet)

If he will make a statement on the impact of his Department's policies on the levels of employment and unemployment in the south-east. [121378]

The Economic Secretary to the Treasury (Miss Melanie Johnson)

In the south-east, as in the rest of the UK, we have created a sound and credible platform of economic stability that will help us attain our objective of high and stable levels of growth and employment. Since the election, employment in the south-east has risen by 203,000 and unemployment has fallen by 60,000.

Dr. Ladyman

I am grateful for that answer. Certainly business is booming in the south-east. Many Conservative Members who are straining to find bad news in the economy have constituencies with more than full employment. Unfortunately, however, that is not the position everywhere. Although the new deal has made great inroads into unemployment in Thanet, we still have far higher levels of unemployment than the national average. Will my hon. Friend consider the possibility of an employment action zone or action team, as announced in the Budget, for Thanet?

Miss Johnson

I am grateful to my hon. Friend for making those points. We have heard already today that the Tories would scrap the new deal. However, I have the figures for those who are benefiting from it in Canterbury, which includes my hon. Friend's constituency. The new deal for young people there is benefiting 2,100 who started the programme. More than 1,000 of those people have moved into employment, with 750 securing sustained employment. I recognise that there may be further opportunities in Thanet through employment action zones and action taskforces for further work to be done. I know that my hon. Friend will share with me the conviction that it is the Government who are getting people back into work and that the Tories are the party of mass unemployment.

Mr. Nicholas Soames (Mid-Sussex)

I warmly endorse the words of the shadow Chancellor, my right hon. Friend the Member for Kensington and Chelsea (Mr. Portillo), and acknowledge that in my constituency the economy is doing extremely well. However, that is nothing to do with Labour; it is due to the policies it was bequeathed by a very successful Conservative Government. Does the hon. Lady understand—or does she realise—the punitive effects on companies in the south-east and elsewhere of increased stealth taxes and, above all, of an ever-increasing burden of regulation? Does she believe that those disadvantages are likely to ensure that the economy continues to grow or rather that, as is the case in Mid-Sussex, a number of companies will remain on a knife edge?

Miss Johnson

We are the party that introduced independence for the Bank of England. We introduced the national minimum wage, the new deal and the working families tax credit. Furthermore, we introduced the rules that are leading to a stable economy in which people are able to plan ahead. We have the lowest corporation tax ever. Equally, we are able to invest in public services—with record increases in expenditure in the health service and, for example, on child benefit. We shall take no lessons from the Conservatives, who left us a £28 billion deficit to deal with.

Mr. Geraint Davies (Croydon, Central)

My hon. Friend will know that yesterday the pound hit a six-year low against the dollar. Given the benign trading conditions that that creates, does she agree that the Government should encourage our manufacturers and exporters to refocus their sales towards the buoyant US market, and that that will help to lift employment rates higher even than the record historic highs that we already enjoy in the south-east?

Miss Johnson

As my hon. Friend is aware, our management of the economy is leading to growth. Indeed, the volume of manufacturing exports rose by 9.5 per cent. in the year to February 2000, and manufacturing productivity is increasing by about 5 per cent. That shows that our management of the economy is succeeding. If one compares that with the Tory record—under the Tories, manufacturing employment fell by almost 1 million from its peak in 1989 to its trough in 1993 and output fell by 7 per cent. between 1990 and 1991—one can see a sharp contrast with this Government who are able to manage the economy and set the rules in the right way so that we can plan ahead on a stable platform. Employment growth shows that—there are 929,000 extra jobs. The Tory record is one of mass unemployment and mismanagement of the public finances.

Mr. Edward Davey (Kingston and Surbiton)

As the Chancellor failed to answer the question put by my hon. Friend the Member for Truro and St. Austell (Mr. Taylor), will the hon. Lady have a go? Does the Treasury agree with the shadow Chancellor and, apparently, the hon. Member for Bolsover (Mr. Skinner), that British business must learn to live with the strong pound? Is the answer yes or no?

Madam Speaker

Order. I called the hon. Gentleman because the substantive question referred to the south-east and he has a constituency there. We will move on.