HC Deb 29 March 2001 vol 365 cc1092-3
2. Mr. Peter Brooke (Cities of London and Westminster)

What recent representations he has received on Government policy in relation to trends in UK competitiveness; and if he will make a statement. [154597]

The Chief Secretary to the Treasury (Mr. Andrew Smith)

We are promoting UK competitiveness in partnership with business and trade unions through policies for stability, skills, investment and enterprise, all dedicated to closing the productivity gap with our competitors.

Mr. Brooke

Does the Chief Secretary agree that a constructive resolution of the long-running Whitehall farce over the London underground, which has had an effect not just today but over the past four years, would do more for the competitiveness of this great city than any other single act?

Mr. Smith

It is in everybody's interests—long-suffering travellers in London, the economy of London and the wider economy of the UK—that we achieve the modernisation in the London underground that is so clearly needed and that was so neglected when the previous Government were in office. The best way to do that cost-effectively, to time, to standard and with the high safety standards that we must secure is through the public-private partnership and through safety remaining in the public sector.

Mr. Ian Davidson (Glasgow, Pollok)

Does the Chief Secretary accept that one industry in which international competitiveness is key is tourism? Does he also accept that Britain's international position is being undermined by the impression overseas that Britain is in crisis? Does he agree that one of the best ways to give the impression that everything is back to normal in Britain is to have a general election now?

Mr. Smith

The timing of the general election, as we all know, is a matter for the Prime Minister. I agree with my hon. Friend about the importance of the British tourism industry, the enormous contribution that it makes to the economy and the damage being inflicted on it by overseas perceptions of the foot and mouth crisis. The best way we can help the tourism industry and the agriculture industry is to eradicate foot and mouth through all the measures that we are taking to tackle it.

Sir Michael Spicer (West Worcestershire)

Why has the rate of productivity gone down since the Government took office?

Mr. Smith

The rate of productivity is rising and, moreover, it is rising at twice the level that it was when the Conservative Administration left office. We are acting to raise the rate of productivity growth. After all, the Government introduced the 10p corporation tax starting rate for small firms, cut the main and small rates of corporation tax by 3p and introduced the research and development tax credit for small firms, which has been widely welcomed by the CBI and business. We are considering extending it to large firms. We also announced in the Budget wide-ranging reforms of VAT, which, again, were widely welcomed because of the simplification and the benefit achieved for business. Of course, there is more to do, but through our policies of stability, investment and promoting skills, we have set the platform on which productivity can further increase.

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