HC Deb 27 February 2003 vol 400 cc398-9
13. Mr. Mark Field (Cities of London and Westminster)

What discussions he has had in advance of the Budget with the Secretary of State for Trade and Industry on the effect of his microeconomic policies on the business environment. [99474]

The Chief Secretary to the Treasury (Mr. Paul Boateng)

The Chancellor and other Treasury Ministers regularly meet ministerial colleagues across Government in advance of the Budget statement. Treasury Ministers and officials have also been conducting a programme of regional visits to listen to the views of businesses throughout the country.

Mr. Field

May I respectfully suggest to the Minister that in those discussions special attention is paid to the financial burden of our increasingly inflexible labour laws on small businesses in particular? Does he agree that one of the reasons that unemployment has been so low in this country over the past 10 years compared with Germany, for example, is the fact that we have had flexible labour laws, and that that competitive advantage of the UK is fast being undermined?

Mr. Boateng

I know that the hon. Gentleman follows these matters closely, and I well recall his contributions on the matter in the Committee that considered last year's Finance Bill, but he might usefully follow the speeches of his right hon. and learned Friend the shadow Chancellor, who, as recently as last month, was opining: Our labour market is still more flexible than that in other EU countries. We intend that that should continue to be the case.

Mr. Kelvin Hopkins (Luton, North)

Does my right hon. Friend recall that last week Mr. Adair Turner, no less, suggested that labour market flexibility had gone far enough, and that it was not the way forward for the future if we want a high investment, high growth economy?

Mr. Boateng

We need to make sure that we get the balance right. We make no apology, however, for introducing measures dealing with fairness at work. We make no apology for introducing the minimum wage. All those contribute to a high wage, high skill economy in which we maximise the productivity of all employees and managers.

Dr. Vincent Cable (Twickenham)

Does the Minister accept that the micro-economic effects of an increase in employers national insurance must be to reduce employment, cut wages or increase prices? Which of those three does he expect to happen?

Mr. Boateng

I am afraid I do not accept the hon. Gentleman's simplistic analysis. He should tell us how he would explain not only to his hon. Friends on the Liberal Democrat Benches, but to all the readers of "Focus"—a diminishing band, I am happy to say—how the improvements in the health service are to be paid for without the increase in national insurance contributions.