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5.38 pm
Mr. Derek Foster (Bishop Auckland): The House has been highly entertained by the hon. Member for East Yorkshire (Mr. Townend). He said that he had lifelong experience in the alcohol industry--which I believe explains a lot about his speech. As if that were not bad enough, he went on to blame my hon. Friend the Financial Secretary for his problem. I have been an almost lifelong teetotaller, and I have been the butt of many jokes in that regard. People say to me, "It must be terribly depressing waking up in the morning and knowing that that is as good as you will feel all day." [Interruption.] I am glad that that entertains my right hon. and hon Friends.
I have sat through 19 Budget debates in my parliamentary experience. This is probably the first one in which I have taken part. Year after year, I have listened to Conservative Members in government announcing proposals that increased the burden of taxation while claiming great credit for reducing the rate of income tax. It therefore comes a bit rich to hear the Opposition's charges against my right hon. Friends.
My right hon. Friend's speech yesterday was a tour de force. When I listened to the shadow Chancellor, I wondered why, if things were so magnificent on 1 May last year, we won a landslide victory.
Mr. Andrew Lansley (South Cambridgeshire)
rose--
Mr. Foster:
I also wondered why, if the Budget was as bad as the right hon. Gentleman said, it has been so well received in the City, by the business community and by families throughout the country. The Opposition protest too much. The language of betrayal is exaggeration in the extreme.
Mr. Foster:
I shall give way in a moment.
Just before the Labour party conference last year, my right hon. Friend said that he wanted a crusade against unemployment and poverty. I know that my right hon. Friend is often accused of being ambitious, but such ambition is worthy of the brightest and best of any generation and would have united the Labour party at any time during its 90-year history. It is the reason why I joined the Labour party, and why I am so enthusiastic about the Budget, which has been the first powerful clarion call for a crusade against unemployment and poverty.
I welcome the widespread improvements offered by all the new deals. My right hon. Friends the Chancellor and the Secretary of State for Education and Employment deserve credit for putting so much drive, energy and money behind those powerful new programmes. Now they are to be extended in a way that the Employment Committee--which, as the House knows, I chair--called for some weeks ago. We asked the Secretary of State to build in sufficient flexibility to respond to the changing nature of the jobs market. We pointed out that there were other groups that deserved priority.
A few short weeks later, the money and the political drive are there to extend all those initiatives. Now those aged 25 to 50 are being substantially catered for, and the over-50s are being brought into the programme. Now there is a substantial improvement to the new deal
for single parents, and the new deals are being extended in various other imaginative ways. I welcome that whole-heartedly.
I promised to give way.
Mr. Lansley:
I am grateful to the right hon. Gentleman, even though he has moved on a little. He criticised former Conservative Chancellors for, as he put it, increasing the tax burden while reducing the rate of income tax, although perhaps he will acknowledge that Conservative Chancellors left the tax burden as a proportion of gross domestic product unchanged, as compared with 1979. Why does the right hon. Gentleman think that it is such a triumph for the Chancellor of the Exchequer to increase the burden of taxation while not reducing the rate of income tax?
Mr. Foster:
It is a triumph for the Chancellor to increase the burden of taxation and to receive accolades from the electorate for doing so. That was what the Opposition achieved over 18 years, which irritated and frustrated me greatly at the time.
The new deal is being extended considerably and is entirely welcome. If we are to get large numbers of single parents into work, which is what I want, the child care package is crucial. I am glad that my right hon. Friends have recognised that. However, if single parents are not to be locked into the low-wage, part-time, temporary sector of the jobs market, we must write into the single parents' new deal a substantial education and training option. At least 40 per cent. of single parents have no qualifications. We need to enhance their employability and earning capacity, if we want to make it worth their while to get a job.
The new deals would not have been introduced by the Conservatives. They still do not know whether to support the programme. The programme to make work pay would not have been initiated by them. I pay tribute to the shadow Chancellor because of the imaginative work that he did to reform the welfare state. Incidentally, most of that was pretty punishing to groups of needy people, but he did tackle the problem.
We have moved on a little further. The concept of making work pay is an exciting one. It will be extraordinarily difficult to pull off, because the complexities of the barriers to work for various groups of people are beyond the majority of Members of Parliament and perhaps beyond many civil servants to negotiate. I am certain that making work pay will be as crucial to modernising the welfare state as the high and stable level of employment written into the White Paper of 1944 was to the proper funding of the welfare state when it began.
I have signed up whole-heartedly to the concept of increasing the number of employable people, not just because it is good for them and good for society, but because it makes economic sense. The pool of employable people will bear down on inflation and allow the Chancellor to run the economy at a higher rate of growth than would otherwise have been the case. As Professor Layard said in his evidence to the Employment Committee, the net result of that should be a net increase in jobs.
Another group who deserve priority are those who are already in work. Some 80 per cent. of the work force over the next decade are already in work. My right hon. Friends
are missing a trick, because there is a far greater and earlier payback to the Government from enhancing the productivity of those who are already in work than there will be from increasing the employability of those who will move into work. We must do both.
Moreover, although the schools agenda has greater political saliency and may have more profound effects in the long term, within the realistic life of the Government--say, within the next decade--there is a greater return if we invest in the people who are already in work.
In the next Budget, I shall look for tax breaks for companies to invest in training. If we are not going down the levy route, we must make it worth while for companies to invest in training. I shall explain why.
I have cited before the case of House Thorn Lighting, in Spennymoor in my constituency, whose managing director said, "We discovered that with every pair of hands we got a free brain." That expression highlights the problem that we are trying to solve: we do no more than scratch the surface of the skill and creativity of our work force. It is the companies that are the most adaptable, flexible and able to respond quickly to market situations that release the creativity of their work force and make them partners in the management of change and in improving productivity and quality. Thorn Lighting does that, as does another company in the north-east.
Nissan spends 7 per cent. of its turnover on training. The average for British industry is below 1 per cent., and for French and German companies it is between 2 and 3 per cent. It is small wonder that, in 14 years, Nissan has made itself the most efficient motor manufacturer in Europe. If we are to make an impact on our competitiveness--which we must--over the next five to 10 years, this is where the greatest return will be made. I urge my right hon. Friend to pursue strongly his lifelong learning agenda, and to remain strongly in favour of encouraging business to train those who are already in work.
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