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8.40 pm
Mr. Jim Cunningham (Coventry, South): To hear the hon. Member for Gosport (Mr. Viggers) talk, one would not think that a Tory Government had plundered pension funds and, in the 1980s, encouraged people to go into private pension schemes. He seems to forget that the Labour Government have reduced value added tax to help pensioners, whereas the previous Government increased VAT, thereby punishing pensioners and one-parent families. I am sure that he is well aware that the Labour Government have been considering not only pensions, and will make proposals in that respect at some time in the future, but have at least tried to do something for pensioners in the meantime.
Many pensioners find it difficult to afford their winter fuel bills, so the Government have reduced VAT on fuel and made winter payments to pensioners to help them. I remember that, when we sat on the Opposition Benches, time after time at about this time of year, many of my hon. Friends raised the question of winter chill payments. Year after year, the then Conservative Government turned down my hon. Friends' requests.
I welcome the fact that the Government have put in £250 million to help the national health service deal with winter problems. That, too, will help pensioners, as it is the elderly population in particular that suffers from the general increase in illness this time of year. Despite all the doom and gloom that we have been hearing, I welcome the £40 billion that the Government are to put into health and education over a three-year period.
The Government are doing that despite the economic position that we inherited from the previous Government. The economic measures outlined by my right hon. Friend the Chancellor will deal with long-term instabilities in the British economy, while allowing us to steer a stable course through the difficult times that we are experiencing. We are addressing the long-term economic problems that we inherited from the previous Government. I remind Opposition Members that we inherited a 20 per cent. productivity gap between the UK and France and Germany, and one of 40 per cent. between the UK and the United States of America.
Before Opposition Members rush to the barricades, I should say that I am not criticising the workers. Let me make it clear that I am not talking about the average factory worker; I am talking about low levels of investment, which mean that, no matter how hard an individual works, the lack of adequate machinery, tools and technology lowers his productivity. When we look further into the previous Government's record, we find that, when they left office, one in five households had no one working, up from one in 10 in 1979 when the Labour Government left office. We also find lower levels of basic skills in literacy and numeracy than those of other major economies.
No one would deny that we are experiencing a downturn in the world economy. The problem in 1979 was that, when the downturn occurred, the Tories refused to recognise it, preferring to blame the previous Labour Government, just as they blame the current Labour Government now. United Kingdom exports to Indonesia and Malaysia have fallen by 50 per cent.; to South Korea by 55 per cent.; and to Thailand and Philippines by60 per cent. The crisis affects the whole world, but, to listen to Opposition Members, one would think that it started in May 1997, when the Labour Government took office.
To set the international context, the International Monetary Fund has revised its forecasts for world growth downward, from 4 to 2.5 per cent. That could fall further as the economic situation changes. World trade growth is set to fall by two thirds. Given those problems, we welcome the Government's determination to get things right and address the weaknesses in our system, which was so neglected by the previous Government.
We welcome the new monetary framework for monetary policy, with the Monetary Policy Committee setting interest rates to reach Government targets free from political control. Also welcome are the long-term targets for interest rates, which bring stability to economic planning. Although interest rates have risen, at 6.75 per cent. they are at their lowest for 30 years, and inflation is hitting its 2.5 per cent. target. I remember when, under the Tories, the public sector borrowing requirement grew to £400 billion. They managed by slashing public spending and getting the receipts from privatisation.
The public understand the need for fiscal tightening equal to 3.5 per cent. of gross domestic product over the years 1996-97 to 1999-2000. They also understand why a reduction in borrowing--by £20 billion last year--and tight control over spending are needed to ensure that spending grows at a slower rate during the lifetime of this Parliament. In less than two years, we have achieved a balanced budget, which is something that the Tories did not do in 18 years.
Although I acknowledge manufacturers' short-term concerns, which are of particular concern to me, I welcome the Government's long-term view and determination to avoid boom and bust, which can affect and erode our industrial base. Instability could and would have been worse had the Government not taken the decisions that they took. As manufacturers have pointed out, the recession can be put down to the downturn in the global economy.
Despite all that, the number of jobs continues to grow: 400,000 new jobs have been created since the election; 250,000 people leave the claimant count each month; and 200,000 new vacancies are notified to job centres each month. In addition, the Government have set up rapid reduction units to deal with redundancies and provide localised help where job losses have occurred. They will be welcome in many parts of the country, providing temporary job centres and job advisers, fast-track help with benefits claims, immediate eligibility for training and travel costs for interviews. That demonstrates the benefit of having a Government with a progressive agenda, as opposed to a reactionary Conservative one, with Ministers preaching from on high about problems that they have never had to experience.
Another issue on which the Tories failed was youth unemployment, so I am delighted that the Labour Government have decided to tackle long-term, youth and single-parent unemployment head on. There are 125,000 people on the new deal, with 23,000 already having found work. In addition, the number of lone parents on benefits is falling and many young people have been given hope. We are helping the most vulnerable instead of throwing them to the wolves of uncertainty and helplessness. That will also play a part in tackling crime and disorder.
Mr. William Thompson (West Tyrone):
We have listened to many speeches tonight, some from former Ministers and hon. Members who have Treasury experience and many from those who are economics experts. If one speaker has argued one case, the next has argued the opposite--that is certainly true of the speeches referring to the single currency and economic and monetary union.
I am a Euro-sceptic. I remember our going into the Common Market, as it then was. We were told that every member state had a veto and that, if one member state disagreed with a policy, nothing would happen. Of course, after we had entered, if we disagreed we were told that we were not good partners. After some time, changes were made and majority or weighted voting was introduced. Over the years, we have seen the effect of that in the issuing of a large number of directives, many of which are neither prudent nor necessary, but over which we have had little or no control.
We have now moved towards political union. There is no doubt that many in the European Union are looking forward to political union, and the single currency is the first necessary step towards that union. If one controls the money and the finances, one has, in effect, political union. Those who are enthusiastic about political union at least now acknowledge that public opinion does not favour it. In fact, we have been told--even tonight--that there is no guarantee that political union will work. I think that it would be dangerous to enter an arrangement that has no guarantee of success without some fallback position, or even an idea of what we will do if that arrangement fails. I believe that there are many dangers inherent in the new single currency.
I have no doubt that the Government intend, sooner or later, to take us into economic and monetary union and the single currency. Efforts are being made to prepare us for entry, and no doubt the Government will seek to change public opinion in the referendum that decides our course. When preparations for entry are made, we will be told that we have gone too far and cannot turn back. I believe that the Government's policies are geared to that end. That is dangerous as it will weaken our means of determining our own policies.
I refer hon. Members to the events of the past two years and to our experiences of the beef crisis. When we consider how our European colleagues have acted, we can have no confidence that we would have much say over our affairs in the context of European political union. This Parliament would eventually become powerless.
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