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The Economy and Welfare Reform

I am privileged to speak in this Queen’s Speech debate. I congratulate the new Members who have made maiden speeches: the hon. Member for Mid-Bedfordshire (Mrs. Dorries), my hon. Friends the Members for Worsley (Ms Keeley) and for Blaydon (Mr. Anderson) and the hon. Member for Northampton, South (Mr. Binley). They have all focused on our primary responsibility: to represent our constituents. I congratulate them on the focus of their maiden speeches and wish them well. I congratulate my right hon. Friend the Member for Torfaen (Mr. Murphy) on his work as Secretary of State for Northern Ireland. He is unique in that he has left his post with acclaim from all sides in Northern Ireland. That is testimony to the great work that he has done in fostering the peace process. I congratulate the Government, and particularly the Chancellor, on their stewardship of the economy. My new constituency is entitled West Dunbartonshire, and the stability of the economy was key to my successful return. I spoke to many hundreds, if not thousands, of people there, who told me that employment and youth employment, which is at record levels, were crucial in terms of their voting Labour. Low inflation and low interest rates have meant that businesses can plan for the future and home owners could have the confidence to invest in their houses and develop their own lives. The family-friendly policies—such as the working families tax credit and child benefit—as well as free nursery places for three and four-year-olds, were important. One of my last duties as MP for Dumbarton was to sign a letter to a single parent of three children to tell her that she was getting £13,000 a year extra as a result of the working tax credit. That is what I call investing in families and communities and ensuring stability in the economy. My new constituency includes Clydebank, and I wish to take the opportunity to thank my colleague, Tony Worthington, who has retired, for his sterling work in Clydebank over the past 18 years. I wish to continue his work in this House and elsewhere. Tony not only represented his constituents in a fine way, but articulated the needs of the international community through his membership of the International Development Committee. He hopes to continue that work with the World Bank and others, and I wish him well, as will all those who know him. I wish to continue his work with Clydebank Re-built, one of Scotland’s first pathfinders in urban regeneration. Clydebank Re-built, although a small development company, will develop the waterfront at Clydebank over the next seven years. That waterfront is where the famous great ships—the Queens, the Lusitania, the Britannia—were built at the former John Brown shipyard. Over £250 million of development work will be put into that area. In the wider constituency, projects including Clydebank Re-built, the Strathleven regeneration company—which I chair—the Loch Lomond shores and the national park are making an impact on the community. The business environment is creating new jobs and providing high-quality business units, tourist destinations and attractive residential areas. Housing is a crucial element in the post-industrial strategy for our region, and I note with pride that more than 60 per cent. of all the people in West Dunbartonshire have privately owned houses. The message to the Government from my constituents is that Clydebank, Dumbarton and the Vale of Leven—the main areas—need the continued economic stability that we have seen over the past eight years to ensure increasing prosperity for our constituents and our communities. Turning to Westminster, there is an air of gloom, particularly among Opposition Members. We have heard that the economy is spiralling into decline, that house prices are down and that unemployment is up—but let us look at the record. In The Sunday Times, David Smith—a distinguished economic commentator—said that the official figures indicated that since the early 1990s more than 3 million jobs had been created, most in the private sector. It is important for us to hit that nail on the head: not all jobs have been created in the public sector. Jobs have been created there, but the majority have been created in the private sector. Statistics for the past 12 months indicate that there has been a rise of almost 80,000 in the number of jobs in the construction industry, 30,000 in financial and business services and 30,000 in distribution including retailing. We have heard that retailers are on a downward path—but they are increasing their business property. If they are doing so, it must be because they have a buoyant outlook for the next few years. That property means more retailing, but also more jobs. The position in which the British economy finds itself in is clear. We are the 12th richest economy in terms of the gross national product per capita and, after nearly falling behind Italy and thus putting our placing at the G7 table at risk, the UK has recently moved ahead of France into a comfortable fourth place in the table of world economies. UK average growth between 1990 and 2003 was 2.7 per cent., putting us at the head of our main competitors, France, Germany and Italy. I note that the Ernst and Young ITEM Club estimate—one that is not always favourable to the Government—indicates that solid growth will continue over the next three years, with consumer confidence expected to recover in 2005 and house price worries evaporating. Those are the comments of outside and objective commentators, but we must face the future, and as the Chancellor indicated, our future is firmly in the global economy. The Bank of England report on inflation has indicated that the pace of expansion of the world economy is slowing and the recovery in global equity prices has ground to a halt. It also says that global growth is expected to slow this year, but is still expected to be higher than the historical averages. The oil price futures curve has risen, suggesting that the record oil prices may persist in the medium term. That is the background. Let us focus on what the Government have done over eight years. Despite constant challenges and the risks of instability in the world economy over the past five years—those include the Asian crisis when Korea went bankrupt, the Russian crisis, the IT crisis, the stock exchange crisis, the US downturn, which spread across Europe and Japan, with world trade stalling for the first time in decades, and the volatility of oil prices—we have outpaced our European competitors in terms of growth. Also, the UK matches the United States in terms of future optimism. Despite world instability we have a base from which to grow the economy, and that is down to the very effective stewardship we have experienced over the past few years. We face challenges from China and India. With the Treasury Committee in the last Parliament, I visited China, which should be taken seriously for a number of reasons. The first is the sheer size of the country: China’s population is 1.4 billion, something that we cannot understand. The second is the pace of change; we visited Shanghai and saw the result of the input there over the past 10 years. The Shanghai skyline mirrors that of Manhattan. Ten years ago there was no such skyline in Shanghai; the pace of change is enormous. I make one request to the Government in terms of the future of the G7. The Government must ensure that China’s place in the G7 is recognised by others. China is growing and we must recognise that. The Prime Minister and the Chancellor could do us all a favour in terms of the global economy by ensuring that China gets its rightful place in the G7. Still thinking about Tony Worthington, I wish to say that there is a great need for the international finance facility, and a need to ensure that the humiliation felt by the billions of people in poverty is eliminated. I wish the Government, the Prime Minister and the Chancellor well at Gleneagles—on climate change, but also on the African objectives, as we try to ensure future security and prosperity for all of us in this divided world.