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Finance (No. 2) Bill

I draw the House’s attention to my entry in the Register of Members’ Interests. When I have the good fortune to catch the eye of the Chair on Second Reading of the Finance Bill, which I do most years in which I am eligible—I have been a bit more eligible in recent years than I used to be—I find myself to be a bit of a usual suspect. However, after listening to the excellent contribution made by my right hon. Friend the Member for West Dunbartonshire (Mr. McFall), and looking across to the right hon. Member for Wokingham (Mr. Redwood) on the other side of the House, who will, I assume, hope to catch your eye, Madam Deputy Speaker, I have some consolation that I am probably not alone as a usual suspect. We live in a world of ever-rapid change. Any of us who want to talk about economic issues in this country or elsewhere would be foolish if we were unrealistic about facing up to the changing international economic situation, which is often referred to as globalisation, that has made things very different for every country in the world. Globalisation is not a new phenomenon. Anyone who has read about the history of the 19th century will be aware of the challenge faced even then by the British manufacturing industry and the excellent way in which the industry met it. The difference today is the speed with which change takes place. I remember talking to the chief executive of a major industrial conglomerate in the textile industry some 25 years ago. He told me that he was still competitive because he had technology that others did not have, which allowed him to sell the relatively up-market products that people wanted to buy worldwide. He felt sorry for textile companies that did not have that technology. The difference today is that nobody is protected from the transfer of technology. Technology transfers instantly, and any company or operation that thinks that it can continue to do as it did in the past without being aware of that international challenge has its head in the sand. As a nation we must take our head out of the sand. The only thing that matters now—I shall turn to this later in my contribution—is the application of human ingenuity and knowledge in doing something new or in doing it better. That is the challenge faced by every Chancellor in the world when drawing up a Budget. In the past 12 months that situation has been additionally aggravated by the change in the world oil price. The increasing demand for energy from countries such as China and India puts pressure on an oil price already under pressure because of the political situation in the middle east. That carries an enormous potential threat to the stability of our economic community. We in this country face a further challenge in maintaining our competitiveness. I refer to the downturn in the rest of the European Union market—I use that term as shorthand because it is others as well—which is the biggest area for our exports. That makes it doubly difficult for us to face the global challenge and the energy challenge. We, of course, are not unique. Against that background, we have a stable economy with considerable growth. I shall not endlessly quote the views of others to the House, but I want to repeat what was said by the Organisation for Economic Co-operation and Development, which is, as most economists in the world would accept, an independent, international body that looks objectively at economic situations. In October 2005 the OECD said:"““The UK is a leader in the quality of its monetary and fiscal policy frameworks among OECD countries. The Framework has played a key role in improving macroeconomic stability relative both to the past and to other OECD countries.””" That is a telling analysis of the strength of the British economy. I follow the exchanges across the House at Treasury questions, and I know that it is the job of Opposition Front Benchers to scoff at particular economic statistics offered in defence of the strong economy. However, I submit that if one takes the package of statistics a clear picture emerges. As my right hon. Friend the Chief Secretary said, in 2005 growth in the UK was higher than in any other major European country. We have had 54 quarters of constant economic growth. As we all know, inflation is the lowest that it has been since the 1960s. Consequently, we now have the lowest interest rates for a generation, and they are not only low but stable, which is crucial not only for those who want to invest in our economy but for those who want to purchase houses or to consume. We were warned when we introduced the minimum wage that employment would fall, and it is clear that that has not happened. There is greater employment in this country now than ever, and the pockets of severe unemployment, including those in my constituency, have been tackled by the Government’s programme. Unemployment is less than half what it was in 1997. Schemes such as the new deal are making a major contribution in edging into employment people who previously were unable to take advantage even of an economic upturn. Our employment rate is higher than that in the United States, Japan, France, Germany, Italy and Canada. That means that people are better off, and that is the real experience of people out in the country. It does not mean that everyone is better off, but on average communities know that they are better off. Real living standards have risen over the past 10 years and the nation’s ability to spend on both public welfare and public investment has increased over that period, and people know that.