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The Economy (Supporting Business)

I very much respect the experience of my hon. Friend, who represents Cities of London and Westminster, which, of course, is home to the core of the financial services in this country. I know the very close relationship that he has with those in his constituency, who are the powerhouse of our economy. As I was saying, some local authorities have implemented a 20-day rule on payments—I am delighted that Westminster city council has implemented a seven-day rule—and bearing in mind that local authorities are dealing with taxpayers' money, I am sure that most taxpayers are very happy with that sort of policy and I hope that it can be followed by many other local authorities. Just a few days can make all the difference in terms of paying bills and staff, and helping businesses to survive, so I urge the Government to approach local authorities to get them to adopt the shortest possible payment period in order to help business at this time. As I said in a question to the Prime Minister, there are currently 2.73 million manufacturing jobs in the UK, down 160,000 on the year and down from 4.5 million in 1997. Productivity in manufacturing was down 4.1 per cent. in the final quarter of last year on the previous quarter, and that compared to a 1.8 per cent. fall for the whole of the economy. The figures are from the Office for National Statistics. I hope that the Minister will recognise the true value of our manufacturing industries to the stability and future success of the United Kingdom. Will the Government seek to reverse the crippling £16 billion burden of constantly changing regulations and the £7 billion a year new taxes that they have introduced, which are a drag on manufacturing industry, making us less competitive? The Minister mentioned France and Germany, and I agree that they have had severe problems, mainly—and this does go against my argument—because so much of their economies is manufacturing based. While they do produce manufactured goods, they have no market for them if the country to which they sell them does not have the money to pay for them. We must not force more of our manufacturers out of business or into relocating abroad. When the economy recovers—as an optimist I believe that it will—we will need manufacturing. A new report out recently from Policy Exchange reveals how the Prime Minister's second spending spree is set to reach 50 per cent. of GDP—a stark figure indeed—and that is not because of the recession. The report also calls for an emergency Budget and a spending freeze. Government spending is growing far more quickly than in other countries, and faster than in previous recessions. This perceptive and important report finds that the surge in spending is not being driven by the recession. At most, it says, only 6 per cent. of the increased spending is going on public works, and just over a third is due to the rising cost of social security or debt. Instead of "investment", most of the increase is due to a decision to spend more on consumption. The report also argues that all budgets, except social security, tax credits and debt interest, could be frozen at 2008-09 levels, resulting in savings of £87 billion on the Government's current plans. I have considerable respect for the Minister—I know his background and I used to work in the area that he represents—so I say with some regret that the truth is that history has a habit of repeating itself, and yet again it is a Labour Government who have brought the UK to the brink of bankruptcy. As Chancellor of the Exchequer, the current Prime Minister squandered the growth that he inherited from the last Conservative Government and he now has to fix the problems that his Government have created. History shows that successive Labour Governments, sadly, always leave the country deeper in debt. The present Government will have doubled the national debt to more than £1 trillion, so that anyone earning more than £20,000 will have to pay more tax. Rampant borrowing and tax rises will make the recession worse and the recovery more difficult, because they undermine the confidence in the future that is crucial to the recovery of economy. I make a plea to the Government and, perhaps just as strongly, to my own party, which has not always been the best friend to manufacturing, although it does appreciate the role that manufacturing can play, to ensure that the measures that we introduce take fully into account the problems facing the manufacturing industry and the important role that it can play in the recovery of our economy.