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Clause 21

Volume 115: debated on Wednesday 29 April 1987

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Charge Of Corporation Tax For Financial Year 1987

Question proposed, That the clause stand part of the Bill.

This clause sets the rate of corporation tax at 35 per cent. for the 1987 financial year.

Companies have told us that advance notice of the main rate of corporation tax helps with their forward planning. Hon. Members will be aware that before 1984 it was normal to set the corporation tax rate in arrears. However, the Finance Act 1984 set the corporation tax rates for the following three financial years and we intend as far as possible to maintain the practice of setting corporation tax rates in advance. Accordingly, this clause fixes the rate of corporation tax for the financial year to 31 March 1988 at the unchanged level of 35 per cent. At 35 per cent. the rate of corporation tax is, at present, the lowest of any major industrialised country, although the United States is shortly to emulate us with a rate of 34 per cent.

The reforms introduced in 1984 are now firmly in place, and the benefits are beginning to be felt, although it will be a few more years before they fully work through. However we can already see improvements in terms of increased dynamism, profitability and the quality of business investment decisions in Britain. That is part of a continuing success story. For example, the average rate of return earned by all industrial and commercial companies has continued to grow, and in 1985, the last year for which we have figures, it was 11.9 per cent., the highest rate since 1964.

Company profits are also up. The gross trading profits of non-North sea industrial and commercial companies have risen from £30 billion in 1984 to £45 billion in 1986. Not surprisingly, there has also been an increase in corporation tax receipts, from £10.7 billion in 1985–86 to a forecast yield of £15 billion for 1987–88. This rise in corporation tax receipts is largely the result of those higher profits. As I have said, the 1984 corporation tax reforms have stimulated business and no doubt led to higher profits. I do not pretend that paying tax helps businesses, but the corporation tax reforms show that improvements to the tax system can benefit businesses without causing a loss of revenue.

This is not a short-term boom that will suddenly collapse. Reference has already been made to one of the most optimistic CBI surveys for many years. That survey, which covered very nearly 1,500 companies, responsible for almost half the United Kingdom's manufactured exports and more than half of manufacturing employment, reported further increases in optimism about the business situation rising to levels experienced only once before in the last decade. United Kingdom manufacturing firms are now winning orders at the fastest rate for many years, with exports at record levels and forecast to rise even further. Manufacturing output, already growing rapidly, is expected to grow faster still.

All this underpins and emphasises that our corporation tax reforms, which were much criticised, have been compatible with healthy industrial development. Certainly the growth in corporation tax receipts reflects the strength of commerce. The clause merely repeats that the present rate of corporation tax at 35 per cent. should be the same for the next financial year. I do not suppose that there will be much dispute about that tonight.

Is it the Minister's wish that we should take clause 22 with clause 21?

As we have started on this debate, perhaps we could take the two clauses separately if that is convenient.

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We take no particular point against clause 21 and we do not propose to divide on it. As the Minister said, it gives us an opportunity to assess three years' experience of the changes which were introduced in corporation tax in 1984. If I recall correctly, the changes were designed to discourage what the Chancellor described at the time as investment which could not be justified or artificial investment produced by a system of capital allowances which the Chancellor felt was distorting the pattern of investment.

One assumes, as a corollary of that, that the changes were also designed to encourage the use of cheap labour as a substitute for investment. I assume that that was part of the Chancellor's interest in promoting what he described in a memorable phrase as a "low-tech, no-tech" economy. Incidentally, that attitude sat uneasily with his subsequent interest in the proposition that our economic ills were the consequence of high wage rates. That also had a brief run of popularity until a reasonable amount of academic research and commentary showed that the proposition could not be sustained.

Why does the hon. Gentleman refer disparagingly to cheap labour? Surely he recalls that the 100 per cent. investment allowance was the response of the right hon. Member for Leeds, East (Mr. Healey), as Chancellor, to excessive rates of inflation. It was basically an inflationary allowance. When inflation came down, it made sense to bring the rates back to more sensible levels. When unemployment was high it did not make sense to have a system that encouraged investment in expensive labour.

What the hon. Gentleman says is true of stock appreciation but not of capital allowances. I have used the phrase "cheap labour" because in any international assessment that is precisely what we have. Notwithstanding the Chancellor's contention that real wages were too high, he has now abandoned that, or, if he has not abandoned it, he is not saying much about it. Again, that may be one of the detectable changes in attitude and in Government policy which owe much to the apparent imminence of a general election.

Surely the chief complaint was not that wages were too high but that some wages were too high in relation to productivity. Has not that been altered by the vast improvement in productivity?

I deliberately used the term "real wages". By definition that covers the hon. Gentleman's point. Since he mentioned productivity in his intervention, I must point out that the productivity improvements of which so much is made demonstrate no improvement in trend. The improvement over the period of this Government is no better than we achieved in the 1960s and 1970s. I shall say a word in a moment about the figures that have been produced and why they are perhaps less reliable than is sometimes suggested.

Let me return to the question of how effective the changes of 1984 have been in securing the objectives that the Chancellor enunciated. We were warned at the time by the Institute for Fiscal Studies that the effect of the changes would be to discourage investment. As I have said, at least in his own terms the Chancellor acknowledged that that was part of the intention of the changes. That objective has certainly been met. Investment in manufacturing rose briefly in the wake of the announcement of the changes, but that was a transitional response. It had a bunching effect to get investment in before capital allowances were phased out. Now that that has happened, manufacturing investment has fallen back to more than 20 per cent. below the level of 1979.

As a consequence of that appalling investment policy for manufacturing industry, we are again as an economy disinvesting. From 1980 to 1985 there was net disinvestment of £5·52 billion compared with positive investment of about the same sum from 1975 to 1979. In other words, we are the first major country to bring in reverse development. That is the outcome of the Government's economic policies and the true measure of their much-touted economic boom.

The Institute for Fiscal Studies also pointed out that the changes would be biased in favour of financial institutions, particularly banks, which had major investments in property and which, therefore, benefited from the cut in corporation tax but lost very little through the loss of capital allowances. The impact of the changes has been principally in respect of manufacturing industry. In that context it is also worth bearing in mind that whereas the Chancellor predicted, and indeed indicated that it was his intention, that the changes should be revenue neutral, that is not how they have turned out. I have full sympathy for the Chancellor. It must have been an extraordinarily difficult prediction to make. Nevertheless, that was his intention.

It appears that the Chancellor missed his target. It again demonstrates how little the Chancellor knows about how the economy is performing and about how much revenue he is likely to receive from corporation tax. The reason that I make the point is that a forthcoming article in Fiscal Studies will point out that, accepting the increased profitability, the changes have produced a £1 billion increase in revenue over what would have been the revenue take if the changes had not been made, even in the same circumstances. In other words, far from being revenue neutral, the changes have produced an extra £1 billion of revenue over and above what has been produced by the buoyancy and profitability of the corporate sector. Therefore, we have yet another indication of why the Chancellor has been inundated with revenue that he had not expected even some months ago. Again, it demonstrates how little he knows about what is happening to the economy.

The other objective of the changes, as the hon. Member for Beaconsfield (Mr. Smith) suggested in his intervention, was to boost employment. Instead of using expensive investment, the objective was to use relatively inexpensive labour. If that had been achieved, one might have said that there was a certain rationale and something to be supported in the changes. But, of course, the loss in manufacturing employment has continued unabated. There has been a 28 per cent. loss in manufacturing jobs since the Government took office.

Turning to the productivity point made by the hon. Member for Vale of Glamorgan (Sir R. Gower), it is the continuing fall in manufacturing employment outstripping the fall in manufacturing output which has produced the misleading productivity figures of which the Government have made so much. If we were to be offered a bargain of further improvements in productivity of the type that the Government have produced, but at the price of falling manufacturing employment outstripping falling manufacturing output, I do not think that many of us would say that such productivity was worth having.

Productivity is not so favourable if one considers it in terms of output per hour rather than output per worker. Rather than sack workers, many employers have kept them on but have asked them to work longer hours. Therefore, the productivity figure is more favourable in terms of output per worker but much less favourable on the more accurate basis of output per hour.

In addition, there is the familiar argument that much of the productivity improvement has been brought about because the weaker performers have gone to the wall and have gone out of business. For all those reasons, I think that we are entitled to look askance at the claimed productivity miracle of the Government.

The changes introduced in 1984 have predictably discouraged investment, which is parlously low. It means that we are disinvesting rather than investing substantially in new capacity, as all our rivals are doing. The change has not been revenue neutral, as the Chancellor intended. Certainly it has not encouraged employment in manufacturing industry. Therefore, the conclusion we reach is that the changes, while in a sense understandable by the Government's rationale at the time, have not been helpful to industry and, indeed, have been deleterious to it in many respects.

We still need some means by which investment — particularly in manufacturing industry — can be picked up off the floor. If that does not happen, we know as a matter of certainty that we cannot go on competing in international markets against countries that are investing in their own industrial bases. If we do not invest, we are trying to compete with one hand, if not two hands, tied behind our back. So it becomes of crucial importance to our economic future to find a means of promoting the investment that we need. Clearly, the Government have no answers or ideas on that subject. The changes that they introduced in 1984 have done nothing to improve the position; they have worsened it as far as one can tell.

We need a different approach, a different macro-economic climate and specific incentives to investment. None of those appear to be in the Government's mind. The Government are guilty of the very short-termism of which the Chancellor accused the City some months ago. If we are to get the investment that we so desperately need, the economy and the country will have to wait for a Labour Government to achieve it.

I do not know how the hon. Member for Dagenham (Mr. Gould) can say that the Government are guilty of short-termism when, in 1984, they reformed corporation tax and, for the first time, told companies what the regime would be for a three-year period ahead. I recall the days when Chancellors of the Exchequer stood up and announced in the course of their Budget statements the rate of corporation tax for the year that had just concluded. That did not help companies that were trying to plan ahead.

I welcome the clause because it states the rate of corporation tax for the coming year, which helps companies. Secondly, it is a low rate of corporation tax — 35 per cent. That will also help companies. I cannot remember the exact history of all this, but I recall that, in the early and middle 1970s, as inflation rose, there was a cash flow crisis in industry. The right hon. Member for Leeds, East (Mr. Healey), then Chancellor of the Exchequer, introduced stock appreciation relief. I believe that 100 per cent. capital allowances were not only an incentive to industry to invest but were necessary so that industry had the cash to replace assets that could cost 100, 200, or 300 per cent. more than they had before because of inflation. The changes that were made in 1984 were a proper response to the fact that there was no longer rampant inflation in the economy. They were not so much designed to encourage employment in manufacturing industry as to ensure that the tax system was not so distorted that decisions about whether or not it would be commercially right to invest in new machinery or use new employees were dictated by tax considerations. So the tax regime for corporation tax and for capital allowances was basically neutral as between a decision to invest or use additional labour. At a time of low inflation and high unemployment, that was the right thing to do.

Now, three years on from 1984, we find that the revenue from corporation tax has risen substantially. I believe that that is largely due to the increased profitability of British industry. The hon. Member for Dagenham tried to argue that the £1 billion figure that is to be published by the Institute for Fiscal Studies is due to the 1984 changes in the regime. However, that figure must he hypothetical, because people change their behaviour in response to tax changes. The figure can only be the institute's best estimate, and, even if it is correct, it shows that the hulk of the increase in revenue from corporation tax—corporation tax revenue was only £3 billion or £4 billion not long ago — has been due to the increased profitability of British industry.

An interesting appendix to the Treasury and Civil Service Select Committee's report on the Budget shows the difficulty of forecasting the yield from corporation tax. It is particularly difficult for the Revenue to forecast the yield of that tax. Another factor is that there were huge tax loss over-hangs in many industrial companies — they were making good profits but paying no corporation tax because of losses that were carried forward. Many of those have come to an end, which is another reason for the substantial increase in yield. For all those reasons, I welcome the clause.

8.15 pm

I want to refer briefly to the effect of the changes on the film industry, in which I have a constituency interest. Pinewood film studios in my constituency is a subsidiary of the Rank Organisation, which has recently had to make a large number of redundancies in response to changes in the market. My right hon. Friend the Financial Secretary to the Treasury will be aware that the chief executive of the Rank Organisation wrote to him on 24 April about all this. I do not want to weary the Committee with all the figures, but it is not enough to say that the business expansion scheme will be sufficient to help the film industry. The amounts of cash involved, the long lead times and the substantial amount of risk make it a special case.

I ask my right hon. Friend to examine the letter from the Rank Organisation carefully; it sets out the arguments for some degree of special treatment for the film industry. The industry is a special case, although I know that it is not the only one. The points advanced by the chief executive, Mr. Gifford, are the substantial amount of funding required for film production and the long period between commencing production and incurring expenditure on a film and the date on which revenues start being received. There is also the fact that such revenues tend to be earned some time after initial cinema release. I hope that my right hon. Friend will give careful attention to those arguments.

I agree with the hon. Member for Beaconsfield (Mr. Smith) about the level of profitability, which I believe is welcome in business at the present time. I also agree with him about the certainty for rates of corporation tax. That proposal was welcome and has certainly been helpful to businesses.

I want to say a few words about the important subject raised by the hon. Member for Dagenham (Mr. Gould) —the impact that the changes have had on investment. That is of fundamental importance to us all. There is a continuing debate about the relationship between the manufacturing and services sectors of the economy, and about whether the one can replace the other or is more important than the other. Surely the services and manufacturing sectors are interdependent. Each rests upon the efforts of the other. In a trading nation such as ours, services inevitably depend more on manufacturing than the other way round Almost 100 per cent. of manufactured goods are tradeable, whereas only 20 to 25 per cent. of services arc tradeable.

All the historical evidence is that those countries that have succeeded in exporting a large number of their products — the most recent example in the post-war years has been Japan—have built upon the back of their enormous manufacturing trade the service industries that go with it — banking. shipping, insurance and all the other things that we provide so well in the City of London. But one needs a strong manufacturing sector to have a healthy services sector. One of the reasons why we have such a successful services sector is that, historically, we have had a substantial amount of world trade in manufactured goods ever since the industrial revolution, Victorian times and the empire. That gave us an enormous advantage.

It is vital that we examine the impact that the changes have made on investment. I draw the Minister's attention to the latest annual report of the Equipment Leasing Association. It commissioned a report at Bath university, and has commissioned a further report on the impact of the changes on industry and investment. Many of us thought that the changes in corporation tax would lead to a considerable reduction in the leasing industry's activities, because it seemed that the leasing business was built largely on the tax structure that used to exist. However, the leasing business has continued to thrive and, indeed, is expanding. Nevertheless, the study that the Equipment Leasing Association carried out demonstrates the decline in investment which has taken place recently and which is forecast to take place in future as a result of these tax changes, and I find it disturbing.

I am fairly pessimistic, but would like to think that the Government will consider whether we can use the tax system to encourage investment in some high-tech areas of the economy in a way which commands broad consensus in the House. Generally speaking, I am sceptical about tax expenditure. One does not like to distort the tax system by introducing tax allowances any more than necessary, but against that one must admit that tax breaks are a wonderful incentive to individuals and businesses. One need only look at mortgages and the insurance and pensions industry to see the impact which tax incentives can have.

It is absolutely vital to reverse the recent awful trend in high technology. Many countries have beaten us solidly; our balance of payments for information technology equipment has been growing increasingly wide and adverse and we must do something about it. The Government should consider introducing tax incentives to encourage more investment in these vital areas in future, not only for those sectors of industry, but for the many other sectors that depend on them.

Information technology is an obvious case in point. In one way or another, both the service industries and manufacturing industries will depend on it. Therefore, we must be at the forefront of that technology in terms of research and development and manufacturing. We must be able to beat the competition from Japan, America and Germany, because that is the only way we can succeed.

We may be able to encourage companies through the tax system to invest more in research and development and in capital equipment and to use and develop high technology in a way which all hon. Members want to see, and I hope that Treasury Ministers will give that some consideration.

Like the hon. Member for Stockton, South (Mr. Wrigglesworth), I agree with what has been said about the advantages of having the corporation tax rate stated firmly and clearly in this clause of the Finance Bill, and with what has been said about the benefits of this low rate, which is extremely favourable in an international context.

The hon. Member for Dagenham (Mr. Gould) went a long way to disparage and discover the loopholes in British productivity. The fact is that our industries have been in decline for several decades and one must recognise that. Indeed, at one stage the decline seemed to be terminal. The decline of much of British industry dates back to the end of the last war and some of it dates back further, so this state has persisted for a long time. The difficulties of British industry were aggravated by the lateness of our entry into the Common Market which meant that we suffered many of the disadvantages, without gaining the advantages. Moreover, we faced enhanced competition from the new entrants into the industrial world—not merely Japan, but Korea, Taiwan, Singapore, Hong Kong and so on. All that aggravated the difficulties of British industry.

It is only now that much of British industry has turned the corner and become more efficient than it was. The fact that our industry went through that difficult period has made it more efficient, but that has brought other problems. By becoming more efficient, industry has shed some of its labour, which has exacerbated our unemployment problem.

I am listening with great interest to the hon. Gentleman, and I would not intervene if it were not that he was making assertions which are widely made but not based in fact. He is saying that British industry has become more competitive as a consequence of changes in productivity and manning levels. I am sorry to tell him that that is not borne out by any index of competitiveness which the Government use—and they use about half a dozen. Each of those shows that competitiveness has declined since 1979, quite apart from the fact that output has fallen.

I have personal knowledge of certain companies and I have seen benefits accruing to them as they have recovered with difficulty from their position of eight or 10 years ago. It is only now that some of those companies are more efficient. One or two specialised industries, such as the textile industry, have made a great recovery, but the hon. Member for Stockton, South tended to belittle what has been a distinct recovery.

For the reasons that have already been given from both sides of the House, we can all accept this clause, and I hope that we shall do so.

Several speeches concentrated on the effects on investment of the changes made in 1984, but levels of investment have held up. We always accepted that reform might affect the investment profile, with some being brought forward to earlier years to qualify for the higher rate of capital allowances, but the DTI investment intentions survey suggests a rise of about 6 per cent. in industrial investment in 1987 and a similar increase in 1988.

The hon. Member for Stockton, South (Mr. Wrigglesworth) referred to the Equipment Leasing Association. Only in March it announced that 1986 had been its second best year ever, contrary to the expectations that leasing would be hard hit by the 1984 reforms.

I said that the effect of the changes on leasing had not been adverse, as had been anticipated. That is different from saying that, because leasing has increased, the amount of capital investment in industry has increased. I hope that the Minister will study the report, because it points out that the level of industrial investment will decline in future and that action needs to be taken to stop that decline.

There are no grounds for saying that industrial investment or investment in the economy has declined. As we all know, investment in the economy is at record levels, but Opposition Members like to point out that manufacturing investment has been adversely affected.

I mention these matters because in 1983, the year before the corportion tax reforms, manufacturing investment, including leasing, was £6·8 billion, whereas in 1986 it was £9·5 billion. Therefore, there is not much evidence that the reforms have had the dramatic adverse effects that hon. Members have described.

That is the figure that we should look at, and that is the point that I would make in reply to the hon. Member for Dagenham (Mr. Gould) when he talked about net disinvestment—a concept that is beloved of statisticians but one about which I remain extremely sceptical because of the difficulty of measuring it. What we can look at and what we do know about is gross investment, and the figures for gross investment are those that I have given the Committee. They hardly bear out the dire predictions by hon. Members of the Opposition.

The hon. Member for Stockton, South said that he did not like tax breaks but thought that we ought perhaps to consider them in this particular instance. It is a very unfamiliar stance for him to say that, while he is against something, on the whole he might just favour it a little. It is a very attractive posture and we know why it was taken, but on this occasion the hon. Gentleman will be very pleased to know that not only have we listened to and considered what he says; we have already done what he advocates. There is already provision for short-life assets to be treated differently: expenditure on assets with a life of up to three years can be written off over the life of the asset instead of at the normal rate of 25 per cent.

8.30 pm

That was specifically introduced for the high technology sector, bearing in mind that in information technology and electronics some investment is written off at a truly astonishing rate these days. I merely draw the hon. Gentleman's attention to it to try to assure him that we had that particular problem somewhat in mind.

We also heard from the hon. Member for Dagenham the view that the tax reforms had increased incentives to invest in services, particularly the financial services, although I think that it is an argument that applies to all services rather than just to financial ones. But, as my hon. Friend the Member for Beaconsfield (Mr. Smith) said, the reforms are particularly designed to bring about a situation where investment is business-driven and not tax-driven. That is the whole point of it. If this means more investment in services, so be it. I agree with the hon. Member for Stockton, South that there is not a right level of investment, either in services or in manufacturing; the important thing is that for the country as a whole the investment should be of the highest quality.

The hon. Member for Dagenham was sceptical about the revenue neutrality of the reforms. We will read with interest what the Institute of Fiscal Studies says on this. It does not automatically follow that, because the revenue is higher than predicted, it has failed to be revenue-neutral. There will have to be rather more to the argument than that, and I know that there will be. But we are not persuaded that there is yet evidence to show that it was not revenue-neutral.

The main factor that has increased the revenue from corporation tax has been the dramatic recovery in the profitability of British companies. I have quoted the rates of return in British non-North sea companies up to the levels of the 1960s. The hon. Member for Dagenham says that the fact that we did not predict that accurately shows how out of touch the Chancellor is. What it really shows is that the economy did even better than the Chancellor said it would, even better than he had expected.

The hon. Member for Dagenham kept talking about short-termism, saying that the Chancellor was running the economy in a short-term way. If ever I heard short-termism expressed, it was in the hon. Gentleman leaping to say that the changes in corporation tax were all wrong and that we ought to look at them again, in the first year in which they have operated in their new form. If that is not short-termism, I do not know what is.

My hon. Friend the Member for Beaconsfield raised the subject of the film industry. I was very glad that he raised it after the hon. Member for Dagenham had spoken and not before, because the hon. Member and I used to debate legislation relating to the film industry, and the changes in corporation tax were much debated — almost out of order—when we were discussing the Films Act 1985.

I will certainly look at the letter to which my hon. Friend referred. He will know that we have taken the view, very much on the grounds that he himself was arguing, that investment should be business-driven and not tax-driven, and that we could not make exceptions for particlar sectors. He will know—I think he said—that the film industry is not the only one to argue that it should be regarded as a special case. We do not say that the answer to the problems of the film industry is the business expansion scheme, not for one minute; but I hope that the changes that we have made in the business expansion scheme will be positively looked at by the industry, because we deliberately made some changes which we hoped would overcome some of the problems perceived by the film industry in making full use of the scheme. Nevertheless, I will look at the point that my hon. Friend made, and at the letter.

I am grateful also to my hon. Friend for picking up the hon. Member for Dagenham when he said that one of the purposes of the corporation tax changes had been to encourage the use of cheap labour. That was never the purpose, and I would have thought that the hon. Gentleman, who likes to represent our arguments fairly, was really parodying the argument. It was always that we ought to have neutrality in the tax system as between capital and labour — it has nothing to do with cheap labour—that companies ought to be given an incentive to employ people rather than substitute machinery for labour. That is the same philosophy as informed the changes that we made in regional development grants as well; we thought it a good thing to make them more job-related. I still think that those were good changes, and I agree with what my hon. Friend said.

My hon. Friend the Member for Vale of Glamorgan (Sir R. Gower) took up the hon. Member for Dagenham on what he had said about productivity and the fact that it was nothing remarkable. If I undestood him—he has certainly made this point on previous occasions — the hon. Member for Dagenham was arguing that there is somehow a difference between a negative increase in productivity — getting rid of people — and a positive increase, which is increasing output while keeping the same labour force. But I would put this to Opposition Members: if there is overmanning in industry, that position will be unsustainable. The level of overmanning that we inherited in 1979 in industries such as steel was untenable. It is a terrible thing that so many people should have had to be made redundant in the steel industry, but this has made the industry more competitive and it has made the jobs that remain in the industry much more secure. He says that there is no increase in competitiveness, but I think that he will find that view very much disputed by the steel industry itself.

I am sure that the Financial Secretary understands the point. It is simply that the rates of productivity are partly produced by a statistical effect, because weaker performers have dropped out of the picture. So the average of what remains appears to rise, although the actual productivity performance of each of those people need not have improved at all. That is what underlies a productivity performance which, despite the claims made for it, is no better than trend in any case.

Many people would dispute the hon. Member's view of that. I remember noticing in about 1980—I speak from memory—the astonishing fact, as I saw it, that the proportion of the labour force engaged in manufacturing was actually higher in this country than in Japan, even though the contribution of manufacturing to output was much higher in Japan. It just demonstrates how unsustainable was the level of manning that we inherited in 1979. However harsh the treatment has been, it is a problem that has had to be faced. By facing up to it we have made industry more competitive and much better able to face the future. We had concealed unemployment. The more we delayed facing that, the greater the ultimate increase in unemployment would have been.

The hon. Gentleman says, "Rubbish," but everyone here knows that it is true.

Question put and agreed to.

Clause 21 ordered to stand part of the Bill.