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Volume 408: debated on Tuesday 7 October 2003

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If he will make a statement on current employment levels and their effect on the economy.[124646]

Employment in the United Kingdom is this year at its highest level ever. We are also today publishing our recommendations for employment creation in the European Union.

I thank my right hon. Friend for that answer. Can he tell me what he is doing about the disparity in employment levels between the regions?

In every region, employment has been rising and unemployment falling. In every region around this country, there are vacancies that there never were even with the high levels of growth achieved in the late 1980s. I say to my hon. Friend that, yes, there are pockets of unemployment in many parts of many regions. That is why we are introducing enterprise areas, which will provide additional resources for job creation in those areas, and why we are also announcing proposals this autumn to improve the new deal. The fact of the matter is that we have employment creation in every part of this country, and it is the policy of this Government to work towards full employment not only for one part of the country, but for all parts of it.

The Chancellor will no doubt be aware of the recent Office for National Statistics figures—the Government's own statistics—showing that, for the 12 months to the end of March, the 9.1 per cent. increase in spending on public services produced only a 2.5 per cent. increase in the real value of services delivered. Is the Chancellor concerned that those ONS figures also reveal that the extra £4.6 billion spending, which included more than 100,000 extra public sector employees, contributed only 0.5 per cent. to GDP growth, when the figures also show that a similar increase in household expenditure would have added 2.2 per cent? How does he propose to tackle the decline in public sector productivity? Does he accept that it is no good creating extra jobs when they do not create appropriate growth in the gross domestic product?

This is a question about employment, and the hon. Gentleman should be congratulating us on the employment increase not only over the past six years, but over the past year, in which unemployment has been rising in almost every major industrial country. Our unemployment is now lower than in America, France, Germany and Japan. On his point about the public sector, he said—this is the view that he expressed in his question, and which lies behind it—in The Sunday Timeson 10 March:

"The whole mentality in the public sector is to do as little as you can."
If that is the motivation behind the Flight review to cut 20 per cent. out of public expenditure, we know exactly where the Conservatives are coming from.

My right hon. Friend will be aware that unemployment in my constituency has halved since 1997, but we still have a problem with people who are caught on benefits. Glasgow is now reaching a skills shortage and we need skilled labour. Does he agree, along with many people in Glasgow, that projects such as Glasgow harbour will create thousands of new jobs, including skilled and unskilled jobs, and that we should be supporting such projects?

I am grateful to my hon. Friend, who is one of those pressing for more job creation in Glasgow. Unemployment has halved in Glasgow since 1997, but there are many areas of Glasgow where unemployment is still too high. That is why the new deal is operational. There is a particular project in Glasgow, which involves working with the private sector, the voluntary sector and the Employment Service to create more jobs, and it has been very successful. There is also a major apprenticeship scheme run by Glasgow city. It has also been very successful and it is one of the most important apprenticeship schemes in the country, bringing people into the building trades and other trades. On Glasgow harbour, I shall pass on my hon. Friend's concerns to the Secretary of State for Scotland.

Contrary to the rosy picture given by the Chancellor, we have learned this week that Scottish manufacturing has fallen by some 24 per cent. over the past year. That comes on top of the Government's own figures, which show that we have lost 39,000 jobs in manufacturing in Scotland since 1999. What specifically is he doing to assist Scottish manufacturing? Is he prepared to comment on the 18 different reports in his Department that suggest that early euro entry would help Scottish manufacturing?

We will debate the euro later today, when I hope that we will hear about the position of the Scottish National party.

As far as manufacturing industry is concerned, the hon. Gentleman will welcome our decisions to introduce a research and development tax credit, to make capital allowances permanent, to introduce an information technology allowance at 100 per cent., and to give funding to all the development agencies, including, via the Scottish Executive, Scottish Enterprise. All those measures help manufacturing most of all.

The hon. Gentleman will also welcome the skills paper that was published yesterday and all the work that is being done throughout the United Kingdom in creating a modern apprenticeship taskforce. Perhaps he will reflect on the policies of the Scottish National party, which would cut thousands of jobs from the Scottish economy and even cut public spending in Scotland.