Britain is at or near the best for employment and enterprise. The report on science that we are publishing today shows the progress that we are making on research and development. Europe accounts for 50 per cent. of British imports and exports. To speed up the pace of economic reform across Europe, we are proposing that Governments and business join together in a Europe-wide business forum.
My right hon. Friend presides over one of the most dynamic economies in the world, with record levels of foreign direct investment, according to the United Nations, and massive levels of employment, according to the G7 nations. In an age of globalisation and cut-throat competition, what is he doing to ensure that our European Union partners go the same way as we have?
I am grateful to my hon. Friend, who has taken a broad interest in these matters. He is absolutely right about our economic performance, given that the shadow Chancellor has congratulated us on establishing economic credibility and on our success in macro-economic policy. On employment, despite the recent difficulties, the claimant count in Britain is 3 per cent. and the labour force survey figure is 5 per cent. Our unemployment rate is about half that of the mainland European economies. I believe that we can continue to expand, even in a situation of massive global competition. Our aim is full employment for this country, and I hope that all parties will subscribe to that.
Will the Chancellor try to speed up progress on the famous Lisbon agenda, particularly deregulation, given that under his stewardship the Scottish economy has grown at only one quarter of the pace of the Irish economy? Can he learn from the Irish economy, which gets less in subsidy from the EU than Scotland gets from England?
I can only tell the right hon. Gentleman what he said in his own report on the British economy:
“What are the most attractive locations today?…The lure of the USA…Of China…Of India…Of the UK”.
We have that allure for investors because we have a low-tax economy, stability, and an open competition policy. When the right hon. Gentleman chairs the Conservative party review on these matters, perhaps he can sort out its policy on Europe, which is in complete disarray according to the e-mails of the Leader of the Opposition’s Parliamentary Private Secretary. Perhaps he can also say that our economic record has brought stability, whereas under the Government in which he served there was instability.
Does the Chancellor intend to continue working with colleagues across Europe to promote employment and stability under the Lisbon agenda, or does he have any plans to isolate us from Europe and common sense by joining up with neo-fascists, weirdos and maniacs from all over the place?
My hon. Friend is right. It was Conservative Members who talked about the cranks, fanatics and extremists that they might have to join if they were part of the opposite grouping to the European People’s party. The choice is between a pro-European and pro-business agenda and an anti-European and anti-business agenda. The tragedy is that the Conservatives are not only anti-European, but are about doing what is damaging to business. If they will not believe what I have said, perhaps the Swayne e-mails—
Is not the Chancellor becoming a little concerned that Britain’s good performance in employment and unemployment is being undermined by the fact that unemployment has risen for 15 of the past 16 months and is at its highest point for six years? Does he have any specific initiative to make in respect of Britain’s mortgage lenders, given that unemployment is translating into rapidly rising repossessions because of the absence of any system of safety nets for people in mortgage arrears?
It is difficult to take lectures from the Liberals when they have just published their tax and spending plans, which show a £20 billion spending hole that would lead to damage to the economy. As for employment, I would have thought that he would give us a balanced account. We have one of the lowest unemployment rates in Europe. At the same time, we have moved closer and faster to full employment under this Government than under any Government for 50 years.
On interest rates, while I recognise that house prices have risen, the hon. Gentleman should recognise that interest rates are among the lowest that they have ever been. In fact, for mortgage holders, interest rates have averaged half under the Labour Government of what they were under the Conservative Government. It is perhaps about time that the Liberals acknowledged that.
The Chancellor will agree that the Lisbon agenda must be founded on the rock of economic stability. The Treasury Committee’s report, “Globalisation: the role of the IMF” suggests that there is significant risk to the UK in Europe if there are global imbalances and disorderly unwinding in the global community. Given that, will my right hon. Friend ensure that when he goes to Singapore in September, he will promote crisis prevention rather than crisis resolution so that economic stability is best served in the UK, Europe and the global community?
I am grateful to my right hon. Friend. The report is an important document, which points to the changing role of the IMF and, indeed, other international institutions. The emphasis must now be on crisis prevention rather than crisis resolution, the transparency that is necessary for countries to report what is happening in their fiscal and monetary policies and, therefore, for programmes of proper surveillance, whereby we can examine at first hand what is happening not only to countries’ fiscal and monetary but their corporate positions. That is why the proposal for extending article IV reports to cover those issues, and for an international form of surveillance as well as national reports, is important. I applaud the report. Perhaps we should also have surveillance of Opposition parties’ proposals.
The Labour Member on the European convention, the hon. Member for Birmingham, Edgbaston (Ms Stuart), said recently that economic policy throughout Europe is moving backwards. She singled out one country for special criticism—Britain. She said:
“The seeds of future stagnation have been sown. We have excessive public spending, rising taxes and excessive micro-management.”
I know that the Chancellor is keen to get on with the parliamentary Labour party at the moment. What does he have to say to his hon. Friend?
I just repeat what the hon. Gentleman says outside the House but not in it. He supported us and congratulated us on our successful macro-economic policy. [Interruption.] What is the country to make of a shadow Chancellor who, inside the House, criticises us for our economic policy but outside, when talking to business, to try to show that he has learned from his mistakes under a previous Conservative Government, refers to
“Labour’s success on macroeconomic policy”
and says that Labour has been successful in “establishing economic credibility.” He also said:
“Labour have improved the macro-economic management of the UK economy.”
If he is not prepared to say those things in the House but says them outside, the country will have to draw its own conclusions.
As for European issues, perhaps he should read the e-mails of the Leader of the Opposition’s parliamentary private secretary. [Hon. Members: “Oh!] Oh yes—they are precisely about the Conservative party’s European policy, which, according to the e-mails, is the subject of dismay, depression, “frustration and impotence.”
Before the Chancellor talks about friends in Europe, he should read the comments of the President of the European Commission, who says that, every time the Chancellor turns up in Brussels, it is like a vegetarian visiting a beef eaters’ club.
If the Chancellor does not agree with the hon. Member for Birmingham, Edgbaston, perhaps he will agree with the Prime Minister’s former chief economic adviser, who wrote recently in the Financial Times that
“higher taxes and intrusive micro-management are gradually taking their toll.”
Or perhaps the right hon. Gentleman is simply no longer interested in the mundane issues of the economy because his whole attitude is, as the right hon. Member for Birmingham, Ladywood (Clare Short) put it recently, “Please, please, let me take over. I’ll do anything you say.”
I can only quote back his own words to the shadow Chancellor and cite what has happened in his constituency, where unemployment has fallen by 54 per cent. under a Labour Government. Only a few days ago, he said:
“I worked for John Major when we lost the 1997 election, was William Hague’s political adviser when we lost the election after that. That doesn’t say much for the quality of my advice.”
Does my right hon. Friend agree that the Lisbon agenda is about real issues such as inflation, employment and getting money for public services? Will he scour the agenda next time to see whether it has any references to saying no to chocolate oranges and padded bras, or hugging a hoodie selling dodgy goods? I do not think that he will find them because they are all part of the Tories’ agenda.
The issue is whether one believes in stunts or substance in policy. The substance in policy is the lowest unemployment for 30 years, the lowest interest rates for 40 years and the lowest inflation rate in a generation. No Conservative Government have been able to boast of such a record. The shadow Chancellor would do better to go back to the drawing board with the right hon. Member for Wokingham (Mr. Redwood) and examine the Conservatives’ economic policy.