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Mr. Purchase: There is much to consider in what the hon. Gentleman has to say.

Mr. Andrew Love (Edmonton): Disagree!

Mr. Purchase: I am being urged to disagree--how extraordinary.

It is interesting to reflect that no country, except perhaps America, is entirely in charge of its own interest rates, for the simple reason that it has to take note of what everyone else is doing and, to an extent, reflect any changes elsewhere in its own arrangements. If we allow rates to get too high, we attract hot money; if we allow them to get too low, out that money goes. We are not independent in the way that the hon. Member for Buckingham (Mr. Bercow) would lead some of his Eurosceptic supporters to believe.

On exports, I gave the House the good news first, because I did not want to fall out about the bad news, which is that Britain's exports, as a fraction of total world exports, have been falling for many years. We are not reversing that trend even though we are increasing our exports. I am sure that the hon. Gentleman understands that we can have rising exports and a falling share of the world markets.

Mr. Graham Brady (Altrincham and Sale, West): Does the hon. Gentleman accept that that damaging trend is likely to be accelerated, rather than slowed, by the imposition of the climate change levy on British manufacturing? Does he accept that the Chancellor's earlier comment seems spurious to those who represent constituencies in the north or the midlands which have many manufacturers, because although there have been offsetting reductions in tax costs for some service industries, manufacturing companies are not benefiting from those?

Mr. Purchase: The hon. Gentleman may know that I have been in the front line of west midlands MPs from all parties, standing shoulder to shoulder, saying to the Chancellor that the levy represents a significant challenge, especially for companies that are energy efficient and which have been careful to introduce new energy-saving technology. They run a good monitoring system to ensure that they are always on the cheapest tariff and are therefore running furnaces and heat exchanges at the lowest possible cost, and have done so for several years so that they remain competitive. We have acquainted the Chancellor with that difficulty, and he has partially responded by agreeing that there can be special dispensations where they can be shown to be beneficial.

I accept the hon. Gentleman's point, and I accept that the levy is extra expenditure. We have to weigh the good against the bad, and there is no question but that a serious crisis in the world's energy use is looming. Fossil fuels are undoubtedly running out, and we have to find ways of meeting the energy needs of a developing world so that it can keep its people in comfort.

Mr. Bercow: I am grateful to the hon. Gentleman for his characteristic generosity in giving way. I accept his

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point that no nation is omnipotent, but does he accept that the experience of our forced ejection from the extended recession mechanism demonstrated that a country that is not tied to a fixed exchange rate system has some flexibility in setting its own interest rates, as we discovered when we were able to slash our rates after our ejection in September 1992? Does the hon. Gentleman further accept--I hope that he does--that increased stability within the eurozone could be bought for Britain at the damagingly high price of increased exchange rate volatility with the dollar and the yen? Is not that particularly important to this country, which trades more with north America than do other member states of the European Union?

Mr. Purchase: Again, the hon. Gentleman makes interesting points. I will not fall out with him because those are matters that we should discuss and analyse. I say to him and to the hon. Member for Altrincham and Sale, West (Mr. Brady) that not one single factor has a total influence on our position. We need balanced consideration of a series of indicators, including the option to join the euro, if not yet then at some time when it is appropriate to our needs. I believe that that will assist British exports, although I accept that the climate change levy and energy taxes have an impact. We must measure all those costs against the benefits of joining. If there were a sophisticated enough cost-benefit analysis model, we would be applying it and making the right decision, but much of this is a matter of judgment.

I must return to the subject of the Budget, or you, Mr. Deputy Speaker, will rule me out of order. Today's Budget, as one of a series, will broadly find a welcome in the country. It is a path towards the balance that we seek.

We have heard today that the management of pension funds is to be freed up. That matter is an important part of our lives because pretty well all of us are now dependent on the investment of our present contributions to ensure that we receive a pension in future. I am a little concerned because I am rather old fashioned when it comes to pension management. I have always understood first, that no pension fund should have too great a holding in any individual stock because one sometimes needs to make an orderly retreat without disturbing anything; and secondly, that not too many of those holdings should be in equities.

In boom times it is nice to say, "Look how well we are managing the fund; pay us our fees now", but there are difficulties when the market flattens out or goes into recession. People who depend on their pension may then find that its value has diminished. One must ensure that the investments of the pension fund as a whole are properly balanced, with not too great an amount in equities, so that pension commitments can be met and the auditors and actuaries are always satisfied that the fund is equal to the job it has to do. I sound a note of caution because it is important for people's future that they are able to rely on their pension fund managers to guarantee that the income that was promised will be paid.

As for the national health service--

Mr. John Hayes (South Holland and The Deepings): Will the hon. Gentleman comment on the Chancellor's

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abolition of dividend tax credits and the impact that that will have on pension funds? Clearly, the hon. Gentleman speaks with some authority on the matter. Does he agree with the estimate that this year the abolition has cost pension funds £5.4 billion?

Mr. Purchase: Yes, because I do not know other than what the hon. Gentleman has just told me. However, I would like to put the matter in context. I listened to Prime Minister's Question Time and my right hon. Friend's answers on this matter. My right hon. Friend the Prime Minister made exactly the right point. Opposition Members will be surprised to hear that. The cost of the abolition has been more than met by growth in pension funds. It is--[Interruption.] That has excited Conservative Members. I can tell that they will become argumentative--

Mr. Tim Boswell (Daventry) rose--

Mr. Purchase: I will give way.

Mr. Boswell: It is because I respect the hon. Gentleman that I want to make a point. Has he considered that whereas pension funds get no relief from the knock that they have suffered with the abolition of dividend tax credit, exactly the same regime applies to charities, and the Chancellor has acknowledged the potential problem by giving charities compensation?

Mr. Purchase: That was a fine gesture. Indeed, it was more than a gesture. My right hon. Friend the Chancellor is to be congratulated on taking such a measure.

If the loss to pension funds will be £5.4 billion, and if there had been no change, that sum would have been in addition to the funds. There is no question about that, if that is the figure. However, that must be seen within the balance that my right hon. Friend the Chancellor is trying to strike.

Funds have increased greatly and the cost of the change will be £5.4 billion, or whatever. That cost will be more than met by growth. To a large extent, that growth has been engineered by successive Budgets together with the growth in our economy, given the way in which, for example, engineers, manufacturers and others in the service industries have performed. There is an obvious loss and it could have been greater, but we always want more. We must have a Chancellor--Labour or Conservative--who makes a judgment on what we have in our pockets and what will be needed to fund public services.

I move on to the national health service.

Mr. Forth: Oh!

Mr. Purchase: I can tell that the right hon. Gentleman is upset.

There has been a considerable boost in expenditure. I expect Conservative Members to accept that as a fact. In real terms, there has been a real boost. I believe my local health service managers--they are honourable men and women--when they say that the difficulty is in getting the money to the front line. There must be a cultural change in the way in which the health service and other public services are managed. We must adopt in public services

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the ethos that is widespread in high-tech industry, which is getting things right the first time and every time. We must also--

Sir Raymond Whitney: I understand the problem of getting the money to the front line. However, does the hon. Gentleman recognise that there is a much more fundamental problem when per capita money available in Britain is about 50 or 60 per cent. less than that which is available in other continental countries?

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