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6.45 pm

Mr. David Borrow (South Ribble): I am very pleased to be taking part in this debate. I look back to Finance Bills since 1997. In April 1997, people in my constituency asked me how a Labour Government could deliver better public services and pensions, when the Conservative Government had been running a deficit of more than £20 billion a year, costing each man, woman and child £500 a year. They were sceptical about the notion that, in those circumstances, a Labour Government could hope to boost public services, improve the lot of pensioners and look after the disabled.

I remember many a time on the doorstep explaining to people that the Government's strategy was to reduce the cost of failure by reducing unemployment and getting more people into work, so that more were paying taxes and fewer claiming benefits. That strategy, based in large measure on the new deal and on careful management of the public finances in the first two years, has delivered what we promised four years ago.

Unemployment has dropped by about 500,000 or 600,000 and the number of people employed has increased to a record level, by 1.2 million. That in itself has transformed the public finances and made the space to provide extra resources for public services. The fall in unemployment in just about every constituency has been mirrored in mine, where the rate is now about 1.5 per cent. In 1997, 1,534 people in South Ribble were unemployed; by this February, the figure had dropped by 42 per cent., to 883.

Last Friday, I attended a business breakfast at Runshaw college in my constituency, where the Under-Secretary of State for Education and Employment, my hon. Friend the Member for Barking (Ms Hodge), was guest speaker. It was the 13th business breakfast that I have attended since being elected. The basis for the discussions was not the problems that were raised in the past about how companies would survive and how we could avoid making people redundant; the focus was on how to ensure that we have a sufficiently educated, skilled and trained work force to do the jobs that need doing.

The problem for many companies in my constituency is in recruiting the skilled work force that they want. We need to invest in education and training through greater

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public investment, rather than looking for more tax cuts in the immediate future, which would do nothing to help to provide the work force that companies in my area need.

Two major manufacturing companies in my constituency have greatly increased their work force since 1997. One might be surprised that either of them, especially Leyland Trucks, was able to do so. In 1997, Leyland Trucks employed 600 people making trucks. Given the weakness of the euro in the past few years and the trading position, the market is difficult, but the company has increased its work force to 1,000 in four years and achieved success in the climate created by the Labour Government in that period. Schwann's Pizzas has benefited from major investment and increased its work force considerably; it is probably now the third largest employer in my constituency.

My answer to people who talk about whether the Government have spent enough on public services and whether they should spend more is that we need to get the fundamentals right. We must ensure that people have jobs and that companies prosper if we are to make space in the public finances for further investment.

I listened with interest to the hon. Member for Kingston and Surbiton (Mr. Davey), who talked about the Labour Government's failure to invest in services. Since Christmas, I have visited more than 20 schools in my constituency. The head teacher of virtually every school had the same message: investment is coming through to education; there are more classroom assistants and computers; extensions are being built; and modernisation is taking place in many schools.

I shall give a few examples of the new buildings and extensions that I have seen in the past few weeks. Tarleton high school has had a major extension and benefited from more than £0.5 million of investment in its new Ribble building. When I visited Little Hoole county primary school a couple of weeks ago, a new classroom was being built. A week ago last Friday, I visited St. Catherine's Roman Catholic primary school and had the pleasure of cutting the first sod prior to a two-classroom extension. Last week, I visited the Church of England primary school in Tarleton, which had just completed the erection of a new classroom. A couple of months ago, I visited Cop Lane Church of England primary school in Penwortham, which has a new hall. Those small schools have received major investment and can see the difference that a Labour Government make through investment.

Mr. Jack: Will the hon. Gentleman give way?

Mr. Borrow: I am always happy to give way to the right hon. Gentleman.

Mr. Jack: If life is so good, will the hon. Gentleman explain why pupil numbers are now at 1,800 in Lancashire's largest comprehensive school in my constituency, which desperately needs a new school hall because only 350 pupils can take school dinner at one time? Can he also explain why the head teacher tells me that he does not have sufficient resources to introduce the new sixth-form curriculum properly?

Mr. Borrow: The answer to that--which also applies to Woodlea primary school and Balshaw's high school in my constituency, where major investment is still

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needed--is that, after 18 years of a Conservative Government who did not invest in school buildings, there is a huge backlog of building work and repairs. My constituents, like those of the right hon. Gentleman, need the continuation of a Labour Government, who are pledged to maintain investment in education.

Let me turn to a different area--health, which has already been mentioned. The four hospitals that serve my constituency--Ormskirk and District general hospital; Southport general infirmary; Chorley and South Ribble district general hospital; and the Royal Preston hospital--have all had major investment in the past four years. I am arguing strongly for further major investment in Chorley and South Ribble district general hospital, because the Government have allocated more than £1 million of investment in renal services for the north-west. South Lancashire, which includes South Ribble, has the worst renal services provision in the north-west. Together with my colleagues in south Lancashire, I am making a strong argument for investment in Chorley and South Ribble district general hospital so that it can set up a dialysis unit. If we are successful, that major investment will have resulted from the fact that the Labour Government have a proven Budget approach over the past four years, have got the economy going well and have created space in the public finances to invest in improved public services. We should all welcome that.

A few moments ago, I mentioned the business breakfast that I had at Runshaw college, a further education college in my constituency. Bernard O'Connell, who runs the college, told me that it was receiving significant new investment and would shortly open a second campus in the constituency of my hon. Friend the Member for Chorley (Mr. Hoyle). I was told that the new campus would be dedicated solely to mature students and that the college was seeking to expand the number of graduates whom it educates from 300 to 1,000. Again, that fits in with the need, which I mentioned earlier, for better education and training for the work force in my area if we are to compete successfully in a competitive economy, which my constituents wish to do.

Let me touch briefly on the comments on pensions made by the hon. Member for Kingston and Surbiton. In 1997, his party's manifesto, in a similar fashion to those of the Conservative and Labour parties, pledged to increase the basic pension by the rate of inflation. However, the Liberal Democrat manifesto added that, if extra resources were available, they should be targeted on the poorest pensioners. The Government have done that through the minimum income guarantee. Occasionally, it would be nice if Liberal Democrat Members congratulated the Government on finding those extra resources to ensure that, as from this month, a single pensioner in my constituency will have a minimum income of more than £92, compared with £68 four years ago. That significant change has been brought about only by the fact that we have a Labour Government.

A few moments ago, I mentioned that one argument that we had in 1997 was about the new deal, a programme opposed by both Opposition parties. Even for a constituency such as mine, which has low unemployment, the new deal is a not insignificant factor in its development. A new partnership has been set up in Leyland to create a Tesco store that which will employ about 300 people. The partnership involves Runshaw college, the Union of Shop, Distributive and Allied

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Workers, Tesco and the local authority. It will mean that 300 people will be taken off the long-term unemployed register, trained at Runshaw college and, at the end of their training, provided with jobs at the new Tesco store, when it is built. Three hundred jobs out of an unemployment total of 885 will virtually wipe out any remaining unemployment in South Ribble. The partnership seeks to train and develop those with the lowest employment skills, so it is targeting those who most need that. As I said, my constituency has skills shortages, but it needs schemes to bring people without skills into the labour market.

A significant amount of the discussion at the business breakfast on Friday morning was about the measures that the Government need to take, not simply to reduce the number of unemployed but to bring people into the employment market in the first place. We discussed a range of measures that were needed to provide better child care support and better help for disabled people to bring into the labour market those who are currently excluded from it. When there is a tight labour market, we need to look at ways in which we can give people who feel that they cannot get a job the right training and education to go for those jobs, and receive the right back-up.

I welcome the measures to reduce VAT on church repairs. I have received representations from my constituency, in particular from St. Andrew's church in Leyland. Those concerned will be pleased by the Government's response.

I also wish to refer to the welcome measures to introduce a tax credit for the development of vaccines, particularly in connection with TB and the AIDS epidemic. That is a useful development. When I was in Uganda last summer, I saw the impact of the Government's debt relief proposals, through the heavily indebted poor countries programme, on improving education and health provision in that country. That is particularly important in assisting in the battle against AIDS.

The Bill mentions discussions with pharmaceutical companies about making drugs available more cheaply to the developed world. It has long been my view that, when drugs are developed by major pharmaceutical companies, they are targeted at the developed world. The business plan assumes that the companies can make a profit and cover their costs on the basis of charging high prices in North America and western Europe. Those companies should be able to supply drugs at cost price to the poorest countries of the world, without provision for the cost of development. They would not be selling the drugs to those countries at a market price--the same price at which they would sell them in western Europe or North America.

South Ribble is a semi-rural constituency and I have raised with MAFF and the Treasury the issue of the climate change levy and its effect on the horticulture industry. I recognise that we have won half the battle by getting a 50 per cent. discount. I recognise also that Ministers are unlikely to agree to an increase in that 50 per cent. discount at this time. However, the big increase in gas prices has added a burden to the horticulture industry. Ministers must closely monitor the situation, given those factors and their effect on the glasshouse industry. While the 50 per cent. discount was welcome, it may not be sufficient to ensure that the industry can compete with others in western Europe.

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Last Friday, I attended a meeting of Labour party members with the Minister of State, Cabinet Office, my right hon. Friend the Member for Makerfield (Mr. McCartney), and we discussed the foot and mouth outbreak. Many of the people who were there remember the devastation of the closures of pits, steelworks and shipyards and, in my constituency, the collapse of Leyland motors and the high level of unemployment that resulted. They remember also the failure of the then Conservative Government, during the late 1980s and early 1990s, to do anything to alleviate those difficulties or to assist the dozens of small firms in my constituency who suffered as a result of the collapse of major employers.

At that point, it did not seem to be part of the Tory agenda to assist individuals and companies in distress. That may be the Conservative way. Whatever failure occurred under the previous Government, the Labour Government should be prepared to use the prudently managed public finances of the past four years to assist the rural economy and those areas--particularly Cumbria--that are suffering greatly. That does not require an amendment to the Bill, but a willingness to use part of the Budget surplus to assist the rural economy.

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