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6.56 pm

Richard Burden (Birmingham, Northfield): I, too, welcome the two new Members of Parliament who have made their maiden speeches today. We have just heard

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the hon. Member for Epsom and Ewell (Chris Grayling), who made a very good first speech in which he clearly stated how passionate he feels about local issues. I am sure that he will be an asset to the House. When he referred to his predecessor in glowing terms and mentioned the height restriction on the seat, there was some twitching on the Bench in front of him: his hon. Friend the Member for Buckingham (Mr. Bercow) will tell him that height and size are not everything. None the less, I welcome the hon. Gentleman to the House.

My hon. Friend the Member for Rhondda (Mr. Bryant) made a first-class speech that highlighted his commitment to combating poverty in his locality. I was worried--less for myself than for others--by that part of his speech in which he mentioned the number of Conservative clubs in the Rhondda. It was a good thing that the shadow Chancellor and other Opposition Front Benchers were not around to hear that remark, or they would have been straight out of the Chamber and off to the Rhondda to canvass.

Today, the debate focuses on the economy and trade and industry, and I should like to discuss four issues in connection with those subjects. First, I shall say a word or two about the contents of some of the enterprise legislation that is to be laid before the House. I shall offer a few thoughts, secondly, on the issues affecting the future of manufacturing and, thirdly, on the relationship over the next four or five years between industrial policy and regional policy. Fourthly, I shall comment on the state of public debate on issues of personal taxation.

I welcome the enterprise legislation prefigured in the Queen's Speech. As well as boosting competition and strengthening our competition law, it will begin to destigmatise responsible risk taking by entrepreneurs. I also welcome the proposed legislation to crack down on rogue traders, which is overdue.

The Under-Secretary of State for Trade and Industry, my hon. Friend the Member for Edinburgh, South (Nigel Griffiths), will remember that in the previous Parliament I introduced a private Member's Bill to crack down on a specific type of rogue trader--those who are half rogue trader and half rogue employer and who continue to rip off thousands of people throughout the country using home working and outworking scams. That Bill had the support of the previous Government and of hon. Members on both sides of the House but, sadly, went the way of many other private Members' Bills as it was blocked by a small group of Opposition Members who evidently felt more strongly about the need to play parliamentary games or people's inalienable right to rip off others in the name of enterprise than about the need to protect the vulnerable. Sadly, the Opposition Front Bench acquiesced in that. I hope that, in this new Parliament, as the Government think about what to include in enterprise legislation, they will consider legislation banning payment upfront for outworking schemes. If they do not include that in the original draft of a Bill, I hope that they will consider including it in an amendment when such a Bill comes before the House.

I should like to turn briefly to issues affecting manufacturing, as I come from a region built on that industry. The nature of manufacturing industry is changing beyond all recognition, but it is still a vital part of the future strength of our economy. Without a firm manufacturing base, the foundations of a strong economy can become extremely shaky. I therefore appreciate the

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welcome of my hon. Friend the Member for Ochil (Mr. O'Neill) for the measures already taken by the Government. Rightly, he made particular reference to the efforts of the Chancellor and his colleagues on regional venture capital funds.

There is no doubt that manufacturing has benefited from the stability that the Government have helped to create, especially the climate of consistently low interest rates, but the sector now faces serious challenges, which cannot be ignored and should not be masked by the overall strength and buoyancy of the economy as a whole. One issue is the persistent question of the level of the pound against the euro, which has been and continues to be a problem. While sudden fluctuations, whether up or down, are not good for anybody, the relationship of our currency to that of our major trading partner, the zone to which we export of our goods, is a serious issue. That relationship, our manufacturing industry and exporters cannot be helped if sterling becomes a kind of hedge currency on the outskirts of the eurozone.

The Chancellor and the Government were right to set clear economic tests both for entry into the euro and a referendum. My hon. Friend the Member for Ochil was right to say that careless talk about this or that exchange rate does not help at this time. What happens to the euro and what happens in the eurozone affects us, whether we like it or not. The relationship of our currency to the euro, our ability to get that into a proper form and ultimately, when the economic conditions are right, look positively at joining the euro, remain important to our manufacturing industry.

Mr. Edward Davey : I have a lot of sympathy with the hon. Gentleman's remarks. Does he regret a briefing given by Her Majesty's Treasury? When the pressure was, seemingly for the first time for many months, coming off sterling, the Treasury deemed it wise to talk up the value of the pound, thus causing our manufacturing, agriculture and tourism industries even more problems.

Richard Burden: I heard the Government state that they had a clear position, which, in principle, is that we are in favour of joining a successful European currency, but that clear economic tests have to be met. That is a wise and realistic position. Many manufacturers tell me that, over the coming period, we need a continuing debate about the positive advantages of being part of the euro and that we must recognise, as I said earlier, that we are not insulated from what happens to the euro simply by claiming that we can stay outside or by opposing entry. That has not been the case, is not the case and will not be the case.

Mr. Bercow: I applaud the hon. Gentleman's witty and gracious tribute to my hon. Friend the Member for Epsom and Ewell (Chris Grayling), but he has not demonstrated whether or how any economic convergence that is achieved within the eurozone can be regarded as anything more than a meeting of ships that pass in the night. What assessment has he made of the lack of democratic control, on which the treaties proudly insist, in the operation of monetary policy?

Richard Burden: I fully acknowledge that the single currency has constitutional implications. I raised the issue in our debate on the economy and industry sections of the

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Queen's Speech precisely because I differ fundamentally from the hon. Gentleman, who seems to think that our trading relationship with Europe, whatever it might be, has something to do with the passing of ships in the night. Our relationship is not like that; the ships are locked together, whether we like it or not. We must accept and act on that.

When addressing the challenges facing manufacturing industry, we need to do more to boost investment, and paying attention to fiscal rules can help us to do so. I welcome moves in the previous Budget to provide further tax credits for research and development and expand the range of tax incentives to foster and promote such work. It is vital to move from consultation to early action, which would certainly be welcomed by manufacturing. It is right that we recognise and meet the environmental challenge and voice our disappointment with policies currently emanating from the United States Administration on meeting that challenge. As a Government, we must look more at the detail of the way in which our own climate change levy has impacted on small manufacturing firms.

The commitment to the climate change levy is, rightly, fiscally neutral, which I welcome, but having talked to manufacturers in my area and other parts of the country I think that there is a need to look at neutrality, not simply between sectors and in the economy as a whole but within sectors. In the past few months, some welcome progress has been made from the motor manufacturing perspective, but more work needs to be done and more attention paid to the problems that might be faced by small manufacturing firms.

The third area that I wish to discuss is the regions. We will not get our industrial policy right or ensure that rising prosperity is spread evenly across our country unless we get regional policy right. People in the regions need far more say about how to map out their economic future and secure and spend the resources to do that. We have faced big industrial challenges in the past few years, some in my own area, and it is no accident that the Government's welcome and important response has been to set up regionally based taskforces that have played and fulfilled a vital role in mapping out responses, bringing together local players and acting as a bridge to government to develop appropriate answers.

The links with the regional development agencies have been important during those crises, but we need to learn the lesson of how the bits fit together and how partnerships, built during problematic times, can be sustained and nurtured, rather than grafted on to what might be most convenient for existing institutions, whether part of local government, Government Departments, local government offices or whatever. It is important that people in the regions understand how, in the development of the regeneration agenda, they and the institutions that they fashion, relate to government. Many good initiatives are emerging, but there is a danger of confusion of the roles of different departments in regional policy; it is important to clarify those relationships.

It is important to allow regional agendas to develop in a way that suits localities and regions. Where area-based regeneration is considered appropriate, the impact on areas not designated for regeneration should be considered as well as that on those that are included. There is a danger of moving towards development schemes that link lines on a map rather than consider the needs of communities. I welcome the Government's commitment

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to maximising the regional agenda, but we must avoid the danger of merely linking lines. We must not fall into that trap.

We must not draw false distinctions between economic and social regeneration. Regeneration that does not promote social inclusion will not work. That is why I welcomed the announcement of my right hon. Friend the Chancellor of the Exchequer in his Budget speech that there would be consultation on the introduction of a community reinvestment tax credit. It is important that that process develops in a way that builds relationships between firms and communities. There might need to be some changes to the plans that have been outlined to achieve that, but the principle of a community reinvestment tax credit should be welcomed.

The creative use of tax credits is a means of integrating benefits and taxation and achieving twin advantages. First, there is the advantage of ensuring that work pays. Secondly, the tax system should be allowed to assist those on low and fixed incomes. I look forward to the introduction of a tax credit Bill, which will foster that process.

However, the public debate about the fairest forms of personal taxation to raise revenue has not advanced a great deal. During the election, Conservative candidates used well-worn scare stories, which fell flat. People know that there is a need for investment in public services. They knew that the sums produced by the Conservative party did not add up.

We have demonstrated the importance of tackling the national debt. Getting more people into work is the foundation for funding public services. We were able to give the lie to the old Tory smears on Labour and tax, and the investment that is committed in the comprehensive spending review round is not dependent on tax and other increases.

The time has come to initiate a debate that moves beyond talking about taxation as a swear word. Instead, we should discuss the place that personal taxation should have in the funding of public services. We must also consider the balance between direct and indirect taxation and how the taxation system can best embody the recognition that economic sufficiency and social justice can go hand in hand. We should discuss how our right to have decent public services carries the responsibility of identifying the fairest means for corporate institutions and individuals to fund such services.

There is time for a grown-up debate on taxation that perhaps moves beyond previous strictures. Given the foundation of economic stability that we have laid, now is the time for us to lead that debate.

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