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7. Mrs. Annette L. Brooke (Mid-Dorset and North Poole): What assessment he has made of trends in manufacturing output in the south-west since January 2001. [53549]

The Financial Secretary to the Treasury (Mr. Paul Boateng): The Government's latest assessment of developments in the manufacturing sector, based on all relevant factors, was published on 17 April in Budget 2002. Manufacturing in the south-west, as in the rest of the United Kingdom, was clearly influenced by the synchronised global slowdown in the aftermath of 11 September. Manufacturing output fell back in March, but is expected to accelerate during the second half of 2002 and well into 2003 as stronger global demand feeds through.

Mrs. Brooke: In light of the CBI's great pessimism for the south-west, how significantly will the Budget measures this year contribute to at least reversing the current trend in manufacturing, jobs and optimism? How will the measures redress the balance between the housing boom and the failing manufacturing sector?

Mr. Boateng: The hon. Lady will appreciate that the cuts in corporation tax, the R and D tax credit, the simplified package of VAT for businesses, and the action that we have taken across the piece to create, through the regional development agencies, a climate of enterprise in the south-west and elsewhere will all contribute to the improvement in manufacturing in the south-west. She is wrong to suggest that the CBI is pessimistic about the south-west. Only today, Mr. Doug Godden of the CBI stated:

I do not call that pessimism.

Mr. Adrian Sanders (Torbay): The Government take great credit for the fact that unemployment has fallen month by month over the past 12 months, but in my constituency it has risen month by month in the past 12 months. More than 5,000 manufacturing jobs have gone in Opto Electronics. How does putting a tax on national insurance help in an area that suffers from high unemployment and wants more jobs, when a tax on income may well have helped my area?

Mr. Boateng: Both business and the country as a whole are agreed that it is important that we invest in our public services. There is a direct feed-across between public health and business. Business gains when health is delivered in ways that reduce absenteeism, business gains when the health of the nation is improved, and business is prepared to make its contribution to what we are seeking to achieve in the national health service—a major contribution from that service to the health and well-being of the entire nation.

Mr. James Gray (North Wiltshire): It is only three years since the Chancellor of the Exchequer came to my constituency with a great fanfare of new Labour trumpets to open the expanded Dyson bagless vacuum cleaner factory in Malmesbury, a town of 4,000 people.

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Mr. Dyson announced recently that he would lay off 1,000 people, not as a result of what is described by the Minister as a synchronised global slowdown, whatever that may be, but because he cannot continue to manufacture vacuum cleaners in the United Kingdom. What is the Minister's explanation to the people of Malmesbury as to why his right hon. Friend's mate Mr. Dyson has laid off 1,000 people in my constituency?

Mr. Boateng: The hon. Gentleman must get real and appreciate what is happening across the globe in manufacturing and the global economy. That is what is synchronised—it is happening in all continents post-11 September. He also needs to understand, in relation to his specific example, that Dyson's is upping its R and D investment in our economy. That is what we are seeking to achieve: high value and high skills. That is good for the economy and good for Britain, and it will be good for the hon. Gentleman's constituents.

Local Authorities (Emergency Planning)

9. Syd Rapson (Portsmouth, North): How the Budget will affect the funds available to local authorities for emergency planning. [53551]

The Financial Secretary to the Treasury (Mr. Paul Boateng): The Budget has had no effect on the amount specifically made available for emergency planning.

Syd Rapson: I thank my right hon. Friend for that answer and welcome the previous increases on the low base that we inherited from the last Government. However, in evidence to the Select Committee on Defence, local authority representatives claimed that there was a 15 per cent. cut this year for English local authorities, and Portsmouth is receiving a reduction of 5 per cent., from £78,000 to £74,000. Will my right hon. Friend reconsider the means of funding for dealing with civil emergencies—perhaps the issue could be dealt with through the standard spending assessment—to enable the public to have more confidence following 11 September?

Mr. Boateng: I know from my time as a Minister of State, Home Office that my hon. Friend takes a great and proper interest in civil defence and emergency planning in his constituency. That is very much to be welcomed. He will be glad to know that the total amount given to local authorities in civil defence grants increased by 36 per cent. in 2001–02, rising from £14 million in 2001 to £19 million in 2001–02. That is a substantial increase. Where there are specific issues in relation to the administration of the civil defence grant, that is a matter for my right hon. and hon. Friends in the Cabinet Office, but I shall certainly draw to their attention the concerns that my hon. Friend expressed.

Mr. Mark Francois (Rayleigh): A recent survey of county emergency planning officers found that 93 per cent. of the 30 officers questioned felt that emergency planning in local government was severely under- resourced. Given the wake-up call that we received on

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11 September, surely the Government can do more to find resources for the people who are so crucial in planning for our safety.

Mr. Boateng: I share the hon. Gentleman's belief that we need to ensure that those who plan for our safety and who play such an important role in securing the welfare and safety of us all have proper recognition. That is why my right hon. and hon. Friends in the Cabinet Office and my right hon. Friend the Chief Secretary have given the matter the attention that it deserves, and why counter-terrorism is now specifically treated as a mainstream priority and is being handled through the spending review 2002. The points that the hon. Gentleman and my hon. Friend the Member for Portsmouth, North (Syd Rapson) have properly made will no doubt be taken into account in that review.

Ms Joan Walley (Stoke-on-Trent, North): May I also express my concern about the size of the emergency planning budget, especially in view of its failure to keep pace with increases in other spending? In Staffordshire, the fire service co-ordinates the emergency service for all the district councils, Staffordshire county council and Stoke-on-Trent city council, and we now have only seven full-time emergency planning officers. This year, the amount available was settled only in April, meaning that people are now employed on temporary contracts. May I urge my right hon. Friend to tell the Cabinet Office that we need certainty for local authority spending during the next five years so that we can rely on our fire service and its officers to provide the emergency service that we all know is needed after 11 September?

Mr. Boateng: I am grateful to my hon. Friend, not least for the interest that she takes in this subject. She will know that no decisions on the other elements of local government funding have yet been made. They will be announced in the spending review in the summer. I am sure that my hon. Friend will join me in welcoming the additional £43 million that has been found for 2002–03 from the capital modernisation fund for the fire service, part of which will meet the very concerns that she has expressed.

Tourism (South-West)

10. Mr. Paul Tyler (North Cornwall): What analysis his Department has undertaken on the impact of (a) the slowdown in the world economy and (b) the exchange rate with the euro on the tourist industry in the south-west of England. [53552]

The Economic Secretary to the Treasury (Ruth Kelly): The Government fully appreciate the difficulties that last year's world economic slowdown, the tragic events of 11 September and the persistent weakness of the euro have posed for businesses dependent on tourism in the south-west and in the rest of the UK. However, the Budget forecast is for a considerable strengthening of the world economy during 2002 and into 2003 and, alongside a number of initiatives that the Government have introduced to promote British tourism, that should help the industry to recover.

Mr. Tyler: May I ask the Minister to concentrate on the impact of the exchange rate on the tourism industry,

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especially in the south-west? Does she recognise that irrespective of whether this country enters the euro, the euro has now entered this country, and is having a dramatic impact, not least on the holiday industry? Has she examined the study published in October 2001 by Caledonian Economics for the British Tourist Authority, and does she accept its conclusion that if we had a realistic exchange rate, the holiday industry could generate 51,000 more jobs and increase its earnings by £1.76 billion?

Ruth Kelly: I point out to the hon. Gentleman that 80 per cent. of visitors to tourist attractions in the United Kingdom are domestic tourists, so the most important thing that we as a Government can do is to create the conditions in which domestic tourism will thrive. Of course we recognise the impact of the slowdown in the world economy, the weakness of the euro and the tragic events of 11 September. In fact, since 1997 the value of the pound has depreciated against the dollar, and American tourists, who are so vital to certain aspects of the tourist industry, should have been encouraged by the exchange rate effects that the hon. Gentleman mentioned.

Mr. David Laws (Yeovil): Although the Minister's comments on euro policy were typically enlightening, does she agree that they were not as enlightening as those made earlier this week by a senior Minister at the Department of Trade and Industry, who is sitting not far away from her, and who said that within two years we would have joined the eurozone?

Ruth Kelly: I have already explained to the House the Government's policy on the euro. That policy will be determined by Britain's national economic interests. We must carry out a rigorous and thorough assessment of the five economic tests. Then, if those tests are satisfied, we will have the triple lock of Cabinet, Parliament and the country through a referendum. That is the Government's policy, which remains unchanged.

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