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Mr. Robert Sheldon (Ashton-under-Lyne): Is my right hon. Friend aware that the costs incurred in earning a living have always been under-estimated, and are very large indeed? He should be warmly praised for what he has done to tackle the problems of child care--an essential part of earning a living. The arrangements he has made for transport are a beginning, and we should look at other areas to see how the tax system can be used to deal with some of the large costs incurred in getting work in the first place.
Mr. Brown: I am grateful to my right hon. Friend, whose work in the Public Accounts Committee on matters such as this and the use of public money has been invaluable.
I think that people will look back on today's statement, and the further announcements which will come tomorrow from the Secretaries of State for Education and Employment and for Social Security, and will say that, at last, a Government have taken on board the concerns of parents about child care costs, provision and facilities in every community of this country. The investment of £300 million over five years to do so is more than any previous Government have contemplated. Side by side with the reform of the tax and benefits system, our child care measures will ensure that child care is affordable, particularly for lone parents who need it.
My right hon. Friend the Member for Ashton- under-Lyne (Mr. Sheldon) referred also to transport costs. Making sure that travel costs to work are low enough for young people joining the new deal will allow them to have more choice of the jobs that they take up.
Mr. Peter Brooke (Cities of London and Westminster):
If our productivity deficit by international standards is now 20 per cent., by the same calculation what was the figure in 1979?
Mr. Brown:
The right hon. Gentleman makes the point about productivity.
Mr. John Bercow (Buckingham):
Answer the question.
Mr. Brown:
I am answering the question.
As I said in my statement, this has been the case for years. We are 30 per cent. behind some of the best countries in the world, and we must do far better. The right hon. Gentleman will understand the comparison with 1979. In 1979, we were 13th in the world of industrialised countries in terms of national income per head. Now we are 18th, as a result of the failure of the previous Government to bring us up the economic league. We are prepared to take action to do so.
Audrey Wise (Preston):
As someone who has campaigned loud and long for warmer homes for pensioners, may I warmly welcome the increased payments and the reduction in VAT on insulation material? May I draw my right hon. Friend's attention to the fact that his figures make it clear that it is not necessary to abolish benefits for lone parents? As the abolition of those benefits will impoverish the poorest children, deepen the poverty trap and provide a disincentive to work, will he look again at this matter, bearing in mind always the fact that not only economic growth but children's growth is damaged by poverty?
Mr. Brown:
I am grateful to my hon. Friend for supporting our initiative on cold weather payments. These go to every pensioner household in the country, with more going to those in the greatest poverty. I welcome what she has said about child care, but I remind her that child benefit is rising every year under this Government. The previous Government did not increase child benefit for two of the years after 1988 in which they were in power. Child benefit will rise. We are announcing the figures: there will be an additional £250 million this year.
The priority must be to enable lone parents to obtain work if they want it. That is why we have said that the £200 million that we have spent on the employment programme for lone parents will now be complemented by millions of pounds that will be put into the child-care element, so that lone parents can choose whether or not to work. From April next year, every lone parent who starts receiving benefit will, if he or she wants it, be given advice on work and training, as well as advice on how to collect money through the Child Support Agency.
We have had to make a decision. What is the priority for this Government? The priority must be to give choice to lone parents who never had it under the last Government, because training, child care and employment opportunities were not made available. We are giving them that choice: that is our first priority.
Sir Peter Tapsell (Louth and Horncastle):
As the Chancellor of the Exchequer has repeatedly appealed--with increasing desperation--for congratulations, may I indeed congratulate him on one of his prophetic economic forecasts? Does he recall that, this time last year, he was assuring us that a new Labour Government would reshape the British economy along the lines of the Asian tiger countries? Is that still his intention?
Mr. Brown:
The hon. Gentleman may search the libraries if he wishes, but I cannot remember saying that I wanted us to be like Korea or Thailand. What I have said is that we must increase our productivity, and what I did say was that we had fallen from 13th to 18th in the world industrial league.
As for the Asian economies, I said earlier that we must be vigilant. I believe that there are problems in relation to the disclosure of information, as well as the regulation of institutions, that will have to be dealt with on both a regional and international basis; but the most important thing we have learnt from the Asian economies, and from what has happened over the past few weeks, is that the economic fundamentals in every country must be sound.
Mr. Clive Soley (Ealing, Acton and Shepherd's Bush):
I congratulate my right hon. Friend on the way in which he has changed the terms of the debate, and not least on the way in which he has combined economic efficiency with social justice. May I add my appreciation of the way in which he has involved parenting and child care with the efficiency of the economy? Some of the measures that he has announced will take time to work, but others will work much more quickly. They bear sympathetic consideration, and I congratulate my right hon. Friend.
Mr. Brown:
I am grateful to my hon. Friend, who I know has been involved in campaigning on the issues that he has mentioned for a long time.
I have always believed that the proper provision of child care is not just a good social policy, but integral to a good economic policy. It is not a side show; it is central to the way in which we conduct our economic affairs. When people look at the figures that will be published tomorrow, they will see that work is to start immediately. It is a five-year programme, providing 30,000 out- of-school child care centres in all communities. That is an ambitious target, but one for which the money is now available.
Mr. John Townend (East Yorkshire):
For a green Budget, this is so short on detail that it could be described as a damp squib. Will the Chancellor reassure the many worried family businesses and family farms that, when he talks of reducing tax avoidance, he is not talking about reducing the inheritance tax reliefs that are so valuable in helping to keep family farms and family businesses in operation?
Will the Chancellor also apologise to pensioners? What he has given them back today is peanuts compared with the £5 billion that will be taken out of their pensions this year, next year and every year.
Mr. Brown:
I suggest that the hon. Gentleman hold a poll among what I understand to be the 19,000 pensioners in his constituency. I urge him to ask them whether they support the last Government's policy of putting VAT on fuel, or whether they support the policy that I have announced today. I think that he will find that our policies, which have included cutting value added tax on fuel, abolishing the gas levy and introducing a new winter allowance that is far more generous than the cold weather payments scheme under the previous Government, are widely supported. He will find that his right-wing, free market views, which would do nothing to help pensioners, do not commend themselves to his constituents.
Mr. Tony Benn (Chesterfield):
The Chancellor made a great point of employment, but is he aware that press reports suggest that the Government are not prepared to help the mining industry, and that up to 50,000 jobs could be lost in mining and associated industries; that
There is a total absence in the statement of any reference to redistribution, although over the years the gap between rich and poor has widened, and it would appear that the poor are especially targeted in some of the cuts proposed.
Mr. Brown:
I do not know what my right hon. Friend means about redistribution, because we redistributed £5 billion from the excess profits of the privatised utilities to job creation in some of our poorest and most deprived communities; if that is not an example of the proper reallocation of resources, from those who did not need them to those who do, I do not know what is. He should congratulate us on it.
The Labour party has always believed in a balanced energy policy, and we have always done what we can for the mining industry.
I am glad that the Campaign group and the Governor of the Bank of England are getting together to discuss issues of mutual interest. We are determined to avoid a return to the instabilities of the past, as when we had interest rates of 15 and 16 per cent. under the previous Government. We hope that by taking early action, with interest rates having had to rise to 7¼ per cent., we can avoid a return to the situation of the past.
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