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Mr. Brown: We have taken the right measures to help pensioners--far better measures than were ever proposed under the previous Government. My right hon. Friend the Secretary of State for Social Security inherited a review in progress that would have made little difference. Our changes in payments mean that every pensioner household benefits: the poorest pensioner households get £50 and, taken with all the other changes--for example, in VAT on fuel--the typical pensioner household could be up to £100 better off next year.
As for the hon. Gentleman's other questions about the exchange rate, I said in my statement that I recognise the concerns of exporters, but I would put it to him that
what they are most afraid of is a return to the stop-go instability of the past. We will not take measures that prejudice the economy as a whole and return us to the boom-bust conditions of the past. If the hon. Gentleman examines the forecasts, he will see that exports are rising in volume by 7 per cent. this year, and are expected to continue to rise by 5 per cent. next year.
As for public spending, if the situation is healthier, that is because of the action that we have taken. The hon. Gentleman should also congratulate us on reallocating resources to the health service, with £300 million this year and £1.2 billion next year; and to education, with £1 billion next year and the £1.2 billion school capital investment programme from which many constituencies will benefit. It is about time the Opposition parties, who were asking for these things--in the case of the Liberal Democrats, asking for far less--congratulated us on what we did.
Mr. Alan W. Williams (East Carmarthen and Dinefwr):
I congratulate my right hon. Friend the Chancellor on every detail of his pre-Budget statement, but may I question him more widely about interest rates? As we move towards joining the single currency, we need convergence on interest rates. How will my right hon. Friend produce the economic climate that will allow interest rates in Britain to fall from their current 7.25 per cent. to the 3.3 per cent. of Germany and the rest of Europe?
Mr. Brown:
By getting stable and sustainable growth and tackling inflation, we will get interest rates down. Our interest rates will come down as we take the tough action that is necessary. My hon. Friend asks about monetary union, but we have yet to hear an answer to the question put to the Conservatives: do they support the principle of monetary union--yes or no?
Mrs. Theresa May (Maidenhead):
Is the Chancellor aware of the real fear engendered among people with disabilities and disability groups that the Government will cut disability benefits through means testing, taxing benefits or a reduction in lifetime rights? Will he answer the question asked by my right hon. Friend the shadow Chancellor, allay the fears of people with disabilities, clarify the Government's position, and state categorically that the Government will not in any way reduce disability benefits?
Mr. Brown:
Our proposal is for a comprehensive spending review that is fair--that is the underlying principle. Today, I explained how we were spending £200 million on helping men and women who are disabled and want to work, to do so. Criticism of the Government comes ill from an Opposition party that, when in government, blocked the Civil Rights (Disabled Persons) Bill, and then cut invalidity benefit for thousands of people.
Mr. David Winnick (Walsall, North):
Is my right hon. Friend aware that, at the end of last year during the coldest weather, a group of Labour Members of Parliament, including me, went to 10 Downing street and pleaded for help for poorest pensioners, and were refused? I therefore welcome the announcement today, which will certainly help many pensioners. Despite the justifiable points he
Will my right hon. Friend bear in mind the comments made over the weekend by Lord Ashley and Lord Morris of Manchester--two Members of Parliament who fought bravely and honourably in the House against strong Tory opposition on behalf of the disabled? Those two men know what they are talking about, and I hope that my right hon. Friend will note their words.
Mr. Brown:
I am grateful to my hon. Friend for his first comments about cold weather payments. I assure him that, if he turns up at No. 11, or indeed No. 10, Downing street, he will be invited in, rather than kept outside as he was under the previous Government.
As for the comments of Lord Ashley and Lord Morris, I and many people throughout the country have great respect for their work on behalf of the disabled. Our comprehensive spending review is designed on the principle of being fair, and we will be fair to the disabled.
Mr. Cynog Dafis (Ceredigion):
The Chancellor referred to the strength of the pound and the problems that creates. He may be aware that that is causing particular problems to agriculture by inhibiting exports, bringing in imports far too easily, and depressing the level of support payments. That, combined with the bovine spongiform encephalopathy crisis, is creating a catastrophic situation in areas such as my own in rural Wales, where livestock farming takes place. He will be aware that the European Union has a mechanism for dealing with such situations by providing compensation and that those payments have been made available by all eligible EU countries. May I plead with the Chancellor to access those funds in order to reduce the pressure on farming?
Mr. Brown:
I cannot give the hon. Gentleman any promises, but I shall put his concerns to my right hon. Friend the Minister of Agriculture, Fisheries and Food.
Mr. Ken Livingstone (Brent, East):
Will the Chancellor give some forecast about the likely risk of slipping, not only down to 1.5 per cent. GDP growth in our third year, but into recession as the high pound continues to erode our export potential? Given the now inevitable devaluation of the yen, coming on top of the devaluation of south-east Asian currencies, and the fact that the deutschmark has led all the European currencies down about 15 per cent., will we not face a major balance of payments crisis unless we do something to bring down the value of the pound, which means tackling interest rates?
Mr. Brown:
I have to tell my hon. Friend that, if we had failed to take action in May and left inflation to rise without taking action on interest rates, that would have caused a recession of the sort he describes. He should therefore support our action in respect of the Bank of England and our subsequent decisions. If he thinks the matter through, he will understand that the very conditions
Mr. Howard Flight (Arundel and South Downs):
The Chancellor will, I am sure, agree that the achievement of higher productivity will require not only higher investment but higher savings. The Conservative Government introduced personal equity plans and tax-exempt special savings accounts to increase savings. Will the right hon. Gentleman tell us whether those schemes will be grandfathered in 1999--that is, the amount invested in them will remain under that contract--or whether his statement means that they will be terminated? Seven million people will be affected by the decision.
Mr. Brown:
My aim is to increase the number of people with savings. As I said, half the population of this country have hardly any savings at all, and that will influence the proposals we introduce next week on the individual savings account. I look forward to discussing with the hon. Gentleman those detailed proposals, which will be published in a consultation document next Tuesday.
Caroline Flint (Don Valley):
I welcome today's statement from my right hon. Friend. As the former chair of Working for Childcare, and on behalf of my constituents, many of whom are lone parents, I welcome the proposals on child care and reform of the tax and benefits systems and other measures to help low-income families into work rather than remaining on benefits for the rest of their life. I recently visited a centre in Doncaster for young mothers under 16 that enables them to continue their studies by providing support in child care and transport. What young parents need post-16 is policies of the future, not a re-hash of the policies of the past.
I remind my right hon. Friend that it was the Conservative party--[Hon. Members: "Question."] Will my right hon. Friend comment on the fact that it was the Conservative Government who introduced a tax on workplace nurseries that put back the development of employer-led child care for 10 years? That was their only contribution to child care while they were in power.
Mr. Brown:
My hon. Friend is right, and the jeers from Conservative Members show that they are not interested in child care issues. As she rightly said, there are three elements in our proposals: first, we want to help people to be able to afford child care; secondly, we want to create child care places; and, thirdly, we want to train young people to be child carers. That is why this is the first national strategy for child care, and I hope that, increasingly, hon. Members on both sides of the House will support it.
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