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6.53 pm
Mr. Tom Clarke (Coatbridge and Chryston): Yesterday, the Chancellor of the Exchequer began to challenge the biggest plight of our time in modern Britain--poverty. It coincided with measures aimed at reducing poverty abroad, too, but I begin by talking about domestic issues.
Coming from a constituency such as Coatbridge and Chryston in what was once the industrial heart of Scotland, I know that it is crucial to address some of the problems faced by those people in what, hitherto, have been known in many minds as the forgotten parts of Britain. In those parts, the people have often felt that politics and government have left them behind. Now, I believe that those problems are beginning to be addressed.
We may have begun to turn the corner. It is long overdue, and that makes the job so much harder. We cannot shirk from the challenge that presents itself in areas such as mine. Our people are not the underclass--they are indeed "our people". For too long, we have failed to acknowledge that it is in all our interests to offer hope to the poorest people in this country--as the Chancellor did, quite magnificently, yesterday.
An economy in which a significant proportion of the population is unable to fulfil its potential is far poorer and far less productive. Real hope lies in providing a decent standard of living for all, and real opportunities to all who want--indeed, need--to work. We need to help people who have been left out of too many Budgets for far too long: those who have worked hard in the past; the nation's elderly; those families who seek, but are unable to find, work; and, of course, those children of the poorest families who represent this nation's future.
Those children do the worst in life. Their chances of upward mobility, of something better, are, as they see it, no better than they were decades or many Budgets ago. In the schools, through no fault of their own, they often lack the educational skills that enable them to progress and to improve their life chances. Their health standards are often way below those of their friends. No one--still less a child--deserves that disadvantage.
At last--less than two years into the life of this Government--we have the signs that the Government believe that that change is not only necessary, but possible. Many of the resources were switched yesterday, for the first time in decades, to improve the chances of
those very children. My right hon. Friend introduced measures such as the new children's tax credit, which will help all families--that is welcome--but clearly benefits the poorest children most. That is not just welcome, but necessary.
We cannot tolerate a society that is prepared to write off the potential work force through poor education. We need to employ the potential of all our people, and yesterday's commitment to utilise modern technologies in all schools was a major step in the right direction. The new deal for the unemployed was an excellent start, and we are seeing the fruits of the windfall tax on the utilities being shifted to help provide opportunities to those at the opposite end of the financial spectrum. I believe that to be right. If equality of opportunity is to mean anything, everyone must have that equal chance.
We must ensure that all the unemployed have access to skills and to work. That includes those who haveworked for many years, but have, unfortunately, lost their job. Large numbers--very large numbers in my constituency--of men and women aged over 50 have, in effect, been driven out of the work force over the past20 years as redundancy after redundancy has swept up millions of our older workers. At that time, the Government of the day had the benefit of what seemed to be almost inexhaustible revenues from oil, which they used not to invest in capital and jobs, but to pay for massive unemployment, and all the economic and social tragedies that went with that. There are now twice as many men over 50 without jobs as there were 20 years ago, and about 40 per cent. of men aged over 55 have no job at all. The plight of this group is one of the unspoken tragedies of our time. I am extremely glad that my right hon. Friend the Chancellor has recognised their needs. Not only do they need to work; we need their talents, experience and knowledge and their contribution to what ought to be their society as well as ours.
That is why I was particularly pleased about the commitment to provide opportunities for people over 50: a voluntary scheme, money to help with retraining and a minimum income guarantee mean that thousands, not least in my constituency, will be given the chance to relearn the skills needed to re-enter the work force with a much better chance of a real job. Creating employment opportunities will not only promote economic growth but ensure that the benefits of that growth are shared throughout society, through families and local communities that are often crying out for the renewal and regeneration that my constituency and many others desperately need.
People will be grateful for this opportunity, which represents enduring Labour values: the equal wealth of all individuals and the recognition of each person's dignity and potential, with everyone making the most of their talents. That is radical, realistic, right and consistent with the Budget.
We must remember that many people have worked all their days and are now retired. In the past, the pensioners were left out of the picture. It is unacceptable to have pensioners living in poverty, and in many cases they are in dire poverty. They have the right to a decent standard of living. They have earned it by working hard for many years. They do not deserve to live in a situation in which they have to choose between heating their homes and eating.
My right hon. Friend the Chancellor has responded to that situation with the warmth that we would have expected of him. I unreservedly commend the commitment to switch resources to the poorest pensioners, who are to receive a fivefold increase in their winter allowances to help to pay their bills. That is right, and long overdue. In my constituency, it will benefit more than 11,500 pensioners. I have to say with candour that some of them are the very poorest of pensioners. I am delighted that they are being recognised at last.
A minimum income guarantee linked to earnings rather than prices is long overdue and is an imaginative and major step forward in challenging the poverty that nobody deserves to endure; and challenge poverty we must.
Poverty--grinding, demoralising and simply wasteful-- has, I am afraid, become the reality for thousands of people of all ages, not only in Scotland, not only in Britain, but throughout the world. It is time that we took action to change that, and change it we can. We live in a time of uncertainty but also of enormous opportunity. We hear that the ever-globalising world economy is creating rapid political, economic and technological changes. That is good. It is also creating vast amounts of wealth, which provides opportunities for all, but we have to ensure that it goes to all.
Mr. David Davis (Haltemprice and Howden):
I have some sympathy with the aims of the right hon. Member for Coatbridge and Chryston (Mr. Clarke), but I spoke at some length last year on the mathematics of the working families tax credit, so I shall not follow him down that route and bore the House twice on the same subject. He intimated that the Government had got good headlines out of the Budget, and he was right. However, it is true that Budgets that are praised in March are often pilloried by May, and I suspect that that might be the current Budget's fate.
It is hard to see the wood for the trees--or, perhaps, to take a line from my right hon. Friend the Member for South Norfolk (Mr. MacGregor), the mirrors for the smoke--following the Chancellor's performance yesterday. Perhaps the wisest course is for me to talk a little about the Government's long-term financing and the effects on the real economy.
As the Economic Secretary is on the Treasury Bench, I want to make a public accounting point. The Finance Act arranges that the National Audit Office audits those parts of the Budget that the Chancellor directs. Some assumptions were audited in the past, and others this year. A valid assumption last year is not necessarily valid this year, and the fact that something has been audited in the past does not make it right today. It is rather like having a public company in which the auditors are allowed to audit only those subsidiaries that the finance director picks in any given year.
Will Treasury Ministers consider amending the Finance Act so that the audit of the Budget is under the control of the Comptroller and Auditor General rather than the Chancellor? That might lead to better public finances and more confidence all round.
I have some concerns about the Government's overall financial strategy. Over the decades since the war, every Government have faced--not unreasonably--welfare, health and education expenditure that has grown faster than the economy. That has been funded by taxation going up as a percentage of gross domestic product, but the process has hit a limit. The world's most successful economies have public expenditure of about a third of their overall economy. Ours is about 40 per cent. When the figure gets to 50 per cent., even countries as powerful as industrial giants such as Germany stagger and fail. There is a serious limitation.
Another method of funding is by transfers in spending. For Britain and other countries since the war that has largely occurred by transfers from defence--expenditure on which has halved as a percentage of GDP over the past 30 years from 6 per cent. to about 3 per cent.--primarily to welfare, but also to education and health. We have already reached a minimum for defence spending.
Too many Governments, including even the Government in which I was a Minister, took too much of a peace dividend at the end of the Soviet Union's hegemony. The present Government have gone even further--unwisely, in my view. The proper dividend of peace is peace, not money for other expenditure. That source of funding, then, is also running out.
A further option for funding is privatisation. The previous Government led on that, and Labour opposed it virulently, although it has now been persuaded to support it. Privatisation was a useful source of funds when nationalised industries accounted for 11 per cent. of GDP, but now they account for only 2 per cent., so that source of funding is limited.
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