| Previous Section | Index | Home Page |
Mr. Pearson: My hon. Friend makes a good point. Donation rates among alumni in the United States are dramatically higher than those in Britain. The Budget changes will make it far easier for individuals to give to universities, and for businesses to donate assets to both universities and charities. I hope that, over the next 10 years, a far greater proportion of universities' income will be raised from donations from alumni and businesses.
Like every other Labour Member--I suspect that our view is widely shared--I welcome the increase in the pensioners' winter fuel allowance to £150, and the increase in the minimum income guarantee in line with average earnings. Pensioners will also welcome the fact that the price of petrol is to rise by only 2p a litre. They drive cars too, and those who must live on low incomes still need to get out and about. I think, however, that the Government might have been more generous in one respect. The Chancellor referred to the needs of those who are just above minimum income levels and who have to pay the full whack regardless of any benefit entitlement.
I still believe that what pensioners really want is an increase in the basic state pension. It would cost an incredible amount--some £18 billion--to restore the earnings link, and no sensible Government could advocate it. However, as part of their review, the Government should consider on a year-by-year basis whether the economy can afford to increase the state pension in line with earnings.
We should not forget pensioners when we talk about the new economy. The rate of internet take-up by pensioners is low, but new facilities such as internet shopping could be of great benefit, particularly as some of our nation's pensioners become increasingly housebound. I hope that the Financial Secretary will consider in due course the introduction of a scheme whereby pensioners could receive free internet training.
There is much to be welcomed in the Budget's enterprise package and the proposed changes in respect of the enterprise investment scheme and venture capital trusts are sensible. They will be widely welcomed by industry, as will making the 40 per cent. capital
allowances regime permanent, reducing the capital gains tax taper from 10 years to four and increasing the range of business assets that qualify. We should not underestimate the significance of those changes and their likely impact. I shall discuss that in a moment.
I also welcome the all-employee share ownership scheme. I did one of the roadshows to promote it in Birmingham recently. Companies clearly want to be seen to be fair to all their employees and recognise the link between employee share ownership and economic performance. I am particularly glad that the Government have decided to continue with the save-as-you-earn share-save scheme, which is very effective. There is no reason to discard it.
The decision to have 100 per cent. capital allowances for buying information technology equipment is novel. It shows that the Government's thinking is going in the right direction--they want to encourage all companies, regardless of the sector in which they operate, to embrace the knowledge economy. However, as I have said before, leasing rather than purchasing IT equipment is often a far more effective option for many companies. Some IT systems become obsolete quickly, which means that it is dangerous to buy assets as they soon end up on the scrap heap. We ought to consider ways of introducing leasing arrangements to the capital allowances regime, which would pass the benefits of leasing on to companies.
I also welcome the enterprise management incentive scheme. Since the pre-Budget report, it has been modified to take account of industry's needs and now offers decent incentives for small businesses that want to attract and retain high-quality, high-calibre senior employees.
I urge the Government to do more for our manufacturing industry, particularly companies that export. Interestingly, the Confederation of British Industry made little reference to manufacturing industry in its pre-Budget submission. It did not want a package for manufacturing, but called for other measures. No initiatives came from it that would help our hard-hit exporters. At least the Government are doing something and have announced the introduction of regional venture capital funds across the nation.
As someone with a background in regional venture capital, I believe that venture capital is important and that we must maintain our lead in Europe in terms of having a thriving industry. However, I feel that we are missing the point. We are planning to allocate about £100 million to the west midlands region and similar sums to Yorkshire and other regions, although amounts vary, but there is already a properly functioning venture capital market in place. Recently, Greater London Enterprise and West Midlands Enterprise, an organisation for which I used to work, announced a £60 million venture capital fund and this week South Yorkshire Investment Partners announced a £110 million fund. They and the Government's regional venture capital plans are targeted on similar areas.
We are missing the gap, which exists in two respects. First, there is a shortage of decent propositions to back and of proposals from universities that are prepared to work on technology that can be dragged out and exploited by other companies. Secondly, we must do something about companies that will never have spectacular venture capital internal rates of return of 20 per cent. or more, but offer solid growth prospects, even though they may have
strained balance sheets and need long-term loan finance. The Government could do more to help businesses if they addressed those issues.
I have three proposals on manufacturing. The CBI has not come up with any, but let me try mine. To be fair, the CBI regards infrastructure as very significant. The previous Government did not pay enough attention to infrastructure and I am worried about whether this Government are paying sufficient attention to its important contribution to Britain's economic performance. I am pleased by the announcement that the Manchester metro extension is to go ahead and I should like the metro be developed in the west midlands, too. Investment in our transport infrastructure has a substantial knock-on economic development benefit for our industries. Let us consider the benefit of building the black country spine road. Industries clustered around it and upgraded their capabilities. We now have profitable companies with modern production facilities that moved from inefficient plant lay-outs to convenient sites. We need to do more for infrastructure, although £280 million is a great start, and I hope that the comprehensive spending review will go substantially further.
We could also help exporters by strengthening the budget and operations of British Trade International so that it can offer packages to help companies to access even more new markets and provide additional assistance with getting projects under way. The Government should consider that, as well as giving more support to regional development agencies and boosting the regional selective assistance budget, which should be targeted on manufacturing industries and companies that export.
I want briefly to discuss the situation at Rover-BMW and Longbridge, which relates directly to those matters. The workers at Longbridge have obviously been badly betrayed by BMW. They are not to blame for the situation. The Government negotiated in good faith with BMW and put a package together. They are not to blame for the situation. Following BMW's announcement, the Government acted extremely quickly. I pay tribute to my right hon. Friend the Secretary of State for Trade and Industry for taking the time and trouble to go to Longbridge to talk to the workers, the trade unions and management. BMW did not extend that courtesy to its work force when it made the announcement. Today, my right hon. Friend is showing his active support for Longbridge's future by having conversations with Joachim Milberg in Germany.
We have established a taskforce, but there is an urgent need for clarity on how the £129 million that has already been allocated will flow. There must be no strings attached to that money. It needs to be able to be spent wherever in the region it is most needed after the decision on Rover Cars. The automotive components supply base will suffer along with Longbridge following the likely loss of jobs there. About 40,000 jobs are at risk in the supply base. We need to ensure that as many of those jobs are safeguarded as possible.
| Next Section
| Index | Home Page |