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Mr. Peter Pike (Burnley): I welcome what my right hon. Friend has announced. I also welcome what the
Government are doing for the low-paid and pensioners, and the investment that is being made in hospitals and schools in constituencies such as mine. May I make one plea, however?In Burnley we have 4,000 empty houses, and the number is rising day by day. The position is becoming desperate. We need Government help to demolish at least 2,000 of those houses speedily. When we come to the spending review in a few months' time, can we be sure that the Government will respond positively so that the council—together with the Government—can tackle what is a major local problem?
Mr. Brown: Housing was one of the issues raised during the last spending review, and we provided more additional funds. I agree with my hon. Friend that there are real challenges and real problems in terms of ability to repair the housing stock, which result from not just years but decades of neglect.
I shall put my hon. Friend's representations to the relevant Department—and this, too, is a matter for the spending review.
Sir Michael Spicer (West Worcestershire): Why has the rate of productivity, which was rising until 1997, been falling since then—and why has a table showing that fact, which appeared in last year's productivity report, been airbrushed out of the current one?
Mr. Brown: The only years in which productivity has been negative were under the Conservative Government. [Hon. Members: "Come on!"] The hon. Gentleman asked about rates of productivity. Is the rate negative, or is it positive? Productivity has been positive under Labour for three years: manufacturing productivity has been positive for two years, and productivity generally for one. It was negative under the Conservatives.
What is happening to the British economy, I believe, is what, in many ways, happened to the American economy in the early 1990s. There has been a large growth in employment—1¼ million—in the British economy. A large growth in employment took place in America in the early 1990s, which made possible the productivity growth that took place later.
Our productivity is rising, not falling. Our manufacturing productivity rose substantially last year. It is ridiculous for the hon. Gentleman to say that productivity is falling.
Sir Michael Spicer: Productivity rates.
Mr. Brown: Productivity is growing, and will continue to grow.
Mr. Martin O'Neill (Ochil): I congratulate my right hon. Friend on the decision to announce that the winter fuel allowance will be sustained for the next three winters. However, as he knows what the sums will be, will he reconsider the entitlement cut-off date? It is causing great difficulty for those who discover that, by an accident of birth, they will not receive the £200 winter fuel allowance that they may have been anticipating.
I also welcome the R and D tax breaks. As my right hon. Friend will be aware, however, in the past couple of years, some manufacturing companies have not been able
to invest because of the need to compete with the eurozone. Consequently, they have had to spend money on keeping prices down rather than on investment. Is it not time for tax breaks for run-of-the-mill investment rather than just for research and development? Productivity in many smaller companies would be assisted if they received a proper incentive to invest in increasing their productive capabilities.
Mr. Brown: I am grateful for those questions. The research and development tax credit currently goes to small firms, but it will now be extended in a different form to large firms. We are publishing a consultation document on that in the next few days. My hon. Friend also mentioned general allowances for investment. We have created a better regime for small and medium-sized companies so that capital allowances are permanent rather than temporary, as they were before. Allowance levels are also far more generous than they were before. I hope that that will allow companies to make the right decisions to invest even in a period of world slowdown.
Equally, we are trying to do more for start-up businesses by providing them with access to capital at a cheaper rate, which is the purpose of regional venture capital funds. There will be a fund in Scotland, a fund in Wales and a fund in Northern Ireland, as well as one in each region of Britain. I believe that the public and private contributions to the funds will make access to them possible for businesses that might otherwise not have that opportunity.
The winter allowance is available to people at 60 and it is difficult to say that it should be available to people at 59. We are, however, trying to be as fair as possible in implementing the allowance. If my hon. Friend would like to draw our attention to a set of anomalies, we will clearly examine it.
Mr. Jonathan Sayeed (Mid-Bedfordshire): I trust that by the time of the next Budget the Chancellor is experiencing the joys of fatherhood and the cost of parenthood under a Labour Government. In every year in which this Labour Government have been in power, the nation has spent more than it has earned. Is that sustainable?
Mr. Brown: That is not the case. We have been paying off debt for the past four years, and we have paid off £51 billion of debt. As for children and families, the hon. Gentleman knows that under this Government child benefit has increased from £11.05 to £15.50, which is a 30 per cent. increase. It is a far larger increase than was ever made under the previous Conservative Government. It is also our contribution to families and to relieving child poverty. The right hon. Gentleman will also know that 5 million families—including many in his own constituency—are now receiving the children's tax credit, which is worth £10 per week more. In other words, in the previous Parliament, child support doubled for 5 million families. That could not happen if the public spending plans supported by the shadow Chancellor were ever pursued.
Kali Mountford (Colne Valley): I should have thought that today the whole House would want to congratulate the Chancellor on steering a very steady course in a major world economic slowdown. He announced that
manufacturing was growing at 2 per cent. Does he accept that that disguises a slowdown in some sectors and some regions? Is he confident that low interest rates and low inflation, regional development strategies—particularly to address the issue of the north versus the south-east—and the tax measures that he has announced today and previously will be sufficient to assist, for example, the textile sector—which particularly affects my own area—and to ensure that there is growth in all areas?
Mr. Brown: I am grateful to my hon. Friend and I know that she is a major campaigner on behalf of the textile industry in her constituency. At the end of the last Parliament, the Secretary of State for Trade and Industry made provision on that issue, given all the difficulties that redundancies had caused for communities in which textile employment was falling. We can create a more balanced economy between the regions and we can tackle regional inequalities. My hon. Friend's region now has a regional development agency, like every other region, and those agencies are making a substantial contribution to planning a better future for the regions, based more on indigenous investment than ever in the past and on support for innovation and skills. I look forward to seeing the latest plan from the RDA in her region so that we can consider what more we can do there. Unfortunately, the Conservative party would abolish the RDAs.
Mr. Alex Salmond (Banff and Buchan): The SNP and Plaid Cymru are delighted to join the Chancellor's consensus on the NHS, but—confidentially—is the Prime Minister with us or is he still hankering after the greatly enhanced private sector role that he was talking about only a few months ago? Has the Chancellor seen the Institute for Fiscal Studies report released this week, which says that total gross public investment has fallen continuously since the mid-1970s and, even allowing for the private finance initiative, the figure for 2000 will be half the 1985 level? Does he accept those figures? How does he reconcile them with his boasts of enhanced public spending in Budget after Budget and autumn statement after autumn statement, and what—if anything—does he intend to do about it?
Mr. Brown: We stood as a party and a Government on a manifesto that said that the NHS should be publicly funded, based on tax revenue, to meet the needs of all people in the country. That is the manifesto on which we stood and that is the manifesto that we are implementing. It is the right manifesto for all parts of the UK. Our support for greater investment in the health service is now shared by the Liberal Democrats, the Scottish National party and Plaid Cymru, but unfortunately it is not shared by the Conservative party which believes that private provision is the way forward. We wish to increase public investment from £7 billion net at the beginning of our term in office to £18 billion, so we wish to double public investment. We have set in place moneys for transport, health, education and the various public services, and the private finance initiative is sponsoring projects worth £12 billion. It is not fair for the hon. Gentleman to say either that public spending is not rising or that it is not the Government's intention to increase public investment, because that is what we are trying to do. Public investment in the economy is rising this year.
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