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Vaccination of Children (Parental Choice)
Miss Julie Kirkbride accordingly presented a Bill to allow parents to choose to have their child vaccinated separately against measles, mumps and rubella; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 21 June, and to be printed [Bill 122].
Orders of the Day
WAYS AND MEANS
Order read for resuming adjourned debate on Question [18 April].
AMENDMENT OF THE LAW
Motion made, and Question proposed,
(1) That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance.
(2) Subject to paragraph (3) below, this Resolution does not extend to the making of any amendment with respect to value added tax so as to provide—
(a) for zero-rating or exempting a supply, acquisition or importation;
(b) for refunding an amount of tax;
(c) for any relief, other than a relief that—
(i) so far as it is applicable to goods, applies to goods of every description, and
(ii) so far as it is applicable to services, applies to services of every description.
(3) Paragraph (2) above does not exclude the making of amendments with respect to value added tax providing for relief on the acquisition from another member State of any goods in relation to which, if they were imported from a place outside the member States, relief would be given by an order under section 37 of the Value Added Tax Act 1994.—[Mr. Gordon Brown.]
Budget Resolutions and Economic Situation
3.51 pm
The Secretary of State for Trade and Industry (Ms Patricia Hewitt): The Budget reflects the fundamental values at the heart of the modern Labour party and the Labour Government: the belief that all human beings are of equal value; the conviction that we all deserve the opportunity to find and fulfil our potential; the belief that together we can achieve far more than we can alone; and the recognition that in our modern knowledge-driven economy, the policies that we need for social justice and equal opportunities are, at one and the same time, the policies that we also need to create a successful dynamic economy. This Budget, like the five earlier Budgets presented by my right hon. Friend the Chancellor of the Exchequer, is based fairly and squarely on our commitment to enterprise, prosperity and opportunity for all.
Mr. Michael Fallon (Sevenoaks): Does the Secretary of State recall appearing with me on a programme called "Powerhouse" on 29 May during the general election campaign? At that time, she said:
- "We've got no plans at all to raise that ceiling on National Insurance contributions . . . It is not going to happen."
Ms Hewitt: The hon. Gentleman will recall that reference had been made to Labour's 1992 shadow Budget in which we proposed the complete abolition of the national insurance ceiling and the imposition of full
national insurance contributions on all earnings above that ceiling. I remind him that we spent about a week of the election campaign making it clear in response to repeated charges by him and his hon. Friends that we had ruled out any increase in the standard rate and the upper rate of income tax, but that we would not commit ourselves in advance on the hundreds of other rates and allowances that operate within the tax system.The priority in our first term was to create a strong and stable economy and to get more people into work. We succeeded in those aims to an extent that almost no one thought possible five years ago. Britain is enjoying the lowest inflation and interest rates for 40 years and the lowest public sector debt for 10 years. More than 1,250,000 more people are in work and there are 75,000 more businesses than there were five years ago.
The tough decisions that we made five years ago have been tested in tough times. Of course, we have not been able to cut ourselves off from the downturn in the rest of the world economy, which began with the collapse of the hi-tech sector in the USA. Our manufacturing industry, especially, has suffered with a fall in output of 7 per cent. over the past year, but other countries—our major competitors such as France, Germany, America and, worst of all, Japan—have all experienced the same or even worse difficulties and falls in output in their manufacturing sectors.
Now, we are seeing signs that manufacturing and the world economy as a whole are turning the corner. Indeed, last week the British Chambers of Commerce reported a sharp upturn in business confidence in the manufacturing sector.
The proof of our economic policy in these tough times is that at a time when Japan has been in recession and likewise America, and when the economy of the rest of Europe has hardly grown, Britain has been the fastest growing economy in the G7. Next year, the OECD, the IMF and the National Institute of Economic and Social Research all expect the United Kingdom to be the fastest growing major economy in Europe.
To create greater prosperity for all, we need to do two things. First, we must continue raising the level of employment. Secondly, we must improve the quality of those jobs by raising our productivity.
Sir Robert Smith (West Aberdeenshire and Kincardine): The right hon. Lady talks of the need to raise the level of employment. Some of my constituents who work in the North sea oil industry have been made redundant, or are being made redundant, to make their industry more competitive, to attract inward investment, so that it might compete with other fields around the world. Will she explain to them how the Chancellor of the Exchequer taking more money out of that industry for the Treasury will make them more competitive?
Ms Hewitt: That sector and every other sector of our economy is under constant pressure to be and to remain competitive. The hon. Gentleman will be aware that profits are high in the North sea oil sector and we have been examining for years the fairest system of taxation for that sector. Alongside the increase in the special rate of corporation tax, my right hon. Friend the Chancellor of the Exchequer announced last week the introduction of 100 per cent. first-year capital allowances for investment
in North sea oil. After consultation, my right. hon Friend has set a date for abolishing royalty payments, which the hon. Gentleman will know are especially unpopular within the sector.
Sir Robert Smith: Will the right hon. Lady give way?
Ms Hewitt: No. I shall make some more progress.
Our achievement in delivering economic stability and rising employment must now be matched by a new achievement in narrowing and then closing the productivity gap.
We have many outstanding companies, both large and small. Our best manufacturers are among the best in the world. However, across the economy as a whole, we still lag behind. Every hour that is worked in Germany, France and America produces 25 per cent. more than an hour worked in Britain. That difference is not because British workers lack drive or determination. Indeed, working hours in the UK are longer than those for full-time workers in the rest of Europe. However, thanks to decades of underinvestment—the direct result of decades of economic instability—too many British workers have to do without the modern tools and technology that our competitors enjoy. Far too many lack even the basic skills that they need to succeed in the modern work force. Too many employees work in firms that are failing even to keep up with best practice in their sector, let alone to lead the way in new products and new production processes.
This productivity gap may sound like an abstraction but it directly affects us all every day of our lives. If we could create wealth as effectively as the US, we could grow our economy by an extra £6,000 a year for every man, woman and child. We could deliver a better standard of living, better public services and more leisure time. That is the scale of the productivity and prosperity challenge.
I shall refer to the Budget measures that seek to meet the challenge by promoting enterprise and innovation, which are the key drivers of productivity. I shall begin by focusing particularly on the impact of small firms; in terms of job creation, small and medium-sized enterprises are vital to our country.
Between 1995 and 1999, businesses created almost 2.5 million extra jobs. It was small and medium-sized businesses that created 85 per cent. of those new jobs. We can forecast quite confidently that in the next 10 years, it will be those small businesses—indeed, there will be almost 1 million more of them—that create the new jobs in our economy. That is why this Budget builds on what we have already done to encourage entrepreneurs and support start-up and small businesses. We are taking 150,000 small companies out of corporation tax altogether and cutting the starting rate of corporation tax from 10 per cent. to zero on the first £10,000 of profits. We are cutting tax for another 300,000 companies by reducing the small firms' rate of corporation tax, which is already the lowest in Europe, by another penny in the pound.
I know that it has been a real frustration for many small businesses—hon. Members will have spoken to them directly—that because they are not incorporated, they do not benefit from corporation tax cuts, although they are benefiting from other changes. That is why I shall announce later in this Session the Government's response
to the report of the company law review and its admirable recommendation of a complete overhaul of company law based on the principle of thinking small first. By removing the unnecessary costs and complexity of incorporation, we will help owner-managers to choose the right structure for their businesses and enable more businesses to benefit from those lower corporation tax rates.
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