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27 Nov 2002 : Column 337—continued

Mr. Brown: I thought that the hon. Gentleman was one of the few Keynesians left on the Conservative Benches. Clearly that is not the role that he is playing today. So far as the changes since the Budget in April are concerned, I think that he would agree with me that a stock market fall of 25 per cent. in Britain, and a 40 per cent. fall in France and Germany, are significant events that not even he, with his prescience, could have predicted in April. He must realise that those events have a bearing not only on the value—[Interruption.] The shadow Chancellor says that the hon. Gentleman did predict this; I would be very surprised if he had actually done so in practice.

A 25 per cent. stock market devaluation must be taken into account in our calculations of corporate tax, capital gains tax, stamp duty and other matters. That is one change that has taken place since April. On other changes since April, I do not think that the hon. Gentleman would have seen the German forecast at that time. Germany was forecasting far higher growth, but growth is now only 0.4 per cent.

Mr. Mark Hendrick (Preston): I commend my right hon. Friend's plans to devolve the training and skills budget down to regional level, which will be welcomed in the north-west. I also commend his plans to ensure that a third of young people go into modern apprenticeships. May I bring to his attention the excellent schemes going ahead at the BAE Systems training plant in Preston whereby 300 young apprentices are getting excellent apprenticeships, which have recently received an award for excellence? That can act as a model for training and apprenticeships throughout the north-west.

Mr. Brown: I am grateful to my hon. Friend. I know that he takes an interest in the BAE development and the work being done on industrial training. Apprenticeships were virtually dead a few years ago, but there are now 200,000 modern apprenticeships, and that number will continue to rise to 300,000. We believe that

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it can rise substantially further, but we need to invest in modern apprenticeships and we need to encourage small firms in particular to take an interest. That is the purpose of the modern apprenticeships taskforce, which I hope will have a regional representation, which he seeks.

Mr. David Trimble (Upper Bann): Among the papers published by the Chancellor today is one on protecting indirect tax revenues. I welcome the fact that it includes detailed information on the extent of oil fraud in Northern Ireland, and I hope that it conveys to Members and the general public here the extent of the revenue loss, which is given as £370 million in 2001.

I draw the Chancellor's attention to the Northern Ireland Affairs Committee report published today, entitled XThe Impact in Northern Ireland of Cross-Border Road Fuel Price Differentials". Will he look carefully at the report and, in particular, consider the fact that it urges the Government to study and

Will he consider also corporation tax rates and the significant cross-border differential between Northern Ireland and the Republic of Ireland, which has a distorting effect on investment in Northern Ireland and limits significantly our ability to attract inward investment?

Mr. Brown: I am grateful to the right hon. Gentleman. We have discussed that a number of times, and he kindly brought a delegation to see me and other Ministers on the matter. We understand the scale of the problems of oil fraud in Northern Ireland, cross-border fraud and trafficking, which is why the report has been published today. I look forward to discussing with him what it says and what we can do to take things forward. We share his aim of reducing the revenues that are lost and we are looking for solutions, which we shall discuss with him and the Northern Ireland Administration, once re-established.

On the question of corporation tax relief, I visited Northern Ireland with the Prime Minister and we made a number of proposals to inject additional resources into the Northern Ireland economy. We recognise that there is a long way to go for business to grasp the opportunities that are potentially available, but we shall continue to do what we can. The right hon. Gentleman should consider some of our proposals—for example, the extension of the business loan guarantee scheme—and I look forward to talking to him again about how we can help to expand take-up of some of those schemes in Northern Ireland.

Mr. George Mudie (Leeds, East): I congratulate the Chancellor on the pension credit. He knows that the minimum income guarantee was much resented by those who had worked hard but received only a small pension that took them above pension credit level. Therefore, they did not get the benefit.

I should like to do the shadow Chancellor's job on that issue, because strangely he left the figures alone. I must press my right hon. Friend on the figures in his speech, because they are too good to be true. I seemed to catch him saying that 5 million people—almost half

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the pensioners in the land—will get about £2 billion between them under that benefit. Why did the shadow Chancellor leave those figures alone—out of generosity to my right hon. Friend or because my right hon. Friend deserves double congratulations on those acts?

Mr. Brown: I am grateful to my hon. Friend for mentioning the importance of the pension credit. The figures are indeed accurate. We shall ensure that pensioners throughout the country are aware of the benefits available to them, just as we shall make people aware of the child tax credit. I believe that the take-up will be high once people realise the benefits that will flow from this measure. The figure is indeed large—5 million pensioners.

I agree with my hon. Friend about the minimum income guarantee for pensioners, but our first job was to ensure that we did all that we could to eliminate or reduce pensioner poverty. That is why we tried to lift the poorest pensioners, particularly widows in their 80s or over, out of the income support system that existed under the previous Government, with a far higher minimum income guarantee. I am pleased that it is now £102; it has risen by 30 per cent. in real terms since we came into office.

We can now build further. This measure rewards savings—the works pensions and the modest savings that people have. Given that 7,000 households will benefit from the measure, I am sure that hon. Members will want to make all those pensioners who can benefit aware of it.

Sir Nicholas Winterton (Macclesfield): I compliment the Chancellor on his robust presentation. However, he would expect me to say that I am rather suspicious of its content. He failed to respond properly to the question put by his hon. Friend who chairs the Trade and Industry Committee, the hon. Member for Ochil (Mr. O'Neill), about the impact of Government policy on manufacturing industry in particular. The hon. Gentleman also mentioned the climate change levy, which damages industry even if it might assist banks, insurance companies and building societies.

Will the Chancellor direct his attention at the red tape, bureaucracy and regulation that he has imposed on British manufacturing industry, because it is making matters harder and harder? He will appreciate my lifelong commitment in this place to manufacturing industry. The Confederation of British Industry, the chambers of commerce and the Institute of Directors are not enamoured with much of what he has done.

Mr. Brown: I am grateful for the first set of remarks from the hon. Gentleman. He is indeed a supporter and defender of manufacturing industry, and throughout the time in which we have been in the House together, he has spoken up for the needs of manufacturing.

The hon. Gentleman must remember that the climate change levy was a revenue-neutral measure as far as business was concerned. We froze the levy this year. We want to meet our environmental commitments nationally and internationally in the long term.

On business taxes, as the hon. Gentleman should know, we reduced corporation tax from 33p to 30p. Small businesses will benefit from that even more this

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year, with the 19 per cent. rate and the 10 per cent. rate abolished so that the first £10,000 of profit are exempt from tax, so we are doing our best to encourage small businesses.

On manufacturing industry, the research and development credit has been widely welcomed. Equally, the measures that we announced today to expand the advisory service for manufacturing industry in every region, are welcomed too. The hon. Gentleman knows that what manufacturing industry wants most are favourable trading conditions, low interest rates and low inflation. We have low inflation and low interest rates; we want to create favourable trading conditions for that industry.

Mr. Tom Clarke (Coatbridge and Chryston): Does my right hon. Friend accept that the Government's achievements and objectives in international development are outstanding in every sense? Could that be why the shadow Chancellor and the former Chancellor, the right hon. and learned Member for Rushcliffe (Mr. Clarke), did not say a word about the Government's policies?

Will my right hon. Friend, based on his successes and those of my right hon. Friend the Secretary of State for International Development, continue with those policies, particularly in debt relief, humanitarian aid and fair trading? Will they find themselves in a position, if not today then later, to tell us when we might achieve the United Nations targets?

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