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9 Apr 2003 : Column 348—continued

5.17 pm

Mr. Bill Tynan (Hamilton, South): This is the first Budget speech that I have made. I went through feelings of elation as the Chancellor spoke to depression when Opposition Members were speaking, and I must now try to find my way round the reality of the situation. I shall begin with a unique contribution: I congratulate the Chancellor on a Budget that improves the lives of my constituents. I am sure that most of the country—I will not say the whole country—will congratulate him. People who smoke will say that they do not like the Budget. Those who drink whisky will be quite happy; those who drink wine and beer might be less so.

The Budget shows the Labour Government's clear determination to maintain the economic strategy and foundations that they have developed over the past six years. It will protect the least fortunate in our society, as the Government have done during that time. They have also delivered effective public services. The hospital- building programme in Scotland has been substantial over the last six years, and without the public-private partnerships, we would not have a new hospital being built on the border of my constituency. We have to understand what is being done and appreciate what can be done if the political will is there.

I understand the concerns that have been expressed about business. We must ensure that business has the best possible opportunities to enable it to thrive and to enable us to pay for the benefits that we would like to see. Since 1997, my right hon. Friend the Chancellor has been delivering for the country, for business and for the people.

We did not have economic stability during previous Governments. That was the position during the 18 years that I served as a full-time union official. I am well aware of the difficulties that those 18 years created for the people whom I represented. I believe that the previous seven Budgets have set the foundations for the well-being of the UK.

We must remember that we have low interest rates, low mortgage rates and low inflation rates, and the highest employment level ever. We should continue strongly to push that message. I welcome my right hon. Friend the Chancellor's commitment to the continuing crusade to create full employment. Many years ago, we could only dream about that. Delegates at Labour conferences spoke about full employment, but never thought that it could be achieved. I think that we are on the brink of something that is extremely important and worth while for the people of this country.

I apologise for having left the Chamber to attend a Select Committee hearing, but I have listened to Opposition Members' responses to the Budget statement. I exempt the hon. Member for Roxburgh and Berwickshire (Sir A. Kirkwood) from the remarks that I am about to make. He made a constructive speech, but some of the other responses were pathetic. Opposition Members' speeches were depressing because they referred to all the problems in their constituencies without recognising any of the solutions that have been created by my right hon. Friend the Chancellor over the years.

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We must have regard to the results. We talk about blighting old age, and I am asked whether the minimum income guarantee is important. If we had a flat-rate increase in the basic state pension, I do not think that we could reach the levels achieved by the MIG, which is crucial if we are to get those who need and deserve support out of poverty.

When I was campaigning in the 2001 election, some people were clearly concerned that those on the MIG were receiving benefits that others were not getting. Some people told me that they were on a small pension but were excluded from housing benefit and the MIG. In those circumstances, they felt hard done by. That is why the pension tax credit is a wonderful opportunity. I recognise that there may be take-up problems, but it is something that we must fight for in the House in a united fashion. If we do that, we can make a difference to each and every pensioner in our constituencies.

Last Sunday morning, I listened to "The Frost Programme"—I am a sad person, and perhaps there are other sad people in this place—on which it was said that nearly 5 million people or families were losing out by more than £10 a week. Last week, I attended a meeting of the Institute for Fiscal Studies, at which it was said that 5.8 million families would see few changes as a result of the pre-announced tax, tax credits and benefit changes that would take place during 2003–04. It was said also that 6.7 million families would gain between £1 and £10, and that 3.7 million families would gain more than £10 a week. So we should tell the whole story when we are talking about the changes that are taking place. I welcome that redistribution, because that is what it is. I can afford to pay more in national insurance contributions and I can afford to pay more to create the opportunity for people to benefit. The 1 per cent. increase should be seen in the context of benefits for the national health service and for the community. If we look at it in that way, we will put it in perspective.

It is time that we looked at the question of the entitlement to tax benefits. It is also time to stop exploiting the situation, which we do to a degree. In talking about tax credits, we are in a position to say clearly, "This is a means-tested benefit." I recognise what was said as regards how we deliver, but the means-testing of the 1930s would be unacceptable to me. It was an attempt to take money from people, not to give money to them. If we make that distinction on tax credit, we will take the stigma away from it. We are looking at people's standard of living as well as what they desire, and we should move forward by saying, "This is what you are going to get." We have to take that message out to the country. We have different points of view and different philosophies, so we tend to exploit the wording that is used, but we should stop doing that as it tends to play on the political divisions between us and it impacts badly on the people whom we want to benefit.

We should welcome in particular the extra £100 for older people. We have been arguing that a 25p increase is rubbish and unacceptable. This increase may not mean £5 or £10 a week, but it is £100 a year for those over 85. That should be welcomed. In Scotland, there is an increase for 135,000 people aged over 80, so an incredible number are being affected. On the extension involving 52 weeks, how many Members in the

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Chamber have found themselves talking to a pensioner's family who say, "This is ridiculous. We are having money taken off because my mother is in hospital."? We should be pushing hard and saying more and more that the benefit is absolutely superb.

I also want to mention the intensive support that we are giving for lone parents and partners. We speak about child poverty, but unless people have suffered it they do not know what it is like. Living in a tenement close where three families shared an outside toilet was real poverty. Today, we have a system that no longer stigmatises lone parents, which was the problem at one time. I have a daughter who has two young children, and she is a nurse at Hairmyres hospital. I know the benefits that have been created—the working families tax credit and the child tax credit—and I have just discovered that she will get about £10 a week more. That is a real benefit for my daughter in those circumstances, and I hope that people understand that. I do not mind paying the additional 1 per cent. in national insurance.

If someone from a different planet dropped in here today, they would think that things had never been any different, but we should look at what happened as regards this country's manufacturing base. I worked in a large factory—Hoover in Cambuslang. When I went there in 1972, there were 4,500 manual workers and about 1,700 staff. It has one of the best pension schemes in the UK, and I am delighted to say that it is still a final salary scheme. Due to competition from the likes of China, Japan and the far east, that factory found itself unable to produce motors at the price that they could be bought from abroad. That is a problem. Unless factories and workplaces continue to invest in research and development to bring about new products that can be delivered for the people who work there, we will lose out.

We have a major problem. In 1972, Robert Carr was Secretary of State for Employment in a Conservative Government. He said that we no longer needed a training incentive to develop apprentices, as employers were too wise and knowledgeable to allow apprenticeships not to exist. At that time, large factories had to pay a levy grant of 2.5 per cent. to develop their own apprentices. Small workshops fed off those large factories and took the apprentices once they had been trained. Therefore, I appreciate the point that has been made about apprenticeships, but we must ensure that people are trained properly if we are to deliver the type of employment that we are looking for.

We cannot compete with the likes of the far east. In my constituency I have a company called Philips, which used to produce about 300 million bulbs a year. The work went to Poland Pila, which now produces about 450 million lamps a year. Philips produces only specialist lamps. We still have employment there, but it will be threatened unless we continue to develop new processes and new job opportunities.

I am conscious of the time and I understand that other hon. Members want to speak, but let me make the following points about the Budget. It is essential that we continue to invest in the health service, education and transport. If that means borrowing more money, we must face that crisis. We must face any issue in order to maintain the stability that we have at present.

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We talk about national insurance contribution increases of 1 per cent. Workplace absences cost companies an estimated £11.6 billion in 2001. The CBI has called on the Government to guarantee that by 2010, all young people will have mastered the basics of literacy and numeracy, to create clear paths into employment and higher education for young people who have vocational qualifications, and to improve intermediate skills by extending entitlement to a publicly funded—note that: a publicly funded—level-three qualification from age 19 to 25.

Even the CBI recognises the difficulties that this country faces internationally as a result of the war in Iraq, but we can move forward if we continue to push as we have done. We have a sound economy and we are creating opportunities for business. In those circumstances, I believe that we will make the progress that is desired.

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