Previous SectionIndexHome Page

Mr. Elfyn Llwyd (Meirionnydd Nant Conwy) (PC): First, I congratulate the Chancellor on the child care provisions and help for small businesses that he has announced, and on the relocation of jobs from the south-east, for which we have been pressing for some time. In support of some of his arguments, the Chancellor referred to the Office for National Statistics report. The ONS forecast for Wales is that gross value added per capita will fall to 74.9 per cent. by 2010. It was 88 per cent. in 1998. The Government's target for Wales is 90 per cent. Which announcement today will help to close that gap?

Mr. Brown: The main feature of the Welsh economy on which I thought the hon. Gentleman would congratulate the Government is the big rise in employment that has occurred in the past few months. I believe that 100,000 more people are in employment in Wales than were when we came into power.

10 Dec 2003 : Column 1081

[Interruption.] The hon. Gentleman is saying that more employment is not relevant to a country's economic growth—

Mr. Llwyd: The right hon. Gentleman is not answering the question.

Mr. Brown: We get economic growth by creating employment and opportunities. If the Welsh nationalists do not realise that, they are not fit to go before the electorate.

Mr. George Mudie (Leeds, East) (Lab): One of most important and ambitious Government targets is to abolish child poverty. The Chancellor's announcements on child care are extremely important because they will allow families to take significant steps to increase their income, and his breathtaking increase in child benefits will significantly help us to meet our target. Those measures, combined with the child bonds that we are to debate on Monday, ask the House to congratulate the Chancellor on the steps that he has taken. At risk of being impertinent, does he feel that those steps will allow us to meet our target early?

Mr. Brown: The first target is for 2004, which is not far away. With the extra £1 billion that we are spending, we are determined to take thousands of people out of poverty, before housing costs are taken into account. The real tragedy of the past 20 years in our country is that for 18 of them—from 1979 to 1997—child and family poverty was allowed to increase, so little was done about it, and such an uncaring attitude towards it was taken. Our proposals are not only for wealth, through the Child Trust Funds Bill that my hon. Friend the Financial Secretary will introduce on Monday, but for child benefits, with an additional £3.50 a week from April for 7 million children—not all children—in low and middle-income households in this country. It was possible for us to argue that, during a world downturn, it was too difficult for us to make that additional investment, but I am pleased that there is support from all parties other than the Conservative party, and I hope that, in time, the Conservatives will come to support taking the action that is necessary to reduce child poverty. I hope also that 10,000 children in every constituency in this country will benefit from the change and that it will prove to be a means by which we reduce child poverty. I would like a consensus in the House and in the country on the fact that the best investment for the future that we can make is an investment in our children. I believe that that is what the country wants us to do.

Mr. Edward Leigh (Gainsborough) (Con): The Finance Act 1998 allows for the Treasury to invite the Comptroller and Auditor General to report on the assumptions underlying the fiscal projections. The trouble is that the Comptroller and Auditor General can report only on the specific assumptions, not on the projections that result from their application. Would not it be a fairer, more transparent and better system if the Chancellor gave the Comptroller and Auditor General full freedom and independence to specify which assumptions he should audit? When will the Chancellor give the Comptroller and Auditor General that freedom?

10 Dec 2003 : Column 1082

Mr. Brown: It is interesting that the hon. Gentleman proposes that new direction in both fiscal policy and the organisation of the public finances. Before Labour came to power in 1997, there was no transparency in the system. The assumptions that we are having audited include the unemployment assumption. When they were in power, the Conservatives put in any figure, which is one of the reasons why the public finances got out of control. In addition, they assumed indirect as well as direct cost savings from spend-to-save schemes and figures were put into the documents that had no basis in fact. We have introduced a series of audited assumptions—we have them audited by the National Audit Office—which include unemployment, revenues from VAT, and the trend rate of growth. I think that the hon. Gentleman should applaud us for having a far more open and transparent system of decision making. Perhaps it is time he got his party to get up to date with some of these things.

I applaud the Chairman of the Public Accounts Committee on one thing: he is a known supporter of the new deal and has said that it reduces youth unemployment. I hope that he will persuade his Front-Bench colleagues to abandon their policy of abolishing the new deal.

Mr. Barry Gardiner (Brent, North) (Lab): The Chancellor has rightly identified the scourge of child poverty and spoke in his report of the reliefs that he has extended for community amateur sports clubs. In the run-up to the Budget, will he investigate the possibility of giving employers incentives to run schemes similar to the ones that he has considered for children, so that the employers of workers who are able to benefit from gyms and exercise in the workplace, perhaps during the lunch break, can benefit from incentives? Obesity in adults as well as in children is also a scourge of this nation.

Mr. Brown: This is in danger of becoming a very expensive afternoon. It is difficult to calculate the cost of accepting my hon. Friend's representations. However, I agree that we must do more in respect of preventive health programmes. The lottery providing money for fitness centres was a good thing to do. As the discussion document on the next 10 years that the Government produced a few days ago said, we shall consider how to encourage and incentivise people to improve their personal health, because doing so results in less pressure on the national health service.

Sir Robert Smith (West Aberdeenshire and Kincardine) (LD): As much oil and gas remains to be exploited under the North sea as we have extracted to date. If those oil and gas resources are exploited, they provide vital revenue to the Chancellor, but if they remain under the sea, that revenue is forgone. Many jobs in my constituency depend on investment in the North sea, as do 240,000 jobs throughout the country. How does the right hon. Gentleman plan in the Budget to encourage greater exploration and appraisal, to ensure that we maximise the benefit that we get from our North sea oil and gas?

Mr. Brown: I agree that the investment incentives in the North sea for all companies have increased as a result of the changes that we made only last year.

10 Dec 2003 : Column 1083

Equally, I think that the hon. Gentleman will applaud the fact that we have made new arrangements with the Norwegian Government so that gas from the Norwegian sector can be properly dealt with in the British sector and create jobs in Britain for the British economy. The hon. Gentleman is right that many fields in the North sea are not fully exploited. New companies must be attracted, perhaps with different technologies, to enable them to release oil resources for Britain's economy and the betterment, through tax revenues, of our society. That is why we propose to provide an incentive towards the costs of exploration for new companies that have not hitherto operated in the North sea, but which either have the technology or are developing it, enabling us to get at difficult reservoirs of oil in the North sea. The hon. Gentleman has a big constituency and economic interest in this issue, so I hope he will welcome the final detailed proposals in the Budget.

Alan Howarth (Newport, East) (Lab): My right hon. Friend fairly drew attention to the striking contrast between the healthy and sustainable growth of the UK economy and the torpor of the eurozone economies. When does he anticipate that the European economic affairs Commissioner will announce his conversion to my right hon. Friend's sensible interpretation of the stability and growth pact, and does he agree that the persistence of slow growth in the eurozone contributes significantly to structural imbalances in the global economy and the associated perils?

Mr. Brown: My right hon. Friend has always taken a big interest in these matters. Once Europe looks at what it needs to do to face up to the challenges of the global economy, not only will the stability and growth pact changes that we have proposed be more acceptable to people but, at the same time, economic reform in Europe will move further and faster. A new social dimension that takes into account the need to get people back to work—there are 14 million unemployed—will also be taken up, and we will not have proposals such as those introduced in the past few months on VAT and corporate tax harmonisation. I therefore agree that we need to do more in a European economic strategy to get growth, and I believe that many of my Finance Minister colleagues in Europe accept that. I believe that when the Irish presidency starts in January further proposals on economic reform will be introduced.

Next Section

IndexHome Page