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Local Land Charges (Fees)
Mr. David Borrow accordingly presented a Bill to make provision in relation to fees payable in connection with local land charges: And the same was read the First time; and ordered to be read a Second time on Friday 23 April, and to be printed [Bill 78].
Orders of the DayWAYS AND MEANS
Order read for resuming adjourned debate on Question [17 March].
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) 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—[Mr. Gordon Brown.]
Budget Resolutions and Economic Situation
12.43 pm
The Secretary of State for Work and Pensions (Mr. Andrew Smith): This is a Budget built on stability that delivers for employment, pensioners, public services and sustained growth for the future. In each area, as I will show, there is the sharpest contrast between our record and prospects for the future and the alternatives put to us by the Opposition. That contrast presents a very clear choice for the country between continued investment and reform in public services and cuts in spending, and between continued economic stability and a return to boom and bust. We relish putting those choices before the country.
On the economy as a whole, we have today the lowest inflation for 30 years, the lowest interest rates for 40 years and more people in employment than ever before. Let us compare that with the situation under the previous Government: 3 million unemployed, double-digit inflation, and interest rates of more than 15 per cent. for over a year. This change in Britain's performance has not come about by accident, but because of the tough economic decisions that we have taken: making the Bank of England independent, sticking to tough fiscal rules and introducing measures such as the sanctions of the new deal. Those decisions have ensured that growth in Britain over the past four years has been higher than that in Japan, Italy and the United States. In 2004, our growth is expected to be double that of France and Germany.
It is right that with such hard-won stability, having accumulated surpluses at the start of the economic cycle, we continue investment and the big job of renewing the country's infrastructure, recognising that it is prudent to borrow to do so, in line with the fiscal rules. Unlike under the Conservative party, which let debt rise to 44 per cent. of gross domestic product, today it stands at
just 33 per cent. Whereas the Conservatives borrowed 8 per cent. of GDP, we have reduced that to just 3.4 per cent.As a result of the tough decisions that we have taken since 1997, we have been able to invest in active labour market policies—investment that is paying off. Employment has risen in every region of the country, and unemployment continues to fall most where previously it was highest. The UK now has one of the strongest labour markets in the world. We have the highest employment and the lowest unemployment of the major industrialised countries. More people are in jobs than ever before. We have tackled the legacy of long-term unemployment—the Tories "price worth paying"—so that long-term youth unemployment has been virtually eradicated.
The new deal is a world-class labour market policy; it has helped more than 1 million people get back to work. The new deal for young people has benefited the economy to the tune of £500 million a year. The shadow Chancellor may laugh at the success of the new deal and the role that it has played in transforming the lives of the young and long-term unemployed people in this country, but he should recognise that an independent study by the National Institute of Economic and Social Research showed that the new deal is saving the economy £500 million a year. The new deal for lone parents is saving the Exchequer £40 million a year. We have a succession of overseas visitors who are keen to emulate the success of the new deal and Jobcentre Plus. The only people who turn their backs on that success are those in the Conservative party.
Rob Marris (Wolverhampton, South-West) (Lab): Is my right hon. Friend aware that the UK's productivity in output per person of working age is higher than that in France and Germany, precisely because of our wonderful employment record?
Mr. Smith: My hon. Friend makes a very good point. Programmes such as the new deal and the benefits of our economic stability not only transform the lives of those who were cut out from opportunity and employment under the Conservative party, but benefit the whole economy in higher output and higher welfare for us all, as he suggests. The Conservatives call all that an expensive failure, but we know what was really the expensive failure: the 3 million unemployed under the Conservative party, whose leader, when he was masterminding employment policy, managed to increase unemployment by more than 1 million. Some 1,300 people were added to the claimant count every day, precisely because he did not invest in policies such as the new deal.
Mr. Alex Salmond (Banff and Buchan) (SNP): The Tory economic record is fairly easy meat, but the Chancellor never talks these days about the balance of payments and the apparent structural balance of payments deficit that the Red Book shows continuing into the future. Does the Secretary of State think that that long-term balance of payments deficit has any implication? Is there any chance that the Government might be blown off course?
Mr. Smith: No, and I will take no lecture on deficits from the Scottish National party. Of course it is
important that we continue to improve productivity, that we continue our infrastructural investment and that we invest in skills through the new deal for skills, as set out in the Budget book, so that we continue to improve our international competitiveness, which will result in improvements in our international trading policy. The hon. Gentleman and others should not talk down this country's success, whether in pharmaceuticals, aerospace, the automotive industry or financial services; nor should they ignore the fact that output in our manufacturing sector has been rising over the past four quarters.
Mr. Kenneth Clarke (Rushcliffe) (Con): The question was about the current account deficit and the balance of trade. I understand the right hon. Gentleman saying that it does not matter, but did not quite catch why he said that it does not matter. It is the largest deficit for 300 years.
Mr. Smith: I did not say that it does not matter. I said that the measures that we have put in place in terms of economic stability, investment in infrastructure and skills, and ensuring that successful sectors thrive is the best way. We take no lectures from the right hon. and learned Gentleman, whose policies were responsible for getting us into the situation to which I have referred.
Mr. Salmond: If that is the case and the measures will bring improvements, why does the Red Book forecast that the balance of trade in goods and services over the next three years will deteriorate?
Mr. Smith: The Red Book forecasts also that imports and exports will rise at the same rate. It should be evident from my remarks that the situation will be better than it would have been had the Government not made the investment and improvements in skills and competitiveness that we have. The situation would be much worse if the cuts in public spending and investment that the Conservative party wants to implement were put into effect.
We will build on the success of our labour market and other policies, not dismantle them. By introducing the new deal for skills, we will equip people in and out of work with the training that they need to progress in the workplace and to lift themselves and their families out of poverty.
Mr. Lindsay Hoyle (Chorley) (Lab): My right hon. Friend will be aware of the new deal's huge success in the north-west, and particularly in my constituency, where unemployment is at its lowest ever level—down to 1.9 per cent. It cannot get any better. Can we ensure that the skills found in traditional industries continue to be honed and that unemployment does not return to the levels of the 1980s?
Mr. Smith: Nobody wants a return to the unemployment of the 1980s and the disastrous policies responsible for it. As a consequence of our policies, and demanding though it may be, we might do even better in my hon. Friend's constituency and get unemployment still lower. His point about traditional industries is well
made. All industries require investment in information technology and skills. It is no longer viable for smokestack industries to operate under outdated practices. Every industry and service must be high tech and Government policies will help my hon. Friend's constituents and others to succeed in competitively challenging world conditions.We want to build on our success and to go further in tackling inactivity. We have made strong progress in helping to improve opportunities for lone parents since 1997; 250,000 have been helped into work thanks to the new deal. The lone parent employment rate is above 50 per cent. for the first time, but we want to do more. The biggest barrier facing parents in returning to work is affordable and trusted child care. The Budget will roll out the extended schools pilots to a further four areas, making better use of school facilities to provide child care in areas of high lone parent unemployment.
From October, we will pilot further ways to help lone parents find and stay in work. In eight areas, lone parents will get an extra £20 a week on top of their normal benefits, to cover the costs of more actively looking for work. When they start a job, we will also offer them £40 a week for the first year of employment in addition to other tax credits—making sure that it pays to look for and get a job.
For persons on incapacity benefits, we will extend the pathways to work approach. From next year, we will bring in extra work-focused interviews for persons who have been on incapacity benefit for longer periods, and a new job preparation payment to help people who are taking steps to get a job. Whereas Conservative Governments trebled the numbers on incapacity benefit, we are taking action and investing to help people who want to get back to work—providing opportunities for those written off in the past.
We have never shirked the tough challenge of modernising public services—challenges presented to us by years of under-investment by the previous Conservative Government. I pay tribute to staff throughout the country, who every day are responsible for the labour market successes that I have described—helping people to find work, getting extra money to pensioners and children, and delivering a valued service to the public.
We are investing £2.2 billion in transforming Jobcentre Plus to make it the best welfare to work service in the world. There are new offices, new information technology and 10,000—17 per cent.—more personal advisers on the front line helping more people into work. That investment and the £2.8 billion being spent on my Department's IT systems are modernising the way that we do business and the service that we provide to our clients.
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