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22. Mr. David Heath (Somerton and Frome) (LD): What guidance is given to the Crown Prosecution Service on the consideration to be given to requests for extradition by foreign Governments in determining whether to prosecute an individual in the United Kingdom. [201250]

The Solicitor General: The Crown Prosecution Service follows the guidance given in the code for Crown prosecutors when deciding whether to instigate or continue a prosecution. If a request for extradition is received in respect of someone against whom a prosecution is under way, the prosecutor will consider whether the public interest is best served by continuing with the proceedings here or discontinuing proceedings in favour of allowing extradition.

Mr. Heath: Does the Solicitor-General see any problem where there is a grossly unbalanced extradition arrangement such as we currently have with the United States of America, which has not even been ratified by the US Congress but nevertheless binds this country to extradite suspects without prima facie evidence? Is she content that that process might be used in circumstances in which a crime had been committed in Britain or upon British citizens and no prosecution had been undertaken by the CPS, but someone stood trial for it under American jurisdiction?

The Solicitor General: The hon. Gentleman is under a misapprehension. The extradition system is not unbalanced. It is for us to decide how we deal with requests for extradition. We have made those decisions and debated them in this House during proceedings on the Extradition Act 2003. Those who were charged to put into effect that legislation—the staff of the CPS—act wholly independently, they act in the public interest and without reference to policy, let alone foreign policy matters. The hon. Gentleman alleged that extradition could take place without prima facie evidence, but evidence was put before the Bow Street magistrates court in the case in October to which he refers. The district judge decided that there was sufficient evidence to send it to the Home Secretary who will consider extradition.
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Pre-Budget Report

12.31 pm

The Chancellor of the Exchequer (Mr. Gordon Brown): At the core of this pre-Budget report is the belief that the Britain of long-term economic strength will be the Britain that at a time of rapid economic change and uncertainty locks in our economic stability for the long-term; the Britain that, as by 2015 Asia acquires a growing share of low-cost production, resolves to invest in high-value-added, high-technology manufacturing and services, and achieves world leadership in science and technology; and the Britain that, with enterprise and high-skilled jobs now the key to long-term prosperity, takes the tough decisions to achieve American levels of business creation and has, at every level, the best educated and most flexible work force in the world. In other words, it is a Britain of opportunity for all that, with this pre-Budget report's long-term measures to support families, ensures that every child and young person has the best start in life.

I turn first to the measures to entrench stability. In last year's Budget I forecast growth for this year of between 3 and 3½ per cent. When I made our forecast, the Leader of the Opposition said that it was not just wrong but a deliberate misrepresentation of Britain's economic position and that not to meet it would destroy credibility. I can report today to the House that growth this year will be, just as I forecast, above 3 per cent.— 3¼ per cent. In other words, Britain will extend the longest period of uninterrupted growth in the industrial history of our country.

Let me give the House the detailed figures. Even after the doubling of oil prices, inflation this year is 1¼ per cent. In any other decade, a 100 per cent. increase in oil prices, a 50 per cent. increase in industrial materials prices and a 70 per cent. increase in metal prices would have led to British inflation and British instability. But with continued and necessary discipline among wage bargainers in the private and public sector and with the resilience of the monetary and fiscal framework, inflation is expected to be just 1.75 per cent. next year and 2 per cent. in the years to follow.

All policy makers will keep a close eye on continuing risks from global trade imbalances, from exchange rate movements and from an uneven world recovery, but with manufacturing output growing this year and next, British business investment is also expected to rise—this year by 5¾ per cent. and next year by 4 to 4½ per cent.

With the expected moderation of house price inflation now under way and as export and industrial production strengthen, domestic demand, which has been growing by 4 per cent. this year, is expected to grow by 3 to 3½per cent. in 2005; and we expect consumption to grow by 3¼ per cent. this year and by 2¼ to 2¾ per cent. in 2005.

Overall domestic investment we expect to grow next year by 6¾ to 7¼ per cent. We expect exports to rise in line with world trade at more than 6 per cent. and, with inflation—as I have said—below its target, growth overall is projected for 2005 at 3 to 3½ per cent., in line with the average growth of G7 countries.

We will remain vigilant to inflationary pressures, both globally and in Britain; but it is the success of the Bank of England's forward looking approach that is the key
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to sustaining growth with low inflation, just as since 1997 it has maintained both inflation and interest rates at historic low levels. Thepre-Budget report shows that since 1997 interest rates have averaged 5.3 per cent.—half the 10.4 per cent. average from 1979 to 1997. Mortgage rates have averaged 6.1 per cent since 1997, almost half the 11.4 per cent. average from 1979 to 1997.

Since 1997, Britain has 1.2 million additional home owners, and as we take forward the Barker review and the Deputy Prime Minister publishes his five-year housing and sustainable communities strategy, we will also pilot mixed communities in deprived estates and, therefore, provide further support for first-time buyers in our country.

Since 1997, mortgage rates have been lower than in any seven-year period since the 1960s. Interest rates have been lower than in any seven-year period since the early 1960s. Inflation has been lower than in any seven-year period since the 1930s. Employment has been higher than in any seven-year period since records began.

Let me sum up for the benefit of the House.

That is not, Mr. Speaker, exaggerated gloating, but the words of the Leader of the Opposition, speaking to an employers federation only two weeks ago.

The strength of our economy is matched by the strength that comes from the decisions we made after 1997 to cut our national debt. Yesterday, I was able to announce £520 million more for the special reserve for Iraq and our international obligations; and I thank our armed forces for their dedication and their courage. Having since 11 September doubled the budget to 2008 for security at home, I am also releasing today a further £105 million for necessary security measures to counter terrorism, to enhance surveillance at our ports and to improve civil resilience.

The pre-Budget report also sets out detailed savings achieved of £2 billion in procurement, an additional one third of a billion saved in NHS drugs procurement and, on target, the reduction of the first 9,000 civil service posts, as we implement the Gershon principles, a £21 billion efficiency saving that we have achieved while at the same time accepting his recommendation that to go beyond that figure of £21 billion could put the delivery of front-line services at risk.

I can also announce the relocation of 1,230 Ministry of Defence posts from the south-east to Yorkshire; 2,300 Department for Work and Pensions posts to Liverpool, Wrexham and Newcastle; 600 from the Office for National Statistics to Wales; and 220 from the Revenue and Customs to Cardiff, Liverpool, Bournemouth, Truro and Manchester. Those are further steps on the way to a total, by 2010, of 20,000 civil service jobs relocated to our regions.

Sir Michael Lyons is also setting out today departmental guidelines for the disposal by 2010 of £30 billion of public assets. And because there is scope for further rationalisation of public sector spectrum, I have asked Professor Martin Cave to lead an audit of public sector spectrum with the aim of releasing the maximum amount of spectrum to the market.
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Lower debt has meant that debt interest payments each year are £4 billion less than in 1997 and because we have more people in work than other countries—75 per cent. of adults in work in Britain, compared with 71 per cent., in the United States, 69 per cent. in Japan and 65 per cent. in Germany and France—social security bills for unemployment are also down by £4 billion a year since 1997.

Having previously set both the fiscal numbers and the detailed spending plans for the years 2005–08, the public finance projections I have set out today are based on our cautious view of trend growth in the years to 2010 and on public spending rising from £579 billion in 2007–08, to £606 billion in 2008–09 and then to £634 billion in 2009–10.

When, in the Budget, I estimated borrowing for the year to April 2004 at £37.5 billion, some external commentators suggested that that was an underestimate. At the same point in the economic cycle 10 years ago, the equivalent figure was £90 billion, but I can report that our final outturn for the year to April is not £37.5 billion; it is £35 billion. And even after taking into account additional expenditure on defence and security, and other decisions that I will announce today, including on fuel duties and council tax, the cash figures for net borrowing for this year will fall to £34 billion, and in future years, fall further to £33 billion, falling again to £29 billion, then falling to £28 billion, £24 billion and £22 billion.

The deficit in 2004 is 3.9 per cent. of GDP in Germany, 3.7 per cent. in France, 4.4 per cent. in America and 6.5 per cent. in Japan. In Britain, the figure is 2.9 per cent., and in future years, it will fall to 2.7, 2.2, 2 and 1.6 per cent., falling to 1.5 per cent. of GDP. For those who take an interest in these matters, it is well within the Maastricht criteria of the European Union.

Our first fiscal rule is to balance the current budget over the economic cycle. For the years to 2009–10, the current balance is minus £13 billion, minus £7 billion, then plus £1 billion, plus £4 billion, plus £9 billion and plus £12 billion. So we are meeting our first fiscal rule in this economic cycle, and we will meet it in the next economic cycle, too.

Our second rule is our sustainable investment rule—that we should borrow for investment, while keeping debt at a low and sustainable level. Because of the world downturn, debt has now risen to 45 per cent. of national income in France, 48 per cent. in America, 55 per cent. in Germany and 85 per cent. in Japan, but in Britain this year, our debt is 34.3 per cent. of our national income. In future years, it will be 35, 36, 36, 37 and 37 per cent., meeting at every point our rule that debt should be kept below 40 per cent. of national income.

So with our deficits lower than our competitors' and lower than in past decades, and with our debt lower than our competitors' and lower than in past decades, we are meeting both our fiscal rules: in this cycle, our first rule, with a margin of £8 billion and our second rule, with a margin of £59 billion, and we are therefore on course to meet both our rules in this cycle and in the next cycle, too.
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The measures that I now announce for this pre-Budget report are informed by the Treasury's assessment, published today, of long-term global economic challenges to 2015. To succeed in the global economy, Britain should build on our strengths—our stability, our scientific genius and our world-class universities and our global reach—with a concerted national mission to invest long term and establish world leadership in science, education and skills, and enterprise.

To build on our new 10-year science framework and the £2.5 billion investment in science and to make Britain the best place for research and development, we will continue our reforms to re-examine the R and D tax credit for mid-sized science-based firms; to remove tax barriers to the formation of university spin-off companies; and to pilot a matched-funding scheme to help universities to build up their resources through new endowments. To benchmark progress in raising business R and D, we will establish an industry-led science forum chaired by the chief executive of AstraZeneca, Sir Tom McKillop, and as part of their £100 million technology investment programme, the northern regional development agencies are together announcing that they will promote science cities for the north, starting with Manchester, Newcastle and then York.

By 2015, Asia will be responsible for as much as 25 per cent. of world trade, yet, today, only 1 per cent. of British exports go to India and only 1 per cent. of our exports go to China. So having set an objective to build trade links with Asia that match those that we have with America and Europe, we propose that the China-UK financial dialogue now expand its role, with enhanced private sector participation, and that the new UK-India dialogue is also broadened to include private business. And a new Asia taskforce will bring together experts to focus on boosting British exports to, and investment in, Asian countries in the years to come.

In the years to 2015, the greatest number of new jobs will come from a larger number of small businesses, and that is why we must achieve American rates of business creation and success.

For long-term investments, I have already reduced capital gains tax from 40p to 10p. I have cut corporation tax from 33p to 30p and cut small business tax from 23p to 19p. We will legislate for tax relief for the renovation of empty business premises in our 2,000 enterprise areas, and through deregulation and self-certification of business angels we will remove barriers to high net-worth investors, enabling them to invest directly in small businesses. We will align the tax treatment of leasing with other forms of finance. For new and ambitious start-ups and high-growth businesses, we have asked the development agencies to make available in every region tailored coaching and support. Building on the success of Britain's first ever national enterprise week, detailed guidance is being issued for schools on the content of enterprise lessons.

In recent Budgets, we have removed the independent audit requirement on small firms, introduced a simplified VAT flat-rate payment scheme, and I am today publishing the interim report of Philip Hampton on rationalising inspection and enforcement regimes. Having concluded that outside high-risk areas, the regulatory focus should be on advice, not inspection,
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and that data-sharing should avoid duplication of requirements on business, his final report will include recommendations to reform the regulators charged with inspection and enforcement and to reform the penalty regimes.

In parallel, the new executive chairman of the Inland Revenue and Customs and Excise, David Varney, is also today announcing the creation of a small business unit, consulting on the scope for a single tax return that would bring together all taxes, and setting as his long-term objective a single account for payments by business.

I am also announcing further detailed reforms that include deregulation in the financial services industry and common commencement dates from 2005 for all new health and safety, company and consumer legislation. Building on what the Foreign Secretary has already announced, he is setting out new rules guiding implementation of European Union regulations.

In the coming decades, as populations age and the dependency ratio grows, the most successful economies will be those that encourage the maximum number of people of working age into the labour market. Alongside greater local and regional pay flexibility, the Secretary of State for Work and Pensions and I agree that it is time to do more to attract into the work force incapacity benefit recipients with the capacity to work and lone parents who at the moment are not able to work.

By extending our successful in-work credit, 250,000 lone parents throughout our country will be offered a £40 a week—that is £2,000 a year— first-year return-to-work bonus. Incapacity benefit claimants, under the successful pathways to work scheme, will have a £40 a week return-to-work credit allied to rehabilitation help, which has been the most effective way of helping incapacity benefit claimants into work. This will now cover a third of the country, on the road to making this a nationwide offer. We will build on successful experience by also locating employment advisers in GPs' surgeries. We are allocating today £30 million more to expand the numbers who can benefit from the new deal for disabled people.

To make work pay, I am also raising the national minimum income guarantee for a single earner couple with one child to a guaranteed income in work of £258 a week, and a lone parent working part-time with one child on the minimum income guarantee will receive £199 a week, the equivalent in work of £12 an hour.

With unemployment among ethnic minorities still twice that of the rest of the population, and the proportion in work just 59 per cent., I have asked the National Employment Panel, working with the Ethnic Minority Business Forum, to report by Budget time on measures to address what is a waste of potential by encouraging employment, self-employment and the growth of small businesses.

Because of the environmental challenges that all nations confront, our 2005 G8 presidency is going to give priority to climate change. It is the view of this Government that all industrialised nations—from the smallest to the largest—must accept their responsibilities and each must bear its share of the burden in reducing greenhouse gas emissions.
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Oil prices have declined from the peak of $50 a barrel, and today are $42. They are well above the long-run average of $23, and they make promotion of energy efficiency and alternative lower carbon sources of energy far more urgent. For Britain's part, the Secretary of State for Environment, Food and Rural Affairs is going to review the innovative technologies and policies that can deliver that step change in energy efficiency. As a first step, she is announcing today measures to accelerate innovation in energy efficient technologies, with the creation of a development fund of £20 million managed by the Carbon Trust.

It is our policy that, each year, fuel duties should rise at least in line with inflation as we seek to meet our targets for reducing polluting emissions and fund our public services. But this financial year, because of the sustained volatility in the oil market, I propose to match the freeze in car vehicle licence duty with a continuation of the freeze on the main road fuel duties. While we will not set a duty differential this year for sulphur-free fuels, we will go ahead with the 20p per litre lower duty differential for bioethanol on 1 January 2005, matching the equivalent differential for biodiesel. Because of oils fraud and the tax evasion that has resulted from the lower rate of duty for rebated oils, it is not right to delay the planned increase on this duty, but I will set it not at the expected 2.4p per litre but at just 1p a litre.

Further anti-avoidance measures published in detail today include action against avoidance on contrived remuneration arrangements, on financial and international transactions, on VAT and on the abuse of the 1992 film tax legislation.

The limit on the value of overseas purchases from outside the European Union, brought back into this country through customs duty and tax free, has been set by the European Union at £145, excluding alcohol, tobacco and perfume. I have written today to the European Commission and member states stating that this limit was last revised in 1994, is now out of date and that we should now raise it.

With the Commission for Africa reporting next year and with the focus for our G8 presidency on debt relief and development, the Secretary of State for International Development and I have written to G8 Finance Ministers saying that our priorities for 2005 will be to institute the international finance facility; 100 per cent. multilateral debt relief; to develop the development round in trade; and, as the second largest donor in the fight against HIV/AIDS, to maximise efforts to develop an infrastructure for co-ordinating research for a cure for AIDS, increase funding for AIDS research and develop innovative advance purchasing agreements for drugs for both AIDS and malaria—Britain making its G8 presidency count to meet the needs of the developing world.

Also, 2005 is the year of the volunteer. To encourage voluntary work, the Home Secretary and I are ready to take forward the Russell commission's proposals for a national youth volunteering and community service. I will report back in the Budget.

The long-term review of English local government finance under Sir Michael Lyons will report next year, but it is also right to take action where there are immediate pressures this year. In order that English council tax rises will be substantially below last year's
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5.9 per cent., I am able to release the following: an extra £125 million resources for England, alongside £521 million reallocated to local councils from Government Departments and a further one third of a billion reallocated from the reduction in ring-fencing and other obligations—in total £1 billion to reduce pressures on the council tax. The Minister for Local and Regional Government will later this afternoon give full details, including on the position of pensioners.

Since 1997, 1 million pensioners have been lifted out of poverty. Raising the basic state pension by earnings would have provided an average of £5 a week more for the poorest pensioners. But the pension credit and our other measures have ensured that many are over £40 a week better off. I can confirm that, next year and in the spending round, the pension credit will rise faster than inflation—by average earnings—meeting our obligation to take hundreds of thousands of pensioners out of poverty in this country.

To help savers, it is right to extend the tax free advantages for the first £7,000 of savings—£3,000 for the cash component—in individual savings accounts each year. So I am consulting, prior to the Budget, on extending the ISA limit for another five years to 2009. We will proceed from April with the low cost savings and investment products recommended by the Sandler report, and we will now extend our savings gateway—the scheme where the Government match the savings of low-income families—to a wider range of income groups.

Two million families still have no bank account. It costs them more to pay their bills, credit costs more and it makes it harder for them to do many things, including, on some occasions, getting a job. I can announce that the banks and Government have agreed to work together to reduce by half the number of families without bank accounts. To expedite this, we are setting aside £120 million to tackle financial exclusion, including more face-to-face money advice, supporting local citizens advice bureaux, support for not-for-profit lenders and with the possible extension of the community investment tax relief.

Our child trust fund will build savings and wealth for every child in the country. In addition to the £250 and £500 down payments that families will receive early next year, we will now consult on extending the child trust fund so that, at the age of seven, we add to the £250 and £500 with another £250 and another £500 for the poorest child in poverty. I hope that, given the long-term commitment that this proposal involves to invest in every child in our country, every political party in the House will now support the child trust fund.

It is because of sustained growth and, after 1997, the prudent reduction of debt and debt interest payments that we can make extra resources today available to local authorities, we can meet the costs of Iraq and the fight against terrorism, we can freeze fuel duties to deal with the impact of the oil price rise, do more to equip the country for the challenges of the long term and are still able to meet all our fiscal rules, with levels of debt and deficit below all our main competitors.

Within the overall fiscal figures, I am now also able to move forward our long-term agenda for opportunity for all: to make Britain ready to meet the global challenge
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by moving people from low-skilled jobs to high-skilled jobs, with a new programme to improve skills and employment in our country and to ensure opportunity for every child while meeting the demands of modern family life—a 10-year child care strategy for Britain.

Since 1997, with education maintenance allowances, modern apprenticeships and the new deal, our priority has been to ensure that no teenager in the United Kingdom after 16 should be outside employment, training or education. With the Queen's Speech legislation to extend benefits to teenagers staying on in unwaged training as well as in college or school, we are removing from teenagers the remaining financial barriers so that every young person can stay on in education or training after 16 to get the qualifications that they need.

But we know also that 80 per cent. of the 2015 work force have already left school and are in the world of work, and it is their skill levels and their qualifications that will, over the next decade, determine the prosperity of our country. So a policy of opportunity for all must provide opportunity for those who have missed out and who should, in the economic interests of the country, have a second chance.

Today 30 per cent. of employees have very low skills or no skills at all. We have, unfortunately, the highest proportion of unskilled of any major European Union country. The unskilled worker is four times less likely to be offered training in work than the highly qualified. For decades, low skills have been an Achilles heel of Britain as a modern economy and the post-war laissez-faire training system has not, and will not, meet the skills needs of our future.

Learning from successful training policies among our European competitors and building on the 100,000 individual success stories of those given time off for training through what have been called the employer training pilots in Britain—the majority who have benefited from them are women, the majority of them have no prior skills and the vast majority of them successfully attain their qualifications—we are able to announce today their roll-out to the whole country, creating for the first time in Britain a national employer training programme, with employers recognising their responsibilities to offer time off, employees recognising their responsibilities to take up the opportunities and the Government recognising our responsibilities to play a part in funding the training.

Since the Budget, lower spending on unemployment has released resources, which means that, together with additional money reallocated by the Secretary of State for Education and Skills, the funds are now available for every employer to make an offer to every adult employee without skills. In future, every adult who has missed out at school will have the funds and the opportunity to acquire skills, starting with a level 2 qualification equivalent to GCSEs at A to C, through time off, free training provision and the help on offer from employers.

With that national employer training programme, combined with the new deal for skills, the offer is, for every adult without skills, in or out of work, a skills check-up and free training provision to achieve level 2 qualifications. And to extend this offer more widely to the unskilled out of work and on benefit who, up until
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now have been debarred from training by the 16-hour rule, we propose to pilot an additional £10 a week learning allowance.

Britain's future as a productive nation depends on a shared determination, from parents and teachers to management and trades unionists, that the acquisition of skills by all and their continuous upgrading is a shared national purpose. In furtherance of this, the Secretary of State for Education and Skills and I have asked the chairman of the National Employment Panel, Sandy Leitch, to build on today's decisions, report on the long-term skills needs for intermediate and degree level skills in the economy, and work with employers throughout the country to ensure that every employee is offered those new opportunities.

The successful economies and societies of the next 20 years—[Interruption.] They have some rethinking to do. The successful economies and societies of the next 20 years will also invest in the potential of all children. We want to transform the way parents are enabled to balance work and family life. A long-term strategy for children and child care starts from recognising two facts of modern life: that the life chances of children are critically determined by the care, support and education they can receive in the years before five as well as after five; and that while 50 years ago fewer than a third of married women were working, today over two thirds of two-parent families have two earners striving to balance the needs of work and family life. The Government's response to this new reality must start from the enduring principles of the Beveridge report: that the family is the bedrock of society; that nothing should be done to remove from parents their responsibilities to their children; and that it is in the national interest to help parents meet their responsibilities.

As part of the new 10-year framework that we are announcing today, the Government set out and make the choice to allocate funds for new reforms in the coming Parliament. First, parents should be able to stay at home longer when their child is born and have the means to do so; secondly, parents should enjoy more flexibility in the workplace when their child is young; thirdly, parents should be guaranteed more accessible, affordable and safe child care while they are at work; and, fourthly, at all times their children, no matter what their background, should enjoy the highest-quality education and care—a welfare state that is truly family-friendly for the first time in its history.

The first choice that parents want is more choice to stay at home. Building on the extension of maternity leave from 18 to 26 weeks, the increase in maternity pay from £56 a week to more than £100, and the introduction of two weeks' paid paternity leave already in this Parliament, we will for the first time respond to the case made to us for greater choice, and we will make paid maternity leave transferable from mothers to fathers. Parents want more flexibility to be with their children not just in the infant years but as their children grow up, so the Secretary of State for Trade and Industry will consult on extending what has been the successful right to request flexible working, which has already helped 800,000 parents, to parents of older children, again creating more choice and more flexibility for today's parents.
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Secondly, having taken the best educational advice about the learning needs of children, and building on the successful introduction of free nursery education this year for three and four-year-olds, the Secretary of State for Education and Skills and the Minister for Children, Young People and Families will, from April 2007, extend our free nursery education to 15 hours a week, as we move towards our long-term goal of 20 hours of free nursery care for 38 weeks a year for every three and four-year-old child.

Thirdly, improvements in the availability, affordability and quality of pre-school and after-school child care are indeed required to meet the needs of working parents struggling to balance the demands of employment and of family life, so the Secretary of State for Education and Skills is today setting aside additional resources to enable schools to remain open from 8 am to 6 pm and to improve the quality and career prospects of those who undertake child care. It is right that parents make a contribution towards out-of-school child care costs, but it is also right, in the interests of both the economy and parents, that we do more for all parents. From April, employers will be able to offer employees, right up the income range, £50 a week extra for child care free of any tax or national insurance. For those on lower and middle incomes we will raise and extend the child care tax credit. It will cover up to 80 per cent. of child care costs, up to £170 a week for the first child and £300 for two or more children, benefiting families on incomes up to £59,000 a year. For a two-earner household on median earnings of £34,000 with typical child care costs, it will be worth an extra £700 a year.

Our fourth goal is that every child should have the best start in life. There are now 600 Sure Start children's centres, and anyone who has visited them knows that they provide not just children's services but a great focus for community life. By 2008, instead of 600 centres we plan 2,500; and today I can go further and announce that by 2010 in England alone there will be 3,500—one for every community, and on average five children's centres in every constituency in the country. As a result of these announcements there will be another 1 million new child care places by 2010. That is a commitment to children and child care worth in total £600 million more by 2007–08—money that could not be delivered if public spending plans were cut by £35 billion.

I have one further announcement to make for families. So that mothers and fathers can spend more time at home with their young children, I am today allocating £285 million, so that from April 2007 we will extend paid maternity leave. Instead of the four and a half months maximum in 1997, it will rise from six months today to nine months, and we will set a goal of an entire year of paid maternity leave. I can also announce that where the maximum maternity pay and child benefits for mothers at home with their first baby in 1997 was just £2,610 for the first year, it will rise by 2007 to £8,300. Even after inflation that is £5,000 more—the most generous maternity support and support for young children ever in the history of our country.

A society is judged by its generosity to its children and the elderly, who have served the community all their lives. I can also announce that next year, at a cost of an additional £260 million, for those over 70 we will add to the winter fuel payment with an additional
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£50 payment. Pensioners aged over 70 will receive a total of £250, and pensioners over 80 will receive a total of £350.

Stability is the foundation; more investment, not less; now and into the next Parliament; opportunity not just for some but for all and a progressive Britain we can be proud of. I commend this statement to the House.

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