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Mrs. Louise Ellman (Liverpool, Riverside) (Lab/Co-op): I welcome the Chancellor's new announcements about additional support for science in the north, although I am disappointed that at this first stage Liverpool has not been designated as a science city. Can the Chancellor assure me that the high-level scientific research at Liverpool university will be supported, including its joint projects with the Daresbury laboratory?
Mr. Brown: I am grateful to my hon. Friend, who takes a huge interest in the economy of Liverpool and has been promoting several initiatives to make it stronger. I believe that Liverpool university is now the biggest single employer in Liverpool; that shows its importance to the city and its future. Liverpool is the culture city of the future and may over time become a science city as well. I am very happy to meet my hon. Friend and her colleagues to discuss what we can do to promote economic development in Liverpool in that way.
Mr. David Heathcoat-Amory (Wells) (Con): As always, the figures that the Chancellor did not talk about tell the real story about the risks to the economy. Since he has persistently underestimated the size of Government borrowing, and since tax receipts this year are coming in very much lower than his estimates at the time of the Budget, can he tell whether that is because of forecasting errors by his Department, or political interference in those estimates? Either way, will he subject to independent audit the definition of his so-called golden rule, and the reasons for those very serious forecasting errors?
Mr. Brown: That is a bit rich, given that the right hon. Gentleman was a Minister in the Conservative Government. We have opened up the auditing of public spending and revenue assumptions far more widely than they were ever prepared to do, and called in the National Audit Office to help us, which the Conservatives never did. He tells us that we must do more in this regard, yet he was not prepared to do anything.
As for the position on revenues, the right hon. Gentleman will see in the published documents that, because of rising employment and growth in the economy, revenues from income tax and VAT have risen, and that in key areas revenues from corporation tax have risen according to forecast. We will have to consider other areas over the next few months. He will also find that, although the former shadow Chief Secretary said yesterday that the borrowing figures would be around £40 billion, if I remember him rightly, in fact they are below £35 billion, at £34 billion. The shadow Secretary of State for Work and Pensions said at the Dispatch Box yesterday that the borrowing figures would be deteriorating, but they are improving every year.
Mr. Michael Connarty (Falkirk, East) (Lab):
I congratulate the Chancellor on his firm stewardship and enlightened redistributive policies. I also echo his comments about the Scottish National party's continuing pessimism on the Scottish economy, given that I am sure that the hon. Member for Banff and Buchan (Mr. Salmond) shares with me the lowest unemployment in his constituency for 25 years.
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One of the problems in business start-up and development is that there is still a lack of free risk capital available to small companies. In my constituency, £50,000 has been applied for to develop an e-commerce project, and some nanotechnology projects require £3 million or £4 million. The trouble is that more money is spent on advice and bureaucrats than on freeing up risk capital for such enterprises. What might the Chancellor do to free up some of that capital for ventures that are of long-term benefit to the economy?
Mr. Brown: As my hon. Friend knows, regional venture capital funds have been set up throughout the United Kingdom. They are designed to encourage the provision of capital for new and dynamic businesses that are being created. That is a start, but there is a great deal more to do, because venture capital was previously aimed at support for management buy-outs rather than new ventures. I shall be happy to meet my hon. Friend to talk about the development of such industry in Scotlandand as for SNP Members, I think that the unemployment they are most worried about is the loss of their seats at the general election.
Mr. Michael Fallon (Sevenoaks) (Con): Will the Chancellor remind taxpayers that last time he talked about sustainable growth before the election, they were hit by an increase in national insurance contributions after the election? Will he come clean with the country and admit that all this borrowing and extra spending means that sooner or later taxes will have to go up?
Mr. Brown: Again, the hon. Gentleman, who sits on the Treasury Committee, has been predicting gloom and doom year in, year out since 1997. Does he not accept that cutting debt interest payments and unemployment, together with the high growth that has been sustained in the economy and high levels of employment, have enabled us to meet our fiscal rules and to provide the public finance necessary to deliver a high level of public services? The hon. Gentleman should be most worried about his shadow Chancellor's proposal to cut £35 billion from public spending.
Mr. Tony McWalter (Hemel Hempstead) (Lab/Co-op): My right hon. Friend knows that the Secretary of State for Work and Pensions has a genuine problem because of the 60,000 people who lost out through the idiotic Pensions Act 1995, and that £400 million has been allocated over 20 years to deal with that. Will he confirm that he has the flexibility to act if more than 60,000 people have lost out through that poor legislation? If the average loss is greater than £3,000, does he have the scope to effect appropriate compensation for those people?
It is indeed a scandal that people who lost their jobs lost their pensions at the same time. We are the first Government to take action to deal with the problems of thousands of pensioners who, as my hon. Friend rightly said, were deprived of what they had saved, and lost both jobs and pensions. As he also said, the sum set aside is £400 million. He asked whether we would review the figure. We have committed ourselves
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to doing that: after two or three years, we will review the arrangements. I assure my hon. Friend that the review will take place.
Mr. Michael Jack (Fylde) (Con): The Chancellor will be aware of the growing sense of insecurity in many families because they know that their endowment policies will not produce enough money to repay their mortgage, or that their money purchase pension will not give them the standard of living that they expected. The only announcement on long-term savings in the Chancellor's statement referred to individual savings accounts, which are not popular. Will he review the tax treatment of endowments and money purchase pensions to ascertain whether there is a way of leaving more of the investor's money in those funds, to work harder for the needs of those who want to save and thus meet their long-term objectives?
Mr. Brown: I would take the former Treasury Minister more seriously if he had not suggested that ISAs were a failure through unpopularity. More than 16 million people have an ISA. Surely all the protestations of doom and gloom that the Conservative party made when ISAs were introduced have been proved wrong. One in five people on low incomes, instead of one in seven, have ISAs. Twice as many young people under 25 have ISAs as had TESSAs and PEPs. The right hon. Gentleman should welcome, not belittle, the success of the ISA scheme. Of course I shall examine his comments on other matters, but he should know that the Turner commission is considering the future of pensions.
Chris McCafferty (Calder Valley) (Lab):
On behalf of my constituents, I warmly congratulate my right hon. Friend on his investment in families, especially the extension in child care, the coming extension in paid maternity leave and, of course, the extra money for child care. I invite him to see for himself evidence of his investment in our future, and ask him to visit the brand-new children's centre in Elland in my constituency, which is due to open in January, and
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witness the best practice of the local Sure Start initiative. That has already made a considerable difference to local people.
Mr. Brown: I take that as an invitation to visit my hon. Friend's constituency, and I shall be happy to do that. By 2010 there will be 3,500 children's centres. I have visited many Sure Start centres. The more that is known about their success, the more people will want to support them. I believe that, over time, we might be able to persuade even our opponents that Sure Start is a good investment. Investment made before the age of five is crucial to determining a child's future, and it is important that the country begins to recognise the value of investments such as that in my hon. Friend's constituency.
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