Orders of the Day — Budget Resolutions and Economic Situation

Part of the debate – in the House of Commons at 5:30 pm on 10th March 1999.

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Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry 5:30 pm, 10th March 1999

I want to make some progress, given the number of hon. Members who wish to speak.

There can be no doubt that the economy of the future will succeed for our people only if it respects the environment. Protecting the environment remains a priority for this Government, and getting the environmental framework right will be good for businesses as they move into the clean technologies of the future. Yesterday's decision to implement the recommendations of Lord Marshall, the former president of the Confederation of British Industry, will make a significant contribution to the improvement of energy efficiency in business, and will also meet the United Kingdom's climate change targets.

Notwithstanding the claims of Conservative Members, the new tax will entail no increase in the burden of tax on business. The revenues will be recycled in full for business, through—among other mechanisms—a cut in national insurance contributions.

We welcome the strides that have already been made by many firms—especially those in more energy-intensive sectors—to improve their energy efficiency. Special consideration will be given to particularly energy-intensive industries. We intend to set significantly lower tax rates for energy-intensive sectors that improve their energy efficiency, and we have asked them directly to submit their proposals. Businesses will also gain from an additional £50 million for schemes to promote energy efficiency and renewable sources of energy.

We need to consider the skills gap. We must ensure that we equip everyone in Britain with the skills that they will need to succeed in the computer-driven world of the future. That is why we will create a national network of 1,000 computer learning centres—one for every community in Britain. That network will have one purpose: to ensure that Britain and our people are equipped for the information age. Inequality in computer learning today will mean inequality in earning power tomorrow. Anyone who is left out of the knowledge revolution will be left behind in the knowledge-driven economy, and that is unacceptable to the present Government.

This Government believe that the best way in which to address inequality and social exclusion is the creation of a more affluent, more successful Britain, providing everyone with opportunities to achieve their full potential—opportunities that accompany the success of British business at home and abroad. Equally, however, the fairer Britain is—the more open it is to the talents of all, whatever their class or background—the more enterprising and prosperous all Britain can be. That is why yesterday's Budget reformed the tax system in favour of work, enterprise and families. It made the tax system fairer by announcing the new l0p rate of income tax, which will be introduced in just a few weeks' time, and a cut in the basic rate of tax from 23 to 22 per cent., which will be introduced in April next year. Those two cuts will increase the rewards of work for all working taxpayers, while targeting the benefits on the low-paid and making work pay.

Our first principle in supporting the family is that the interests of children must be paramount. For the past 30 years, families with children have been the losers in the tax system: their tax burden has risen by nearly 20 per cent. under successive Governments. That is why we are increasing child benefit by 3 per cent. in real terms from April next year. It will be worth £15 a week for the first child, and £10 a week for subsequent children. That will make a real difference to families who are supporting parents and have other responsibilities.

Yesterday's Budget also guaranteed a better deal for all pensioners. It provided a fivefold increase in the winter allowance, from £20 to £100, and took an extra 100,000 pensioners out of tax altogether. It provided for pensions to increase in line with wages rather than prices. It also provided a guaranteed income for pensioner couples of £121 a week, nearly £800 a year more than the amount that obtained when we took office in 1997. On average, pensioner households will be £240 a year better off.

I was particularly interested by the comments of Stella Hague, the mother of the Leader of the Opposition. Commenting on the £80 rise in winter fuel payments for pensioners, Stella Hague, aged 71, said, "It's very nice to have it. The £100 will be very acceptable." Given that the Leader of the Opposition now believes in "kitchen table" politics, perhaps he will get around the kitchen table with his mother, and take some of her advice in regard to the Budget.

Yesterday's Budget is a Budget for enterprise and fairness, a Budget which could be brought about only because of our prudent economic management of the economy. It will ensure a better deal for children and the elderly, a better deal for the hard-working majority and a better deal for Britain's enterprising small businesses and risk takers. It is a Budget for the many, not the few. It is a Budget which is radical and forward looking. It is a Budget for prosperity, fairness and social justice, and I commend it to the House.