Orders of the Day — Budget Resolutions and Economic Situation

Part of the debate – in the House of Commons at 7:44 pm on 10th March 1999.

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Photo of Stephen Hepburn Stephen Hepburn Labour, Jarrow 7:44 pm, 10th March 1999

I shall concentrate my remarks on the effects of the Budget on the northern region and the constituency that I represent. I shall explain how the Government's actions are continuing to improve the quality of life of the people in my area, by rewarding work and supporting families. However, first, I pay tribute to my right hon. Friend the Chancellor and his team and to the team at the Department of Trade and Industry who have worked since the beginning of this Parliament to bring about that better standard of life for the many and not the few. The many are the people on low incomes and middling incomes—the real wealth creators in this world.

The great thing about the Budget is that it continues that work in a spectacular way, by recognising and rewarding the central aspects of life—families and work—and putting great investment in public services. Families are given more by increasing child benefit to £15; 12,000 families in my constituency benefit from that. That increase plus the new child tax credit mean that families will be hundreds of pounds better off and that the youngsters in those families will have a better start in life.

The £40 billion for public services, such as health and education, was promised some time ago, but the fact that it was widely discussed before the Budget statement should not take off the shine. The importance of public services to the poor, who cannot afford private health services or to send their children to private schools, cannot be stressed too strongly. The modernisation of my local accident and emergency unit will be greatly appreciated; and the £2,000 for every school for books will be gratefully received by hard-pressed teachers and governors. The Budget also delivers a better deal for pensioners by increasing the winter fuel allowance from £20 to £100 which, taken together with the earlier cut in VAT on fuel and the minimum income guarantee, means that more than 16,000 pensioners in my constituency will be hundreds of pounds better off.

It is significant that the Budget rewards work by building on the new deal, which has already had an impact in Jarrow where it has halved both youth unemployment and long-term unemployment. The minimum wage will make hundreds of people better off, as will the l0p starting rate of income tax and the future cut in the basic rate from 23p to 22p. Taken together, all those measures mean that there will be more money for people to spend in the area. Individuals and families will be better off, with the result that the local economy will receive the boost it needs. The stronger the local economy, the more jobs are provided for local people.

We in the northern region, in the Jarrow constituency and on the Tyne, still rely to a great extent on engineering. We welcome the service industries, which have created valuable jobs, and we welcome the high-tech industries, because they represent the future and we have to look to the future. However, we have to remember that balance is important in any economy, so I pay tribute to the employers and the workers in the north who have survived the bad times—the boom and bust under Tory rule.

It is a disgrace that the average age of a skilled worker on the Tyne is now 50. It is more important than ever that Tyneside and Swan Hunter get the Ministry of Defence work for which tenders are currently being submitted. If the £130 million tender for Royal Navy supply ships is accepted, work will be provided for hundreds of skilled men for many years to come. Perhaps more important are the opportunities that that will create for youngsters to learn skills and carry on the good work that made Tyneside great.

In my area, small businesses were set up as the larger firms closed down. Redundant workers used their skill and determination to provide a living, not only for themselves and their families, but for their work colleagues, whom they took along when they set up the business. Although many have gone to the wall over the years because of problems in the economy, some have survived. They have told me that they welcome the new climate of economic stability; they welcome the new deal, which has given them opportunities to employ people who they might not have employed in the past; and they welcome the cut in the small business tax rate to l0p.

With mortgage rates at a 35-year low, tax incentives to work and massive investment in public services— £40 million has been identified—people in the south of England must be asking why they did not listen before to those in the north and cast their vote for the Labour party. I am pleased that the good people of the south have now listened to those in the north and cast their vote with sense. I know that the Labour Government will not let them down: they are providing jobs and a good standard of living for all the people of this country.