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Amendment of the Law

Part of Budget Resolutions and Economic Situation – in the House of Commons at 6:05 pm on 21st March 2000.

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Photo of James Plaskitt James Plaskitt Labour, Warwick and Leamington 6:05 pm, 21st March 2000

The right hon. Member for Penrith and The Border (Mr. Maclean) said that he would give the Budget a muted reception. I can tell him that it will receive a much more positive reception in schools in Warwick and Leamington, given the extra funding that will come through to them shortly. It will receive a warm welcome from the national health service in my constituency, and by all those who are concerned about the proper funding of the NHS.

The Budget will be welcomed also by working families and low-income families, who have much to gain from the measures that have been announced today. The Budget will be welcomed by all those in my constituency who have found work in the past two and a half years. Unemployment has fallen by 40 per cent. as a result of the Government's measures. The Budget will certainly receive a warm welcome from pensioners in my constituency, who will have several reasons to cheer the measures that have been announced today.

I certainly welcome the Budget because it represents further progress in delivering some of the Government's vital objectives, which brought me into the House. These include tackling child poverty and eventually eradicating it, helping pensioners on low incomes and helping working families to get the best return from the work that they do. We want to boost the vital services of education and health and ultimately deliver full employment. These are the Government's vital social objectives. We have already made dramatic progress towards achieving them, and the Budget takes us much further down that road. That has been possible because we have created a sound base for the economy. That makes possible the mix of tax cuts that are targeted at certain areas and the public investment increases that are similarly targeted at important areas. For the long term, it is essential to maintain all the sound fundamentals that have made such progress possible.

The Budgets and measures that the Government have introduced since taking office have helped the country start to overcome three traditional weaknesses in the UK economy. First, there has been a tendency to move towards inflation as soon as there is a period of growth. Secondly, there has been a tendency to under-invest. Thirdly, there have been problems as a result of low productivity. These three structural and fundamental problems have plagued the economy for decades, and the Government are making more progress in tackling them than any of their predecessors.

Inflation has been held at a low and stable rate for three years. On average throughout this Parliament it has been precisely on the 2.5 per cent. target. There is no precedent for delivering that sort of inflation in modern times.