Orders of the Day — Finance Bill

Part of the debate – in the House of Commons at 5:46 pm on 30th April 2002.

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Photo of John McFall John McFall Chair, Treasury Committee 5:46 pm, 30th April 2002

Your power, Mr. Deputy Speaker, is clearly greater than mine, as my hon. Friend the Paymaster General turned her back on me as soon as you spoke. However, I heard her question nevertheless.

The CBI has welcomed the R and D tax credit. It certainly wants the measure to be implemented. That is a plus for the consultation that has taken place between Government and industry.

I turn now to the stability and growth pact, and I draw the House's attention to paragraph 33 of the Treasury Committee's report. It states:

"We share the Government's view that the Stability and Growth Pact should be reformed to take account of issues such as the economic cycle, debt sustainability and the accounting for investment expenditure. We urge the Government to work with other Member States to find agreement on the definition and interpretation of the Stability and Growth Pact as soon as possible."

The Committee is making a wide-ranging inquiry into Europe, and I hope in the next few months that we will be able to visit the European Central Bank and speak to Wim Duisenberg and others. However, we will go charged with the belief that the Government's actions with regard to the Monetary Policy Committee and independence for the Bank of England have been good. The Committee urges the Government to begin a dialogue with other countries to find the best solution to such matters.

In conclusion, I am aware that the Government have tried, with this Budget, to build a consensus with regard to the welfare state. It is already clear that families will benefit from some useful measures. I used to be a schoolteacher, and I worked in a number of deprived areas, as they were termed. It warms me to know that child benefit, which in 1997 was worth £11 for the first child, has been raised to £16. Moreover, 5 million out 7 million families will now receive £27.50 for the first child, and poorer families will receive £54.50. That is of immeasurable benefit for families that have been at the margins of society.

I am very pleased, too, about the Government's proposals for pensioners. We must be alive to the fact that we must be generous to pensioners who have got by on small pensions but who have been penalised by the system. The fact that the pensioner credit will be available to between 5 million and 6 million pensioners is a cause for celebration. The average pensioner will be £8 a week better off from October, so many elderly people will be able to stay in their homes longer and look after themselves in a better fashion.

I agree with my right hon. Friend the Chancellor that we should use the tax and benefits system to build a consensus with regard to the welfare state. However, we must remember that nothing can be delivered if sound economic policies and a sound economic platform are not in place. The Government have established those policies and that platform, and I urge that they be maintained.

I am also at one with the Government in their ambition to enhance and promote public services. For too long—for decades—those services have been in disrepair. I want the Government to communicate to the electorate the fact that we have a viable strategy, but they must also make people understand that its implementation will take time. However, if we do not repair the public services, we could lose them all. This Budget hinges on that question. I urge the Government to stand by their fairness agenda for families and pensioners.

It is very important that Britain look outwards, to the EU and the third-world countries, so that we keep abreast of what is happening on the international stage. I shall be back, in another capacity, to urge the Government to do more about global poverty. I welcome my right hon. Friend the Chancellor's admission that we survive in the global economy but that half the people in the world are not engaged in it. We must be outward looking, and ensure that the fairness agenda applies globally, and is not confined by borders.