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14 Apr 2003 : Column 703continued
David Burnside (South Antrim): I refer to my declaration in the Register of Members' Interests. I want to comment on the Budget in the context of the past eight years. All I see since 1997 is an annual £8 billion increase in taxation on the British economy, and I see 74 per cent. of it being carried by the private sector and by business, which create the wealth that we spend on the public sector. I see a 1 per cent. increase in national insurance contributions, which will have a serious impact, as Opposition Front Benchers have said. It is a dishonest tax, not a straight tax, and it will hit jobs.
In Northern Ireland, we have lost 11,000 manufacturing jobs since 1998. Only 95,000 remain, which is the lowest figure since 1920. Manufacturing output is falling, and output in computer and related industries has fallen in the past five quarters. The House should consider the fact that manufacturing and the private sector, which are wealth creating, are in recession. National insurance contributions should be directly related to benefits. They should not be used as a tool for increasing taxation.
Like other Members, I surveyed business in my constituencySouth Antrimbefore the election. What were the major concerns? They were increased taxation and more regulation, and not just because business people always say that. More regulation is not some generality, because in Northern Ireland and, to a large extent, nationally, we are getting more and more regulations on environmental content, waste disposal, new maternity and paternity rights, new flexible working as well as single equality legislation. Regulation, regulation, regulationit is a cost and a burden to business.
I welcome the Chancellor's announcement on the relocation to the regions taskforce. I hope that the attractiveness of Northern Ireland, its work force, our education system, wages and capital grants will be considered, and that we benefit in that relocation to the regions.
We should consider the end product of increased taxationdelivery in the NHS and in the education service. When I look at Antrim hospital, I see a need for two new wards and about 40 extra beds because there are waiting lists. I think about my constituent in Ballyclare who recently went twice to the Royal Victoria hospital in Belfast, but came back, not because there were no consultants or nurses to carry out the operation, but because there was no bed.
I consider the state of education and I hear the promises of increased spending. I look at the end product as well as the spending imbalance between primary and secondary education in Northern Ireland, where primary education spending is the lowest in the UK.
David Burnside: I agree with my hon. Friend completely. The delivery of public sector spending is not coming through. The economy can be managed only by the Government and by those who run the public sector, and they are not delivering the money to the end user, who we in business used to call the customer. The customer is not seeing an improvement and a benefit in the product.
I am not a cat person, but I have a cat at home. She is about eight years old and we called her Prudence. She is a yard cat but sometimes some members of my family allow her to come into the house through the back door. I do not. I think that a yard cat should stay in the yard. The cat comes in fast and goes out quite fast. She is lean, mean and cunning. When I see Prudence the Chancellor, I do not see anything lean or mean, although I do see a little cunningness. What I see most of in the Chancellor is more tax and a greater burden on the wealth-creating sector of the economythe sector that funds the health and the education service. The Chancellor is indulging in a little bit of spin in styling himself as Prudence, because Prudence is not slim, lean or competitive. I wish the Chancellor would be more like my cat.
Paul Goggins (Wythenshawe and Sale, East): It is a pleasure to follow the hon. Member for South Antrim (David Burnside), although I do not share entirely some of his criticisms of the Budget. Yes, we have an increase in national insurance contributionsit was announced last year and it will be implemented this month. Yes, additional borrowing is included in the Budget statement, but this borrowing is certainly prudent when compared with the borrowing that took place in the early 1990s. It is well within the rules that my right hon. Friend has already set out. Given the military action in Iraq and the difficult global economic downturn, I think that any fair analyst would say that the Budget is a fair one that was announced at a difficult time.
I shall concentrate on three particular areas. First, there is a skills gap in our economy. It is quite breathtaking that in the United Kingdom, which is the fourth largest economy in the world, one in three adults lacks basic skills or NVQ level 2. It is estimated by some that a third of the productivity gap between the United Kingdom and the United States and some of our leading European partners can be attributed to this skills deficityet we know that high skills represent the future for our economy.
I warmly welcome the announcement of a £130 million extension of employer training pilots. The pilots were announced last year, and about half a dozen are already under way in various locations, including Greater Manchester, which includes my constituency. The pilots mean that employees who lack basic qualifications are paid to receive basic or level 2 training, while employers are provided with a level of
In Manchester, where we started the pilot in September 2002, the target for the first year was to get about 2,200 people on to level 2 training. That target was exceeded after only about eight months. We already have 2,500 people into level 2 training, and 500 employers are involved. This is reinforcing the sense of partnership between training providers, businesses and business links, which is so important. In view of the Chancellor's announcements last Wednesday, we are able to revise those targets. By August 2004, we expect to have 5,000 people engaged in level 2 training, 1,000 in basic skills training and some 660 companies actively engaged in the programme. The programme will increase not only productivity and competitiveness, not least in the north-west, but the prospects and earning potential of the individuals involved. Typically, those with NVQ level 5 can expect to earn three times more in wages than those with no qualification at all.
The measure will sit alongside greater flexibility in the way in which advice and benefits will be delivered, greater access to capital, particularly for small businesses that depend on the knowledge economy, and, I am pleased to say, the review of the minimum wage requirements as they apply to 16 and 17-year-olds. It will extend the legal routes for people who want to come to this country not only to earn but to contribute to the economy. All those measures are welcome.
The child trust fund has not been mentioned in today's debate, but is important. We know that the Government have already done a lot to reduce poverty, to provide greater opportunity through work and to redirect cash to the least well off in society. Many families, as a result of the working tax credit and other measures, will be substantially better off, but tackling poverty is about not just income distribution and redistribution, but building the asset base and the capacity of individuals and the wider community, particularly those people who have been excluded from society and the wider economy.
We are told that there will be a £250 injection of cash into the fund when a child is born. The amount will be £500 where the family is entitled to the full amount of child tax credit. The state will, at certain key points, perhaps at the age of five, 11, 16 or whenever, add to the fund. Family and friends can make additional payments up to a maximum of £1,000 a year.
The Chancellor said on Wednesday that he would announce further details in the summer, but I was pleased that, in a recent survey, 83 per cent. of parents said that they would consider making additional payments into the child trust fund. They thought that it was worth while. I have looked at reports from Virgin Money and PricewaterhouseCoopers. It is interesting that they say that the fund could produce massive benefits for children in the long term. Virgin Money says that if an additional £10 a month were paid during the 18 years of the fund following the initial £500 outlay to a child in a family entitled to full child tax credit, it would be worth more than £5,000 when the young person became 18. PricewaterhouseCoopers has
We all know that wealth is concentrated far too much in the hands of the very rich. Meantime, one in 10 households in our country have no assets whatever. I believe that the child trust fund could begin to change that, promote saving as a good thinga necessary thingfor people, provide something that young people moving into adulthood can draw on, and reinforce personal responsibility.
There is a balance to be struck between personal responsibility and collective responsibility. Perhaps in the 1960s and 1970s, we tended to veer too much towards the collective approach. Certainly in the 1980s and 1990s, we veered far too much towards the individual approach and failed to give people the resources that they needed to find a way through. I believe that the measure will be a significant development in providing opportunity for self-help and self-reliance, which is a good thing and vital to healthy communities.
I want to make one final point about international development, which my right hon. Friend the Secretary of State for Trade and Industry mentioned. It is interesting to note that international development was once barely a footnote in Budget speeches, yet now it is a central feature as we strive