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The Parliamentary Under-Secretary of State for the Home Department (Andy Burnham): The inappropriate use of mini bikes is a growing problem and incidents that disturb local residents, damage the environment and put the safety of the public at risk are becoming more frequent. A range of powers can be used to deal with the illegal use of those vehicles. The most commonly used legal power is under section 59 of the Police Reform Act 2002, which allows a constable in uniform to stop and seize vehicles, following further nuisance after giving an initial warning.
Ministers have come to the House on previous occasions to tell us about the full range of powers that the police have and on which I offer my congratulations. However, the rumour in the west midlands is that a 14-year-old "asboid" on a mini bike is difficult and dangerous to catch and that the police have been told not to chase them, lest the charming "asboid" or, indeed, the policeman should be injured. What advice can the Home Office offer the police, because if we cannot catch those involved, we cannot confiscate their mini bikes or do anything about the problem?
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Andy Burnham: I fully appreciate the seriousness of the issue, because a 13-year-old boy who was riding a mini motor bike on the street died in my constituency in the summer. I sympathise with my hon. Friend and know that problems have occurred in the Brook Vale park and Witton lakes area of his constituency, although I understand that four vehicles were recently seized. I am sure that his chief constable will have heard his remarks today. I know that West Midlands police has the power, which is under trial, to issue fixed penalty notices to those who are causing harassment, and I hope that it will use that power, too.
Mr. Philip Hollobone (Kettering) (Con): Is the Minister aware of the scale of the problem caused by mini bikes in my constituency? What restrictions has he considered on the sale of those vehicles to under-age youths?
Andy Burnham: I am grateful to the hon. Gentleman for bringing the scale of the local problem in his constituency to my attentionas I have said, I, too, have a significant problem in my constituency. We have introduced a significant number of powers, but he is right to draw attention to the role of retailers, and of irresponsible retailers in particular. I know that some well known high street names are selling these vehicles to young people, and I urge them to use their retailing campaigns responsibly.
The Minister for Policing, Security and Community Safety (Hazel Blears): Knives have no place in our schools, on our streets or in our neighbourhoods, which is why we have worked out a package of measures with the Association of Chief Police Officers to strengthen our legislation in that area. We want to tackle the knife culture, especially among young people, and engage with our communities. The Violent Crime Reduction Bill, which is currently before Parliament, will give police and local communities new powers to tackle knife-related violence.
Alison Seabeck: I welcome the Minister's comments. However, I am a little concerned that today's Plymouth Evening Herald has shocking figures showing that there have been 1,000 knife crimes in the past three years in Plymouth, and that between April and August this year there was, on average, one incident involving a Samurai sword each week. The Minister may be interested to know that following a high-profile campaign run by Devon and Cornwall police, that fell to one incident in the 37 days of that campaign. Shopkeepers, too
I am delighted that my hon. Friend and her local police force have been involved in such a successful campaign in the Plymouth area. I can tell her that there is a range of measures in the Violent Crime
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Reduction Bill, including not selling knives to under-18s, ensuring that we can search for knives in pubs and clubs, and giving schools the power to search for knives. I can also tell her that we are working with police forces on whether we can have a general knife amnesty in the
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early part of next year. I believe that that will be a huge success in terms of people handing in knives. I am also looking seriously at adding Samurai swords to the list of offensive weapons because of the damage that they cause.
The Chancellor of the Exchequer (Mr. Gordon Brown): Having taken the long-term decisions to achieve and sustain low inflation and stability, the task of this pre-Budget report is to meet and master global economic challenges and to make the critical decisions to secure Britain's long-term economic future. The theme of this report is that by combining our enterprise with investments in skills and science, in infrastructure and in housing, at every point matching investment with reform, Britain can lead in the world's most wealth-generating and dynamic sectorsin science and modern manufacturing, in finance and capital markets, and in education and the creative industries. With fiscal discipline, and by matching investment with reform in welfare and in public services, we can combine a strong economy with opportunity and security for all.
The past year has seen a virtual doubling of global oil and commodity prices. In the United States, inflation has risen to 4.3 per cent. In the euro area, inflation forced a rise last Thursday in interest rates. Across Europe and America, almost a million manufacturing jobs have been transferred to Asia, and a quarter of a million service jobs have been outsourced to that continent.
While all countries have faced global inflationary pressures, the British economy has also had to deal with domestic inflationary pressures to achieve what we and the Bank of England identified early last year as the necessary slowing of house prices and of consumer spending, which some in this House predicted would return Britain to the old familiar stop-go cycle of overheating, inflation and recession, and which, under previous monetary and fiscal regimes, did so time and time again.
In the past eight years, our new monetary framework has been tested: in 1997 when domestic inflation had to be curbed; and then in 1998 and 2001 when we had two global crises, the first starting in Asia, and the second the IT crash, the US downturn and of course falling stock markets around the world. Now, in 2005, tested by both domestic and global pressures, we are on course to meet our inflation target of 2 per cent. House prices, which were rising at 15 per cent. each year for three years, and at their peak rose by 25 per cent., have moderated to 3 per cent.
This is in stark contrast to previous decades when our economy faced simultaneous domestic and global inflationary pressures, in 1990, when inflation went above 10 per cent., in 1980 to over 20 per cent., and in 1975 to over 27 per cent.; when in the past a cycle of overheating and inflation could only be brought back under control by mortgage rates above 10 per cent., recession and unemployment.
Now today, when, more than ever, stability and low inflation are the essential foundation for investment and job creation for our future, Britain ends this year with inflation lower than America, the euro area and the European Union. We are on course to meet our inflation target not just this year but next year and the year after that.
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The average inflation in Britain from 1970 to 1997 was 8 per cent., with inflation often going above 20 per cent. Our stability since then is such that, in the past seven years, inflation has been at or around 2 per cent. [Interruption.]
Mr. Brown: As Chancellor, I have always understood that the strength of a monetary and fiscal regime is how it performs not only in good years but in this, the toughest and most challenging year for the economy. It has been a tough year, but by facing up to global and domestic inflationary pressures, inflation is notas it was in the pastabove 10 per cent. but 2 per cent. Interest rates are not above 10 per cent. but below 5 per cent. Unemployment is not, as it was in the past, at record highs but at record lows.
The economy is not in recession; growth, even in this toughest year, is at 1.75 per cent. This is the 34th quarter of continued growth under a Labour Government. We are the first Government of any party to achieve eight years of uninterrupted growth since 1805.
For the fifth successive year, British growth is higher than that of France, Germany, Italy, the euro area and the European Union. British business investment is already rising this year by 3 per cent. and is expected to increase next year by 3 to 3.5 per cent. and in 2007 by 4.5 to 5.25 per cent.As production grows, we expect exports to rise by more than 5 per cent. next year and the year after.
Globally, there are continuing risks from trade imbalances, exchange rate movements and commodity price shocks. Domestically, monetary policy will continue to monitor closely the housing market and consumer spending. Domestic demand is projected to grow at the same rate of the economy. Overall growth is projected in 2006 at 2 to 2.5 per cent. and in 2007 and 2008 by 2.75 to 3.25 per cent.
Some people said that, as we moderated the housing market and responded to the oil shock, employment in this country would fall. Some predicted that we would end this year with fewer people in work. In fact, I can report to the House that, in just 12 months, employment in this country has risen by 330,000 to 28.8 millionthe highest in this country's history. It is higher in every region and nation of the country.
This year, the economy has been generating 6,000 new jobs every week and 3,500 new companies are being formed every week. Indeed, of the extra jobs since 1997, almost 1 million have been generated by small businesses alone.
By tackling youth and long-term unemployment, the new deal has helped ensure that, while unemployment in America is higher than oursand in France and Germany, it is much higher, at nearly 10 per cent.in Britain, unemployment is lower than 5 per cent.
We know that continuing that record of high employment with low inflation demands continued wage responsibility in all sectors. So the Secretary of State for Health is submitting evidence to the pay review body that the headline rise in national health service pay should be based on our 2 per cent. inflation target, and
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the Secretary of State for Education and Skills is announcing that, even after taking account of the normal annual increments and performance pay, the total increase in the education pay bill will be just 2.8 per cent. These are both signals of our determination to keep public pay costs under control and to contribute to continued low inflation in this country.
On this foundation of stability, our task is to match investment with reform in science and skills, infrastructure and housing, and to show that working in partnership with the private sector, we can best meet the challenge of globalisation. Although we have already doubled investment in science, global competition requires us continuously to update our 10-year framework. With, this week, a new public private partnership, supported by £50 million of new public investment, Britain is determined to lead the world in the new frontier of genetics and stem cell research. With the establishment of a new national institute for health research in the NHS, pharmaceutical and biomedical companies have just announced a new £500 million a year investment in Britain, making Britain the leading location for research in new drugs and treatments.
To support research and development across modern manufacturing, I am publishing today reforms to help access the research and development tax credit. The design of new products and services is now such an important sector that we propose a network of creativity and innovation centresone in each regionoffering start-up help to new design talent and supported by an expanded national centre in London to showcase British design. Because we have learned in the past that the neglect of investment in science held our economy back, we are determined to make the necessary long-term investment, with Government and private sectors working together to make us fully equipped for the global challenges ahead.
The same is true in skills and education. The successful economies of the global era will be the high-skill economies. Published today is the interim report of Lord Leitch, the first long-term assessment of Britain's skills needs. Since 1997, we have more than doubled investment in education, and the Leitch report finds that the number of adults with skills has risen from 79 per cent. to 86 per cent. But workers will, on average, change their job seven times during their working life, and the vast majority of today's workers will need to train or retrain for tomorrow's skills. The final Leitch proposals will come next year, but to step up the pace of change now, the national employer training programme, which offers free training for employees and help for all small firms with their costs, will be expanded nationwide from next summer to provide training in 50,000 companies for 300,000 new employees a year.
Some people seek to abolish the new deal, but, more than ever, a Britain equipped for the global economy needs a new deal that continuously equips people for jobs and skills. So this Government will not abolish the new deal; we will strengthen it. In eight areas of the country, teenagers who have too often fallen through the net and are receiving no training will be offered learning agreements: a training wage in return for gaining skills. No teenager in our country should be
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denied the opportunity to acquire the skills and employment that they need. With opportunities come responsibilities. The new deal pilots to help lone parents back to work will be extended to new areas of the country. From April, for men and women unemployed for six months or over, we will pilot personal action plans that involve compulsory interviews and intensive work plans.
Our third economic challenge is to make more affordable housing available for the rising number of families seeking homes. In the last eight years, low inflation and low interest rates have given homebuyers the lowest mortgage rates for 40 years. There are 1 million more homeowners now than in 1997. But to build more affordable homes of high quality in strong communities, Britain mustas the Barker report recommendedput in place long-term reforms in planning, land use, the competitiveness of the construction industry, and infrastructure in both the private and social sectors across the country.
The Deputy Prime Minister is today responding to the joint representations of the CBI, the Town and Country Planning Association, and Shelter. He is publishing new planning guidelines that will bridge the gap between the 150,000 new houses that we build each year and the 190,000 new households that are formed, in particular to help to build houses that young couples can afford. To provide land for new houses while protecting and improving the environment, he is asking local authorities to bring forward more brownfield areas for development. Where proposed new housing is of high quality, meeting the design code, local authorities will be obliged to accelerate planning consent. The construction industry must also rise to the challenge, particularly of investing in skills. To widen the number of investors in the residential and commercial property markets, we will this month publish legislation to set up in Britain real estate investment trusts to increase the funding for new property developments.
Because our aim is to build not just homes but communities, and to fund the new roads, schools, hospitals and infrastructure that convert estates into genuine communities, building on the recommendation of Kate Barker, we are today publishing for consultation proposals for a local planning gain supplement, which will give local authorities a fair share of planning gains to invest locally. Investment in social housing has almost doubled since 1997 but will have to rise further. We are announcing pilot projects today to encourage local authorities to bring derelict sites back into use and to build new housing for rent.
We know that shared equity has an increasing role to play in helping young couples in all our constituencies to get on the first rung of the housing ladder, and I can tell the House how we plan to extend equity share schemes. I can announce that three of the biggest building societies and banks have joined the Government as partners in shared equity; that building companies, including four of the biggest builders, are also now able to offer shared equity purchases; that we are now in discussion with investment companies on their possible involvement; and that we see a possible role for housing associations in extending shared equity.
Our aim is a new consensus across our country on the extension of home ownership and affordable housingpublic and private sectors working and investing
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together to strengthen the economy, protect the environment and meet the housing needs not just of some but of all in our country.
As part of the figures that I am publishing today, let me confirm that already this year the first £4.7 billion of savings identified by the Gershon review have been achieved, with the Government's target of £3 billion in procurement savings exceeded by £1 billion, one year early. On target, we are also seeing a further 18,500 reduction in civil service posts, including 10,000 from the Department for Work and Pensions and 3,500 from Revenue and Customs. I can also confirm that we are on target with the relocation of a further 2,000 civil service posts out of London. Ahead of schedule, £5.7 billion of assets have been sold, on target to meet our objective of £30 billion of sales by 2010. In the coming year, we will conduct a zero-based asset review.
In addition to the new measures that we have announced to implement our new risk-based approach to regulation, I am proposing at the EU Finance Ministers meeting tomorrow competitiveness tests for all new and existing European regulations. I am closing a relief under which, for tax reasons only, people are being persuaded without changing what they do to set up a company, replacing the £10,000 starting allowance with a rise in the investment allowances for smaller business to 50 per cent.
I have today written to the European Commission asking for a derogation so that over 1 million businesses with turnovers not at the current two thirds of a million but at one and a third million or less will be able to take advantage of more flexible VAT payment options that will suit their business needs.
After consultation with British film makers, I can announce a new film tax credit to support British films. To increase support directly for producers, we can guarantee a credit worth 16 per cent. for large-budget films and at least 20 per cent. for small-budget films.
Anti-avoidance and fraud measures published today, including new requirements for disclosure, will address artificial tax arrangements involving capital gains and losses, trusts and offshore companies, rebated oils and the misuse of self-invested personal pension schemes to purchase second homes.
From reallocations to local councils from Departments, £305 million in 2006 and £508 million in 2007 will be made available to reduce pressures on the council tax. Later this afternoon my hon. Friend the Minister for Local Government will give full details to the House.
I can tell the House that the current budget deficit, which reached a peak of £55 billion in 1993, will fall from £19 billion last year to £10 billion this year and then to £4 billion, and then zero. There will then be a surplus of £7 billion, then £11 billion and then £13 billion in future years, meeting the fiscal rule in this cycle by more than £16 billion, in contrast to the deficit over the last cycle, 198697, of £157 billion.
It is on the basis of this fiscal rule and our second fiscal rule, the sustainable investment rule, that the Government will plan our 2007 spending review, including our response to the long-term reviews on transport, pensions, energy and skills. Our second rule allows us to borrow for essential public investment, as long as there is a sustainable level of debt.
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In 1997, the capital investment being made by this country in schools and colleges was just half a billion pounds a year. Today, we are investing £7 billion a year, and we are on track to renovate 12,000 more primary and secondary schools in our country. In 1997, Britain invested just over £1 billion a year in building and renovating our hospitals. Today the figure is £5 billion and it is rising to £8 billion by 2008. And investment in transport is doubling.
In total, net public investment, which was just £5 billion a year in its overall total in 1997, will this year be £26 billion and next year £29 billion. Even with this record investment, we meet our second rule, which ensures borrowing for investment within sustainable levels of debt. Net debt levels will be 36.5 per cent. this year and in future years 37 and 37 per cent., and then 38, 38 and 38 per cent., at every point lower than today's 44 per cent. in France, 47 per cent. in America, 60 per cent. in Germany and 80 per cent. in Japan. So, our debt levels are lower than those of our major competitors. Even as we borrow not for short-term consumption but for long-term investment, our borrowing levels are lower than that of our competitors. Total net borrowing, which reached £51 billion in 1993, will fall from £37 billion this year to £34 billion, £31 billion and then £26 billion, £23 billion and £22 billion. Cyclically adjusted, our net borrowing this year is just 2.2 per cent. of GDP, and it will fall to 1.6, 1.6 and 1.6 per cent., and then 1.5 and 1.4 per cent. in the years that follow.
Within these figures public investment, which I remind the House was just £5 billion in 1997, will continue to rise to £31 billion in 2007, then £32 billion, £34 billion and finally £35 billion in 2010. That is on average £40 million a year today per parliamentary constituency rising to £55 million a year by 2010, contrasted to just £10 million per constituency in the years before 1997. In just five years, from now until 2010, Britain will see more investment in its social and economic fabric than in the entire 18 years from 1979 to 1997.
Our two fiscal rules enable us to meet the country's priority to invest more not just in schools and hospitals but in transport, housing and, of course, in sport and the Olympics. I have, however, noticed representations that a third fiscal rule should be adopted. It is, each and every year, irrespective of the needs of the economy and the case for investing in public services, to restrict public spending growth to a lower rate than the growth of the economy in order to cut taxes. On closer examination, what has been called sharing the proceeds of growth would mean this year spending at least £12 billion lower and, by next year, £17 billion lower than plans, and I have concluded that this rule, however rebranded, is simply a new gloss on an old proposal advanced before previous Budgets, which would undermine our public services, our infrastructure and our economy.
It is our commitment to investment for the long term that allows us not only to address global economic challenges but to combine prosperity with fairness to all. Within the fiscal figures we can now do more to help families, the elderly and young people, and to meet our obligations on security and defence.
Defending our country is the first duty of Government. In response to the bombings in London in July and to the terrorist threat, it is right to do all that we can to support our police, our armed forces and our
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security and emergency services, whose bravery we commend and on whom we depend each and every day for our security and safety. Since 11 September we have doubled the budget for national security. Today we are making available an additional £135 million for security and counter-terrorism, and we are providing an additional £580 million for the armed forces for Iraq, Afghanistan and other international obligations.
At the end of a year in which we have seen the doubling of aid to Africa, promised at the G8 summit, and of debt relief, multilateral and bilateral, to 100 per cent.which is just the start of what we must do in future yearsthe Secretary of State for International Development, to expedite the critical negotiations on trade, is offering to treble Britain's aid for trade to £100 million. It is unacceptable that the world is insufficiently prepared for natural disasters, so Britain will contribute to an expanded United Nations emergency fund. We will also contribute £50 million to a new IMF shocks facility.
Child tax credit is benefiting 6 million families, with 1.5 million poor children already lifted out of poverty. The mobility of our economy is now such that each year 200,000 men and women who move into new and better jobs see their family incomes rise by more than £10,000. Some have suggested that we should cut back child tax credit. This I refuse to do because, with child benefit, child tax credit is doing more to help families meet the costs of bringing up their children, and helps more families out of poverty, than any single measure from any previous Government.
Although a case has been made for fixed awards based on last year's incomes, to which we will continue to listen, it would be better to have a system that responds flexibly to changes. While requiring earlier notification of changes in circumstances, the Paymaster General is today making a detailed statement that from April next year we will allow annual income changes not of £2,500 but of up to £25,000. That will cover 95 per cent. of all income rises during a year. Where recovery takes place during the year, we will adopt new rules on repayment to address potential hardship.
Our policy is opportunity for all, and it is matched by responsibility expected from all. Today the Treasury and the Department for Education and Skills are jointly publishing plans showing how parents who want to do their best by their children can be given the support that they need, from child care tax credits and maternity pay to support for parenting at Sure Start centres and the increase in mentoring for children in care that we are announcing today.
But what parents often seek is early help, the most effective measure and the best hope we have to keep children out of trouble later. There are a dozen agencies that often duplicate each other's efforts without reaching that troubled child. To inform decisions in our spending review, the Secretary of State for Education and Skills is piloting a new conceptthat of one lead professional, based around the school, using funds brought together in one budget, with the authority to identify problems early and the freedom and capacity to intervene quickly and do what is right before a child's future is blighted.
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The oil shock of this year has led to calls for more efficient use of energy and support for alternative fuels. Today I am enhancing the capital allowances for production of the most environmentally friendly biofuels. That will include help for oil companies to meet the agreed biofuel obligations.
Carbon capture and storage protect the environment from carbon emissions by containing them at source and transporting them to the North sea, where they make it easier to extract remaining oil from mature fields. I can announce a new partnership with the Norwegian Government. Together we will consider the right level of incentives to speed up the adoption of this important new technology. Because the United Kingdom can also become a world leader in clean coal, the Secretary of State for Trade and Industry is today announcing further support for clean coal and all carbon abatement technologies. That is part of our wider energy review.
Because we need to encourage energy efficiency in small and medium-sized businesses, the Secretary of State for Environment, Food and Rural Affairs is today announcing further funding for the Carbon Trust.
So that all import capacity for gas is put to use, Ofgem is announcing today that it will use its powers to intervene where necessary to ensure that importers either "use or lose" their capacity to import. The Secretary of State for Trade and Industry and I have today written to the European Commission supporting Ofgem's call for an urgent investigation to make sure that this winter there are no blockages to the full use of the interconnector with Europe and thus no restriction on imports of gas from Europe.
Our economy has had to withstand an oil price rise from around $25 to a current price of around $55, which is also close to the level of almost all future projections. Returns in the North sea are now nearly 40 per cent. on capital, compared with ordinary returns of 13 per cent. With the tax on new development in the North sea now lower than in the USA, the Gulf of Mexico, Norway, Italy and Australia, and in order to strike the right balance between producers and consumers, I will raise the supplementary North sea charge from 10 per cent. to 20 per cent., while giving new incentives to companies for exploration and development of the most difficult fields by extending the exploration expenditure supplement to all their ring-fenced activity.
I am also now able to freeze petrol and diesel and road fuel gases duties for this full financial year at an Exchequer cost for the full year of £600 million. I am also able to set aside resources, so that the winter fuel paymentthe universal payment tax free to all pensioner householdswill be £200 not just this year, but next year, the year after that and every single year of this Parliament, and it will be £300 for the over-80s, paid every year before Christmas.
In addition to the winter payment, I want to ensure that for pensioner households energy costs are as low as possible while ensuring the most efficient and effective heating system against the winter cold. Insulation and central heating can reduce heating bills for the typical pensioner household by £300 a year. The energy savings are so great that no pensioner household should be without insulation and no pensioner should be without help to install central heating. After many years, it is time to complete that insulation and the installation of central heating where it is possible to do so.
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The Government's warm front programme has so far insulated 1 million homes but there are still 500,000 with no central heating and 2 million without insulation. Separate announcements will be made for Scotland, Wales and Northern Ireland. By setting aside an additional £300 million over the next three years, the Government's warm front programme will not only be able to offer pensioner households on pension credit free installation of central heating, but we will offer all other pensioner households without central heating £300 towards the costs of installing it. We can go further. I am grateful to the energy companies that are matching our offer by announcing this afternoon that they will extend their offer of insulation. There will be free insulation for all pensioner households on pension credit, with, for all other pensioner households, between £125 and £175 paid towards the costs of insulation.
Let me conclude with a set of measures in an area which is not fashionable today, but I believe vital for the long-term future of our country. It is an area where we can make progress only if the Government invest and work together with the voluntary and community organisations that are at the heart of every community in this country. A responsible society requires strict measures to combat vandalism and violence. It also requires that society fulfils its responsibility to encourage what is best in our young people, and we have to do far more where in the past too little has been done, investing in youth and community facilities that are modern, relevant and welcoming for teenagers up and down the country.
Today, I can announce an agreement with the banks and building societies that unclaimed assets held in bank accounts will, once realised, be put to use to improve youth and community facilities throughout Britain. It is right for us as a Government to make a start now. First, the Government are joining with seven of Britain's leading companies to launch the country's first national youth community service. With up to £100 million of initial finance, it will fund gap-year volunteering in Britain and abroad for young people who otherwise could not afford gap years, and it will fund part-time and full-time community service in every constituency. Secondly, because we want the 2012 Olympics and, beyond that, any English bid for the 2018 World cup, to regenerate sport for young people in our country, the Culture Secretary and I are today announcing details of a national sports foundation, modelled on the Football Foundation's successful investment in football facilities. We will invest new money in improving facilities, amenities and participation across all sports in every area of the country.
But as the Youth Green Paper said, more can be done not only to support wider youth services, but to put decisions about the programmes for young people in the hands of young people themselves. So as a first step, we will provide finance for each local authority to set up a young people's fund; for amenities and activities run by young people, and decided on by young people themselves. On average, half a million pounds will be provided for each local authority over the next two years, so that they can strengthen local communities.
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