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I hope that the whole House now agrees not only that regional development agencies are an essential element for achieving balanced regional growth, but that regional policy itself, equipping people and areas to cope with change, will have to be enhanced rather than swept away if we are to achieve high levels of growth in employment in every region of the country. [Interruption.] I see that some Members of the Conservative party have learned nothing from the past few weeks.
Michael Fabricant: The Chancellor will be aware that, over the past four years, the UK's position in the world competition league has dropped from ninth to 19th place. He will also be aware that Motorola, for example, has closed its plant in Scotland while keeping open its plant in Germany. He has just announced a series of new
Mr. Brown: Not only are there 1 million more people in jobs and 170,000 new small businesses, but productivity has been rising this year, last year and the year before and it continues to rise. The question that Conservative Members should address with us is how we can do better. I would like to hear from the hon. Gentleman whether he welcomes our new competition policy proposals, our cut in capital gains tax and other measures that we are introducing?
Dr. Vincent Cable (Twickenham): I welcome the Chancellor's personal interest in encouraging a tougher line against anti-competitive practices, but why has his Department bottled out of its commitment to an early introduction of a regulator--Paycom--to curb the substantial excess profits that the banks earn from their control over the clearing system?
Mr. Brown: We have not bottled out of anything. It was us who set up the Cruickshank review, published its proposals and put the performance of banks in relation to small businesses to the competition authorities. We are now waiting for their response on this matter. I thought that the hon. Gentleman would be standing up to congratulate us on taking action to deal with those abuses, as they will certainly have to be dealt with if we are to have the most competitive economy in the future. The Liberal party should be congratulating us, rather than criticising us for what we have done.
Our measures for opening up enterprise to all are complemented by our measures for opening up employment opportunity to all. Today in Britain, 28.1 million people are in work. That is more than at any time in our history. Long-term unemployment, which stood at 326,000 in the spring of 1997, is now below 100,000--the lowest for 20 years. Youth unemployment, which was once as high as 500,000, is now down to 41,000--the lowest since 1975. The shadow Chancellor might wish to note that in the past four years in his constituency, youth unemployment fell by 79 per cent. and long-term unemployment by 81 per cent. as a result of the new deal.
Because there is more to do, we shall never be complacent. For too long, Britain's communities--such as the one that I represent--were ravaged by long-term unemployment, youth unemployment, the fear of unemployment and the poverty and insecurity caused by unemployment. The first stage of the new deal tackled unemployment among young people. Now we shall tackle unemployment among all four of the worst hit groups: the long-term and young out of work, lone parents and disabled people, all of whom have been denied their right to work for too long.
If only one young person had benefited from the new deal, it would have been justified, but, already, almost 300,000 young people have found work. I hope that there can now be all-party agreement that the Government were right to impose the £5 billion windfall tax, which is still helping to pay for our welfare-to-work programme, and are right about the principle of our approach. An active labour market policy is essential to equip people for the future, and we recognise that, in the modern economy, economic efficiency is bought not at the cost of social justice, but, indeed, by promoting social justice.
We also believe that decent minimum standards advance not only social justice but economic efficiency. Thus, in October the minimum wage, on which we legislated in the previous Parliament, will rise to £4.10 and, next year, to £4.20. That will mean a £17.50 a week rise. Also, last week, my right hon. Friend the Secretary of State for Trade and Industry announced to 140,000 young people that their minimum rate will rise to £3.20, then £3.50 and then £3.60 in 2002.
Following those changes, I can also announce that, in October, the guaranteed minimum income under the working families tax credit for full-time working families with children will be raised to £225 a week. That represents an £11,000 a year guaranteed income for working families with children, which means a negative tax rate of minus 200 per cent. as a result of our new proposals. Again, I hope that all parties will affirm that a working families tax credit, which Ronald Reagan himself said was the best anti-poverty and pro-family policy in America and which has been raised most generously by George Bush in the past few months, is also good for Britain's social justice and Britain's economic success.
The new tax credit Bill, with its targeted tax cuts for work, extends the principle of the working families tax credit to working households without children. Thus, for couples, the employment credit that we are introducing will guarantee for adults working full-time a minimum weekly income of £170, or £8,800 a year. That could not have begun to happen without a second-term Labour Government.
Ms Diane Abbott (Hackney, North and Stoke Newington): Labour Members are delighted and relieved to know that aspects of my right hon. Friend's active labour market policies have the endorsement of Ronald Reagan, but he will be aware that statistics published towards the end of the last Parliament appear to show that the gap between rich and poor had widened under the previous Administration. Can he give the House an undertaking that, by the end of this Parliament, the gap between rich and poor will begin to narrow?
Mr. Brown: Of course, it is as a result of the working families tax credit, the minimum income guarantee for pensioners, raising child benefit and the children's tax credit that low-income families are finding that their income position is being raised. If my hon. Friend talks to
I hope that my hon. Friend will take this from me: in the previous Parliament, Conservative Members were unable to support a policy that had the support of Ronald Reagan and George Bush, which was an amazing commentary on the Conservative party between 1997 and 2001.
In a modern economy, all young people should have the chance to develop their potential to the full, and a party that promises opportunity for all should be prepared to allocate the necessary public spending resources to ensure that every child has the best possible start in life.
Child poverty is a scar on the soul of our country. It was a matter of shame for Britain that, when we came to power in 1997, one child in every three was born poor. Having taken 1 million children out of poverty in our first term--if the Tory party had been in power, they would have remained condemned to poverty--our ambition in what I believe is the best anti-deprivation policy and the best anti-delinquency and anti-crime policy, is to take the next 1 million children out of poverty. Alongside our commitment to public services, that will be a central priority for next year's Budget and spending review. I am pleased to tell the House that in the Queen's Speech we were able to move closer to achieving that ambition.