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Finance (No. 2) Bill

I am grateful to my hon. Friend for setting the wider context for the debate in relation to climate change, and for indicating something that the House may already know: not only does the Treasury have responsibility, through provisions in the Finance Bill, for part of the programme addressing such issues, but that responsibility is shared across the Government, principally by my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs and her ministerial colleagues in DEFRA. My hon. Friend is right to point out that only 2 per cent. of carbon emissions are produced in the UK. That was a significant part of the reason why my right hon. Friend the Chancellor made the speech that he gave at the weekend to an international audience, explaining our international responsibilities for dealing with such issues, including protecting our environment from the effects of climate change. I turn to the details of the Bill, and I will talk first about productivity and competitiveness. To raise our game as a nation we must meet the productivity challenge. The logic is simple. With the right long-term decisions Britain can lead in some of the fastest growing and highest value-added sectors—City and business sectors, education and health, creative and science-based industries. As my right hon. Friend pointed out, those once small sectors now cover a third of our economy and exports, and will soon see a much higher share of jobs and wealth. The House will remember the cycle that ended in 1997, and productivity is estimated to have grown at a rate of 2.59 per cent. over the first half of the current economic cycle—higher than the growth of 2.04 per cent. over the previous economic cycle. After decades of being behind, Britain has caught up with Germany in productivity, is ahead of Japan and has halved the gap with France. We must not put that opportunity at risk.