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AMENDMENT OF THE LAW

““Congratulations, Mr. Chancellor, I am pleased to tell you that you have passed your test and can now throw away the L-plates.”” It was a test taken in very difficult conditions, with storm clouds overhead, inconsiderate drivers ahead and traffic lights changing against the Chancellor all the way. To put it another way, this was a Budget drawn up in the very difficult international circumstances, following the collapse of the housing market in America, of a global credit crunch. We have recently heard that America is now probably in recession, so around the world people are downgrading their estimates for growth in their own countries, hoping that the old saying ““When America sneezes, the rest of the world catches a cold”” is no longer true. I hope so, too. This was always going to be a difficult Budget for the Chancellor to be able to use to say something of interest to us. With such limited room for manoeuvre, I was interested to see what his priorities for making change would be. I was pleased to hear at the beginning of his Budget speech that the values guiding his choice of priorities were fairness and opportunity. Those are my values and, I believe, the values of the Labour party. When I made my own Budget representations before today, with those values in mind, I kept my requests to two: would the Chancellor help pensioners in poverty, and children in poverty? I am pleased to see that those priorities emerged today. The increase in the winter fuel allowance for pensioners will help. I hear what people say about the fact that it was announced as a one-off payment, but if people want to join a campaign to get it incorporated into the winter fuel allowance for future years, I would be glad to be at the head of such a campaign, and to seek further increases in the future. This is a Labour Government, and although it is relatively late to do it, they are going to restore the link between increases in pensions and earnings. Again, if people want to join a campaign for that decision to be taken sooner rather than later, I would be pleased to head it. When people called, as I did, for something to be done to reduce the number of children in poverty, we did not quite have the same loud voices in support of our calls as the non-doms, in their corner, did. I am pleased that the Chancellor listened to us, however, and took a decision that will lead to still more children being drawn out of poverty. Back in 1997, we inherited a position where more than 3 million children were in poverty, but through the steps taken so far we have drawn 600,000 of them out of poverty—and the steps announced today will reduce the number still further. The Chancellor was right to focus on helping parents who are in work. Recent research has shown that more than half the children still living in poverty have at least one parent who is in work. It is right to concentrate on raising the national minimum wage, which will happen again in October, it is right to raise the tax credit for children, as the Chancellor announced today, and it will be right next year to raise child benefit by much more than the rate of inflation. I was also pleased to hear that next year, for the first time ever, child benefit will be disregarded in certain circumstances when parents go back to work and claim housing benefit and council tax benefit. All the right decisions have been made there. I want to say a few words about green taxes. I think that The Guardian said yesterday that this was set to be the greenest Labour Budget yet. I have to say that I think not. Nevertheless, I believe that the Chancellor was right to postpone this year’s increase in fuel duty. If one of the reasons for putting that duty up is to try to change motorists’ behaviour, encouraging them to use their vehicles less, I would have thought that massive increases in the world price of oil are doing exactly the same job for us. While the price is so high, I think the Chancellor is right to wait. The Chancellor briefly mentioned the climate change levy, which is going up only in line with inflation this year. The levy has, however, been a staggering success over the 10 years of the Labour Government. By 2010, something like 20 million tonnes of carbon dioxide will have been taken out of the atmosphere because of that levy, and about a third of it through voluntary agreements with intensive energy users. That is a great success. Following on from last year’s announcement about having zero carbon domestic properties by 2016, I hope that today’s additional target for building zero carbon non-domestic properties will make a real difference to future house and property building. We must not forget that, as the Chancellor reminded us today, the Government provide immense support for making existing homes more energy efficient, helping people to cut the cost of heating their homes. Warm Front and the predecessor of CERT—the carbon emissions reduction target, which used to be the energy efficiency commitment—have already supported work done on more than 2 million homes. CERT alone is estimated as likely to be supporting work on nearly 3 million more homes over the next three years. The Chancellor reminded us of the historic step that will be taken next year, when alongside the economic Budget will be a carbon budget. For the first time, we will count the tonnes of carbon just as we count the pounds sterling in a Budget statement. The Chancellor also announced that in future we would auction 100 per cent. of the emissions trading scheme allowances for producers of electricity. That will bring in huge amounts of extra income, and I think we should establish the principle that it should be spent on environmental works for the future. My hon. Friends the Members for Wolverhampton, North-East (Mr. Purchase) and for Wolverhampton, South-West (Rob Marris) both mentioned manufacturing, which performed very strongly last year. Nearly 3 million people are employed in United Kingdom manufacturing, responsible for more than half our exports and accounting for three quarters of the spending on research and development. In its business trend survey, the Engineering Employers Federation describes what is happening in manufacturing as"““the best conditions for manufacturing in ten years with rising levels of output and new orders… expanding employment levels. Investment levels… the strongest since 1995.””" In its Budget representation, the EEF calls for measures to encourage enterprise and improve"““access of small and growing businesses to finance.””" Both those measures were included in the Chancellor’s announcement today. I hope that in the year ahead we will build on the manufacturing successes of the last 10 years. As manufacturing takes its position centre stage, as house buying and selling slows and as consumer spending becomes more subdued, manufacturing has an opportunity to be at the forefront of our efforts. I think that the current world situation will ensure that it has that opportunity. I wish the Chancellor well in his future career as our Chancellor of the Exchequer, but I also wish UK manufacturing well in its position in the world from now on.