PBR (3): Chancellor's speech (part three)

The final part of the Chancellor's Pre Budget Report.

The Chancellor said:

Some have suggested we should cut back the child tax credit. This I refuse to do because, with child benefit, the child credit is doing more to help families meet the costs of bringing up their children and helps more families out of poverty than any other single measure.

While a case has been made for fixed awards based on last year's incomes, to which we continue to listen, it would be better to have a system that flexibly responds to changes.

So while requiring earlier notification of changes in circumstances, the Paymaster General is making a detailed statement today that, from

April next year, we allow annual income changes, not of £2,500, but of up to £25,000 - covering 95 per cent of all income rises during a year. And where recovery does take place during the year, we will adopt new rules on repayment to address potential hardship.

Our policy is opportunity for all matched by responsibility from all.

Today the Department of Education and the Treasury are publishing plans showing how parents who want to do the best by their children can be given the support 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.

What parents often seek is early help - the most effective measure and the best hope we have to keep children out of trouble.

Instead of the dozen agencies that often duplicate each others'

efforts without reaching the troubled child, to inform decisions in our spending review, the Secretary for Education will pilot a new concept - one lead professional, based around the school, using funds brought together in one budget and 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.

Mr Speaker

The oil shock of this year has led to calls for more efficient use of energy and support for alternative fuels.

I am enhancing the capital allowances for production of the most environmentally friendly biofuels including to help oil companies meet their agreed biofuel obligations.

Carbon capture and storage protects 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 new technology.

Because the UK can also become a world leader in clean coal, the

Secretary for Industry is announcing today further support for clean coal and all carbon abatement technologies, as part of our wider energy review.

And because we need to encourage energy efficiency in small and medium sized firms, the Environment Secretary is announcing further funding for the Carbon Trust.

So that all import capacity for gas is put to use, Ofgem have announced today they will use their powers to intervene where necessary to ensure that importers either "use or lose" their capacity to import. And the Trade Secretary 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 on capital of 13 per cent.

With the tax on new development in the North Sea now lower than in the USA and 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 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 payment

- the universal payment tax free to all pensioner households - will be

£200 not just this year, but next year, the year after and every single year of this Parliament - and it will be £300 for the over eighties, 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 systems 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.

And after many years it is time to complete the insulation and installation of central heating for their homes.

The Government's Warm Front programme has so far insulated 1 million homes.

But there are still half a million that have 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 also offer all other pensioner households without central heating £300 towards the costs of installing it.

And we can go further.

And I am grateful to the energy companies who are matching our offer by announcing this afternoon that they will extend their offer of insulation: free insulation for all pensioner households on pension credit, and for all other pensioner households between £125 and

£175 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, an area where we can only make progress if Government invests and works together with the voluntary and community organisations which are at the heart of every community.

Mr Speaker, a responsible society requires strict measures to combat vandalism and violence.

It also requires that society fulfils its responsibilities to encourage what is best in 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.

And it is right for us as a Government to make a start now.

First, the Government is 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 years volunteering in Britain and abroad for young people who could otherwise not afford this - and fund part time and full time community service in every constituency.

Second, 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 announcing today details of a National Sports Foundation, which, modelled on the Football

Foundation's successful investment in football facilities, will invest new money in improving facilities and amenities and participation across all sports in every area of our country.

But as the youth Green Paper has 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;

decided by young people themselves;

on average half a million pounds for each local authority over the next two years to strengthen local communities.

Mr Speaker

Stability the foundation

More investment not less

Responsibility from all

Opportunity for all and not just the few

And I commend this Report to the House