it will be interesting what the perception is a year from now. we are not going to have the same sort of announcements about the so-called early deliverable that we saw last year. host: 5 more minutes with rebecca adams. robert is a democratic caller calling from saratoga, new york. caller: i had a comment -- first of all, she brought up pre- existing conditions. those would start after a six- month period. one thing that was not mentioned, the medication. they get dropped and the old copays are no longer there, $5, $10, and but now it is a thousand dollars a month. what is going to happen after

six months of pre-existing conditions? who is going to cover the medication? guest: people in the pre- existing condition pool have drug coverage, but you need to be in the program. host: tinsley is in the health- care industry. caller:, actually, dr. tinsley. this is hoping that a lot of us doctors are concerned about. a lot of us doctors can no longer afford to take medicaid. i just did it. i miss my medicaid patients. unfortunately, it is a business. i do not make enough money. i cannot a miner says, staff. -- my nurses, staff. my salary has also been greatly

reduced. we were making $0.19 on the dollar earlier, but i think now we are only making about $0.50. when you are talking about medicine, it is not necessarily medicine, but the cost of insurance has gone up. my premiums have gone through the roof of my salary has not. where is the money? another thing about medicare, four out of five dermatologists here are no longer taking medicare. a lot of my colleagues are on the edge. a lot of other family physicians have got out of medicare practice. you are going to have a shortage of family doctors want to have an increase in the medicare population. they are having a problem finding medicare doctors. as far as filling in gaps with mid levels, they are not physicians.

medicare patients are very sick. i do not know if that is what you would want your grandmother our grandparents to be taken care of by. host: you talked about going under and not being able to afford medicare. moreer: you have to make mone money than you are paying out. currently, we are in the hole. guest: that goes to access problems we are talking about. doctors are concerned. for about 10 years now there has been an animal debate over physician payment rates. there is a formula that pays the medicare rate, that congress routinely comes in and changes, but this formula always calls for cuts. if this payment is not changed, doctors will see cuts of about 30%.

congress often comes in and changes that, but they do not give doctors a big boost. physician payment rates for medicare have not gone up as much as doctors say that they need. host: melbourne, pennsylvania. pete is on the republican line. you are the last phone call. caller: i am an employer, i run a company of about 150 people. in 2014, i understand i will find out if i am subject to fines or not. currently, we contribute $11,000 toward a family of four health insurance. so am i going to have to find out the household income of all of my employees? that is my first question. second, all of these incentives appear to show that i should

drop health care. either i pay relevant thousand dollar premium or a $3,000 fine. i think cbo made a miscalculation assuming employers would not do that. what happens to the total cost of the plan if employers like me, en mass, decide to do that? guest: employers are subject to fines if they have 50 or more employees. if they do not offer coverage starting in 2014, or if the coverage does not match federal torments. there are two different kinds of find that an employer might be subject to. if you are paying an $11,000 premium and your coverage does meet the federal requirements, you should be fine. he would probably not be subject to the fine, but you have to pay attention to the details. in terms of the question about household income, i am wondering if he is referring to the tax

credit. there are tax credits for small business. that is just for small businesses. companies of 25 employees or less. your average income has to be $50,000. host: one last question, a tweet -- guest: we have heard a lot about repealed and replaced, house republicans want to start over. one of the things they talk about frequently is medical malpractice reform. they want to cap liability rewards. they're also interested in allowing insurance to be sold across state lines of they are not subject to mandates. several other things that they have talked about. we do not know exactly what they're going to propose. that will probably pass the house but not go anywhere in the

>> on tomorrow's "washington journal," former u.s. comptroller general david walker has a report on america's fiscal management. then political strategists maria cardona and john feehery and u.s. ambassador to morocco, marc ginsberg. "washington journal" begins at 7:00 a.m. eastern on c-span. coming up on c-span, morocco's foreign minister. foreign policy analysts argue for negotiating a peace treaty with the taliban in afghanistan. and britain's government presents its annual budget. thursday night, a look at education reform with michelle rhe and sacramento mayor and

former nba player kevin johnson. they will discuss academic disparities between american children of different races and districts in country and why they hit the has worsened despite a doublinging of spending over the years. >> we all have to do our part. there are far too many kids that are lang witching in schools that are not doing well 3789 there are also kids that live in nice neighborhoods. >> i concur with him. >> you know, we are in a position right now in this country where if you were to tell me the zip code that a child lives in, and the race of that child, we could with pretty good accuracy tell you what their academic achievement levels are. that's one of the most un-american things that i can possibly imagine.

it is betraying the ideals by which we live as americans. >> watch this event from the university of arkansas thursday night at 8:00 eastern on c-span. >> this weekend on book tv on c-span 2, the "washington post" leads a panel discussion on john hinckley jr.'s failed assassination of president ronald reagan. and afterwards, the mercantile exchange. panels on medicine and science. the vietnam war, the founding fathers. religion and more. to have our scheduled email directly to you, sign up for our booktv alert. >> with the backdrop of political protests breaking out around the arab world, they have proposed constitutional changes

to grant parliament more power. morocco's foreign minister is in washington for meetings with secretary of state clinton. he talked about arab politics at the brook haven reform for an hour and 10 minutes. >> good morning, ladies and gentlemen, welcome to brookings. i'm martin indyk, the director of the foreign policy program at brookings and on behalf of that program and especially the saban center, director ken pollack is here in the front row this morning, we're delighted to bring you another statesmen's forum, this time to host the minister of foreign affairs in cooperation of the kingdom of morocco, taieb fassi fihri. it's a special pleasure for me.

the minister has been a good friend personally and a good friend of the united states for many years and i've long wanted to have the opportunity to host him here and am delighted that he's agreed to do so. the minister has a distinguished career in diplomacy, but it didn't start out that way. he was a professor of microeconomics at the university of paris, then became a research fellow at the french institute of international relations, ifri, before he joined the planning directorate in the ministry of planning of the kingdom of morocco. from 1986 to 1989 he served as the head of division in charge of relations with the european

community at the foreign ministry and then was nominate das secretary of state for foreign affairs and cooperation in 1993 by the late king hassan ii. he served in successive governments and then his majesty king mohammed vi appointed him to the position of minister of foreign affairs and cooperation. as some of you may know, king hassan made a king's speech a couple of weeks ago. it did not get a lot of attention here. but king mohammed announced sweeping reforms -- political reforms. reforms pointine have frica

today an amazing set of phenomena. on the one side muammar gaddafi using brutal force to suppress the aspirations of the libyan people. on the other side we have chew needsa where a revolution has taken place and long-time leader has been overthrown in three days and left the country. a process of transition to democracy now under way. then we have what ken was calling the third way. the way that king muhammad ii has announced for morocco. and it's that way that i have asked the foreign minister to explain to us this morning. so, ladies and gentlemen, please

join me in welcoming taieb fassi fihri. >> ladies and gentlemen, thank you, thank you very much, martin, for this introduction. but maybe you have to add that my english is still today, but i will try, i will try to say some -- to express observations about what happened in our area. we can first have some conlution and -- conclusion and i think the first conclusion is that there is no arab exceptions for

the universal principles for democracy. and hopefully the arab citizens like others wants better life and wants to live in the context of freedom, democratic, multiparties. then no one can progress, including in our area, without working on the -- walking on the two legs. economic development and political progress. the second lesson is that even as a -- even if there is economy growth, this economy growth has to be shared by all people in the country. shared in different area of the

country, but also shared by all people. and i think that the egyptians and twnearbyans case -- two nearbyians -- tunisians case is observation is that what's happened in some countries in terms of revolution when we look to the tunisian and egyptian case we see the regime maybe was , i don't know if we said that in english, scler rotic -- sclerotic. it's better in french. and remember that when the president was re-elected in november, 2009, some weeks after

there was mobilization from many people to -- a new candidate in 2014. imagine this people, young people, opened their eyes under the regime and we said to them that we have to live under the me system with the same values, with the same injustice until 2019. and i think that is also the case for the egypt hosni mubarak , then we can say there are many hopes in these countries and that the arab group is not a monolitical group and the regime

in bahrain is totally different, an algeria, or tunisia or morocco an yemen. monarchies here, monarchies there. military power, and the specific power in libya. it means that the change will happen hopefully. because we are face -- facing the same challenges. same challenges in terms of employment. same challenges in terms of investing people. because more than 50% of our societies are less than 25 years old. and how to response to am

digses, natural ambitions, and legitimate ambitions of our youth. facing the same challenges, probably going forward in terms of evolution, but there will be no impact in the situation because each country have its own specific itinerary because each country have its own political system. but between revolution and evolution, respect is large and i hope that each country can progss and response to this legitimate aspiration of people and mainly of youth people. what about morocco? i can say that first morocco

refuse the unic party since the beginning and was not easy. aonarchy expressed clearly that we want multiparties. and people work and political parties work together and hopefully we have the system and the multiparties was concentrated in the first constitution in 1962. and when i read some days ago the proposal, the new constitution in egypt, i think that we have to be proud as morocco that in 1962 we have this constitution. and this constitution was amended four times.

then it's expressed that morocco progress and progress looking to the evolution of our society, but also of our alignment regionally and internationally. we have also integrate the friendship of france. in 1998 for the first time the opposition came to power. we also tried since this time with the king, muhammad vi, to continue thanks to some efforts to progress on our two legs. on human development, fighting against poverty, and the other

thing is the fighting against corruption, creating business environment possible, and in this context we negotiate and conclude and f.t.a. wit u.s.a. but beyond the trades or business or investments aspect, what we are interested at this time is to take a strong commitment for better environment for business. when we talk about environment for business, we talk about the necessaryity to have transparency, the necessaryity to have transparent rules of game in morocco. and with it the same with european union. probably you know that morocco since many years asked for

specific status with european union, and european union don't offer to us because,or morocco advanced status and this status for us is testimo that morocco walk on the two legs and he will continue to walk on these two legs and we are very happy and satisfied to note that the same status just given to jordan. recently. what happened inhe arab world then, taking account the evolution in morocco, i want to insist on as martin said this new step taken by morocco an people of morocco. and when the king propose and

advanced organization in november, 2009, then before the air raabe spring, sayinthat it's time for morocco to have this -- not only this organization but more of that because the democracy start first at the local level. when we present that and ole political parties, all n.g.o.'s part -- participate to the debate about the regionalization and to report presented to the king during the last month, then the king said, ok, for this important step, but maybe we have to takehis opportunity to go forward deeply and to not go to constitutional reform

overwhelm for organization. let us take this momentum, let us take this possibility and opportunity, listen to what's happened in our own society, but also looking to what happened around us. not only in the arab world, but also in europe and in other countries. and what it was now it's an inclusive debate for the best constitution we can have during this year. the king ask to have the reform before the end of june -- proposal for reform before the end of june and the process, as i said, start with all political parties, with all n.g.o.'s, with all trade unions, including

youth organizations. and the goal is to have total independence of powers and powers body. executive, parliamentary, and justice. in morocco justice is still today an administration. it will be before the end of the year an independent, totally independent body. i am member of cabinet, elected cabinet, with a large coalition of political parties. but we will have a jump many here during the next month. elected government, yes, but with the prime minister we will

have the best score in the elections. human rights, we just reform our mechanism of human rights. and i can say to you not as diplomat, not as member of the cabinet, that the system is maybe the best system for the supervision and guarantees of human rights in our area with the best international -- with the new national council for human rights, with the new invigorate institution of mediator, and a new and energetic executive coordation among the government in connection with the

international institutions and also international n.g.o.'s. then after same moment some protest -- at the same moment some protest continue, peaceful protest. and here, too, happy it's happened like this. i'll talk about inclusive debate . we have also to note that the process in the street, because there is the freedom for protest when it's peaceful. and i am sure that in some month morocco will continue. i don't appreciate the term exception or the leaders of reform in the region, but because we do that for us first,

not only to come to washington and to say my country's the best in the region, no. because we want to see our people progress and our people taking opportunities for their own benefit. in conclusion the arab spring is here. we are not sure the summer will succeed to the current spring. and maybe, we can talk, maybe we will go directly, toward a dark winter like it happened in our area in iran in 1979, like when we see the counterrevolutions

are still dynamic in tunisia or egypt, and when we see that we'll probably take this opportunity to create the atmosphere because al qaeda needs large space more than only the sahara region, but they are very active now in all west africand maybe they will take this -- maybe evolution in this country, then we have to be very careful, very prudent, and we have all u.s.a., european union, arab countries have to work together to protect this positive evolution. this transition and to be sure thathe legitimate aspiration

of people will not -- were not kept by others and to come back to autocratic systems. thank u very much. >> thank you very much. we are going to have a bit of a conversation here first and then we'll take -- the minister will take your questions. i wonder if i can start with the political reform process and just get you to elaborate on a couple things. your presentation was very clear, but i suspect not everybody has had a chance to read the king's speech. there are a couple of things that i wanted to just have you elaborate on. the first is the parliament. you said you had political parties. you had rotation, opposition

leader and party has become the government in the past. the difference now as i understand it is that the king will not appoint the prime minister. the prime minister will be the leader of the largest party in the parliament, is that correct? >> exactly. it's important. it's happened. the current prime minister is the leader of the party who has the best results. but naturally it need coalition. but his majesty like in other countries, democratic countries, will ask the best results party to lead the government. and it would be in the constitution. >> i don't know whether you can answer this question, because as a constitutional process as you describe it, what do you imagine

will be the reserve powers of the king under this arrangement? will he -- what powers will he retain? >> first, the monarchy in morocco is the -- one of the oldest monarchy in the world. monarchy play a key role in terms of guarantee of the unity, because morocco are naturally, arab country, we are not only arab, we are muslim, jews, we are african country, and it's mixed. needs, different source of our identity are expressed by this monarchy system of the the king is also commander, and in morocco the political area and the religious area are totally

independent but they are joined only at one point, the level of the monarch. then it's important and everyone in mocco prefer to live in this -- under this umbrella. but now in terms of executive decisions, the role of the government will be enlarged significantly, and as much as it's opened now to delegate many of its current power to the government. and this government will take its responsibility to parliament. when i say for you it's normal, but let us come back to what

happened in our area to take note that it'sery important and significant step. >> forgn policy and defense will remain in the hands of the king? >> like in all democratic countries, it's the guarantee of the unity, it's a shared power, but the head of state will continue to lead the foreign policy. >> so as foreign minister you'll be a member of the executive branch of the government. >> i have only sibility -- after the reform then many thing will change with the implementation of the next constitution. . >> i did not mean to make it

personal. the foreign minister is a member of the executive branch. >> in many countries, the foren minister is not necessarily -- it is open. i hope for morocco that it will be the best possible foreign minister. >> you mentioned this new regionalization arrangement. what will be the powers of the regional governments? >> that is an important point. will be a real revolution. a revolution in morocco, because today at the level of the region, we have people appointed by the government, the national government, but today, we will have an elected council with a

president with all -- for the local government. and then, the elected people will have the power to manage the region. it is not -- this is not easy because the elected people means that the political party can have a program and can manage that. we take the experience of some countries like mexico or tunisia, to have success in this important step. important because we have many regions in morocco. in each region, we have disparities, socially, economically, that will create and within each

region, the best possibility in housing and education, health and roads. that will be for the local government. >> the indepdence of the judiciary will be a new development. presumably that will be guaranteed under the constution. and so the judiciary will function independently of the king, as well as the parliament? >> no. the executive. the justice will have its own law. an independent power -- and independent power. this will be expressed by the

king. >> he will appoint the judges. >> we will have an independt body. think in terms of -- in morocco, first we have our own justice principles. but we have the legacy of the latin law and the code. will have -- we will have what is important. it is not ready today. and because some -- time to time, the justice department, but now we want to ensure this development. >> can i ask you a couple of

questionsbout foreign policy? your region in north africa is now considerable turmoil. do you feel it in morocco? is the trouble in libya going to affect life imorocco in any way? >> in terms of condition, yes, .ecause we have the treaty - this treaty -- we have difficulties with our brother, nigeria. but we have the ambition to bring this important integration among the five member states. nigeria, morocco.

we demonstrate maybe we have to wait more. that what is sure is that when we talk about north africa, revolutions from tunisia, the libyan case is maybe very complicated, and the think that no one can today say clearly what will happen. there is, maybe for the first time, a strong expression of real consensus from the arab league. we have to notes that the arab league did not succeed in terms of economic integration short in terms of shedding the same values, or in terms of crisis management.

and i hope that taking the opportunity ofhese -- we can rest and we can give to our common house. but the arab league is our common house with many windows, many from time to time national position is stronger than the common decisions. but we note that the arab league claimed the first for the -- in libya. with some reservation in syria and algeria. and mauritania. my colleague changed this morning, maybe do to that. i do not know. it changed --

>> against or in support? >> no, it changed. a new foreign minister this morning. this coming from the region -- , the international community. today, we have a resolution, a securi council, which might give to us all international communitand all countries. we are in the chapter 7. and this resolution, it is not the resolution of france. it is our common resolution. each country can say i am interested by this or like that. the resolution is cment.

the resolution talksbout -- it takes about four weeks. first, a cease-fire. second, to protect civilians taking all necessary measures. third, human -- actions. first quarter, a political process. some countries decide that to protect the civilians, they have to intervene against the army which killed the civilians. and then i cannot say that is illegal. i note there is a large coalition of countries saying that is the best way. i have to respect this point of view. but morocco said at the same time, the resolution is wider, in some countries have to prepare themselves for a contribution for each human

actions or the real, deep, frank dialogue. between people in lya. between people. >> does that include colonel khadafy? >> all the expression of something. be sure there are many groups saying many things, asking for a change. these people will watch on tv disagree. but we have some experience in the past. >> so at morocco is part of the coalition, but -- >> morocco participated at the paris summit.

we we invited. the resolution inviting us together. i participated in the summit. with with my colleague of rdan and from qatar and with my colleague from iraq. and they were -- the current president from the arab league. and we discussed and i said what i said now. morocco is member of coalition, trying to the best implementation of the resolution. >> we have a saying here. i do not know how will it translate to a french or arabic. we say what happens in vegas

stays in vegas. [laughter] the question is as follows. does what happened in libya stay in lib, or does it have a ripple effect through the region? we can see what happens in egypt has a powerful impact on the rest of the region. explain. is live be a different to that? -- is libya it different to that? >> no. the heart of north africa, the heart of the south mediterranean. but also in connection with many countries. >> african countries. >> african countries. i'm sure it will have a real impact. al qaeda is present in the south

of -- in niger, in chad. and we want to link between al qaeda and the activities in the east of africa, somalia, and others. and when muaar gaddafi said it will have an impact, we have to take account of this. >> is he exaggerating al qaeda's role at the moment? >> i cannot -- i do not know i can say to all people in libya and benghazi or from al qaeda. probably not.

what is sure is that al qaeda will move, will try, will test. taking the opportunity of this question. al qaeda loves the space where there is no strong and democratic national power. >> why don't we go to the audience now for questions. i did not recognize at the beginning, we have some distinguished guests in the audience. the ambassador to jordan. and yo excellent ambsador. welcome to all of you. let's take some questions. wait for the microphone. identify yourself to the foreign minister. please make sure there is a question mark and the end of

your -- yes, here. >> good morning, mr. fihri. i am a senior at georgetown. what role for morocco in the future? i like to believe we could be a model for the region. thank you. >> the answer is simple. express what you want to express do do what you want to and contribute to the debate. it is open. morocco needs all -- >> how would he participate in the debate? >> there is a mechanism.

you can send your contribution to the internet, articles. we have more in morocco, more internet, internet. >> internet. >> then vultures. true.it is it is true. we have this fresh -- the last elections, less than 40% of citizens participated in the elections. these elections were free, totally free. but some people said, why go to vote?

your voice is important. >> right up to back there. >> i am a graduatstudent. you talk about a multi-party system. with that include the islamic parties -- will that include the islamic parties? >> they have been banned. >> tee tee difficult -- it is difficult to say. islam is the radical spehre -- sphere of environment. they said, ok for constitutional monarchy for many years. we have some -- in the

paiament that if they want to be in the party, are welcome. if they want to say no, i will not participate, i am waiting for -- io not know which element. but everyone is associated -- is invited to participate to this debate. and i love the conscription of a new constitution. >> ken? >> thank you, mr. foreign minister. we're honored to have you here. i assume it is not coincidental you decided to come to the united states to a library on the king's vision. there is a desire for some kind of american role. americans looking at the

region, we understand that changes need to be made in the region. people want ownership of those changes. what the king is proposing is exactly what some money americans wanted to see more of in the region. how can the united states help? we want to see the vision to succeed. what can the united states do? >> i think the question is maybe more larger. when we compare what is happening in the arab world of what happened in central and eastern europe between 1989 and 1992. it showed that thevolution or revolution changed from a problem to -- check slovakia --

czechoslovakia. i am impressed by nato the european bank. it was easy to do that. it was important. usa contributed. the european union and the g-8 members and mainly usa. the three together. and i hope they act together in a complementary effort, to help this transition. to respect the change - including the condition -- you what progress? i can help you.

the marshall plan, ok. don't forget that the marshall plan, there was some conditionality. i think it's logical if the u.s.a. and others say, ok, we're interested by your process. europe -- by the progress of tunisia. if there is this possibility, i am sure we can win together. it means that we need some new initiative. new speech by president obama. maybe. i am not taking notes of all this. new meeting for future. thg-8 effort, and it will be

now maybe more successful, because before the egyptians, the two nations and others were unisians andwo na others -- there is the possibility to create, to take note of this evolution. the transitions and to create a new arab world. everyone said in washington or in paris, wdo not want to impose. we just wa to -- i do not know the difference. what is important -- to have

ownership in the definitions of the global end in the implementations of the means. >> a question. >> thank you, minister. i would like to congratulate morocco's progress of reform on human rights. >> which you identify yourself -- would you identify yourself? >> i am from george washington university. >> it is important. the justice is the best --the best for the society in progress. and the king said now five years and ask the government to propose a real and deep reform

system. some proposal, some projects are rated. there will be adopted during the next week or month. what is more important is not only code or new text is the spirit, and the spirit is that there is a colorado -- there is a law. no more, but no less. >> it occurs to meet asou're talking that -- palestine has not come up yet. >> yet. >> i think that is interesting in itself. >> which palestine to prefer, gaza or in the west bank? >> i am asking the questions.

>> how is it likely to impact on the palestinian issue and the prospects for resolving it? >> many people talk about the capacity of thgovernment of -- to create or to prepare the future of the independent state. and some people talk about justice, but i am sure that it will have an impact and we see the west bank, some protests expressed strong desire to have a better life. i note also that -- they tried to reach some new success.

not in the political process, because -- but all around the rld is the recognition of an independent palestinian state for us is important. but i hope globally that quickly and quicker will be better to create once again this negotiation process. it has to start again. and maybe including some new elements, some new elements. ok? at which independent states. how to be sure we will go directly to this democratic palestinian state, with the constitution, ich won? it is important for palestinians to listen to what

is happening and to talk also with the brothers in gaza. we heard about t reconciliations and we know it is not an easy mission. but the arab conflict is still here. and if we forget it, unfortunate what happened this morning in jerusalem, here to talk to us together, to the arabs and two others -- and to otherrs. s. >> thank you. mr. prime minister, i like to ask you for your views on how

the new government will approach the existence of a national government in the market, and at the same time the regions to which referred and in terms of how these regions will be structured, because they will contain some of the several communities that comprise the nation. and ashese committees will be distributed in different regions or may be concentrated in " art two of several reasons, how will a balance be maintained in the new government to represent all of the religious and ethnic populations? thank you. >> first, we have to house -- we have the senate, and the senate

will change. participation in the senate will be the results of the elections at the original level. in terms respect, the problem in morocco, we don't have this problem because we're all moroccans. moroccans first. after that, we're from the north, the east, and the south. it is important question because we have a problem, and the name is the western sahara. we present a proposal to resolve this dispute between us and moroccan nigeria. it was welcomed by the international community.

with that, it negotiates -- the security council said we have to negotiate, taking into account the air force and the realistic proach. but we cannot wait for the final solution of this problem. that is why we think and we strongly believe that we have to move forward. then it will respect all the inhabitants of the beach area. the national rules protection of freedom of religions, we have no problem in morocco because we have jews and muslims living together since many centuries. some jews are more -- not more

but -- longer american than others. arabs came from morocco 14 centuries ago. jews are a reality. this is an interesting mix of people. each sensitivity will be protected in the complex of national law. >> he said last night -- you told the associated press last night that arab strength could end. this does not lead to real democracy. how long do you think the people in the street will be comfortable waiting? their expectations are high.

they must be puffed up. how long the you think they can sustain this enthusiasm without a real change in governance in those two countries? do you think it will come quickly? you do not expect this to happen in six months, do you? >> i think the transition is important and the time for this transition is also important. like you, we heard the for the best and fair and fruitful elections in tunisia, general elections, we need time, citizen time for the organization of the new parties to be included. but not too much time to not

give it to some islamic radicals to have more -- and i am sure that the elections have to be over night in tunisia and egypt after september for egypt and after novembe4 tunisia. -- for tunisia. if we ask the g-8 and some arab countries to help this transition, we need some appropriate time. because youth needs youth -- youth and others need political change. at the same time, this society needs some concrete results in

terms of employment, in terms of subsidies. the transitn has to combine between the political reforms and the economic and social needs. it is not easy. impact, investment. the comet has to continue to produce and distribute -- the economy has to continue to produce and distribute. >> i am a representative of the moroccan democrats. here is my question. what are the implications of thisew reality in the arab world on the u.s. policy in the middle east? thank you. frank.s be very

the bush administration asked for a revolution in the arab world. after 11 september. and there were largely -- to impose the change, to help or to continue to talk with this country, but let them organize. now, with the current administration, we continue this effort. but with different approach. less imposition, but more ownership. the change happened in tunisia

and egypt. it is more clear. the media will notnow to what the outcome in yemen. the change will be quickly. and the u.s.a. has to realize that offer of the region -- i know that maybe it will be difficult. intel in accdance with others, the total complementary to others, including the government opinion. >> over here. back there. you. come back to >> i am a photographer. i was encouraged when you made

reference to the arab world and you kept makinreference to it. there is a tendency here to dividehe arab world up to say north africa to not see us as a unified group. with differenc. arab nationalism is still very much alive, at least for the people in the region. i was wondering, given that fact, i think when bad things happen in the arab world, here we have a tendency to demonize all arabs. but when things are happening that are frightening to us, maybin a positive direction, we want it divided up somewhat. prison as aco's country that is seen as a positive country, not least of

which hollywood has done a good job because people love to shoot film there and that is always a potive thing. what has happened as much as you can talk about it with the king speaking to some of these regional leaders behind the scenes? what kind of influence did you guys have in terms of -- not putting the screws, that is a negative thing to say -- to encourage them to be seen as a more positive force, rather than bringing about all the negative stuff, which think is also encouraged because people do not really respect a lot of the other arab countries of the way in morocco is perhaps respected. >> she is referring to leaders across the region. >> i insist that each country will reach its own solution, if

i can talk about a solution. that would ensure is that i remember myself -- that what is sure is that i remember myself in 2002, 2003, the king made many speeches and participated in manyummits and insisted on the necessity to not just talk politics between the -- about the israeli conflict. it is important for the stability. the arab citizen needs to see this cooperation and the production from the arab league. we have not -- free-trade

zone -- some investments are shared with private initiative rather than a global arab economic charter, and also human development, because many arab countries can help. once again, we cannot compare it cut dark with egypt in terms of human development. i think the most important cash think we can share among us as arabs -- the most important thing we can share is to concentrate more on the concrete operational issues, rather than to talk, talk, talk. principals from time to time are a contradiction with some

national decisions. >> the sultan of oman came out with a similar program after the king'sspeech. i think this will have to be e last question. >> i'm peter from brookings. many people were quite surprised at the arab league approved action against libya. what is the significance of that? does that portend a greater readiness, willingness, on the league and the member states to intervene domestically more than they have in the past, or how significant is this step? >> in 2009, i think, during a summit, we adopted a new code

for progress. and it was at this time not imposed. but the dialoe with the u.s.a. and with the european union, our partners asked us to fix a resolution or an annex of our charter this modern concepts. but nothing happened. nothing happened. how to modernize and how to be more liberal. now, we have the -- we have -- even from the ground, given to us as member of the arab league an opportunity to creates a new common house with

common vision, which is more importance, the same and shared rules -- how to conduct some domestic issues in this country have to be the same then in other countries. and i hope tt is -- in french we say -- [speaking french] >> springboard. >> springboard for arab world. and i hope that the next secretary of the arab league can work with the spirit. it will be a change. >> i want to thank you not oy

for your presentation today but for morocco's friendship with the united states and the leership and role your country is playing now. we hope that flowers will bloom across the arab world as a result of the role that you are playing. thank you very much. [applause]

intervene either on the chancellor of the exchequer or the leader of the opposition. i know, -- i now call the right honorable chancellor of the exchequer george osborne. >> thank you, mr. deputy speaker. mr. deputy speaker. last year emergency budget was

about rescuing the nations finances and paying for the mistakes of the past. today's budget is about reforming the nation's economy so that we have an enduring growth and jobs in the future. and it's about doing what we can to help families with the cost of living and the high price of oil. we understand how difficult it is for so many people across our country right now that we are able now set off on the route from rescue to reform, and from reform to recovery is because of the difficult decisions we have already taken. those decisions have fought economic ability. and without stability there can be no sustainable growth and no new jobs. without stability governments have to keep coming back to their citizens for more, more taxes and more spending cuts, in britain we do not have to do that today. we have inherited a record budget deficit, but we have set

out a credible comprehensive plan to deal with it. we have had to undertake difficult measures but we have already asked the british people for what is needed your and today we do not need to ask for more. so this is not a tax raising budget, nor can we afford to take give away. taken together the measures i will announce today are fiscally neutral across the period. this is a budget built on sound money, a budget that encourages enterprise, that supports exports, manufacturing and investment. that is based on robust independent figures, a budget for making things, not for making things up. [shouting] britain has a plan and we are sticking to it. in recent months any other countries have seen their ratings downgraded and their borrowing costs soar. our country's fiscal plans have been strongly endured by the imf, the european commission, the oecd, and that every

reputable business body in britain. and for anyone who questions whether this massive in the real world, the real businesses and families, consider this. market interest rates increase our at 12-point by persevered in ireland close to 10%. in portugal and spain they are 7% and 5%. today, our country's market interest rates have fallen to 3.6%. we have a higher deficit in portugal, greece, and spain but we are virtually the same interest rates as germany. this is our powerful monetary stimulus to our recovery economy. stability, credibility, lower interest rates, that is what we have achieved. [shouting] but stability, mr. deputy speaker, is not enough. so today in addition to the redbook we're publishing a plan for growth. this budget confronts the harshest truth that it has been ignored too long.

britain has lost ground in the world's economy and needs to catch up your in the last decade other nations have reduced their business taxes, remove barriers to enterprise, improved education systems, reformed welfare systems and increased exports. sadly, the reverse has happened in britain. we gambled on a debt fueled model of growth that failed. with a state now account for almost half of all economy can we simply cannot afford to go on like this. britain has to earn its way in the modern world. mr. deputy speaker, i turned to the forecast. last november i told the house that the recovery was going to be more challenging than recoveries from recessions in recent decades. that is inevitable when we've had the sharpest fall since the 1930s, the highest budget deficit in our peacetime, and the largest banking crisis in our entire history. but i said thanks to the course

we've set, the independent forecast was for our economy to growth in each of the next five years, for unappointed peak this year and then fall, and for employment to rise through the parliament. that remains the case in the independent forecast we publish today. those forecasts have been drawn up by the office for budget responsibility. this important change has transformed the way budgets are put together. so instead of chancellors nixing the figures to fix the budget may not to fix the budget to fit the figures. yesterday, the legislation for the office for budget responsibility on a prominent statutory an independent received royal assent, and i'm sure the whole house will want to thank robert, steve, graham parker, and their whole staff for the very professional job they are doing. let me start with their growth forecast. now it has been know for chancellors in recent years to

wrap these office such great state in hopes that no one will keep on or notice. [laughter] >> i will not do that. although average quarterly growth this year is set to be higher than was previously forecast the annual forecast for 2011 has been revised to 1.7%. this the obr a true specifically to the weekend reports of last year, the rise in world commodity prices and a high than expected inflation in the u.k. however, the obr points out that the effect in their words is to create scope of slightly stronger growth in later years. so while the expect real gdp growth of 2.5% next% next year, they forecast it will then rise to 2.9% in 2013, the 2.9% in 2014 followed by 2.8% in 2015.

the european commission has also this month published its growth forecast. the show that the uk's full cast to grow more strongly in the coming years and spain, italy, france but the average for the euro zone and the average for the european union. all countries have to steer a course between two central risks. the risk of european sovereign debt crisis, on the one hand, and on the other the risk that comes from rising global poverty prices. food prices around the world have increased by nearly 50% since the beginning of last year. or has risen by 35% in just five months. that is why the obr expects inflation to remain between four and 5% for most of this year, before dropping to 2.5% next year and then 2% in two years time. i have today, tricky written to the governors of the bank of england to confirm that the

inflation target for the monitor policy committee will remain at 2% ash but by the consumer prices index. i can also confirm that the facility set up by my predecessor will remain in place. one cause of current instability is the conflict inside libya. the whole house will praise the courage and professionalism of our armed forces are trying to bring the conflict to an end and save lives. i can confirm that the additional cost of military operations will be met entirely on the treasure reserve. house will also know that last week i authorized the u.k. to part in according to g7 currency innovation in support of the japanese yen. our hearts go out to the japanese people, and this is one way in which britain can help. it is still too early to say what lasting impact the earthquake and tsunami will have on the world economy. but this is an opportunity for me to report that we had already decided to rebuild the uk's foreign currency reserve, which

are at historically low levels. we will purchase a range of high quality assets that will unfortunately the price of gold now at a record high we will not be able to replenish the gold reserves that sold at a record low. [shouting] >> mr. deputy speaker, i turn now to the fiscal forecast for our debt and deficit. borrowing to fund the deficit this year is now set to come in below target at 146 billion pounds. then fall to 122 billion next year, in 101 billion the year after, than 70 billion in 2013-14. in 46 billion, and 29 billion by 2015-16. inflation has had its impact but crucially the obr a fix that next years structural deficit remains the same as forecast last november. in other words, the size of the task or repairing britain's

finance is unchanged. our national debt and the share of our national income is forced to be 60% this year, before peaking at 71%, and then starting to fall reaching 69% by the end of the period. this leads me to one of the central task of the obr. that is assessing the government's performance against its stated budget goals. in an open and independent way, so that we avoid repeating disastrous experience of the so-called golden rule. our fiscal mandate is to achieve a cyclically adjusted current balance by the end of the rolling five year forecast period, which is currently 2015-16. we have not with a 6% target as the debt should be following in the proportion of gdp by the year 2015-16 as well. i can report to the house that the obr confirmed that on the central forecast we will meet both these objectives, a thousand structural current budget, and falling national debt by the end of the

parliament. indeed, the forecast remains that we will meet both these objectives one year earlier. [shouting] mr. deputy speaker, i said at the start of the stability and fiscal responsibility were not enough. our country has to compete if we are going to create jobs and growth. britain has fallen behind many others in the world in the last decade. we've dropped in the world global competitiveness seen and growth in the country has become so unbalanced, consider this staggering truth. during the boom years before the bust, private sector employment actually felt in the region as important as the west middle. so today's budget is an urgent call for action for britain. private sector growth must take the place of government deficits. prosperity must be shared across all parts of the united kingdom. yes, we want the city of london to remain the world leading center for financial services, that we should resolve that the rest of the country becomes a

world leader in advanced manufacturing, life sciences, industries, business services, green energy and so much more. this is our vision for growth. difficult decisions and major reform are needed to make it happen. but the alternative is to accept britain's economic decline and a continuing fall in the living standards for our population. and that is not an alternative anyone in this house should be prepared to accept. mr. deputy speaker, this budget sets are but these four economic ambitions. britain should have the most competitive system energy 20. be the best place in europe to start finance and grow a business. the a more ballots economy by encouraging exports and investment. and have a more educated workforce that is the most flexible in europe. let me set up the measures now that will achieve these ambitions. first, taxation. here's the truth. britain used the third lowest corporate tax in europe and now

has the sixth highest. at the same time our tax code has become so complex that in recent years it took india to become the longest in the world. from adam smith to others people set out the principles of good taxation. this government for the modern age. our taxes should be efficient and support growth. they should be certain and predictable. they should be simple to understand and easy to comply with. and our tax system should be fair, reward work, and asked the most from those who can't afford the most. in july last year we set out the office of tax simplification to provide independent advice -- advice. i want to thank michael jack and john for the work they have done. following their recommendations i can announce today that its budget abolishes no fewer than 43 complex release.

this includes the money and give a system which we will let me for another 989 years. [laughter] >> however i decided not to follow their advice to post the committee investment tax relief and instead i encourage people to take it up. this budget at a stroke removes over 100 pages from our tax code that begins the work. in the last budget i announce that from next month welfare payments and public service, pensions will be in line with the consumer price index. i said at the time we should also consider operating the tax system in the same way. from april 2012 the assumption for direct taxes will move to cbi. there will be protection to this of those eligible for age-related, married couples, and blind persons allowed his, and for employers national insurance contributions. the increase in the personal tax allowance already announced will fast exceed anything, and that's

even before any further increases in that allow its. but this will bring coherence to the facts and benefit system and we look to moving into a taxes over the same basis for what the fiscal system allowed. but there is in one service which we want to undertake, that will dramatically supervise the tax system. for decades we've operated income tax and national insurance as two fundamentally different tax code, and force businesses large and small to operate two completely different systems of administration with two different periods of basis of charge. the resulting anomalies are legion, and it imposes totally unnecessary costs and complexity on employers, and it costs the taxpayer in the extra burden it places on a gym or see. so i am announcing today that the government will consult on emerging the opposition of national insurance and income tax. i am not proposing we extend national insurance to

commissioners are other forms or we abolish the contributory principle. our purpose is not to increase taxes. it is disabled by the. and huge task will therefore require a great deal of consultation and take a number of years to complete. but it is time we took this historic step to simplify dramatically our tax system and make it fit for the modern age. making our tax system more competitive is another challenge for the times we live in. again, let's face facts. other countries are quite deliberately making their tax systems more competitive and attracting multinational companies away from the united kingdom. we could stand and do nothing, increasing the living standards of every house and come in the country depends on key things, investment and the tax revenues that come with them here in the united kingdom. so we will go ahead with a highly competitive tax rate on

profits derived from industries like pharmaceuticals. we will fundamentally reform the complex rules that control foreign companies and make them more territorial. we will introduce new rules that effectively applied older competitive by .75% rate for overseas financing income. this will give us a far more attractive system than france, america or germany. i want britain to be the place international businesses go to, not the place that they leave. but today i wanted even more. so i can announce that from april this year, corporation tax will be reduced not just by the 1% my previous announce but by 2%. and it will continue to fall by 1% in each of the following three years taking on corporate tax rate right down to 23%. 16% lower than america, 11% lower than france, 7% lower than germany, the lowest corporation tax in the g7.

let it be heard clearly around the world, from shanghai to seattle, britain is open for business. [shouting] >> and to ensure, and to ensure that this is not a net tax cut for banks. i am adjusting the bank levy rate next year to offset its affect. [shouting] >> in each -- mr. deputy speaker, in each and every year of this parliament, our permanent bank levy raises more in any one year of the last parliament bank taxes. the most competitive access and energy 20 is the first of our economic ambitions. the second is that britain becomes the best place in europe to start, finance and grow a business.

again let's face facts. in the last decade countries like germany, denmark, finland and the netherlands have all overtaken us in international rankings of competitiveness. that is not surprising when the total cost of regulation imposed on business since 1998 is almost 90 billion pounds a year. so in today's plan for growth we take action. 350 million pounds worth of specific regulations will go, including the quality act, discrimination rules, the recommendations on health and safety laws will be implemented in full, and no win no fee legal services that prey on employers will be restricted. existing regulation will restrict neither the public process, and from april we're going to impose a moratorium exempting all businesses employing fewer than 10 people, and all genuine startups funded domestic regulations for the next three years.

[shouting] >> we'll also take this fight against regulation to brussels where this week my right honorable friend the prime minister bibby including other allies. we will tackle what every government has identified as a chronic obstacle to economic growth in britain. and no government has done anything about the planning system. councils of spending 13% more in real terms than they did five years ago despite the fact that applications have fallen by a third. yes, local communities should have a say in planning, but from today will expect all bodies involved in planning decisions to prioritize growth in jobs. will introduce a new presumption in favor of sustainable development so that the people say yes. we will retain existing controls on greenbelt, but we will remove the national impose targets on use of praided lands. and will also allow certain use

class changes introduced time limits on applications, and pilot for the first time ever auctions of planning commission on land. planning rules and bad regulations stand in the way of new jobs. so too, mr. deputy speaker, does the shortage of finance. small businesses are the innocent victims of the credit crunch. that is why we have agreed with the banks to pay 50% increase in the availability of credit to small businesses. and lack of startup capital has long been a problem in the british economy. too often with very ideas and britain but it is other countries that exploit them. today i announce sweeping changes. from april this year income tax relief will increase from 20%, to 30%. next year we will double the amount of any individual can invest increase the size of companies that qualify for

investment and raise the limit on the amount that can be invested in the company by 400%. and next week my right honorable friend the prime minister of the business sector will launched a new campaign by entrepreneurs for entrepreneurs, supported by many of britain's most successful firms that will help people start and grow a business. today we can add to the help from the six of april this year i am doubling the size of entrepreneurs relief to 10 million pounds. let britain be the home of enterprise in an age when people can't invest all over the world. it's time that we ended the uncertainty around the taxation of non-domiciles. they are welcome in this country but i always believe they should be pay something in return for the special tax status. the last government followed our advice and introduce a 30,000-pound charge for those who have lived here for seven years. i think we can ask more for those who have been your even longer so i'm increasing the charged up 50,000 pounds for

non-dom so been in the country for 12 years. this will raise over 200 million pounds in the coming years. but in return and to encourage investment in our country i am removing the tax charge when non-dom's remain capital gains to the u.k. for the purpose of investing in a british business. we will introduce a statutory residents test to end the speculation and uncertainty and to provide stability, i confirmed that i will be making no further changes to the taxation of non-domiciles in this parliament. in an age when business and capital and people can't increasingly move anywhere, high tax rates can do real damage. that's true for high corporate tax rates, and it's true for high personal tax rates, also. they crush enterprise. the divine aspiration. they often undermined tax revenues and people avoid them. i include that the 50% tax rate would do lasting damage to our economy if it were to become

permanent. that is why i regard it as a temporary measure. just as my labour predecessor, the right honorable did when he introduced a. i said before and that wouldn't be the right time to remove it and we're asking others in our society on much lower incomes to make sacrifices, for we are all in this together. [shouting] >> i think it is sensible -- to see how much revenue it actually raises. i've asked hmrc, mr. deputy speaker, i've asked hmrc to find out the truth when the self assessment forms start coming in. of course, the taxation must be fair. it's right that the wealthy should pay more than others and it's especially wrong when they avoid taxes. i will have much more to say later on in his speech on tax avoidance and evasion, but there's one area that needs extra work in the coming months and that's on the taxation of a very high value prop it would

evasion and avoid and are widespread in the some of the wealthiest are not paying their fair share. so as well as reviewing revenues from the 50 the tax rate will also be redoubling our efforts to find ways of ensuring that owners of high by your property cannot avoid and their fair share. help for small businesses, a boost for enterprise, reforms to planning, cuts to existing regulations, and a moratorium on new ones. all part of our ambition to make britain the first place in your to start, grow, and finance a business. [shouting] >> our third edition is to encourage investment and exports to a more balanced economy for britain. in the plan for growth we publish today we set out specific measures we can take to help a wide range of businesses. and life sciences we dramatically reduce the time it takes to get approval for clinical trials. in our digital and creative

industries we will approve intellectual-property regime. in our professional and business services, one of our unsung success stories, we will reform our burdens of money-laundering regime now for legal obligation and launch a new trust in business for the services to our retail sector includes many small shopkeepers, anxious about the impact of coming business rises. the last government planned at the current rate holiday for small businesses should end in october this year. i don't think that would be right. so i can announce that at a cost to the exchequer of 370 million pounds i will extend the right holiday for small businesses for another year to october 2012. [shouting] >> we will also take action to help the construction industry. stamp duty will not be levied on the mean value of the house is being purchased within, and real estate investment trust will be simplified to encourage homebuilding.

but average mortgage deposits are close to 30% and this goes homeownership beyond the reach of many, many families. this is not fair. so i can announce today that from the proceeds of this year's bank levy, we will fund a 250 million pounds commitment the first time buyers. and you shared equity scheme first time will be available for first time buyers who want to purchase a newly built property or who cannot afford. this will help 10,000 families get onto the housing ladder for the first time. [shouting] >> the previous government, mr. deputy speaker, intended to end the temporary changes to the support for mortgage interest next january. instead, we will extend it for another year. and that will reduce mortgage arrears for around 100,000 out of work homeowners. mr. deputy speaker, manufacturing is crucial to the rebalancing of our economy. over the last decade the share of the economy accounted for by

financial services decreased by over two-thirds while manufacturing share fell by almost a half. under this government manufacturing is now growing at a record rate at 14,000 more jobs have been created in this sector in the last three months. to help us continue the government announced its plan today to make out export promotion more entrepreneurial to great new export credits to help smaller businesses, launch britain's first technology and innovation to hide manufacturing, and fund a further nine new university centers in manufacturing. science is one area where britain already has an advantage over many other countries and it is essential to our future as a place to create business. that's one reason what i protected the science budget from cuts last year. i can tell the house that i have been able to find again from this years extra bank levy an additional 100 million pounds to invest in new scientist

facilities, in cambridge, the knowledge research environmental and life sciences, the international space innovation center, and the national science and innovation campus. but if britain is willing to become a home of innovation, then we want research and development to take place not just in our great universities but in a small list -- our smaller businesses also. i've listened to him and gone even further then he recommends. from april this year, mr. deputy speaker, the small companies research and develop it tax credit will rise to 200%, and from extra it will rise again to 225%. we also want to encourage manufacturers to invest in a lease machinery and technology. so i propose to double the limit on the capital allowances for short life assets from four years, to eight years. and it allows for the renovation

of business premises and assisted areas which was due to expire next year we will extend for a further five years. supported the private sector across the whole of the united kingdom is central to our economic ambitions. savings in the transport department mean that we can also afford 200 million pounds of additional investment in our regional whale ways. will go ahead with the 85 million pounds also linking manchester and piccadilly stations, significantly reducing journey times between liverpool and leeds. we can commit to and i know as we have just been hearing many honorable members have been calling for this, redoubling the scale. and this will help our great western main line to wales. and we can find another 100 million pounds to help councils repair the potholes on our roads. mr. deputy speaker, helping all

parts of our country succeed is also the purpose behind the new enterprise zone to be launched today. mr. deputy speaker, there have been reports that we be able to fund 10 new enterprise zones. i confirmed instead we will fund 21 new enterprises. [shouting] >> businesses will get up to a 100% discount on rates, new -- the potential to use capital allowances in zones where there is a strong focus on manufacturing. in return for radically reduce planning restrictions, we will that local authorities keep all business rate growth in their zone for a period of at least 25 years to spend on development priorities. the first 10 enterprise zones will be in urban areas of highest need, but also the highest potential. they'll be in birmingham, in leeds, liverpool, manchester,

the bristol area, the black country, and sheffield. tomorrow my right honorable friend prime minister and deputy prime minister will announce some of these specific locations of these new enterprise zones. and i confirmed that a further zone will be located in london where i've asked for a suitable site. a further 10 enterprise zones will be announced in the summer and i want local enterprise partnerships all over the country to come forward with proposals. responsibilities are to go in northern ireland, southern to wales. so we will work with the administration so that they can enjoy the benefits of this policy. in northern ireland to martha treasury will publish a paper on how we help their private sector to grow, to do with the unique issues posed by the irish republic business tax regime. to consider the case for northern ireland having an even lower rate of corporation tax than the rest of the united

kingdom. i look forward to engaging with all parties there on the way forward. there is one of the particular issue that affects a specific part of our country, and that is the very high water bills for customers in the southwest because of the geography there, particularly for those on lower incomes. so we will come forward with public money to help bring those bills down. [shouting] >> mr. deputy speaker, let me turn now to the opportunity presented by the green energy revolution, and as our determination to be the greenest government ever. we've already announced our ambitious renewable incentives and support for low emission cars. and changes to the a company car tax regime today increases that support. our greenfield to reduce the energy bills for homes will be introduced next year and i confirmed that we will act to incentivize and encourage its take a. we are pioneering new carbon capture and storage technology with 1 billion pounds already

provided and future projects will be funded out of general spending rather than a complex new levy. but we need to take two-thirds of both if we're going to make the green energy revolution a reality. first as i have argued, investment in green energy will never be certain and less we bring some stability to the price of carbon. today we become first country in the world to introduce a carbon price in the power sector. the price will start at around 16 pounds per ton in 2013, and move to a cart -- target price of 30 pounds in 2020. this will provide the incentive of those accounts of new investment in our dilapidated energy infrastructure. to ensure customers get a fair deal, we will closely follow developments in the energy sector in the light of the off year published on monday. at the same time i am extending the climate change agreements to 2023 and increasing the climate change levy discount on electricity for those who sign up from 65%, 80% from apri

april 2013. this will help our most energy intensive industry. green taxes will increase as a proportion of total tax revenues as we promised, and the second bold step we take today is the creation of the green investment bank to support low carbon investment with the returns of two long-term are too risky for the market. we've already committed a billion pounds to a. today i commit to billion pounds more, funded from sales and underwritten by the treasury. this will enable the green investment bank to start operation one year earlier than planned in 2012. [shouting] >> it will leverage an additional 18 billion pounds to private sector invested in green projects over this parliament, i can also confirm today that from 2015-16 subject to our overall debt targeting that will allow the green investment banks to borrow and invest. so a green investment bank is

resources, a new carbon price more, new capital allowances for manufacturing, new support for home builders and first time buyers, and economy where growth happens across the country and across all sectors. that is our ambition. [shouting] >> and mr. deputy speaker, it leads me to this fourth ambition. to create a more educated workforce that is the most flexible in your. britain's working age population has the lowest skills than the populations of america, germany and france. and that's probably the biggest problem facing our economy in the future. that's why we are undertaking far-reaching reform of our schools and universities, and funding of people premium. an additional earlier support for a most disadvantaged children in poverty. that's why we commissioned the most impressive reform. the government is committed to funding new university technical colleges which will provide

vocational training but it is the best incorporate the curriculum is being developed in close coordination with both locally universities and leading employers. and i commend ken baker for getting these new colleges up and running in our manufacturing centers. today the government has announced that it will fund 12 new university technical colleges. i can tell the house we will provide funding to double that number to at least 24. we will also deal directly with the challenge of youth unemployment that has been on a steady rise for the last seven years and give people direct contact with the workplace. instead of 20,000 young people benefiting from our new work experience scheme as we plan, we'll increase that number five fold, to 100,000 places over the next few years. in austria, germany and switzerland, around one in four employers offer apprenticeships. in england, fewer than one in 10 do. that's got to change.

[laughter] >> that's got to change after 10 years of a labour government. [shouting] >> last year, my right honorable friend published a steel strategy and confirm the largest ever expansion in adult apprenticeship or today i'm funding another 40,000 a partnerships for young unemployed people. there are currently only 1500 high level apprenticeship across the whole of england. this budget provides for 10,000 more. that brings a total of 250,000 more apprenticeships over the next four years as a result of this government policy. [shouting] >> a government backing once were, watch real trained to secure jobs and more growth. mr. deputy speaker, we shouldn't talk about those without talking about those who are coming to the end of their working lives, and looking through retarded. i am very proud that this

coalition government that took the decision to relate the basic state pension to earnings and guarantee its increased to a triple lock. this would simply not have been afforded as they argue without an increase in the state pension age. the state pension age is set to rise to 66 by 2020 or i can tell the house that we will now seek hopefully with more parties support a new more automatic mechanism for future increases in the state pension age based on regular independent reviews on longevity. this is another major reform that would help britain live within her means. we also need to make sure that our public service pensions are both fair to those who give their working lives to help others, and fair to the taxpayers who have the burden. to say we publish the results of our consultation on the discount rate which shows that a more appropriate rate would be inflation plus gdp growth, this reinforces our case to

increasing the employee contributions by an average of 3% to indeed the new discount rate could be used to justify further cogitation rises. as part of the reforms i am not prepared to ask more than the average. john has been completed his final report which looks at the pension benefit. i'm sure members in all parts of the cells were want to thank thu for a very impressive report. [shouting] >> or at least part of the house. i can from today that government expects recommendations as a basis of consultation with public sector work with unions and others. they should be no cherry picking on either side. i believe this how should also recommend similar changes to the pensions of mps. we should also address the state pension system which has become unbelievably complex.

if people can't work out, what they're going to get in retirement or how much with the means test, then they can't work out what they need to say. so the pensions minister, the pensions secretary and i have worked together to develop options including a new single tiered pension. it will be simple, it would be based on contributions, it would be a flat rate that people know what to expect. it will cost no more than the current system. we currently estimate this new single tier pension will be worth around 140-pound per week. it will not apply to current pensioners and it will pay years to come into effect. as with the other major reforms i've announced today, simplify our tax system to improve our economic performance, to reform our public sector pension, this government is doing the right thing for the long-term. [shouting] >> the most competitive corporate taxes, the best place to start up and run a business, and investing, exporting, green and manufacturing more balanced economy, a better educated

workforce, a more fair pension system, these are our ambitions with the measures to match. mr. deputy speaker, let me turn now to personal taxes and duties. let me start by noting that a society should not be judged by the strength of its economy alone, but also by the compassion of its people. the culture secretary and i -- [shouting] >> that's what i happen to think at least in what. the culture secretary and i have been working on a series of substantial reforms that will support, from the largest to the coins collected in the charity bucket. so first we will dramatically simplify the administration of gift aid instead of asking charities to submit a written record everything they can we will by 2013 pay for a much easier system. second, we will encourage wealthy people in our society to give even more. they gift aid benefit will be

increased from 500 pounds to two and a half thousand pounds of cherries and museums can say thank you properly. we will consult in the coming year on how to encourage the preeminent work advance to our nation in return for a tax deduction. we will introduce from april next year this major change to our inheritance tax system. if you leave 10% or more of your estate to charity, then again it will take 10% off your inheritance tax rates. [shouting] >> let me be clear. no beneficiaries will be better off as a result of this policy, just the charities. to the tune of 300 million pounds, i want to make giving 10% of a legacy to charity the new norm in our country. the third reform we make to the charitable taxes is not about the biggest donations but the smallest. [laughter] >> we will introduce, mr. deputy speaker, a new scheme where gift

aid can be placed on small donations up to a total of 5000 pounds a year per charity without the need for those to fill in any forms at all. that means give dave on the content of the collecting tin and the street bucket, 100,000 charities will benefit to the tune of 240 million pounds. and together, these represent the most radical and most generous reforms to charitable giving for more than 20 years. [shouting] >> do the right thing for a charity and the government will do the right thing for you. it's a big help for a big society. [shouting] >> but mr. deputy speaker, our charity does not extend to those in our society who seek to avoid paying their fair share of taxes. tax avoidance innovation means we have to ask more from working families, and that is not fair. unfortunately, not enough has been done in recent years to tackle this injustice.

agent elsie estimates that 14 billion pounds was lost to avoid and innovation in 2008. today we published our new strategy paper on tackling tax avoidance? and we take specific measures to shut down the open abuses that have been allowed to continue for too long. we will can close down the reforms of the plant taxa points, tying capital gains rules for copies and in the practice of disguising enumeration which highly -- lifetime loans that have never been paid. and we're going to tackle the exploitation of low value consignment relief that has left out music scores losing battle. in total, on the numbers audited by independent obr, the tax avoidance measures in this budget raise around 1 billion pounds a year, 4 billion pounds over the parliament, we are doing more today to clamp down on tax avoidance than in any budget in

recent years. [shouting] mr. deputy speaker, t gives us more resources in a fiscally neutral buzz it to help those families who do pay their taxes but who are struggling with the daily cost of living. we've already taken steps to help the disabled. i'm glad to report the following measures in my budget last year, every local authority in england has chosen to freeze council tax in the coming year. compared to the amount council tax could have risen by, this race will save a family at an average robbery 72 pounds a year. in two weeks time the child tax credit are low income families will increase by an additional 255 pounds. i confirmed today that in the coming year all workers in the armed forces, as inserts, teachers and civil servants earning 21,000 pounds a year or less will receive a pay uplift of 250 pounds. as i said last year, the

national insurance rate rise which the last government announced will have to go ahead, but because with increased the threshold it will be cheaper to employ people on incomes of less than 21,000 pounds than it is today. that's how we stop labors job attacks. >> anyone learning lesson 35,000 pounds a year will also be better off. in 14 days than the personal income tax allowance, the amount people can earn tax-free will go up by a thousand pounds. that's the largest rise in our history. that means in real terms around 160 pounds extra per year, or 200 pounds in cash for 23 million taxpayers. the coalition agreement commits this government to real increases in the personal allows each and every year. and since this country, no one earning less than 10,000 pounds should be caught in income tax net. this budget today takes another step towards that valuable coal. i can confirm that from april

next year, the personal tax allowed to increase by a third, 630 pounds, 8105 pounds. that's another real increase of 48 pounds extra per year, or 100 expounds in cash terms. together with issues rise, a total of 326 pounds extra money each year for those working hard to pay for their family needs. [shouting] >> and, indeed, and it means just 10 months into office this coalition government has taken 1.1 million low-paid people out of tax altogether. [shouting] >> and one more thing, and one more thing, last year we restricted the allowance increased. this year we have not. the result is there will be no more people into the higher tax rate as a result of this budget. mr. deputy speaker, let me turn now to excise duties. first, air passenger duties.

mr. deputy speaker, let me be straight to the house. we had hoped we could replace the per passenger tax with a per plane tax. we have tried every possible option, that it reluctantly have to accept that all are currently illegal on international law. so we will work with others to try to get that law changed. but in the meantime, we are consulting today on how to improve existing bans that appear to believe the caribbean is further away than california. we will also seek to bring private jets which pay no duty at all into the scope of taxation. the wealthiest should not escape attacks by the ordinary holidaymaker has to pay. and i can tell the house there was a heavy duty last year and with the cost pressures on family we think it would be fair to delay this able air passenger duty rise for next year. let me turn to duties on alcohol. we have already announced plans to increase duty on the

strongest beers and cut in half the duty paid on low alcohol beers. beyond that i can tell the house i have no further changes to announce the rate of on-call duty put in place by the previous government. as usual these changes will come in at midnight on sunday. i will announce again by my predecessors, tobacco duty rates will increase by 2% above inflation. however, it is clear that the structure of the tobacco duty regime is being exploited to produce cheaper cigarettes so we will change the regime to near the differential between these lower brands and the rest. between cigarettes and handle tobacco, this will reduce smoking and improve our nation's health. these tobacco duty changes will come into effect at 6 p.m. this evening. i turn now to other excise duties. rates of vehicle excise duty will increase by inflation only, and we will freeze rates for heavy-duty vehicles. i'm also proposing to increase the improved mileage allowance

payments. this mileage rate has not increased at all since 2002, making those who depend on their car to work increasingly worse off. it will not increased from 40p to 45p per mile. and i can tell the house that we will extend this release because volunteers out as package, cherries and other 7.4 for many years. all other duty rises will remain exactly as planned by the previous government, except fuel duty. the price of petro has become a huge burden on family. in the last six months, the cost of filling up a family car such as a ford focus has increased by 10 pounds. this rise is also hit businesses hard. especially small businesses. and it's important when shops -- and responsible government is able to listen and respond. let's be clear about what is

within our control and what is not so we don't raise false hopes. british government are not in charge of the world's oil price and as we've seen, events like those in the middle these can push the cost of petco at the pump higher. but british governments are in charge of the duty that we levy on petro. and the previous cabinet -- [shouting] the previous cabinet put in place before they left office a new fuel duty escalator that involve seven fuel duty increases. three have already taken place adding just over 3%, for the price of petrol. the third step on the escalator is due to come into effect next week and that would add almost another 5 cents to the price of a liter of petrol. i've made it clear that i would listen to the concerns put to me by so many people. many have suggested that we should use the extra revenues we automatically get from the north sea. and it's true that they go up when the oil price rises, but

the obr confirmed that rising oil prices also cause other tax revenues across the rest of the economy to fall by a similar amount. i'm not prepared to undermine the public finances like that. others in this house have suggested we create a separate vat rate for petrol. the treasury that examine this proposal it was not for the offset their 5p rise as coming. it would take six years to come into play and that is because it turns out to be illegal. so i have decided to reject this approach and do something different. [shouting] [laughter] >> mr. deputy speaker, mr. deputy speaker, the north sea oil tax regime was most recently changed in 2006 when the price of oil stood at $66. it is now almost doubled that amount. that means that oil companies

are making unexpected profits on oil prices that are far higher than those who base their investment decisions on. we do not in the north sea is intend to introduce a regime now. we can do something else. we can introduce a fair fuel stabilizer. [shouting] >> from tomorrow the supplementary charge levied on oil and gas production will increase from 20%, to 32%. even after this problems on a barrel of oil are forecast to be higher in the next five years than in the last five years that this will raise an additional 2 billion pounds of revenue. and we will use the new tax money to do this. first, we will delay the inflation rise until next year and also delay the april 2012 inflation rise and to the following summer. second, the fuel duty escalator

that adds an extra penny on top of inflation every year will be canceled. not just for this year or next year, but for the rest of this parliament. [shouting] >> but i don't want important investment in the north sea lost. so if the oil price sustains our falls below $75 we will consult on the precise figure, we will read and it is the escalator and reduce the new oil tax in proportion. that is how it will work. know as clear when the oil price is high. no extra tax on the profits of north sea oil company said the oil price falls and stays low. that's the fair fuel stabilizer. [shouting] >> and this is the result for bringing hard-pressed families. i have made sure there be no fuel duty rise this year. i have canceled the fuel escalator when oil price is high, and one final thing. as well as stopping these fuel duty rises i am saying that fuel duty by 1 penny per liter.

this will take effect in petrol stations from 6 p.m. tonight. [shouting] >> mr. deputy speaker, i know that by itself this will not in the pressure on family budget, but we've done what we can to help. help for families, help for businesses, governments have listened and tell. mr. deputy speaker, there was some who said issue that my job was to help families with the cost of living and of others who said no, mine is to support business, undertake far-reaching reform to help the economy grow. it is the central understanding of this government and core to our strategy that these are not two separate tasks. they are one and the same thing. we are only going to raise the living standards of families if we have an economy that can compete in the coming age so this is our plan for growth. we want the words made in britain, designed in britain, invented in britain to drive our nation forward. ..

>> chancellor -- >> the question is, that the pursuant to >> r supple charge portion no. 8. the alcoholic duty rates notion

10. and motion no. 12. d, amusement license duties, amount of duty motion no. 13. e, field duty raised from the 23rd of march, no. 14. f, stop duty prevention of avoidedance no. 9. as many say aye. the ayes have it. i call the counselor of the exchequer to call the motion of the law and the motions of the debate will take place today and end on the succeeding day. the remaining motions will be put to the end of the budget debate on tuesday the 29th of march. will the chancellor please read the motion. >> the question is that the expedient to amend the law with respect to the national debt and the public revenue and to make further provision in connection with the finance. 2, that the resolution does not

extend to the making of any amendment with respect to value-added tax so as to provide. a zero rating or exempting supply acquisition or importation. b, or the refunding an amount of tax, c, for any relief other than the relief has that i so far applicable to applies for every description and 2 so far as applicable to the services and applies the services of every description. i note the right honorable david miliband, leader of the opposition. >> mr. deputy speaker. the chancellor spoke for an hour but one fact says it all. and he couldn't bring himself to say it. growth down this year and next year. it's the same old tory, it's hurting but it isn't working. what was he said last year about

growth? judge me on the figures. judge him we will. every time he goes to the chamber, growth is down. down from 2.6% to 2.63%. in november, down again. and in january, what did the prime minister say. his three priorities for the year were growth, growth, growth. and what happened in this budget, growth, down, down, down. and taking account of all the measures -- and taking account of all the measures, what is -- >> order, order, order! we should show the same courtesy that was shown to the chancellor deputy. >> mr. speaker, what is the chancellor's singular achievement to deliver a budget for growth that downgrades the growth forecast. down this year to 1.7%.

downgraded next year to -- mr. deputy speaker, it didn't happen by chance it, happened by choice. it's the wrong choice to go too far and too fast. in his own words in the june budget, he chose to go 40 billion pounds further and faster in tax rises and spending cuts than our plan to half the deficit in four years. it seems in consumer confidence fall every month since the general election. in his first budget the chancellor promised steady and sustained economic recovery. and when last september's growth figures came out, the chancellor took the credit. he called the figures a vote of confidence in the government's economic policy. [laughter] >> but when the economy contracted in the fourth quarter, what did he do? he blamed the snow. mr. deputy speaker, even he -- even he must appreciate the

irony. because while the prime minister was grounded from his trip to thailand, he was on the piece of cloisters. i guess it was a right type of holiday but a one trip for our economy. mr. deputy speaker, what is it about the british snow? because they had worse snow? germany. a big freeze in france. in the u.s., the worst blizzards of the decades. but despite all of that, but despite of all that, their economies grew in the fourth quarter. and while our growth has worsened, theirs have improved. the german economy -- the chancellor -- the chancellor should just calm down just a little bit, mr. deputy speaker. the german economy is forecast to grow more strongly than it was last year. so is the united states. growth in the world economy has

been revised up. but which is the major country downgrading its growth forecast, the united kingdom. mr. deputy speaker, it's not the wrong type of snow to blame. it's the wrong type of chancellor. it's the wrong type of chancellor in the wrong type of government with the wrong priorities for britain. mr. deputy speaker, mr. deputy speaker -- >> courtesy should be shown but can i say to everybody, the public also wants to hear what the opposition has got to say. if the cabinet members do not want to listen, then please leave the chair. some people may agree, some may disagree. the opposition? >> they shout and sneer when it hits the highs. he also promised in his june budget that he would deliver low inflation.

and what happened? inflation has risen months after months after months. and it didn't simply happen by accident. it happened because he took the wrong decision on v.a.t. same old taxes, same old tories. and he promised us falling unemployment, too. and what has happened since he gave his first budget? over 60,000 more people looking for work. to this tory government, just like the ones of the past, unemployment is still is price worth paying. and when people heard -- and when people heard the chancellor's budget speech today, they will wonder what world he was describing. i think the chancellor should listen to this because -- because -- well, in the constituencies, in the constituencies of over 130 members of this house, 10 people are chasing every vacancy. 1 in 5 young people is looking for work. families are seeing their family

finances squeezed, not this year but year after year. and mr. deputy speaker, what does the government say to communities losing their jobs? let me tell you the people of the newport justifying the closing of their passport office. they say the redundantly would provide a boost in trade for the local economy. mr. deputy speaker, what kind of planet do these people live on? on growth, on inflation, on unemployment, on the promises he made, the chancellor couldn't bring himself to admit that his second budget tells the story of the failure of his birth. at this stage of the recovery, growth should be powering ahead. unemployment should be falling fast. and every month when unemployment is higher than it should be, it throws up long-term damage. every month when growth is low as it should be it hits the potential of our economy. the problem is instead of

committing it, he refuses to change course. what did the energy secretary say? if the figures change the government should not be lashed to the mark of their reckless gamble. it should be willing to change and think again. now, mr. deputy speaker, it's not as if they haven't had practice of the u-turn business. they're becoming the past masters on forecasts, school sports, housing benefits for those looking for work even for the vanity but on the lashed to mast they are least willing to change. now we learned something new about the chancellor. apparently his political aspirations is to be a blend of nigel lawson and michael hessletimes. mr. speaker, another comparison brings to mind. the same hubris and arrogance of the early 1990s. the same broken promises. the same views of unemployment is a price worth paying.

he's norman lamont with an ipod, mr. speaker. and no doubt on his playlist, jenna regret. [laughter] >> mr. deputy speaker, this is not a growth budget, it's not a jobs budget. it's a budget for more of the same. from a complasent arrogant chancellor and a complacent arrogant government. it's hurting but it isn't working. and let's not forget, mr. deputy speaker, these are not just the chancellor's decisions. they are not just the prime minister's decisions. they're the deputy prime minister's decisions, too. he is an accomplice to the tory plan. when it comes to the economy, the man who coined the phrase, long live britain, has a snooze button truly on. nobody voted for this plan.

least of all his liberal democrat voters who are told and promise after promise he would never confront them. mr. deputy speaker if i can put it this way to him, there's a reason nobody wants to share a platform with him. on the measures on this budget, on the measures in this budget, i welcome the support for the armed forces. i welcome the support for the armed forces. and on the measures he promotes growth, we will support him. but there is -- there is little -- if they listen. there is little reason -- there is little reason they will make the difference to grow we need. the justice secretary fell asleep during the chancellor's speech in growth strategies that were so compelling. but -- but, mr. deputy speaker,

but mr. deputy speaker, this is important. the office for the budget responsibility -- the office for budget responsibility has already factored in every single measure he's just announced and they still pronounced today's downgraded growth forecast. and you can't blame people for being skeptical when the chancellor says he has a new flagship policy for growth. because people are asking, people are asking what happened to his last flagship policy for growth during the budget? does anyone remember the national insurance holiday? in june, he took the credit of that dispatch force to helping 400,000 small firms. how many have actually benefited? mr. deputy speaker, he's strangely shy in revealing the figures. but someone let slip to the financial times. by mid-january it wasn't

400,000, it wasn't 40,000. it wasn't even 4,000. it was less than a half percent of the number he promised just 1500 businesses. now, on his incentives to small firms, we all looked at the details. i have to say -- but i have to say -- i have to say his decision to counsel flexible working for families with children between 16 and 18 is extraordinary. this prime minister took credit for championing that policy. and in a few months later he takes the credit for small businesses for dumping it. has he got no shame? the idea -- no. the idea -- the idea that families needing flexibility for our economic future is frankly absurd and it tells you all you need to know about this

government's values. and how they think our economy succeeds. greater insecurity as a route to greater prosperity. we take a different view. flexible working is yet another growth and promise from the broken promise prime minister. now, mr. deputy speaker, while we're on the subject of broken promises, remember what the prime minister said before the election. he said he would be the banker basher in chief. now, the chancellor made great play of his budget speech but the reality is this, last year labour's bonus tax raised 3.5 billion pounds. it's in the redbook. and this year the bank levy raises just 1.9 billion pounds. it's the tory government cutting taxes for the banks while they raised taxes on everybody else. and he should have -- and he should have used the money to invest in the jobs funds which

they abolished to make a real difference to housing in this country and to boost enterprise. mr. deputy speaker, they're failing on growth and they are failing on living standards, too. what did the prime minister say before the election? to families receiving tax credits? he said that below 50,000 pounds a year, that the tax credit was safe. when labour said otherwise, the home secretary said this. that is a lie and it is irresponsible for labour to be worrying families needlessly. but what is the truth? next year over 1 million families with incomes as low as 26,000 pounds will lose all their tax credits. they should be ashamed of their broken promises on tax credits. and it's hard the cost of living crisis they are pursuing. the chancellor said everybody under thro-5,000 would be better off. but let's look at the facts. he came along in the june budget

and put out v.a.t. costing families 450 pounds a year. now, he's got the nerve to expect them to be grateful when he gives them a fraction of their own money back. and what the what did the institute that fiscal studies tell us this morning. they said this, there's an all of lot of giving with one hand and taking away with lots and lots of other hands. it's a classic tory con. and what about about the decision on petrol. he whacked up v.a.t. by 3 pence. families won't be fooled by the economics. both on average families it's 5 up in the basic rate of income tax and just one p down next year. what do the british people know from history? every tory ends up costing them more. same old tory, same old defeat.

mr. deputy speaker, we needed a budget that changed the direction of economic policy. we needed a budget that protected the promise of britain so the next generation does better than the last. we needed a budget that changed course on cutting too far and too fast. the chancellor said over the weekend with his customary modesty he completed his rescue mission of the british economy. after this budget it's not the chancellor who's rescuing the country it's a country that needs rescuing from this chancellor. mr. deputy speaker, when families look at this budget, look at the squeeze on their living standards, look at their job losses in that community, they will conclude it's hurting but it isn't working. >> order! [inaudible conversations]

[inaudible conversations] >> put statements to this house first before going -- >> get on with the debate. >> we must move on. mr. andrew tirid. this budget will be judged on whether it keeps up on course to tackle the deficit and whether it provides the strategy to improve the long-run performance of the british economy. >> in my view we need to be clear, all of us, about one thing. we are living beyond our means

as a country. >> here, here. >> with every one pound in every four they spend has been foreign. that overshadows everything else today. despite all the clash of party symbols, the gap between the parties actually on the scale of action to reduce the deficit has been done. two-thirds of the adjustment has been done by the counselor of the exchequer. i regret he's not in place at the moment. it was courageous of him to set that deficit reduction plan out and their spending cuts out before the election. he did it. today, this chancellor has stuck to his plans to sort out the public finances. and that's taken courage, too. and i think deserves our full support. i think he's done the right thing. i want to make three further

points on the deficit. first, the government is not reducing public expenditures to dangerous levels. at 40% of gdp by the end of parliament, it will be returned to promptly the same level achieved by labour in 2008. nonetheless, the retrenchment is going to feel more painful from this time on. the consolidation in each of the next three years at around 2530 billion pounds a year is three times the amount implemented in the first year of this government. the third point i want to make on the -- on the deficit is that the pressure to flinch will now mount. we simply must not do so for at least two reasons. for a start it would cost the country a fortune in high deficit response as markets lost confidence in economic policy. and secondly, to do so would mean a field day for the

spending lobbyists once they smelled blood the government's strategy would be put severely at risk. i want to say a few words about the great strategy. today, the chancellor announced a comprehensive new approach to this. and it contains many measures which i think we should welcome, not least the large risk of deregulation measures. the planning and measures to improve access to start up capital. on all of those it's essential that each part of the strategies is consistent with other parts of public policy. individually, direct measures always sound attractive. the test is whether they form a coherent strategy. on those grounds i warmly welcome what amounts to a new agenda for tax reform to create the most competitive tax system in the advanced world. and i particularly support the reductions in corporation tax which will bring it down to 23%

within a few years. mr. deputy speaker, it's an absolute disgrace that the u.k. now has the longest tax code in the world. the complexity of the system is getting in the way of thousands of small businesses in our constituency. the very people who can take us back to sustained growth. we must have a tax system which allows enterprise to flourish. a few weeks ago, the treasury committee published a report setting out the key principles which should underpin tax reform. i can summarize them very briefly. let's have more simplicity. let's have more stability. and let's have lower rates and fewer relief as possible. i note in this budget the chancellor has announced -- has abolished 43 reliefs and he's gotten rid of 43 pages of the tax code and let's have medley in the tax system as well. the chancellor appears to have

set us out in the right direction. it will be now for the treasury committee and others to judge whether his proposals match up to the principles that we set out in our report and which match quite closely what others in the tax industry have concluded -- the tax advisory industry have concluded on the way forward. the committee would also examine who gains and who loses from the budget. last year, the committee demanded an unprecedented amount of detail on the distribution with respect to the budget. the chancellor responded and i'd like to commend him for this. by publishing more information than had ever been provided by a chancellor before. this will be particularly important with respect to the plan to merge income tax and national insurance contributions. now, this has been a beguiling idea at around which chancellors of the exchequer have looked at very closely and then in the end

rejected. largely because it hits the incomes in certain groups in unexpected ways. maybe the time has come for the treasury committee will take evidence on whether indeed the time has come to implement it. i think we should also look at a number of other proposals that will have long-term distributional impacts. among them, of course, the encouragement of charitable giving with the sizeable extension of gift aid and the inheritance tax relief. and i hope that the vast majority in the house welcome that, too. we will also do -- we'll do our best to examine the coherence of some of his other measures against wider public policy. i can best illustrate it by alluding to points made too me by colleagues in the house. the chancellor announced the creation of 21 enterprises. they must be designed carefully to ensure that they create jobs

and increase overall activity. the risk would always be with enterprises that they distort activity at the boundaries and add no new jobs. [inaudible] >> i will. >> i thank my honorable friend putting up the remarks. and don't you think it should be expended out to towns where we have a strong scientific corridor? >> yes. it just crosses my mind that you might have an interest in harlow. [laughter] >> the crucial issue is that if we are to create areas which have special reliefs that we don't inadvertently merely moving activity around the country while adding nothing to overall welfare of u.k. and that is a very difficult judgment and we need to look extremely carefully at it. >> will my right honorable friend be -- >> i will. >> my right honorable friend will have heard the chancellor

say that there will be discussions in relation to the position in wales and scotland. and the existence of an enterprise in the bristol area if the welsh assembly might not follow in that policy and it mightial for the relocation -- >> i think my right honorable friend is saying and i think they need to be accountable point to. and the cost of fuel. this budget gives some relief on fuel duty rises with the cancellation of the fuel duty escalator among other things while reducing other government policies putting up the cost of energy are a lot for businesses and homeowners in other ways. not least the price of electricity. and the cost of rail travel is also going up. does all this, the reduction for motorists and increase for rail users and much higher energy bills form a coherent policy?

i don't know. but it needs to be carefully examined. it needs to be examined particularly in the light of the chancellor's announcement for a price for carbon. all these issues need to be very carefully looked at. the distorted energy policy will make britain less competitive, particularly, in our export market. in our effort to -- in our effort to return to sustained growth, we need to make best use of every pound invested in our public services. another example of the need to make sure we have coherence in growth policy, it was put to me by colleagues on both sides of the house. they've asked whether spending 17 billion pounds up a high-speed rail is best use of the money instead of investing in modern rail and improving existing tracks. i suspect that millions of rail commuters whose trains are

unreliable and relatively slow will be interested to the answer to that question. i'm very pleased that the transport select committee has just announced an inquiry into this and i think a lot of people will be awaiting the outcome. >> i'm grateful on my right honorable friend. would he agree that high-speed rail has a profoundly bad economic decision for the whole country? >> what i'm deliberately trying to do is not answer the questions here but pose these questions for the select committees and others to try and answer. i think -- what i'm trying to point out is that in order to demonstrate a coherent of growth strategies, a large policies need to look to ensure that we're not wasting public resources in the next few years. i'd like to end just by making one -- i'll give way to -- >> can i thank the honorable

gentleman -- does it not concern him that nothing has been said in the budget today about the centerpiece of the government's growth strategy? in other words, the holiday on national insurance for small companies outside london and the southeast. shouldn't we know more about how that is going and whether it's been in any way a success? >> an interesting point and, of course, as he notes, we'll be holding hearings next week on this and we'll have an opportunity to take evidence on exactly that point. i'd like to draw my remarks to a close by just observing the growth and the deficit reduction strategy, the two issues that i've been discussing today. it will be one and the same thing. if a reduction in the size of the government -- of government allows room for the private sector to grow. i know that it's not something on which agreement will be reached across the house. but i hope members on the other side of the house will permit me

to end with a personal review. even if there was no debt, i believe we should still reduce public spending. at close to 50% of gdp, public spending is too high. >> here, here. >> it reduces choice and freedom for millions of individuals, and it burdens enterprises with unacceptable levels of taxation. during the 13 years of the last government, public spending averaged around 40% of gdp. i support the government's plan to reduce it back to that level again. >> here, here. >> could i just say to honorable members, there's a lot of members who want to get in today and quite rightly want to get in as many as possible. there's no time limit but brevity will be helpful to other people. so stewart bowden. >> i'm grateful, mr. deputy speaker, for the opportunity of speaking earlier and for the hollingable member and i raised three points i would like to take up. the first one he referred to the

reduction in the deficit over the next 45 years. and he said that he thought that this would give grave concern in the future and bring great pressure to bound the government not to continue with the program. in this sense he's perfectly right. 146 billion reduced to 122 billion. reduced to 70 billion, reduced to 26 billion for the years 2015 and '16. that's a massive drop and it will have consequences for the public sector which in the end he acknowledged. in the budget speech of the chancellor he did not make any mention to the welfare state. nor did he mention the point which the honorable member finished on which is the balance between the public and the private sector. and that is a clear imbalance that we're going to see between the public and the private and whether the public sector can shed jobs and whether they can go into the private sector. that is an interesting point.

and we will follow it with great interest. in the northeast of england, where we have something like 47% in the public sector, then you can see, mr. deputy speaker, the difficulties and the dangers of moving quickly and rapidly with such a massive debt reduction over 45 years. how wilson once said one man's pay rise is another man's ticket to the -- the deficit reduction we're talking about today is one man's job passing from the public sector. and i have to tell the honorable member since he made the point, he must remember that those who actually work in the public sector are producers. they pay taxes. they consume. and to remove them from that sector by such a drastic and rapid reduction in the deficit will not actually add to the prosperity or the standard of living of our people. >> mr. deputy secretary, i'm very grateful for the honorable

borrowed at 8 billion pounds. we have mixed up the structural deficit with the overall deficit but p but public spending will continue to go up. but ertain hand from the chancellor of the

exchequer when he made his budget speech. >> i'm very grateful for my right honorable friend giving way. would he also agree with me that my public sector jobs has a direct effect on the private sector. the university shows the northeast some 50,000 jobs will go because of public sector costs. 20,000 will be in the private sector. >> i'm grateful to my honorable friend. i've also seen the study of the pricewaterhousecooper on the impact on the northeast of the various deficit reduction plans that we have seen. may i congratulate without sick or fancy to the leader of the opposition, he made a very short speech, a very precise speech, but he hit -- he hit every nail on the head that needed to be hit. growth is down.

growth is down. we ended to a zero growth in the last quarter. where is growth going this year? 1.7% for the year. how does that compare with germany, 3% growth. >> could the honorable gentleman just enlightened the house when in any recovery from any major asset-based inflation growth has returned with even a 5 or 7-year period? one thinks of the 1930s which wasn't -- there was no return to growth until the end of that decade. one thinks of japan where there was no return of growth until this decade. how can you possibly attribute to this government a situation who regards growth as you do. >> i'm very grateful to the honorable gentleman's point and we have argued consistently and so has the international community that we had a financial crisis from 2008 and 2009. and out of that financial crisis, without making references to tsunamis, earthquakes, there are many after-shocks and it takes much

time to actually get over that. so i certainly agree with that point. but it was not us who said that we were going to raise growth in last year. it was the conservative government and the honorable member made an excellent point when he pointed out quite rightly that under a labour government, we had 40% growth of debt in relation to gross domestic products. my recollection it was 37-something percent. it was the financial crisis that pushed it up to where it was. >> i'm very grateful to my honorable friend for giving way. would he also say after all the measures we've heard from the chancellor and the budget, the growth forecast is actually after the effect of those. so actually how bad would the growth forecast have been without these measures? which it's still drastically down what he was suggesting when he delivered this budget nine,

tric ten months ago. >> i haven't government that far in my speech. if growth is down and inflation is up. and prices going up in france, inflation has 2%. where we have higher inflation is because of the policy of the government. we decrease it over a period of time the value of our currency by 25%. we increased our exports but we increased our imports. our imports are still greater than our exports. we are importing the inflation. the difference between the french inflation of 2% and our inflation which is going to run between 3.5 and 5% is actually we're importing and we're importing because of government policy. and so unemployment -- let me say is the point. unemployment going up. 17 years high. the chancellor made a great thing about 3,000 jobs in the manufacturing sector.

he didn't refer to all of those jobs. how many more jobs will be lost when we move into the actual cutbacks starting april the 1st on local councils. how will they deal with the 20% reduction and the nigel health system. we know we will lose jobs in middleboro. we're the fourth highest unemployment rate in the country. that is wrong. and that happened under a labour government, happened under a tory government but the cutbacks that have been announced and have come back to this massive deficit reduction program announced by the chancellor in his last budget would actually push us further down. further down. and there was no reference made to the welfare states. what happened to the welfare state. what happened to the balance between the public and the private sector. what happened to those who are not able to look after themselves? where was all that in today's

budget. >> honorable members talked about what's happening in the northeast and the northwest over the last 10 years. we've seen public sector jobs increase by 100,000, between '99 and 2009. in the private sector we've seen growth of just about 10,000 jobs. that is completely unsustainable. what can -- what do you propose is going to address -- address that situation? how are they going to do that? >> well, let me be how grateful to the honorable gentleman. that may be a figure in his part of the world and it may not be a figure in the other part of the world. let me get back to the point. we created a balance between the private sector and the public sector and we believe that balance was the right plans of the country and in terms of the northeast of england when we lost manufacturing jobs, we lost steel jobs, we lost coal jobs and ship-building jobs, we dissolved in the public sector unleashed those who worked in the public sector created careers for themselves and

related to the point my honorable friend made. there was a relationship between the public and the private sector. they work together. >> i think the honorable gentleman had a -- >> i say my right honorable gentleman who has been most generous committee explain why the government whom he supported was given a structural deficit several years before the financial crisis? >> we had no difficulty with the structural deficit because we believed in infrastructure projects. we believed in public/private initiatives. and it was exactly the same what the germans brought. it was a fine way of doing it and it's still a fine way of doing because in my constituency, we got the first public/private initiative which was to change university hospital. so we have nothing to regret on what is now called the structural deficit and when i say to the honorable gentleman i

said earlier, the structural deficit is like any other deficit. it's part and parcel of the full objective. and the right honorable gentleman who made the point earlier is perfectly right. why is the taxing this deficit public expenditure in other areas is going up. so get your balance right, mr. deputy speaker, and what we're not getting right is the balance here. the chancellor made a great play of competitiveness. he said that we were -- we've moved from fourth in the league of competitiveness to 12. we've made a big thing about competitiveness. he did not mention the euro, not surprisingly. he didn't mention the conference tomorrow and the day after when the european union, the sfooep -- 17 members of the eurozone. and why are they doing that? they are wishing to increase their growth and their imports and we're in competition with them. we're in competition with germany. we're in competition with france. we will be in competition with

these other countries when the counselor of exchequer talked about greece and spain. why the fourth economy of the world has to compare itself with greece? with 150% deficit, not the 60% or the 50%. we're talking about 115%. the 50% debt against gross domestic product. how come our nation states, the fourth largest in the world has to be compared to a small country of greece. and we go in the 67 billion deficit reduction in one budget and the chancellor today -- he was very gracious having already taken all this money out of the economy is now saying i won't be taking any more out. i'll hit you on the head with one big hammer and i'll come back with another one. how gracious of him. how gracious to destabilize within the space of nine months

our economy. and that is what he's done. that is what he continues to do. he will certainly rebalance the economy. it will be away from the welfare state. it will be away from the public sector. it will be away from the work force of our country. and he will weaken the fabric of our country and weaken the standard of living of all of our people. >> it's actually not the chancellor who's associated this economy with those of portugal, ireland, greece and spain but it's the international markets. when we have the governor of the bank of england in front of the treasury select committee two weeks ago, he and his team confirmed that without a package of fiscal austairity we will be we'll have more than what we are doing now at the moment and that's the official position of the bank of england and that's why these measures have been taken. >> i won't go down the road that

the exchequer will be criticizing the president of the bank of england that would not be appropriate for me but the advice that was given to the government when it became a government was a very severe advice comparing us -- comparing us with agrees. now, the right honorable gentleman makes an interesting point. at what point in our history did we turn over our economy to the ratings agencies? at what point did we say to ourselves, it's only a rating agencies when the rating agencies call you, and they all have a fix -- they have a panic. you're not to reduce our ratings, are you? mr. speaker, why would -- why did we as a nation state give our economy over to a ratings agency to moody's, to standard & poor's? where was the chancellor of the exchequer who said, no, i'm not going to do that. and in relation to the ratings agencies. the ratings agencies accepted the deficit reduction plan of a

labour government. they were happy with the four-year program. it was this particular government who fell back to the age of the noble lords and to the -- john major referred to my right honorable member. it's not working. it's not -- [laughter] >> it's not working. and that was the two points. the honorable gentleman gave away one i'm not sure i should give away to a second time. >> would you not agree with when john major left office in the last government? [inaudible conversations] >> that mr. deputy speaker is not true. and it could not possibly be true. how this made the reference to the we borrowed 11 billion in the month of february alone. so if one takes every aspect of this government's policy in relation to competitiveness in relation to growth, in relation

to unemployment, in relation to inflation, what one does see, that's the point i wanted to make in relation to the noble lords. this government is falling back to where it was way back from '79 to '83 and then into '92. the public sector doesn't count for very much. the welfare state doesn't count for very much. what counts is balancing the budget and i'm surprised that the honorable members of chiexster. in five years maybe we will be adopting a german proposal of balancing the budget completely in that time. so i don't want to hold the house up much longer. i would like to make some reference to my constituency and to say to the chancellor, we're very grateful that we have an enterprise zone. we're very grateful we have a local enterprise partnership. we will work closely with the government on both of those.

we have seen the muck balling of steals. we have someone to take over our steel mills. we will look to this budget. we will look to the local enterprise partnership. we will look to the new enterprise zone and we look to the new steel mill that that will create jobs, bring in 600 million in investment and for my part of the world, notwithstanding the cutbacks, notwithstanding the impact on local counselors for tea side, the future is bright and i'm very happy to be confident in that notwithstanding all the blows we will take over the next four years. thank you, mr. speaker. >> john? >> thank you, mr. deputy speaker. >> here, here, here. >> i want to remind the house that i do offer industrial advice to a swedish industrial group and investment advice to a british investment company. mr. deputy speaker, some members

ahave expressed displeasure that this side of the house should have mentioned the circumstances in agrees agrees and portugal. they remind us that we have a much bigger economy. and i'm pleased to say at the moment we have a better-managed economy than the case in greets agrees, spain portugal. our public deficit was larger even than theirs as a proportion of our national income when the big deficit reduction program started. and i would like to praise my right honorable friend the counsel of the exchequer for overseeing his central task day in and day out, month in and month out our five-year burden all of us in this house is to get that deficit down before it kills our public finances and our economy. >> here here. >> if anyone thinks there is no risk, i would invite them to go visit greece portugal or ireland and see what happens when you

ignore a deficit for the best of reasons. when you say, i do want to spend a little bit more on a good public cause and so i will borrow it so spend it. of course, we've all got great causes we would like to spend more money on. borrow somethi borrowing is something so often and when you're borrowing too much it destroys your general economy it doesn't provide too big of a burden on those who have to pay the taxes and the interest charges but in the end brings down the public sector as well with far bigger cuts and far less favorable choices than we have trying to take matters into our own hands by planning a steady deficit reduction. it is particularly poignant, mr. deputy speaker, that we are debating in this relatively civilized atmosphere in a relatively sane and sensible way an economy position about which there are strong agreements but no overall disagreements about the imperative to avoid big

rises in bond rates, interest rates and the imperative to get on with some kind of deficit reduction. on exactly the same day that the portuguese parliament is meeting to discuss not their first, not their second, not their third but their fourth package of emergency damaging public spending cuts and unaffordable tax increases because such is the plight their economy is being driven into by reckless overspending and too much borrowing and by of course being within the euro area. >> i thank my right honorable friend for giving way. would he agree in answer to the gentleman's question when the ratings agencies took over. they will go no further back in 1949 when we had a run on the forge exchange markets -- foreign change markets and we had the foreign exchange markets under labour government in 1976 to '9 where we had a run on the foreign exchange markets under a labour government? >> mr. deputy speaker, my right honorable friend is quite right.

the labour party has pointed out there was one or two examples under conservative governments too so i don't want to be drawn too far down the historical path. i think we can see what we need to see by looking at the modern reality where we see that as my right honorable friend the chancellor rightly said, currently and fortunately, british bond rates, the rate we have to pay to borrow money for public purposes are much closer to germany's than they are to many other countries in europe. and they are on the half the level they are in trouble of portugal at the moment. portuguese 10-year moment went through 8% today just to stress to those beleaguered portuguese parliamentans whether aem election might be an answer to their problems. if they don't take dire immediate action their country can't borrow at any affordable rate of interest and so they can't go on spending the extra 10% of national income that we

are currently spending which is borrowed to tie us through and to get us through better managed times. mr. deputy speaker, i think my right honorable friend the chancellor is right that having tackled the deficit and set out a pathway for doing it, he should then turn to the question of how he can accelerate growth. the truth of the 5-year deficit program is very simple. that we need well above average growth for the last three or four years of the program period in order to deliver the numbers in the redbook today, which is very similar to the numbers in the redbook we saw in the first edition of this chancellor last summer. and just to remind the house, the scale of the task, the government's plan is to be spending 70 billion a year more in the fifth year of the plan, 2014, '15 than the last labour year. an increase of 70 billion in cash terms, not a big increase.

there will be pressures because of it. but it is an increase of 70 billion a year. and to get the deficit down, by increasing the amount of tax revenue collected by an eye watering 175 billion pounds extra in the last year of the plan compared with the last labour year. we believe that we've seen all the important tax rate rises that the chancellor thinks are needed to do that. the rest depends upon that above-average growth that is still there in the official forecast at the office of budget responsibility. so the -- i give way. >> can i thank the right honorable gentleman for giving way your laying out the keys as i understand it for why we need to have credible reduction in our deficit because of the likely market reaction but does the honorable gentleman also be

concerned about the impact any austairity program might have and even a limited impact so far in the united kingdom and greece and likely in ireland that maybe too much too soon? >> i think he's absolutely right. i think the policies that ireland, greece and potter goal are being driven to may well not work because they are excessive. but that is the result if you go into the euro and then follow the market pressures inevitably produces. i see some labour members trying to see it's nothing to do them and they're looking away i remember being a lonely figure when i said we would not join the euro. i'm very pleased my party seems to be of that view. >> here here. >> i now believe the other two principal parties in this house have come around to the view that we certainly shouldn't join the euro any time yet. we have still to receive the apologies from them because surely they must accept now that if britain is being driven into

the euro in the way that they thought, we would have broken the euro and broken ourselves. the euro could scarce contain small economies the size of greece, portugal and ireland that were around that amount of debt. it couldn't contain britain comfortably with that amount of debt that britain started to incur and the british banks just as it's finding spanish banks difficult to tackle. i give way. >> i'm glad he added the words "anytime yet" in relation to the euro because it's inevitable over many, many years we will join the euro. oh, yes. can i tell the honorable gentleman that tomorrow and the next day 17 euro states will get together and put forward a proper plan for the euro and for the first time in our history, united kingdom is excluded. >> mr. deputy speaker, if they come up with good ideas we can adopt them. if they come up with bad ideas, we will be very