Budget breakfast Q & A

Speaking at the <em>New Statesman</em>'s annual Budget breakfast the Financial Secretary to the Trea

Philip Denner

Q: The macroeconomic policy of the government has clearly backed the wrong horses. Given the need for a radical rebalancing of the economy in the medium term, how will the government ensure that we pay our way in the world rather than living on borrowing to support a standard of living that the economy hasn't, to date, justified?

Stephen Timms agreed that we will see the financial sector accounting for a smaller share of the economy in the future. The government has been very careful, he suggested, in supporting other sectors to create a stronger economy - particularly with regard to manufacturing, a sector that has advanced greatly and is helping to shape the future of the economy.

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Barry Crossman

Q: What is going to be done about the dire straits that our nursery services find themselves in? Currently, couples are charged around £900 for a child to attend a nursery school and in some cases - for example, when in part-time work - the cost of child care surpasses earnings. In such an instance what is the incentive for people to continue to work? This country should be encouraging more people into work and considering tax breaks.

Mr Timms cited the Sure Start nursery scheme as having had a high success rate in return for the big investment made in nursery schools - investment that will continue for Sure Start centres. He acknowledged that maintaining support costs for childcare is a significant challenge and in response, as detailed in the Budget, the government has committed to giving tax credits to support the payment of childcare when people lose their jobs.

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John and Nancy Bray

Q: If inflation is, indeed, at 0 per cent will you be pegging our pensions in September this year? Our Old Age Pension recently went up by 80p which, on a four weekly payment of £457.00, seems to be less than even the bank rate.

Mr Timms responded by saying that the state pension has now increased by one of the highest amounts ever - from £90.50 per week to £95 per week. The amount of the current pension is set according to the high Retail Price Index (RPI) figures from September 2008. The obvious question, therefore, is that if next September's RPI decreases then will pensions also decrease? Mr Timms stated that the pension level will definitely not decrease and in fact is projected to increase by at least 2.5 per cent in April 2010.

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Mick Hitchin

Q: Efficiencies are okay but compulsory job cuts are not. As a Labour member and trade unionist can you pledge to defend public sector jobs which are now vital to so many jobs in the private sector?

Mr Timms responded to this with examples from HM Revenue and Customs where significant reductions have been imposed and will continue to be, though there have been no compulsory redundancies. It is hoped that with public sector jobs greater efficiency will be achieved as far as possible without the need for compulsory redundancies.