In his tenth Pre Budget Report yesterday Chancellor Brown spoke about the threat to British capitalism from India and China.
He said: ‘Once responsible for just one eighth of the world’s growth, China and India will soon capture almost half.
‘And increasingly they are competing not just on low cost, but on high skills.
‘While every year Britain adds 75,000 engineers and computer scientists, India and China add half a million; and while annually Britain turns out quarter of a million graduates, India and China now graduate four million.
‘So economies like ours have no choice but to out-innovate and out-perform competitors . . .’
Brown stressed ‘the investments that Britain must make can only be achieved in a new era of shared responsibility and partnership between private and public sectors.’
Announcing ‘a new system for assessment and funding’, for universities, he added: ‘we will bring together the research capability of our universities, institutes and pharmaceutical companies with the unique resources of the NHS.’
Moving to the ‘skills gap’ Brown pledged to ‘reform’ ‘underperforming colleges’.
After getting rid of student grants and bringing in fees driving thousands away from university education, Brown announced ‘an “earn to learn” programme for people to gain graduate qualifications whilst still working part time; new “summer universities” along with work experience and coaching to motivate young people to stay on in education after sixteen.’
Brown announced increases in Child Benefit to £64 a week and that child benefit will be paid from the 29th week of pregnancy.
He said the government was yesterday publishing an action plan for ‘third sector’ (i.e. charities and private companies) to take over public services.
He continued: ‘I can announce that in the spending review the norm should not be one year funding but three year funding for third sector organisations.
‘Community ownership of assets can provide local communities with a financial and social stake in their own areas.
‘So we are announcing a new £30 million fund to encourage local authorities and the third sector to work together to expand community ownership of community assets.’
Moving to ‘green’ issues, he said: ‘We are bringing together the major financial institutions: our aim, to make London the world’s leading centre for carbon trading.’
Announcing a pittance more for pensioners, he said: ‘In addition to the Basic Pension rising from next April by 3.6 per cent and the winter allowance, the pension credit minimum guarantee will rise by £5 a week for a single person and £7.65 a week for a couple.’
Playing on environmental concerns over carbon emissions, he announced that ‘From February 1st we will double air passenger duty.
‘For most journeys, over 75 per cent of them, duty will rise from £5 to £10, securing extra resources in the coming spending round for our priorities such as public transport and the environment.’
Also, ‘an inflation rise in fuel duty from midnight tonight, of 1.25 pence per litre.’
On ‘planning flexibility’, Brown announced plans for ‘strategic decisions on location and planning permission’ to be taken outside of local authority and government control by an ‘independent planning body’.
He added that ‘our risk based approach to local and national regulation’ will ‘cut the numbers of local authority inspections’.
He confirmed that ‘to fund operations in Afghanistan and Iraq and other international obligations’ he is spending ‘an additional £600 million’ on defence.
Also ‘an additional £84 million directed to intelligence and counter terrorism’ and the security budget for 2008 will be over £2 billion.
To raise cash, Brown revealed ‘over the spending review periods we will raise a further £30 billion from sales of land and buildings.
‘I can also confirm real term reductions, of five per cent a year, in the budgets of HMRC, DWP, Cabinet Office and Treasury and of 3.5 per cent a year in the Department for Constitutional Affairs.
‘And I can announce that for the years to 2011, I have reached agreement with Secretaries of State for net efficiency savings in their overall budgets of three per cent a year; and to cut their administration budgets by five per cent a year.’
In answer to a question, Brown said: ‘Of the Gershon numbers, 45,000 jobs have actually gone in the civil service.’
He added: ‘This is happening now and this is part of our desire to drive forward efficiency and get resources to the front line.’
Civil servants’ union PCS general secretary Mark Serwotka commenting yesterday said: ‘In cutting departmental budgets, the Chancellor has in effect signalled more jobs cuts and a u-turn on his acceptance that to go further than Gershon’s recommendations would put the delivery of frontline services at risk.
‘Services are already suffering as a result of politically driven job cuts and to go further in areas such as HMRC will undermine key services and the ability of the Exchequer to collect revenues to invest in public services.
‘It is against this backdrop that a civil service wide strike ballot grows increasingly likely unless the government can give assurances on services and jobs.’