To help preserve that heritage and to cut the costs of saving and repairing

To help preserve that heritage and to cut the costs of saving and repairing our listed church buildings we will introduce for repairs started after April 1 a new grant, the equivalent of a VAT reduction from 17.5 per cent to 5 per cent, a reform long sought by congregations across the country.At the centre of our communities are also thousands of non-profit sports clubs, and we will now consider the best way for the tax system to give them further support and to recognise their contribution to our community life.This Government’s policy is for free museums and I can announce that we will change the law on VAT to make that possible. The Secretary of State for Culture will set out the full details of the change.The film industry tax incentive we introduced in 1997 which is contributing to the unprecedented success now enjoyed by independent British films, will at a cost of £50m next year be extended until 2005.Our ambition for Britain is full employment, employment opportunity for all. I can report to the House that one and a half years early and at one-half of the planned cost, we have exceeded our goal, not 250,000 but 275,000 young people have now moved from welfare to work.With 1.1 million more men and women in work than four years ago, Britain now has the lowest unemployment since 1975, the lowest long-term unemployment since 1979, the lowest youth unemployment since 1975; the highest employment ever among women; with today 1 million vacancies spread across the country.EMPLOYMENTBut there is still more to do. The demands of the new economy mean we are likely to need 2.5 million more employees at degree or higher degree levels, and overall more workers requiring higher skills and qualifications to fill new and higher paying jobs.So at the heart of our approach is that Government must meet its responsibilities, providing incentives for work and training; companies must meet their responsibilities to upgrade skills in the workplace; and people must take up their responsibilities to work and to prepare for the jobs of the future.We have already made major changes to reward work – the New Deal, the working families tax credit and the 10 pence income tax rate. Now we have decided that following on stage one of the New Deal – when long-term youth unemployment has fallen by 80 per cent – it is time for stage two designed to link those who need jobs to the jobs that need skills.TRAININGNext week the secretaries of state for Employment and Social Security and I will publish detailed plans to get the hard-to-employ back into work; to promote employer-led sector initiatives under which the unemployed learn key skills; and to improve training in the workplace.The starting point is a new “employment first” principle. In the past the unemployed signed on for benefit before they looked for work.

Now before receiving benefit the employment first principle means they will first have to be interviewed about job opportunities and the steps they are ready to take to get back into work.For the hard-to-employ, those still left behind, we are proposing from April at a cost of £200m a year a new regime built around more intensive coaching and stronger sanctions for the over 25s.For 30,000 benefit claimants who have been drug addicts, a new three-year budget of £40m will mean they can receive the mentoring and training they need, but to get on the programme they will have to get off drugs. We will fulfil our responsibility to help them; they must fulfil their responsibility to become drug-free.Next, to link the unemployed without skills to the jobs that require skills, we will announce separate initiatives to fill job vacancies in the IT industry, construction, hotels, retail and financial services.And as a result of the spending review the Secretary of State for Education and Employment has now allocated over £1bn so that modern apprenticeships – 75,000 in 1997, over 220,000 today – will rise to 320,000, as we discharge our duty to invest in the skills of the next generation.Already with the New Deal lone-parent employment has increased by 100,000, on the road to our goal of 70 per cent employment for lone parents.From next month at a total cost of £100m next year we will enhance the choices on offer to include not only full and part-time jobs and training but an offer of self employment, in all cases accompanied by help for child care. In return the Government has decided that from next year all lone parents on income support including parents with children under five will be required to undertake interviews about work choices at regular intervals.And in the new economy people already in work constantly need to improve their skills. Britain cannot succeed when up to 30 per cent of employees do not have the basic level two qualifications. Here too employers, employees and government all have a role to play.For our part we are pre-pared to examine radical new options. To back up the tax relief we offer for employee training, we are prepared to consider how best we can help employers meet their responsibilities, including the case for a new tax credit.PAYIf we are to reach our long-term employment goal we must also do more to reward work.Our vision of the future of the tax system for work is of one that by integrating low starting rates of tax and targeted tax credits makes work pay, brings more people into work and moves us towards our goal of full employment.This government introduced the first-ever national minimum wage and it is this government which has this week raised the minimum wage as of October this year from £3.70 an hour to £4.10 an hour and then, next year, subject to economic conditions, to £4.20.Today I can go further and announce that for all families on the working families tax credit there will be a rise from June this year of £5 a week.This takes the hourly minimum rate for those on the working families tax credit not just to £4.10 an hour but to £6.40 an hour.When we first announced the working families tax credit the minimum family income for full time work was £180 a week. This year the minimum will be £225 a week, or £11,700 a year.And as part of our programme to ensure new disability rights I can announce that in addition to a new guaranteed minimum income for a severely disabled person on benefit of £142 a week, for those in full-time work the disabled person’s tax credit will alsobe raised from June this year by £5 a week to guarantee a minimum weekly family income of £250.CHILD CARETo help parents into work I have also decided to pay working families more towards the costs of child care.In addition to the childcare places being created for one million children, the childcare tax credit will, from June, pay up to 70 per cent of childcare costs up to, instead of £100 a week as now, £135 a week for one child and, instead of £150 a week, up to £200 a week for two or more children, another step in our plan to place affordable childcare within the reach of all working families who need it.I turn to other measures that will help hard working families.MOTORINGI can announce that for the coming financial year we will freeze all rates of car vehicle excise duty.Having completed our consultation on new duty rates, I will now move ahead with the proposal to extend the £55 reduction on the standard licence fee from all cars up to 1200ccto all cars up to and including 1.5 litres.This will include for example Escorts, Astras, Micras and Rover Metros, in total an extra 5 million cars.This reduction, to be implemented in July, will be backdated to November last year.

In total nine million cars up to 1.5 litres will pay £55 less.From this month also for all newly purchased cars, a new four-band vehicle excise duty rewards the most environmentally friendly vehicles. Seventy per cent of all new cars will now enjoy a reduced licence fee.Since last November, lorry owners have already received rebates for up to half of this year’s licence fee, a total of £220m.And following our pre-Budget consultation and at a cost of £300m a year we will sweep aside the 100 separate lorry licence rates, consolidate them into seven rate bands – linked to environmental standards and set in consultation with the industry – cutting the rates to match the lowest in Europe.For the lorries used most for international haulage the fee reduction will mean savings on the old rate of between £1,500 and £2,100 a year. Around 115,000 vehicles will saveover £1,000.And next month we will abolish vehicle excise duty on all tractors. Transport spending is set to rise by 20 per cent a year over the next three years, as we take forward our ten year plan of £180bn private and public investment.PETROLIn November 1999 I announced the Government’s new approach to the fuel escalator, first introduced by the previous government in 1993, and which by 2010 will have secured a reduction in carbon dioxide pollution of one to 2.5 million tonnes.As I stated in the pre-Budget report: this year we will not proceed with the annual inflation rise in petrol tax that has been the norm on Budget day.After consultation on my pre-Budget report I am able to confirm further changes.In addition to the 1 pence cut in ultra low sulphur petrol last October, the duty on ultra low sulphur petrol will be further cut by 2 pence per litre. To make sure all motorists can benefit from this 2 pence cut I will extend it to unleaded petrol until June 14: when the industry says ultra low sulphur petrol will be 100 per cent available. The 2 pence cut for both ultra low sulphur and unleaded petrol will take effect at 6 pm.Lead replacement petrol will also be cut – by a further 2 pence per litre.And because it is right to maintain the proper balance in the tax treatment of petrol and diesel I propose to match the cut in low sulphur petrol with a cut in excise duties in ultra low sulphur diesel for all diesel users of 3 pence a litre, to take effect from 6pm.The pre-Budget report launched the green fuel challenge: with industry invited to submit plans for new, more environmentally friendly fuels.

I can announce that duty will be cut radically on alternative fuels – a further 6 pence per kilogramme duty cut on road fuel gases with effect from 6pm tonight and from next April a 20 pence duty cut for bio-diesel.To allow this new industry to plan ahead, duty on road fuel gases will be frozen in real terms until 2004.ENERGYWe cannot achieve the Kyoto targets and our goal of cutting carbon dioxide emissions by 20 per cent without the climate change levy which, with April’s simultaneous cut in employers national insurance, brings no additional revenues to government but which will cut carbon emissions by 5 million tonnes by 2010.To reward businesses investing in energy saving improvements, the Government is publishing this month the list of technologies that will qualify for 100 per cent tax relief and later this year we will launch a green technology challenge offering this 100 per cent tax relief to companies investing in the next generation of environmental technologies.As previously announced, the landfill tax will rise from £11 per tonne to £12 per tonne.EXCISE DUTYI turn to the other excise duties Last year I froze duties on spirits. This year an inflation rise would push the price of whisky up by 11 pence a bottle. Because of the competitive position of the industry I will this year continue to freeze duty on whisky and on all spirits.And this year I propose to go further and freeze duty on wine and on beer.Beyond the normal inflation rise of 6 pence, I will not go ahead with any real terms rise in cigarette taxes.Following our consultation with the betting and gaming industry over the impact of internet trading, I have decided from January 1 to abolish betting duty which has been in existence ever since betting shops were legalised.I have agreed that the tax on bookmakers’ gross profits will be 15 per cent, which the leading bookmakers have agreed not to pass on to their customers. So by January 1 no one will have to pay a tax on their bets.For inheritance tax I propose to raise the allowance, so that no tax will be charged on estates up to almost a quarter of a million pounds, a threshold of £242,000. 96 per cent of estates will pay no tax.FAMILIESI turn to tax and benefit policy for families.A policy that puts families first in the tax and benefit system insists that – as the Beveridge report said in 1942 – nothing should be done to remove from parents the responsibility of maintaining their children but it is in the national interest to help parents discharge their responsibility properly.Our vision of the future of the tax system for families with children is to support all families; to give most help at the time they need it most; and to give more help to the families who need it most. So freed of poverty, every child has the best start in life.And consistent with our support for independent taxation of individual income, our vision for the integration of the tax and benefit system for families is that support should be based on family income, the basis of the new integrated child credit.By 1997 support for children had fallen in real terms by 6 per cent since 1979 as child benefit was frozen; there was no recognition at all of the needs of children in the tax system; as a result families with children had incomes 30 per cent lower than families without children; and child poverty had trebled.So first we made radical improvements in child benefit which is paid to all 7.5 million families with children.Child benefit in 1997 was only £11.05, or £575 a year.From April child benefit will be £15.50 a week, £806 a year.But of course we realise that £15.50 is too small a recognition of family needs for most families and that it is totally wrong if the tax system contains no allowance for the needs and costs of bringing up children. So in addition to child benefit the new children’s tax credit is being introduced on April 6.And after consultation I have decided that our new children’s tax credit will be paid not at £8.50 a week or £442 a year, as originally proposed, but it will be paid at £10 a week, £520 a year.For families on average earnings this is worth more than a 2.5 per cent pence cut in the basic rate of income tax.With the children’s tax credit 5 million families who received only £11 a week in 1997 for the first child now receive up to £25.50 a week, an increase from £575 a year to £1,320 per family.With this major change in our tax system, financial support for families with children has never been higher.We know also that greatest help should be there when children are youngest; the time when family income tends to fall as family costs rise.We can do more to help mothers and fathers balance work and family responsibilities.Indeed, we want to make it easier for mothers to make the choice to stay at home after their child is born and for much longer than previously.I can announce that following the maternity review set up in last year’s Budget under the leadership of the Secretary of State for Trade and Industry, maternity pay which is £60 will be increased in successive stages to £75 next year and the year after to £100 a week, as big a rise in two years as in the previous 40.We will also legislate so that, at the same time as the £100 is introduced, the statutory obligation to maternity pay will be raised from 18 weeks to 26 weeks.And at a cost of £30m I will extend the help small and medium-sized employers receive for administering the scheme.Parents who adopt will for the first time receive similar benefits.And we will introduce two weeks paid paternity leave, set at the same level of £100, paid for by the Government, with further details of this and other measures to be announced by the Secretary of State for Trade and Industry.For the first year of a child’s life, I propose a further innovation.From April next year for families with new-born children, the children’s tax credit will be set at an even higher level and paid up the income scale to all households where the main earner earns up to £50,000 a year.I propose to set this children’s credit at over £1,000 a year, worth £20 a week.

And I will ensure that this £1,000 baby credit will be continued and will be paid to the mother when the new integrated child credit comes in, in 2003.So to summarise these changes: families receiving the higher children’s credit and maternity pay will be up to £2,240 better off.Our ambition for Britain is that every child has the best start in life. When we came into power, one child in every three in our country was in poverty.While child benefit starts at £15.50 for all families, the maximum rate of support for children will go as high as £51 a week, a rise of £23 a week since 1997.The income support child credit will rise by £1.50 a week, the Sure Start maternity grant will be set at £500, helping to take more than 1.2 million children out of poverty this parliament as we work to cut child poverty in half by 2010 on the road to its abolition.DRUGSFor the sake of every family in the country we must and will do more to fight drugs.For too long in too many communities we have fought a war against drugs which drugs have won so I have a further spending announcement.Next week the Home Secretary working with the Minister for the Cabinet Office will announce a new three-year budget of over £200m. To every one of the country’s 350 partnerships against crime and disorder, direct payments averaging £500,000 and up to £1m will be made straight to police commanders and anti-drugs leaders. Similar funds will be available for Scotland, Wales and Northern Ireland.This war against drugs will never be won by government alone but can only be won neighbourhood by neighbourhood across the country, so further resources will be announced to support a new anti-drugs campaign involving prominent figures from the world of business and sports to mobilise communities against drugs.I come to the next set of Budget judgements.