HC Deb 03 December 1997 vol 302 cc346-54
Q1. Dr. Tonge

If he will list his official engagements for Wednesday 3 December.

Does the Prime Minister—[Interruption.]

The Prime Minister (Mr. Tony Blair)

This morning, I had meetings with Cabinet colleagues and others. Later this afternoon, I shall have a meeting with the Prime Minister of Italy.

Dr. Tonge

I apologise to the House, Madam Speaker.

Does the Prime Minister accept that yesterday's local government settlement will inevitably mean that local councils will have to take money from the elderly and the disabled, and that next year's council taxes will be the highest on record?

The Prime Minister

Under our proposals, an extra £1 billion is going into education—more than the hon. Lady's party sought—and an extra £350 million for community care. We are making the funding of councils fairer, but yes, there is a limit on the amount of resources that we are able to put in. The hon. Lady and her party call for more money for health, education, local government, the coal industry, transport and the environment, and all that is to come out of 1 p extra on the standard rate of tax. They also want the programme for the young unemployed, but they do not want the windfall tax. All I can say is that it must be the longest "p" in history.

Siobhain McDonagh

Does my right hon. Friend share the anger of my elderly constituent, Mrs. Goldsmith, whose husband is in a coma in hospital, as a result of suffering a heart attack brought on by the distress caused to him by bricks being thrown at his window by young people, some of whom were as young as nine or 10? Will my right hon. Friend take this opportunity to reaffirm to the House and to the country, as well as specifically to Mrs. Goldsmith, that his Government will do everything in their power to reduce the time that it takes to bring young and persistent offenders to justice?

The Prime Minister

Certainly, I can confirm that to my hon. Friend. The Goldsmith family have my deepest sympathy, and the sympathy of all in the House. They are, unfortunately, not alone in the plight that they suffer, which is why the Government are determined to take action not just in cutting the time that it takes to get persistent young offenders to court but in dealing with the fact that youngsters, sometimes under the age of 10, are out late at night with no proper parental supervision. We are determined to put an end to that, in the interests of our elderly people and safety in our communities.

Mr. Ashdown

Leaving aside for a moment the fact that the Prime Minister seems to be as good this week as he was last week at misrepresenting the Liberal Democrat position on the basis of what he well knows to be an inaccuracy, I turn to a different—and perhaps even more serious—subject.

I have no wish to anticipate the details of the statement to be made later on bovine spongiform encephalopathy, but will the Prime Minister at least confirm that he knows and understands that a decision to ban beef on the bone at this stage will come as a bitter and terrible blow to a beef industry that is already reeling from recent events? Will he confirm that the paramount necessity to take whatever steps are required to preserve public safety will be applied equally not just to British beef but to imported beef?

The Prime Minister

I understand the plight that the beef farmers face at the moment and how great a blow this must be to them. However, when we receive scientific advice and the chief medical officer makes certain recommendations, we feel obliged to follow them. We shall do everything we can to mitigate the problems that farmers face. I confirm to the right hon. Gentleman that we would expect the same conditions to apply to any beef that is imported into this country.

Mr. Ashdown

I am grateful to the Prime Minister for that reassuring answer, and I am particularly grateful for his statement that he will do anything he can to compensate and assist farmers. I remind him that there is a great deal of unclaimed money in the European Union.

It would be especially helpful at this stage if the Government were to claim that, because of the high rate of the green pound and the damage that it is doing. Has the time not now arrived when we should have, once and for all, a proper public inquiry into the whole miserable mishandling of this affair by the previous Government?

The Prime Minister

We shall make a statement later about an inquiry into BSE and the handling of that issue in the past few years. This year, with the over-30-months scheme and other measures, some £1.4 billion will be spent on providing support. The problem with asking for more money from Europe is that, as a result of the abatement scheme agreed under the previous Government—which is, on the whole, a good thing for Britain in terms of the rebate that we receive—£71 out of every £100 that we receive must come from the British Exchequer. We obviously must take account of that when making any such application.

Mr. Borrow

Does my right hon. Friend agree that the appointment this week of the Independent Commission on the Voting System is an important part of the programme to modernise the British Constitution? When is the commission likely to report and when will the referendum be held? If the referendum finds in favour of an alternative to the first-past-the-post system and if the Parliament runs to its full five-year term, will it be possible to have that alternative system in operation at the next general election?

The Prime Minister

The answers to those questions must await the outcome of the commission, although I expect it not to take an overdue amount of time in reporting. I am very pleased that it has been set up, in fulfilment of the pledge that we gave at the election.

Q2. Mr. Peter Atkinson

Does the Prime Minister recall writing an article that appeared in the Evening Standard of 14 April this year—two weeks before the election—in which he provided answers to 50 questions? One answer states: Our expenditure plans require no additional taxation. In light of that, how does the Prime Minister justify a 10 per cent. increase in council tax? Surely that is yet another Labour broken promise.

The Prime Minister

That is absolute nonsense. We gave pledges on the standard and top rate of income tax, and we have kept to those pledges. We never promised—no Government could—that we would never raise council tax bills in any shape or form. The actual rise that has occurred is the increase pencilled in in the Conservative Government's spending plans.

Q3. Mr. MacShane

Question 3, Madam Speaker—[Interruption.] This is my first question under the new regime. Forgive me, Madam Speaker.

Does my right hon. Friend agree that, in view of the fact that RJB Mining made profits of £173 million in 1995 and £189 million last year, questions about the future of the coal mines that Mr. Budge owns should be addressed, first and foremost, to Mr. Budge? Given the huge importance of the industry, especially in Yorkshire, I ask my right hon. Friend to give some words of assurance to those who believe in the future of that industry—particularly those brave and skilled men who work in it.

The Prime Minister

We will do everything that we can to assist the coal industry. My hon. Friend is absolutely right to point out the very substantial profits of RJB Mining in the past two years. It is also the case, of course, that other British deep-mining companies have signed contracts with generators at more competitive prices. However, having said that, we are working as intensively as we can to try to ensure that the generators and RJB come together. We want to preserve as much of the deep-mined coal industry as we possibly can. This comes at a time when the National Grid and others are advising us of the dangers of relying too much on gas-fired power stations.

In the light of that new advice, my hon. Friend the Minister for Science, Energy and Industry will announce today a review of our policy on the approval of new power station developments. He proposes that, in the meantime, all existing applications should be put on hold. That is consistent with the long-term energy needs of the country. It is not a panacea by all means, and it certainly is not a Government subsidy, but it is important that we do all that we can in the long-term interests of energy policy in this country.

Mr. Hague

When the Paymaster General said yesterday that the well-heeled have already done very well out of tax shelters, was he referring to people who have saved more than £50,000 in their working lives, or was he simply speaking for himself?

The Prime Minister

The announcement that was made yesterday is good news for middle Britain. There will be 6 million extra savers as a result—6 Million people will be able to save but at present cannot. Nothing better demonstrates the difference between the two political parties than the right hon. Gentleman's party saying that the system should not be changed at all and our party saying that another 6 million people should benefit.

Mr. Hague

We are all in favour of encouraging saving. We are not saying that the system should not be changed, but do not these proposals penalise hundreds of thousands of people who have worked hard and saved hard in good faith? Was it not a bit rich for a Minister who has £12 million in tax-free offshore trusts to introduce a new tax for people who have worked all their lives, only to build up much smaller amounts? In order to improve these proposals, will the Prime Minister reconsider? Will he order the Treasury to reconsider the £50,000 limit that the Government advocate?

The Prime Minister

I should explain that the same amount of tax relief is going in under our proposals. Indeed, over time there will be more. As a result of people being able to put in cash and take it out as they want—as opposed to its being tied up at the moment for five years—many more people can benefit. Supermarkets, banks and others will offer new proposals. The right hon. Gentleman says that the limit is £50,000. I should point out, of course, that for a couple it is £50,000 each—in other words, £100,000. Therefore, I believe that ensuring that the tax relief that we give is directed to middle and lower-income families is the best way of using it.

Mr. Hague

If the Prime Minister is not prepared to reconsider these proposals for the hundreds of thousands of people who will be adversely affected, what will he say to the people who were told by that the Labour party would not do this? The Chief Secretary said to the Investors' Chronicle last year that the idea that Labour is examining proposals to abolish personal equity plans and tax-exempt special savings accounts was "not true". He went on to say that people were entitled to certainty. What sort of promise is that? What consideration can the Prime Minister give to proposals that involve breaking a promise on which his party was elected to power?

The Prime Minister

That is absolute nonsense. No promise was broken. The same amount of money in tax relief is going in, but, for the first time, the 4.5 million people who have TESSAs, which have a £9,000 limit and which have to be in for five years, can now increase the amount up to £50,000. They can put in £1,000 in cash each year as they wish, and they can get it out as they wish, and the amount of tax relief is set to rise over the coming years. For the first time, middle and lower-income families have a tax-free account into which they can put money. The money can grow. This is about extending opportunities to save, not curtailing them.

Mr. Hague

If the Prime Minister does not think that the Chief Secretary broke promises from what he said to the Investors' Chronicle, he should see what the Chief Secretary said to The Observer. The Chief Secretary said: We've always supported the Pep regime … We're not reviewing it at all. The newspaper commented: It is easy to imagine Labour putting a cap of … £50,000 per person on these holdings. But Darling says he is 'not actively looking at' the question of a cap. Does the Prime Minister recognise that the proposal is a clear breach of an election promise? Have not middle-income earners now seen mortgage tax relief slashed, pensions clobbered, council tax raised and TESSAs and PEPs scrapped? Will he reconsider the £50,000 limit, because people invested in good faith?

The Prime Minister

The right hon. Gentleman has just suggested that the £50,000 limit is retrospective. That is not the case. Those who have money in funds are protected right up to April 1999, when the new system will be introduced. There will actually be more money for them.

We know that interest rates have had to go up since the election, on the advice of the Bank of England: they would have gone up before the election had the previous Government acted responsibly. As for council tax bills, we inherited those figures from the previous Government, and I doubt whether the right hon. Gentleman stood up in Cabinet and said that they were wrong.

The plain fact of the matter is that this proposal will give 6 million more people the chance to save. There is a simple choice. We can either give those 6 million people the first chance that they have had in their lives to save in a tax-free account or carry on paying a large sum of money to a small group of people at the top. I believe that we should opt for the many, not for the few.

Mr. Hague

If the Prime Minister does not recall what the Chief Secretary said, does he recall that, during the election campaign, he himself said that the idea that he would take action against PEPs was "completely absurd"? Does he recall saying that he had no plans to increase tax at all? When he put up posters saying that, he did not put a footnote saying, "Except for people who have saved hard over recent years" or "Except for people with pension funds" or "Except for people reliant on disability benefits." He said that he had no plans to increase tax at all. Will he now review the £50,000 proposal? It is, after all, in a consultation paper; so if it is not open to review, what is the point of the consultation?

The Prime Minister

First of all, let me say that no one will take lessons on broken promises from the party that said that it would never put VAT on fuel, and put it on, and introduced 22 tax rises.

Government is about the choices that we make. There is a choice: we can either spend the same amount of money on tax relief and give 6 million more people the chance to save, or carry on with the existing system. I believe that it is better to give people the chance to save for the first time in their lives by opening up savings to the millions of people who have never had that chance. Millions of people in this country who listen to this debate will realise yet again that the Conservatives represent a few people at the top, whereas the Labour party stands for the many.

Charlotte Atkins

Does my right hon. Friend agree that a sensibly set national minimum wage will encourage employers to invest in the skills of their staff, and hence help this country to compete? What time span does the Prime Minister envisage for the introduction of the national minimum wage, which is so important to my constituents in Staffordshire, Moorlands?

The Prime Minister

Obviously we want the minimum wage to be established as soon as possible. Of course my hon. Friend is absolutely right: properly implemented, a minimum wage is a good part of a modern labour market strategy, which is why many countries that have minimum wages, such as the United States and the Netherlands, have lower unemployment than Britain.

Of course, one of the benefits of a minimum wage is that it will get us some way towards reducing the huge benefit bill that goes to subsidise low pay. Despite what the neanderthals on the Opposition Benches say, a minimum wage is not just fair, but the right thing for employment.

Q4. Mr. Green

The Prime Minister will recall the Chancellor of the Exchequer saying at the Labour conference last year that A Labour Chancellor will not permit"—

Hon. Members


Mr. Green

I am reading the Chancellor's quotation. He said: A Labour Chancellor will not permit tax relief to millionaires in offshore tax havens. May I ask the Prime Minister: has the Chancellor reversed that policy? If not, may I suggest that the Prime Minister introduce him to the Paymaster General, who, at the same time as denying small savers in TESSAs and PEPs the fruits of their saving, is enjoying the fruits of exactly the kind of offshore tax avoidance that the Chancellor condemned in opposition?

The Prime Minister

No, Madam Speaker.

Q5. Mr. Skinner

Now that my right hon. Friend has turned over the pages of the energy policy—which some of us have been arguing about for a long time—by restricting the amount of gas that is used in power stations, may I sort of jolly him along a little further and suggest that it would be a good idea as well to restrict the electricity from France, which is also getting rid of miners' jobs, and to stop the protection for nuclear power? Will he also bear it in mind that it comes a bit thick for that millionaire Budge to talk about sacking miners, when he is getting opencast licences by the score and every million tonnes that are ripped out of the soil result in 500 miners losing their jobs in a coal mine? Something has to be done about that as well.

The Prime Minister

On my hon. Friend's point about imports of fuel, of course we are taking action on that. Indeed, a Bill that is going through the House will improve the situation. It is also the case that, as a result of the announcement that my hon. Friend the Minister for Science, Energy and Industry will make, some relief will be given to the industry by the moratorium on gas-fired power stations.

On opencast mining, proper consideration needs to be taken—which my hon. Friend knows that we will ensure—of the environmental factors, although many people work in the opencast industries as well, but what is important is that we set any decisions that we take within a long-term energy policy, because it is too important to be left simply to short-term market forces, which was the policy of the Conservative party.

Mr. Shepherd

Why, when the Cardiff electorate rejected the Welsh Office's proposals for an elected assembly, and when 75 per cent. of the Welsh electorate withheld consent to the proposals, are the Government proceeding with them? Is that not a denial of representative democracy? Why bother to have a referendum?

The Prime Minister

The case was for a simple majority in a referendum and that was achieved. On that basis, it would be perverse if we were then to say, having secured a majority in the referendum, that we were not proceeding with the elected Assembly. May I put the question the other way around? Supposing there had been a minority in favour and we had then said that we were proceeding with it, there would have been an outcry from the Conservative Benches.

Q6. Miss Begg

As someone who does not understand the allure of football, I can appreciate that it is a great passion for many boys and girls and some hon. Members. May I therefore welcome today's announcement by my right hon. Friend the Secretary of State for Education and Employment that he is to set up homework clubs in football grounds, thereby improving the literacy of many young people and giving them a great chance in the future? Are there any plans to extend the scheme to Scotland, even if the Prime Minister cannot guarantee the success of Aberdeen football club?

The Prime Minister

I am afraid that I can give no guarantee on the latter point. The circumstances in Scotland are obviously different because there are fewer big football clubs, but—[Interruption.] That is a statement of fact. However, my hon. Friend the Minister for Education and Industry, Scottish Office, is working on a scheme that will apply the same principles in those clubs. We are trying to get them together in a Scottish programme as well. The programme launched today will be an enormous success. It is exactly the right thing to do, to try to involve children in homework centres that will excite them as well as teach them and give them the chance to build relationships for the long term with those clubs, which will be helpful to both parties involved.

Mr. Hogg

Does the right hon. Gentleman understand the anger and distaste of existing—[Interruption.]

Madam Speaker

Order. Let us have some order in the House.

Mr. Hogg

Does the right hon. Gentleman understand the anger and distaste of existing PEP holders who have seen their savings capped at £50,000, the statement having been made by a Minister, namely the Paymaster General, who has so ordered his own affairs as to put his millions outside the scope of UK taxation? Is that not a disgraceful double standard?

The Prime Minister

In relation to my hon. Friend, the right hon. and learned Gentleman is wrong as a matter of fact. In relation to the point about £50,000 PEP holders, which of course for a couple would be £100,000, there is, as I said to the Leader of the Opposition, a choice: we can spend the same amount of tax relief as it is spent at the moment, or we can do it in a fairer way that gives millions of people who do not get the chance to save now the opportunity to do so. We have made our choice; as usual, the Opposition want to have their cake and eat it.

Q7. Mr. McDonnell

As well as ignoring the hypocritical cant from the Opposition, will my right hon. Friend intervene at this late stage in the discussions on lone-parent benefits, and in the spirit of his concept of the giving age, to refer the issue to the newly formed social exclusion unit to address the genuine and deep-seated concerns of many Labour Members, in order to avoid the tragedy of the new Government being the first Labour Government to cut benefit for the poorest children in our community?

The Prime Minister

I simply say that we have to make a choice of priority. The money that we have put into child care and specific help for lone parents—the £200 million programme announced by my right hon. Friend the Chancellor—is, we believe, the best way to help lone parents. Many of them want the chance to get off welfare and into work. The Government are putting several hundred million pounds into the system to help them do that. We inherited a difficult situation, but we believe that we have made the right choice of priority, however difficult it is.

Mr. Loughton

Last week, the Prime Minister invited himself and the world's press to tea with a pensioner couple to proclaim the benefit of the £20 pre-Christmas bonus. In the light of yesterday's local government spending allocation, will he tell us whether he has been invited back for tea to explain how last week's £20 gift has been more than gobbled up by the average council tax rise of £70?

The Prime Minister

First, what the hon. Gentleman says is incorrect. Secondly, the increase in council tax was the increase envisaged by the previous Government. The Conservative Government were not giving any additional help to pensioners for fuel bills, so I bet that, if I went back to the same pensioner couple, they would say, "Thank goodness we voted Labour, not Tory."

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