Engagements (Hansard, 18 March 1998)

§ Q2. Mr. Whittingdale
If he will list his official engagements for Wednesday 18 March.

§ The Prime Minister
This morning, I had meetings with Cabinet colleagues and others and, later today, I shall have further such meetings.

§ Mr. Whittingdale
Will the right hon. Gentleman confirm that his own Red Book shows that, as a result of the Budget measures, an extra 250,000 families will face a marginal rate of taxation and benefit withdrawal of 60 per cent. or more? Rather than improving work incentives, will not that considerably reduce them?

§ The Prime Minister
No. That is entirely wrong. As a matter of fact, the Budget will increase work incentives dramatically because it will take a whole lot of people out of paying national insurance. It will mean that a whole lot fewer people pay tax and that poverty traps for the vast majority of people will be reduced. I should have thought that a Budget that makes work pay and helps get people back to work would be supported even by the neanderthals in the Conservative party.

§ Q3. Mr. Savidge
Following a Budget that was focused on social justice and on rewarding work, and given the centrality of a national minimum wage to achieving both objectives, has the Prime Minister had any indication from the Leader of the Opposition as to whether he will now support that Government policy, or whether he will go into the next election campaigning for a return to poverty pay?

§ The Prime Minister
We have not yet had a policy from the Conservative Opposition, but I will keep the 1282 House informed when we get one. This Budget will mean that no family with earnings of less than £220 a week will pay any income tax at all. Any family with a full-time worker has a guaranteed income of £180 a week. Child benefit is up. There is new help for child care. There are cuts in corporation tax and small business corporation tax. It is a Budget that both helps people back into work and rewards both enterprise and fairness. That is a new Labour Budget and we are proud of it.

§ Mr. Hague
The biggest single tax change in yesterday's Budget was a change to corporation tax, which will cost businesses £3.5 billion in the next two years. When he delivered the Budget statement yesterday, why did the Chancellor of the Exchequer neglect to make that clear?

§ The Prime Minister
Business has welcomed the changes that have been made. The Budget will mean that, when the changes are through, business pays less tax than before.

§ Mr. Hague
Actually, the Confederation of British Industry spoke about the "adverse impact" of that particular policy. The right hon. Gentleman has spoken about the cut in corporation tax, which, according to the Red Book, gives businesses £700 million in two years' time. Other changes in corporation tax, which the Chancellor glided over in his speech, will cost businesses £2,000 million in the same year. That is in the Red Book—or, apparently, in the Prime Minister's case, the unread book. Will he now admit that yesterday's Budget increased the total tax on businesses for the whole of the rest of this Parliament?

§ The Prime Minister
"No" is the answer to that. As we have made clear throughout—this is the reason why business welcomed the Budget—it allows us to move to a situation where businesses are going to have corporation tax reduced. Indeed, corporation tax under this Government—a Labour Government, I remind the right hon. Gentleman—is the lowest that it has ever been.

§ Mr. Hague
I have to give the Prime Minister a few more details. How can "No" be the answer to my last question when the total tax reductions for businesses shown in the Red Book add up to £1,600 million and the increases add up to £3,800 million? Is the table in the Red Book—which contains the Treasury's own official figures—correct when it shows a large increase in business taxation for the rest of this Parliament?

§ The Prime Minister
For the reasons that I have already explained to the right hon. Gentleman and that were explained by the Chancellor last year, the fact of the matter is that, once the changes are all through, there is a reduction in corporation tax, not an increase. As I have said, this Government have cut corporation tax twice since being in power—a rather better record than that of the right hon. Gentleman's Government.

§ Mr. Hague
Is it correct that business taxation has been increased for the whole of the rest of this Parliament—yes or no?

§ The Prime Minister
As I have just said, the rate of corporation tax has been cut.

§ Mr. Hague
It is a pity that the Prime Minister cannot look at a piece of paper issued by his own Government 1283 and say that what it says is true. Why was the Chancellor not straight about that when he presented the Budget yesterday? Why should we not have next year's Budget read out by the Foreign Secretary? He does not care what he blurts out or whom he offends, so he should read out the Budget. After five interest rate rises and rumours of more, with the pound at a level that is strangling the life out of exporters, and with manufacturing output down for five months in a row, does the Prime Minister think that this was the time to add billions of pounds to the tax bills of British businesses?

§ The Prime Minister
Let me remind the right hon. Gentleman again that we have cut corporation tax and small business tax. As a result of the changes going through, businesses will pay less tax, not more, which is why business has welcomed the Budget. What is the right hon. Gentleman's policy? He says that he opposes all the changes. He opposes all the revenue measures although in the past he has proposed them—the fuel escalator, for example. He wants more money to be spent, although he opposes all the measures to raise it. He wants to cut tax and borrowing, and he wants action to tackle the pound, he says—although the only action to tackle the pound lies in raising revenues, not depleting them. The fact of the matter is that his figures do not add up, and the real loser by the Budget is the credibility of the Opposition.

§ Mr. Hague
The Prime Minister says that the figures do not add up, but the figures that I am reading out to him are the Chancellor's figures, out of the Chancellor's own book. The tax rises for British business are yet another step in the step-by-step betrayal of business in this country. After all the hype of yesterday, now, in the cold light of day, businesses face higher taxes, a crippling exchange rate and falling output. Is not the message to businesses that the Government are not on their side?

§ The Prime Minister
No; we are on their side, which is why they have welcomed the Budget. The only people who have not welcomed the Budget are the Conservative party. When we hear their figures today—[HON. MEMBERS: "Your figures."] No; we have cut corporation tax and small business tax. When we hear all the Conservatives' comments today, the fact of the matter is that their figures simply do not add up. I can tell the right hon. Gentleman that if he wants to stop raising revenue while at the same time increasing spending, one of the toddlers on the Chancellor's new child care scheme with a set of beads could make a better job of opposition than the present Opposition.

§ Mr. Ian Stewart
From what the Leader of the Opposition has said today, it is clear that the official Opposition cannot count and cannot read. [HON. MEMBERS: "Question?"] Does the Prime Minister agree that over the past 18 years the Tories' high levels of taxation have penalised those on low incomes? Does the Prime Minister—

HON. MEMBERS
"Question?"

§ Madam Speaker
Order. If the Opposition had been quiet they would have heard the hon. Gentleman put a question. I have been listening, and he has put his question.

§ Mr. Stewart
Does the Prime Minister accept that the taxation system should pay work? Will he ensure that 1284 the proposed system of working families tax credit is implemented as soon as possible, so that the families in my constituency of Eccles and throughout the country can benefit as soon as possible?

§ The Prime Minister
Yes. The scorn of Opposition Members is due to the fact that they do not care about the low-income families who will benefit from the Budget. We have cut not merely corporation tax and small business tax, but national insurance. The effect of raising child benefit, with the extra help with child care and the working families tax credit, will both make work pay and help families in poverty. The Budget is good for all of Britain.

§ Mr. Ashdown
As the Prime Minister knows, we broadly support the new direction set in the Budget. [Interruption.] I suppose we would have to, as more of its provisions were drawn from our manifesto than from the Prime Minister's. However, as the Prime Minister also knows, we regret what we regard as the Government's timidity on the environment, and we believe that the provisions in the Budget are inadequate to deliver the right hon. Gentleman's personal promises on health and education. I ask the Prime Minister a very specific question: are rising hospital waiting lists now at an end?

§ The Prime Minister
As the Secretary of State for Health will say, we will lower national health service waiting lists—by spending more money than either the Conservatives or the Liberal Democrats were intending to spend. I should point out to the right hon. Gentleman—because, as he knows, 1 always like to be very welcoming to Liberal Democrats—that, while he is saying that we have not done enough to meet our environmental targets, other Liberal Democrat spokesmen are criticising us for raising petrol prices.

§ Mr. Ashdown
The reason for that criticism is very simple: the Prime Minister has cut emission targets from 20 per cent. to 8 per cent.
However, let us return to hospital waiting lists. The Prime Minister says that hospital waiting lists will be cut, which is welcome, but cut from what level—from the level that he inherited, from today's record level or from the even higher levels that will be reached in the next few months?

§ The Prime Minister
Very simply, from the levels that we inherited; that is our promise, and we will keep it. The only way in which we can lower national waiting lists—which have been rising since March 1995—is by putting extra cash into the health service. This year, we have provided an extra £300 million. As was announced in yesterday's Budget, next year an extra £1.7 billion will go into the health service. That is a lot more money—even by the Liberal Democrats' arithmetic—than the £1.1 billion that they were promising before the general election. We will get waiting lists down and deliver on our pledge. We will keep our promise, but we will do it while keeping a tight grip on public spending—because we promised that, too.

§ Ms Oona King
Is the Prime Minister aware that the recent genocide in Rwanda of 1 million people in three months is possibly the worst the world has seen? It is 1285 worse than, for example, the deaths of 180 million Africans in the slave trade or 6 million Jews in the second world war for one reason: the United Nations did not exist and was not there watching when those horrific genocides occurred. In the light of that fact, although I speak as someone of African and of Jewish descent, I appeal to anyone of human descent to help to ensure that victims of genocide do not go unhelped. Will the Prime Minister give his assurance that the United Kingdom will be a friend and staunch ally to Rwanda? Will he also push for the IMF and the World bank—as a minimum measure—to reduce Rwanda's crippling debt burden? If we do not prioritise genocide, our priorities must be wrong.

§ The Prime Minister
I thank my hon. Friend for her question. Since the 1994 genocide, we have put about £190 million of aid into Rwanda. We are continuing to work, both within Europe and with other countries, to ensure that Rwanda gets the debt relief that it desperately needs for its future. Although we have been able to help many of the families who were victims of genocide with the aid that we have provided, I agree with my hon. Friend that more can be done. We will see what we can do—both within the European Union and elsewhere—to increase the help that we are giving.

§ Q4. Mr. Baldry
Does the Prime Minister know that, this year, Oxfordshire county council has a £3.5 million deficit in its education budget, which is leading to very severe cuts in school budgets, such as that of the Warriner school? The cuts are being made at a time when people in Oxfordshire are having to face a double-digit increase in council tax bills. Given that much of the £250 million for education that was announced yesterday seems to be for inner-city education action zones, is the Prime Minister satisfied that sufficient money is going into education in English shire counties?

§ The Prime Minister
I do not doubt that more could go in, but the fact is that—quite apart from yesterday's Budget announcement—in the coming year, an additional £800 million will go into education spending, which will help areas such as Oxfordshire. That sum is £800 million more than the previous Government were, before the general election, intending to spend on education.
I understand that many schools still face problems. We have always said that our first priority would be to sort out the public finances, which we have done, and that our second priority would be to invest in our schools and hospitals—on the basis that we are not simply throwing money at them but achieving long-term reform that improves standards and makes possible the excellent service that people want them to perform. I sympathise with the current problems of the hon. Gentleman's constituents, but, next year, we will put in extra money, which is a lot more than the previous Government planned to spend.

§ Mr. Efford
Will my right hon. Friend join me in welcoming the news that the family of murdered teenager Stephen Lawrence have accepted the Home Secretary's assurances and will take part in the public inquiry? Will he also join me in condemning journalists who have managed to get articles into daily newspapers that have denigrated the people in my constituency and portrayed them all as racist? Does he agree that such reporting does 1286 nothing to address the issue, which exists throughout our society, or to bring together the whole community, including the good people in my constituency, which is overwhelmingly not racist, to attack and address the issue?

§ The Prime Minister
I am obviously pleased that the inquiry is now back on foot, and I very much hope that it will continue to be so. I obviously understand and sympathise with the position of the Lawrence family, and I am delighted that a suitable agreement has been found. As for my hon. Friend's constituents, I believe that the vast majority of people in this country want to live in a society where, irrespective of people's race, they are treated equally and are of equal status. That is a fundamental principle, which I am glad to say is shared by every single mainstream political party in the House. That is one reason why we can be optimistic about the future of race relations.

§ Q5. Mr. Gorrie
When traditional Labour voters ask why the Government are sticking to Tory expenditure plans and Tory Treasury rules, which will result in yet further cuts in essential services in the coming year and create the worst services in living memory, how does the Prime Minister respond to such supporters, who feel betrayed?

§ The Prime Minister
My hon. Friends tell me that the hon. Gentleman used to be in a Conservative coalition on Edinburgh council some time in the early 1990s, so I do not think that we should be too persuaded by what he is saying. We are sticking to very tight spending plans—that is right—but within those spending plans it is completely wrong to say that we are spending the same sums of money as the Conservative party on the same things: we are not.
We are actually spending more money on health and education than the Liberal Democrats ever asked for. They shake their heads, but they should read their manifesto. We are spending about double what they wanted on, for example, education and health. It is absurd for the Liberal Democrats to oppose every measure that raises revenue, such as the windfall tax, but end up saying that they want all the spending, or that it all comes out of their 1 p on income tax. I am sorry but, in government, there is a bottom line of credibility, and the Liberal Democrats are not meeting it.

§ Q6. Mr. White
Given that bus services have been devastated since deregulation in 1985, particularly in rural areas, does the Prime Minister agree that yesterday's announcement of £500 million for transport, and particularly £50 million for rural areas, will be especially welcome in my constituency, but that it is only a start, and more must be done to achieve our sustainable transport objectives?

§ The Prime Minister
Yes. About three quarters of our rural communities do not have a proper or regular bus service. That is the legacy that we have inherited. I hope that the rural transport fund will at least give some forward relief to people who need a proper rural bus service and that, in future, we are able to do more. The £500 million over and above what the Conservatives planned to spend is an additional indication of how it is quite wrong to say that we are sticking to Conservative 1287 spending plans. We are not sticking to Conservative spending plans, but we are sticking to Labour's tough rules on financial prudence.

§ Q7. Mr. Greenway
Will the Government's review of child benefit include the option of ending the separate taxation of men and women? Would not that be the inevitable consequence of taxing child benefit?

§ The Prime Minister
No, I do not accept that. I hope, from the indication given by the Leader of the Opposition yesterday, that the Conservatives do not object to the review in principle. We have to look at all the factors. If we are to increase child benefit by substantially more than inflation—yesterday we announced a 20 per cent. increase in child benefit, which is the largest for decades—the question of how best to do it is properly on the agenda. I hope that the Conservative Opposition will react constructively to our proposals when we table them.

§ Mr. Tony Clarke
Contrary to the official Opposition's announcement yesterday that they support little of the Budget, will my right hon. Friend join me in congratulating our right hon. Friend the Chancellor on his announcement about child care tax credits? The proposal will not only empower those parents who want to go to work but enable them to do so in the knowledge that up to 70 per cent. of the cost will be met by the Government. Will my right hon. Friend announce when the credit will come into force so that my constituents can take full advantage of it? Will he also ensure that the child care offered is of a sufficient standard to give parents comfort about how their children will be looked after while they are at work?

§ The Prime Minister
The changes come into effect next year. The £300 million for child care that my right hon. Friend the Chancellor announced some time ago will take effect far sooner. My hon. Friend is right. Many families, even those earning up to £30,000 a year, will benefit from the proposals, which will allow them to afford decent and quality child care. That is why our proposals are important. We do not want to prevent people from staying at home and looking after their children if they wish to, but they should have the choice to go out to work, knowing that they will get some help with the costs of child care.

§ Q8. Mrs. Spelman
Does the Prime Minister believe in principle that the tax system should favour marriage or be neutral between married and unmarried couples?

§ The Prime Minister
Whenever we have this debate, I am perfectly happy to say that, if people can give us a sensible proposal on how to assist marriage, we are prepared to do so. It is as well to be honest about the problems we face. As my right hon. Friend the Chancellor pointed out yesterday in relation to the married couple's allowance, single parents get the same allowance at the same rate as do unmarried couples with children. It does not seem rational to focus the help in that way. It is better to do what we announced yesterday and help children, because that helps all families. That is the best way to do it. Of course I believe in marriage, but 1288 every time that we ask for proposals from people who want to assist the process, it is difficult to get one that makes sense.

§ Q9. Mr. Linton
Will my right hon. Friend reassure my 87-year-old constituent in Battersea, who has had to suffer a five-month delay for her knee operation, that the Government are fully committed to tackling the backlog in waiting lists that grew so rapidly under the previous Government? Will he assure us that the £500 million announced in yesterday's Budget, coming on top of £1.5 billion in last year's, will be dedicated above all to reversing the rise in hospital waiting lists, to honour the pledge on which the Government were elected?

§ The Prime Minister
Yes, of course it will. The money that is going in today will be additional money to help reduce national health service waiting lists—again way over and above anything that was asked for by the Liberal Democrats or promised by the Conservatives. However, it will take time—it was always going to take time. Once we have the finances sorted out, as we have done, we shall be able to get additional money in. That is the right way to do it, so that the investment that we put into the health service and our schools carries on year on year. We have to get away from the system under the Conservatives, in which spurts of spending were followed by cuts.

§ Mr. Butterfill
The Prime Minister is well known for his concern for the safety of British citizens travelling abroad, and in particular the safety of Members of this House. As hon. Members will want to avoid getting a hostile reception in overseas territories over the Easter recess, will the Prime Minister publish the itinerary of the Foreign Secretary?

§ The Prime Minister
The hon. Gentleman and his hon. Friends said during the debate we had on Iraq that we were being remiss in not taking a high-profile attitude in the European Union to ensure that the obligations entered into were adhered to. That settlement was one part of those obligations. My right hon. Friend the Foreign Secretary was entirely justified in doing what he did, and the hon. Gentleman would do better to support him.

§ Q10. Mr. Barry Jones
Does my right hon. Friend accept that, from time to time, Government Back Benchers will have critical opinions of his Government as well as supportive ones? Does he know that, since he has visited my constituency, the Airbus factory has received £123 million of investment, the Toyota factory has received £130 million of investment and the £40 million Flintshire bridge has been opened, and that, try as I might to be critical, I cannot? Will he accept also that the Budget was magnificent?

§ The Prime Minister
On balance, I would agree. Some people may not like some old-fashioned sycophancy—but not me. I am grateful for what my hon. Friend said, although it may mean that I make slightly fewer constituency visits in future. The money has been given on the basis of highly efficient production and it is a tremendous tribute to those who work in the two plants in his constituency. I am delighted they have done so well and I look forward to coming back and announcing new jobs in his constituency later.