Windfall Tax (Hansard, 22 July 1999)

§ 3. Mr. Michael Clapham (Barnsley, West and Penistone)
What evaluation he has undertaken of the use made of the windfall tax on the privatised utilities. [91093]

§ The Chancellor of the Exchequer (Mr. Gordon Brown)
Madam Speaker—[Interruption.]

§ Madam Speaker
Order. Let me explain to the House what has happened. When an hon. Member says that he intends to raise a question on the Adjournment, I must end the exchanges and move on.

§ Mr. Brown
The windfall tax, which raised £5.2 billion, has enabled the Government to embark upon the new deal—the biggest ever programme to get the unemployed into work. More than 284,000 people have now entered the new deal through the young person's scheme and almost 100,000 long-term unemployed have 1311 entered the scheme. The windfall tax has also enabled the Government to inject much-needed capital investment into more than 10,000 schools. We will launch the new deal for the over-50s in the autumn. Therefore, we will continue to expand the new deal over the next few months.

§ Mr. Clapham
I am grateful to my right hon. Friend for that reply, which shows clearly that the windfall tax has been used to create hope and opportunity for tens of thousands of young people. Does my right hon. Friend agree that, if we are to reach the Government's objective of eliminating child poverty within the next 20 years, we must complement what has been done at regional and local levels in areas such as Barnsley where the average income per household on council estates is between £5,000 and £6,000 and 34 per cent. of children come from families that are in receipt of family credit or income support? Does he agree that we need more opportunity, greater equality and further redistribution of wealth if we are to eliminate child poverty and remedy the neglect that the Tory party inflicted on older industrial areas?

§ Mr. Brown
My hon. Friend is absolutely right—when we came into power in 1997, a third of our children were in low-income families and 40 per cent. of children were being born into low-income families. That is why the first thing that we had to do was to create new job opportunities for the unemployed. That is why, with nearly 600,000 more people in work and nearly 300,000 young people involved in the new deal, we are creating working opportunities for families in this country.
As my hon. Friend rightly says, the second challenge is to make work pay, and it is very surprising that the Conservative party still opposes the new deal, the minimum wage and the working families tax credit. On every issue, it is on the wrong side for the needs of working families, and I hope that at some point the shadow Chancellor will withdraw his remark that the new deal is a waste of public money and a fraud perpetrated upon a great many people."—[0fficial Report, 4 November 1998; Vol. 318, c. 881.] The fraud is what the Conservatives perpetrated on the unemployed.

§ Mr. Geoffrey Clifton-Brown (Cotswold)
How can the Chancellor have the gall to stand there and say that the windfall tax and the new deal have been a success? How many genuine jobs at full pay have been created? How much do those jobs cost? What will the Chancellor do in two years, when the windfall tax revenue will have run out?

§ Mr. Brown
There are 100,000 young people now in jobs. If only one young person had got a job, that would be satisfactory, but 100,000 young people are now in work. I should have thought that despite party politics, the hon. Gentleman would welcome the fact that there are more people in jobs.
On the use of the windfall fund, we have a new deal not only for young people, but for the long-term unemployed and single parents, and in October we shall introduce a new deal for the over-50s. If anybody considers the cost of unemployment under the Conservative Government, they will realise that the introduction of a windfall tax to get people back to work is the best use of public money.
1312 The Conservatives' problem is not only that they opposed the new deal, but that they opposed the windfall tax, which was the right measure to take revenue from companies that had made excess profits as a result of the unfair privatisations and to use it to get people back to work.