HC Deb 10 March 1999 vol 327 cc357-64
Ql. [73859] Mr. Laurence Robertson (Tewkesbury)

If he will list his official engagements for Wednesday 10 March.

The Prime Minister (Mr. Tony Blair)

This morning, I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall have further such meetings later today.

Mr. Robertson

Given the Prime Minister's motion to the House on 3 February stating that the Government had a commitment to protect the green belt and open countryside, and to increase the number of houses that were built on brown-field land, does he still support that policy? If so, given that my constituency of Tewkesbury has few brown-field sites, can he tell me why his own inspector proposes in his report that a disproportionate number of houses be built in Tewkesbury, and that thousands of houses be built on the green belt, on green fields and in the open countryside? Is that not yet another example of the Government saying one thing and doing another, just as in yesterday's Budget?

The Prime Minister

The hon. Gentleman did not decide to raise the Budget, did he? I am surprised that he did not welcome the fact that, thanks to—

Mr. Robertson


The Prime Minister

I will come to the question in a moment, but thanks to—[Interruption.] Conservative Members do not want to talk about the Budget at all. Eleven thousand families in the hon. Gentleman's constituency are better off as a result of yesterday. As for the green-field and brown-field sites, Labour is the party that, in government, has raised the amount of building that there has to be on brown-field sites. We have changed the policy that was left to us by the earlier Government.

Mr. Jonathan Shaw (Chatham and Aylesford)

May I say how welcome was the boost for businesses and jobs in yesterday's Budget? But my right hon. Friend will be aware that, if duty free is scrapped, some 5,000 jobs in Kent and Medway will be at risk. Can he give an assurance to the House and to the people of Kent and Medway that the retention of duty free will be at the top of his agenda when he meets European Union Ministers later this month?

The Prime Minister

It has been at the top of our agenda. We have made a certain amount of progress in order to get an extension of the regime, because the successor regime simply is not good enough for our country and, indeed, other countries in the European Union. My hon. Friend will know that the problem we have is that the previous Government agreed to the abolition of that scheme. None the less, like many other problems that were left to us by the previous Government, we are sorting it out.

Mr. William Hague (Richmond, Yorks)

Now that we have the figures behind the propaganda, will the Prime Minister explain why the Chancellor of the Exchequer failed to make it clear in his Budget speech yesterday that his changes to national insurance contributions mean a tax rise for self-employed people of £240 million?

The Prime Minister

The right hon. Gentleman is wrong: we announced all the changes yesterday. As a result of our changes, there is a net tax cut for everyone— direct taxes of £9 billion.

Mr. Hague

The Chancellor made no reference in his speech to the tax rise of £240 million. Does the Prime Minister recognise that, when we look at the figures, and I do not know whether he has looked at the Government's own figures—normally he does not look at them—we see that all the tax reductions for companies, first-year capital allowances and so on are more than cancelled out by that one single measure, the cost of which the Chancellor did not refer to in his speech? Does that not illustrate not only that the presentation of the Budget was inaccurate and misleading, but that, for every trumpeted tax reduction, there was a corresponding stealth tax increase?

The Prime Minister

No. The right hon. Gentleman was wrong when he said that yesterday, and he is wrong when he says it today. Today, he should have read the Budget figures more carefully. [Interruption.] I have them here—at page 14—and they show a net tax cut of £4.5 billion. It is there in the Red Book, right in front of his nose.

Mr. Hague

I do not know whether it is more worrying that the Prime Minister does not know the truth, or that he is not prepared to admit it. So—given that he has been looking at some of the figures—let him answer this central question: what is the total tax increase for the coming year, in pounds, as a result of the Government's Budgets to date?

The Prime Minister

There is a net tax cut of£4.5 billion. That is what the right hon. Gentleman seems unable to handle. He seems unable to handle the fact that we are cutting taxes. Furthermore, he and his spokesmen have been touring the television studios, relying on the Institute for Fiscal Studies, to say that a whole series of people are worse off because of the Budget. He may like to know that, this lunchtime, the IFS has reissued its figures, which show that every tenth of the population— the top 10 per cent. as well as the bottom 10 per cent., and every 10 per cent. in between—is better off because of the Budget.

Mr. Hague

Oh, now, let us cut the waffle and the propaganda, and let us have the answer to the question that I asked—this is Prime Minister's Question Time. What is the total tax increase for the coming year as a result of the Government's Budgets to date?

The Prime Minister

There is not a tax increase— [Interruption.] No, I am afraid that I have to tell the right hon. Gentleman that there is not a tax increase. Tax is falling by £4.5 billion net. The average family is £740 a year better off. The average pensioner is £240 a year better off. In total, 20 million families are better off. They are better off under Labour.

Mr. Hague

What is the total tax increase for the coming year, in pounds, as a result of the Government's Budgets to date?

The Prime Minister

I wish that the right hon. Gentleman would simply listen to what is being said to him. We are cutting net taxes. The l0p rate is a tax cut. The national insurance rate is a tax cut. The basic rate is a tax cut. We are putting up child benefit. We are putting up people's children's credit. Pensioners are getting an increase. Labour is the party bringing down taxes for every single family that has had them put up by the Tories.

Mr. Hague

So the right hon. Gentleman does not want to answer the question. The actual answer—easily arrived at with the Treasury's own figures and a calculator, and easily arrived at by the House Library in the figures that it produced last night—is that the total tax increase in the coming year as a result of the Government's Budgets to date is £7,100 million. In the following year, the increase is £10,500 million. The right hon. Gentleman does not want to admit that because, when they said no tax increases at all at the general election, they lied to the people of this country. With his pick-pocket Chancellor and his stealth taxes, taxes have gone up, are going up, and are going to carry on going up.

The Prime Minister

Not merely is the right hon. Gentleman wrong—as the table on page 154 of the Red Book shows, the tax burden is falling next year, not rising—but, comparing current tax tables with the Conservatives' planned taxation, as outlined in their last Budget, taxes will be lower at the end of this Parliament than they would have been as planned by the Tory party. He is going to have to get used to one or two very simple facts. This is the Government who sorted out the huge debt left us by the Conservatives. This is the Government who have curbed inflation, which was rising under the Tories. This is the Government who have given us the lowest interest rates and mortgage rates for more than 30 years. This is the Government who have given the best deals for pensioners year upon year. This is the Government who have got tax for ordinary families down below 20 per cent. This is a new Labour Government delivering economic competence and social justice together. What a contrast and what an improvement on the old Tory years.

Mr. Malcolm Savidge (Aberdeen, North)

Given not only the assistance to the over-50s seeking employment, but all the other measures in the Budget, does my right hon. Friend feel that more members of the shadow Cabinet may feel encouraged to follow the example of the shadow Foreign Secretary and spend more time with their finances?

The Prime Minister

I do not know quite how many members of the Opposition Front-Bench team will benefit from our proposals, since they seem to have many different sources of income, but if I could simply say— [Interruption.]—not that I am suggesting that there is anything wrong with that at all. Our proposals for helping the over-50s back into work will deal with the fact that one third of the over-50s below retirement age are not in work. I believe that many of them would like to work if they were given the chance to do so. The new package will help them.

Mr. Paddy Ashdown (Yeovil)

Of course I am delighted that yesterday's Budget contained so many Liberal Democrat measures, but why did the Chancellor leave out the most important one? Is it not clear that, by deciding to cut income tax by a penny next year, the Government have revealed that their real priority is undercutting and wrong-footing the Tories, when it ought to be education?

The Prime Minister

First, I thank the right hon. Gentleman for what I take to be a compliment on the question of Liberal Democrat policies. Perhaps that is a good reason for people to vote Labour rather than Liberal Democrat in the forthcoming election.

On the point that the right hon. Gentleman makes about 1p, it is important to recognise that we have delivered not just the basic rate cut, but the largest single increase in public service spending over three years that this country has seen in our schools and hospitals. We understand that it is important to give incentives to people to work and to target help on hard-working families, as well as putting a substantial investment into our public services.

Mr. Ashdown

The Prime Minister is simply wrong in that. There was not a single penny extra for public services in yesterday's Budget. There was recycled money from previous decisions. The Prime Minister had a clear choice: it was education or politics, and he chose politics. May I bring the Prime Minister's attention to the situation in Scotland? This Labour Government have cut in real terms the amount of money put into education in 29 of the 32 Scottish councils. Even after the Budget and even after the end of this Parliament, the Labour Government will have put less money into education in those councils than the Tory Government did three years ago.

I have a very simple question for the Prime Minister: on the eve of the establishment of the Scottish Parliament, is he saying not only that the Scottish people will not be able to raise their taxes to spend the money on better schools, but that now they must follow him in cutting them?

The Prime Minister

When the right hon. Gentleman put to me the 29 out of 32 authorities, I went back and looked at the figures. He is comparing budgeted figures with outturn figures, and is doing so wrongly. I can give him the true figures. Education spending in Scotland is increasing by 15 per cent. It is not being cut as he says.

As for the right hon. Gentleman's strictures on lowering the basic rate of tax, we believe that targeting tax measures on those families that need them and making sure that people get to keep more of their money and have the incentive to work, at the same time, as putting money into public services, is the right way to guarantee both prosperity and better public services.

To go back to the election campaign, the amount that we are putting into schools and hospitals is 10 or 11 times what the right hon. Gentleman's party asked us to put in. The truth is that, no matter what the tax rate is, he always wants to put it up.

Mr. Phil Woolas (Oldham, East and Saddleworth)

Whatever the figures show in Scotland—I listened to my right hon. Friend's comments with great interest—in the borough of Oldham, education expenditure will increase next year by almost £5 million and three new schools will be built in my constituency alone. I look forward to visiting those primary schools to announce the £2,000. Would my right hon. Friend like to come to Oldham with me to congratulate the head teachers on the successful hard work that Opposition Members oppose?

The Prime Minister

My hon. Friend is right to say that there is £2,000 for each school in every constituency; there is additional money to deal with class sizes and for school buildings and nursery education. Yes, the capital money announced yesterday comes out of the capital modernisation fund, but it has now been allocated by us to schools, hospitals, transport and crime—precisely the priorities of the people of this country.

Q2. Mr. Christopher Gill (Ludlow)

Perhaps I could ask the Prime Minister a less sycophantic question. He will appreciate that the Ludlow constituency is a large and sparsely populated rural area, where there is almost no alternative to road transport. What timely words of advice does he have for my constituents who find themselves, as a result of his Budget yesterday, paying no less than 85p tax for every pound that they spend on petrol? While he is thinking of the answer to that question, will he also consider what he will say to the road hauliers who find that the duty on diesel has been increased by an astronomical 11.6 per cent?

The Prime Minister

In relation to the hon. Gentleman's constituents and their cars, we announced the first cut in the licence fee for 50 years. It is also correct to say that we have put a large additional sum into rural transport—something that the Conservative Government never did. As for the fuel escalator on petrol, Conservative Members should remember that they introduced it; they not merely introduced it, they introduced it for road hauliers as well.

More than 10,000 families in the hon. Gentleman's constituency are better off as a result of the Budget. Furthermore, almost 16,000 pensioners are better off as a result of the Budget.

Q3. Mr. Gareth Thomas (Clwyd, West)

While welcoming the environmental measures in the Budget, may I draw my right hon. Friend's attention to a serious oil spill that occurred off the coast of north Wales last weekend? It involved the offshore operator BHP, and was the second such incident in nine months. Given the growing concern all over the United Kingdom about marine oil pollution, does my right hon. Friend acknowledge that big oil companies will cut corners unless there is effective and independent regulation? Will he ensure that the courts pass tough sentences for such offences, so that this message is sent, "the polluter must pay"?

The Prime Minister

I know that this is not the first time that there has been a spill from BHP petroleum's facility in the Liverpool bay development. I understand that, as my hon. Friend indicates, the Department of Trade and Industry is prosecuting BHP for an earlier incident. The latest incident is being fully investigated by a DTI inspector. The Department has also taken steps to ensure that independent assessors conduct a review of the incident. In general terms, I agree with what my hon. Friend says. Of course, penalties are a matter for the courts.

Q4. Mr. Steve Webb (Northavon)

Is the Prime Minister aware that people in my constituency are receiving letters from Frenchay hospital telling them that they will have to wait 104 weeks to see an orthopaedic consultant, perhaps to be put on a waiting list? Will he promise my constituents not to cut the standard rate of income tax until those waiting times have been slashed?

The Prime Minister

We are getting waiting times down, and have done so consistently—they are down by more than 100,000 in the last six months. The additional £21 billion that we are putting into the health service from 1 April onwards is precisely in order to make the necessary improvements. Those improvements are not just in accident and emergency departments, but in technology in the health service and primary care facilities. It will take time to sort out the problems in the health service, but we will sort them out with the new investment.

Q5. Mr. Jim Murphy (Eastwood)

My right hon. Friend will be aware how warmly welcomed the Budget was in Scotland—particularly the new investment in schools, families and pensioners. Does the Prime Minister share my view that Scotland's future is one of efficient taxation and making work pay? Does he share my concern that the future well-being and standard of living of Scottish people will be threatened by any plans to divorce Scotland from the rest of the United Kingdom?

The Prime Minister

Divorce from the United Kingdom would cost Scotland very dear in jobs, industry and the future of the country. My hon. Friend is right to draw attention to the fact that there is £165 million of additional capital investment going into Scotland over the next three years, on top of the £3 billion for schools and hospitals that we announced earlier. As a result of the Budget, substantial numbers of Scottish families will not just be better off, but get the public services that Scotland deserves.

Mr. Michael Colvin (Romsey)

Does the Prime Minister agree that the Chancellor's introductory remarks to yesterday's Budget—

Mr. Brian Jenkins (Tamworth)

Were brilliant.

Mr. Colvin

In this respect, they were. Did not those remarks give a further indication—if that were required— that the Government inherited a very sound economy from the previous Conservative Administration? While he is checking that, will the Prime Minister recall that the nation was promised stability? With economic growth in the last quarter of 1998 at 0.2 per cent., are not he and the Chancellor trying to achieve stability by stopping the economy? Are not the Chancellor's estimates of economic growth for the next two years—on which the whole Budget is based—wildly optimistic?

The Prime Minister

The hon. Gentleman need not take my word for it. The International Monetary Fund report into the handling of the UK economy, published the other day, is one of the best reports that any country has received from the IMF for many years. The report said: Executive Directors commended the authorities for the United Kingdom's impressive economic performance", and went on to talk about the consolidation needed to help redress the policy mix imbalance that had developed in the early 1990s and to reverse the effects of a series of deficits. The truth is that we did not inherit an economy in great shape; we inherited an economy with national debt doubled and inflation back in the system. It is thanks to this Government that both those problems are now solved, and we can look forward to the recovery of economic growth, as we have intended.

Q6. Mrs. Helen Brinton (Peterborough)

Following the publication of the Macpherson report and the Home Secretary's acknowledgement of the need to stamp out racism, not only in the police force but in all public services, does the Prime Minister agree that it is most vital that the mental health sector is included in those investigations and considerations, and that consideration is given to the use and application of control and restraint techniques—particularly following the death of my constituent, David Bennett?

The Prime Minister

Our sympathies go to Mr. Bennett's family, and I know that my hon. Friend has been very concerned about the case. The NHS trust has begun a review into the circumstances surrounding his death. We are committed to stamping out racism in all public services, including the whole NHS. In addition, she will know of the measures that were announced recently to improve control and restraint techniques within the mental health service. There will be zero tolerance of racial harassment or racial discrimination of any kind in the national health service, or any other part of our public services.

Q7. Mr. Howard Flight (Arundel and South Downs)

I am sure that the Prime Minister will be aware of the fact that the tax changes abolishing the recoverability of advance corporation tax will result in a loss of revenue to charities of about £500 million a year, on a phased basis. I can find nothing in the Government's review of charity taxation to offer compensation for that. What do the Government intend to do about it? I am sure that someone as professedly caring as the Prime Minister would not want to preside over a Government imposing the biggest increase in taxation on charities in memory.

The Prime Minister

The hon. Gentleman is wrong. When we announced the plans for charities, we said that they would be implemented over seven years. We are in consultation with the charities. My right hon. Friend the Chancellor listed a whole series of measures that we are taking to help people to give money to charities. New reliefs have been introduced that will have precisely the opposite impact to the one that the hon. Gentleman described. All the measures taken together give a very good deal indeed to the charitable sector.

Q8. Mr. Jeff Ennis (Barnsley, East and Mexborough)

Is my right hon. Friend aware that one in 18 workers in my constituency is currently paid £2.49 or less an hour? Does he agree that the implementation of a national minimum wage will reduce further the current inequalities in our society?

The Prime Minister

The minimum wage will help 2 million low-paid workers in the United Kingdom. The working families tax credit, and the increases in it, will give 1.5 million families at the lower end of the income scale an increase of up to £20 a week. We now know that the Conservative party is committed to abolishing both the minimum wage and the working families tax credit. Every one of those low-income families should know that, if they vote Conservative, they put at risk not only the floor beneath their wages in the form of the minimum wage, but a £1.5 billion family tax cut which will benefit some of the poorest families in the country.

Q9. Mrs. Angela Browning (Tiverton and Honiton)

Is the Prime Minister aware that 80.4 per cent. of households in my rural Devon constituency own a car, for very obvious reasons? We do not want to know about 1100 cc cars in Devon: we would never get them up the hills. When the Prime Minister replied to my hon. Friend the Member for Ludlow (Mr. Gill), he seemed to suggest that the gains for rural areas in the Budget could somehow sop up the amount that would have to be paid for petrol. What is his message to an area where cars are essential, but where the wages are lower than the national average? Is this not yet more discrimination against people living and working in rural areas?

The Prime Minister

The opportunism and hypocrisy of the Tory party know absolutely no bounds. The hon. Lady was a Minister in the previous Government at the very time they introduced the fuel escalator. As a result of the Budget, 21,000 pensioners and 12,500 families are better off in her constituency. If she is concerned about low pay, she should support the minimum wage and the working families tax credit, instead of which she is committed to abolishing them.

Forward to