HC Deb 03 November 1999 vol 337 cc285-94
Q1. Mr. Adrian Sanders (Torbay)

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

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. Sanders

The Prime Minister will be aware that his Government, unlike the previous Government, have recognised some of the problems facing seaside resort economies. Money has been available through the single regeneration budget, although it is not enough, and councils have to bid for it and not all of them get it. Recent statements by the Government suggest that objective 2 is being used to help seaside resort economies, but closer analysis reveals that the wards that have designated objective 2 status do so because of deprivation, not because they are seaside resorts. What extra help will the Government give to seaside resort economies around the country that are facing desperate problems?

The Prime Minister

The Government recognise the special needs of seaside resorts by making allowances for seasonal changes in employment and heavier social services costs in our support to such areas through the local authorities financial settlement. In addition, since July, the hon. Gentleman's constituency has been awarded almost £3 million under the single regeneration budget. Torbay has now been designated a new enterprise grant area, with grants available for small and medium companies, many of which are involved in tourism. Torbay has also been included in our proposals for objective 2 structural funds.

Mr. Dennis Skinner (Bolsover)

The day after the Prime Minister was at the CBI conference and share option tax breaks were being thrown around like confetti, he probably heard on the radio and saw on television that the last pit in the north-east had closed, so two very significant industrial matters arose in one week. As Richard Budge is investing money in coal mines in Australia, Venezuela and other countries, can he really be trusted to save the last 13 deep mines, which still produce the cheapest coal in Europe? There is only one solution, which is not to fill the pockets of Mr. Richard Budge and his gang, but to think the unthinkable and take those 13 coal mines back into public ownership.

The Prime Minister

I do not think that I can do that, but I can say that, as a result of the changes that we made on coming into office, we have given time for the whole energy policy to be sorted out and, in particular, for the discrimination against coal to be ended. That gives tremendous help to the coal mines and coal-mining areas. If we had continued the policy of the previous Government, every single pit in Britain would have been closed by now, but this Government will not do that; this Government will carry on sorting out an energy policy that is in the interests of all the country.

Mr. William Hague (Richmond, Yorks)

When it is so important to encourage small information technology companies to thrive in this country, what on earth are the Government doing voting tonight for yet another of the Prime Minister's stealth taxes which will hit precisely those companies? Will not another £500 million of taxes drive such companies to set up business abroad rather than here in Britain?

The Prime Minister

No, because as a result of the changes that we are making to the taxes on small businesses, including lowering corporation tax and the small business tax, we are giving the best boost to small businesses that this country has seen for many years, which is why so many of them are thriving.

Mr. Hague

We are talking about the knowledge economy, and judging by the Prime Minister's answer, he is not part of it. The Government will vote tonight for another £500 million stealth tax that affects thousands of small businesses, particularly information technology businesses, and other contractors. That measure is called IR 35, but it is really a stealth tax.

As the chairman of the Professional Contractors Group says, the proposals show astonishing naivety. Their effect will be to kill the enterprise culture. American multinationals will be laughing all the way to the bank as the British Government destroys their home grown competition. It is not too late to avert this, so will the Prime Minister look at it again, and vote with us tonight to strike it out of the legislation?

The Prime Minister

I certainly will not do that. We are quite right to introduce this measure. Companies will be treated on a fair basis—the same basis on which everyone pays taxes in this country. If we did as the right hon. Gentleman says, we would lose hundreds of millions of pounds of revenue. That is in addition to the £7 billion of revenue that we would lose if we accepted all the Opposition's amendments. Perhaps, when he gets up and attacks me again, he will explain how he will fund those commitments.

Mr. Hague

The Government have not yet brought in the measure, so they would not lose any revenue at all; and when the Government are driving thousands of IT businesses out of this country, there is no point in posing with a computer every other week trying to be computer-friendly—presumably looking for the on switch.

The British Chambers of Commerce has calculated from the Government's own figures that business taxes will rise by £30 billion in this Parliament as a result of the Chancellor's Budget, so will the Prime Minister acknowledge that what he told the House in February when he said business tax has come down"—[Official Report, 10 February 1999; Vol. 325, c. 316.] is, yet again, the opposite of the truth? Will he acknowledge now that business taxes are going up?

The Prime Minister

They are not. We are cutting corporation tax, as we have said many times. In answer to the right hon. Gentleman's central point, the measure will ensure that everyone in the country pays tax on the same basis, so people do not avoid tax, which others then have to pay.

The measure will not drive companies out of Britain. Countries such as ours are thriving because, for the first time in years, we have managed to bring public spending and inflation under proper control, which is why the economy—far from being in recession, as the right hon. Gentleman said a few months ago—is thriving.

The right hon. Gentleman says that we have not yet lost money. If we did not take these measures, and if we went down his path and included that £7 billion of tax cuts, we would have to find that money from somewhere in the years ahead. As he says that he wants to run an effective economic policy, it is about time that he answered the questions that we had to answer when we were in opposition. Where does the money come from for that £7 billion of tax cuts?

Mr. Hague

The more the right hon. Gentleman refuses to admit the truth, the less people believe what he says. He talked about reducing corporation tax, but, yesterday, at the CBI conference, he actually said that he had heard complaints about corporation tax. People do not come and complain that he has cut the rate; they come and complain because they have to pay. On Monday, the president of the CBI said that when the Government talk about changes in business tax, any cuts are more than offset by the windfall tax, the loss of the Dividend Tax Credit and now the Climate Change Levy. The sums they give back are trivial by comparison. Will the Prime Minister now answer the question and agree that, although he said that business taxes were coming down, the opposite is the case, and they have actually gone up?

The Prime Minister

I will not, for the reason that I gave on corporation tax. If I may bring the right hon. Gentleman back to the central point, what business needs more than anything is economic stability. That stability depends on our running a budget and ensuring that the finances are under proper control, so that we can get inflation under control and provide the stability that business needs. That is precisely why we have some of the best economic circumstances that the country has seen for years.

If we went down the alternative path of the Opposition's amendments to the Finance Bill, it would mean £7 billion of lost revenue. However, the Opposition have also tabled amendments to the Welfare Reform and Pensions Bill totalling an extra £4 billion social security spending. That makes £11 billion—[Interruption.] I am afraid that Conservative Members should understand what their own Front Benchers are doing before they shout at me. The amendments would mean that this country would lose £11 billion a year.

All Governments have to take difficult decisions. We have taken them and sorted out public finances. The right hon. Gentleman cannot tell us where the £7 billion will come from, but will he at least tell us what he will do about the £4 billion-worth of extra social security spending?

Mr. Hague

The question is whether business taxes have gone up. The Prime Minister is as stealthy with the truth as he is with his taxes. He claims that taxes are going down when they are going up; he says that he is worried about red tape when he is introducing it by the yard; he talks about the importance of information technology, but will tonight vote to drive many such companies abroad; he speaks about competition but is diminishing Britain's competitive advantage. Along with his promise to increase no taxes at all, is not all that part of the great Labour lie?

The Prime Minister

The Government are investing more in new technology than any previous Government. Indeed, we are putting several hundred million pounds into technology centres around the country to give people access to the new skills. As a result of measures announced by the Chancellor, we have probably provided a better system of help to start up technology companies than this country has ever seen—and that is acknowledged by many people.

In the end, the choice is between the economic priorities and economic competence of both parties. We inherited a £28 billion borrowing requirement and a national debt which had doubled, but we have sorted out the public finances and, for the first time in many, many years, given the country the prospect of steady growth. The right hon. Gentleman has totally failed to say how he manages, at one and the same time, to tell people that he will cut their taxes by billions of billions of pounds, but increase social security spending by billions of pounds, while still wanting more money to be spent on defence, law and order, schools and hospitals.

In opposition, we had to answer those questions, and at some point the right hon. Gentleman will have to answer them, too. Then, the country will see that it has a clear choice between a Labour Government who are running a competent economy and a Conservative party that not merely cannot add up its sums, but has not the faintest clue of how to deal with the tough decisions affecting the British economy.

Ms Bridget Prentice (Lewisham, East)

If it is true, as is often said, that my right hon. Friend pays attention to the views of the readership of the Daily Mail, will he allay the concerns of this reader and of my very many right hon. and hon. Friends that the headline on its front page today about a retreat on the ban on hunting is simply wrong?

The Prime Minister

I assure my hon. Friend that the Home Secretary will make an announcement in the next few days, although I can tell her that she should not believe all that she reads in the newspapers.

Mr. Charles Kennedy (Ross, Skye and Inverness, West)

We know that the Government have offered some concessions on the detail, but not the principle, of means testing incapacity benefits. Although that might be enough to buy off some rebels on his Back Benches, will the Prime Minister acknowledge that such a policy will still end up penalising some of the most vulnerable people in our society? Where in the previous Labour manifesto was such a pledge made—on what page, in what paragraph?

The Prime Minister

We certainly did say that we would reform the welfare state. I believe that the reform that we are introducing is the right reform, and I shall explain why. Since 1979, the number of people claiming incapacity benefit has trebled. Our reforms will not affect any existing claimants, but if we do not reform the system for the future, we will carry on running up large bills, while many people who are severely disabled and who genuinely need the help are not getting it.

As a result of our reforms, we will bring the system of incapacity benefit under control, as we should do, but we will also extend help to some of the most severely disabled. Some of those, particularly the younger severely disabled, will be better off by up to £30 a week.

Mr. Kennedy

Given that the principle of means testing incapacity benefit is established, the alarm bells should be ringing. Will the Prime Minister give the House and the country a categorical guarantee that he will not extend that principle to the basic state pension?

The Prime Minister

We have already said that. It is absolutely clear. The right hon. Gentleman says that to extend any form of means testing to incapacity benefit is wrong. We have extended means testing to other forms of contributory benefit, and of course incapacity benefit is taxed. In the end, it comes down to the simple question of how we spend the money that we propose to spend on disability and welfare.

For example, during this Parliament we shall spend an extra £2 billion on disabled people. [Interruption.] I have already answered the question about the basic state pension. The new deal for disabled people will give personal support and quality training to almost 1 million disabled people. We shall implement the Disability Discrimination Act 1995 in full. We are setting up a Disability Rights Commission. We have introduced the disability rights task force. We are helping carers of disabled people with new pension rights and the opportunity to take a break from their responsibilities.

Those reforms mean that more disabled children get help with mobility, and there is more help for severely disabled people, more help with rehabilitation for those people who want to work, and more help with retention so that those developing a disability can stay in their job. That is a good package for disabled people as a whole. [Interruption.] To Conservative Members who are shouting—[HON. MEMBERS: "Look behind you."] At this moment I am looking in front of me.

Madam Speaker

Order. This is extremely time consuming. [Interruption.] Order. I shall suspend the sitting. I have had enough of hon. Members interrupting.

The Prime Minister

It is right that the country should know that the Conservatives want to slash welfare bills, but they support every single one of the measures that would increase bills. In particular, in the past two days, we have discovered that they support a measure in the Immigration and Asylum Bill that would increase spending on benefits for asylum seekers by £500 million, and which would reverse a change introduced by the very Minister who is now shadow Home Secretary. The country can tell the difference between serious opposition and serious opportunism.

Mr. Barry Gardiner (Brent, North)

Will my right hon. Friend take this opportunity to extend the sympathy and support of the House to the people of Orissa whose lives have been devastated by the cyclone? Will he ensure that Britain plays a prominent role in all the aid and development work that is necessary from us and our partners in the international community to restore those people's livelihoods?

The Prime Minister

I entirely concur with my hon. Friend. We extend our deepest sympathy to the victims of that disaster. I have just spoken to my right hon. Friend the Secretary of State for International Development, and she informs me that we are contributing to the international fund that has been set up to tackle the disaster. In due course, as fresh information reaches us, I am sure that we will make further help available.

Q2. Mr. Ronnie Fearn (Southport)

The millennium dome, which will undoubtedly be a success, entails the expenditure of £758 million. Of that, £399 million is from the lottery. How does the Prime Minister square that with the fact that St. Dunstan's, which cares for those who have been blinded in the service of their country, has applied three times for lottery grant and not received any? I wear my poppy with pride, as do many hon. Members. Many of those poppies have been made at St. Dunstan's.

The Prime Minister

I should point out to the hon. Gentleman that four fifths of the lottery stream goes to a host of other lottery causes. I cannot comment on the particular cause to which the hon. Gentleman draws attention.

Mr. Bob Russell (Colchester)

Make inquiries then.

The Prime Minister

I am happy to make inquiries, but it is not for me to distribute lottery money. That is done by the relevant organisation.

Ms Rosie Winterton (Doncaster, Central)

Is my right hon. Friend aware that Victim Support is campaigning for victims and their families to have the right to be consulted and to be given the same information about the possible release of offenders held under the Mental Health Act 1983, as is offered in cases involving the release of convicted criminals from prison? Will he bring together the Department of Health and the Home Office to see how to resolve the current situation and give some peace of mind to victims and their families who have already suffered enough?

The Prime Minister

I assure my hon. Friend that we will take into account the views that she has expressed. In the Green Paper on the review of the Mental Health Act, we proposed that families should be given rights to information about the detention and release of restricted patients who have committed serious violent or sexual offences. We have also increased the funding of Victim Support by 50 per cent. since taking office. I am well aware of people's concerns about the fact that they need to know about releases from prison. I am sure that we can deal with this in the way that I have described.

Q3. Mr. Andrew George (St. Ives)

If achieving social and economic inclusion is the biggest challenge a Government can set themselves, what decisive action will the Prime Minister take to guarantee the efficient and effective delivery of public-matched funds to the poorest regions of the United Kingdom, namely European Union objective 1 regions?

The Prime Minister

We are looking at how we can make the proper arrangements for the co-ordination of matched funding. Under the new procedures and the new deal that we secured, 75 per cent. of the money for objective l comes from the European Union. That is a big increase on the previous position. As a result of objective 1 status being given to Cornwall, which is the area represented by the hon. Gentleman and others, it will receive some £320 million during the next seven years.

Mr. Bill Rammell (Harlow)

Will the Prime Minister reassure the House that the Government will not promise welfare changes that we cannot fund? Does he agree that any political party that simultaneously calls for a reduction in welfare spending as a proportion of GDP, argues that that can be achieved by cuts in welfare benefits and then votes for substantial amendments involving billions of pounds of extra expenditure comes, to use the words of the right hon. and learned Member for Rushcliffe (Mr. Clarke), dangerously close to hypocrisy?

The Prime Minister

That is right. People should be aware of the Conservative party's commitments in respect of cutting social security funding. If the Conservative party is to make its sums add up, it will have to cut certain things. It is already committed to cutting the new deal for the unemployed. That is help which the Conservative party will take away from 250,000 young people. It is also committed to abolishing the working families tax credit. That means that 2 million low income families will have money taken from them. Above all, having told us that it was reckless to promise extra social security spending on specific groups, every pensioner household should know that the £100 going to them next week will be taken off them by a future Conservative Government.

Q4. Mr. Richard Spring (West Suffolk)

Is the Prime Minister aware that the House of Commons Library has decisively and definitively analysed his spending pledges, particularly on health and education, and shown that they are wholly misleading? Is he aware that there is no other country that takes it spending plans and double and treble counts them? Can we have some simple truth from the Prime Minister on this issue instead of the spin-doctoring and grotesque manipulation of the figures that we have from him and his Ministers?

The Prime Minister

That is complete nonsense. The £40 billion for schools and hospitals is extra money over and above the present allocation. Expenditure during our first two years in office, including that extra money, has been more generous than Conservative spending plans. The hon. Gentleman belongs to a party that wants to cut money for schools, hospitals, the police and transport. [Interruption.] Oh yes, it does. The shadow Chancellor and the Leader of the Opposition have been to the CBI conference and elsewhere and have said that they would cut public spending and guarantee that everyone's tax would come down every year. They could not do that without cutting the money for schools, hospitals, law and order, transport and pensioners.

The Government are combining enterprise with fairness. We have sorted out the mess in public finances that the Conservatives left us. The only people who cannot criticise us on any public services are the Conservatives. At some point—at the next general election if not before—they will realise what a strategic blunder they have made.

Kali Mountford (Colne Valley)

Has my right hon. Friend examined the Ontario experience, where there has been a common-sense revolution? If so, is he aware that it has led to increased homelessness and poverty? Would not it be better to have a new definition of common sense—one that leads to modernisation and welfare reform with fairness and justice, rather than the division between poverty and wealth that the Tories' common-sense revolution would bring about?

The Prime Minister

The common-sense revolution and the election of the Conservative party is a contradiction in terms. When I went through the list of measures that it opposes, I forgot to mention that it is also opposed to the 20 per cent. increase in child benefit that came in this April. Not only would pensioners, working families and the young unemployed lose, but 7 million families would be worse off under the Tories.

Q5. Mr. Lembit Öpik (Montgomeryshire)

I do not participate in blood sports, apart from Prime Minister's Question Time and paragliding, but I am in the Middle Way group, which seeks to find an alternative to either an outright ban on fox hunting or maintaining the status quo. Will the Prime Minister meet a cross-party delegation from the Middle Way group to hear our proposals for an independent hunting authority so as to move the debate forward?

The Prime Minister

I am always interested in third ways, but I have nothing to add to what I said to my hon. Friend the Member for Lewisham, East (Ms Prentice), except that I would be happy to meet the hon. Gentleman's group.

Q6. Ms Sandra Osborne (Ayr)

The news that Britain has destroyed its last operational anti-personnel mine three years ahead of schedule will be welcomed nationally and internationally? Does my right hon. Friend agree that we must keep up the pressure until every country has followed Britain's lead and taken action?

The Prime Minister

I confirm that the United Kingdom's anti-personnel land mine destruction programme has been completed, a full three years ahead of the time frame laid down in the Ottawa convention. The United Kingdom will never again use anti-personnel land mines in military operations. We have led the way on this issue, and we hope that the rest of the world will follow.

Mr. Jonathan Sayeed (Mid-Bedfordshire)

In 1997, when the Government came to power, people were putting more than 10 per cent. of their income into long-term savings. Two years later, the savings ratio has declined from more than 10 per cent. to less than 5 per cent. Why have the Government introduced policies that have been so deeply damaging?

The Prime Minister

I do not accept that, and the most recent figures show an increase in the percentage of savings, not a decrease. I go back to the point that I made to the right hon. Member for Richmond, Yorks (Mr. Hague). As a result of the measures that we have taken, we have saved this country from what would certainly have happened if we had continued the policies of the previous Government when we came to office. Those policies would have landed us back in the cycle of recession that we were in twice under the Conservative Government. As a result of the help that we are giving, not least in the new welfare reform proposals for pensions, stakeholder pensions and pension reform, we will enable this country to keep the costs of pensions under control, and to bring pensions within the purview of many people currently denied them. Moreover, we will do so at the same time as running the most effective and confident economic policies that have been seen in this country for decades, and—if I may return to a theme that featured earlier in Prime Minister's questions—avoiding boom and bust.

Madam Speaker

Time is up. I call Mr. Gummer. [Interruption.] Order. I ask Members to leave quietly, particularly Opposition Members.