HC Deb 11 November 1999 vol 337 cc1278-81
5. Mr. Christopher Leslie (Shipley)

What steps he is taking to ensure that all sections of society share in increasing economic prosperity. [96994]

The Economic Secretary to the Treasury (Miss Melanie Johnson)

The Government is committed to a fair and inclusive society in which everyone can contribute to and benefit from economic prosperity. The Chancellor set out the Government's strategy in the pre-Budget report, published on Tuesday. We want to create employment opportunity for everyone of working age, ensure that children have the best possible start in life and deliver a better deal for pensioners.

Mr. Leslie

Have not 18 years of Conservative failure made pensioners some of the poorest in society? Is my hon. Friend aware that pensioners' poverty takes its toll particularly in the colder winter months, and has done for far too long? Will she take this opportunity to make it crystal clear that the welcome new £100 winter allowance is not a computer error, a mistake or even a one-off, but a bonus delivered only by a Labour Government?

Miss Johnson

I am grateful to my hon. Friend for that question. Of course, there is no computer error on the £100 winter allowance. We are delighted to be able to say that it will go to more than 7 million eligible pensioner households this year and—as my right hon. Friend the Chancellor announced on Tuesday—every year hereafter. Under this Government, pensioner households are on average £300 a year better off. In addition to the free television licence, from which more than 3 million pensioner households will benefit, another 1.5 million pensioner households will benefit from the extension of the 10p rate to savings income, which was also announced on Tuesday.

Mr. Michael Fallon (Sevenoaks)

I welcome the hon. Lady to her new responsibilities. Why does the Government persist in their nasty and mean-spirited attack on pensioners who happen to have saved all their lives? Those who have a few hundred pounds of investment income can no longer reclaim the tax on their dividends. Is she proud to be punishing savers in that way?

Miss Johnson

We are helping pensioner households across the board. We are also helping those who are paying tax. Pensioners were already paying less tax under this Labour Government than ever before, even without Tuesday's announcement on the lop savings rate, which will be of particular help to many pensioner households. The hon. Gentleman seems to fail to recognise that two thirds of pensioner households pay no tax.

Ms Sally Keeble (Northampton, North)

May I draw my hon. Friend's attention to the work of the Northamptonshire Association of Asian, African and Caribbean Businesses and welcome the many measures in the pre-Budget statement that promote enterprise and encourage people to set up small businesses? Will she ensure that steps are taken to encourage organisations that support businesses in ethnic minority communities so that they too can benefit from economic prosperity?

Miss Johnson

I am grateful for my hon. Friend's comments and her detailed knowledge of the work being done in her constituency to support enterprise. The Government supports such work throughout the country. We want to achieve our economic ambitions for the next decade. They include closing the productivity gap and ensuring that enterprise is open to all. As part of that, we are providing a new £30 million package to promote enterprise in disadvantaged communities, providing better access to finance, better advice and mentoring and demonstrating that our commitment is borne out by practical steps.

Mr. Francis Maude (Horsham)

I welcome the Economic Secretary to her new post and wish her well in it. I remind her that before the Government share out economic prosperity, they must ensure that it continues to increase. Does she agree that Productivity is a fundamental yardstick of economic performance…poor productivity condemns a nation to be held back"? That is what the Chancellor said in his pre-Budget statement document last year. Was she surprised to hear him admit on Tuesday that, since he became Chancellor, productivity growth has fallen by two thirds? Does she call that making Britain more competitive?

Miss Johnson

I am grateful to the right hon. Gentleman for welcoming me to my new post. However, my right hon. Friend the Chancellor certainly did not make that admission. We are taking steps to address exactly the issues that the right hon. Gentleman is raising. The two worst recessions since 1945 occurred when the Conservatives were in government. They doubled the national debt and presided over interest rates of 15 per cent. In addition, there were 22 Tory tax rises. None of that did very much for productivity, growth or enterprise.

Mr. Maude

The hon. Lady may not have had a chance to read it, but the admission is in a document published by the Chancellor on Tuesday. It shows productivity and growth falling—she should take a look at it.

If the Government honestly want to increase prosperity, why did they raise tax by £40 billion—by £30 billion on business alone—and give Britain the fastest rising tax burden in Europe? Does the hon. Lady remember when she was a candidate in the general election the Prime Minister saying that Labour had no plans to increase tax at all"? Why are the Government still piling on regulations costing business £5 billion a year? What does the hon. Lady have to say to the president of north-east chambers of commerce, in the Prime Minister's own area, which said that bureaucracy…is stifling business competitiveness"? Is that not why the president of the Confederation of British Industry said that the sums that the Government give back are trivial by comparison"? Did not the Chancellor inherit the fastest growing economy in Europe and are they not squandering that inheritance?

Miss Johnson

We inherited a deficit of £28 billion in public finances. We inherited a boom and bust economy with no possibility for businesses or individuals to plan ahead because of its instability. We have turned that around; we now have stability. The right hon. Gentleman will not even tell us whether he supports one of the key measures to ensure that we have that stability in the British economy—the independence of the Bank of England.