Engagements (Hansard, 22 March 2000)

§ Q1. Dr. Stephen Ladyman (South Thanet)
If he will list his official engagements for Wednesday 22 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 be having further meetings later today.

§ Dr. Ladyman
Does my right hon. Friend agree that he has a duty to respond publicly to suggestions that are made to him for managing the economy? If so, will he examine research provided to me yesterday by the Library that shows that if a Government came into power committed to cutting the tax burden by as little as 1 per cent. a year, in a year when growth was slightly lower than expected they would have to cut spending by 971 £20 billion, and that proportionately £3.5 billion of cuts would have to be found by the national health service? As that is the Opposition's suggestion, does not my right hon. Friend have a duty to ensure that people have an opportunity to compare Tory policy with yesterday's Budget?

§ The Prime Minister
My hon. Friend has touched a raw nerve. The only reason that we have the money to invest in the health service and in our schools is because we introduced policies of welfare to work, which were opposed by the Conservative party. We reduced national debt, which was given us by the Conservative party, and we achieved strong economic growth, when the Conservative party predicted recession and when their policies would have caused recession. The choice is very simple; a strong economy under Labour or boom and bust under the Tories.

§ Mr. William Hague (Richmond, Yorks)
A year ago the Prime Minister claimed in the House that business taxes were coming down. Taking into account yesterday's Budget, will he give the updated figure for the total increase in taxes on business over the lifetime of this Parliament?

§ The Prime Minister
We have cut the rate of corporation tax, and corporation tax and small business taxes are now at their lowest level ever.

§ Mr. Hague
Is not that answer an example of why nobody believes anything that the right hon. Gentleman says about tax cuts? The actual figure given by the Scottish Chambers of Commerce yesterday shows that the additional cost to business—[Interruption.] I know that Labour Members do not like hearing from Scotland any more, but they should hear from it. The additional cost over the lifetime of this Parliament is £25 billion to £30 billion. Characteristically, the Chancellor never mentioned in his Budget speech one of the biggest taxes levied on business yesterday, and that was the change to double taxation relief. Is the Prime Minister aware that PricewaterhouseCoopers voiced its extreme concern this afternoon about the matter and said that it fears that the yield could run into several billions of pounds? It fears that this will make the UK one of the least attractive places for large international groups. Is the right hon. Gentleman completely confident in the figures that the Chancellor has given to the House?

§ The Prime Minister
Yes, I am aware of the PricewaterhouseCoopers letter and its concerns. We believe them to be mistaken and we have asked PwC to discuss them with us. I believe that its assessment is based on a misunderstanding of the tax position.

§ Mr. Hague
After what everyone has been through with the Government's figures over the past few years, when it is a contest between the Chancellor's accuracy and that of the most reputable and largest accountancy firm in the world, suspicion is likely to arise on the Government Benches. If the right hon. Gentleman will not acknowledge that business taxes are increasing, what is 972 the up-to-date figure for the total increase in taxes as a result of last year's Budget and the present Budget coming into force next month?

§ The Prime Minister
As I have explained to the right hon. Gentleman on many occasions, yes, we had two years clearing the deficit that we inherited from his party but now, I am delighted to say, the tax burden is falling. However, I do not want to leave the PricewaterhouseCoopers point before I have answered it again for him. PricewaterhouseCoopers has written on behalf of certain of its clients. It is important for us to investigate whether that is true or not, but I think that the right hon. Gentleman is being absolutely fatuous in suggesting that that applies to the entirety of business in the United Kingdom.

§ Mr. Hague
Greater credibility would be attached to the Prime Minister's statements if he could answer a simple question such as the one that I just asked him. What is the total net increase in taxes coming into force next month? All he has to do is look at one page of the Red Book and deduct it from another page. The answer, even on the Government's figures, is a £365 million tax increase coming into force next month. On the figures from the House of Commons Library, which strip out all the fiddles, it is a £1.4 billion increase. Will the Prime Minister now tell the House—because this is one of the reasons that it happens—how many people will lose the married couples allowance next month without receiving any compensating children's tax credit?

§ The Prime Minister
Child benefit has gone up and there is the basic rate income tax cut. The tax burden this year is falling according to the figures in the Red Book, not rising. For 1999–2000, it is 37 per cent.; next year it falls to 36.9 per cent. With the action that we took clearing the deficit for the first two years, any rise is less than the rise in the last two years of the Tory Government when the right hon. Gentleman was in the Cabinet. It is less than the rise under Margaret Thatcher and less than the rise profiled under Tory plans. In future Budgets, the right hon. Gentleman can also see the path of the tax take. The 10p starting rate, the basic rate tax cut, the increases in child benefit and the working families tax credit mean that Britain's working families are better off.

§ Mr. Hague
The question was about the married couples allowance. For someone who is meant to know about the Budget, the right hon. Gentleman does not know very much. The question was how many people are losing their married couples allowance without anything to compensate for it next month. The answer is that 10 million people are losing that allowance, with nothing to compensate.
Let me read the right hon. Gentleman a letter from a taxpayer—I will send him a copy. It says: Having received my tax code now for the year 2000–2001, I am deeply disappointed by the Labour party's continued lying and "spin" about the protection of the family.—[interruptionj 973 We know that Labour Members do not want to hear from an actual taxpayer, but taxpayers know more about it than the Prime Minister. The letter goes on to say: I read there will be a "Children's tax credit" that only comes into force from April 2001…How this new tax credit can be replacing a loss of allowance for this year is beyond me, as it is introduced a year later. What is the justification for the gap between the abolition of the married couples allowance and the introduction of the children's tax credit?

§ The Prime Minister
They get the basic rate cut this year, plus there is a £4 rise in child benefit this year, and a £2 rise for the second child, and the average family will be better off as a result of this. If the right hon. Gentleman is opposing all these measures, let me point out another thing. He was a Member of the Government who cut the married couples allowance from 40 to 15 per cent. In fact, his shadow Chancellor cut the married couples allowance, cut mortgage interest relief at source, raised VAT on fuel and introduced the fuel duty escalator. So we will take no lessons from him on tax rises.
In the end, the question is whether we have sorted out and stabilised the public finances so that the economy is strong. We have, and let the right hon. Gentleman get to his feet now and say whether he opposed all the measures that we have taken to sort out the finances.

§ Mr. Hague
The truth is that business taxes are up £30 billion, and the Prime Minister will not admit it; total taxes next month rise by £1.5 billion, and he will not admit it; 10 million people lose a key allowance next month, and he will not give the numbers in the House of Commons; they will lose it with no compensation for a year, and he has no explanation to give the House of Commons; the tax burden continues to rise, even while the Chancellor denies it; and taxes are up by 8p in the pound for businesses, pensioners, drivers, savers, home owners and millions of families. The Government who promised that there would be no tax increases have cynically and totally broken their promises.

§ The Prime Minister
On tax, in relation to the married couples allowance, again, the right hon. Gentleman is wrong, because of the child benefit rises and because of the basic rate income tax cut—plus the lop starting rate cut, plus the lower national insurance help. He is simply wrong on that point. In fact, because of the changes that have been made, the figures show that the average family is better off as a result of the Budget. Indeed, by April next year, when all the changes come into effect, on average, households will be £460 a year better off and families with children will be £850 a year better off.
There is a choice between sustaining the public debt and going back to the policies of boom and bust—the right hon. Gentleman's policy—or sorting out the public finances with the result that we can have stronger growth, more employment, rising living standards and better take-home pay. The truth is that the right hon. Gentleman is fine when he is attacking us—as he showed when he got to his feet just now—but when it comes to his own policies, he does not have a clue.

§ Q2. Mr. Malcolm Savidge (Aberdeen, North)
Having just heard the predictable routine from the Leader of the Opposition—the man of all gags and no policy— 974 and before we hear the predictable routine from the leader of the Liberal Democrats, who promises to satisfy the complete wish list of the entire electorate from a single penny on tax, let me ask my right hon. Friend this: will he continue his routine of building a sound economy from which we can carry on providing improvements in our essential public services of health and education, and in the welfare of young and old?

§ The Prime Minister
The single most important thing is the strength of the economy. For the first time in decades, under the Labour Government, Britain has come through a slow-down in economic growth without a recession. During the late 1980s and early 1990s, we had interest rates of 10 per cent. for four years and 15 per cent. for a year. What happened then? Because the Conservatives lost control of public finances, they had to put taxes up—they did so 22 times. The only way to sort out the economy for the long term was to take the difficult decisions that we took to put sound public finances in place with monetary discipline; then, the country is better off. That is the way to make working families better off in this country; it is the Labour way. We know the Tory way: it is tax rises, public service cuts and boom and bust.

§ Mr. Charles Kennedy (Ross, Skye and Inverness, West)
The hon. Member for Aberdeen, North (Mr. Savidge) is having his own high-profile week, but may I point out to him that I do not think that Catherine Zeta-Jones will be alternatively attracted based on what he said this afternoon?
Does the Prime Minister acknowledge that, for the Conservatives, the issue is tax cuts whatever the cost? Surely the legitimate question to the Government is: tax cuts, but at what cost?
Will the Prime Minister confirm two facts—that although the projected underspend for the Department of Social Security budget this year is £2 billion, pensioners will receive only a 75p uprating?

§ The Prime Minister
That is not all they will receive, is it? They are receiving help not only through the minimum income guarantee, but through the £100—to be £150—winter allowance; the 10p rate on savings; the free television licences for the over-75s; the free eye tests and the concessionary bus fares. We are doing much for Britain's pensioners, but, yes, we also believe that it is important to proceed with the basic-rate cut for Britain's hard-working families.

§ Mr. Kennedy
The Prime Minister confirms what the Chancellor did yesterday, which was to recycle two old policies and promise a consultation. The tragedy is that, by the time this consultation reports after its completion, it will be too late for too many pensioners. Surely the basic state pension should be uprated more at a time when there is a £12 billion budget surplus.

§ The Prime Minister
First, it is worth pointing out to pensioners that the Liberal Democrats' policy at the last election was not to raise pensions in line with earnings. Now that we have sorted out the economy largely by ignoring their advice, it is true that they want more. We have not just introduced policies with no effect for pensioners; it is not just a consultation document. The rise in the savings limits means that more people get help, 975 and the minimum income guarantee and the £150 are not illusory benefits. But what the right hon. Gentleman will never do when he explains Liberal Democrat policy is explain to people what the cost of that policy is. The effect of his tax policies will be that average families even on average incomes will be £5, £6 or more a week worse off. That is the consequence of his policy and I do not think that it is fair to those families.

§ Q3. Mr. Derek Wyatt (Sittingbourne and Sheppey)
I listened with interest to the earlier exchanges on tax. This morning, I had breakfast with 60 members of my chamber of commerce and they and 1,680 small and medium-sized enterprises and businesses are grateful that capital gains tax has been reduced. On small and medium-sized enterprises and chambers of commerce, does my right hon. Friend agree that chambers of commerce have the grass-roots ability to be at the centre of the knowledge economy? I notice that my right hon. Friend the Chancellor of the Exchequer said yesterday that chambers of commerce can participate in the new enterprise firms if they are in high unemployment areas. May we participate and, if so, may I offer Sittingbourne and Sheppey as a pilot?

§ The Prime Minister
The national enterprise campaign will be launched on 11 May and it will be a business-led campaign that will be spearheaded by, among others, the chambers of commerce, the Confederation of British Industry and the Institute of Directors. The measures that we have announced this year, together with the 3p cut in small company rates, will cut corporation tax bills of small businesses on average by nearly 25 per cent. Along with the measures on electronic commerce and capital gains, this is a good environment for business. Most important of all, the best environment for business is a strong economy. That is why it is so important that we run the economy in a disciplined and sensible way. I believe that business wants investment in education. The Conservatives may oppose extra investment in education, but I believe that many business people recognise the importance of education and skills for our economic future.

§ Mr. Jonathan Sayeed (Mid-Bedfordshire)
When the Prime Minister takes his family on their summer holiday this year, will he pay the full cost of that holiday himself or will he expect some fat-cat acquaintance to subsidise him yet again?

§ The Prime Minister
That question is typical of today's Conservative party.

§ Q4. Mr. Roger Berry (Kingswood)
May I welcome the biggest-ever real-terms increase in spending on the national health service that was announced by my right hon. Friend the Chancellor of the Exchequer yesterday? I note the silence of Opposition Members at this point. Does my right hon. Friend the Prime Minister agree that there are potentially great health benefits from developments in human genetics, but that there are opportunities for genetic discrimination by, for example, employers, insurance companies and others? Will he consider referring the issue of genetic discrimination to 976 the Disability Rights Commission, which I am delighted to remind the House will open its doors in only a few days time?

§ The Prime Minister
This is an important, difficult and new issue. As my hon. Friend is aware, from April this year, the new independent Disability Rights Commission will promote equalisation of opportunities for disabled people. As an independent commission, it will, of course, decide its own priorities, but I understand that the issue of genetic testing is one that it will consider in the context of drawing up its future work plan. The issue obviously has important ramifications and consequences for disabled people and I know that the Disability Rights Commission will want to consider it. I am proud that it was this Government who introduced the Disability Rights Commission in this country.

§ Q5. Mr. Michael Fabricant (Lichfield)
I welcome the money allocated for the NHS, which will help repair the damage of the past two years. Is the Prime Minister aware that, as the Chancellor of the Exchequer was making his statement yesterday, the cash-strapped South Staffordshire health authority was also making an announcement? It proposed closing the Hammerwich hospital and the Barton hospital, eliminating the maternity unit and the dialysis unit at Lichfield Victoria hospital and slimming down the minor injuries unit. Will the Prime Minister promise please to intervene personally to prevent that very thing from happening?

§ The Prime Minister
It is for the local health people to draw up their local health plans. I do not think that it would be right for me to intervene. If the hon. Gentleman wants more money for the national health service, he does not want the tax policy of the Conservative party. I am sorry, but at some point in time, the Conservative party will be forced to choose. Is it in favour of extra investment in schools and hospitals or of a tax policy that will not allow that investment to be made?

§ Mr. Nigel Evans (Ribble Valley)
Answer the question.

§ The Prime Minister
That is the answer to the question.

§ Judy Mallaber (Amber Valley)
Does my right hon. Friend agree that the announcement in yesterday's Budget that VAT on sanitary protection is to be cut from 17.5 per cent. to 5 per cent., the minimum for essential goods, will be welcomed by women throughout the country and will be of particular benefit to those on low incomes? Will he join me in congratulating all those who have campaigned for a very long time on the issue, especially my hon. Friend the Member for Calder Valley (Ms McCafferty)?

§ The Prime Minister
I certainly do congratulate her. Women's sanitary protection is currently taxed at the standard rate of 17.5 per cent., but from 1 January next year such products will be taxed at the reduced rate of 5 per cent. It is another Labour tax cut for the many.

§ Q6. Mr. Edward Davey (Kingston and Surbiton)
Can the Prime Minister confirm that, despite the Budget yesterday, his Government are set to miss and to break his manifesto promise to raise the proportion of 977 the national income spent on education in this Parliament? Will he explain why he is allowing his Chancellor to spend almost three times as much on a cut in the basic rate of income tax next year as he has given to schools? Will he tell the House and the people of this country what has happened to his election priority of education as opposed to Tory tax cuts?

§ The Prime Minister
The hon. Gentleman is wrong. The proportion of the national income spent on education will rise in this Parliament. The percentage rise for this year is 8 per cent. We have put an extra £1 billion into education starting this April. That is more than the Liberal Democrats ever asked for. What happens with the Liberal Democrats, as ever, is that the moment we do even more than they ask, they just up the demands. It is about time that the hon. Gentleman explained to the country how he could spend even more on schools, pensioners and local government. No doubt he will be telling us that we have not spent enough on the health service either. [Interruption.] We did not quite get an answer to that. It is not possible to get all those increases out of an increase of 1p on the basic rate of tax. It is just not, and it is about time that the Liberal Democrats took a lesson in economic literacy.

§ Mr. Paul Goggins (Wythenshawe and Sale, East)
Will the Prime Minister join me in welcoming the announcement by my right hon. Friend the Deputy Prime Minister this morning that the Government are to invest £250 million in the extension to the metrolink tram system in Greater Manchester? Does he agree that it is excellent news for the north-west and will provide first-class connections with Ashton, Oldham and Rochdale and, in my constituency, quality public transport connections to Manchester airport and Wythenshawe town centre and hospital?

§ The Prime Minister
I remember visiting the metrolink. It is a fantastic project. The extension will be well worth the money. One of the benefits is that, because it is based on an integrated transport policy, it has cut car usage. It is beneficial environmentally and it allows people to get to work more easily. It gives people greater freedom. It is a first-class public transport system.

§ Q7. Mr. Edward Garnier (Harborough)
Yesterday's Budget statement showed that the Chancellor of the Exchequer, despite his many psychological flaws, is a man of greater intellectual and political ability than the Prime Minister. Will the Prime Minister now redeem himself by lifting at once the threat of closure hanging over the brand-new breast cancer unit at Glenfield hospital, Leicestershire?

§ The Prime Minister
I do not know about the particular circumstances of that hospital, but I am perfectly happy to look into them. Yet again, however, a Tory has had the cheek to get up and tell us that we should spend more money on the health service, when the Conservative party is opposed to spending more money on the health service—[HON. MEMBERS: "No!"] They say no, but, a few days before the Budget, the shadow Chancellor was asked whether he wanted taxes to be reduced or spending to be increased and he replied that the Chancellor should cut taxes. The truth is that the 978 Tories know that they have been rumbled. They are not just a boom-and-bust party; they are a cuts-in-the-NHS party as well.

§ Mr. Steve McCabe (Birmingham, Hall Green)
If the Foreign Secretary visits Iran later this year, which aspect of Iranian policy will be of greatest concern to the British Government? Will it be the continuing reports of torture, executions and human rights violations, or Iran's weapons of mass destruction programme, which recently led the commander-in-chief of American forces in the middle east to describe Iran as the most dangerous state in the region?

§ The Prime Minister
Of course there are concerns about Iran's policy in several different areas, but the question is whether we should refuse to engage with the new Iranian Government. We believe that it is better to engage with them, because there are elements with whom it is important to have a dialogue. That in no way diminishes our concern about other matters, and we shall voice those concerns in a proper way. However, the dialogue that we have begun with the Iranian Government is the right course of action.

§ Q8. Mr. Nick Hawkins (Surrey Heath)
Is the Prime Minister, for once, a touch embarrassed that the independent Commissioner for Public Appointments has pointed out that 83 per cent. of all councillors appointed to NHS boards since Labour came to power are Labour councillors—no fewer than 284 of them? Will he, for once, abandon his smug sanctimoniousness and apologise for his culture of cronyism?

§ The Prime Minister
Now, in the country as a whole, about 70 per cent. of chairs and non-executive directors have no declared political activity at all; 50 per cent. of appointees are women; and 11.5 per cent. are from ethnic minorities. I am proud of that record.

§ Q9. Liz Blackman (Erewash)
In the light of announcements already made, no one can doubt the Government's commitment to end fuel poverty, but there is still a great deal of ground to cover. Can my right hon. Friend assure the House that the inter-ministerial group that is charged with setting out the Government's fuel poverty objectives and how to meet them will report back as speedily as possible and enable us to eradicate that scourge for ever?

§ The Prime Minister
Yes, I can give that assurance. The programme will combat fuel poverty by supporting the installation of energy-efficient central heating systems in up to 1 million low-income homes. It is estimated that the residents of about two thirds of the households thus helped will be aged 60 or older. We have already doubled grants for people on low incomes under the new home energy efficiency scheme. From this winter, the fuel payment for pensioner households will be increased to £150. In addition, we have reduced VAT on domestic fuel to the lowest permissible level. All those measures mean that we have made a start on tackling a serious problem affecting millions of people in this country.

§ Q10. Mr. Simon Hughes (Southwark, North and Bermondsey)
On the subject of asylum seekers, immigrants and beggars, and given the Government's 979 welcome commitment to anti-racism, may I ask the Prime Minister to look at this Monday's editorial in The Daily Telegraph? It said of the Home Secretary that fanning resentment against … immigrants … is the height of irresponsibility. It also says that careful language is necessary and the avoidance of "cheap populism" desirable. Will the Prime Minister ensure that Home Office Ministers and all those for whom he is responsible do not speak or act in a way which encourages some of the press to pander to the twin evils of racism and prejudice?

§ The Prime Minister
Of course we will not pander to that. However, there is a genuine problem with asylum in 980 this country. Unless reasonable and tolerant people deal with what are plain abuses of the system, unreasonable and intolerant people are encouraged. The proper way forward is to do what we are doing: introducing tough new asylum measures that will allow genuine asylum seekers through, but will halt those bogus asylum seekers who do nothing but harm to the cause of proper asylum seekers.
Therefore we are introducing tough new measures in April that will replace the benefit system, open the new centres, which are important, and speed up the process of dealing with asylum claims. I reject entirely the argument that those measures are in any shape or form whipping up prejudice. They are, in fact, the best way of preventing it.