Engagements (Hansard, 7 March 2001)

§ Q1. Mr. Derek Wyatt (Sittingbourne and Sheppey)
If he will list his official engagements for Wednesday 7 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 meetings later today.

§ Mr. Wyatt
I thank my right hon. Friend for the nudge that he gave our new community hospital on the Isle of Sheppey.
Does my right hon. Friend agree that, given the on-going overhaul of the computer systems in the Department of Social Security, any plans to offer pensioners an opt-in or an opt-out would mean increasing the number of DSS staff by 3,000, and that it would take computer software engineers two to three years to reconfigure 10 million pensions at a cost of £1 billion?

§ The Prime Minister
I assure my hon. Friend that we shall do what we have done, which is pay the winter allowance to pensioners. We shall give free television licences to the over-75s. We are giving extra help with the basic state pension, which will come in shortly.
If we were to go down the route proposed by some, and end up offering some incredibly bureaucratic and costly choice, it would mean not merely £100 million wasted on bureaucracy but some 3,000 extra civil servants. It is no doubt for that reason that in recent Conservative party 285 literature the party chairman suggested that instead of using the word "Conservatives", the party might decide to use the word "we".

§ Mr. William Hague (Richmond, Yorks)
How much extra tax will pension funds be paying this year as a result of the Chancellor's abolition of dividend tax credits in his first Budget?

§ The Prime Minister
The value of pension funds has gone up dramatically as a result of the success of the economy. The abolition of payable tax credits was done for the reasons that we stated at the time. It is the right reform, and as a result of the buoyancy of the stock market the value of people's pension funds has gone up.

§ Mr. Hague
The stock market has fallen by 11 per cent. since September, so the Prime Minister cannot say that this year's tax is being paid out of an increase in the stock market.
The Government published estimates of the cost of pension funds for the first three years of the tax. Last year, it was £5.4 billion. Does not the fact that the Prime Minister will not give a figure for this year suggest that the figure is even larger this year? If he will not give that figure, will he give the figure—already published in Government documents—for the total amount paid in tax by pension funds in the first three years?

§ The Prime Minister
First, let me correct the right hon. Gentleman. As a matter of fact, the value of pension funds has gone up considerably as a result of the buoyancy of the stock market. Secondly, we have cut the rate of corporation tax—a tax which, of course, affects the businesses in which pension funds invest. Thirdly, just so that the right hon. Gentleman knows, the actual proportion of tax paid by businesses—the proportion of corporation tax receipts—has fallen, not risen, under this Government.

§ Mr. Hague
Let us get back to the actual subject. The figure is £11.7 billion: that is the amount of additional taxation taken out of pension funds. It teaches us all we need to know about the Government and the honesty of their Budget that, on Budget day, the Prime Minister cannot be relied on to read out the Government's own figures relating to one of the biggest tax rises in history.
The total that pension fund holders have paid out over the last four years is estimated to be £17 billion. If the Prime Minister disagrees with that estimate, what does he think the figure is?

§ The Prime Minister
As I have just said to the right hon. Gentleman, because the value of pension funds has gone up, the value to pensioners has gone up.
In its "green Budget" report, the Institute for Fiscal Studies says that if the Government implements all of the measures for consultation announced in November's pre-Budget report, there will have been no change in government revenues resulting from Budget announcements over the Parliament". It goes on to say that by contrast, when the right hon. Gentleman's party was in office, Budget measures announced during the 1992 to 1997 Parliament meant that revenues by the end of that Parliament were £19.6 billion higher". 286 We would take the right hon. Gentleman a lot more seriously if he told us that he was going to reverse all the reforms that we hae introduced, but he does not. Instead, he is committed to a cut in investment—which is the worst thing that we could have for public services—and irresponsible tax and spending policies that would cause mortgages to increase and take us back to boom and bust.

§ Mr. Hague
The Prime Minister wants to know whether we would reverse that measure. We will restore dividend tax credits to 630,000 people who have lost those tax credits and are too poor to pay income tax. So, now let us have some answers from him. It is a good thing that it is the Chancellor and not the Prime Minister who is giving the Budget—we might even get some figures out of the organ grinder that we do not get from the monkey. We cannot get him to give a figure.
Since the Prime Minister wants to quote about it, is he aware that, the last time that he gave that answer, a firm of accountants wrote to him and said: I suppose the Treasury tried to tell you that stripping £40 billion out of pension funds over a 10-year period…would have no impact on pension funds: this is fair game for a Treasury seeking to mislead the prime minister, although many would be surprised that you bought into it. Will the Prime Minister now accept that a large new tax on pension funds has to be paid for either in reduced pensions or in increased contributions?

§ The Prime Minister
Undoubtedly many accountants write to Governments from time to time. However, I can assure the right hon. Gentleman that the key issue is whether the value pension funds and their stock has increased. That is the point that he will not deal with. However, as we an in a debate about parties' pension policies, I should quote the remarks that the shadow Chancellor made this weekend in Harrogate—[Interruption.] I think that we are entitled to have an exchange about the different pension policies. He said: Well you're perfectly right—that if people choose to take the option to move out of Laying into the national insurance fund, then there would not be as much money to pay current pensioners—so we have to fill the pump. And we can do that by a variety of ways, for a start by selling gilts". What that means is that we would end up either not paying pensioners the money that they are owed out of the national insurance fund—which is the very fund into which they paid—or with increased borrowing. It would be either unfair to pensioners or exactly what we have warned about all the way through—as the Conservatives' sums do not add up, they would be back to boom and bust.

§ Mr. Hague
The Prime Minister is not only economical with the truth, but less than truthful about economics. He has raided pension funds to a greater extent than Robert Maxwell or anyone ever in history, but seems to think that that has no impact on pension funds. One speech on the environment and he thinks that money grows on trees—ignoring the fact that of 200 pension funds surveyed on the matter, 11 had cancelled their benefit improvements, 55 had increased their contribution rates and seven had had to change the whole nature of the scheme. Is not the truth that funds that belong to millions of pensioners are being taken by the Chancellor in stealth 287 taxes, and that any claim that the Government have today to being a tax-cutting Government should be treated with total contempt?

§ The Prime Minister
If we are comparing economic records, we should first point out that inflation under this Government has been within the 2.5 per cent. margin, but that it averaged 6 per cent. under the Government of whom he was part. Mortgages and interest rates have averaged 6 per cent. under us, but were 10 or 11 per cent. under him. We all remember the days of 3 million unemployed under the Conservatives. Today, there are a million more jobs in the economy and just over 1 million unemployed.
So, I think that if we compare the record on the economy under this new Labour Government and the record on the economy under the Conservatives, it does not compare very favourably for them That is no doubt why, at the weekend, the previous Deputy Prime Minister said: I have been in a dilemma, but I have resolved it in my own mind…I am going to vote Conservative. 1 ye been a Conservative too long to do anything else. If that is the best that the right hon. Gentleman can do to persuade people to vote Conservative, it only shows what a mess he has made of his party.

§ Q2. Mr. Paul Marsden (Shrewsbury and Atcham)
Will my right hon. Friend review urgently a serious and growing animal welfare problem that is paralysing the countryside? The foot and mouth outbreak means that farmers are not allowed to move healthy animals down public highways, with the result that one of my farmers in Shropshire will have to slaughter 400 piglets in the next couple of days because the barn in which they are being kept is overcrowded. The piglets need to be moved to farrowing outbuildings only 100 yd down the road. With the right precautions, would not it be possible to save those healthy animals?

§ The Prime Minister
That is a very reasonable point. We are looking urgently to determine what further changes we can make. My hon. Friend will know that about 250 of the 390 abattoirs in the UK have now been licensed to slaughter animals under arrangement. The difficulty for us is to get the balance right between putting in place the measures necessary to make sure that the disease cannot spread, and not going over the top and limiting justifiable movements of animals. My right hon. Friend the Minister of Agriculture, Fisheries and Food informs me that he has a meeting with the National Farmers Union later this afternoon, at which those very issues will be discussed. I hope very much that we can announce further relaxations of the restrictions in the not-too-distant future.

§ Mr. Charles Kennedy (Ross, Skye and Inverness, West)
Following on from that question, and our exchanges last week, may I say that I very much welcome the fact that the Government have been able to take steps in the direction of allowing the controlled movement of 288 animals for slaughter? That is giving a genuine degree of hope to the very hard-pressed farming community in our country. However, I have a couple of specific questions—

§ Mr. Eric Forth (Bromley and Chislehurst)
Gently, gently.

§ Mr. Kennedy
When it sees these exchanges, the farming community will notice that the Conservatives are not interested in serious discussion of the problem.
Does the Prime Minister have any plans yet for widening the scheme? Given what the hon. Member for Shrewsbury and Atcham (Mr. Marsden) properly and sensibly said when he asked his question, will the Prime Minister make arrangements for the controlled transport of some ewes to suitable lambing sites? That is a real problem, not least for farmers in the hill livestock sector.

§ The Prime Minister
In addition to this afternoon's meeting to which I referred, there is a meeting on Friday specifically to discuss that matter. I understand that we shall move on next week to look at the possibility of permitting some longer-distance movements in unaffected areas. For instance, that will allow sheep that have overwintered in the lowlands to return to the hills. It will also help with the specific problem of the ewes that the right hon. Gentleman mentioned.
At the last outbreak of the disease in 1967, measures were relaxed too quickly, and the disease broke out again. It would be a false comfort to all parts of the farming community to relax restrictions before we are ready. So far, however, all the cases that have been identified can be traced back to the same source. That is a hopeful sign, although it is too early to be absolutely certain. The measures that we have put in place so far have worked. Obviously, we will look at how we can relax them as soon as possible, as we are aware of the heartache and the financial difficulty being experienced by farmers.

§ Mr. Kennedy
I thank the Prime Minister for that reply. Hon. Members of all parties hope that we get through this crisis sooner rather than later. The Prime Minister has called for an open and serious debate about the nature of sustainable agriculture in this country. When we get over the immediate crisis, will he be open minded enough to acknowledge the need for that debate to be conducted with representatives of the entire agriculture community and those involved in the wider farming and food-chain community? Does he agree that the debate should also be conducted on an all-party basis?

§ The Prime Minister
I am sure that the discussions on that will continue. I emphasise that it is not as if these discussions have not been taking place as a result of the measures that were announced last June. There has been a debate about the right structure for the farming community in the future. In addition, the rural development regulation, which will amount to more than £3 billion worth of spending over the next seven years, will mean big changes in the way that we farm in this country. I am pleased to see the first signs in Europe that the debate is going wider than these shores. Without 289 fundamental reform of the common agricultural policy, it will be difficult to give our farming community the future that it deserves.

§ Mr. Phil Woolas (Oldham, East and Saddleworth)
May I, along with my right hon. Friends the Members for Ashton-under-Lyne (Mr. Sheldon) and for Oldham, West and Royton (Mr. Meacher), express our profound sorrow at the tragic killing in Oldham on Monday evening of WPC Alison Armitage? WPC Armitage, who only two weeks ago had taken part in a successful operation to apprehend suspected armed robbers, was to be commended for her actions. She was one of the bravest and finest officers in the police force. The sense of shock in Oldham is deep and tangible. I am sure that the whole House will want to express its sympathy. Will the Prime Minister do all that he can to support the brave work of the police and to ensure that justice is done?

§ The Prime Minister
I am sure that the whole House will join with my hon. Friend in paying tribute to the memory of WPC Alison Armitage, who was tragically killed while on duty on Monday. I understand that she was an outstanding young officer who lived for her job, and was greatly respected and regarded throughout the force. Our thoughts and prayers are with her family and friends and, of course, we hope that those responsible are brought to justice as soon as possible.

§ Mr. Graham Brady (Altrincham and Sale, West)
What steps has the Prime Minister taken to guarantee the safety, the lives and the property of British citizens in Zimbabwe who are currently under threat?

§ The Prime Minister
We have taken what measures we can in respect of the Government in Zimbabwe, including reductions in our aid, the withdrawal of military training facilities and, of course, the representations that we make. We keep in very close touch with British citizens in Zimbabwe. Easily the best thing that can happen is that the Government of Zimbabwe live up to their responsibility to treat their own citizens properly.

§ Q3. Mrs. Anne Campbell (Cambridge)
Is my right hon. Friend aware of the difficulties that have been caused by teacher shortages, particularly in maths and science subjects? Those shortages have been evident for at least 20 years. [Interruption.] Will he ensure that there is an adequate supply of well-qualified teachers so that our children can reach the highest standards?

§ The Prime Minister
Given the shouting from Conservative Members, I will give them the figures. The number of applicants for postgraduate teacher training places is up by 19 per cent. on this time last year. Applications for shortage subjects have seen the largest increases: maths applications are up by 14 per cent.; science applications are up by 27 per cent., including a 24 per cent. rise for physics; and modern foreign languages applications are up by 7 per cent. That reverses eight successive years of falling recruitment to teacher training.
Overall, there are 7,500 more teachers than there were four years ago. Yes, we need more, but no one should forget that when we came to office, the number of places 290 had been cut, the investment per pupil had been cut, and it is only now that the damage done by the Conservative party has been put right.

§ Mr. Alan Duncan (Rutland and Melton)
The outbreak of foot and mouth has left a lot of farmers and their families with no income whatever. They have to look after their animals and do not qualify for any kind of income support or benefit. In the meantime, a local self-publicist in Melton Mowbray has been driving around to try and find a local infected farm so that he can be photographed there. He has done the same in the local cattle market next to the abattoir and has invited photographers to take pictures of him putting up "Keep Out" signs near infected farms. Will the Prime Minister compensate the former and unreservedly condemn the latter?

§ The Prime Minister
I do not know of the particular case in Melton Mowbray that the hon. Gentleman is talking about, but if that is happening, of course it is wrong.
Farmers are entitled to benefits and are entitled to claim them. It is partly for those reasons that we agreed to draw down the agrimonetary compensation. I point out to Opposition Member who were shouting at me a moment ago that we had clone nothing, that in relation to agrimonetary compensation, which is of course reimbursed by the British taxpayer, we have drawn down more than £600 million over the past few years. When the Conservatives were in power, they drew down precisely nothing.