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Volume 464: debated on Wednesday 10 October 2007

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.

Will the Prime Minister join me in congratulating the Conservative-controlled London borough of Bromley on achieving the highest rate of dry recycling in London and on being recognised as an exemplary authority for garden and home recycling? Would he like to come and see the work that we are doing in Bromley? I could take him and show him one of our bottle banks.

The hon. Gentleman will therefore be very pleased with the public expenditure settlement yesterday, which gives huge amounts of money to the environment.

Will my right hon. Friend take a personal interest in helping to resolve the industrial dispute at Royal Mail? I am sure that, as the owner of the business, the Government share everybody’s concern about the interruptions in the cash flow of small businesses, in the contacts between constituents and their MPs and in the daily lives of all residents, including those in rural communities. Given that both sides of the dispute say that they share the same interest—[Interruption.]

This has to be settled by negotiations between the Post Office and the work force, but there is no justification for the continuation of the dispute. It should be brought to an end on the terms that have been offered as soon as possible. I urge the work force to go back to work.

The big question this week is: can we believe what the Prime Minister says? So let us start with his credibility gulf over the election. The Prime Minister was asked, “Hand on heart, if the polls showed a 100-seat majority, would you still have called off the election?” and he said yes. Does he expect anyone to believe that?

I will take no lectures from the Leader of the Opposition. This summer he was for grammar schools, against them and then for them again. He was for VAT on air fares and then against it. He was for parking charges and then against them. He was for museum charges and then against them. I will take no lectures from the Leader of the Opposition about that.

He is the first Prime Minister in history to flunk an election because he thought that he was going to win it. Does he remember writing this? It is in his best-selling book about courage:

“As far back as I can remember, I have been fascinated by men and women of courage. Stories of people who took brave decisions in the service of great causes…especially when more comfortable and far less dangerous alternatives were open to them”.

Does he realise what a phoney he now looks? Has he found a single person who believes his excuses for cancelling the election?

He talks about a clamour for an election. I looked at the Downing street website this morning. There is a petition on the website—[Interruption.]

Certainly there is a petition on the Downing street website calling for an election. It is signed by 26 people—and not one of them is on the Conservative Front Bench. We will govern in the interests of the people, and what matters to the people is the health service, education and housing. We will govern to make housing, health and education better in this country.

The Prime Minister is going to have to do better than that. Let us try another claim. Did the draft of the pre-Budget report, written before the Conservative party conference, include plans for the taxation of non-doms and the raising of inheritance tax? It is a simple question: yes or no?

If the right hon. Gentleman looks back to the summer and to the interviews given by the Chancellor, he will see that he talked about these very issues. We have raised the exemption on inheritance tax on 10 occasions since 1997, and we have dealt with tax avoidance in relation to non-domiciles and non-residents on many occasions since 1997. We are going to continue to take the right decisions for the country. It is very interesting that he has raised the issue of inheritance tax and non-domiciles, and I think that we can have a detailed discussion on this over the next few weeks. He will have to explain to the House, as we will explain to the House, that there are not 150,000, or even 115,000, non-domiciles who would pay this tax; there are only 15,000. When the Conservatives start to look at the official figures, they will find that they could raise only £650 million, not £3.5 billion, as they claim. As for inheritance tax—again, I welcome the debate that we are going to have in the country on this—we can exempt estates below £700,000 by 2010 and put money into health and education. The Conservative party are going to put £2 billion into giving money to those with estates above £950,000—£1 billion to those who are already rich. When the debate is held in the country, people will choose our policies and reject theirs.

I tell you what: if you have got some questions about our policy, find a bit of courage, discover a bit of bottle, get in your car, go down to Buckingham palace and call that election.

The Prime Minister now tells us that he was planning to change the rules on inheritance tax and non-doms all along. He is treating the British people like fools. Next, he will be telling us how much he admires Margaret Thatcher! Let us try another example of straight talking from the Prime Minister. Your manifesto said—[Interruption.] The Prime Minister said that the Labour manifesto was an issue of trust. That manifesto promised a referendum on the European constitution. Do you understand how not holding that referendum damages your credibility?

If we were having a debate on the euro, we would have a referendum. If it was the old treaty, we would have a referendum. But because we have won in negotiations, by standing up for British interests, all the red lines that we asked for have been achieved. When the intergovernmental conference reports, he will see very clearly that these red lines have been achieved. I just ask the right hon. Gentleman to look at the issue of the referendum. Every single shadow Cabinet member who was in this Parliament in 1992 voted against a referendum on the Maastricht treaty. Every country apart from Ireland that wanted a referendum a few months ago no longer wants one. We stand up for the British national interest, and we will continue to do so.

Nobody believes him. The Labour-dominated European Scrutiny Committee says that the EU treaty is “substantially equivalent” to the constitution. It says that pretending otherwise is “misleading”. When Labour MPs say this, why should anyone believe the Prime Minister?

Because I have the report here and it makes a distinction between the treaty—[Interruption.] Oh yes—[Interruption.] Well, if people want a debate about the future, they should read the full report. It makes a distinction between the treaty itself and its effect on Britain with the protocols, the opt-ins, the exemptions, the emergency brake and the veto. What the Leader of the Opposition forgets is that we went to Brussels and negotiated for Britain the opt-out, the protocol, the opt-in and the emergency brake. We have stood up for the British national interest. That is more than the Conservative party ever did over Maastricht.

What we will not forget—and what the British people will not forget—is that the Prime Minister made a promise and he has broken it. We have a Prime Minister who will not talk straight about the election, who will not own up on inheritance tax and who will not keep his promises on an EU referendum. Never have the British people been treated with such cynicism. For 10 years the Prime Minister plotted and schemed to have this job—and for what? No conviction, just calculation; no vision, just a vacuum. Last week he lost his political authority, and this week he is losing his moral authority. How long are we going to have to wait before the past makes way for the future?

This is the man who wanted an end to the Punch and Judy show! This is the man who wanted an end to name calling! We are the Government who have created 10 years of economic stability in this country. We are the Government who adopted the minimum wage—against Conservative advice. We are the Government who made the Bank of England independent—against Conservative advice. We are the Government who have delivered record rises in health expenditure—against Conservative advice. We are the Government who are improving our education system—against Conservative advice. We will continue to govern in the interests of the whole country.

Yesterday the Chancellor of the Exchequer revealed that an increase in the inheritance tax threshold to £1 million would hand an eye-watering windfall of £1 billion to just 1 per cent. of the richest estates in this country. Has the Prime Minister had an opportunity to cross-reference those figures with the Register of Members’ Interests to find out how many Members would benefit from the Conservative proposals?

Let us have this debate about the future of inheritance tax. I welcome such a debate, because there is a choice to be made between those who favour raising the threshold to £700,000 and using the extra money to spend on health and education, and those who want a £1 million threshold, which would mean giving £1 billion to the top 1.5 per cent. in this country. I know how the British people will feel about that issue: they will want investment in health and education, as well as the improvements in inheritance tax. Once the Conservative party settles down, it will realise that by publishing its election manifesto early, it has ensured that that will be dissected week by week in the House of Commons.

As the Prime Minister has stolen Liberal Democrat policies in order to help the better-off, will he also steal Liberal Democrat policies in order to assist lower and middle-income families, and cut the basic rate of income tax to 16p in the pound?

We are cutting the basic rate of income tax, from 22p to 20p in the pound—but what we will not do is follow Liberal party policy, which would cut the basic rate by another 4p, costing £12 billion and putting the public finances at risk. In exactly the same way as the Conservative party, the Liberals would put the management of the economy at risk. We will not follow that policy.

Let us remember that the Prime Minister’s cut in the basic rate is at the expense of some of the poorest people in the country. Was not the most glaring omission in yesterday’s pre-Budget report statement the absence of any proposals for reform of the unfair council tax? Council tax is set to rise by twice the rate of inflation. How fair is that for low and middle-income families?

The right hon. and learned Gentleman should look at his own proposals. First, he faces an £18 billion black hole in his proposals. Secondly, he is not offering people a free gift on council tax, as he wants to replace it by local income tax, which would mean people paying 3p in the pound more. Thirdly, at every point where I have costed the Liberal party proposals, nothing adds up. The Liberals would be better going back to the drawing board.

The Government are giving considerable assistance to London in preparation for the 2012 Olympic games. I wonder whether the Prime Minister has considered any increase in the assistance going to Liverpool, which next year celebrates being the European city of culture. I am thinking in particular of increased funds for the Merseyside police and the local authorities.

I congratulate Liverpool on becoming the city of culture. Having visited the city and seen what has been done to prepare for that, I know that there is more urban regeneration place in Liverpool than at any time in the last 20 to 25 years. I would also say to my hon. Friend that the local government settlement and the public expenditure plans announced yesterday will help Liverpool and the north-west, ensuring that jobs can be created in the area and that urban regeneration continues. We will keep our promises to the people of Liverpool.

Q2. The Prime Minister might be aware of proposals in West Sussex to downgrade the accident and emergency units at either St. Richard’s hospital in Chichester or at Worthing hospital. Will he therefore clarify Lord Darzi’s comment on the “Today” programme last week that his statement that the days of the district general hospital are gone applies only “to big metropolitan capital cities like London”.Given that neither Chichester nor Worthing is a big metropolitan capital city, will the Prime Minister assure my constituents that both these excellent hospitals are now safe? (156089)

Obviously, I am happy to talk to the hon. Gentleman about what is happening in his constituency. I have to say, however, that he should be applauding yesterday’s announcement that health service expenditure will go up from £90 billion to £110 billion. In the interests of accuracy, given that Conservative Members raised the issue throughout the summer, and listed 29 hospitals that they said were at risk or subject to reconfiguration, I should explain that it was immediately pointed out that 10 of those hospitals had no such plans. As far as the Leader of the Opposition is concerned, on the Horton hospital in Banbury, the shadow Health Secretary said,

“We wouldn’t get that wrong”.

The chairman of the local heath trust then said,

“As far as the A&E is concerned, there is no threat, indeed it’s rather the opposite, the board has agreed to invest additional funds”.

Once again, the Conservatives cannot be trusted with the national health service.

Q3. In the past two weeks, we have heard alternative approaches to the taxation of foreign non-domiciles. Will the Prime Minister confirm that he is confident that the Government’s approach will target people who can realistically be expected to be able to pay the tax? (156090)

It is right that people pay their fair share, and we have taken action against avoidance every year for the past 10 years. This will be a debate held over the next period of time, but I have to say that the proposal that we can find 150,000 non-domiciles to tax is completely wrong: only 115,000 are registered in this country, and only 15,000 have earnings and income that would allow them to consider that paying £25,000 in taxation was in their interests; others are nurses and teachers who earn little more than £25,000. When we asked where the calculations came from, first we were told that they came from Accountancy Age, then we were referred back to The Observer, and then we were referred back to a so-called tax expert, who was unnamed. Those who put forward proposals to tax non-domiciles, and say that they can raise £3.5 billion, will have to do better in future.

Could the Prime Minister give us a cheerful answer, and tell me whether he believes that imitation is the surest way to salvation or merely the sincerest form of flattery?

When we made the Bank of England independent, the Conservatives opposed it; now they support it. When we created a minimum wage, they opposed it; now they support it. When we invested in the health service, they opposed it; now they support it. I know who has been leading the argument in this country: it is the Labour party.

Q4. Does the Prime Minister think that people who want to return to work but have become trapped in the incapacity benefit system should be supported and encouraged to seek and obtain work, or forced to do so by the removal of their benefit? (156091)

There is an interesting debate to be heard on the future of incapacity benefit in this country. My hon. Friend is absolutely right: under our proposals, 1 million people will come off incapacity benefit by 2015. Under an alternative proposal, it is said that that figure could be 1.6 million: two thirds of those currently on incapacity benefit would come off it and lose £5,000 per person. It is said that that proposal, put forward by the Opposition, would raise £3 billion. Given the number of constituents we know who are disabled and who are in wheelchairs, and the many who are mentally as well as physically handicapped, the idea that 1.6 million of 2.7 million people could come off incapacity benefit by the beginning of the next Parliament is faintly ridiculous. Given that we already expect 1 million to come off incapacity benefit, those who say that they can raise £3 billion from that proposal are, again, completely wrong.

May I remind the Prime Minister that some time ago an announcement was made about Northern Ireland losing many of its Army installations, and a promise was made in a joint statement that the people of Northern Ireland would benefit from what was done with those areas of Government ownership? Will the Prime Minister give me an assurance today that that will be done, and will he announce the time when it will be done?

I hope that the right hon. Gentleman, who is the First Minister in Northern Ireland, will accept that the public expenditure settlement reached yesterday was very much in line with what we talked about previously; indeed, it was higher than the figures that I gave him before. I will certainly look at what he says about land in Northern Ireland, just as I am looking, as I promised to do, at the corporate tax regime in Northern Ireland. Perhaps we can talk about these issues at a later date.

Q5. May I welcome the recent uplift in the minimum wage which is helping 90,000 people in the south-west? May I ask the Prime Minister to guarantee that the future of the minimum wage will be assured as long as he is Prime Minister? (156092)

The rise in the minimum wage, which came in on 1 October, is an increase from its initial £3.60, and it is now £5.35. It will continue to rise—obviously, subject to economic conditions. What we have achieved in addition to that in the last few years is a minimum wage for teenagers. We were also able to introduce on 1 October the first number of days of paid holiday entitlement for workers in this country—again, a sign that if we can keep the economy moving forward and have stable economic growth, the rewards will flow to the whole of the population, and not just to some of the population.

Q6. The Prime Minister recently described Burma as one of the world’s darkest corners and said that human rights were universal, but his Government are still trying to deport Burmese dissidents into the hands of that dreadful regime. Will he tell the House why his moral compass has failed to identify this transparent hypocrisy? (156093)

I will certainly look at any individual cases that the hon. Gentleman brings to me, and look at them sympathetically, but there is an appeals system and that will be dealt with.

May I say that I hope that there will be all-party support on Burma? This is a repressive and illegitimate regime. Aung San Suu Kyi was the elected democratic leader of Burma. The sanctions that we will step up in the European Union are necessary to tell that Burmese regime that what it is doing is completely unacceptable. I hope that the Secretary-General of the United Nations will be able to lead a United Nations team that will bring reconciliation to the people of Burma.

Does my right hon. Friend agree that the reported statement from the Association of British Insurers on future cover for flood damage is deeply unhelpful, and will lead people to conclude that the industry wishes to remove any commercial risk to its own profits and place that risk instead on current and future policyholders, including families and businesses in my own Sheffield constituency?

I am grateful to my right hon. Friend. I think that what the Association of British Insurers announced today is a review of its practices for the future. I hope that it will not take the step that he suggests, which might be considered, of denying people insurance. I also have to say, again in the interests of accuracy, that over the summer and very recently, the Association of British Insurers has asked that by 2011 we spend £750 million a year on flood defences. The figures that we announced yesterday are that we have raised spending on flood defences from £600 million this year to £800 million in 2011. I hope that whatever difference there is between the Association of British Insurers and us—a very small difference, on the figures involved—we can show, as a result of the Pitt report, which will come soon, that we are doing everything we can to improve flood defences in this country.

Q7. On 20 September the governor of the Bank of England said that the market abuse directive had undermined his ability to carry out an operation that would have been in the interests of everyone connected with Northern Rock. Does the Prime Minister agree? (156094)

The Chancellor will make a statement on that very matter in the House tomorrow. There is an issue about the requirement to make dealings that take place to try to rescue companies transparent, and there is an issue that must be dealt with in the European Union as part of that, but other issues arise from Northern Rock which I think are probably more important for the longer term. There is, for instance, the question of how the international community can come together to arrange an early warning system when events happen in America, affect Europe and then affect the United Kingdom. On all those issues, the Chancellor will make a statement tomorrow.

The brutal murder of my constituent Mr. Garry Newlove has highlighted continuing concerns about the effects of under-age drinking. I welcome what the Government have done so far to tackle the problem, but can my right hon. Friend assure me that he will consider what needs to be done now? In particular, will he assure me that he will try to persuade the industry to end the immoral practice of targeting alcoholic drinks directly at young people, and enforce severe penalties for those who sell alcohol to under-age youngsters?

I share my hon. Friend’s sadness, and send my condolences to the family of her constituent.

We are committed to doing everything in our power to tackle antisocial behaviour, and specifically under-age drinking. I have appealed in the past to alcohol and drinks companies to advertise the dangers of teenage drinking far more widely. We have said repeatedly that we will fine, and impose heavy penalties in closing down, shops that sell illegally to young people. I urge councils to use their new powers to ban alcohol in trouble spots. Police already have powers to disperse young people who are involved in alcohol-fuelled disorder, and I hope that they will use their powers as well. Local authorities can designate areas in their towns, including town centres, and make it an offence to drink alcohol there. The combination of all those measures—as well as, I believe, a review of the 24-hour drinking laws—is an essential element of making it absolutely clear that teenage drinking is unacceptable at the level at which it is being carried out in our towns and inner cities, and that action must be taken.

Q8. Does the Prime Minister think it right that a pupil in my constituency receives, on average, £736 less than a pupil in an inner-London borough, although the cost of employing a teacher is the same? Will he put an end to that huge injustice, so that schools in Hornsey and Wood Green can finally be given a fair funding deal? (156095)

I should have thought the hon. Lady would accept that expenditure per pupil in every part of the country is rising. I hope she will accept that although in 1997 we inherited a situation in which average expenditure was only £2,500 per pupil, it is now £5,500 per pupil and rising. Of course we will continue to look at what happens in particular areas—in this case, the outer London area—but it is only because of this Government’s policies in securing economic growth that every school pupil in the country is enjoying additional investment in the future.

Q9. Given the still extremely serious situation in Darfur, will my right hon. Friend explain what steps his Government took during the recess to support Security Council resolution 1769, as well as the wider peace agreement in Sudan, in order to ensure that humanitarian aid is delivered in desperate circumstances, and that this carnage is discontinued? (156096)

I know that my right hon. Friend has taken a huge interest in these matters, and in the future of the whole of Africa. I think the United Nations resolution that was achieved at the beginning of the summer is now being complemented by the United Nations-African Union forces, who are ready to come to Darfur and to be there on the ground. At the same time, we want an end to hostilities, and there is a sense that all the parties in Darfur may be prepared to bring an end to them as the peace talks begin. The combination of peace talks beginning in the next few days, and the possibility of an end to hostilities, gives us hope that this outrage—which has meant that 2 million people have been displaced, 4 million are in famine and a quarter of a million have died—can soon be brought to an end.

I hope that as a result of the announcements we made yesterday to increase the money for flood defences from £300 million in 1997 to £600 million now, £650 million next year, £700 million the year after and £800 million the year after that, the hon. Gentleman’s constituency, and every other constituency where there are flood defence issues, will benefit. He might have heard the head of the Environment Agency saying this morning that it would be able to continue to spend more money on flood defences not only in his region, but all over the country.

Q11. Will the Prime Minister consider visiting Milton Keynes to see the large number of new houses being built as a result of this Government’s policies, together with new schools and GP surgeries, and does he agree that building more houses is the most effective way of increasing the supply of affordable housing, and that a cut in stamp duty would simply be taken up in increased prices if demand continues to outstrip supply? (156098)

If we are to have a housing strategy that ensures that there is affordable housing for young couples, we need to build more houses, and the demand and supply equation must be improved. In the last 10 years there have been almost 2 million more owner-occupiers. For the next few years, we hope to build 3 million new houses by 2020. I must say, however, that Conservative councils that are resisting plans to build more houses will not help the country meet its objectives. There must be a common effort by all parties if we are to achieve the number of houses that people need.