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Volume 474: debated on Wednesday 23 April 2008

Before I list my engagements, let me say that I am sure the whole House will wish to join me in sending profound condolences to the families and friends of Senior Aircraftman Graham Livingstone and Senior Aircraftman Gary Thompson, who were killed in Afghanistan on Sunday 13 April, and Trooper Robert Pearson, who was killed in Afghanistan on Monday 21 April. We owe them, and all others who have lost their lives, a deep debt of gratitude.

I am also sure that I speak for the whole House when I say how sad we were to learn of the death of Gwyneth Dunwoody. She was a great parliamentarian, and she will be greatly missed from her usual seat in the Chamber. Our thoughts and prayers are with her family.

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.

While I welcomed the letter from the Chancellor that was published recently, may I ask the Prime Minister to make a specific commitment to introduce, in the current financial year, measures to protect the 5 million people who will be penalised by the abolition of the 10p tax band? Does he agree that such a step would be consistent with the Government’s successful policies in combating poverty, making work pay, and moving people from welfare into work?

For over a decade, with the minimum wage and child and pension credits, this Government have done more than any Government for a century to tackle child poverty and help low-income families. However, as we have found, there are better ways of helping low-income families than the 10p rate.

I think I should tell the House that 85 per cent. of the benefits of the 10p rate go to higher-rate and basic-rate taxpayers, and that 11 million people, mainly the lowest-income people in the country, receive no benefit at all from it. That is why we have increased tax credits to tackle poverty. That is why we have increased child tax credits, pension credits and the pension tax allowance in our Budgets. That is why the Chancellor said today in his letter to the Treasury Committee, repeating what he had said yesterday, that for the group that had missed out—those of pensionable age, between 60 and 64, who were benefiting from the 10p rate—we would present proposals, perhaps using the mechanism of the winter allowance, to provide them with additional payments that could be backdated to April this year. And that is why we will present proposals on the working tax credit, which involves issues relating to young people and part-time workers, in time for the pre-Budget report.

We are determined to take action, because we are the party of fairness tackling poverty. I should prefer to be on this side of the House cutting poverty than to have been in the Conservative Government when they were in power trebling poverty.

I think that we should call this session Prime Minister’s U-turns rather than Prime Minister’s questions.

I join the Prime Minister in paying tribute to Senior Aircraftman Graham Livingstone and Senior Aircraftman Gary Thompson, who were killed in Afghanistan on Sunday 13 April, and to Trooper Robert Pearson, who was killed on Monday. The whole country owes them a great debt of gratitude.

I also associate my party with the Prime Minister’s warm words about Gwyneth Dunwoody. She was the very model of an independent Back Bencher and Select Committee Chairman. She spoke her mind, she had no truck with political correctness, she was courageous in her political beliefs and she—[Interruption.] I can remember exactly where she sat. She was never afraid to hold any Government to account if she thought that they were doing the wrong thing. She will be sorely missed on both sides of the House.

The Prime Minister’s emergency announcement about income tax this morning represents a massive loss of authority. This morning, we have had panicked concessions before he came to the House of Commons. We were told that there would be no back-down; we have had a back-down. We were told that he could not rewrite the Budget; he is rewriting the Budget. We were told that there would be no concessions; there are now massive concessions. So will the Prime Minister tell us whether he is making those changes because he thought he would lose the vote next week?

We have said for some time that we want to do more to help people on low incomes. His party policy, two years ago, was to abolish the 10p rate. Last year, it was to abstain on the 10p rate. This year it is to keep the 10p rate. They are the “no, don’t know, yes” party: they cannot make up their minds what they want to do. We will be consistent in our desire to tackle child poverty.

Consistent? Does the Prime Minister have any idea what a pathetic figure he cuts today? He is making these changes because he thought he would lose the vote. Or is this like the general election that he cancelled even though he thought he was going to win it? Is he not just taking people for fools once again? Why will he not admit it? He is not making these changes because he thinks they are right. He is not making these changes because he wants to help the people whom he hurt. He is making these changes because he was frightened of losing a vote. Why not admit it? Why not be straight with people?

I see the right hon. Gentleman’s new-found enthusiasm for poverty has lasted only a few seconds. Why does he not address the central issue? The central issue is that we are taking more people out of poverty than any previous Government. If we took the advice of the Opposition, we would not have a minimum wage, but 2 million people are better off. If we took his advice, we would not have tax credits, but 6 million people are better off. If we took his advice, there would be £10 billion of tax cuts, depriving the poor of the public services they need. The choice is clear—between a Conservative party that would cut the incomes of the poor and a Labour party that will increase them.

What this is about is weakness, dithering and indecision from the Prime Minister. He talks about the central issue, so let us deal with the central issue. Why did all this begin? This began because as Chancellor of the Exchequer he stood there and presented a tax con Budget to try to wrong-foot the Opposition, to try to pose as a tax-cutter and to try to win a few cheap headlines in the newspapers. He did all that on the back of 5.3 million of the poorest people in our country. Will he admit now that that Budget was a gross miscalculation and it was immoral, and will he apologise for the tax con Budget?

Everybody now agrees that the 10p rate is not the best way to tackle poverty. The Conservative party agreed with that two years ago. They abstained on the vote a year ago and now they are supporting the 10p rate, and nobody believes their credibility on that matter.

The Leader of the Opposition has said that he wished we had

“simplified all our tax rates and produced one band, somewhere around 20 per cent., that applied to spending, saving, capital gains and income”

and abolished

“all…endless relief and credits”.

The policy he announced in 2002 was not just cutting the 10p rate but abolishing tax credits and allowances. That is not a party that cares about the poor; that is a party that put more people in poverty.

As ever, the Prime Minister was about to thump 5.3 million of the poorest people in our country and he is scrabbling around with policy documents trying to find some excuses. As ever, there is no apology or admission of guilt, just a U-turn to try to save his skin. Does that climbdown not tell us all we need to know about this Government? It is always about politics, not policy. It is always about calculation, not conviction. It is always about his self-interest, not the national interest. Does the Prime Minister think that his reputation can ever recover?

Why does the right hon. Gentleman not address the central issue, which is how we lift people out of low incomes and poverty in this country? Why does he not admit that as a result of our tax credits, which he opposed, 3 million children are in families with incomes of £80 more a week than in 1997? Why does he not admit that 2 million pensioners have incomes of £40 more than in 1997 because of the pension credit? None of that could have been achieved through the 10p rate. It can be achieved only through tax credits, which he opposes.

Why does the right hon. Gentleman not recognise that under the Government 1 million pensioners and nearly 1 million children have been taken out of poverty and 3 million more jobs have been created? We are nearer to full employment than at any time in our history. None of that could have happened if we had followed the policies of the Conservative party.

The truth is that under this Government —[Hon. Members: “More!”] I shall tell you what is more: under this Government, 600,000 more people are in extreme poverty than when the Government came to power. The Prime Minister talks about the central issue. The central issue is his massive loss of authority. Was there ever anything more humiliating than a Prime Minister breaking off talks with the President and asking for an outside line in the White House in order to beg one of his Parliamentary Private Secretaries not to resign? This is what Labour MPs—[Interruption.] They should be quiet and listen. This is what Labour MPs are saying—[Interruption.]

Order. Let the Leader of the Opposition speak—[Interruption.] The hon. Member for South Swindon (Anne Snelgrove) is far too noisy. So is the Lord High Chancellor—that is his title now.

It is not often that you have to give the Lord Chancellor an ASBO, Mr. Speaker.

This is what Labour MPs are saying about their Prime Minister: he is losing touch; he does not know what fairness is; he needs to see the world through the eyes of voters; he is like a scared rabbit in the headlights. The Labour peer, Lord Desai, said that the Prime Minister’s leadership style is like porridge. Another week like this and it will be Cheerios. Is it not the case that the Labour party has finally worked out that it has a loser, not a leader?

Why does the right hon. Gentleman never address the central issue? Child benefit increased from £11 to £20 under this Government. The poorest child in this country received £27 under the Conservatives and receives £75 under Labour. Tackling poverty so that we get nearly 1 million children and 1 million pensioners out of poverty—that is what we are doing. Here is the choice: a Labour Government who support a minimum wage and tackling child and pensioner poverty and who have got 3 million people in to jobs, or a Conservative party that would go for £10 billion of tax cuts, with the priority being stamp duty on shares and not the poorest in the country. I know which side the country is on.

The central issue is the Prime Minister’s weakness and his inability to hold to a position for longer than half an hour. That is what today’s humiliating climbdown is all about. Is not the real lesson today the fact that the only time that the Prime Minister listens to people is when he is faced with personal defeat? Is that not the lesson that everyone in this country, in London and beyond, should think about on 1 May, if they want to send a message to this weak and incompetent Government that enough is enough?

The Opposition used to oppose the 10p rate. Last year, they abstained on the 10p rate. This year, as a result of their opportunism, they wanted to keep it. We are for opportunity for everyone; they are for opportunism in everything.

OAPs can now travel with their freedom passes before 9 am. That has been warmly welcomed in my constituency in Brent and all around London, and has even been replicated around the UK. Does my right hon. Friend agree that the Opposition’s proposal to abolish the freedom pass is more dim-witted than Dick Whittington?

I am proud of our record on free travel for pensioners. I am also proud of the fact that in London the Mayor has been able to extend free travel to many additional groups of people. However, we have to remember that the Conservative candidate for Mayor has said:

“We have got to be absolutely clear where the scope for real economies is…the real big ticket…is the Metropolitan Police and Transport for London. That’s where the real savings, believe me, are to be found.”

So the choice is very clear: investment in transport under Labour, cuts in transport under the Conservatives.

I should like to extend sympathy and condolence to the family and friends of Senior Aircraftman Graham Livingstone, Senior Aircraftman Gary Thompson and Trooper Robert Pearson. I also want to express my sympathy and condolence to the family and friends of that exceptional parliamentarian, the unforgettable and formidable Gwyneth Dunwoody. As we know, she enjoyed enormous admiration on all sides of the House.

I thought that penalising the poor to reward the rich was the job of the Conservative party. The Prime Minister is deliberately making more than 5 million of the lowest earners in this country even worse off, so will he explain why he is doing the Tories’ job for them?

We have done more to take children and pensioners out of poverty than any Government in the history of this country since the second world war. Contrary to the advice of the Liberal party, which wanted us to abolish the new deal, we have helped more young people and long-term unemployed into work than any Government since 1945. If we had taken the Liberal party’s advice, there would have been high unemployment where there is now low unemployment.

Labour Members are now in full cry, but where were they on Budget day? Why were they silent then? The truth is that, under the Prime Minister’s Government, income inequality is rising, working age poverty is up and now he is doubling the tax rate for the lowest earners. The Prime Minister used to be a man of principle but, if he cannot deliver on poverty, what on earth is the point of this increasingly pointless Prime Minister?

The point is to have economic growth in this country that gets more people into work. That could not happen under Liberal policies. The point of this Government is to take more people, including children and pensioners, out of poverty, and that is exactly what we are doing. I repeat: if we had followed the Liberal party’s policies, there would be fewer people in work, and more in poverty.

Q2. Last week, the Prime Minister made a very successful visit to my constituency of Ilford. Does he agree that London is the most successful and diverse city in the world, with fantastic community relations? Investment has been made in its buses and trains, and there is still Crossrail to come. Does he think that all of that would be put at risk if someone with uncosted commitments and shadowy advisers were to be parachuted into our capital city? (199805)

People know that more people are able to use public transport—buses and the London underground—as a result of the Mayor of London’s policies. In addition, more people are able to get affordable housing as a result of his policies. What would be completely unacceptable to the people of London would be to wake up and find that, as a result of a Conservative Mayor, housing was being cut, affordable housing was being taken away and the very transport services they relied on were being savagely cut. We will not allow that to happen.

Let me deal with the first part of the question first. I think that it is very regrettable that teachers are going on strike tomorrow, and the reason is that even the chairman of the pay review body has said that this is an independent award, independently adjudicated, and one that the teachers should be prepared to accept. I hope that, after reflection, the teachers will reconsider the action that they are going to take in future on this matter.

As far as St. George’s day is concerned, it is a matter for public debate on whether this is going to be a holiday.

Q3. One of the best performing schools in this country is the Whickham sports college in my constituency. Sadly, a number of weeks ago it was badly damaged by fire. May I ask the Prime Minister to urge the Schools Minister to sit down with the local education authority and the school to try to bring forward Building Schools for the Future money to repair the school, and not let the Opposition do away with billions of pounds of the BSF programme? (199806)

I know that the school in my hon. Friend’s constituency to which he refers was subject to a fire but that the children are now back in the school, and I know that he wants resources for urgent repair work. The Building Schools for the Future programme is increasing the number of secondary schools that are either renewed or completely rebuilt, and he is absolutely right—what would put that at risk is the Conservative proposal to take £4.5 billion from that programme and to deprive people of the secondary schools that they have been promised.

Q4. The first stage of the renewable transport fuel scheme came into operation last week. May I ask the Prime Minister what his priority is? Is it to put bioethanol in a Range Rover’s fuel tank or to put bread in an African’s stomach? (199807)

We had a seminar on food yesterday in Downing street, with all the different organisations that are involved, and I think there is a general recognition that the policy on bioethanol has got to be reviewed. I may say that we have reviewed the tax incentives associated with it. But there is also a determination that we do more to increase the supply of food in the world. I think the hon. Gentleman will be aware that the increasing numbers of consumers in China and India are pushing up the demand for food, at the same time as the supply is not rising. That is why we discussed yesterday emergency measures that could both increase food supply in the short term and avoid famine, and increase food supply in the longer term to cut the prices of food in this country, as in every country in the world. I hope that there would be all-party agreement on the need to take action on this.

The Prime Minister will know that the Chancellor’s recently implemented Budget has benefited four out of five households in this country. May I say to him that I am pleased that we are going to look at the fifth household as well? He will know that constituencies such as mine have suffered from poverty for generations now, not helped by Governments in the past who have closed coal mines and caused massive unemployment, and that this Government have no lessons to learn from the anti-poverty lobby sat on the Opposition Benches.

We have halved unemployment in the past 10 years. There are 3 million more people in jobs, and we have virtually eliminated long-term youth unemployment. We could not have done that without the new deal, which was opposed by the Opposition parties. We will continue to create jobs; the Opposition are the party that, in government, created mass unemployment.

Q5. The Prime Minister claims that his is the party that looks after jobs. Will he explain why this week the chicken factory in Sutton Benger in my constituency was closed with the loss of 450 jobs, hard on the heels of Hygrade in Chippenham with 600 jobs, hard on the heels of St. Ivel in Wootton Basset with 500 jobs and hard on the heels of Dyson moving 1,000 jobs offshore? Does the Prime Minister take any personal responsibility at all for the meltdown in manufacturing in my constituency, or is it all somebody else’s fault? (199808)

Of course whenever jobs go in any particular part of the country, that is to be regretted, but the important thing is that we are creating more new jobs, and creating them more quickly, than other countries. I just have to remind the hon. Gentleman that employment, according to the last figures, was at record levels—29.5 million people in work, 3 million more than in 1997—and that employment is up in every region and country of the United Kingdom. Our unemployment rate contrasts with a rate twice that in Germany and France and rising in America, and I think he should give some recognition to the fact that, even in difficult global times, we are continuing to create jobs and continuing to bring unemployment down.

May I welcome the Chancellor’s letter to me this morning on the Treasury inquiry and the 10p tax rate, and in particular his clear commitment to help the low-paid without children and the pensioners under 65 and to make those changes backdated to this financial year? The Prime Minister will be aware that the Treasury Committee has identified four groups, and that our inquiry will report before the Report stage of the Finance Bill. May I seek the Prime Minister’s co-operation in seriously considering our recommendations and in contemplating any further measures that the Treasury Committee proposes in its inquiry?

I have to point out to the Treasury Committee that 70 per cent. of the people who were losing under the Budget have incomes above £20,000. Although many people who are low-paid and on low incomes are now being helped by the child tax credit, which we have raised, by pensioner tax allowances, which have been extended, by the pension credit, which is rising, and by the working tax credit, more can be done in the two areas I have talked about: helping pensioners aged 60 to 64—we shall bring forward proposals soon—and equally helping those on low pay who are part of the low-paid group in our society but not part of the working tax credit. That is what we will look at over the next period of time and we shall obviously do so in consultation with the Treasury Committee, but it is important to recognise that of those who lost in that Budget 70 per cent. earned above £20,000.

Q8. Does my right hon. Friend agree that the Army cadet forces, which are national voluntary youth organisations, are excellent and the best youth organisations in Great Britain today? They are organised by enthusiastic staff and officers. My detachment, the Durham ACF, takes 700 youngsters away during the summer holidays, many of whom would never go away on holiday. Will my right hon. Friend announce to the House today what my Government are to do to support further the future of the Army cadet forces? (199811)

I am grateful to my hon. Friend because she works with her local Army cadets and plays a prominent role with the cadet force in her area. I have been hugely impressed by the good work of our cadet forces—the combined cadet force, the sea cadet corps, the Army cadet force and the air training corps. They develop a sense of self-reliance and service to the community among young people and I praise all the adults involved. We will provide extra money to help the development of cadet forces, not just in some schools but across a whole range of schools. We are of course committed to providing more money for positive opportunities for young people in this country. The cadet forces play an important role and we are determined to extend them.

Q9. My constituents in Ilford, North arrive home late at night to find some stations unmanned. Does the Prime Minister agree that the current moribund Mayor of London is letting them down and that next week, hopefully, we shall have a Mayor of London who will protect their safety? (199812)

If that is the case, the last thing the hon. Gentleman’s party would want to do is to cut spending on transport, but that is exactly the policy of that party.

Q10. [199813] People on good salaries tend to ensure that they pay the correct amount of tax and take advantage of any tax concessions or tax relief available to them. People on low incomes do not. Will my right hon. Friend ensure that there is a concerted and sustained effort to ensure that people take full advantage of the tax credits, concessions and benefits to which they are entitled?

As my hon. Friend says, tax credits are important because they can take people out of poverty. That is why, whether it be tax credits or council tax benefit and housing benefit, we are promoting an awareness campaign targeted at pensioners so that they know of their rights and can apply for the benefits. We are determined that all the benefit due to pensioners and others gets to them as quickly as possible.

The Westmorland general hospital is the major provider—or rather the provider—of acute coronary and other medical services to an area larger than Greater London, but those services are proposed for closure later this year. If we believe our local ambulance service—as of course we must—that would leave 63 per cent. of my constituents taking more than the golden hour to get to hospital in the event of a stroke or a heart attack. Will the Prime Minister take a personal interest in the matter and agree to meet me and local health professionals in South Lakeland to help to resolve it?

Obviously I shall look at what the hon. Gentleman says and the facts he brings before me, but he needs to put the matter in its proper perspective. We have doubled expenditure on the national health service, there are 30,000 more doctors and 80,000 more nurses, and 110 hospitals have either been built anew or are being refurbished. Of course I will look at what the hon. Gentleman says, but he should put it in its proper perspective: there is more investment than ever before in the health service in his area.

Q11. Will my right hon. Friend send a clear message to Robert Mugabe to stop brutalising legitimate opposition, to listen to the democratic will of Zimbabwe, and to go? (199814)

I agree with my hon. Friend that a message should be sent from the whole of the United Kingdom that what is happening in Zimbabwe—failing to announce an election result and trying to rig an election result—is completely unacceptable. I call on the whole world to express its view that that is completely unacceptable to the whole international community. Because of what has happened in South Africa, where there is an arms shipment trying to get to Zimbabwe, we will promote proposals for an embargo on all arms to Zimbabwe. At the same time, we ask all African Union observers and international observers to make their views known about the unfairness of the election.

Q12. If the Prime Minister will not say sorry for the 10p tax fiasco, will he at least apologise for voting down the restoration of the earnings link for the state pension last night, or is sorry the hardest word? (199815)

Perhaps I could remind the hon. Gentleman that it was a Conservative Government who abolished the earnings link for pensions. Perhaps I could also remind him that it is a Labour Government who are committed to restoring it. The reason for that is that we take seriously our responsibility to the dignity and security of everyone in retirement. We will restore the earnings link for pensions.