The latest survey conducted by the Royal Mint indicated a potential counterfeit level of around 2 per cent. The Royal Mint continues to work closely with the police, banks and cash-in-transit companies to introduce more robust methods for detecting and removing counterfeit coins from circulation.
Is not the biggest scandal not the number of counterfeit coins but the fact that each of these counterfeit pounds in the pocket is worth 14 per cent. less than they were at the time of the last general election? Is not that 14 per cent. devaluation of the pound a tragedy for our country and a reflection of the failure of this Government’s economic policies?
The hon. Gentleman is imaginative in trying to get a dig at the Government. The key point, of which he will be aware, is that we have robust coinage in this country. We have strong enforcement mechanisms to ensure that counterfeit coins and notes are rigorously followed up. The counterfeit note rate represents something like 0.013 per cent. of the average stock of notes in circulation. We take vigorous action in these areas, and I am sure he welcomes that.
Topical Questions
The core purpose of the Treasury remains to ensure the stability of the economy to promote growth and to manage the public finances.
My right hon. Friend may be aware of the Help for Heroes campaign, which is raising money to support those injured and disabled in the service of our country. Next week, contestants on “The X Factor” will release a charitable single to raise money for that excellent cause, but as things stand they are liable for VAT on the proceeds. I wonder whether there is anything that he can do to help.
I very much support the Help for Heroes campaign and the efforts made by contestants on the “The X Factor”. In recognition of that, I am proposing effectively to waive VAT on the sale of the singles. We will do that by making a donation to the fund equivalent to the value of the VAT.
If the hon. Gentleman thinks that our policy of supporting the economy is wrong, he should have a word not only with the shadow Chief Secretary, but also with the leader of his party, who said on the “Today” programme on 20 October that at a time like this
“borrowing goes up. That is inevitable…you have to allow that to happen. Those automatic stabilisers as Keynes called them, those have to operate.”
If it is good enough for the Leader of the Opposition, it ought to be good enough for someone who, I presume, supports him.
I agree with my hon. Friend. Maintaining investment in training is essential. As we get through the present difficulties, the opportunities for this country and, importantly, for the people of this country are immense.
I also agree with what my hon. Friend said about nuclear power. At a time like this, when we must reduce our dependence on imported gas and oil, it is imperative that we invest in the new generation of nuclear power stations. That is another example of the Conservative party’s inability to face up to the difficult decisions that we need to make for the benefit of the people of this country.
The Chancellor knows about the enormous anxiety in charities and local government about the billions lost in Icelandic banks, and the thousands of British savers whose savings disappeared because they were routed through Kaupthing Isle of Man. Now that he has confirmed that he was informed of the difficulties of Icelandic banks months ago, will he place in the House of Commons Library a full record of the information that the Treasury was given over the past year, and the action that it took on the back of it to protect British savers’ interests?
As the hon. Gentleman knows, the Financial Services Authority, which is the regulator of banks, building societies and other financial institutions, monitors what is happening in institutions all the time. That is its job. It is not surprising that, from time to time, the FSA may have concerns about institutions. It speaks to those institutions, and it gets them to try to address those concerns.
As for the Icelandic banks, the fundamental problem was not here but in Iceland. As the hon. Gentleman knows, Iceland has effectively had to take over its banks. I have been trying to persuade the Icelandic authorities to ensure that they honour their obligations to savers in this country under their compensation scheme, and also that they treat creditors in this country fairly and on the same footing as Icelandic creditors. I have had a number of discussions with the Icelandic Prime Minister and Foreign Minister, but so far we have not been given those assurances, which is why I have had to step in to guarantee retail depositors and savers in this country. That is where our obligation lies. I will continue to do whatever is necessary to protect people who find themselves in that position, but what we really must do is encourage the Icelandic Government to conclude their discussions with the International Monetary Fund. Some of those discussions will, I hope, ensure that British creditors—indeed, all creditors outside Iceland—are treated fairly, and in the same way as those living in Iceland.
Order. The hon. Lady really should cut that behaviour out.
During the recession of which the Prime Minister has spoken, tax receipts are likely to fall rapidly. What assessment has the Chancellor made of future tax receipts, and is there any truth in reports in the newspapers that the Treasury is already considering—beside borrowing—tax rises and cuts in public services?
As I think is clear to everyone, when a global credit crunch hits, it hits not only tax receipts from the financial sector but tax receipts from such things as stamp duty. We have made it clear that it is right to maintain public spending and increase borrowing to support the economy at a time like this, but we are also cutting taxes this year, for example through increased tax allowances and by freezing fuel duty below the level of inflation. That is in contrast to the policy of the hon. Gentleman’s party, which would increase taxes on fuel duty this year.
I think that my hon. Friend is referring to tax reliefs for investment and allowances for business. I think it right for us to support businesses through what is a difficult time for not only the world economy but the United Kingdom economy. That includes, for manufacturing industry, tax allowances for investment, and claims that cutting those allowances would help businesses are simply disingenuous.
There was a meeting with charities in relation to the Icelandic banks and those discussions with charities are continuing. We are aware of the position in which they find themselves and, as I said to the hon. Member for Twickenham (Dr. Cable) a moment ago, if Iceland can resolve its problems, that will be helpful for all creditors. We are aware of the problems and the discussions will continue.
Is the Chancellor aware that it makes a lot more sense to borrow money to create jobs and to help small businesses rather than spending the whole summer cadging money for the Tory party to shore up its finances?
Order. I thought the hon. Gentleman was going to give us a good example, but that did not happen.
Obviously we understand the issues, particularly in island communities. We are continuing to look at the matter, and we will make announcements in due course, but I hope he will recognise that there has some been some easing of fuel prices since the time we met. I understand that his community has to face extra costs, and I assure him that we are focusing on the matter.
Will the Chancellor confirm that the latest estimate from the Bank of England of worldwide write-offs is £2.8 trillion? Is not a cause of that the uncontrolled creation of credit by private financial interests, which has jeopardised the public and the public interest? There have been a lot of dubious financial practices invoked as part of that. When will we get a full-scale analysis from the Treasury of all the causes, so we can make sure that it does not happen again?
I agree that there are lessons to be learned as a result of what has happened over the past few years. It is important that we act on that and, as I said last night at the Mais lecture, I hope to be in a position to publish some preliminary conclusions and proposals in the not-too-distant future.
The legislation that we used was approved by Parliament and I believe that it was necessary for us to take action to safeguard the position of creditors in the United Kingdom. It is important that we take action, because there is a clear public interest there.
The Prime Minister has made positive statements, welcomed by Members and by people across the country, about oil companies and utility companies passing on the cut in oil prices to their customers. Can Treasury Ministers encourage banks to pass on the recent, and future, cuts in bank rates to its mortgage borrowers and customers?
My hon. Friend is right. It is important that, with world oil prices coming down, those cuts be passed on to consumers because, as we all saw, the price increases were certainly passed on to consumers. We have seen many petrol companies passing on price cuts, and it would be good to see all petrol companies bringing prices down right across the country. Gas and electric companies could also do more to pass on reductions in oil prices in their fuel bills. He is also right that it is important to ensure that the banks do their bit, particularly given the amount of support that the Government are providing for the banking system as a whole to keep it safe, and we will be setting out further procedures to monitor the way in which banks can do that in future.
Does the Minister accept that for many small and medium-sized businesses the last straw in these difficult times is having to find the money to pay the rates on empty properties? Please will the Government recognise that as an urgent problem?
We are aware of the worries about empty property relief, but it is important to remember that the vast majority of that relief went to the City of London and four other areas. We are looking into the matter, and we understand the difficulties, but it is also important to remember that when 100 per cent. relief was given, buildings remained empty for a very long time and therefore were not recycled, which is economically inefficient, and that the areas that had the most access to the relief had some of the highest rents in the world.
Does my right hon. Friend recognise the difficulties being faced by businesses in ports such as Hull and Liverpool now that they have been presented with three years of backdated business tax bills? What steps is he taking to deal with that injustice?
My hon. Friend the Minister for Local Government and I talked about this matter with the Treasury Committee yesterday, and we said that we were looking at ways to enable companies that had been affected to pay the due amount over a longer period than would normally be the case. What has typically happened is that the rates liability for the port operators has been reduced, whereas the liability for the occupiers has been increased. There has been some rebalancing there, and the port operators also have a responsibility to consider whether they can help.
It is important that we consider what we can do to help businesses, as we have been discussing during Question Time, and individuals. I repeat what I said earlier: steps such as reducing the amount of tax being paid by basic rate taxpayers and postponing the fuel duty increase will all help. I should also say to the hon. Gentleman, however, that it is important as well that the Government are prepared to put their money behind what they say, which means we have to allow borrowing to rise. The Conservative party is now saying that we should not borrow, which would have consequences, and sooner or later it will have to spell them out—or perhaps not, if, as with so many other Conservative policies, it adopts it one week, and then drops it the next.