House of Commons
Thursday 13 February 1997
The House met at half-past Two o'clock
PRAYERS
[Madam Speaker in the Chair]
Oral Answers to Questions
TREASURY
Endangered Species
1. Mr. Tony Banks: To ask the Chancellor of the Exchequer what plans he has to make additional resources available to Customs and Excise to combat trafficking in endangered species and products. [14169]
The Exchequer Secretary to the Treasury (Mr. Phillip Oppenheim): The control of endangered species is a priority, and one to which I give my strongest support. Customs has just increased the staffing of the specialist Convention on International Trade in Endangered Species enforcement team at Heathrow airport.
An important issue is to increase public awareness of the problem to prevent unintended imports. To that end, Customs and Excise--in partnership with the World Wide Fund for Nature and the Department of the Environment--is providing an endangered species video which most, although not all, of the airlines we have asked have already agreed to show in-flight, and I hope that others will follow suit.
Mr. Banks:
First, I pay tribute to the work of Customs and Excise in trying to stamp out the trade in endangered species and wildlife products. I also thank the Minister for his commitment to the cause.
What specific resources are made available for the training of staff so that they can recognise the products that are coming in? Will there be an increase in specifically allocated staff? Clearly, the trade is now so large and growing that we need more people doing the job. The Minister referred to the CITES team at Heathrow. Will that model be extended to other airports, such as Manchester?
Finally, what is being done to stop the illegal importation of bear bile, rhino horn and tiger bone products, which are coming into this country for traditional Chinese medicine shops and are now available in London?
Mr. Oppenheim:
The hon. Gentleman asked a number of questions, all of them important. Each of the 14 customs regions now has an expert CITES liaison and intelligence officer. The team at Heathrow--which has just been expanded to eight people--is the only
The hon. Gentleman mentioned Chinese medicine, and I agree that no nation can be complacent about this matter. In addition, no nation has an unblemished record on the issue. There is a particularly serious problem worldwide with Chinese medicines and aphrodisiacs. It is sad paradox that the most populous nation on earth sometimes seems determined to wipe out the last rhino because some of its menfolk seem incapable of performing. That is sad and ironic.
Mr. Harry Greenway:
Reverting to a serious aspect of this important question, what is my hon. Friend doing--apart from providing manpower--to educate the public about the dangers of bringing in endangered species, as this seems to be the crux of the situation?
Mr. Oppenheim:
The Government are developing a package of leaflets, posters and videos, with the help and support of wildlife and animal welfare groups. Almost all the travel agents and tour groups that we have approached have agreed to send these out with tickets, and to send posters to their reps abroad. Most of the airlines that we have asked have agreed to show the videos on their flights, including British Airways. The only major UK airline not to have agreed yet is Virgin Airways which, when reminded, said that Mr. Branson was currently too busy to respond.
2. Mr. Bellingham:
To ask the Chancellor of the Exchequer what steps he is taking to promote wider share ownership; and if he will make a statement. [14170]
The Financial Secretary to the Treasury (Mr. Michael Jack):
In addition to the recent changes made to the three tax-approved employee share schemes, my right hon. Friend the Prime Minister has issued a challenging target to our largest businesses that he would like to see half their employees holding shares in their own companies by 2000.
Mr. Bellingham:
Is my right hon. Friend aware that many of my constituents own shares in the companies for which they work and that many also own shares in privatised utilities that operate locally, such as Railtrack, British Telecom, British Gas and Anglian Water? Does he agree that those shareholders need confidence and that the one thing that would destroy that confidence would be a windfall tax which, apart from possibly being illegal, would amount to a straightforward confiscation of wealth from small shareholders?
Mr. Jack:
My hon. Friend is right. If we follow what the shadow Chancellor said on the "Today" programme, it would be the equivalent of levying another 2p in tax. The shadow Chancellor's explanation on the radio this morning of the windfall tax was a cynical attempt to dodge the issue. He must have briefed the legal advice that he claims to justify it with all the details about the tax, so why does he not come out and tell the truth about which of the companies to which my hon. Friend referred
Mr. Corbett:
As the Minister made a plea for truth, will he tell us how the Government propose to pay for their share match scheme, which we are told is intended to spread wider share ownership? Will he give the House an assurance that it will not be done by extending value added tax on food, children's clothing, public transport, and so on? If he will give that undertaking, will he say where the money will come from to pay for it?
Mr. Jack:
I would be happy to give a straight answer to that question, in contrast to the efforts of the shadow Chancellor to dodge any question about the windfall tax. The share match scheme requires a change in the regulation of an already existing mechanism in the approved profit-sharing scheme, and we are considering how precisely to achieve that.
Mr. Nicholas Winterton:
Does my right hon. Friend agree that a windfall tax could be considered an increase in price for the vital necessities of life, such as gas, electricity and water? Will not the increase therefore bear down most heavily on pensioners and those on low incomes?
Mr. Jack:
For the shadow Chancellor to smile at the conclusion of my hon. Friend's question shows his cynical disregard for pensioners, who would have to pay for the tax--which could cost households about £100 a year--but he will not come clean on it. My hon. Friend has exposed the Opposition's cynical attempt to raise money through a utilities tax.
Mr. Darling:
Is it not clear that the Conservatives are not particularly bothered about pensioners, but are keener to climb into bed with the boardroom fat cats? Does the Financial Secretary recall that it was the Tory party that pioneered the windfall tax in 1981, and that the idea was supported by the chairman of the 1922 Committee? If the Financial Secretary is in the business of giving straight answers, can he confirm--given that stability, more than anything else, affects share ownership--that the Chancellor will meet his inflation target of 2½ per cent. by the end of this Parliament?
Mr. Jack:
Let me say to the hon. Gentleman, who has just put up another smokescreen to dodge answering questions about the windfall tax, that it is not only fat cats who would have to pay: many pensioners and people on low incomes would be the victims of the windfall tax. The hon. Gentleman knows what my right hon. and learned Friend's target is; he is confident of meeting it.
Sir Sydney Chapman:
Will my right hon. Friend confirm that not only shareholders but pensioners would suffer from the introduction of a windfall tax, because the fundholders of pension schemes invest heavily in the privatised utilities? Will he further confirm that the costs of the utilities for consumers are bound to go up in the event of a windfall tax, simply because, if the prices were too high now, the regulators would have intervened to force them down? [Interruption.]
Mr. Jack:
My hon. Friend is right. Opposition Members scoff, but Professor Littlechild, the electricity regulator, told a Commons Select Committee that he would have to take into account the windfall tax and its effect on utility prices when prices came to be set in the future. There can be no stronger endorsement of the line that my hon. Friend took. All the speculation and concern of Conservative Members are the direct result of the cynical attempt by the shadow Chancellor to dodge putting on the record the information that he gave to Mr. Beloff, who is said to have provided a legal opinion justifying his tax. He should make it public and be answerable for it.
3. Ms Eagle:
To ask the Chancellor of the Exchequer what representations have been made to him about recent levels of VAT receipts. [14171]
The Chancellor of the Exchequer (Mr. Kenneth Clarke):
I receive a large number of representations on this and other subjects.
Ms Eagle:
Will the Chancellor of the Exchequer explain how many times his Government have extended the scope of VAT and increased its rate since 1979?
Mr. Clarke:
That would involve the history of many Budgets. The Labour party has committed itself to our spending plans. It has obviously belatedly come around to approving the Government's fiscal policy. As far as I know, it is making no commitments to reduce any tax. Instead, it proposes to introduce a windfall tax, about which it is singularly unable to answer any questions but which would add to the tax burdens of many households.
Sir Terence Higgins:
On the collection of VAT and other Customs and Excise taxes, has my right hon. and learned Friend seen the article in the Financial Times the day before yesterday and the leader in the early editions of the Evening Standard yesterday that suggest that clauses 51 to 54 of the Finance Bill would make it possible for customs to take money direct and forthwith from bank accounts and, if people have no money in their bank accounts, from other people who owe them money? Is that story true? If it is, does he appreciate that that would not be acceptable?
Mr. Clarke:
I, too, read the article in the Financial Times and the editorial of the Evening Standard, as did my colleagues. I discussed it with my right hon. Friend the Financial Secretary and my hon. Friend the Exchequer Secretary, among others. We are aware of the concerns and are considering them. I am not sure that I totally recognise the proposals in the newspaper reports, but I do not dismiss them.
Sir James Molyneaux:
On the July capping of VAT refunds, will the Chancellor of the Exchequer give sympathetic consideration to the settlement of claims that had been accepted and promised before the announcement was made in July?
Mr. Clarke:
We are carefully examining that. My hon. Friend the Exchequer Secretary will take a close interest in the matter. Where people were promised refunds in writing before July, I assure the right hon. Gentleman that we will honour those promises.
Mr. Garnier:
My right hon. and learned Friend will have seen the posters put up by the Labour party advertising that the Government are to put up VAT on fuel. [Interruption.] I am glad that Opposition Members are listening. The mistake was mine. I meant VAT on food. Has my right hon. and learned Friend also heard that Labour proposes to abide by all our tax and spending plans? Does it follow that Labour advocates VAT on food?
Mr. Clarke:
I very much doubt whether my hon. and learned Friend will get an answer to a question of that sort from the Labour party. I have no plans to impose VAT on food. I have never had any such plans. The Labour party knows perfectly well that I have not had any plans to impose VAT on food. The people who put up the poster did not believe it. The Labour party should advertise the answer to a straightforward question: will a windfall tax be imposed on British Telecom and on our telephone bills? We already know that it will be a tax on fuel, to go back to my hon. and learned Friend's slip of the tongue.
Mr. Malcolm Bruce:
Will the Chancellor of the Exchequer acknowledge that his inability to forecast VAT receipts correctly is a significant factor in his inability to get borrowing down? Unless the situation has improved, does he accept that one way that would immediately help to bring down the cost of borrowing would be to make the Bank of England independent and, as a result, reduce the base of interest rates by between 0.5 and 0.75 per cent. and Government debt by £1.4 billion this year, according to the Library?
Mr. Clarke:
First, estimates of VAT are always difficult. Treasury estimates have been going wide of the mark for some years, since about 1990. The hon. Gentleman will know that we set out the reasons for that in the Red Book. We have introduced measures to deal with many of them in the current Finance Bill, including a three-year cap on retrospective claims. We have also taken steps to improve collection. We have in hand the task of getting right the estimates of receipts, although it will always be difficult.
With regard to making the Bank of England independent, I believe that the present arrangements work extremely well. I find myself subjected to more debate than we used to have on the subject, because I made the process transparent by ending Treasury editing of the Bank's inflation report and by publishing regular minutes. The Governor and I are agreed that there is only a small difference of judgment between us--of one quarter of 1 per cent. He thinks that I put a little too much emphasis on the present strength of sterling and I think that he puts a little less emphasis on the strength of sterling than he should. We will continue to consider the matter. We are both confident that we will hit the target and maintain the best inflation record that Britain has had for 50 years.
The Governor's own forecast--the one that caused all the dispute--estimates that inflation will fall to 2¼ per cent. in the latter half of this year.
Sir Patrick Cormack:
I revert to the question asked by my right hon. Friend the Member for Worthing (Sir T. Higgins). Will my right hon. and learned Friend go just a little further and give an unequivocal undertaking that the forecast in the Financial Times will never come to pass while he is Chancellor?
Mr. Clarke:
We will have to consider what the Financial Times said. I have very high respect for that newspaper, but I will not sign up immediately to its assertions of what will follow. However, we are looking closely at those clauses of the Finance Bill and reflecting on the concerns raised in the Financial Times. Were those concerns fully borne out, we would wish to address them, but I do not want to concede the whole way until we have given more thought to them.
Mr. Gordon Brown:
Will the Chancellor confirm that the commitments that he has just made on VAT on food were exactly the same commitments that the Prime Minister made on VAT on fuel in 1992 and then cynically broke? Given that VAT receipts depend on levels of spending and inflation, will the Chancellor repeat the commitment that he made before--that inflation would be at or below 2½ per cent. by the end of the Parliament? Will he repeat that promise, or is it yet another Tory broken promise?
Mr. Clarke:
My recollection is that, at the last general election, a poster went up showing my right hon. Friend the Member for Kingston upon Thames (Mr. Lamont) dressed as "VAT man", in a Batman costume. The public were told by the then Labour spokesman, who did not believe a word that he was saying, that we had plans in the pipeline to increase VAT to 22½ per cent. A great deal of debate took place on that. Most of the quotations on which the Labour party relied were in response to a subordinate plot to that. It was a deceitful and incorrect campaign, which was never borne out by the facts.
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