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Mr. Lilley: Will the hon. Lady tell us how many of the 17 tax rises introduced in the Budget she had the honesty and openness to trust her voters with before the election?
Dawn Primarolo: We have stuck to our promises. Our manifesto made absolutely clear our intention to invest in industry and infrastructure, and to plan for the future.
Openness has never been a hallmark of the previous Government. We hope that, in the exchanges between Front Bench Members in the coming years, our openness will help the Opposition to understand the direction that the Government are taking, even if they cannot grasp it now.
We have undertaken a major reform of the corporation tax system, providing a low-tax environment for companies, encouraging quality long-term investment, and maintaining an attractive environment for inward investment. We have cut the basic rate of corporation tax from 33 per cent. to 31 per cent. from April 1997, and the rate for small companies from 23 per cent. to 21 per cent.
Let me make it clear that there is no attack on pensioners or pension funds. Opposition Members are engaging in scaremongering. Tax credits for pension funds and United Kingdom companies are abolished from Budget day. The abolition of credits removes the distortion which encourages the payment of dividends rather than the reinvestment of profits. Many pension funds have large surpluses totalling nearly £50 billion, so they can absorb the loss of tax credits and improve company performance as a result of encouraging long-term investment.
The measure is good for pensions and pensioners, not bad for them. Furthermore, the existence of pension fund contribution holidays demonstrates that there is scope to absorb the measure. People should understand that our reforms will benefit pension funds.
Mr. Christopher Chope (Christchurch):
Is the hon. Lady aware that, this evening, Sir Jeremy Beecham, a highly respected member of the Labour party's local government team, has spoken out by saying what a disaster tax credits will be for people who pay council tax due to the implications of costs on local government? He is calling on the Government to give an indemnity to local authorities against the additional burden. Is she able to meet his demand?
Dawn Primarolo:
Having listened to this debate and despite all the hon. Gentleman's protestations, I would like to ask him why the Government whom he supported cut advanced corporation tax if they believed that it would be so damaging. The issues are clear. The tax credits can be coped with in being withdrawn from pension funds and companies will benefit as a result. There is no change for charities and no change for other non-taxpayers until April 1999. Charities will then receive transitional compensation for five years, giving them a total of seven years' notice--more than the previous Government did.
Mr. Boswell:
The hon. Lady has just effectively given the House the impression that there will be no impact in most cases of the changes which we have discussed. In that case, why is it necessary to give charities compensation? If there is no problem, why are the Government giving compensation to one sector but not another?
Dawn Primarolo:
We accept that there is an impact on charities, and that is why we are giving compensation. It seems a very simple proposition, but obviously not one that Opposition Members can understand.
Individual savings accounts will be created to continue to provide tax-favoured savings. The provision of first year allowances for small businesses is a temporary measures to ensure that investment in machinery and plant for small and medium-sized companies can also assist their development.
The Government have responsibilities to promote real opportunities for all the people in Britain. Young unemployed men and women have responsibilities to seek
work and accept reasonable opportunities, and to upgrade their skills when those opportunities are provided. Those people are ambitious and motivated but cannot get work. There are also young men and women who have lost their motivation and whose ambition has been eroded as a result of years of unemployment under a Government who offered them no hope.
The Government have put forward a Budget which invests in people, education and health, and which creates stability and long-term security. This Government keep their promises and will be earning the respect of the people of this country. The people know that they can trust this Government because they are fair, open, honest and direct. That is why this Government have been elected. The economic policies to which Opposition Members have constantly referred in this debate have been rejected.
I hope that, in the discussions that will ensue on the Finance Bill, the Government will demonstrate that they do not follow the example of the previous Government. There will be no abuse of our majority; there will be debate and discussion of the issues before the House. I sincerely hope that, as has been said, we shall do so in a fair and open manner--not trading insults across the Dispatch Box.
Mr. Boswell:
On a point of order, Mr. Deputy Speaker. The Financial Secretary has an endearing style of what might be termed serial peroration, which is why I intervened somewhat prematurely in her remarks. I gave her every opportunity to make some attempt to answer the four specific questions that I posed to her at the end of my remarks. I appreciate that she is new in the job and she may not be familiar with the answers to entirely reasonable questions, but she might have sought advice and made some effort to respond, as she indicated she would. Is not that a gross abuse of the House of exactly the kind that we have complained about before?
Mr. Deputy Speaker (Mr. Michael Lord):
The way in which Ministers choose to answer questions is not a matter for the Chair.
Debate adjourned.--[Mr. Robert Ainsworth.]
Debate to be resumed tomorrow.
n made, and Question proposed, That this House do now adjourn.--[Mr. Robert Ainsworth.]
Dr. Ashok Kumar (Middlesbrough, South and Cleveland, East):
I am grateful for the opportunity of this Adjournment debate, because the subject is very important to my constituents. I congratulate my hon. Friend the Member for Hampstead and Highgate (Ms Jackson) on her appointment as the Minister for Transport in London. I am sure that she will make a great contribution, and I wish her well in the future on behalf of my constituents.
Some weeks ago, commuters on London underground and railway services found their journeys enlivened by sitting next to my hon. Friend the Minister for Transport in London and my right hon. Friend the Secretary of State for the Environment, Transport and the Regions, who abandoned the aroma of the leather seats of their ministerial Jaguars for public transport. I applaud them for that demonstration that we are committed to building a good public transport system for the 21st century. However, if their ministerial duties had taken them to the isolated villages in my constituency, they would not have been so lucky.
My constituents living in the hamlets of Margrove Park and Charltons have found that they have no bus services in the early mornings, evenings and Sundays, because of the supposed freedoms conferred on them by the previous Government's bus deregulation measures. Other communities, such as Loftus and Easington, have seen big reductions in their services and the loss of school runs. They can only watch bemused as more urban areas of my constituency experience a motley procession of buses, many nearly empty, through their estates.
Stainton village, which adjoins a more urban part of my constituency on the edge of Middlesbrough, has had its direct bus services to the town of Yarm cut. That has affected people's work prospects and dramatically affects school children, even though they live on the edge of a conurbation. Schoolchildren have petitioned me. For example, Carla Sterling, a 13-year-old from the small east Cleveland village of Brotton, tells me that she has to make a roundabout journey of one and a quarter hours to get to and from her school, Huntcliff, in Saltburn. That means that Carla loses two and a half hours a day out of her young life just to make the journey to and from her place of education. That adds up to nearly 400 hours a year, which could make all the difference between a good or poor GCSE grade. That is the human reality of the effect of a poor, deregulated bus service on a family.
Those villages need their services. Many local people find it hard to hold down a job. In an area of high unemployment, a job is a job is a job. Many people do not have access to private transport and in many wards more than 40 per cent. of families are without cars.
Many of my constituents find their social life during the evening disrupted, and local snooker, domino and darts clubs are finding their existence undermined. In the Lockwood ward there is only one church and the Sunday bus service was a lifeline for scattered worshippers. It has now gone. Why? Simply as a result of the impact of
deregulation and the measures originally pioneered by the former Secretary of State for Transport, the late Nicholas Ridley. The local bus company, which has a near total monopoly in the rural part of my constituency, has decided that the pickings are richer elsewhere. Those services were formerly underwritten by the then Cleveland county council, and most villagers travelled on buses supported by the public purse.
It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.
Motion made, and Question proposed, That this House do now adjourn.--[Mr. Robert Ainsworth.]
9.55 pm
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