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Retail Prices Index

5. Mr. Nicholas Winterton (Macclesfield): If he will estimate the cumulative increase in the retail prices index as a result of increases in petrol and diesel duty rates since 1992. [38246]

The Financial Secretary to the Treasury (Dawn Primarolo): Since January 1992, petrol and diesel duties have added around 1.75 per cent. to the RPI compared with a cumulative increase in the headline RPI of around 18 per cent. over the same period.

Mr. Winterton: I am grateful to the Minister for that response. Is she aware that the recent rise in petrol is the third in only 18 months and that the new Labour Government have increased the road fuel escalator, which, together with bringing forward the Budget, has raised another £9 billion in taxation from the British people? Is she aware that the announcement of £50 million for rural transport in the Budget is a pittance that will have no impact in most rural areas, where there is no meaningful public transport and never can be? What is she going to do to help the people of those areas who are suffering from additional taxation that was not promised by the new Labour Government?

Dawn Primarolo: The hon. Gentleman is suffering from amnesia. His Government supported the fuel escalator. Indeed, when the previous Chancellor increased it, he said:

I agree with the previous Chancellor.

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On the subject of hypocrisy, I can tell the hon. Gentleman that it is this Government who have invested in rural transport, committed £500 million to transport over the next three years and come up with a plan for London Underground--unlike his Government, who did nothing at all.

Budget (Work Incentives)

6. Mr. John Hutton (Barrow and Furness): If he will make a statement concerning his Budget measures to increase the financial incentive to work. [38247]

The Chancellor of the Exchequer (Mr. Gordon Brown): The Budget contained a number of measures to help ensure that work pays, including the working families tax credit and reform of national insurance contributions.

Mr. Hutton: I thank my right hon. Friend for his reply. I strongly endorse his emphasis on making work pay, a central element of the philosophy underlying our welfare-to-work review. Is he aware that 1,500 families and 3,000 children in my constituency will benefit from the introduction of the working families tax credit? Is that not one of the best ways to achieve greater fairness in our society--something that, in 18 years in government, the Conservative party conspicuously failed to do?

Mr. Brown: I am grateful to my hon. Friend. The increased take-up and availability of the working families tax credit to people on low incomes will mean that the number of people benefiting will increase from 800,000 to nearly 1.4 million. It also means that the marginal tax rates of many of those people will subsequently fall. My hon. Friend is right: this is part of a comprehensive set of measures, including the national minimum wage, cuts in national insurance for employees and employers and a child care package, that enable people to have proper child care when they need it. It will eventually include the 10p starting rate of income tax.

Mr. Nick Gibb (Bognor Regis and Littlehampton): How will the tax rises implemented by the Government since 1 May help people's financial incentives to work? What did the right hon. Gentleman mean when he said during the general election campaign:

Mr. Brown: The hon. Gentleman should be congratulating the Government. We cut VAT on fuel after saying we would. We abolished the gas levy and helped people with their fuel bills. He asks about taxation. We cut corporation tax for business, we cut small business corporation tax, and we have now cut national insurance for every employee in the country. We have kept our promises on tax. The Conservative party broke all its promises on tax.

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Budget Effects

7. Ms Sally Keeble (Northampton, North): What assessment he has made of the impact of the Budget on families with average earnings of £16,000. [38248]

The Financial Secretary to the Treasury (Dawn Primarolo): A single earner couple with two children both under 11 will see a real increase in their disposable income of about £10 a week.

Ms Keeble: Is my hon. Friend aware that the £16,000 litmus test was in fact set by the right hon. Member for Hitchin and Harpenden (Mr. Lilley) in his speech to the House on 18 March? Can she confirm that her figures show that all the average families in my constituency, who are, exactly as the right hon. Gentleman said,

will find their personal finances more secure as a result of the Budget?

Dawn Primarolo: The Budget helps low-income families. The working families tax credit will mean that every family with a member working full time will be guaranteed an income of at least £180 a week. The Labour Government are tackling the problems--the barriers to moving from benefit into work and the problems of low pay--unlike the previous Government, who were prepared to see families consigned to poverty.

Windfall Levy

8. Mr. Ross Cranston (Dudley, North): What discussions he has had with his EU counterparts on his policy to spend the windfall levy on an extension of the welfare-to-work programme. [38249]

12. Gillian Merron (Lincoln): If he will make a statement on his policy of spending the windfall levy on an extension of the welfare-to-work programme. [38253]

The Paymaster General (Mr. Geoffrey Robinson): We have had extensive discussions with our EU colleagues about how to equip our young and long-term unemployed people with the skills that they need to find and keep work. Promoting employability is a key policy objective of the EU employment guidelines agreed last November, and it was endorsed by G8 Finance and Labour Ministers meeting in London in February. I am pleased to report that our new deal policies have been received enthusiastically in both the EU and the G8. I am sure that the whole House would like to congratulate my right hon. Friend the Chancellor of the Exchequer on the initiatives that he has taken in all these respects.

Mr. Cranston: I thank my hon. Friend and my right hon. Friend for taking the news of this brilliant programme to other parts of Europe. I should like my hon. Friend and my right hon. Friend to meet the 200 young people in my constituency who now have a chance of decent employment as a result of the programme. Now that the programme has gone nationwide, what are the early indications of its success?

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Mr. Robinson: The only people yet to be convinced about the seriousness of our intent and the success of the programme are cynical Conservative Members. My hon. Friend will be pleased to know that, on his pathfinder project in the black country, which I had the privilege to visit, 2,467 people have joined the programme and 158 have already found work. Most important, three quarters have gone into unsubsidised jobs. That is most important for the eventual success of the programme. We have made a good start. It is too early to make an overall judgment about the whole programme, but it is clear that we have started well, and we are continuing to make progress in all the pathfinders across the country.

Gillian Merron: I welcome the extension of the new deal in the ways that were announced in the Budget. They were asked for by people in my constituency, and that is an indicator of the success that we can expect in tackling unemployment. How will the new deal for communities help places and people who daily have to battle with poverty, difficulties and deprivation?

Mr. Robinson: My hon. Friend is right to draw attention to the fact that we have continued to extend the moneys and the areas covered by the new deal. We have put £50 million more into the gateway programme, which is one of the most important new developments in the new deal. We have found £100 million for the long-term unemployed over-25s. We have a £60 million programme to help partners of the unemployed to give them access to employment opportunities that they did not have before. In all those ways the community will clearly benefit.

I shall take this opportunity to tell the House how active my hon. Friend has been in making a success of her new deal programme in Lincoln. She convened a meeting involving all the partners to the programme and, as a result, eight private sector companies have signed up. Opposition Members should take a similarly involved and active interest. We expect 17,000 companies to have signed up to the new deal programme within the next three months. It will be a big success despite Opposition Members, not thanks to them.

Mr. David Willetts (Havant): I commiserate with the Paymaster General on his not being Prime Minister, and hope that he will explain whether he thinks that, at the end of this expensive welfare-to-work programme, unemployment will be lower than it is now.

Mr. Robinson: If there is to be any commiseration in the House, it should be extended to the hon. Gentleman, and I commiserate with him.

Mr. Peter Brooke (Cities of London and Westminster): How does the Paymaster General define a windfall?

Mr. Robinson: I define a windfall tax as one that we exacted on the privatised utilities that were sold grossly below their value because of the incompetence of Conservative Members. The £5 billion that we raised from that is being put to good use.

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