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Windfall Tax
3. Mr. Mike Gapes (Ilford, South): If he will make a statement on the mechanisms for the allocation of the proceeds of the windfall tax. [61747]
10. Ms Rosie Winterton (Doncaster, Central):
If he will make a statement on the use made of the proceeds of the windfall tax. [61754]
17. Dr. Stephen Ladyman (South Thanet):
What further plans he has for the proceeds of the windfall tax on the privatised utilities. [61763]
The Paymaster General (Mr. Geoffrey Robinson):
The House will be pleased to know that the second instalment of the windfall tax has been paid in full, raising £5.2 billion. Some £2.6 billion of that has been allocated
Mr. Gapes:
I am grateful for that reply. Will my hon. Friend confirm that, if the whingeing Liberals and the neanderthal Conservatives had had their way, there would have been no windfall tax, and therefore no new deal? Will he further confirm that, by April next year, 300,000 people will have benefited from the new deal, including 30,000 18 to 24-year-olds, who will be in work as a result? May I draw to his attention the regional discrepancies in take-up of the new deal? Will he try to remedy the problem of some people in London staying for a considerable period in the gateway?
Mr. Robinson:
I can give my hon. Friend that assurance. The length of time in the gateway is one aspect that needs particular attention. The Employment Service is well aware of that. He is right to point out that the Conservatives oppose the windfall tax, the new deal for schools and the welfare-to-work programme. Of course, that is not true of all Conservatives. They might look at the wise words of the hon. Member for South-West Bedfordshire (Sir D. Madel), who made it clear on 4 December that he welcomed the new deal in his constituency, and referred to the great amount of good that it was doing for young people there.
Ms Winterton:
Is my hon. Friend aware that, in areas such as South Yorkshire, the public utilities used to have a good track record on training, exceeding their requirements? Are the privatised utilities participating in the new deal by providing training opportunities? If not, what action will the Treasury take to encourage them to participate?
Mr. Robinson:
In fairness, the utilities have played a full part in making the new deal possible. Beyond that, many of them have signed up and are participating in it, and providing training. Yorkshire Water has signed up and Yorkshire Electricity is already in meaningful discussions with the Employment Service. Instead of sniping from the sidelines, the Conservatives should make it clear why they are against our measures to provide jobs and training for youngsters and to make employment work.
Dr. Ladyman:
Does my hon. Friend agree with a constituent who wrote to me this week, who certainly regards the windfall tax spending on the new deal as money well spent? It is entirely thanks to the new deal that the man, who is in his 40s, is back in full-time paid employment for the first time since 1994. Will my right hon. Friend assure me that we shall continue to extend the new deal, and that the remaining proceeds from the windfall tax will be used to improve its quality further, in particular to extend the gateway, which is key to the success of the new deal?
Mr. Robinson:
My hon. Friend is correct. We have 28 pilot projects under way for the long-term unemployed. He referred to one constituent. He will welcome the news that the pilots are showing good signs of success throughout the country. We intend to build on them.
Mr. Tim Boswell (Daventry):
As the hon. Gentleman has apparently remained a Treasury Minister in the
Mr. Robinson:
To start with, the hon. Gentleman has got the figure wrong--it is £5.2 billion. All the regulators for the industries signed up to it. Instead of carping around irrelevant points, why do not Opposition Members concentrate on what is happening in their constituencies, and work with the Employment Service agencies to make the deal a success? As they have opposed the scheme so vehemently throughout, the country will expose their hypocrisy on it.
Mr. Nick St. Aubyn (Guildford):
One of the objections to the new deal is that it does not provide enough money to help the older unemployed--those in their 30s, 40s, 50s and perhaps even early 60s. Will more money be made available for them, including unexpectedly retired former Ministers?
Mr. Robinson:
The Opposition really have to make up their mind. Either they are in favour of the new deal and the £500 million that we have made available for the long-term unemployed, to whom I think the hon. Gentleman was referring, or they are not. If they are not, they should make it clear, but if they are, I should tell him that we are looking at the 28 pilots. If we can build on them, and if they prove successful--and the signs are that they are--we shall extend the scheme.
Mr. Malcolm Bruce (Gordon):
Does the Paymaster General acknowledge that the hon. Member for Daventry (Mr. Boswell) has a significant point? The consumers who paid for the excess profits that have been taxed would have benefited had those profits been returned to them in lower prices or further investment. As he is answering this question, can he confirm that he is still in charge of the windfall tax programme and sorting out the problem faced by the poor pensioners who have suffered from the dividend changes that he introduced? He pledged to do something about it. Does he plan to do so, or has he been stripped of that responsibility?
Mr. Robinson:
It is interesting that, typically, the Liberals voted against the windfall tax, yet continue to pretend that they are in favour of it, willing the end but not the means. That inconsistency is a hallmark of the Liberal party. For our part, we have raised £5.2 billion. We are putting it to good use, and it is recognised throughout the country that the programmes on which we have embarked are proving successful.
Mr. Dale Campbell-Savours (Workington):
My hon. Friend will recall that the windfall tax is actually a Tory tax. It was imposed on the banks in the 1980s. Following the news that the NatWest bank made £1 billion profit in its first six months--through ripping off some of its customers, such as The Tanning Shop franchisees--I wonder whether the banks should now be subject to a windfall tax.
Mr. Robinson:
My hon. Friend will understand if I do not follow him down that route of speculation. However,
Mr. Ian Bruce (South Dorset):
I am sure that the hon. Gentleman now knows that he is in charge of looking after taxpayers' money rather than taking it away from them. In the first year of the Labour Government, long-term unemployment was decreasing rapidly and when the new deal was first introduced long-term unemployment actually went up. The latest figures show that the long-term unemployed who disappeared from the register are not actually in jobs under the new deal, but are participating in the make-work schemes being provided under the new deal. In six months' time those people will be back on the register, and the Paymaster General will have wasted taxpayers' money again.
Mr. Robinson:
In the months since we started the new deal for the young unemployed--the 18 to 24-year-olds--unemployment in that category has fallen by 27 per cent. We have only just got the 28 pilots for the long-term unemployed under way, but if they prove successful we shall see similar improvements in that group. Instead of carping and criticising, why do not the Opposition welcome the measures, and work with us to make them succeed?
4. Mr. Hugh Bayley (City of York):
What initiatives the Treasury is taking to help United Kingdom businesses prepare for the possibility that the United Kingdom joins the euro. [61748]
The Economic Secretary to the Treasury (Ms Patricia Hewitt):
The Government will be publishing an outline national changeover plan early next year as a first step in setting out the practical steps that would need to be followed if the United Kingdom decided to join the single currency.
Mr. Bayley:
Does my hon. Friend recall that Conservative European policy more than doubled VAT from 8 to 17.5 per cent., extended the scope of VAT to include gas and electricity, and agreed to the abolition of duty-free, all in the name of European Union tax harmonisation? Does she agree that it is important that UK businesses prepare to use the euro, regardless of whether we join, and that the introduction of the euro has no bearing whatever on our resisting further EU tax harmonisation?
Ms Hewitt:
I entirely agree with all my hon. Friend's points. I am sure that he will agree with me when I say how extraordinary it is that the Conservative party is no longer waiting and seeing, but has decided to be the anti-European party--it has turned its back on Europe and on the British national interest.
Sir Michael Spicer (West Worcestershire):
As part of the process of preparing business for the possibility of our
Ms Hewitt:
We hear again the authentic voice of the Conservative party--it is opposed to Europe and to Britain's continuing membership of the European Union. As more than half our trade is with the rest of the European Union, it is essential for British business that we assist it to prepare for the introduction of the euro next year.
Mr. Denis MacShane (Rotherham):
Does my hon. Friend share my excitement about the coverage of European economic affairs in The Sunday Times, The Times and The Sun? Has she seen the marvellous articles that they have published showing how clothes, cars, computers and food are much cheaper in Europe than in Britain after 20 years of Tory rule? As the rate of VAT in Germany is 16 per cent., does she agree that British consumers would welcome the harmonisation of our VAT down to red Oskar levels?
Ms Hewitt:
I am not sure that I share my hon. Friend's excitement, but he makes an extremely important point about the extent to which British consumers in many product markets are paying higher prices than consumers do in other parts of the European Union and, indeed, in the United States of America. In striking contrast to the previous Government, this Government are determined to strengthen our competition laws in the interests of the British consumer. As my right hon. Friend the Chief Secretary and my hon. Friend the Financial Secretary set out last night, we have a clear position on taxation in the European Union, unlike the Conservative party, which has ceased defending the British national interest in the EU.
Mr. David Heathcoat-Amory (Wells):
Will the hon. Lady assure the House that no public money, either from the European Union budget or from the Treasury, will be used to fund propaganda for the euro? In particular, will she confirm that the new parliamentary Liaison Committee, which is chaired by a Labour Back Bencher, will be used only to help businesses to prepare for a new foreign currency on 1 January and not to soften them up and persuade them that the United Kingdom should join the euro?
Ms Hewitt:
If the right hon. Gentleman is referring to our recent campaign to raise the awareness of small and medium businesses about the introduction of the euro, I hope that that is something that he will support. As for the cross-party Committee to which he refers, he will be aware that my right hon. Friend the Chancellor, in his letters of 10 November, said that the group will be designed
Ms Debra Shipley (Stourbridge):
Will my hon. Friend join me in welcoming the initiatives taken by my colleagues
Ms Hewitt:
I am happy to welcome the work of Dudley council in helping local businesses to prepare for the introduction of the euro. It is extremely important that small and medium businesses which are trading with suppliers and buyers within the euro-zone are aware of the implications for them of the introduction of the euro on 1 January. I congratulate the council on the work that it is doing in assisting local businesses, and small businesses in her constituency and across the country can rely upon the Treasury to assist them in practical terms in taking advantage of the opportunities that the introduction of the euro will provide.
"to act as a channel for the exchange of information and to develop cross-party awareness of the continuing preparations for the Euro."
I hope that, despite the anti-European stance of his party, he will agree that it is in the interests of British business and British citizens to be aware of the continuing preparations for the euro.
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