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Mr. Barry Jones (Alyn and Deeside): How will my right hon. Friend's statement on the climate change levy change for the better the position of the steel industry? He will know that my constituents from Shotton steelworks and I took a deputation of management and labour to see Treasury Ministers.
May I also tell my right hon. Friend of the constituent who visited my constituency surgery with his wife and child? He told me of his astonishment and pleasure at how the working families tax credit had given his family £28 a week more. If that is redistribution by stealth, may we please have more?
Mr. Brown:
My right hon. Friend draws attention to the working families tax credit, which is giving many thousands of people in this country up to £50 a week more--money that is necessary to lift them out of poverty and give them a decent weekly income. I wish the
My right hon. Friend also mentions the climate change levy, which, with others, he has raised before. I believe that the sector for which he puts the case will be pleased to learn that we have achieved the 80 per cent. discount and that there are lower main rates for the levy, equivalent to a 90 per cent. reduction in the levy rates published at Budget time. In addition, that sector can claim on the energy efficiency fund that we are creating and benefit from the new proposal for 100 per cent. capital allowances for moving to more energy efficient products and processes.
I believe that the welcome that will be given to our measures on this matter today will show that it is possible to build a consensus in this country, that we can make changes in the taxation regime to deal with the environmental commitments negotiated by the Deputy Prime Minister, and that we can do so in a way that is fair to all.
Mr. Peter Brooke (Cities of London and Westminster):
Does the Chancellor think that there is a possibility that those entering the country with an IT work permit may notice those who are leaving the country in the opposite direction because of IR35--or is the former policy intended to mask the effects of the latter?
Mr. Brown:
The right hon. Gentleman, who has a considerable reputation in the House, should not mislead people about the new measures on personal services companies. As he knows, we have listened to the consultations on this matter, and a few weeks ago we published new proposals. Those proposals have been generally welcomed by people who understand what we are trying to do.
Mr. Brown:
The only thing that I can say about the shadow Chancellor is that he wants to create a situation where, even when people may be earning thousands, or hundreds of thousands of pounds a year, they pay no national insurance on their earnings. We are taking the necessary action, and if the right hon. Gentleman wants to make changes in these measures he must tell us now: is he opposing the payment of national insurance contributions by people who have personal services companies? Yes or no?
Mr. Martin O'Neill (Ochil):
May I congratulate my right hon. Friend on his statement? I was one of those who had misgivings about the climate change levy, and in large measure my right hon. Friend seems to have listened to what we were saying. Given the opportunities that are now available to companies and trade associations to enter into negotiations with our right hon. Friend the Deputy Prime Minister, there is no reason why most of them should not be able to arrive at reasonable settlements, in view of the reduction offered by the discount and the lower rate, the opportunities for combined heat and power, and the £150 million for energy efficiency investment, as well as the capital allowances.
We must congratulate my right hon. Friend because, although many of us criticised him, he listened; and I believe that most of us are relieved and almost happy.
Mr. Brown:
I am grateful. My hon. Friend is Chairman of the Select Committee on Trade and Industry, and I have met him on that basis. Of course, he may be happier on Saturday when we attend the Scotland-England football match at Hampden together. He rightly points to the changes that have been made as a result of the consultation period, but I stress to him that we have managed to cut emissions by a greater amount than previously proposed in addition to halving the levy. I believe that most people throughout the country will welcome that.
Eight European countries have, or are about to have, a climate change levy or a similar measure. I believe that we must accept that that will happen, but I also believe that it can be a done in a fair and balanced way. We have put forward these measures in order to achieve that, and there is no revenue gain whatever to the Government from meeting those environmental commitments.
Mr. John MacGregor (South Norfolk):
Will the Chancellor make it clear that he will not now proceed with a pesticides tax, which would further devastate an already devastated agricultural industry?
While he is working that one out, will the Chancellor admit that, contrary to the impression that he tried to give earlier, he has substantially cut the road programme and other transport expenditures?
On the fuel duty escalator, would it not have been much better if the Chancellor had said that he would not increase fuel duties now at all, given that fuel duty is much higher in this country than in other European countries? If he does proceed with the fuel duty increase, will he make it clear that the expenditure hypothecated for roads and other transport programmes will not be offset by reductions in the transport programmes financed by public expenditure generally?
Mr. Brown:
When the right hon. Gentleman makes these points, I suspect that he is really welcoming the fact that we are creating a ring-fenced fund for roads and public transport and wishes that his colleagues in the previous Government had done exactly what we are proposing. When I say that this is money for roads and public transport, I mean that it is additional money for roads and public transport.
Once Conservative Members have stopped their knee-jerk reaction of opposing everything recommended by the Government, I hope that they will accept that this is a reasonable way forward. It was, after all, the previous Government who introduced the escalator on fuel duty in 1993, where it remained until 1997. It is we who are reforming it, by putting in place new environmental measures that are best for the country.
Mr. Denis MacShane (Rotherham):
Is the Chancellor aware of how welcome his statement on the climate change levy will be in the steel communities, in response to the delegations that he has received from companies, Members of Parliament and trade unions?
Does my right hon. Friend agree that his very ambitious proposals on employee share ownership will take us from passive share ownership to an active partnership stake in
many more of our firms? Will he ask his fellow Ministers in the Department of Trade and Industry and the Department of the Environment, Transport and the Regions, as well as members of employer organisations and trade unions, to build employee share ownership into their thinking, so that we have an active stakeholding economy in which the many have a stake in the firms of this country, not just the few?
Mr. Brown:
I am grateful to my hon. Friend, who was one of the Members of Parliament in a delegation which made representations in our consultative period on the climate change levy. I believe that we have created a pattern in which it is possible to consult on such measures and to listen to what is being said by various sectors of British industry before a Budget. My hon. Friend will be pleased to know that the steel industry will benefit from the 80 per cent. discount, the lower main rates of levy, the trebling of Government assistance to business for energy efficiency measures and some of the exemptions. It is important to recognise again that these measures have no revenue benefit to the Exchequer; all the money will go back into business.
As for my hon. Friend's second point, our aim over the next few years is to double the number of companies with employee share schemes. I believe that the proposed package of measures to be introduced in April will show immediate results. I hope that trade unions and managers can get together to work out how they can move this forward.
Mr. David Davis (Haltemprice and Howden):
The Chancellor had some fun attacking the forecasts of my right hon. Friend the Member for Horsham (Mr. Maude). The right hon. Gentleman should perhaps be a little more careful. I remember when, as shadow Chancellor, he said after a Conservative Budget that it would lead to increases in unemployment month after month after month. In fact, those measures led to reductions in unemployment month after month after month until this Government came to power, when the right hon. Gentleman gained from the reduction.
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