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Poverty Alleviation
4. Mr. Archy Kirkwood (Roxburgh and Berwickshire): What plans he has to include measures relating to the alleviation of poverty in his pre-Budget statement. [96993]
The Chancellor of the Exchequer (Mr. Gordon Brown): In the pre-Budget report, I set out the long-term ambition for the next decade to halve child poverty as a step on the way to abolishing it within a generation. Building on measures in the last two Budgets that will lift 800,000 children out of poverty, I also announced that we shall consult on a new children's fund to provide project grants for community action to tackle all aspects of child poverty.
The pre-Budget report also announced measures to tackle unemployment and pensioner poverty. The winter allowance for every pensioner household will be £100 for the rest of this Parliament; there will be free television licences for pensioners who are over 75; and because our intention is to tackle pensioner poverty, we shall uprate the minimum income guarantee for pensioners in line with earnings for the rest of this Parliament. Consequently, by April 2000, the oldest pensioners will be £10.35 per week better off than when we came to power, and the pensioner couple will be £15.90 better off.
Mr. Kirkwood:
I am very grateful to the Chancellor for that answer. However, has he had a chance yet to consider the results published in the British household below-average income study, which examined work that had been done, between 1991 and 1997, by the British household panel study? Does he agree that the panel's study showed that--for that entire seven-year period--9 per cent. of the sample of households studied stayed below 30 per cent. of income distribution? With a potential Department of Social Security underspend of £7 billion, and a current balance of £12 billion in the national insurance fund, does the Minister really believe that a 1.1 per cent. uprating of long-term social security benefits is adequate for families who really cannot find work?
Mr. Brown:
The hon. Gentleman--who is Chairman of the Social Security Committee--is an expert on many of those matters, but he is painting an incomplete picture.
First, benefits for the disabled are rising by £1 billion. Secondly, benefits for children are rising by £6 billion annually by the end of the Parliament. Thirdly, we have just announced measures ensuring that benefits for pensioners are rising by £3 billion annually. It is, therefore, simply not correct to state that benefits for those groups who are most in poverty are rising only by the rate of inflation: we are taking additional measures for every group. It is about time that the Liberal party, which in its general election manifesto promised far less--indeed, a fraction--of what we have done, started to support us.
Mr. Geoffrey Robinson (Coventry, North-West):
I congratulate my right hon. Friend the Chancellor on the excellence of his pre-Budget statement, in all the respects that we are discussing. In particular, I welcome his announcement of an important initiative enabling gifts of quoted shares and securities to be made to charitable bodies. During the consultation in which the regulations and legislation involved will be decided, will he make it clear to his colleagues--and, of course, to Inland Revenue officials--that they should bring to the negotiations the positive and flexible spirit that was embodied in his important pre-Budget statement?
Mr. Brown:
I thank my hon. Friend. He is, in fact, saying that the House should unite in tackling child poverty. The children's fund that we have announced will allow voluntary, community and charitable groups to be involved in innovative projects tackling all its aspects. As part of that, we are changing the charity tax laws to make it easier for people--through either payroll giving or direct giving--to donate more to charities, voluntary organisations and other bodies. I would have expected support for those measures throughout the House, but is it not typical of the Conservatives that they cannot support action against child poverty?
Mr. Desmond Swayne (New Forest, West):
How many new pensioner couples will be hit by the abolition of the married couples allowance by the end of this Parliament? Did the Chancellor fail to tell the Prime Minister about that yesterday, or did he simply forget? Why did he not mention it in his pre-Budget statement?
Mr. Brown:
It is this Government who, for pensioners--
Mr. James Gray (North Wiltshire):
Answer the question.
Mr. Brown:
The hon. Gentleman asks me to answer the question, and then does not give me a chance to do so. Is that not typical of the Conservatives? They have learned nothing in two and a half years of opposition. Do they not understand that they lost the election because they never listen to the country?
First, we have taken more pensioners out of tax. Secondly, we have reduced the savings tax rate to 10p: I would expect the Conservative party to support that. Thirdly, we have reduced the basic rate of income tax from 23p to 22p, in order to help all pensioners. Finally--
[Interruption.] I will tell Conservative Members this, if they will listen. Finally, all pensioners who are currently on the married couples allowance will retain it.
Fiona Mactaggart (Slough):
Does my right hon. Friend recall that, when he took office, there were 4.4 million children in poverty in Britain? His promise to take 800,000 children out of poverty will still meet only a fifth of the huge challenge that we were elected to meet. He has already committed £1,080 each to the poorest families, but can he assure me that his change to children's tax credit will ensure that women--the main carers for children--will have the necessary resources in their purses, so that the money can benefit children directly?
Mr. Brown:
That is exactly the proposal that we are presenting for consultation. I hope that many people will become involved in the pre-Budget discussions about how we can make progress in providing benefits for all children.
Our proposals for tackling poverty have four separate strands. First, there are the increased benefits that will help families: child benefit, the working families tax credit, the 10p starting rate of income tax and changes in national insurance will all benefit the poorest working families. Secondly, our proposals include the provision of more resources for nursery and pre-school education, and for school education. Thirdly, there is the sure start programme, which will provide about £1,000 per child in the poorest parts of the country in order to create new opportunities in health care and education. Fourthly, we are expanding our programme relating to the innovative children's fund. I believe that that will involve a partnership between Government, communities and voluntary organisations, and a national crusade to tackle and eliminate child poverty.
Mr. Matthew Taylor (Truro and St. Austell):
The Chancellor will understand that the next comprehensive spending review will be crucial for those interested in tackling poverty. Will he clarify a question that I asked when he gave his pre-Budget statement? Does the fact that the new review has been brought forward a year mean that the current 2001-02 spending plans may be changed, as the hon. Member for Bolsover (Mr. Skinner) hopes, or is the Chief Secretary to the Treasury right to say that those plans are set in stone?
Mr. Brown:
I am grateful to the hon. Gentleman for asking that question again. We have not changed our position on the comprehensive spending review. The hon. Gentleman suggests that it has been brought forward. It will be at the time that we said and will be happening over the next few months. The Liberals must wake up to the situation in this country. They cannot have it both ways. They cannot keep saying that they are going to be tough on public spending and yet demand more money at every turn. Let me remind the House what a Liberal spokesman said last week:
5. Mr. Christopher Leslie (Shipley):
What steps he is taking to ensure that all sections of society share in increasing economic prosperity. [96994]
The Economic Secretary to the Treasury (Miss Melanie Johnson):
The Government are committed to a fair and inclusive society in which everyone can contribute to and benefit from economic prosperity. The Chancellor set out the Government's strategy in the pre-Budget report, published on Tuesday. We want to create employment opportunity for everyone of working age, ensure that children have the best possible start in life and deliver a better deal for pensioners.
Mr. Leslie:
Have not 18 years of Conservative failure made pensioners some of the poorest in society? Is my hon. Friend aware that pensioners' poverty takes its toll particularly in the colder winter months, and has done for far too long? Will she take this opportunity to make it crystal clear that the welcome new £100 winter allowance is not a computer error, a mistake or even a one-off, but a bonus delivered only by a Labour Government?
Miss Johnson:
I am grateful to my hon. Friend for that question. Of course, there is no computer error on the £100 winter allowance. We are delighted to be able to say that it will go to more than 7 million eligible pensioner households this year and--as my right hon. Friend the Chancellor announced on Tuesday--every year hereafter. Under this Government, pensioner households are on average £300 a year better off. In addition to the free television licence, from which more than 3 million pensioner households will benefit, another 1.5 million pensioner households will benefit from the extension of the 10p rate to savings income, which was also announced on Tuesday.
Mr. Michael Fallon (Sevenoaks):
I welcome the hon. Lady to her new responsibilities. Why do the Government persist in their nasty and mean-spirited attack on pensioners who happen to have saved all their lives? Those who have a few hundred pounds of investment income can no longer reclaim the tax on their dividends. Is she proud to be punishing savers in that way?
Miss Johnson:
We are helping pensioner households across the board. We are also helping those who are paying tax. Pensioners were already paying less tax under this Labour Government than ever before, even without Tuesday's announcement on the 10p savings rate, which will be of particular help to many pensioner households. The hon. Gentleman seems to fail to recognise that two thirds of pensioner households pay no tax.
Ms Sally Keeble (Northampton, North):
May I draw my hon. Friend's attention to the work of the Northamptonshire Association of Asian, African and Caribbean Businesses and welcome the many measures in the pre-Budget statement that promote enterprise and encourage people to set up small businesses? Will she
Miss Johnson:
I am grateful for my hon. Friend's comments and her detailed knowledge of the work being done in her constituency to support enterprise. The Government support such work throughout the country. We want to achieve our economic ambitions for the next decade. They include closing the productivity gap and ensuring that enterprise is open to all. As part of that, we are providing a new £30 million package to promote enterprise in disadvantaged communities, providing better access to finance, better advice and mentoring and demonstrating that our commitment is borne out by practical steps.
Mr. Francis Maude (Horsham):
I welcome the Economic Secretary to her new post and wish her well in it. I remind her that before the Government share out economic prosperity, they must ensure that it continues to increase. Does she agree that
Miss Johnson:
I am grateful to the right hon. Gentleman for welcoming me to my new post. However, my right hon. Friend the Chancellor certainly did not make that admission. We are taking steps to address exactly the issues that the right hon. Gentleman is raising. The two worst recessions since 1945 occurred when the Conservatives were in government. They doubled the national debt and presided over interest rates of 15 per cent. In addition, there were 22 Tory tax rises. None of that did very much for productivity, growth or enterprise.
Mr. Maude:
The hon. Lady may not have had a chance to read it, but the admission is in a document published by the Chancellor on Tuesday. It shows productivity and growth falling--she should take a look at it.
If the Government honestly want to increase prosperity, why did they raise tax by £40 billion--by £30 billion on business alone--and give Britain the fastest rising tax burden in Europe? Does the hon. Lady remember when she was a candidate in the general election the Prime Minister saying that Labour
"There are a lot of things our party wants to promise, but we have to be realistic about what we can deliver if we want to be seen as fit for government. For example, it would be great to abolish television licence fees for pensioners, but it would cost hundreds of millions and voters would not like it."
Is it not about time that the Liberals supported the good things that we are doing?
"Productivity is a fundamental yardstick of economic performance . . . poor productivity condemns a nation to be held back"?
That is what the Chancellor said in his pre-Budget statement document last year. Was she surprised to hear him admit on Tuesday that, since he became Chancellor, productivity growth has fallen by two thirds? Does she call that making Britain more competitive?
"had no plans to increase tax at all"?
Why are the Government still piling on regulations costing business £5 billion a year? What does the hon. Lady have to say to the president of north-east chambers of commerce, in the Prime Minister's own area, who said that
"bureaucracy . . . is stifling business competitiveness"?
Is that not why the president of the Confederation of British Industry said that the sums that the Government
"give back are trivial by comparison"?
11 Nov 1999 : Column 1281
Did not the Chancellor inherit the fastest growing economy in Europe and are they not squandering that inheritance?
Miss Johnson:
We inherited a deficit of £28 billion in public finances. We inherited a boom and bust economy with no possibility for businesses or individuals to plan ahead because of its instability. We have turned that around; we now have stability. The right hon. Gentleman will not even tell us whether he supports one of the key measures to ensure that we have that stability in the British economy--the independence of the Bank of England.
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