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Working Families Tax Credit
6. Mr. Andrew Miller (Ellesmere Port and Neston): What estimate he has made of the number of families in the north-west region who will be eligible for working families tax credit. [96995]
The Paymaster General (Dawn Primarolo): It is estimated that 250,000 families could receive the working families tax credit in the Government north-west administrative region.
Mr. Miller: Contrary to the rant of the right hon. Member for Horsham (Mr. Maude), something must be right because, since this Government have been in power, unemployment in my constituency has fallen by 34 per cent. It is important that we bring together all agencies that can help promote the working families tax credit and make it work. I commend to my hon. Friend an exercise that I conducted in co-operation with the private sector--Warner cinemas and THI Developments especially--local authorities, the Benefits Agency, and so on, to help to promote the creation of jobs under the new deal and, indeed, outside it. Perhaps similar exercises in co-operation may help to create more jobs.
Dawn Primarolo: I agree with my hon. Friend that co-ordination is necessary to ensure that people understand that the working families tax credit tackles the traps of unemployment and poverty, and, most importantly, helps parents with children who want to work with their child care expenses. The shadow Chancellor must explain to, for instance, the young woman whom I met last week, who will be £109 a week better off as a result of the working families tax credit--1.5 million families will benefit--why he would take that money away from her and put up her taxes.
Mr. Michael Jack (Fylde): I hope that the Minister agrees that one way of helping those on the working families tax credit in the north-west is to ensure a strong export performance in industries such as aerospace in my constituency? To that end, I seek her assurance that the
Treasury has no plans to change the present way in which it supports and funds the operation of the Export Credits Guarantee Department--
Madam Speaker: Order. That does not relate to the question on the Order Paper. The right hon. Member is a long-standing member of the House, and should not try to do things like that.
Mr. Peter L. Pike (Burnley): Is not the working families tax credit, together with the national minimum wage, a tremendous help in areas such as Burnley, in the north-west, where we have traditionally suffered low pay and deprivation? Is not it important help not only to the families affected but to the entire economy in such areas?
Dawn Primarolo: My hon. Friend is right to draw together the national minimum wage and the working families tax credit as underpinning employment. They are good for both the employee, whose wages make work worthwhile, and employers, in ensuring retention and recruitment of the work force, and especially assisting them, through the provision of child care tax credits, to retain the skills of women who would otherwise be forced out of the labour market for a long period when they have young children.
Climate Change Levy
10. Mrs. Ann Winterton (Congleton): What assessment his Department has made of the impact on chemical industries of the proposed climate change levy. [96999]
The Financial Secretary to the Treasury (Mr. Stephen Timms): We have studied the impact very carefully. Together with the Secretary of State for Trade and Industry and the Minister for the Environment, I recently met representatives of all the energy-intensive industries including the Chemical Industries Association Ltd. Last week, I had a useful discussion with members of the all-party parliamentary chemical industry group.
The chemical industry will have the opportunity to benefit from the 80 per cent. discount for energy-intensive sectors that sign energy-efficiency agreements with the Government, and from exemptions for electricity for good quality combined heat and power plant, which is widely used in the chemical sector.
Mrs. Winterton:
I welcome the fact that the climate change levy will not be as punitive, as announced in Tuesday's statement, although it should be noted that there will be an annual increase of £1 billion a year, starting next year. What other measures do Treasury Ministers envisage taking to assist the competitiveness of the chemical industry as the UK's top manufacturing export earner?
Mr. Timms:
All the £1 billion will be refunded through the reduction in employer national insurance contributions.
I do not know whether any of the hon. Lady's constituents work for ICI Chlor-Chemicals--I suspect that they may.
Today, my hon. Friend the Member for Halton (Mr. Twigg) has been talking to the chief executive there who said that he was encouraged by the way in which the Government have responded to his company's concerns about competitiveness. He said that the Government had clearly listened and made a significant and intelligent response. Those views will be widely shared by people in the chemicals industry and hon. Members who represent constituencies with substantial employment in chemicals, like that of the hon. Member for Congleton (Mrs. Winterton). The two aims for the climate change levy are to maximise environmental benefit and not to pose a threat to the competitiveness of UK firms. We have made progress on both this week with the announcements of my right hon. Friend the Chancellor of the Exchequer: there will be substantially greater environmental benefits, which have been welcomed by environmental organisations, and we have taken steps to protect competitiveness in the chemical sector and other industries.
Dr. Alan Whitehead (Southampton, Test):
I welcome the exemption of renewables from the climate change levy announced by my right hon. Friend the Chancellor of the Exchequer in his pre-Budget statement. What appraisal has my hon. Friend made of the effect on growth and competitiveness of the United Kingdom renewables industry that the exemption will produce?
Mr. Timms:
My hon. Friend makes an important point. The renewable energy industry is important and the UK has considerable strength there already. The combined heat and power industry is also important and we have some leading technologies in that area, too. Both industries will benefit from the exemptions that my right hon. Friend announced this week, so that is good for British business and technology.
Mr. David Heathcoat-Amory (Wells):
Will the Minister confirm that despite the Government's climb-down on the energy tax on Tuesday, major sectors of industry will continue to pay in net amounts of tens of millions of pounds which their overseas competitors will be exempt from? Has he seen that, as well as the chemical industry, the Steel Association said yesterday that the tax
Mr. Timms:
No, the energy tax will certainly not do that. First, there is no climb-down because the new package will have substantially greater environmental benefits than the package that was outlined earlier in the year. We said in the Budget that the levy would save 1.5 million tonnes of carbon emissions a year by 2010. Under the new proposals that figure will rise to at least 2 million tonnes, and the negotiated agreements could easily provide the same amount again. The steel industry
Mrs. Anne Campbell (Cambridge):
Is not the climate change levy to be welcomed, saving 2 million tonnes of carbon each year? Has my hon. Friend heard anything from the other side of the House that would meet these commitments to the environment and be just as warmly welcomed by environmental groups as my hon. Friend's proposal is today?
Mr. Timms:
My hon. Friend is absolutely right. The climate change levy is a big winner for Britain in terms of the environment and our industry. We have always said that protecting the environment goes hand in hand with building the economy. It must be good to tackle pollution--to work to reduce emissions. Surely even Conservative Members support that aim. We are delivering it.
11. Mr. Peter Atkinson (Hexham):
What estimate he has made of the net financial gain to Government Departments as a result of the introduction of the climate change levy. [97000]
The Financial Secretary to the Treasury (Mr. Stephen Timms):
Education, health and other public services will gain, along with the majority of firms, from a reduction in employers' national insurance contributions that will exceed their payments under the climate change levy. My right hon. Friend the Chancellor made it clear in his statement on Tuesday, however, that the net gain to public services will be wholly offset by the additional support he has announced for energy efficiency measures in the private sector. There will therefore be no net financial gain to the public finances from the introduction of the levy.
Mr. Atkinson:
The people who will lose, of course, are the unemployed in the north-east of England, because it is estimated that foreign inward investors will be put off by that billion pound energy tax. What assessment has the Financial Secretary made of the damage that will be caused to inward investment by the imposition of that new tax?
Mr. Timms:
We have protected the competitiveness of UK firms and we have made big progress with the announcements that have been made this week. We want to provide additional incentives at the margin in every sector to reduce emissions, because everybody has a role to play in meeting our legally binding targets, which also have to be met by other countries in the same way. That is the right thing to do, because we all want to cut down on pollution and that is the effect that the levy will have.
Mr. David Kidney (Stafford):
With last year's pre-Budget report, Lord Marshall's report, the Customs and Excise consultation and the wide consultation meetings held by my hon. Friend the Financial Secretary, does he agree that vast consultation has taken place about the design of the levy before it was introduced? My right
Mr. Timms:
My hon. Friend is right and the process that we have followed is a model for how such things should be done. We had Lord Marshall's report, the initial announcements in March, the following consultation, and the announcements this week. Of course, the levy itself will only be introduced a year from next April. That is in contrast to the imposition of VAT on fuel under the previous Government.
Mr. Owen Paterson (North Shropshire):
What is the gain to this country of closing large sectors of the horticultural industry and flying in cut flowers on jumbo jets that do not pay duty on fuel?
Mr. Timms:
The horticultural industry will also gain from what has been announced this week. It is a big user of combined heat and power plants and it will therefore benefit substantially from what my right hon. Friend the Chancellor has announced.
"will still result in more steel being produced overseas, often by producers using less environmentally friendly plant than those in the United Kingdom"?
According to that association, the tax is bad for industry, jobs and the global environment. Will Ministers stop mouthing slogans about competitiveness, fairness and enterprise, and start listening to those who work in industry and can deliver all the necessary reductions in these damaging gases, and so meet our international obligations without exporting British jobs, as the energy tax will do?
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