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All-employee Share Plan
3. Mr. Jeff Ennis (Barnsley, East and Mexborough): What steps he is taking to promote the new all-employee share plan. [116602]
The Financial Secretary to the Treasury (Mr. Stephen Timms): A number of steps have been taken. A thousand company representatives have attended presentations around the country on the new all-employee scheme, and further training events are being planned for employers. The Trades Union Congress is working with us to inform employees, and Members of Parliament are being sent material to help them to explain the advantages of the plan in the course of their constituency work.
Mr. Ennis: The scheme is fully supported by all trade unions. They have campaigned for it for years. Does my hon. Friend agree that it will greatly reduce the old "us and them" attitude that used to prevail among company bosses and their employees?
Mr. Timms: My hon. Friend is absolutely right. Encouraging employee share ownership enables us both to boost productivity and to promote fairness. We know from research that employee share ownership boosts productivity, but, as my hon. Friend pointed out, it also helps to ensure that the benefits of company success are spread fairly. The TUC has made an important contribution to the consultation, and I shall meet TUC policy officers this afternoon to discuss it.
The scheme is a clear example of our ability to build a modern economy and a decent economy at the same time.
Mr. Oliver Letwin (West Dorset):
When the Financial Secretary and his colleagues designed the brilliant new national insurance contribution for high-tech companies and their share prices, did they mean to tax success? Did they know that they were creating an unquantifiable contingent liability, which would appear on those companies' balance sheets? Are they aware that Oracle and other high-tech companies are now joining Cisco in the emigration queues, and what are they going to do about it?
Mr. Timms:
As the hon. Gentleman knows, consultation is under way on employers' national insurance on share options. I am engaged in discussion with the firms affected about how best to solve the problem, and we expect to be able to present proposals sooner rather than later.
The hon. Gentleman mentioned Cisco. I am pleased to say that Cisco was an enthusiastic participant in a seminar that we had last week on how our welfare-to-work policies and programmes could be used to benefit the information technology industry. For that industry and, indeed, the whole economy, the economic success that we are currently enjoying is extremely good news.
Mr. Denis MacShane (Rotherham):
Is my hon. Friend aware of the warm welcome given to the employee share ownership measures in the Budget by organisations such as ProShare, Capital Strategies and Job Ownership? Although the last Government talked a lot about employee share ownership, they delivered very little. Is that not the big difference? We have really broken through.
A number of organisations are helping to promote employee share ownership. Could my hon. Friend have a word with the Department of Trade and Industry? Perhaps it could get on to the bandwagon, through the Small Business Service and its other agencies, to promote employee share ownership as an important new economic development building a partnership economy, as opposed to the two-class economy that the Tories have always supported.
Mr. Timms:
My hon. Friend is right. There has been wide support for the consultation on the new plan, in which many firms, organisations and trade unions are taking part. This is a partnership effort, and the wide welcome given by the Confederation of British Industry and others to the details of the plan announced in the Budget testifies to the success of our approach.
Dr. Vincent Cable (Twickenham):
I welcome the Government's new enthusiasm for the long-standing Liberal policy of worker share ownership.
Does the Financial Secretary agree that the number of such schemes is so utterly derisory--1,750 companies are using them, out of millions--because of the convoluted, time-consuming procedures engaged in by the Inland Revenue in its valuation of unquoted companies? What does he propose to do to alleviate the problem?
Mr. Timms:
We aim to double the number of companies that have an all-employee share scheme
4. Mr. Jon Trickett (Hemsworth):
If he will make a statement on his plans to increase opportunities to learn about business in schools in unemployment blackspots, with particular reference to former coal-mining areas. [116603]
The Economic Secretary to the Treasury (Miss Melanie Johnson):
We are providing an extra £10 million in this financial year to enhance education- business link activities in England, including in high unemployment areas. On 11 May, we are launching Enterprise Insight, a campaign to inspire young people to follow careers in enterprise, which will focus initially on young people and high unemployment areas.
Mr. Trickett:
I thank my hon. Friend for that reply and welcome the initiatives that she has announced. I hope that, shortly, there will also be a welcome announcement on state aid to the coal industry. Is she aware of the work in schools such as Hemsworth high and Minsthorpe community college, which seek to bring together the education and business sectors in areas of long-term decline? Will she seek to build on that work? After all, the future regeneration of areas such as mine and those represented by many other hon. Members depends on today's younger people.
Miss Johnson:
Yes, I certainly support the work in my hon. Friend's constituency and recognise its importance, as, I am sure, he recognises the importance of the work that the Government have done to raise standards of literacy and numeracy in schools, so that young people will be equipped for the world of work. I am sure that he recognises, too, the progress that we have made as a result of initiatives to reduce unemployment throughout the country.
In my hon. Friend's constituency, youth unemployment is down by 68 per cent. since the last election and long-term unemployment has fallen by 60 per cent. Those figures clearly show that business-education partnerships will be working in fertile territory in building for young people for the future.
Miss Anne McIntosh (Vale of York):
Does the Economic Secretary regret that the Government's announcement that they will abolish training and enterprise councils will lead to the removal of business input to training, including in schools?
Miss Johnson:
No, I do not regret the change. The TECs were strong in some areas, but discredited in others. A number of difficulties had arisen. Our initiative in that regard, coupled with the work of the new Small Business Service, will do only more to enhance support to small and medium enterprises throughout the country. When we set all that in the context of the fact that we are able to provide a stable economic climate in which business can
Mr. Elfyn Llwyd (Meirionnydd Nant Conwy):
On the question of coal mining communities, the hon. Lady might know that, on Tuesday, there was a substantial lobby of people from the various coal mining communities in the United Kingdom. The Welsh representatives, a cross-party group, were desperately worried about the absence of additional funding, or any commitment from the Chancellor to provide that, to secure objective 1 funding. Had he done something about it, the Prime Minister would not today have to be in the south Wales valleys, trying to shore up the haemorrhaging Labour vote.
Miss Johnson:
Objective 1 status is a matter for the spending review. Obviously, the hon. Gentleman is forgetting the enormous progress that has been made in his constituency through the new deal in lowering both long-term and youth unemployment, and the initiatives that have already been launched in respect of the coal fields, which include new provision of £60 million over three years to fund the Coalfields Regeneration Trust and Coalfield Enterprise Fund. A further initiative, Network Space Ltd., has been established as a joint venture between English Partnerships and the private sector to provide workspace sites in former coal fields and to create yet more jobs.
5. Mrs. Cheryl Gillan (Chesham and Amersham):
How many families that qualified for the married couples allowance in 1999-2000 will not qualify for the child tax credit in 2001-02. [116605]
7. Mr. Desmond Swayne (New Forest, West):
How many married couples will be liable for higher-rate tax as a result of the withdrawal of married couples allowance. [116607]
11. Mr. Graham Brady (Altrincham and Sale, West):
If he will make a statement on the impact on married couples reaching pensionable age after 6 April of his withdrawal of tax allowances to date. [116613]
The Chief Secretary to the Treasury (Mr. Andrew Smith):
As a result of the measures that we have taken in this and previous Budgets, pensioner households will, from next April, be on average £400 a year better off, and families with children will be on average £850 a year better off. The number of couples liable for higher rate tax as a result of the withdrawal of married couples allowance will be zero.
Mrs. Gillan:
Why is the Minister congenitally incapable of answering the question on the Order Paper? As that answer bore no relation to my question, I shall tell him that, today, 10 million people lose the married couples tax allowance, and that, of those 10 million people, 5 million will not qualify for the child tax credit. Is the Minister proud to be part of a Government who have removed the last recognition of marriage from the tax system and a Government whose stealth taxes mean
Mr. Smith:
The Budget's success has clearly upset Conservative Members. My colleagues and I are proud to be members of a Government who are focusing resources on families with children and tackling the obscenity of the extent of United Kingdom child poverty which we inherited from the previous, Conservative Administration. The fact is that 5 million families will benefit from the child credit. Moreover, from next week, people will see the record increase in child benefit--£15 for the first child and £10 for others. From June, they will see the increase in the working families tax credit--£4.35 extra for a child under 16. From next April, they will see the children's tax credit of £8.50 a week. Families are benefiting from those measure because we are a Government who are working hard for hard-working families--whereas the previous, Conservative Government consigned millions of children to poverty.
Mr. Swayne:
Madam Speaker, do you think that the Chief Secretary's failure to answer question 7 was intentional or unintentional? The question is quite simple, and the answer has to be a number. I have asked the question twice before, but twice before the Chief Secretary has failed to give me the answer. How many families is it? My hon. Friend the Member for Chesham and Amersham (Mrs. Gillan) says that it is 10 million. Is it 10 million? Is the right hon. Gentleman ashamed to say the answer?
Mr. Smith:
The hon. Gentleman not only did not listen to my answer, but seems not to have read his own question. His question was to ask the Chancellor of the Exchequer:
Mr. Brady:
Are not the Chief Secretary and the Chancellor, in their Budget tax increase, which is effective today, also hitting 200,000 pensioner couples who this year will lose the married couples allowance? Will not those couples each be up to £500 a year worse off? Is not the Government's policy hitting hardest those who, in the Chancellor's phrase, are "most prudent" and have made some provision for themselves?
Mr. Smith:
It is very important on this question to underline that those pensioners who get the married couples allowance have not lost it as a consequence of our changes. Moreover, those who become pensioners from today will benefit not only from the higher rate of personal allowances, but from the introduction of a £150 winter allowance--which Conservative Members would take away from them--and a 10p tax rate on savings which we have introduced and which benefits 1.5 million pensioners. The minimum income guarantee for the poorest pensioners will give 1 million poor pensioner couples £1,000 a year more than they were receiving under the Conservatives.
Mr. Ian Stewart (Eccles):
The people of Eccles and Salford welcome my right hon. Friend's answer. The situation is a great improvement on what the Tories left. Does he agree that he should take no lessons from the Liberals, who were irresponsible in the city of Salford by suggesting an illegal budget, supported by their leader?
Mr. Smith:
I welcome my hon. Friend's support. He is right that we should accept no lectures from Opposition Members. However, we cannot let the issue go without mentioning that when the current shadow Chancellor was taking the axe to the married couples allowance, he said:
Mr. Bill Rammell (Harlow):
Does my right hon. Friend agree that any political party needs credibility on taxation? Does he also agree that to promise to cut taxation year on year, regardless of economic circumstances, while at the same time promising to match our huge spending commitments to schools and hospitals is not only incredible, but the most sure-fire way of returning to the economics of boom and bust? If one believes recent newspaper articles, it is a policy with which even the shadow Chancellor does not agree.
Mr. Smith:
Absolutely. The last time that the Conservatives made similar promises, they broke them all. They brought in the 22 tax rises and put VAT on fuel when they promised not to do so. Their sums do not add up. They cannot promise the so-called tax guarantee and at the same time say that they will maintain our levels of health spending. When they had the chance on the Budget, they refused to vote for the first £400 million for the health service from the tobacco tax.
How many married couples will be liable for higher-rate tax as a result of the withdrawal of married couples allowance.
I gave him the answer: it is zero.
We have considered the tax system and chosen the allowances that appear to have the least on-going justification or to be the most anomalous.--[Official Report, Standing Committee A, 22 February 1994; c. 348.]
Those are the words of the Conservatives.
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