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Dividend Tax Credits
11. Mr. David Ruffley (Bury St. Edmunds): If he will make a statement on the abolition of the ACT dividend tax credit as it relates to pensioner incomes. [124956]
The Minister of State, Department of Social Security (Mr. Jeff Rooker): The abolition of advance corporation tax was part of a package of measures to encourage companies to invest in their long-term future. Removing the tax credit removed the encouragement for companies to pay dividends instead of retaining profits to finance future expansion. That is in the interests of all investors, both individuals and pension schemes, and will help to promote a thriving economy, which will benefit all pensioners' incomes.
Mr. Ruffley: The Minister should be aware that there are some 300,000 pensioners whose incomes are so low that they do not pay tax but who are modest shareholders. They now face the loss of about £75 a year as a result of the Government's abolition of dividend tax credit. Why did the Government impose this sneaky, unjust and unfair stealth tax on some of our poorest pensioners?
Mr. Rooker: To be honest, it is not possible to disaggregate the exact effect of a package of measures designed to improve economic performance. From the hon. Gentleman's experience as an economic consultant to the Conservative party, he knows that it is much better for businesses to base their decisions on the operation of the business, not on the vagaries of the tax system. Making the change made a substantial difference. The average return on pension fund investments in 1998 was 16 per cent; in 1999, it was 21 per cent. Part of the package was that corporation tax went down from 33 to 30 per cent. Pensions are a lifetime investment--the hon. Gentleman understands that--and they need a strong and healthy economy. That is what we are creating.
Lone Parents
12. Laura Moffatt (Crawley): What steps he is taking to help lone parents gain access to information about the labour market. [124957]
13. Mr. James Gray (North Wiltshire): If he will make a statement on the new deal for lone parents. [124958]
16. Mr. Jim Fitzpatrick (Poplar and Canning Town): What progress has been made with the new deal for lone parents. [124962]
The Parliamentary Under-Secretary of State for Social Security (Angela Eagle): The new deal for lone parents offers a comprehensive package of back-to-work help for lone parents on income support, through an individual personal adviser service--and it is working.
More than 148,000 lone parents have participated in the new deal since the programme started; 50,000 have found jobs and nearly 16,000 have entered education or training.
Laura Moffatt: There is little doubt--especially in my constituency of Crawley--that the whole programme has been warmly welcomed by lone parents, who are thrilled by the response they receive when they go to the Employment Service. May I raise the issue of child care? Will my hon. Friend enlighten the House as to how all lone parents--women and men--get information about the availability of child care places? There has been an enormous increase in the number of places available. Is there good departmental working so that lone parent advisers can give the information about the location of those places to our new dealers, so that they can take advantage of them?
Angela Eagle: Yes; by the end of this year, the expansion of child care is due to create 180,000 new child care places, not counting the extra places created in nurseries for four-year-olds and for those three-year-olds whose parents want them. In practical ways, we are allowing lone parents--who were left on the scrap heap by the Conservatives and given no practical way to get back into work so that they could be better off--to take those steps into work. So far, 50,000 of them have done so; 16,000 are undertaking training and education to improve their job prospects.
Mr. Gray: The Minister makes use of the figure of 50,000 lone parents--the number, she says, who have found jobs since 1 May 1997. Will she admit that the reality is that the figure of 50,000 includes all lone parents who have found jobs during that time--most of whom have nothing whatever to do with the new deal? The truth is that only 1 per cent. of lone parents who found jobs say that the new deal was the reason they did so. If that figure is put against the cost of the programme, the cost is
£22,000 per job. Will she admit that that is an expensive gimmick, and that it is not only a gimmick but a flop? Will she abandon it?
Angela Eagle: No, it is not a flop, nor is it a gimmick; it is giving many thousands of lone parents good chances to get back into work. They were offered nothing by the Conservatives. The programme is key to our policies in the battle to end child poverty. It is clear from their pronouncements that the Tories--who created the large increase in child poverty of the past 20 years--are not interested in ending it. They have already announced that they will abolish the scheme--they will abolish the new deal, the working families tax credit and help with child care. That is some Tory guarantee for lone parents--"You're on your own".
Mr. Fitzpatrick: Will the Minister commend with me the efforts of Miss Carole Lowry and her Employment Service lone parents team covering Newham and Tower Hamlets? Miss Lowry is confident that the first of nine pilots for London to train child minders will be as successful as the existing classroom assistants training scheme that has been running in Tower Hamlets and Newham. Does the Minister agree that those are the types of employment opportunity that many lone parents trying to break back into the job market would find attractive? Would not such opportunities be jeopardised if the Conservatives had their way and abolished the new deal for new parents?
Angela Eagle: Yes, the Tory party says that it would save the £190 million that we are spending on the new deal for lone parents, but 90 per cent. of that spending pays for itself. It would therefore save very little money and it would consign the 1 million lone parents whom we inherited and who were given no help by the previous Government to the dole.
Let me provide some figures. In the final years of the Tory Government--between 1991 and 1997--there was a 14 per cent. increase in the number of lone parents on income support. The record speaks for itself. Between 1997 and 2000, there has been a 10 per cent. fall in that figure--100,000 fewer lone parents are on income support than we inherited. That, by anyone's measure, is success.
National Air Traffic Services
3.30 pm
Mr. Bernard Jenkin (North Essex) (by private notice): To ask the Secretary of State for the Environment, Transport and the Regions if he will make a statement on the failure of National Air Traffic Services computer systems on Saturday 17 June and the ensuing chaos for air travellers.
The Minister for Housing and Planning (Mr. Nick Raynsford): As has been widely reported, the flight data processing system--FDPS--at the London air traffic control centre at West Drayton suffered a software failure last Saturday, 17 June. That resulted in extensive disruption to air traffic and consequent delays to air passengers over the weekend. I naturally very much regret the serious inconvenience that that failure caused to passengers and to airlines, and I understand that the chief executive of NATS is issuing an apology to his customers today.
The main concern of NATS is to maintain and enhance safety in air traffic control. When faced with problems with the FDPS software on 17 June, NATS therefore acted immediately to maintain safety standards by imposing tight limits on the flow of aircraft in UK airspace. It maintained service to aircraft and safety standards, in the first instance, by using stand-by procedures. Those procedures involve the manual transcription of flight details, which creates additional work for controllers who can therefore handle safely fewer flights than normal. The delays experienced by airlines and passengers were a direct consequence of these measures.
NATS staff have been working hard to identify and correct the problem with the FDPS software, which had malfunctioned on one previous occasion on 9 June. The software in question was upgraded some three months ago to meet changes in the way that NATS manages UK airspace. Upgrading the software is a common occurrence. The FDPS is a relatively modern computer system, but it has to be upgraded regularly to match growing levels of traffic and changes in NATS operating procedures to cope with that growth.
My understanding is that NATS has yet finally to resolve the underlying problem with the new software. NATS continues to work on that, but in the meantime has reverted to the fallback system, which involves using the previous well-tried version of the software. This takes some hours to set up and therefore could not be immediately deployed when the software problem came to light. However, this back-up system, which was the main system until three months ago, is now functioning well and air traffic should substantially be back to normal today. It is the intention of NATS to continue to operate this well-tried system until the problem with the new software has been identified and remedied.
This incident demonstrates the importance of the air traffic control system to the well-being and smooth operation of the United Kingdom. It also demonstrates the commitment of NATS and its staff, at all levels, to maintain safety in our skies. It shows the importance of building on NATS operational excellence with investment
in new technology and world-class project management skills, so as to meet the demands of the growing market in air transport.
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