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House of Commons

Thursday 6 December 2001

The House met at half-past Eleven o'clock


[Mr. Speaker in the Chair]

Oral Answers to Questions


The Chancellor of the Exchequer was asked—

Public Service Agreements

1. Mr. Mark Francois (Rayleigh): What work his Department has carried out to date on the public service agreements that will form part of the 2002 spending review. [18682]

8. Mr. Andrew Robathan (Blaby): What work his Department has carried out to date on the public service agreements that will form part of the 2002 spending review. [18691]

The Chief Secretary to the Treasury (Mr. Andrew Smith): The Cabinet Committee on Public Services and Public Expenditure, which is chaired by my right hon. Friend the Chancellor of the Exchequer, monitors Departments' performance against their public service agreements. Departments will propose a new set of PSAs covering the period 2004 to 2006 as part of the 2002 spending review decisions, which will be published at the end of the review.

Mr. Francois: The Chancellor's PSAs cover a wide range of Departments, including the Department of Health. From his perspective, can he or one of his Ministers please explain why, if the Treasury's claims that it is putting ever more money into the health service are correct, waiting times in accident and emergency units are going up instead of down?

Mr. Smith: The progress that we are making on the national health service in implementing our public service agreements and targets is evidenced by the fact that, as we said we would, we cut waiting lists by 100,000 and have increased the number of nurses by 17,000 and the number of doctors by 6,700. Also, some 600,000 more operations are taking place in the NHS and we have the biggest hospital-building programme in its history. This Government and this party would not follow the advice of the shadow Chancellor, who describes the NHS as a "Stalinist creation" and wants to bring in charges.

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Mr. Robathan: May I quote from objective 1 for the Cabinet Office in the public service agreements for 2001 to 2004? That objective is

Given all the fine words that we get from the Government about freedom of information, as they are the only Government who have ever refused to comply with the findings of the parliamentary ombudsman on the code of practice on access to Government information, are not these public service agreements yet another example of fine words but absolutely no substance in reality?

Mr. Smith: Not at all. We are complying with the public service agreements and our requirements under the relevant codes. The evidence is there in the extra investment and extra quality of services that the people of this country are seeing.

Mr. John McFall (Dumbarton): I welcome this innovative feature of the spending review, which was introduced in 1998. However, we are aware that not all the money allocated last year was spent. Indeed, I think that £7 billion had to be spent. Can my right hon. Friend give me an assurance that the public service agreements will help that money to be spent, so that we can get delivery on the ground? There was also a plethora of targets. Can he assure us that we have targets not merely for the sake of targets, but for delivery at the end of the day?

Mr. Smith: On the architecture of the public service agreements, I echo what my hon. Friend says in welcoming this innovation, as did the National Audit Office, which described the introduction of public service agreement targets and, in particular, the move to outcome-focused targets as

I also agree with him that it is delivery on the ground that matters. That is why we realigned the targets more closely with the key priorities in the last spending review and are working with the delivery unit in No. 10 and with the Departments to ensure that promises made are promises kept.

Mr. James Plaskitt (Warwick and Leamington): What prospect would there be of delivery on any single one of these public service agreements if it were Government policy to get public spending down to 35 per cent. of gross domestic product?

Mr. Smith: There would be no prospect of such progress. Of course, that is the policy of the right hon. and learned Member for Folkestone and Hythe (Mr. Howard).

Mr. Michael Howard (Folkestone and Hythe): How astonishing it is, in view of the importance of the question, that the Chancellor of the Exchequer should run away from it and leave it to the Chief Secretary to answer. In relation to achieving the aim of the public service agreement on health, what importance do the Government attach to their policy of raising spending on health care to the European average by 2005?

Mr. Smith: It is very important indeed. That is why that policy was set out by my right hon. Friend the

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Prime Minister in Question Time last Wednesday and yesterday, and by my right hon. Friend the Chancellor in Monday's debate on public services. It is the Government's policy.

Mr. Howard: In that case, will the Chief Secretary answer one of the questions that I asked the Chancellor on Monday, namely, does that mean the European average as it was in 2000, as it is in 2001 or as it will be in 2005?

Mr. Smith: If I recall correctly, the most recent figure for the European average is from 1998, when it was 7.9 per cent. The Prime Minister committed us yesterday to achieving 8 per cent. in 2005. We shall achieve that target.

Mr. Howard: Is that the sum of the Government's ambition—to reach by 2005 the European average as it was in 1998? Does not that show the utter confusion at the heart of the Government's policy on health? Is not it extraordinary that they make a song and dance about that target when people in this country are dying from illnesses that they would survive if they lived elsewhere? Is not the meddlesome Chancellor at the heart of the mess?

Mr. Smith: I think that the shadow Chancellor is trying to rerun Monday's debate when my right hon. Friend the Chancellor and my hon. Friend the Member for Dumbarton (Mr. McFall) comprehensively demolished him. When challenged on whether he would keep the NHS free at the point of need, he would not confirm that. He remains committed, as he said in the last Parliament,

That would inflict incalculable damage on our national health service, which the right hon. and learned Gentleman described as a "Stalinist creation".

Working Families Tax Credit

2. Mr. Huw Edwards (Monmouth): How many people in Wales receive the working families tax credit. [18683]

7. Harry Cohen (Leyton and Wanstead): What assessment he has made of the impact on child poverty in (a) London and (b) other parts of the United Kingdom of the working families tax credit; and if he will make a statement. [18688]

The Chancellor of the Exchequer (Mr. Gordon Brown): Seventy-six thousand families in Wales and 95,000 families in London are among the 1.3 million United Kingdom families who benefit from the working families tax credit. Together with other policies, it has taken 1.2 million children out of poverty.

On Monday, the House will debate the Tax Credits Bill, which will create from 2003 the working tax credit and the child tax credit. Final decisions on that will be announced in the Budget. I can confirm that tax credits will disregard maintenance payments for the working tax credit, and that therefore work will pay even more.

Mr. Edwards: Does my right hon. Friend agree that the WFTC has been a valuable instrument in enabling

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people to get off benefit and into work, and an important measure against child poverty, for which the Government have not had the credit that they deserve?

Some small employers, who employ two or three people, have approached me. They are conscious of the problem of administering the WFTC and believe that it might discourage some small employers from taking on, for example, single parents. Will my right hon. Friend consider the administration problems for small employers?

Mr. Brown: That is precisely why the new integrated child credit will streamline the procedures. On my hon. Friend's first point about the success of the WFTC, not only have we taken 1 million children out of poverty, but it is our target to take another million out of poverty in this Parliament. We also aim to ensure that work pays for people who take up jobs.

There are 170,000 more single parents in work and many more people have been able to take up work because they know that it will pay more than social security benefits. Other countries around the world are considering the policy to ascertain whether they should adapt the same policy.

I am surprised that the Conservative party, which opposed the minimum wage and the new deal, also opposes the WFTC. After all, Ronald Reagan said of a similar system in the United States:

Mr. Speaker: I call Harry Cohen.

Hon. Members: Where is he?

Mr. Speaker: I call Mr. Gibb.

Mr. Nick Gibb (Bognor Regis and Littlehampton): What is the Chancellor's assessment of the burden on small businesses of paying the benefit through the payroll system? Would not it be better to pay it directly to the homes of those entitled to it?

Mr. Brown: The regulatory impact survey has been applied to the benefit. The hon. Gentleman should take into account the fact that the measure benefits businesses, which are thereby able to get people to take jobs that they would otherwise not accept. It backs up the minimum wage and makes work pay. It pushes up the wages and take-home pay of the employees especially of small businesses, which might not otherwise be able to attract people. Like the earned income tax credit in the United States, the WFTC has widespread support. Belgium, the Netherlands and Spain are considering the WFTC and France has already introduced a version of it. It is the modern way of combining efficiency in business with fairness for business. It is time that the Conservative party, which opposed the minimum wage and the new deal, started supporting the WFTC.

Mr. Edward Davey (Kingston and Surbiton): Will the Chancellor admit that 43 per cent. of children in London are living in poverty, that London has a higher percentage of families living in poverty than any other region, and that the initial analysis of the impact of the working

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families tax credit on households in receipt of housing benefit shows that families in London receive less benefit from his policy than families in other regions? As he considers the new policy of an integrated child credit, will he ensure that families and children in London do not lose out?

Mr. Brown: It is true that a report is being prepared on the situation in London. There are 95,000 families in London receiving the working families tax credit, which is a smaller proportion of the population than in the rest of the country. We are examining how to develop the integrated child credit and the employment credit in the future, but the fact is that 95,000 families in London are better off than they would otherwise have been because there is a Labour Government who have adopted the working families tax credit.

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