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27 Nov 2002 : Column 343—continued

Mr. Brown: My hon. Friend, who takes an interest in these matters, should look at some of the public sector projects undertaken without PFI projects. For example, the Jubilee line was two years late and 50 per cent. over budget. That was one example of the many public sector projects that did not work as well as they should have. The lesson that we learn is that it makes sense to use the private sector when one seeks to combine the transferred risk with management expertise in transport, infrastructure and the building of hospitals and schools. After all, private sector companies construct the buildings. The means by which we bind them in and ensure that the buildings are well constructed and managed is the means by which we have secured greater value for money in the public sector.

Mr. Michael Jack (Fylde): With falling investment in both manufacturing and, equally worrying, the service sector, it is evident that a number of the fiscal measures enunciated by the Chancellor a few moments ago, which were said to benefit business, have not been working.

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May I inquire, in the interests of transparency, whether the Chancellor would be willing to ask the National Audit Office to evaluate the effect that his fiscal measures for business have had, so that we might at least on that occasion see the wood from the trees?

Mr. Brown: We are continuously evaluating the effect of our measures. That is what the pre-Budget and Budget processes are for. But is the right hon. Gentleman against the 30 per cent. corporation tax? Is he against the 3 per cent. cut that we introduced? Is he against the cut in small business tax from 23p to 19p? Is he against the capital gains tax cut from 40p in the pound to 10 per cent., which is helping many companies with business assets? Is he against those measures? [Hon. Members: XAnswer."] Well, if he thinks they should be evaluated he must have some doubts about their effectiveness. I believe we have proved that those are the right tax cuts for British business.

Alan Howarth (Newport, East): As he surveys the circumambient economic gloom, does my right hon. Friend share my relief that we in this country have been prudent enough not to go into the euro, and not to subject the United Kingdom economy to the deflationary pressures of the growth and stability pact? Does he endorse the calls made this week by the Governor of the Bank of England and the United States Treasury Secretary for the European Commission and the Eurozone countries to buck up, reform the system and make the contribution that they should make to economic growth?

Mr. Brown: My hon. Friend has strong views on these matters. I can remind him of what I said: the assessment of the euro will be made by June next year, and will take all such factors into account.

Tim Loughton (East Worthing and Shoreham): Earlier this week, the Chancellor berated the Confederation of British Industry and told it to stop whingeing about the likely impact of the extra £8 billion in national insurance contributions. He said that it was the CBI's duty to make its contribution to the NHS, because healthy workers helped their businesses. What has he to say to employers who already fund more than 2 million employees with private medical insurance, which in turn is contributing £390 million in benefit-in-kind taxation to his Exchequer this year? Is it right that they should suffer a double whammy, paying to keep people away from the NHS while at the same time paying tax in the form of additional national insurance payments?

Mr. Brown: But private insurance schemes need the national health service—for accident and emergency treatment, for the training of doctors, for public health and for so many of employees' health needs.

As for business costs in health care, in America many employees cost their employers about $100 a week in health insurance charges. In France the figure is about £60 a week, and in Germany it is about £30 a week. Those are the average social insurance costs. In every industrial country employers are paying in one way or another, while health care costs are going up. I believe

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that the national insurance charge for employers is less than anything being paid in France, Germany or America to cover employees for health insurance.

Mr. Tony McWalter (Hemel Hempstead): I welcome the Chancellor's statement, which I saw as—in the words of the right hon. and learned Member for Rushcliffe (Mr. Clarke)—a cunning Keynesian plot to counter the effects of the economic cycle. I admire my right hon. Friend's surefootedness in responding quickly to pressures on huge increases in companies' insurance costs, and look forward to learning the details; but may I contrast that with the absence of any comment on the crisis in university funding? If we do not act quickly, we will further erode the science base, to which my right hon. Friend made an important reference.

Mr. Brown: The inquiry into employers' liability insurance will go ahead under my right hon. Friend the Secretary of State for Work and Pensions. I recognise, as he does, the concern that is felt.

As for universities' finance, under the spending review a considerable extra sum, about £1.25 billion—some in association with the Wellcome Trust—is being put into science in the universities, and the rebuilding and modernising of the science base. And as for university funding in general, my hon. Friend may not know that in the spending review we allocated considerable sums to education. The specific allocation for universities will be made in due course.

Mr. Crispin Blunt (Reigate): From 1 May 1997 until yesterday, the British stock market underperformed the American stock market by 30.24 per cent. Why?

Mr. Brown: The hon. Gentleman knows that the balance between the companies involved in the British stock market is quite different from the American stock market. Most of what has happened has been effect of what has been happening to the IT sector. The hon.

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Gentleman should also know—and this is in reply to the shadow Chancellor's point—that since April there has been a 25 per cent. in the British stock market but a 40 per cent. fall in Germany and France.

Mr. Nick Gibb (Bognor Regis and Littlehampton): The Chancellor gave a figure of 37 per cent. for the proportion of GDP taken in tax. Does expenditure on working families tax credit, which used to be called family credit, count as public spending, or does it reduce the figure? If it is the latter, does that not make nonsense of all the right hon. Gentleman's figures?

Mr. Brown: We use all the internationally agreed assumptions about this. The position adopted by the previous Conservative Government on mortgage tax relief was at odds with the international conventions. I have given a report on this matter to the Treasury Committee and I am happy to pass it to the hon. Gentleman.

Chris Grayling (Epsom and Ewell): Can the Chancellor rule out further rises in personal or business taxation during this Parliament?

Mr. Brown: We made our commitments in our manifesto at the general election that we would not raise the basic rate of tax or the top rate of tax, and we stand by those commitments.

Adam Price (East Carmarthen and Dinefwr): The part of the Chancellor's statement dealing with public investment contained a tantalising reference to the importance of recognising the limits of markets in areas such as health care. Can the right hon. Gentleman tell us what he meant by that statement, and has he told the Secretary of State for Health or the Prime Minister?

Mr. Brown: We believe in the national health service, as I hope all right hon. and hon. Members do. That is what I mean about the limits of markets in health care.

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Points of Order

5.11 pm

Mr. Simon Thomas (Ceredigion): On a point of order, Madam Deputy Speaker. We are shortly to discuss the Health (Wales) Bill, and the Order Paper says that the third report from the Welsh Affairs Committee and the Government's response thereto are relevant. I am sure that they are, but it is also relevant that the Bill has been subject to considerable pre-legislative scrutiny by the Welsh Grand Committee, which consists entirely of Welsh Members, whereas, in theory, members of the Welsh Affairs Committee may be from any part of the United Kingdom and not from Wales. If future Bills relating to Wales are subject to pre-legislative scrutiny by the Welsh Grand Committee, can that be referred to on the Order Paper? It is important that right hon. and hon. Members know that the Welsh Grand Committee plays an important role in the pre-legislative scrutiny of legislation that relates only to Wales.

Madam Deputy Speaker (Sylvia Heal): The reference is usually to Select Committees, but if there has been an error on this occasion, the matter will be looked into.

Miss Anne McIntosh (Vale of York): On a point of order, Madam Deputy Speaker. You will be aware of the need for Members of Parliament to respect each other's parliamentary boundaries. You will also be aware of XErskine May", page 123, which says that to intimidate a Member in his parliamentary duties by threats is a contempt. Mr. Speaker has been helpful—

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