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House of Commons

Thursday 12 December 2002

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 Spending

1. Ann Winterton (Congleton): What representations he received in advance of the pre-Budget report on the targets he has set for outputs from public spending. [85247]

The Chief Secretary to the Treasury (Mr. Paul Boateng): Numerous representations are received in advance of the pre-Budget report on a range of matters, including individual targets. Departments are responsible for delivering, and reporting progress on, their own public service agreements.

Ann Winterton : The Chief Secretary will be aware that concern about the Government's high rate of tax and spending growth featured in the International Monetary Fund report published this week, which highlights the need for effective and efficient delivery for taxpayers' money. Is he aware of the national health service data published today which show that up to April this year NHS funding was up by 21.5 per cent, but that hospital treatment outcomes are up by only 1.6 per cent. and hospital admissions are down by 0.5 per cent? When will we see real reform for real public service improvements—or will it be the same old story of missed targets, more tax and spend, and more failure?

Mr. Boateng: The hon. Lady's strictures are misconceived. I am well aware of the IMF report. It states that the economic achievements of the Government are due in no small part to our sound macro-economic policies. That was not something that could ever have been said about the achievements of the hon. Lady's party when it was in office.

In fact, the NHS figures reveal that there has been an 11 per cent. increase in the number of patients admitted to hospital against the comparable figure for 1997–98. The number of medical procedures taking place has

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increased by almost 1 million. That is a record to be proud of—resources accompanied by reform delivering results.

Caroline Flint (Don Valley): The three primary care trusts in Doncaster will see an increase in their funding of more than 30 per cent. over the next three years. When I was elected in 1997, there were huge health inequalities in the area and we have been trying to put that right. Although much has been done, we still need to focus on primary care to ensure that people do not develop diseases that may kill them later on in life.

Mr. Boateng: My hon. Friend makes a good point about the importance of ensuring that we address inequalities—hence the appointment of a Minister for Public Health, as well as our continuing drive to reduce inequalities, using targets, and the announcements made by my right hon. and learned Friend the Secretary of State for Health yesterday. Again, that amounts to resource, reform, results.

Mr. Michael Howard (Folkestone and Hythe): As the Chief Secretary knows, the Prime Minister and the Secretary of State for Health think that an important contribution to greater outputs from public spending on the health service can be made by foundation hospitals. The First Minister for Wales and the Secretary of State for Wales disagree. What is the Treasury view?

Mr. Boateng: The Treasury view was made clear by my right hon. Friend the Chancellor of the Exchequer when, in the course of the pre-Budget report to the House and subsequently, he made repeated reference to the benefits—actual and potential—of foundation hospitals, in terms of delivering resource with reform and meeting local needs according to the concerns of local people. That is something that Opposition Members should welcome.

Mr. Howard: We know why the Chancellor did not answer the question: because he told The Guardian less than a month ago that he was opposed to foundation hospitals. He thinks that they give NHS bosses too much power, so why will the Chancellor not tell the House what he told The Guardian?

Mr. Boateng: Not that Guardian breakfast again—how many times is that meal going to be regurgitated by the right hon. and learned Gentleman? He has the facts. My right hon. Friend the Chancellor supports foundation hospitals and so should the shadow Chancellor.

Dr. Nick Palmer (Broxtowe): Does my right hon. Friend agree that even those of us who take a special interest in Treasury affairs may be in danger of valuing improvement only by measurable output? For instance, the replacement of tricyclic drugs by modern drugs that has taken place in the NHS has transformed the lives of many patients, yet it is not measurable at all. Does my right hon. Friend also agree that the Conservative policy of not increasing funding is inherently implausible—

Mr. Speaker: Order.

Mr. Boateng: I agree with my hon. Friend on both counts—especially the latter. My hon. Friend's first

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point was extremely important: we need to get targets right. We need to ensure that they are not seen as an end in themselves but as a drive—a goad—to improve performance. That is what we are doing and I should have thought that it would be welcomed by hon. Members on both sides of the House, including the hon. Member for Congleton (Ann Winterton), who shares with me real concern about adoption policy. She would be the first to admit that the target of a 40 per cent. increase in adoption has helped to drive improvements in that area.

Business Taxation and Regulation

2. Mrs. Cheryl Gillan (Chesham and Amersham): What estimate he made in advance of the pre-Budget report of the annual cost to businesses of new (a) taxes and (b) regulations introduced since May 1997. [85248]

The Paymaster General (Dawn Primarolo): The Government's corporation tax changes introduced since 1997 have reduced business taxes. We now have the lowest corporation tax rates in the United Kingdom's history. The Government are committed to ensuring that regulations are fair and effective, balancing enterprise and encouraging productivity with protection for the individual.

Mrs. Gillan : I think that businesses listening to the Minister's reply will believe that she does not live in the real world. Is it not the truth that the burden of taxation and regulation on businesses has rocketed under this Government? From 1997 to the end of this Parliament, the director general of the CBI says that the Government will impose #47 billion of extra business taxation. That is equivalent to the entire gross domestic product of Wales. Is that not a shocking statistic? Does it not show that Labour is no friend to business in this country?

Dawn Primarolo: I am afraid that the hon. Lady, who I know is genuinely concerned about this issue, has incorrect information. For instance, she refers to the CBI's figures, but those figures, which are not a fair reflection, include the windfall levy—a manifesto commitment and an imposition to ensure that the taxpayer had a fair return on the public utilities after the previous Government had sold them off. If the hon. Lady looks at international comparisons, particularly those recently published by the Organisation for Economic Co-operation and Development, she will see that, if we take corporate tax income and employers' social security contributions, Britain is in the third lowest category among all our competitors. Our tax system, with corporate taxes going down—30, 19 and 0 per cent.—is the correct way forward, and the hon. Lady needs to tell us how much lower the Conservatives would go than zero.

Mr. Bob Blizzard (Waveney): Without revisiting the arguments about the supplementary charge on corporation tax for the oil and gas industry—that is now a settled matter—will my right hon. Friend consider what can be done to encourage more new exploration for oil and gas, which had almost fizzled out before the

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Budget? The energy review tells us that we need all the oil and gas that we can get. That is an important source of tax revenue, and undiscovered fields pay no tax at all.

Dawn Primarolo: I know that my hon. Friend takes a keen interest in the oil and gas industry. I also know that he is aware that the 100 per cent. tax relief and the abolition of royalties were introduced in recognition of the importance of continuing to ensure exploration for the national resource in the North sea for the benefit not only of those companies and jobs, but the taxpayer. I should like to reassure him that the Government continue to listen carefully to the industry and to follow developments closely to ensure that the changes that we have put in place deliver exactly the types of issue and investment that he wants to see, as do we.

Mr. Peter Lilley (Hitchin and Harpenden): Are the Government proud that, according to the OECD, taxes are now rising more rapidly in this country than in any other major country, eroding our competitive advantage? How is it that similar countries are able to cut taxes while improving their public services, but this Government have done the reverse?

Dawn Primarolo: The right hon. Gentleman will see from the pre-Budget report that taxes fell in this country as a proportion of national income. Given that he is a keen reader of the OECD's reports, he will also know that the OECD says that we have the lowest barriers to entrepreneurship of any major economy and that Britain is one of the best places in the world to do business.

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