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Pensioner Incomes

7. Bob Spink (Castle Point): What the average income of pensioners was in 2002–03. [118663]

The Chief Secretary to the Treasury (Mr. Paul Boateng): The latest information available is for 2000–01. In that year, pensioner couples had an average income of £301 per week, and single pensioners had an average income of £160 per week.

Bob Spink : Does the Chief Secretary accept that the highway robbery of £5 billion a year from pension funds through advance corporation tax by the Chancellor and his partner in crime, the Prime Minister, is a major cause of the devastating failure of final salary pension schemes?

Mr. Boateng: No, that analysis is as misleading as it is inaccurate. The truth is that ACT was part of a wider package that involved reductions in corporation tax—long overdue reforms addressing a distortion that was not promoting investment in the British economy, which ought to be widely welcomed on both sides of the House.

David Cairns (Greenock and Inverclyde): When calculating pensioners' income, does my right hon. Friend set aside expenditure that pensioners incurred previously but no longer have to incur—in particular, expenditure on eye tests, bus travel and, for older pensioners, television licences? Is not the true income of pensioners even greater when that is taken into

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consideration, showing that pensioners are much better off under this Government than they were under the Conservative Government?

Mr. Boateng: My hon. Friend makes a fair point. He might have added to it the reduction in VAT on fuel, concessionary travel for pensioners and the introduction of a 10p starting rate of tax, all of which have benefited pensioners. All of those are things that we have done, and that Conservative Members failed consistently to do during the years in which they had stewardship of the economy.

Mr. David Laws (Yeovil): On the issue of pensioner incomes, does the Chief Secretary recall reading recently about the agreement between the Chancellor of the Exchequer and the Prime Minister a numberof years ago to sign up to something called a fairness agenda? Under what part of the fairness agenda should the Chancellor of the Exchequer, who earns about £140,000 per year, pay the same council tax as many poor pensioners on far lower incomes?

Mr. Boateng: The hon. Gentleman's point fails to address the real benefits that have accrued to pensioners. The reality is that the fairness to pensioners comes from an average increase for the poorest third of pensioner households of £1,600 a year in real terms, amounting to more than £30 a week, from October 2003. That is the real fairness for pensioners. With the minimum income guarantee, and with 400,000 fewer pensioners living in relative low-income households than in 1996–97, pensioners are really benefiting from the measures taken by my right hon. Friend the Chancellor.

Angela Eagle (Wallasey): Will my right hon. Friend accept congratulations from many pensioners who live in Wallasey and elsewhere on the magnificent record in ending pensioner poverty, with the introduction of the minimum income guarantee, and in dealing with the terrible legacy of pensioner poverty left by the previous Government? Will he also look forward to the introduction of the pension credit, which will build on that, in October?

Mr. Boateng: My hon. Friend makes an important point. I want to pay tribute to the contribution that she made as a Minister in the Department of Social Security, as it then was, to alleviating pensioner poverty. The reality is that, as a result of the pension credit, we are currently spending £9.2 billion extra in real terms on pensioners, which will be £5.7 billion more in 2004–05 than if the basic state pension had been linked to earnings since 1998. Those are real benefits in tackling pensioner poverty.

Private Finance Initiative

8. Gregory Barker (Bexhill and Battle): What the current total is of PFI debt guaranteed by the Treasury; and what the mechanism is for reflecting this in the national accounts. [118664]

The Chief Secretary to the Treasury (Mr. Paul Boateng): PFI debt is not normally guaranteed by the Treasury. A letter of comfort has, however, been issued

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in relation to the debt issued by London Underground. A guarantee is in place in relation to the bonds issued for the public-private partnership development of the channel tunnel rail ink. Contingent liabilities for both have been laid before the House.

Gregory Barker : Many people will be surprised that the total PFI figure is not larger, but is that not because the Government exclude from their PFI calculations the debt of Network Rail and London Underground? Can the Chief Secretary tell the House what the total PFI figure would be if it included the debt of Network Rail, as the National Audit Office says it should?

Mr. Boateng: I can tell the hon. Gentleman exactly: £28.9 billion. All our PFI deals are subject to audit by the NAO or the appropriate audit body. The rules for accounting for PFI are drawn up by the independent Accounting Standards Board, not by the Government. We have a record of transparency and accountability that far exceeds the record of the previous Administration.

Mr. Howard Flight (Arundel and South Downs): Will the Chief Secretary confirm that total Government PFI liabilities have risen some 17 per cent. to £109 billion, and that those gross liabilities, payable over 25 years, are now equivalent to 12.5 per cent. of GDP or, if discounted at 5 per cent.—a high level in today's interest rate environment—to 9 per cent. of GDP? On the figures that he has just given, does the right hon. Gentleman accept that if one adds to those the liabilities guaranteed by the Strategic Rail Authority, the figure is 15.5 per cent. of GDP, or 12 per cent. of GDP, which the Government have off balance sheet, resulting from PFI and PPP liabilities? [Interruption.] The Chancellor, who is chattering to himself, has not commented that no other EU country has off balance sheet PFI or PPP liabilities of that size. Do the Government propose to harmonise or reduce their PFI liabilities as part of their convergence agenda?

Mr. Boateng: The hon. Gentleman made rather a mess of that one. He makes precisely the opposite point from that made by his hon. Friend the Member for Bexhill and Battle (Gregory Barker). The figures are as I gave them to the hon. Member for Bexhill and Battle. The rules that we use to account for PFI are no different from the accounting treatment used by the previous Government. If anything, the accounting standards have become stricter since 1997 because of our adoption of FRS 5. The only figure that the hon. Member for Arundel and South Downs (Mr. Flight) need bear in mind is the 20 per cent. cut in public services—which are currently being improved by PFI—that would be imposed were he ever to gain the stewardship of our economy.

Biofuel Duty

9. Paddy Tipping (Sherwood): If he will make a statement on the level of duty on biofuels. [118668]

The Economic Secretary to the Treasury (John Healey): In his Budget statement, my right hon. Friend the Chancellor announced that, from 1 January 2005,

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we would introduce a duty incentive for bioethanol, set at 20p per litre below the rate for sulphur-free petrol. Biodiesel already benefits from a duty incentive of 20p per litre below the rate for ultra-low sulphur diesel.

Paddy Tipping : I am grateful for my hon. Friend's continuing interest in the matter. Has he had an opportunity to read the recently published Sheffield Hallam university report, which concludes that the rate of carbon dioxide reduction is greater than previously thought? Given the clear environmental gains and the new biofuels directive that is coming, will he and his colleagues re-examine the rate of duty in time for the next Budget?

John Healey: I am indeed aware of a Sheffield Hallam university study. It was designed to give us better evidence to make such judgments in future. For the moment, we judge the duty rates that we have set to be appropriate to reflect both the potential environmental benefits of biofuels and what is affordable and good value for public money to achieve those environmental gains.

Mr. Julian Brazier (Canterbury): Over the years, the Chancellor has consistently advocated in his Budgets the role of the Treasury in promoting good environmental practice and given us lectures on joined-up government. Is there not an inconsistency between the policy of rebates for biofuels that the Minister has just announced and the determination of the Department for Environment, Food and Rural Affairs that the crops cannot be grown on land set aside and otherwise wasted?

John Healey: Although we are conscious of the potential of the duty rate cuts for farming and non-food crops and support diversification across government in other ways, the incentives for biofuels are not targeted at supporting farmers or subsidising agricultural production. I offer the hon. Gentleman a word of caution: if we introduce these biofuel duty discounts too fast or they are too large, we will increase the incentive to import biofuels, decrease the prospects of our own UK-based production industry growing and increase the risk that farmers in countries other than our own will benefit.

Mr. Peter Pike (Burnley): Does my hon. Friend accept that, despite all he has said, changes are taking place with regard to the widening of the European Union and the common agricultural policy, and will he assure me that we will keep the policy in mind so that we can make it possible for people to continue to grow biofuels in a sensible way?

John Healey: As with all taxation, we monitor the issue very carefully and we are prepared to review the appropriate rate, particularly if new evidence and analyses are presented to us.

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