| Previous Section | Index | Home Page |
Non-domiciled Tax Status
7. Norman Baker (Lewes): If he will review the treatment of those claiming non-domiciled tax status. [124648]
The Paymaster General (Dawn Primarolo): In the 2002 Budget, the Chancellor announced a review of the residence and domicile rules as they affected the tax liabilities of individuals. That work is continuing. A background paper was published on Budget day 2003. It provides a framework for further analysis and discussion so that any specific options for reform are based on the widest possible understanding of their effect.
Norman Baker : I am grateful for that, but we were promised opinions and proposals in the November 2002 pre-Budget report. It is taking a long time to provide them. Does the Paymaster General accept that ordinary, decent, hard-working people in my constituency who pay their taxes in full find it a little rum that a few multi-millionaire freeloaders pay next to nothing?
Dawn Primarolo: The hon. Gentleman follows the debate closely and he therefore knows that the rules are broadly unchanged since the early 19th century. In the absence of guidance, they have largely built up through case law. Consequently, the current rules are complex and, as he says, poorly understood. They do not reflect the realities of today's integrated world. In taking forward the review and examining all the questions, including the hon. Gentleman's, it is vital that the outcome is fair, clear, easy to operate and supports the competitiveness of the UK economy, for his constituents as well as mine and those of other hon. Members.
Value Added Tax
8. Bob Russell (Colchester): What plans he has to reduce value added tax on residential conversion works to existing buildings. [124649]
The Economic Secretary to the Treasury (John Healey): The Government have already reduced the VAT on most types of residential conversion work to the lowest rate permissible under the European Community VAT rules, but we will continue to keep the VAT treatment of that and other types of construction work under review.
Bob Russell : I welcome the progress that has been made, but I am sure that the Minister knows of English Heritage's campaign for 5 per cent. VAT throughout the building industry, for new build and established buildings. Why do the Government refuse to follow the advice and recommendation of English Heritage?
John Healey: I am aware of English Heritage's campaign, about which several hon. Members have contacted me recently. Creating a flat rate of VAT for all building work, for which English Heritage argues, would mean that we would have no option but to give up our zero rates, including on new charity buildings and new housing. I understand the argument that a VAT level playing field for all sorts of construction would encourage the repair of existing properties as opposed to the building of new ones. We will continue to keep those matters under review. We have undertaken to consider English Heritage's representations and several others in the context of a current European Commission review of the reduced rates rules at European level.
Mr. Peter Pike (Burnley): Despite our welcome actions, does my hon. Friend believe that we have done enough for areas such as Burnley, which has 4,500 empty houses? We need to do more in the housing pathfinder renewal areas because although we might need to demolish 2,000 houses, the cost of converting two into one and other schemes to save some others is expensive. We need more Government assistance to make the options viable.
John Healey: I understand my hon. Friend's point. Most conversions of residential properties have been done at a reduced rate of VAT since 2001. That is also true of non-residential buildings, about which my hon. Friend is concerned, and conversion work to increase the number of residential units in existing buildings. The additional support for which he rightly argues in some of our most disadvantaged areas can come from beyond the VAT regime. We are providing for precisely that, especially in the 2,000 most disadvantaged wards in the UK. We are designating them as enterprise areas.
Sir Patrick Cormack (South Staffordshire): Is the hon. Gentleman aware that the English Heritage campaign has strong support from the all-party arts and heritage group, which has some 300 members from all
parties in both Houses? May I draw his attention in particular to the problems faced by historic churches and by those charged with their repair?
John Healey: I am aware of the support from the all-party group, and of the hon. Gentleman's support in particular. He has spoken personally to me about this matter, and I know of his work on the all-party group. All that I can say to him is that we are willing to consider proposals for new reduced rates in the context of the current European Commission review. We have received representations on proposals for reduced rates for a wide range of items, from bicycles and compact discs to restaurants and houseboats. We shall consider them all carefully, but they will be considered in the round, and in the context that I have just mentioned.
Private Medical Insurance
9. Siobhain McDonagh (Mitcham and Morden): What representations he has received about giving tax relief to private medical insurance payments. [124650]
The Chancellor of the Exchequer (Mr. Gordon Brown): We estimate the Exchequer cost of full tax relief for private medical insurance to be about £1 billion—money that would be lost to the national health service.
Siobhain McDonagh : I thank my right hon. Friend for that answer. Does he agree that the way to tackle waiting lists for hip and knee replacements in Mitcham and Morden is not through expensive subsidy of the private sector but by developing cutting-edge projects such as the south-west London treatment and diagnostic centre, which will open in December and, we hope, reduce waiting lists to six months?
Mr. Brown: I am grateful to my hon. Friend for making that point. I know that she does a great deal in fighting for more resources for the health service in her area. It is true that, if we were to expand capacity in the private sector using policies that have been put to us, operations would cost twice as much as in the public sector. If we were to give expensive tax relief to private medical insurance, and to subsidise vouchers for private medical care, the overall cost could be in the order of £2 billion, but pensioners would still have to pay £5,000 for a hip joint operation. We consider that unfair.
Mr. Edward Leigh (Gainsborough): The Public Accounts Committee recently undertook detailed discussions with the Cour des Comptes in Paris on the back of a study published by the National Audit Office on international health comparisons, which showed that health care in France and Germany is far more comprehensive and effective than ours. Will the right hon. Gentleman therefore adopt a third way by rejecting the ideological solutions that suggest that either a central, state-run system or an entirely privatised system is best, and follow the French and Germans in promoting new ways to encourage ordinary people to devote a greater proportion of their income to their health care?
Mr. Brown: What the hon. Gentleman, who is the Chairman of the Public Accounts Committee, forgets is
that the French spend substantially more on health care as a whole. Even in the public sector, they spend more than is spent in the United Kingdom. It therefore seems strange that he is also putting forward the proposal that he will not support additional national health service spending here. So far as private medical insurance is concerned—[Interruption.] There seems to be a division within the Conservative party: some people will not support additional health spending, but some are now suggesting that some of their Back Benchers do support it. The shadow Chancellor said clearly today that he did not support additional health service expenditure—
Mr. Michael Howard (Folkestone and Hythe): indicated dissent.
Mr. Brown: The shadow Chancellor said that very clearly today, and it will be in the Hansard record tomorrow. So far as private medical insurance and the French model of social insurance are concerned, the hon. Member for Gainsborough (Mr. Leigh) also forgets that all the private medical insurance policies on offer in Britain at a rate that people might even consider exclude treatment for conditions or symptoms arising from physiological or natural causes, critical care, routine health checks, out-patient consultations and physiotherapy. In other words, people are paying substantial amounts of money for policies but not getting complete cover.
Trade Liberalisation
10. Syd Rapson (Portsmouth, North): What discussions he has had on progress with world trade liberalisation. [124651]
The Chancellor of the Exchequer (Mr. Gordon Brown): At the International Monetary Fund, I chaired a discussion of the trade negotiations by the governors of the IMF and central banks and the head of the World Trade Organisation. That was in the run-up to what we hope will be the successful outcome of the trade negotiations in Cancun in Mexico.
Syd Rapson : I thank the Chancellor for that reply. Will he join me in congratulating the Trade Justice Movement and Christian Aid on organising last weekend's campaigns—involving many Members of Parliament—to raise liberalisation issues across the country? The question being asked in Portsmouth, in support of the Government's move, was whether the Government would maintain the momentum to enable the poorer countries to be free to choose the way in which they obtain sustainable development and poverty reduction in their own countries.
Mr. Brown: My hon. Friend is right. A successful outcome for the world trade negotiations could lift 300 million people out of poverty. That is why I applaud the work done last weekend in presenting the case of the Trade Justice Movement to Members of Parliament in all political parties, and why I hope that the trade discussions that will take place in Cancun will gain extra momentum.
There are a number of areas in which progress must be made. The first is agriculture, but that has been helped by what happened in the European Union last week, and I hope that the talks can now move to a successful conclusion. The second is pharmaceuticals. As my hon. Friend knows, there is considerable worry about a failure to reach an agreement allowing drugs, particularly generic drugs, to go to the poorest countries. I hope that those who have not been able to sign up to that agreement will now do so.
As for access to the developing countries generally, I hope that my hon. Friend agrees that the Government's record in ensuring that the developing countries' voice is heard in the trade negotiations is something of which we should be proud, but also something that we should continue and extend.
Mr. John Bercow (Buckingham): Given that agriculture subsidies of up to $1 billion a day are gravely damaging to some of the poorest people in the world, and that the poor countries have vastly fewer resources to enable them to make their case in international trade negotiations than their richer counterparts, will the Chancellor endorse the Conservative proposal to establish an advocacy fund, paid for by the richest countries in the world, to allow the poorest countries in the world to choose the best possible legal representation to protect their interests and ensure that they will enjoy the level playing field that they have not enjoyed in the past?
Mr. Brown: I will of course look at any proposal that is presented, but the hon. Gentleman must recognise that the United Kingdom Government have been helping the developing countries through the IMF and the World Bank and in the WTO talks, and will continue to do so.
The decoupling that took place in last week's European Union agriculture talks is of some help, but we shall have to move the talks forward with other initiatives in other areas over the next few months. If legal assistance is needed we shall be willing to consider it, as we have done in regard to debt relief and at the International Monetary Fund. I hope that the hon. Gentleman will acknowledge that, in involving the developing countries, we all share the same aims.
Mrs. Anne Campbell (Cambridge): Does my right hon. Friend agree that although further trade liberalisation is essential, there may be a case for offering protection to emerging markets in the least developed countries? That is one of the points made to me by members of the Trade Justice Movement when they visited my advice surgery. How will the issue be dealt with in the Cancun talks?
Mr. Brown: I agree that that is a point of contention between the WTO and others who are presenting proposals, including many non-governmental organisations that subscribe to the Trade Justice Movement. I believe that there is a way forward, however. The sequencing of capital liberalisation and trade liberalisation will enable us to bridge the gap between the position taken by some NGOs and that taken by some of the Governments who have not yet reached agreement in the WTO. I think that the answer
for some of the poorest countries is to work within the WTO to bring about a sequencing of their liberalisation. If they do so they will not lose out, and at the same time will gain the benefit of trade in the world market.
Mr. Stephen O'Brien (Eddisbury): The Chancellor has the details of the Conservatives' pledge to establish an advocacy fund to help secure a fair deal on trade for the people of the developing countries, consisting of contributions from the world's rich nations. Those details were in a letter from my right hon. and learned Friend the shadow Chancellor that the Chancellor received 10 days ago. The fund would allow developing countries access—according to their own choice—to the highest-quality economic advice and advocacy on trade issues and WTO round negotiations, and support in the settling of trade disputes.
As the Chancellor knows from that letter—and the answer that he gave my hon. Friend the Member for Buckingham (Mr. Bercow) was not unhelpful—this is designed to be a long-term, sustainable fund, despite being misrepresented as short-term by the Under-Secretary of State for International Development, who declined to correct his error. Our advocacy fund will go far beyond what is currently available from the Geneva advice centre.
On the bipartisan basis on which the Chancellor always seeks—and indeed receives—our support for initiatives to help developing countries, will he now respond to the proposals set out in my right hon. and learned Friend's letter, and support our advocacy fund initiative?
Mr. Brown: Of course, as I said earlier, we will look at every proposal that is put forward. The hon. Gentleman is suggesting economic advocacy but the hon. Member for Buckingham (Mr. Bercow) was suggesting legal advocacy. We will examine this issue in detail, but I will not be prepared to have international development funds being paid out in big fat fees to lawyers over the next few years. What I will do is to look at how we can help the poorest countries in all the areas in which they are negotiating—that includes the IMF, the World Bank and the WTO—and on which we have already made progress in terms of debt relief. We are prepared to look at such proposals, but there will be no huge payments in fat fees for lawyers.
| Next Section
| Index | Home Page |