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Euro Roadshow
6. Mr. George Osborne (Tatton): To ask the Chancellor of the Exchequer how many euro roadshow events he has attended in the past month. [138329]
The Financial Secretary to the Treasury (Ruth Kelly): Ministers have held a variety of meetings to discuss the euro in the past month. In addition, Treasury officials have held more than 150 meetings with opinion formers in Britain and Europe since the Chancellor's statement on 9 June.
Mr. Osborne : I gather from the Financial Secretary's answer that the Chancellor attended no roadshow events in the past month, unless one includes the radio interviews that he did last week. That is slightly surprising because the deal that he stitched up with the Prime Minister was that he kept the pound and the
Prime Minister launched a roadshow. Where is it? Why does not the Financial Secretary simply admit what we all know—that the roadshow does not exist?
Ruth Kelly: I was going to congratulate the hon. Gentleman on his appointment to the Front Bench. However, given his preoccupation with Ministers' diaries and who answers the question rather than the substance of the issue, perhaps he has already decided that he prefers to answer questions from the Back Benches.
Perhaps I can clarify a couple of points. Ministers continued to meet last month. Indeed, my right hon. Friend the Chief Secretary addressed a meeting in Scotland and I filled in for my right hon. Friend the Chancellor, who was taking paternity leave, at a meeting in London. As the hon. Gentleman knows, Treasury officials have been deeply engaged in continuing discussions with stakeholders in the past month as in previous months.
Roger Casale (Wimbledon): I invite the Financial Secretary to meet my constituents who have shown since at least May 1997 that it is possible to hold an open, balanced and rational debate about the euro and Britain's membership of the European Union. When she does that, will she remind them that a benefit of joining the euro would be the ability to lock in the economic stability that a Labour Government have created in this country and that entry would almost eliminate the risk of a return to the 15 per cent. interest rates that pertained when the Conservative party was in power?
Ruth Kelly: I know that my hon. Friend takes a great interest in those matters and of course I would be willing to meet his constituents. We have to put the national economic interest first—that is why we set up the five-test procedure. We shall review that at the appropriate time in the Budget.
Business Taxation
7. Bob Spink (Castle Point): To ask the Chancellor of the Exchequer what plans he has for changes in the taxation of business. [138330]
The Paymaster General (Dawn Primarolo): My right hon. Friend the Chancellor is considering representations on business tax, including corporation tax, and will make his pre-Budget statement in due course.
Bob Spink : Did the right hon. Lady read the CBI's comments about the 19 new business taxes in the previous Parliament and the decision to drive up national insurance contributions, which destroy business competitiveness and productivity? Last year, business investment fell by more than at any other time in the past decade. Will she undertake not to introduce the Government's proposed new taxes on businesses?
Dawn Primarolo: I am sure that the hon. Gentleman is fully aware of all the international comparisons with tax levels for businesses in the United Kingdom. He also knows that the Government have undertaken huge reform of the corporate tax regime to support businesses
through provisions on intellectual property rights, the research and development tax credit and intangible assets as well as through lowering corporation tax for large and small companies. All the comparisons show that the United Kingdom is the best place in which to do business. Digby Jones, director general of the CBI, echoed that when he said:
- "I would much rather be doing business in Britain than anywhere else in Europe . . . We are still the most successful economy in Europe."
Mr. Andrew Miller (Ellesmere Port and Neston): Does my right hon. Friend agree that we need to encourage the vehicle industry to invest in future technologies, some of which have a long gestation period? Does she also agree that, as part of that, it is important that we show our commitment by continuing to give support to interim technologies?
Dawn Primarolo: I am sure that my hon. Friend is fully aware of the importance of the research and development tax credit for innovation in any industry, and that its extension to the small and medium-sized enterprises has been crucial in ensuring that those ideas continue to be funded and developed. We keep the R and D tax credit continually under review, and the definition of it has reduced the maximum expenditure necessary to qualify for that tax credit. I will continue to look closely at its operation, to ensure that industry is rewarded for innovation and development and that the tax system encourages that.
Mr. David Ruffley (Bury St. Edmunds): Is the Minister aware that Digby Jones also said recently:
- "Ministers cannot keep siphoning off company funds without damaging investment, productivity and competitiveness. That will reduce the ability for the government to invest in public services—the money will simply not be there."?
Dawn Primarolo: We are not siphoning off funds, as the hon. Gentleman puts it. [Hon. Members: "It was Digby Jones."] The Government, in whose consultations Digby Jones is an active participant, want to reform the tax system to support growth, encourage stability, create investment and jobs, allow our businesses to grow and maintain the competitiveness of the British economy. All those things are being done, with stability at the heart of them, and Digby Jones agrees with that.
World Debt
8. Stephen Hesford (Wirral, West): To ask the Chancellor of the Exchequer if he will make a statement on progress the G7 Finance Ministers are making in tackling world debt. [138331]
The Chancellor of the Exchequer (Mr. Gordon Brown): Twenty-seven countries are receiving debt relief that will be worth $70 billion. Of the other 10 and more that are eligible, most are in conflict.
Stephen Hesford : Given the relative success of the debt relief talks, and the relative failure of the World Trade Organisation negotiations at Cancun, can my right hon. Friend see any possibility of convergence of the twin-track talks in order to benefit post-Cancun negotiations?
Mr. Brown: I am grateful to my hon. Friend, who I know takes an interest in these matters. He is absolutely right: the prospects of the developing countries depend not only on debt relief and adequate aid but on their ability to participate in the global economy. What comes out of the world trade talks is therefore crucial to their future. When we met at the International Monetary Fund and World Bank meetings in Dubai a few weeks ago, it was agreed that we should try to do everything that we could to remove the barriers to the resumption of trade talks. That will require Europe to make a move forward on the competition and investment clauses that were preventing agreement and progress. It will also require countries to look very carefully at their proposals on agriculture. I hope to meet the head of the WTO, Dr. Supachai, very soon to discuss what other things can be done by Governments in Europe and elsewhere to help to progress the talks forward, but I agree with my hon. Friend that we must ensure that they resume.
Rev. Martin Smyth (Belfast, South): I welcome the Chancellor's response. Could he tell us to what extent some of the debt has not been dealt with because of the recalcitrance of the Governments in certain countries about coming up to standard? Does he agree that, at a time when many people live in poverty even in the developed countries, we should not forget that those in the developing countries are much worse off?
Mr. Brown: I am grateful to the hon. Gentleman, and I know how much he does in Africa, working with the churches to help countries there to solve some of the problems that are preventing them from delivering decent health and education services to their people. The main reason debt relief has not progressed beyond the 27 countries is that most of the countries that would be eligible are in conflict, about to come out of conflict, or have made a decision to come out of conflict but not yet achieved it. I would bring debt relief up to $100 billion, which was our target, but we cannot sustainably give debt relief at a time when we have no clue as to how those resources would be used.
If countries come out of conflict, we are prepared to work with them on a restructuring plan so that they can rebuild their infrastructure and, at the same time, get rid of their debts. Conflict is the major barrier to debt relief. Of course we require transparency, and corruption in countries that are eligible for debt relief is a major issue. That is why, at all the recent meetings of the World Bank and the IMF, the emphasis has been on developing countries pursuing an anti-corruption, pro-stability policy to enable them properly to participate in the world economy.
Mr. Kelvin Hopkins (Luton, North): One way in which the developed world causes debt in the third world is by exporting heavily subsidised agricultural products, which devastates farming in those countries.
Would it not be a good idea to stop exporting surpluses, start buying more of those countries' food, and begin to seek the abolition of the common agricultural policy?
Mr. Brown: Agricultural issues are complex, but the basic problem is that agricultural protectionism cannot continue if the countries of which my hon. Friend speaks are to develop. That is why it is incumbent on the European Union and the American Government to make progress by liberalising agriculture and removing what are, in effect, subsidies worth $350 billion—seven times the amount given to the poorest countries in development aid.
My hon. Friend is absolutely right. We need to push further in the agriculture talks. Agricultural protectionism serves the poorest countries badly, as well as being bad for the environment and bad in other ways. We also need to press on with the international finance facility plan to meet the millennium development goals. In return for countries' opening up to investment and pursuing stability policies, we must help them to deal with major health and education problems.
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