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Stamp Duty Land Tax
5. Mr. Bill Wiggin (Leominster) (Con): What discussions he has had with representatives of licensees regarding the case for reform of stamp duty land tax. [144720]
The Financial Secretary to the Treasury (Ruth Kelly): In the Finance Bill of 2003, the Government modernised and streamlined the stamp duty system. As a result of tax avoidance, only half the stamp duty owed on all large commercial property transactions was being paid. As part of our package, we reviewed the lease duty regime to ensure that businesses pay stamp duty fairly and consistently. Following consultation, including with the British Beer and Pub Association, the stamp duty land tax proposals were amended to help all tenants, but it was targeted at small and medium-sized businesses.
Mr. Wiggin: Is it correct that independent evidence shows that the average pub licensee faces a tenfold increase in the amount of tax from £600 to £6,000? How can the Financial Secretary possibly justify that?
Ruth Kelly: From the information that the licensed trade supplied, we know that very few leases were exempt from stamp duty under the old regime. However, increasing the threshold means that more than 30 times the number of leases in the sector will be exempt from stamp duty land tax duty.
Mr. Mark Prisk (Hertford and Stortford) (Con): For licensees and others, the tax is half-baked and hideously bureaucratic, yet the real scandal is the increase in the tax burden, to which my hon. Friend the Member for Leominster (Mr. Wiggin) referred. Since 1997, stamp duty has been increased four times, and now we have discovered a fifth increase. Tucked away on page 217—how surprising—of the pre-Budget report is the information that the Government expect stamp duty revenue to rise from £7.5 billion this year to £9.3 billion next year. Given that property prices are expected to rise next year by 8 per cent., how do the Government plan to secure an increase of 24 per cent. in revenue?
Ruth Kelly: The hon. Gentleman has got his facts completely wrong. The tax burden is lower now than it was almost throughout the 1980s. He must realise that the economy is stronger than it has ever been, with 1.7 million more people in work, interest rates at their lowest since 1955 and net wealth, including property prices, rising.
Energy Efficiency
7. Alan Simpson (Nottingham, South) (Lab): If he will make a statement on the implications of the pre-Budget statement for the energy efficiency implementation plan to be proposed in the forthcoming energy White Paper. [144722]
The Economic Secretary to the Treasury (John Healey): The Government plan to follow up the energy White Paper by publishing the implementation plan on energy efficiency early next year. The pre-Budget report
confirmed the case for using further economic instruments and we are giving close consideration to a range of measures. My hon. Friend knows that decisions on tax are, as always, a matter for the Chancellor in the Budget.
Alan Simpson : I know that we made a commitment in the pre-Budget statement to introduce further measures on energy efficiency in the home. However, will my hon. Friend ensure that he, the Chancellor and Treasury team pay special attention to the warnings that we have just received from the Government's fuel poverty adviser that, unless there is a dramatic increase in the warm homes programme, we will fail to meet our commitments to tackle and to eliminate fuel poverty? Given the Chancellor's specific interests in the problems of child poverty, will he ensure that dealing with fuel poverty is a priority in the forthcoming Budget?
John Healey: My hon. Friend is right about the value of the warm homes initiative. Indeed, in the past couple of weeks, I visited constituents, Mr. and Mrs. Cowdell, in Wath upon Dearne. They, like some of my hon. Friend's constituents, have benefited from the programme by insulating their home, cutting their bills and being kept warm throughout the winter for the first time in their lives. His points about trying to ensure that our measures improve energy efficiency and reduce domestic fuel poverty are well made. The pre-Budget report confirms that we see the case for using more economic instruments in this area to promote energy efficiency and reduce fuel poverty in the home. The work is complicated at present by a review of the reduced rates of VAT in Europe and by a review within government of corporation tax, but we are working hard on these measures and hope to make announcements on the budget cycle in due course.
Richard Ottaway (Croydon, South) (Con): The Minister will be aware that a key to sustainable and efficient energy is the renewables obligation. However, is he aware that, beyond that obligation, not a single new generating project is being developed owing to a complete lack of long-term finance? What steps is the Treasury taking to encourage long-term finance in the electricity generating sector?
John Healey: Today's announcement about offshore wind capacity forms part of an extended programme of support that we are putting in place to encourage the kind of long-term investment that the hon. Gentleman is after. He is right to highlight the role of electricity generation in meeting our climate change targets but that is not the only area involved. The pre-Budget report and the track record of this Government since 1997 demonstrate that we will take decisions for the long term and put in place programmes of support that will help the UK to make a contribution to tackling the threat of global warming.
Child Poverty
8. Mr. Tom Harris (Glasgow, Cathcart) (Lab): What measures his Department is taking to tackle child poverty. [144723]
The Paymaster General (Dawn Primarolo): As part of their commitment to tackling child poverty, the
Government have improved financial support for families with children, increasing child benefit for the first child in every family by 25 per cent. in real terms since 1997, and introducing the child tax credit in April 2003. A total of 5.9 million families are already benefiting from the new tax credits. This is 98 per cent. of the total number of families expected to benefit in 2003–04.The Chancellor announced in last week's pre-Budget report an increase in the child element of the child tax credit by £180 to £1,625 a year in April 2004, equivalent to a weekly increase of £3.50, benefiting 7.2 million children in 3.7 million families. As a result, the Government are on track to meet or to exceed their public service agreement target to reduce the number of children in low income households by a quarter by 2004–05 on a before housing costs basis.
Mr. Harris : I am sure that my right hon. Friend will agree that, if a Labour Government are for anything, they are for the fight against poverty, particularly child poverty. Given that the Joseph Rowntree Foundation announced only this month that the latest figures have passed the notable milestone of taking income poverty lower than at any time in the 1990s, does she agree that the Government's aspiration to abolish child poverty altogether should be founded not only on one party's policies but on bipartisan consensus?
Dawn Primarolo: I congratulate my hon. Friend on all the work that he does on these issues in his constituency. I agree entirely, and I hope that Opposition Members will, even at this late stage, join the Government in an all-party crusade to eradicate poverty from society, particularly among children, instead of simply complaining about the fact that people live in poverty. It is difficult, however, to see how their commitment to cuts of £80 billion would help to achieve that.
Mr. David Laws (Yeovil) (LD): The extra money for tackling child poverty announced by the Chancellor in the pre-Budget report is certainly welcome. Can the Minister explain, however, why the Chancellor did not have the honesty to explain in his statement that the child poverty measures were being funded by freezing other tax credits?
Dawn Primarolo: I regret the tone of the hon. Gentleman's question, which is typical of the kind of carping that goes on, rather than joining in the celebrations. As he well knows, all the elements of the child tax credit were announced on pre-Budget day, as is always the case. He is trying to make it sound as though the House was misled, but perhaps I should remind him that for the first time millions of families are receiving the payment, which he and his party have yet to confirm that they would honour.
Mr. Barry Sheerman (Huddersfield) (Lab/Co-op): Does my right hon. Friend agree that, although we have made remarkable progress and invested so much in early years and the eradication of child poverty, it is still true that the Sure Start programme is one of the most effective that we have introduced? However, a lot of children in poor homes do not live in the 20 per cent. of
wards that are the most deprived, so can she think of any way in which we can get to those poor children more quickly?
Dawn Primarolo: My hon. Friend is entirely right. I am sure that everyone in the House will want to celebrate the massive achievements of the Sure Start programme. At its centre, it involves parents in shaping their future and that of their children.
My hon. Friend will also know that the Government's commitment on children's centres is a commitment to roll out and to continue that programme. To take a much wider perspective, I am sure that he would acknowledge that in tackling poverty—particularly child poverty—the Government need to concentrate not only on the income of such families but on the full range of public services that are delivered to them.
Mr. Henry Bellingham (North-West Norfolk) (Con): The Chancellor has said lots of times that one of the best ways to tackle child poverty is to get unemployment down. Obviously, progress is being made, but can it continue? Has the Minister had a chance to examine the recent CBI report on Britain as a place to do business? It reveals that 60 per cent. of senior managers surveyed believe that the Government are not taking seriously their concerns about red tape and regulation, and 40 per cent. said that they were thinking of offshoring—
Mr. Speaker: Order. That is far too wide of the question.
Mr. George Mudie (Leeds, East) (Lab): May I speak on child poverty? I applaud the Chancellor and the Treasury team's £1 billion pre-Budget report initiative to deal with child poverty and particularly commend the children's bond, which will give the poorest children in the country £500 immediately, with additional sums so that they will have a nest egg at 18 that they would not have dreamed of having otherwise. However, does the Minister share my sadness that the official Opposition did not go into the Lobby last week—
Mr. Speaker: Order. The first part of the question was in order.
Dawn Primarolo: It is an excellent question, Mr. Speaker. I congratulate my hon. Friend because I know that he has done a huge amount of work in his constituency on that matter. He highlights the commitment to the child trust fund as one of many measures that the Government are taking. It is an asset of £500 for a child over their life. It encourages the savings habit and is an example of progressive universalism. I return to the point made by my hon. Friend the Member for Glasgow, Cathcart (Mr. Harris). We need all-party support and determination to tackle and to eradicate child poverty—support and determination that unfortunately are seriously lacking in both Opposition parties.
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