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The Paymaster General (Dawn Primarolo): Information for 200304 is not available. The latest available information, for 200102, shows that the bottom 20 per cent. of households paid 4.8 per cent. of their income in council tax, after allowing for council tax benefit.
Mr. Tyler : The Minister will know that in Cornwall, and in the south-west generally, many households fall into that category while others are just above that level, and do not benefit from the council tax benefit concessions. Will she now give us a straightforward answer to a straightforward question? Has that proportion risen or fallen since the Government came to power?
Dawn Primarolo: I am sure that the hon. Gentleman will congratulate the Government, as will his constituents, on the extra £340 million announced on Wednesday 10 December. That shows that the Government recognise the particular pressures on local authorities in terms of the environment and social services for children. That money is on top of the extra £420 million announced in the provisional statement in November. We should make the comparison with previous years. By next year, local authorities will have received a real-terms increase of some 30 per cent. since 1997, as against a fall of 7 per cent. in the last years of the previous Government.
I note that the hon. Gentleman's party is not suggesting that it would vary expenditure levels from the Government's current position, so perhaps he would like to tell us what the magic answer is that the Government's proposals do not provide.
Mr. Barry Gardiner (Brent, North) (Lab): Given the effect of the council tax on low-income families, does my right hon. Friend agree that it is unsurprising to find that council taxes in Labour areas are, on average, the lowest, while those in Conservative areas are the highest, and those in Liberal Democrat areas are the second highest?
Sir Patrick Cormack (South Staffordshire) (Con): Does the right hon. Lady accept that the last question was somewhat loaded, and will she also assure the House that however much the Liberal Democrats might rabbit on about local income tax, this Government will never introduce it?
Dawn Primarolo: The Prime Minister has made it clear that we do not favour that particular proposal, but for such any such proposal to be taken seriously, the Liberal Democrats would need to move beyond generalisations and tell us exactly how it would be achieved, how much it would cost and what extra bureaucracy would be entailed, particularly in respect of employers, who currently collect pay-as-you-earn. How would they deal with such a highly complex system, and how much would it cost them?
Mr. Stephen McCabe (Birmingham, Hall Green) (Lab): Does my right hon. Friend agree that replacing the council tax with local income tax would entrench regional disparities, and result in the poorest people in the poorest regions bearing a far greater proportion of the cost?
Dawn Primarolo: As you, Mr. Speaker, often say to Ministers at the Dispatch Box, it is not possible for us to speculate on the details of Liberal Democrat proposals. As always, the Liberal Democrats provide no detail and simply make win, win generalisations. Even superficial scrutiny of these proposals would reveal the problems of local disparities, the complexity of the system and the burdens on employers. As a result, the security of finance to local authorities could be seriously undermined.
Mr. Andrew Tyrie (Chichester) (Con): A moment ago, the Paymaster General referred to the £340 million that has been given to help contain the massive council tax rises resulting from Labour's burdening of local authorities with huge demands to supply more services. Is she aware that, either through incompetenceas I suspector design, the distribution formula means that each council tax payer in East Sussex and West Sussex will receive precisely tuppence of that £340 million? Does she not realise that those who are worst hit by these policies are poor people and pensioners in constituencies such as mine? How can she possibly justify a figure of tuppence a head?
Dawn Primarolo: I welcome the hon. Gentleman to the Dispatch Boxthis is the first time he has asked a question in Treasury orals. If he cares to look at the tax and benefit reform undertaken by this Government and opposed by his party, he will see, for example, the massive increases in respect of families with children in the poorest fifth of the population. On average, they will be £2,900 a year better off by September 2004. The
The Economic Secretary to the Treasury (John Healey): The climate change levy was designed as an environmental tax, and is achieving important environmental gains. UK carbon emissions fell by 3.5 per cent. in 2002, and although there are always a number of factors affecting emission levels, it is clear that the levy system will have played an important part in that reduction.
Mr. Challen : I thank my hon. Friend for that answer, because it shows that a bold and decisive policy gets bold and decisive results. Will he assure me that the hard won gains in reduced carbon emissions will not be sacrificed owing to the exponential growth in aviation, and that the Government will take a similarly bold and decisive policy approach to reducing emissions from aircraft?
John Healey: My hon. Friend is something of an expert on the subject; he serves with distinguished commitment on the Environmental Audit Committee. He is right that aviation is responsible for about 10 per cent. of the UK climate change problem, but the projections that I think he has in mind overstate the potential problem, and fail to take into account a couple of important points, as he may recognise. First, the projections assume no improvements in technology, although over the past 30 years there has been a 50 per cent. cut in fuel consumption. Secondly, they assume that no new measures will be put in place. My hon. Friend will know, because his Committee has studied the matter, that with the publication of this week's air transport White Paper, it is clear that we are putting in place what I hope he will acknowledge to be bold and decisive measures to deal with emissions that contribute to climate change, noise levels that affect local residents, and local air pollution. The air transport White Paper makes it clear that the additional capacity that we need in this country will be balanced by broad-ranging environmental measures to tackle the environmental consequences of aviation, which we need, too.
Mr. Peter Pike (Burnley) (Lab): Does my hon. Friend recognise that although the policy has obviously achieved the environmental impact that he mentioned, the Government changed it considerably to meet the requirements of heavy energy users from the industrial sector? Will he confirm that discussions on that subject are ongoing, because as well as wanting environmental benefits, the Government recognise the importance of ensuring that our manufacturing jobs are secure, and that we keep those jobs?
The Chancellor of the Exchequer (Mr. Gordon Brown): As I announced in the pre-Budget report, total managed expenditure in the UK for 200304 will be 41.4 per cent. of national income. Cutting total managed expenditure by 6.4 per cent. of GDP in the UK, were it to be reflected locally, would mean, in Yorkshire, a cut in spending of £100 million for each constituency, and that would mean fewer doctors, nurses, teachers and classroom assistants.
Lawrie Quinn : I thank my right hon. Friend for that answer. Does he agree that one of the main challenges in Yorkshire is the lack of investment in our transport infrastructure? If those policies were followed, what assessment would he make of our chances of clawing back the 30 years and more of under-investment in transport infrastructure in my region?
Mr. Brown: The local transport capital expenditure for Yorkshire and Humberside was £180 million, and it is £106 million in 200304. That compares with just £70 million in 1999. That doubling of expenditure could not take place under a 35 per cent. of GDP quota. Nurses, doctors and teachers, as well as the road and rail programmes, would be affected by such a massive cut.
Miss Anne McIntosh (Vale of York) (Con): How can the Chancellor square the record increase in investment in Network Rail with the fact that performance will not reach the levels enjoyed on the railways in 1997 for a considerable time to come? He is putting more money in, but performance and reliability on the railways is decreasing under this Government.
Mr. Brown: The hon. Lady forgets that more people are using the railways than at any time for 50 years, as a result of the extra investment that has been put in by this Government. She appears not to have heard that her Front Benchers have regretted railway privatisation and apologised for it. Just as they were wrong on the new deal, the Bank of England and the minimum wage, they were wrong in the way they privatised the railways.
Hugh Bayley (City of York) (Lab): What would the impact be on investment projectssuch as the three new schools being built in York, the £16 million upgrade of York district hospital, the £26 million that York city
Mr. Brown: If we were faced with the spending level proposed by the Conservatives, with public expenditure pegged at 35 per cent., we would have to sack most of the 50,000 nurses, the 20,000 doctors, the 20,000 teachers and the 90,000 classroom assistants who have been employed[Interruption]and they laugh at the prospect of sacking such important public service workers.