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Investment in Residential Property
12. Hywel Williams (Caernarfon) (PC): What assessment he has made of the likely change in investment in residential property as a consequence of his proposed changes to (a) self-investment and (b) self-arranged personal pension schemes. [151553]
The Financial Secretary to the Treasury (Ruth Kelly): The Government's technical paper, "Simplifying the taxation of pensions: the Government's proposals", proposes allowing pension funds to invest in all types of investments, including residential property. The impact of this change, if introduced, will depend on the extent to which trustees and administrators decide that residential property is a suitable pension scheme investment.
Hywel Williams : Will not any conscientious tax adviser advise investment that yields greater returns—for example, in areas such as my constituency, where house price inflation was 30 per cent. last year? Does the Financial Secretary believe that there will be any
regional variation in the rate of investment in housing? What would be the impact of that new money on local housing markets and the ability of first-time buyers to participate?
Ruth Kelly: Clearly, the overall impact of the changes will depend on how attractive an investment property is seen to be. Concerns have already been expressed that property will not hold its value over the longer term or perform as well as the equity markets. I know that the hon. Gentleman has a particular concern about second homes being bought in Wales, and I understand that. I have checked this point, and a tax charge would apply if second homes were used for private purposes, so there would be no new incentives to buy second homes in Wales through that channel.
World Debt
15. Mr. Desmond Swayne (New Forest, West) (Con): What progress has been made with respect to debt relief for the poorest countries. [151556]
The Chancellor of the Exchequer (Mr. Gordon Brown): Twenty-seven countries are already receiving more than $70 billion of debt relief, of which 10 have completed the process. Seven others have not yet received debt relief because they are in conflict; a further three have not done so due to internal instability and governance issues; one other has not applied. A number of other countries, including Sudan, Liberia and Congo, should enter the debt relief process soon.
Mr. Swayne : Does the Chancellor agree that the greatest leverage that we could have on the problems faced by the poorest countries would be provided by giving them greater opportunities to trade with us? What prospect is there of driving forward such an agenda with our principal allies?
Mr. Brown: I am grateful to the hon. Gentleman for raising the issue of trade in the context of debt relief, because we all know that what is needed for countries, especially those in Africa, to move forward is a combination of debt relief, the necessary aid and, most importantly, the development of their economies. That requires them to be able to trade with the developed countries, which is why there is a premium on reopening the world trade talks; that is in everyone's interest. There was an American initiative only a few days ago, and we are hoping for a positive response in greater detail from the European Union. The matter will also be discussed at the G7 in Florida, and there was a meeting of Trade Ministers just before Christmas to consider some of the issues. I hope that we can move forward very quickly, and I believe that once the Singapore issues are cleared from the deck and there has been movement on agriculture, it will be possible that this will genuinely become what was originally called the Doha development round. That means development helping developing countries.
Mr. Tom Clarke (Coatbridge and Chryston) (Lab): Will my right hon. Friend the Chancellor build on his truly remarkable achievements on debt by bearing in mind in his discussions with the G7 and G8 countries,
the World Bank, the International Monetary Fund and so on, the problems of the countries that experience genocide, such as the Democratic Republic of the Congo, which he mentioned? If those countries can make the most of their mineral wealth and share it widely, we shall achieve not only poverty reduction but the millennium goals, to which he is absolutely committed.
Mr. Brown: I am grateful to my right hon. Friend. He has spoken on these issues over many years and visited many of the countries that he is asking us to consider. I have added Congo to my list, although it was previously not regarded as a country that would ever qualify for the heavily indebted poor countries process. However, conflicts are being ended in Congo, Sudan and Liberia. Because of that, although it will cost the international community substantial amounts of money—running into billions of dollars for those three countries—to give the debt relief, it is right that they should be offered the chance to be part of the process. It is also right that we should help them to reconstruct their economies after conflict, and, in particular, that we help them to get their health, education and other social services systems moving so that their people can genuinely see that out of conflict, there is a way forward.
Mr. Alistair Carmichael (Orkney and Shetland) (LD): Has the Chancellor of the Exchequer considered the terms of the report produced by IMF researchers towards the end of last year, which suggested that the heavily indebted poor countries initiative could be running into difficulties? The report concluded:
- "Unless HIPCs improve their primary fiscal positions or grant financing is sustained at current, or possibly higher, levels, debt sustainability in HIPCs may prove elusive"
Mr. Brown: I am grateful to the hon. Gentleman for raising the issue of what will happen now in the IMF and the World Bank. The issue of debt relief will not and must not be forgotten. That is why, when I chair the IMF committee that will meet in Washington in April, and when the World Bank development committee meets, we shall consider that very issue raised by the IMF report. We shall discuss whether we can reach agreement on what is called topping up—that is, getting more money for the poorest countries at the point at which their debts are being written off—and on taking into account some of the changes that have taken place. For example, in some cases commodity prices have collapsed, and in others there have been problems in relation to trade.
Equally, we will have to look specifically at country-by-country solutions for many of those people, which is why the poverty reduction plans that have been produced by the World Bank are very important. In the long run, the way forward, in my view, is the international finance mechanism that we propose. That allows us to do exactly as happened when the World Bank was formed in 1945: to provide a mechanism for financing that involves both the public and private
sector but guarantees the up-front money that is necessary if we are to meet the millennium development targets for each country.NHS Funding
16. Mrs. Ann Cryer (Keighley) (Lab): If he will make a statement on funding the NHS through general taxation. [151557]
The Chief Secretary to the Treasury (Mr. Paul Boateng): This Government are firmly of the view that the most efficient and equitable way of funding the NHS is through general taxation—an NHS that is free at the point of use.
Mrs. Cryer: I thank my right hon. Friend for that very pleasing reply. Is he aware that Airedale general hospital is not only an excellent facility but is the biggest employer in my constituency? The vast majority of those employees are doctors, nurses and those giving essential support such as cleaners, maintenance workers and medical secretaries, without whom the medical care so much appreciated by my constituents could not be given.
Mr. Boateng: I am grateful to my hon. Friend for the care and attention that she pays to health care services in her constituency, whether that means a magnetic resonance scanner or mental health services. The whole NHS team, including the ancillary and support workers whom she mentioned, have enabled us to deliver 450,000 more operations a year than took place in 1997, 15,000 of which were heart operations and 90,000 of which were cataract operations, as well as 8,000 more hip replacements and 12,000 more knee replacements. Each of those numbers is higher than in 1997. That is good news, and it is achieved only by the sort of team working of which my hon. Friend is so supportive in her constituency.
Miss Anne McIntosh (Vale of York) (Con): I should perhaps declare an interest in that my brother is a GP in north Yorkshire. Will the right hon. Gentleman tell the House what the additional cost to the taxpayer will be of the out-of-hours service for GPs in north Yorkshire from 1 April, and of the additional costs under the working time directive of training and recruiting more doctors, particularly in the mental health sector of the NHS?
Mr. Boateng: Certainly, I will write to the hon. Lady on the specific costs in relation to north Yorkshire. I am sure that she will fairly appreciate and give credence to the fact that none of those improvements could be achieved were we to adopt the spending policies advocated by Conservative Members.
Mr. Stephen McCabe (Birmingham, Hall Green) (Lab): Does my right hon. Friend agree that any attempt to suck general taxation funds out of the NHS and use them to subsidise the private health sector would be disastrous for the NHS? Is that not a classic example of a cynical ploy that would attack the health of the nation and mean that the many would end up funding the privileges of the few?
Mr. Boateng: My hon. Friend makes a fair point. That is precisely the policy that Conservative Members
seem to be suggesting. It would involve a dead-weight cost of some £1 billion, which could be met only by cutting back on the gains that we have made for the NHS since 1997. That would be an absolute disaster, and would add still further to the inequalities in health that we inherited from the stewardship of the Conservative party.
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