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Lawrie Quinn: I thank my right hon. Friend for that answer. Can he confirm that the evidence given by the Chartered Institute of Public Finance and Accountancy to the balance of funding review suggests that the proposed pay-as-you-earn scheme for local income tax would be impractical and far from fair? Is it not time that the parties in this House recognised that the public know when they are being sold a pup, and is it not time that we achieved transparency and fairness in terms of local government income?
Mr. Raynsford: The balance of funding review has received very good evidence from a variety of sources, including from CIPFA, whose report has certainly poured a great deal of cold water on the Liberal Democrats' over-optimistic assumptions about a local income tax. Such assumptions were well exposed during Monday evening's debate in this House.
Mr. Edward Davey (Kingston and Surbiton) (LD): Will the Minister confirm that he failed to read out on Monday all the very positive things that CIPFA said about local income tax? Has he decided totally to reject the idea of a local income tax, even though it is used in America, Japan, Sweden, Denmark and Swinland[Interruption.] Sorry, Mr. Speaker, I meant to say Switzerland. [Interruption.]
Sorry, Mr. Speaker, that was very Prescottian of me. Was the Minister pre-empting the conclusion of the balance of funding review and ruling out local income tax at any time, in any form?
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Mr. Raynsford: Well, I say to the hon. Gentleman what I said to his colleagues on Monday evening. They invited me to read out the four recommendations that supported a local income tax, and I said to them that, in all fairness, if I did so I would have to read out the six recommendations that were against the idea. In the interest of economy and of proceeding smoothly, I thought that I would spare the hon. Gentleman and his colleagues that pain. We know that the Liberal Democrats love to live in never-never land; now we realise that they want to live in swindleland.
Peter Bradley : Having read the papers all week, I am relieved to see that the Prime Minister is still here[Hon. Members: "Oh!"] We may all have been victims of another media hoax. The Government have rightly dedicated both attention and resources to the experience of young people in the home, at school and in further and higher education, but they have perhaps dedicated less attention and fewer resources to the quality of their spare time. Does the Prime Minister agree that the principal reason why young people congregate on street corners is that they have literally nowhere else to go? Will he take the opportunity provided by the forthcoming spending review to dedicate a real increase in resources to the youth service and to facilities for young people?
The Prime Minister: About £500 million is now provided every year for youth services and for community services specifically dedicated to young people. That will increase by almost £30 million in this financial year, but in addition, we are pioneering the concept of extended schoolsjust such a school has been announced today in my hon. Friend's constituencyin which we also provide facilities for youngsters after school hours. Such schools are used as a basis for the local community to bring together some of the youth services, so that young people are kept out of trouble and off the streets, and given something proper and sensible to do. Together with the measures that we are taking in respect of antisocial behaviour, that will make a real difference in many of our communities.
Mr. Michael Howard (Folkestone and Hythe)
(Con): May I begin by thanking the Prime Minister for responding so promptly to my call last week for compensation for people who have lost their pension entitlement? May I also welcome this week's announcement that there may be variable penalty points
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for speeding, as we suggested last month, just as we welcomed his change of mindhowever belatedabout a referendum on the EU constitution? So we seem to be working rather well together in the interests of the country: we put forward the policies, and he adopts them. Following those very happy precedents, may I ask him to respond to another of our proposals. Will he ask the Chancellor to drop the petrol tax rise due in September?
The Prime Minister: Of course we understand the concern about oil prices, but it is not due to Government action. The high price is due to a number of factors, the most important of which is extremely high demand in China and America. Other factors include low stocks in the United States, so we do not see these as the same circumstances as obtained last year.
When the right hon. and learned Gentleman says that we are following his record in all respects, I have to point out that I shall certainly not follow his record in these following respects: we shall not go back to boom-and-bust economics; we shall not go back to 3 million unemployed; we shall not go back to under-investment in the health service; and we shall certainly not reintroduce the poll tax.
Mr. Howard: I am afraid that none of that will wash. People are interested[Interruption.] People are interested in what is happening now and what will happen in the future. Does the Prime Minister not appreciate the hardship that a further increase in petrol tax will cause? Last year, the Chancellor told us that he was going to defer the annual increase in petrol tax because of high and volatile oil prices. Petrol then cost 77p a litre and now costs 82p a litre. This week, oil prices reached a new high. So will the Prime Minister now have a word with his Chancellorhe does not have to go to Loch Fyne to do itand drop the proposed increase?
"I certainly don't think that anybody ought to get in any kind of blind panic about this but nor incidentally do I think that there's anything very material that the UK Government can do and obviously one shouldn't blame the Government for oil prices rising."
[Interruption.] That is a quote from the shadow Chancellor. [Interruption.] I do not think that it is me who needs to have a word with my colleague; it is him who needs to have a word with hisand he need not go to Loch Fyne for that either.
Mr. Howard: Does the Prime Minister not understand the simple difference between the oil priceof course the Government cannot control thatand the tax on petrol, which the Chancellor can directly control? That is the question I put to the Prime Minister; that is the question that he has refused to answer twice. Why will he not tell the Chancellor to drop the proposed increase in the tax on petrol?
The Prime Minister:
When we are talking about the tax on petrol, let me remind the right hon. and learned Gentleman of his record when he was in government. We have done a little research and found the figures. In the last seven years of the Conservative Government, the fuel duty went up by 17p a litre. It has gone up by
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only 10p a litre under this Government. Of course we know it is a problem, for reasons that he has accepted are beyond the Government's control, but it is important to realise that we have to run the economy in an effective way. He talks about not going back to the past, but the strong economy with record employment and record low unemployment is happening now.
Richard Burden (Birmingham, Northfield) (Lab): Will my right hon. Friend join me in welcoming today the Palestinian parliamentary delegation, which is watching our proceedings, and which, as you know Mr. Speaker, is led by your counterpart in the Palestinian legislative council? He comes from Gaza, where 100 homes have been demolished in the last few days and 3,000 over three yearsin contravention of the fourth Geneva convention. Will my right hon. Friend join me in condemning that destruction of homes? As a high contracting party to that convention, what will Britain do to ensure that it is enforced?
The Prime Minister: I join my hon. Friend in welcoming the delegation from the Palestinian Parliament. I assure them that the exchanges that have just taken place do not represent the total sum of what happens in parliamentary proceedings. My hon. Friend makes a very serious point. We entirely understand Israel's concerns about acts of terrorism, but what happened yesterday was unacceptable and wrong.
It is very clear now that we need to do several things. We need to press on with the proposals for disengagement from the whole of the Gaza and parts of the west bank. We then need to allow the international community to help moderate Palestinians re-establish control and authority in those areas over which they will have control and authority. Above all else, we need to begin a process that allows us to restart proper negotiations that lead to a final status settlement.
Obviously, that would happen far more easily if the terrorism stopped, and therefore we all have a responsibility to do two things. First, we must do what we can to stop the terrorism while acting in accordance with international law. Secondly, we must make sure, above all else, that we get to the point where Palestinians and Israelis can once again sit down in proper negotiation and reach a settlement. I am sure that that is what the majority of Israelis and Palestinians want.
Mr. Charles Kennedy (Ross, Skye and Inverness, West) (LD): Can the Prime Minister confirm that the 30 June handover of power in Iraq will involve the transfer of full sovereignty, and the authority that goes with it, to the new Iraqi Government? Will that Government be able, for example, to retain control of both their oil revenues and their prisons?
On the related question of the possible further deployment of British troops, if the US requests that further British troops be deployedand that may happen outside the present British sector and involve an extension of the troops' role into Najafwill the Prime Minister confirm that the House of Commons will be able to vote before any such deployment takes place? Will he also guarantee that any such decision and announcement will not be slipped out during a parliamentary recess?
The Prime Minister: The House will be informed, and there will be consultation in the normal way. However, I do not believe it right to set a precedent that there must be a vote before any further troop deployment is undertaken. No decision has yet been taken on whether to deploy further troops, or about where that might happen. Discussions are continuing at the moment, but the important thing is that this country continues to play its full part in trying to create a democratic and stable state in Iraq. There are obviously huge difficulties, as was made clear by the assassination of the president of the governing council earlier this week. Responsibility for that assassination is now being claimed by one of the leaders of al-Qaeda, which shows us exactly what we are up against. However, the one thing about which I have absolutely no doubt is that it is our job to stay and get the job done. We must make sure that Iraq becomes that democratic and stable state, because that is in the interests of the Iraqis, the region and the world.
Mr. Gerald Kaufman (Manchester, Gorton) (Lab): My question follows my right hon. Friend's reply to my hon. Friend the Member for Birmingham, Northfield (Richard Burden). Taking into account the fact that my right hon. Friend is uniquely responsible for the process that led to the creation of the middle eastern road map, and that the Gaza strip has become a blood-bespattered charnel house, will he condemn the murder of an Israeli women and her four daughters, and the deaths of those Israeli soldiers who gave their lives futilely in pursuit of a futile policy? At the same time, will he also condemn, in the most categorical terms, the Israeli Government's policy of indiscriminate slaughter in the Gaza strip, which yesterday led to the deaths of 20 people, including two children? Will he condemn too that Government's policy of destroying large numbers of homes, and take the earliest possible opportunity to use his unique influence to get the road map back on track?
The Prime Minister:
My right hon. Friend the Foreign Secretaryand I echo the words that he used yesterdayhas already made it clear why we regard what happened yesterday to be unacceptable and wrong, as I said earlier. My right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) is quite right to list the pain and grief on the other side, and in particular the brutal and appalling murder of a pregnant Israeli women and her young children. He makes clear the importance of beginning again a process that means that we must do everything that we can to stop the terrorism that gets in the way of achieving a political settlement, and which gets us back into proper negotiations. The road map remains the only way we can get back into those final status negotiation discussions. I will do everything that I can over the
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coming weeks to see that we are able to be in that position, because it is the only possibility for the future in both Palestine and Israel.
"I think it's true that when plates appear to be moving, everyone positions themselves for it."
The Prime Minister: I have no intention of engaging in a textual analysis of what my right hon. Friend said. I will leave that to others better qualified than myself. In the end, the issue will be very simple: it will be between the record of the right hon. and learned Gentleman in government and the record of this Government. Perhaps we should now debate that.
Mr. Howard: Let me see if I can help the Prime Minister a bit, because that was not the only thing that the Deputy Prime Minister said. He was asked whether the Cabinet was discussing life after the Prime Minister, and he said:
"Yes, people do talk about it and you get that discussion."
"Every British Prime Minister goes eventually."
Mr. Howard: I can assure the Prime Minister that no one is plotting against my leadership. But everyone will notice that he did not answer the question. What everyone will want to know is whether if they vote Blair, they will get Brown. This week the Leader of the House said that the Prime Minister has hit a "really big sticky patch", the worst of his premiership; the Secretary of State for Health gave members of the Cabinet a dressing-down; the Chancellor issued a one-paragraph statement of support; and the Chancellor and the Deputy Prime Minister have been discussing a "smooth transition" at an oyster bar in Argyll. Is it not the case that the most senior members of the Prime Minister's Cabinetthe two people he is sitting between nowhave stitched him up like a kipper?
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