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Carbon Emissions

11. Mr. Colin Challen (Morley and Rothwell) (Lab): What fiscal measures his Department is taking to reduce carbon emissions from road transport. [179133]

The Economic Secretary to the Treasury (John Healey): The Government have introduced a range of fiscal instruments to reduce carbon emissions from road transport, including restructuring vehicle excise duty, reforming company car tax and introducing duty differentials to support the use of cleaner fuels.

Mr. Challen: I thank my hon. Friend for that reply. May I commend to him early-day motion 527 on the way to go proposals? As he will know, environmental justice and social justice often go hand in hand, and the way to go campaign's document, "Paying for Better Transport", contains many detailed proposals for achieving both those aims at one fell swoop. Will he read the document carefully, as is the Treasury's usual very principled way of dealing with such matters, and come back with some answers to the campaign's proposals?

John Healey: I welcome this further interest in environmental issues. I am normally seen as the Minister for booze cruises and fag flights, but I will indeed study the proposals that my hon. Friend mentioned and ensure that the campaign receives a full response. I have noted the support that it has in the House, including that of my hon. Friend.

Lawrie Quinn (Scarborough and Whitby) (Lab): Has my hon. Friend considered the possibilities of modal switch away from road to other modes of transport? With that in mind, has he given particular consideration to the freight sector, and to whether some fiscal incentive for the rail freight industry might help to reduce carbon emissions from road use?
 
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John Healey: Clearly, policy for transport modal switches is less my responsibility than that of my right hon. and hon. Friends in the Department for Transport. My hon. Friend the Member for Scarborough and Whitby (Lawrie Quinn) will lead a delegation from the rail freight industry that is coming to see me next week, and the point that he has raised is no doubt one that the industry will want to make at the meeting. I look forward to seeing him and his colleagues from the industry then.

National Insurance

12. Mr. Peter Pike (Burnley) (Lab): What revenue his Department estimates would be received by HM Treasury if the ceiling were to be removed on national insurance contributions on earnings in a full financial year. [179134]

The Paymaster General (Dawn Primarolo): The estimate provided by the Government Actuary's Department is £5.6 billion in 2004–05.

Mr. Pike: I thank my right hon. Friend for that answer. That is a lot of money. Remembering that the Treasury team believe that this Government are best when we are a Labour Government, can we not remove that ceiling, so that we can do more to help the poorer people in this country and spend more on the health service and other such matters?

Dawn Primarolo: As my hon. Friend will know, all those matters are for the Chancellor to consider in the Budget. With regard to pensions, however, the £10 billion extra includes £5 billion more on the poorest one third of pensioners. There is a commitment in relation to the 1 per cent. national insurance contribution rise to secure substantial and sustained increases in the national health service. That will provide investment in more nurses, more doctors and 100 more hospitals, to ensure that we have the health service to which people in this country aspire.

Gregory Barker (Bexhill and Battle) (Con): Removing the ceiling would be another massive tax rise, but there have already been 66 tax rises under the Labour Government. How many more tax rises will there be before this Parliament is out?

Dawn Primarolo: I will not be taking prompts from the hon. Gentleman about tax rises, given his party's record when in government. Nor will I be taking any prompts for cuts in the public services, which his party is suggesting. We will continue the sustained investment to provide the education, health service and transport system that the people of this country want.

Interest Rates

13. Sir Nicholas Winterton (Macclesfield) (Con): What discussions he has had with the Governor of the Bank of England on the current level of interest rates. [179135]

The Chancellor of the Exchequer (Mr. Gordon Brown): I meet the Governor regularly, but the level of interest rates is entirely a matter for the Monetary Policy Committee of the Bank of England.
 
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Sir Nicholas Winterton: I am grateful to the Chancellor for that factual and accurate response to my question. Is he aware of the views of the British Chambers of Commerce on interest rates? Although it agrees that small interest rate rises may be necessary to curb inflationary features in our economy, it is also concerned that excessive interest rate rises would have a devastating effect on manufacturing industry, and might not even curb house price inflation, which is one of the problems that this country is facing.

Mr. Brown: I meet representatives of the British Chambers of Commerce regularly, and I last met its president only a few days ago. I listen seriously to what it says. It wants low inflation, which has been achieved, low interest rates, which have been achieved, and low unemployment, which has also been achieved. I thought that the hon. Gentleman was going to thank me for the 63 per cent. drop in unemployment in his constituency since we came to power.

Ms Sally Keeble (Northampton, North) (Lab): May I tell my right hon. Friend that the east midlands regional agent for the Bank of England recently visited my constituency, where he met people from several businesses, including some manufacturers who were more optimistic than they have been for a considerable time and reported improvements in performance, because of both the stability that they have had and low interest rates? If he intends to vary the inflation targets for the Bank of England, will he take carefully into account the needs of manufacturing industry, and will he welcome the improvements in performance in the east midlands region?

Mr. Brown: I am grateful to my hon. Friend, who takes a big interest in questions of manufacturing and the state of the economy. I agree that although manufacturing output has been rising, we wish to see more progress. The important thing is that we have and maintain economic stability. She will be as pleased as I am that the rate of unemployment in her constituency has been halved under a Labour Government.

Mr. Nick Gibb (Bognor Regis and Littlehampton) (Con): As a full-blooded and committed monetarist, the Chancellor will be more aware than many of the power and the effect that even small interest rate rises can have on the level of demand in the economy. Does he therefore share concerns about the Monetary Policy Committee's apparent fixation on house prices, and the potential damage to the real economy that excessive interest rate rises could have if implemented before the impact of recent rate rises fully takes effect?

Mr. Brown: If the hon. Gentleman wants to keep interest rates low, he will want to maintain a Labour Government. The average interest rate under the
 
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Conservative Governments from 1979 to 1997 was 10.3 per cent., and interest rates have been less than half that under a Labour Government. I seem to remember that when we made the Bank of England independent, he said:

"The decision to give the Bank of England independence . . . will, in due course, lead to unemployment increasing."—[Official Report, 11 November 1997; Vol. 300, c. 791.]

We have created 2 million jobs and halved unemployment.

Transport (London)

15. Roger Casale (Wimbledon) (Lab): What representations he has received in the context of the comprehensive spending review on increasing investment in transport infrastructure in London. [179137]

The Chief Secretary to the Treasury (Mr. Paul Boateng): Representations on investment in London's transport have been received from a wide cross-section of organisations and individuals.

Roger Casale: My constituents recognise that there has been substantial investment in south-west London by the Government in the Merton-Croydon tram link, in new rolling stock and stations on the Northern line by Transport for London, and in rolling stock and stations by South West Trains. But does my right hon. Friend accept that if we are to keep pace with the extraordinary growth of business activity and employment, and to attract important international events such as the Olympics to London, it is important for us to proceed with projects such as Crossrail 1 and 2 and the east London line? The Government must give a strong lead in that regard. Will my right hon. Friend take account of those representations, and seek to invest as much as he can in transport infrastructure in London through the comprehensive spending review?

Mr. Boateng: We take all representations into account. We have already invested some £15 billion in London's transport infrastructure since 1997, and that is delivering the real results that my hon. Friend has identified in his constituency. We welcome his interest in transport and the Olympics, and in that context we should remind ourselves of the International Olympic Committee's comment that London has one of the most extensive rail and underground systems in the world. The committee says that its main transport infrastructure ratio is one of the highest among all the applicant cities.

Between now and 2012—irrespective of whether we win the Olympics bid—we intend to invest more than £18 billion in London's transport. That is a good record, which should be compared and contrasted with the record of the Conservatives.

 
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