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Gas Price Increases

7. Mr. Laurence Robertson (Tewkesbury) (Con): How much additional revenue the Exchequer has received due to the recent increase in gas prices. [213421]

The Economic Secretary to the Treasury (John Healey): This year, Government revenues from North sea oil and gas are expected to increase by about £1½billion over Budget forecasts, largely because of increased oil and gas prices. However, the overall impact on public finances is likely to be more limited because of other direct and indirect effects of the higher prices.

Mr. Robertson: The industry estimates that the effect will be somewhat greater. Does the Economic Secretary agree that the best thing that we can do to ensure security of our energy supply and so that we do not become over-reliant on imported sources is to increase investor confidence, and that talk of a windfall tax—or, worse, its imposition—would destroy confidence at the very time that we need it?

John Healey: When making decisions on the North sea oil and gas taxation regime we attempt to balance a desire to promote investment with ensuring that the companies pay a proper price for the exploitation of a finite natural resource that is a national asset. When profits and prices are high, oil companies pay more tax. Next year, we expect oil companies to contribute almost £6 billion through North sea taxes alone. We have no plans to introduce a windfall tax on oil companies.

Mr. Michael Clapham (Barnsley, West and Penistone) (Lab): My hon. Friend will be aware that the Ofgem report produced last year suggested that one of the factors that had caused the increase in gas prices was that the companies all carried out their maintenance at the same time of the year, causing the spike. That resulted in windfall profits. If he is not prepared to go ahead with a windfall tax, will he consider encouraging those companies to put much more money into anti-fuel poverty measures?

John Healey: A number of the companies are making such contributions to relieving fuel poverty. I know that my hon. Friend plays an active role on the Trade and Industry Committee, which is looking into high oil prices. In the Treasury as much as in the Department of Trade and Industry, we look forward to the Select Committee's report in due course.

Mr. Andrew Tyrie (Chichester) (Con): If Labour wins the next election, everybody knows it would put our taxes up. It has an £11 billion black hole to fill. The Chief Secretary has just confirmed to us that the IFS is well worth listening to, and it says the figure is £11 billion. Everybody knows that Labour would try and do it without people noticing. A windfall tax on oil and gas
 
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would fit Labour's bill. We have had questions this afternoon on that tax, and a refusal, point blank, to rule it out. We have had—

Mr. Speaker: Order. I give those on the Front Bench the privilege of asking a question at their request. They must ask a question, not make a speech.

Mr. Dennis Skinner (Bolsover) (Lab): Come on, answer, professor.

Mr. Tyrie: I will take that as a compliment.

Will the Minister go further than what he has just said, which was, "We have no plans to introduce a windfall tax"? That is exactly the form of words that the Chancellor used early in his tenure, just before he introduced new and higher taxes.

John Healey: I am not sure the hon. Gentleman heard the answer that I gave in clear terms to the hon. Member for Tewkesbury (Mr. Robertson). I suggest that he look at the Hansard record tomorrow.

Mr. Peter Pike (Burnley) (Lab): Can my hon. Friend estimate what the average family is saving, despite the increase in VAT because of prices going up, bearing in mind the fact that when we came into government VAT was 8 per cent.? The Tories intended it to be 17.5 per cent. How much has the average family benefited because of the Labour Government's policy of reducing it to 5 per cent.?

John Healey: My hon. Friend is right to remind the House that one of the first things that we did on coming to office in 1997 was to reverse the increase in VAT that the Conservatives had put on fuel. He is right to say that householders have benefited also from the changes that we made in the competition regime for the supply of electricity and gas. Over the past couple of years UK prices have been among the lowest in Europe for gas and electricity, for industrial and for domestic consumers.

New Deal

8. Mr. Ronnie Campbell (Blyth Valley) (Lab): If he will make a statement on public investment in the new deal. [213422]

The Chancellor of the Exchequer (Mr. Gordon Brown): For the £3.6 billion that has been invested in the new deal, 1.2 million men and women have been helped, with long-term unemployment down three quarters since 1997 and unemployment benefits, which cost £10 billion in 1997, now costing only £5 billion.

Mr. Campbell: Coming from a constituency that had high unemployment under the Tories all those years ago, I can tell my right hon. Friend that the new deal has been a godsend to young people especially, and my constituency now has record low unemployment. Rather than cut the new deal, as the Tories said they would, will he sustain it, if not increase it?
 
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Mr. Brown: We are not only retaining the new deal; we are improving it all the time. It is sad that what should have all-party support is opposed by the Conservatives and would be abolished by the Liberal party as well. The Chairman of the Public Accounts Committee, commenting on youth unemployment, said that the programme had been effective in reducing long-term unemployment and

"clearly many young people have been helped by this programme".

That was not from a Labour Member, but from the hon. Member for Gainsborough (Mr. Leigh).

Mr. Eric Forth (Bromley and Chislehurst) (Con): Given that in 1996 and 1997 unemployment was falling at the rate of 50,000 a month, and given the number of immigrants who seem to be able to find jobs readily in this country, what is the point of the new deal?

Mr. Brown: We have halved unemployment since we came to power—that is the point of the new deal. More than 2 million people have been helped and we have 2 million more jobs in this country. For the right hon. Gentleman to say that the new deal is useless when unemployment has been halved just shows how out of touch the Conservative party is.

Huw Irranca-Davies (Ogmore) (Lab): Does my right hon. Friend recognise that the undoubted success of the new deal is underpinned both by economic stability and by the success of schemes such as objective 1 in the south Wales valleys and the west of Wales? Will he, with me, offer congratulations on the milestone that has been passed today in Bridgend, where objective 1 funding has created almost 2,500 growth jobs, safeguarded an equal number of growth jobs and helped more than 2,800 small and medium-sized enterprises? The way forward is to continue with the new deal programme, economic stability and more funds coming in to west Wales and the valleys.

Mr. Brown: Unemployment in Wales is now lower than it has been for 30 years. One of the reasons for that is that public investment in the regional policies of the European Union and in the new deal have made it possible. I have to ask Conservative Members this: what sense does it make for them to want to abolish, as an act of dogma, a programme that is so successful?

Mr. Damian Green (Ashford) (Con): Let us look at the facts. The admirable purpose of the new deal is to reduce the number of young people who are not working, training or studying. The fact is that the number of young people who are not working, training or studying has gone up since the new deal was introduced. Why does the Chancellor think that the programme is such a success, given that simple fact?

Mr. Brown: I will give the hon. Gentleman the facts. In 1985, 350,000 young people had been unemployed for more than a year; today, fewer than 5,000 are unemployed—an average of seven per constituency. The hon. Gentleman should be congratulating us, because unemployment has halved in his constituency.
 
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Andy Burnham (Leigh) (Lab): Does my right hon. Friend agree that the 2.7 per cent. unemployment rate in Greater Manchester shows that the new deal has been worth every single penny and that it contrasts sharply with the 10 per cent. plus unemployment rate that was shamefully described by the Conservatives as a price worth paying? Rather than scrapping the new deal and introducing a token £1,000 payment to 14-year-olds, will my right hon. Friend not only give a commitment to extend the new deal, but give a real push to modern apprenticeships, which are beginning to work?

Mr. Brown: I visited Manchester only a few days ago and saw how employment is increasing, how research-based industries are growing, how the university and colleges are creating new businesses and new jobs for the future, and how the new deal is having an impact That is why, when the shadow Chancellor says that to cut the new deal means painful cuts, he knows precisely what it would mean: more unemployment. Unfortunately, the Conservatives believe that unemployment is a price worth paying.

Mr. Desmond Swayne (New Forest, West) (Con): What has happened to the disappeared young people who are not registered as unemployed, are not studying, not in training and not in full-time education of any kind? That is the key statistic.

Mr. Brown: There are more young people in work than at any time for 30 years. The hon. Gentleman does not want to face up to the fact that in his constituency and in the country youth unemployment has fallen by two thirds. He should be congratulating us and saying that in future more resources go towards helping those who remain unemployed.

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