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Taxation

4. Mr. Boris Johnson (Henley) (Con): What assessment he has made of the effect of the level of taxation on the state of the economy. [8143]

The Chief Secretary to the Treasury (Mr. Des Browne): The Government's macro-economic framework has consistently delivered stability with strong growth and low inflation, thus establishing a      track record that has been acknowledged internationally. The Government's approach to taxation balances the need to finance better quality public services, deliver fairness and promote sustainable development, while ensuring that the UK benefits from the advantages of being a lightly taxed economy.
 
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Mr. Johnson: One of my constituents is a road sweeper of 18 years' service. He attracts no benefits or tax credits, so will the Minister undertake to explain to him the justice of his payslip, which he showed me recently? On gross earnings of £542 per fortnight, he pays £161 in tax and £86 in national insurance. On top of that, he has to find a further £50 for council tax. Does the Minister think that that is fair? The Government have raised the overall burden of taxation over the past eight years. Is it right that that burden should fall disproportionately on the poorest fifth of the population, who now pay almost 40 per cent. of their income in tax?

Mr. Browne: If the hon. Gentleman is unable to explain to his constituent how the tax system is structured, I shall of course be happy to assist him. However, I have two observations that he may care to pass on. First, I am not aware that his party is proposing to change any element of the tax structure. Secondly, the hon. Gentleman has championed getting more investment for care of the elderly, especially in his constituency. Will he explain to his constituent how that would reduce the tax burden? Will he also explain how a fair tax burden delivers appropriate and better public services?

Mr. Dennis Skinner (Bolsover) (Lab): Is my hon. Friend aware that over the past eight years, the state of the economy and the level of taxation have caused unemployment in Bolsover to fall from more than 10 per cent. to less than 4 per cent.? That has happened because Treasury money has been used to improve the pit sites and turn them into industrial estates where people have been able to go back to work. The hon. Member for Henley (Mr. Johnson) should be more worried about the state of the economy at The Spectator. He has resorted to spreading graffiti around Parliament in an attempt to get people to buy it. Such is the state of those who went to Eton—they are educated beyond their intelligence.

Mr. Browne: I approach the Dispatch Box to answer that question with some difficulty, in the sense that I cannot match my hon. Friend's ability to put his finger on the pulse of the issue. He has in his constituency living evidence of the improvement in ordinary people's lives as a result of our investment not only in public services, but principally in the new deal, which was funded by a form of taxation that the Conservatives opposed. That may have been because of their ideological education in public schools, but I have no idea about that.

Mr. Philip Hammond (Runnymede and Weybridge) (Con): When the Chief Secretary turns his attention from the economy in Bolsover to the international economic scene, something that the Chancellor has considered quite a lot lately, he may notice the well-documented and strong correlation between lower taxes and higher rates of economic growth. What conclusions has he drawn from that about the consequences for Britain's long-term prosperity of the Chancellor's policy of increasing taxes by a further 2.3 per cent. of gross domestic product over the next five years?
 
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Mr. Browne: The hon. Gentleman is aware that since the turn of the century our growth rate has been equal to the best growth rates in the world, including the US growth rate. I am interested in, and follow carefully, the shadow Chancellor's consideration of the international scene, and I am aware that he has recently been to Estonia. No doubt at some stage he will be able to explain how Estonia provides an analogous model for the British economy. I am also interested in his comments that there has to be much more to our response to global economic change than just reducing tax, and that a tax policy is not a substitute for a proper economic policy. This Government have a proper economic policy and an appropriate tax policy, so to that extent I agree with the shadow Chancellor.

Mr. Barry Sheerman (Huddersfield) (Lab/Co-op): Does my right hon. Friend agree that it is not just the level of taxation that is important, but what we spend that taxation on? In the past eight years it has been spent on investing in skills, schools, education and our universities, and that is why we have such a successful economy. Perhaps my right hon. Friend could consider the tax affairs of the hon. Member for Henley (Mr. Johnson), because he has several incomes and probably a very—

Mr. Speaker: Order. The question is not about the hon. Member for Henley (Mr. Johnson).

Mr. Browne: I shall restrict my answer to the first part of my hon. Friend's question. He is right that the investment of taxation is now beginning to pay significant dividends in all our communities. However, it is not only communities that have benefited from the   tax and benefit measures introduced by this Government. In real terms since 1997, households will be on average £900 a year better off; families with children £1,400 a year better off; importantly, families with children in the poorest fifth of the population £3,200 a year better off; and pensioner households £1,500 a year better off. This is a Labour Government who deliver for the community and for the individual.

Mark Pritchard (The Wrekin) (Con): Part of the justification for the huge increases in taxation and, in particular, national insurance contributions is the Government's so-called investment in the national health service. Perhaps the Minister could correlate that investment with the 100-week wait for an MRI scan in my constituency.

Mr. Browne: The hon. Gentleman touched on that issue in the context of his own local election campaign, where he appeared to argue for more investment—more money—in the national health service. Of course, he will have to explain to his hon. Friends, including those who sit on the Front Bench, how that is consistent with the Conservative party's general policy of cutting investment in public services. However, the point that he makes about an ambition to reduce the waiting times of individuals in the NHS is, of course, important, and it is just that progression that our investment is delivering.
 
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Immunisation

5. Mr. Iain Wright (Hartlepool) (Lab): What proposals he intends to put to the G8 summit in Gleneagles for an international finance facility for immunisation; and if he will make a statement. [8144]

The Chancellor of the Exchequer (Mr. Gordon Brown): Britain hopes to secure approval soon from the European statistical authorities for the creation of an international finance facility for immunisation. With the front-loading of aid that that would involve, if implemented, the international facility could save 5 million children's lives by 2015. I am confident also that our proposal for an international finance facility will help us to lock in the doubling of European aid and enable us to front-load its use, and we hope to make announcements on that in the next few days.

Mr. Wright: I am grateful to my right hon. Friend for pushing immunisation to the top of the agenda. It is vital to eliminate diseases that exacerbate poverty and affect people's lives. He referred to the work planned and carried out by this Labour Government and the Gates Foundation in front-loading investment from the capital markets to pay for vaccination. Has he made any assessment of what benefits that will provide?

Mr. Brown: I hope to meet Mr. Gates, when he is in the country in the next few days, to discuss the progress of the international finance facility for immunisation. Over the past few years, 50 million people have been vaccinated as a result of the work of the Global Alliance for Vaccines and Immunisation. If we could raise the additional money, as we propose with the international facility, partnered with the Gates Foundation, a number of countries believe that 5 million lives could be saved by 2015, and another 5 million in the 10 years after that.

The advances now being made in the technologies and medical cures for malaria and strains of tuberculosis, as well as action on HIV/AIDS, make it necessary for the international community to come together to consider what advance purchase agreements we can put in place to cut the cost of those drugs for the poorest countries, to make them available at a price that they can afford and to enable us to use modern medical technologies to avoid the 1 million deaths that are caused by malaria each year and the deaths caused by tuberculosis. So, over the next few days we hope to make further announcements on those matters, too.

Tony Baldry (Banbury) (Con): The Chancellor will know that he has the support of the whole House both on the international finance facility for immunisation and on the international finance facility itself. What we are all keen to see now, though, is the detail. We have been waiting for the detail for a very long time. Will he give an undertaking that he will make a written statement on the detail, so that we can see where the money is coming from, whom it is coming from and where it will be spent? Does the reference in his answer to the European Union mean that he has given up hope of the United States and other key G8 players supporting those initiatives?

Mr. Brown: No, but the discussions are taking place at the moment. The reference to the EU was that our
 
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proposal about the treatment of the international finance facility for public expenditure purposes must—for the purposes of the involvement of France, Germany and Italy, as well as Britain—go before the European statistical authorities, and we expect them to give us their verdict in the next few days.I believe that we will set up an international finance facility for immunisation very quickly. I think that we are in position, working with France, Germany and Italy, to create an international finance facility. We are prepared to hypothecate some of our air ticket levies to do so and other countries are considering what they might do. I will certainly do what the hon. Gentleman suggests and make a written statement to the House on the progress that we make in the next few days.

Paul Farrelly (Newcastle-under-Lyme) (Lab): Yesterday, my son asked me a question. He said, "Daddy, are you going to the G8 summit this weekend—you run the country, don't you?" I said, "No, son, but I know one or two people who do." Bless him, he is only six, but they have been talking about this during school assembly. May I ask my right hon. Friend—especially in relation to immunisation, HIV, malaria and TB, which are both major causes and symptoms of poverty—what he will do at the G8 summit this weekend to ensure that people throughout the land, including children in school assemblies, come away from this weekend's summit with a feeling of hope that something will be done to address those problems, rather than with a feeling of disappointment?

Mr. Brown: My hon. Friend is right that there is enormous interest in what will happen at the G8 next Wednesday and Thursday. I understand that there have been 25 million hits on the Make Poverty History campaign and organisations such as Oxfam and Christian Aid have more than a million subscribers each. There has been a tremendous growth in public opinion about the need to take action on those matters. A combination of debt relief, aid and trade justice and a demand for transparency and proper governance in the countries that we are talking about will make for both a successful communiqué and the action in Africa that is necessary to relieve poverty.

Mr. George Osborne (Tatton) (Con): As my hon. Friend the Member for Banbury (Tony Baldry) said, we wholly support the Government's efforts to increase aid and debt relief for the poorest countries in the world. Like tens of thousands of people who will be taking part in Live 8 this weekend, we wish the Prime Minister and the Chancellor every success at Gleneagles. As we said at the first Treasury Question Time of the Parliament, an international finance facility for immunisation would of course be welcome and could, as the Chancellor said, save millions of lives. May I press him on the broader international finance facility? He said that he would make a statement in the next few days—to the House of Commons, I hope. What does he think the chances are of getting non-European members of the G8 to sign up to the IFF and will he confirm that, even if they do not sign up, we can still proceed, during the British presidency, with setting up an IFF?
 
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Mr. Brown: The hon. Gentleman's first point was about other countries and we, of course, continue to talk to them. On the facility for immunisation, South Africa, China, Canada, Brazil and many other countries outside the EU have expressed an interest. We are continuing our discussions about the IFF with EU members and, as he rightly said, the finance facility can go ahead if a number of countries are willing to contribute to it. There is discussion about the use of air ticket levies as a contribution to that fund. We already have such a levy, which could be hypothecated for it.

The advantage of an international finance facility is that it could front-load aid, as I described in relation to immunisation. By front-loading $4 billion of aid the vaccinations and immunisations that are possible could be done. I am grateful for all-party support. I believe that the Liberals and other parties in the House, as well as the Conservatives, support it, and I hope that we can agree a funding mechanism in the next few days. I shall certainly make a written statement to the House in the run-up to the G7, if there is a chance to do so, or afterwards, and I should be happy to answer questions on it either at a Select Committee or to the House.

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