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Employment (Social Cohesion)

8. Tony Lloyd (Manchester, Central) (Lab): What steps he is taking to ensure that employment flexibility does not adversely affect social cohesion. [26729]

The Chief Secretary to the Treasury (Mr. Des Browne): The Government are committed to advancing flexibility and fairness together, to ensure that everyone in society has the support that they need to achieve their full potential in a modern economy. Steps to ensure that that happens include the introduction of the national minimum wage, reform of the tax and benefit system, delivery of high-quality responsive services such as Jobcentre Plus to enable people rapidly to re-enter the labour market, and investment in education and training.

Tony Lloyd: Will my right hon. Friend reflect on some of the things that he said earlier about the comparison between the past 10 years and the 10 years before that? During that previous decade, this country experimented with the concept of economic promotion at the expense of social cohesion, and we saw the impact of that on our inner cities in the form of rising crime, unemployment and all the other social ills that this Government inherited. Has not the success of this Government been to marry economic advance with social cohesion through the measures that my right hon. Friend described, including the minimum wage, better working conditions for families, and the kind of regulations that are consistent with economic growth but that also allow society to operate properly as a society?

Mr. Browne: My hon. Friend is perfectly correct. It is a component of our success, particularly in labour markets, that we have ensured that flexibility and diversity—which are important in labour markets—go hand in hand with fairness. People are entitled to security and support to ensure that they can cope with the effects of economic change. The Government's approach therefore entails an approach to economic reform that advances both of those concepts. It combines flexibility with fairness, and equips people to cope with the change and to tackle the insecurities that surround it. That is the best route to full employment, and we are well en route to achieving that objective. My hon. Friend is correct.
 
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Mr. Andrew Turner (Isle of Wight) (Con): The Chief Secretary has just spoken about flexibility and diversity. Can he explain how giving 10,000 work permits to Bangladeshis to work in the hospitality industry helps social cohesion among the 50 per cent. of young Bangladeshis in this country who are unemployed?

Mr. Browne: The hon. Gentleman refers to a specific route of migration that has been taken advantage of by those who operate what we call Indian restaurants, but which are predominantly owned and populated by Bangladeshis. Part of the raison d'être for that was that those jobs could not be filled from the indigenous labour market because of a skills shortage. In fact, the people who come in and work in those restaurants make a significant contribution not only to the economy of this country but to the diversity of the community that we live in—I am sure that the hon. Gentleman, among others, has enjoyed some of the products of their labour—and, in my view, the ability to do just that in our communities, where we can celebrate our diversity, contributes to cohesion.

Judy Mallaber (Amber Valley) (Lab): There is one element of employment flexibility that adds to cohesion, particularly among families, that my right hon. Friend did not mention: measures to enable people to combine work and home responsibilities, such as those in the Work and Families Bill on parental and maternity leave, and leave for carers. Will his Department take action to promote with employers and businesses the advantages of such measures to them in helping them to retain experienced staff who are not totally stressed out by the daily burden of juggling their lives at work and at home?

Mr. Browne: My hon. Friend is perfectly correct. It will become more important as time goes on, with the changing demographic of this country, that skilled workers, particularly women, are not lost to employment because of the competing pressures of home life and work. That is why the Government are, after full discussion with all the sectors of industry and business, incrementally and carefully moving forward to deliver the best balance between work and family responsibilities. Of course the Treasury will play a full part in that process.

VAT (Charities)

9. Sammy Wilson (East Antrim) (DUP): If he will take steps to exempt charities from VAT. [26730]

The Paymaster General (Dawn Primarolo): Charities benefit from VAT and other tax reliefs worth £2.4 billion a year. This forms part of the Government's total support to the voluntary and community sector of something like £3.3 billion a year. An exemption for all charities would add between £500 million and £1 billion to the cost, and the Government believe that the available resources are better and more effectively deployed through targeted initiatives rather than through a general VAT refund scheme.
 
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Sammy Wilson: In 2004, the Royal National Lifeboat Institution paid £3.2 million in irrecoverable VAT—that is £3 for every £1 raised by volunteers. That would have paid for the running costs of the Larne lifeboat station in my constituency for the next 13 years. What plans has the Paymaster General to implement the Transport Committee's recommendations on search and rescue, published earlier this year, which called for   such organisations to be relieved of the burden of VAT, or if that proved legally difficult, to make an annual grant to offset the VAT payments for the previous year?

Dawn Primarolo: I congratulate the hon. Gentleman on giving a great deal of support in this area. The whole House would want to echo his comments with regard to the RNLI and the services that it provides for the country. He will also know that since 1997 the Government have undertaken two reviews to consider this issue. There are something like 250,000 charities, and a general exemption for all of those would produce astronomic costs, of the order that I explained to him in my previous answer. The review also demonstrated that it was extremely difficult, and nigh impossible, to reach a fair and principled position, and to decide how some charities might get VAT relief and some might not. He referred to the Select Committee report, to which the Treasury responded, and I have noted his comments. I undertake to consider the matter again, but I hope that he and the House understand the tight and difficult constraints in relation to a complete exemption for all charities and the costs that that would incur.

David Taylor (North-West Leicestershire) (Lab/Co-op): Successive Governments have done a great deal to help charities with various VAT exemptions, but inconsistencies remain. For those charities that operate admission fees to facilities, exemption is provided as long as the surplus is invested to improve or protect those facilities. Will the Financial Secretary consider the inconsistency that prevents them from using any surpluses for deficit funding of a general nature? It would be immensely helpful to museums, art galleries and other such facilities to have access to that exemption for that, too.

Dawn Primarolo: I know that my hon. Friend the Financial Secretary will of course bear in mind the points that my hon. Friend the Member for North-West Leicestershire (David Taylor) has just made. I want to stress to him and the House, however, that having completed two extensive reviews, making exemptions within the tax system that are fair, targeted and properly used is a challenging and difficult task, and can lead to perverse incentives in the system. I shall reflect on his points with my hon. Friend the Financial Secretary, but I am sure that he appreciates that it is extremely difficult to achieve what he is seeking.

Millennium Development Goals

10. Steve McCabe (Birmingham, Hall Green) (Lab): What discussions he has had with other Governments on financing the millennium development goals. [26731]
 
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11. Mrs. Betty Williams (Conwy) (Lab): If he will make a statement on progress towards the millennium development goals during the UK's presidency of the G7. [26732]

The Economic Secretary to the Treasury (Mr. Ivan Lewis): The UK is contributing towards meeting the 2015 millennium development goals through our aid programme and by working with the international community. UK aid will reach nearly £6.5 billion a year by 2007–08, and the Chancellor has announced that we will reach the UN target of 0.7 per cent. overseas development aid as a proportion of gross national income in 2013.

Steve McCabe: I know from talking to my constituents in Hall Green how much they value the leadership that this Government and our Chancellor have shown on this issue. But does my hon. Friend accept that it is now the time to focus on the outcomes and the real contribution that each country makes, and to put less store by the warm words and vague promises of those who are dragging their heels?

Mr. Lewis: I agree entirely with my hon. Friend. I pay tribute to the work that he has been doing in his constituency, with Hall Green churches and other organisations, on the "Make Poverty History" campaign.—[Interruption.] It is interesting that the Conservative party scoffs when we talk about the moral mission of making poverty history and the Government's leadership in that respect around the international community. My hon. Friend is absolutely right. We will be judged on actions, not words, which is why the Chancellor has personally focused on ensuring that both nation states and individual institutions make definite commitments that are transparent and can be judged in terms of our credibility with the people of the world.

Mrs. Williams: I congratulate the Government on the leadership shown and the excellent progress made thus far. On the basis of that success, may I draw my hon. Friend's attention to early-day motion 899, tabled by my hon. Friend the Member for Ochil and South Perthshire (Gordon Banks)? It calls on the Government to consider introducing a new target date of 2010 instead of 2013.

Mr. Lewis: I must confess that I have not studied the early-day motion, but I shall do so now. As for changing the target, I can give no such assurance today. I will say, however, that while we are absolutely committed to making progress as quickly as possible, it is also important that our target is credible and that we can be judged to have delivered. That is why we intend to stick to our current target.

Mr. Geoffrey Clifton-Brown (Cotswold) (Con): Does the Minister agree that by far the most helpful way of reaching the millennium goals in developing countries is through free and fair trade? Will he say exactly what the Prime Minister is doing in the European Union presidency to break down trade barriers facing the developing world?
 
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Mr. Lewis: The hon. Gentleman makes an important point about the United Kingdom's position and about our role as EU president. We are determined that the trade talks scheduled for December should deliver real and radical change, and should not repeat the historic fudge, compromise and failure that have characterised
 
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such talks in the past. The hon. Gentleman can rest assured that we are leading in that respect, and in particular that we are using our EU presidency to persuade some of the other nation states that we must step up to the mark in terms of our responsibilities to the developing world and in the context of the trade talks.

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