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Mr. Martyn Jones (Clwyd, South) (Lab): I am sure that my right hon. Friend's proposals to use unclaimed money in so-called dormant bank accounts for youth and community programmes will be welcomed. Will he ensure that the banks do not use the definition of dormancy as a way of hanging on to that money unnecessarily?
Mr. Brown: I am grateful to my hon. Friend for that. He has taken an interest in unclaimed assets for a long time. The problem has been dealt with and considered by successive Governments for many years. It involves a negotiation with banks and building societies, and there is still the issue of pension funds and insurance companies to address.
However, as far as banks and building societies are concerned, he will see in the print of the Treasury documents that an agreement has been reached whereby once the money is released from the dormant assets, it will be used for youth and community services. The full negotiation on the detail of the money to be released is still to be completed, but there is an agreement in principle, first, that the money will be provided and, secondly, that it will go to youth and community services, and some to financial education. That will allow us to build the youth and community services that our country has long needed. Those have been neglected. As each of us, in every one of our constituencies, knows, young people are being asked to behave properly, and so they should, but at the same time they say that they do not have proper community and sports facilities. If we can make an impact on that with the unused assets, it would be a great advance for Britain.
Mr. Kenneth Clarke (Rushcliffe) (Con):
Surely even the Chancellor would agree that, since this time last year, the main event is that British growth has fallen below the most pessimistic independent forecasts. It is now among the lowest in the developed world and in the last quarter was the lowest in the G7 apart from Italy. It is unlikely to recover quickly because it has been accompanied by a fall in personal consumer demand, crushed by the level of household debt, and an impending fall in public demand because of the fiscal crisis and mounting debts. Even if the people who still believe in his fiscal rules and his description of the public finances also believe in fairies, does he accept that the two big economic announcements of new taxes are both dangerous? Oil tax slowed down development of the North sea gas fields in 2002 and a land development tax has never worked and will go against all his measures to restore the housing market.
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Given that the right hon. Gentleman is planning to slow down the rate of public spending beyond 2008, does he not accept that he has to accelerate that and, before his review in 2007, show that it is possible to slow down public spending without sacking policemen, doctors and nurses? Does he also accept that he will not be a responsible Chancellor until he demonstrates that he can do that and unless he gets on with it now?
Mr. Brown: I know that the right hon. and learned Gentleman makes a more comprehensive contribution to the debate than the Conservative Front-Bench spokesman, but if he reads the Conservative research department brief, he will find himself misled about what is happening to the British economy. Despite what he says, growth is higher than it is in France, Germany, Italy, the euro area and the European Union. The figures, as published, show exactly that.
As for his objections to our two policies, the land development proposals are part of a consultation document. We look forward to the consultation that will take place over the next few months. However, on planning gain, when builders make money out of the sale of development land where infrastructure is needed in areas where housing is being built, the question is not whether the infrastructure should be provided, but who takes responsibility for financing it. The right hon. and learned Gentleman may agree with me that the developer and companies should make a contributionindeed, a bigger contributionto the development of the infrastructure. This is an argument that we can have in the next few months, and it is an argument that is certainly needed if we are to build the houses that we need in this country.
I disagree with the right hon. and learned Gentleman's statements on oil. The argument is exactly the same as the one that we advanced, to which he refused to listen, on the effect of VAT on fuel. He has to face the fact that returns on the North sea, at about 40 per cent., are quite different from the returns on ordinary investment in other firms. He has to accept that even in countries such as America, tax measures are being considered or used to ensure that more of the return from changes in oil prices comes to the consumer. In the past three years $1.2 trillion has been transferred from consumers to producers because of the escalating price of oil. I think that if he were Chancellor, he would be the first to want to do something about that.
Mr. Andrew Smith (Oxford, East) (Lab): While congratulating my right hon. Friend on his statement, may I welcome in particular what he said about housing? Does he agree with me that building more homes, especially in areas such as central Oxfordshire where his science investment is so important and welcome, can both increase economic growth and tackle acute housing need? Is not that precisely the combination of social justice and economic opportunity that will be welcomed by businesses large and small, by public services and especially by those who desperately need housing and whose hopes are blocked by Conservatives in local government?
I agree with my right hon. Friend and thank him for his contribution to the debate over many years. The fact is that we have to face up to the need for
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housing and for infrastructure around housing. Those who are not prepared to face up to that fact will find either that waiting lists for houses in their local authority areas grow, or that we are unable to attract to this country some of the people whom the financial services industry and other industries need for their expansion. Given the increasing number of households, it is necessary to be able to build more houses. We have made a number of proposals on planning, land use, social housing and the development of shared equity. I had hoped that there could be an all-party consensus on what needs to be done to build the houses that we needhigh-quality, affordable houses that build communities as well as homesbut if that is not to be, we will have to press ahead to make sure that we build the housing and infrastructure of the future and do not get stuck in the past.
Stewart Hosie (Dundee, East) (SNP): Today the Chancellor has announced a doubling of the North sea supplement from 10 per cent. to 20 per cent., in effect creating a 50 per cent. corporation tax regime in the North sea or imposing a 25 per cent. hike in tax on the sector. Is he aware, as many in the industry are, that that fiscal regime may well lead to a rapid and irreversible loss of key resources, skilled people and equipment; that that resource flight may in turn lead to the loss of many of the 260,000 jobs in the sector, 60 per cent. of which are in Scotland; and that it may lead to the sector being unable to deliver the benefits to the economy that it has been delivering? Is the Chancellor confident that the £1 billion cash grab that he has made today will not lead to a massive reduction in revenue in the medium and long-term future?
Mr. Brown: First, we have given new incentives for the development of smaller oil fields. Secondly, the hon. Gentleman will know that the tax rates on new developments in other parts of the world are higher than they are in Britain and that we are bringing ours into line. Thirdly, the hon. Gentleman has to face up to the fact that the oil price when we established our regime was between $22 and $28 a barrel. Even in the last year it was estimated to be about $40, but it has risen to nearly $70 and fallen back to $55 a barrel. It is right to strike a balance between the needs of producers and consumers. The last people who can complain about taxation in relation to Scotland are the Scottish National party. In the past few weeks and months in the Holyrood Parliament SNP Members have proposed more money for child care, more money for children in care, more money for the fishing industry, more money for GPs, more money for police officers, more money for the arts, more money for local authorities and more money for social workers. They could not pay for any of it under their party's plans.
Mr. John McFall (West Dunbartonshire) (Lab/Co-op): I welcome the Chancellor's announcement of 1 million new homes and in particular what he said about shared equity schemes. Can we encourage more building societies such as Halifax and Nationwide to become involved in that important scheme?
I realise that negotiations on unclaimed assets are continuing with the banks and building societies. Will my right hon. Friend ensure that the money is not only
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distributed from those sources, but that, as in the Republic of Ireland, local communities are able to put in bids in relation to their own areas? They know their areas well and they know how to build them up, and it is important that they share in the windfall.
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