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New Deal for Young People

5. Ms Dawn Butler (Brent, South) (Lab): What assessment he has made of the economic effects of the new deal for young people. [45617]

The Chief Secretary to the Treasury (Mr. Des Browne): Since 1998, the new deal has helped more than 630,000 young people to find jobs, contributing to a fall in long-term youth unemployment from 210,000 in May 1997 to 52,700, which compares with a high of 400,000 in the mid-1990s. Independent research has shown the new deal for young people's positive impact on the economy, with estimated benefits to the economy of up to £500 million a year.

Ms Butler: In my constituency, 3,699 young people have participated in the new deal, with 1,200 of them obtaining sustainable employment. Scrapping the new deal would have a detrimental effect on those young people, who are finally finding a means to work their way out of poverty. Will my right hon. Friend assure me that we have no intentions of scrapping the new deal?

Mr. Browne: My hon. Friend can be assured that we have no intentions of scrapping the new deal. As my right hon. Friend the Chancellor explained in the pre-Budget report, we intend to build on the new deal going forward, to learn from its success in the past and to create better opportunities for those who will take advantage of it in future. Let us contrast that with the policy of the Conservative party, which would scrap the new deal, and by doing so effectively scrap and throw all those young people who have benefited from it—

Mr. Speaker: Order.

Adam Afriyie (Windsor) (Con): Of course there are individual success stories under the new deal, and they
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must be welcomed. My concern continues to be for the least well-off and most vulnerable in society. With one in 10 people struggling with dyslexia or some other learning disability, will the Government persist in inflicting their complex tax system on the most vulnerable in society?

Mr. Browne: I welcome the hon. Gentleman's recognition of what he describes as the individual successes. In fact, the success of the new deal is the aggregate of all those individual successes. In all our constituencies, including his I am sure, it has taken significant numbers of young people from having no future to having significant opportunity to move themselves up the labour market and to improve their conditions. The challenge that we face in relation to the people whom he describes is that they have not had an opportunity to work in the past, rather than that they are faced with the complexity of income tax forms. My right hon. Friend the Secretary of State for Work and Pensions has set out our plans for the coming years to deal with the challenges that those people face, and to move them nearer to and into the labour market. I was delighted that those on the Conservative Front Bench supported those plans.

Mr. Wayne David (Caerphilly) (Lab): Does the Chief Secretary agree that the new deal for lone parents has been particularly successful? Reforms are needed to the welfare system, however, to enable more lone parents to work.

Mr. Browne: My hon. Friend is right. When we came into power, about 45 per cent. of lone parents were working, and that figure is now slightly beyond 55 per cent.—56 per cent., I think. There is still significantly more to do. That is why, in the pre-Budget report, my right hon. Friend the Chancellor announced additional support through the new deal for lone parents, which was augmented by the announcement this week by the Secretary of State for Work and Pensions. He is entirely correct to identify the challenge that we face, but we will only meet that challenge by redoubling our efforts through the new deal.

Mr. Paul Goodman (Wycombe) (Con): To be a success, however, the new deal could reasonably be expected to produce a consistent fall in the number of young people who are neither in employment nor full-time education. New data released since the previous Treasury questions show that number to be 1.2 million. If the new deal really is such a success, can the Chief Secretary explain why that number is now 180,000 higher than when the Chancellor launched the new deal, and at its highest since he took office?

Mr. Browne: The hon. Gentleman articulates an argument for doing more on the new deal—more investment and, as I described it, redoubling our efforts—not for scrapping it. The fact is that the statistics that he quotes do not show the whole picture. That 1.2 million includes some people who are in part-time education or training. The situation is not nearly as bad as he describes it. I do not demur from the
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challenge—it is significant. We will only deal with this group of young people, however, if we are prepared to invest in them, not if we ignore them.

Barbara Keeley (Worsley) (Lab): Last Friday, a group of young people from high schools in my constituency came in to discuss their issues with me. The interesting thing is that worries about future employment did not rank among the concerns even of young people from a ward that is among the top 3 per cent. most deprived in the country. Does my right hon. Friend agree that we must redouble our efforts on the new deal, so that those young people can continue to feel that confidence?

Mr. Browne: My hon. Friend describes one of the remarkable contrasts between the situation only a decade ago and the situation now for young people. Most young people in most of our communities now have the opportunity of a job, which they did not have before this Government came to power, but there are—it has already been highlighted in some of the supplementary questions—continuing challenges. Because of the state of the labour market, the bulk of the people coming into the new deal now are those who present the greatest challenge. We need to build on, to revise and to reform the new deal in order that it can address those issues more consistently.

HMRC Estate

6. Mr. Henry Bellingham (North-West Norfolk) (Con): When he next expects to meet senior representatives of HM Revenue and Customs to discuss the outsourcing of their buildings and other assets. [45618]

The Paymaster General (Dawn Primarolo): I meet with senior HMRC officials regularly on a range of issues. There are no meetings planned to discuss the matter to which the hon. Gentleman refers.

Mr. Bellingham: Is it true that as part of an outsourcing deal in 2001, 600 HMRC buildings were sold to Mapeley, an offshore Guernsey company, for £220 million? Is it also true that Savills recently valued those buildings at £566.6 million, a staggering 150 per cent. increase? Is not that a rotten deal for taxpayers? Does the Paymaster General agree that if she and the Chancellor were investment bankers and made such a duff deal, they would not just be in line to lose their bonuses, but would be facing the sack?

Dawn Primarolo: No, that is not true. Let me give the hon. Gentleman the facts. The HMRC estate was independently valued prior to the Mapeley contract at £370 million. That money was paid to the Department: £220 million first, then £150 million in facility payments. The National Audit Office looked at the report, published a report on 7 May 2004, and found that the deal had delivered benefits, that more was expected over the duration of the contract, and that therefore it represented value for money for the taxpayer. Those are the facts. The speculation is incorrect.
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Mr. Bob Blizzard (Waveney) (Lab): Will my right hon. Friend assure me that in future the buildings and assets of the HMRC will not be used to collect the flat tax, which has been continually advocated by the Conservative party this morning?

Dawn Primarolo: I have been the Minister responsible for the two departments for rather a long time now. I do not know how much longer that will last, but may I say on behalf of the Government that we intend to make absolutely sure that there is not an introduction of a flat tax, which would be unfair and significantly reduce resources into the Exchequer. It does not operate in any of the substantial industrial economies. It would be a disaster for us and take us away from what is a fair and proportionate tax system that ensures that public funds are invested in line with the requirements and aspirations of our electorate.

Debt Relief

7. Ms Celia Barlow (Hove) (Lab): If he will make a statement on proposals for debt relief to be discussed under Russia's presidency of the G8. [45619]

12. Chris Bryant (Rhondda) (Lab): What assessment he has made of the likely impact of Russia's presidency of the G8 for cancellation of debt in the world's poorest countries. [45624]

The Chancellor of the Exchequer (Mr. Gordon Brown): Since our last Question Time, 100 per cent. multilateral debt relief has been finally achieved for the first 19 heavily indebted poor countries, of 40 countries that are now eligible to share in the £170 billion write-off in debt. In Britain's view, however, all 67 of the poorest countries of the world should have debt reduction. By paying our share of their debt service, we will unilaterally lead debt collection for those non-HIPCs, and when I am at the G8 in Moscow I will urge other countries to follow us.

Ms Barlow: I am proud of the many achievements in international development secured under our stewardship of the G8 last year. However, those should be seen as merely one important step along a long road. Can my right hon. Friend outline what he is doing to keep those issues at the top of the agenda during the Russian presidency, and what are the prospects of future successes for the world's poor this year?

Mr. Brown: I am grateful to my hon. Friend. She has done a huge amount in her constituency to make people more aware of these important issues. Indeed, around the country hundreds of thousands of people are campaigning for greater debt relief. I will meet other Finance Ministers at Davos tomorrow when we shall undertake a session on this very set of issues. When the G8 meets in Moscow on 14 February I will propose that we go further on debt relief. We will pay 10 per cent. of the share of the debt interest payments of the non-HIPC countries—that is more than 30 countries who are not in the first list for debt relief, but who in our view should receive debt relief. Other countries, including Canada, have already announced that they will do likewise. We are trying to persuade yet other countries that this is the
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right step forward. Although we have had an enormous advance in the past few months, with multilateral and bilateral debt relief agreed at 100 per cent. for some of the poorest countries in the world, there is still a great deal more to do. Our aim is that nearly 70 countries will receive the debt relief that is necessary for them to begin their economic reconstruction.

Chris Bryant: Largely thanks to this Government's determination to get a better deal for the poorest countries in the world, we have seen an amazing turnaround in the last 10 years in international public opinion on debt relief. Does my right hon. Friend the Chancellor worry a little, with changes of Government in some G8 countries, particularly with Conservatives coming to power in Canada, that sometimes Conservatives are a little Johnny-come-lately on these issues? They say a lot of things, but then never put them into practice. Earlier, my right hon. Friend talked about the missionary work of Sir Bob Geldof. Will he be undertaking it with the Conservatives in Canada?

Mr. Brown: That is all the more reason for the missionary work about which I talked earlier. I am sure that it could be effective over a period of time. Let us not forget when we are facing up to problems that involve public expenditure that the last Conservative Government halved overseas development aid; we have now doubled overseas development aid. If the Conservatives are going to support us in increasing overseas development aid, I welcome that, but it means a commitment of additional resources to enable poorer people in the world to have education and health.

Miss Julie Kirkbride (Bromsgrove) (Con): In relation to the G8, I was delighted to hear what the Chancellor said earlier about free trade and the importance of allowing countries to trade their way out of poverty. To that end, what negotiations has he had with his erstwhile friend, or perhaps foe, Commissioner Mandelson, whose support for French farmers seems to be one of the principal obstacles to freer trade in the world today?

Mr. Brown: I think we know that the European Union has made proposals which reform the agricultural policy, but that more must be done. I was describing how, at the G8 meeting in December, India and Brazil joined our discussions and made proposals to modify their position, subject to America and Europe looking at theirs. It is important over the next few weeks that America and Europe look at their position and see whether they can make the concessions that are necessary for a trade agreement to take place. Again, I hope that there will be all-party support for this.

Damian Green (Ashford) (Con): In recent years the G8 has quite properly concentrated on African debt relief. The Chancellor will be aware that in other parts of the world, notably eastern Europe, there are countries afflicted by poverty and debt. It would be particularly ironic if during the Russian presidency of the G8 those countries continue to suffer, especially as many of their economies—Ukraine and Moldova spring to mind—have been damaged by Russia's recent actions which not only threatened the cut-off of gas supplies, but the growth potential of their economies. Will the
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Chancellor ensure that during the Russian presidency that country does not continue to try to bully its poor neighbours, but concentrates on debt relief in that part of the world as well?

Mr. Brown: Sometimes it is difficult to see the connection that the hon. Gentleman is making between debt relief and Russian policy towards Ukraine. Two of the countries to receive debt relief under the proposal passed by the International Monetary Fund board and the World Bank board are eastern European countries. They will benefit from the measures that we are taking.

As for countries toward the east of Europe, it is remarkable that some of the poorest countries, which have now joined the European Union, are prepared to contribute aid themselves. That is a welcome sign. We will of course look at the debt relief proposals of other eastern European countries, but the priority countries are obviously those that, according to income per head, are the poorest in the world, and they are mainly in Africa, Asia and Latin America.

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