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The Financial Secretary to the Treasury (John Healey):
As a Labour Government, we have given pensioners pension credit, winter fuel payments, extra help with council tax, free prescriptions, free eye tests, free local-area bus travel and, for the over-75s, free television licences. All those measures have, directly or
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indirectly, increased pensioner household incomes, and all of them were opposed or criticised by the Conservatives at the time of their introduction.
Jim Dobbin: The Chancellor has indeed done much to eradicate pensioner poverty with such measures as free off-peak bus travel. The Greater Manchester passenger transport authority provides free travel on trains and trams after 9.30 am. Will the Minister encourage other PTAs to follow Manchester's example, and even to consider cross-county agreements with the aim of giving free travel to pensioners and disabled people in particular throughout the country?
John Healey: I am glad that my hon. Friend welcomes the fact that, in his constituency and throughout Greater Manchester, half a million people will benefit from the beginning of next month. It is true that some bus journeys from the Greater Manchester area will be free. It is also true that local authorities and passenger transport executives will retain the ability to arrange concessionary travel beyond their areas. We would certainly encourage them to do so, and I am sure that the Greater Manchester passenger transport executive is considering such action.
Mr. Nigel Dodds (Belfast, North) (DUP): I acknowledge that genuine measures have been taken to increase the prosperity of pensioners throughout the United Kingdom, but does the Minister accept that the widespread and growing use of means-testing acts as a major deterrent, discouraging low-income pensioner households in particular from claiming benefits?
John Healey: The Government are spending around £7 billion more on pensioners this year than we would be if we had restored the link to the rise in earnings. In a situation where almost one in five people are retiring on more than £400 a week, it is surely right that we put in place help for all pensioners. Clearly, the basic state pension remains the cornerstone for that, but it is right that we put in more help for the pensioners who need it most.
Edward Miliband (Doncaster, North) (Lab): Is my hon. Friend aware that in the seven years since 1997[Hon. Members: "Nine years."]the poorest fifth of single pensioners have seen their incomes rise by more than in all the years between 1979 and 1997? Is he further aware that the reason for that is the pension credit, and will he ensure that, in the years ahead, we build on those gains?
I thank my hon. Friend for that question and for the statistics that he has supplied the House. He is right about the progress that has been made, and he is right to urge the Government to do more. Since 1997, 2 million pensioners have been lifted out of poverty by the measures that we have put in place. When we combine the personal tax and benefit changes made since 1997, this year, the average pensioner household will be £26 a week better off and the poorest 10 per cent. of pensioners will be £42 a week better off than they would have been under the Conservative system.
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Peter Viggers (Gosport) (Con): The Minister is avoiding the question. How can he possibly justify a system that, through means-testing, means that it is possible for someone who has saved prudently for their retirement to be worse off than someone who is entitled to means-tested benefits?
John Healey: The hon. Gentleman needs to study the operation of the pension credit. For the first time, we have a system in place that gives extra help to the poorest pensioners but also gives an extra reward for those who put a bit by for their retirement, either through savings or modest personal or occupational pensions. It is high time that he and his party accept and welcome the operation of the pension credit and see it as something to build on further.
The Chancellor of the Exchequer (Mr. Gordon Brown): The review of the Lisbon agenda will take place at the European Finance Ministers meeting on 14 March and at the European Council on 23 March. I have today published a written statement showing the progress that has been made on the reform agenda under the British presidency. Our proposals include further liberalisation of services, energy and utilities and risk-based regulationareas where Britain is leading the way in Europe.
Keith Vaz: At a meeting in Brussels last Monday, Commissioner Günter Verheugen stated that 90 per cent. of the Lisbon targets could only be implemented by national Governments on a member state basis. Given the success of the United Kingdom's achievements against the score cardwe were fifth overall in terms of progress last year, we are fourth in terms of the entire targets since 2000what will my right hon. Friend do to encourage other EU countries to match Britain's excellent performance?
Mr. Brown: I have even better news for my hon. Friend: in the last survey, we were third. One of the Lisbon targets is for the overall employment rate to reach 67 per cent. by 2005 and 70 per cent. by 2010we are at 72 per cent. Another target is for the female employment rate to reach 57 per cent. by 2005we are at 67 per cent. already. Those are examples of where we are making progress. I will continue to press our colleagues in the rest of Europe to do so. It might help if the Conservatives were to enter the mainstream of European politics.
Dr. Vincent Cable (Twickenham)
(LD): Further to the answer that the Chancellor has just given on the Government's performance on unemployment, does he agree that, while the claimant count is relatively impressive in the UK, when we take into account the number of people on Government schemes, the number of people who retired early and want to work and the International Labour Organisation measure of unemployment, the true level of unemployment is closer
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to 10 per cent. than the 3 million figure suggests? Is that a satisfactory basis from which to lecture other members of the European Union?
Mr. Brown: I do not accept the hon. Gentleman's figure. Uniquely among our European partners, we have created 2.3 million jobs in the past eight years, and surely even the Liberal Democrats will acknowledge that fact. [Interruption.] I do know whether the hon. Member for Eastleigh (Chris Huhne) is giving the hon. Gentleman instructions this morninghe is sat next to himor is simply acting as his lieutenant. We will see what happens this afternoon, but I understand that very few people have voted in the Liberal Democrat leadership election. For a few months, the Liberal Democrats have been in search of a leader; now, we will see a leader in search of a party.
Mr. Brian H. Donohoe (Central Ayrshire) (Lab): On the question of the UK's performance, will my right hon. Friend give some indication of the impact of the high energy costs of the past few months? They could lead to job losses, particularly in my constituency, where up to 2,000 jobs are under pressure as a result.
Mr. Brown: I understand my hon. Friend's worries about energy costs, and the cost of gas in particular has risen very fast recently. It is an achievement of British macro-economic policy that, even despite the big rise in energy prices, the inflation target of some 2 per cent. continues to be met. One issue in terms of pricing is what is happening in the EU energy market, and all Members will agree that it is about time that we saw the full liberalisation of the EU's gas and general energy markets. We estimate that British business would save about £20 billion a year if that happened.
Mr. Eric Forth (Bromley and Chislehurst) (Con): Will the Chancellor be boasting, as he has just done today, to his fellow Finance Ministers about how wonderfully well we are doing and, by implication, how badly they are all doing? In that context, what will he say to the French Finance Minister about the current scandal in France? The French are advancing protectionism, which is completely in conflict with the so-called Lisbon agreement.
Mr. Brown: I would quote the right hon. Gentleman's own Conservative leader, who praised the United Kingdom for doing far better than any other country in the EU. I point out to the right hon. Gentleman that it would help if the Conservatives participated in debates in the EU in a sensible way. Even the leader of the Conservative group in the EU says, "You can't move to the centre ground at home and move to the extreme right abroad. The Conservative policy is just barking".
Mr. Barry Sheerman (Huddersfield)
(Lab/Co-op): Does my right hon. Friend agree that, although we have done quite well on the Lisbon agenda targets, that agenda will be undermined if, in a free market such as ours, our companies are opened up to takeovers? France and Germany, however, seem absolutely determined to prevent British companies from doing the same thing in Europe.
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Mr. Brown: I accept my hon. Friend's point about the opening up of markets and trade protectionism in general. We will continue to press the EU and America to move further and faster in order to secure a world trade agreement based on the removal of the protectionist policies that have been pursued in the past. Within the EU, we will continue to press for the liberalisation of markets that my hon. Friend proposes, but I must point out that it is free trade countries and countries that are open to competition that are creating jobs. Countries closed to competition are, in the long run, not creating the jobs that they need.
Mr. George Osborne (Tatton) (Con): The Chancellor agrees with me that the big challenge that European countries face is competing in the new global economy. Presumably, he shares my disappointment that Britain's trade deficit with China widened by 20 per cent. last year. What is his explanation for that?
Mr. Brown: We are trading more with China[Interruption.] If the hon. Gentleman will just listen. We are trading more with China. I have visited China twice this year and we have signed trade agreements with the Chinese in a range of areas, including financial services. Chinese companies are now registering on the London stock exchange and trade between China and Britain is improving. The hon. Gentleman should be congratulating us on our efforts, instead of criticising us.
Mr. Osborne: I asked the Chancellor about the trade deficit. The truth is that he can change his ties, change his shirts and even change his teeth, but he actually needs to change his economic policies if Britain is to compete in future. So will he comment today on the decision by the internet book retailer Amazon to relocate its European service headquarters from England to Ireland? What is his explanation for that?
As you rightly say, Mr. Deputy Speaker, I was asked why a company should relocate to Ireland. The right hon. Member for Wokingham's answer was that companies were relocating to Ireland because the EU had heavily subsidised the Irish Republic and thus allowed it to reduce corporation tax. If the shadow Chancellor wishes to be consistent in his approach to economic policy, why does he not remind the House that he has spent months congratulating the Government on establishing economic credibility after improving the macro-economic management of the economy, and admitting that his own policies lack popularity?
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