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House of Commons

Thursday 15 June 2006

The House met at half-past Ten o’clock


The Speaker having leave of absence pursuant to Order [16 May], The Chairman of Ways and Means took the Chair as Deputy Speaker.

Oral Answers to Questions


The Chancellor of the Exchequer was asked—

Science and Innovation

1. Andrew Miller (Ellesmere Port and Neston) (Lab): What assessment he has made of the potential impact on the economy of Government encouragement of investment in science and innovation. [77539]

6. Helen Southworth (Warrington, South) (Lab): What his assessment is of the impact on the economy of investment in science and innovation. [77547]

The Chancellor of the Exchequer (Mr. Gordon Brown): With science spending doubling since 1997 and research and development credits now worth £1.5 billion to business, Britain has seen 200 spin-off businesses created each year compared with 70 10 years ago. To support Britain as the world’s best location for science, the Minister for Science and Innovation is announcing today that he will build on our proposed new institute for energy and environmental research and the single budget for health research by inviting the Royal Society to create new international science fellowships to bring the world’s best scientists to the United Kingdom.

The House might be interested to know on the day of the national service of thanksgiving to mark Her Majesty the Queen’s 80th birthday that, in addition to a crown piece to celebrate her diamond wedding anniversary, there will be two £2 coins, one to mark the Union of 1707 and a second to mark the abolition of the slave trade in 1807.

Andrew Miller: I thank my right hon. Friend for his recent visit to Ellesmere Port, which was truly welcomed by the Vauxhall work force and management. What steps does he intend to take to enable UK manufacturers such as Vauxhall to position themselves so that the UK can take a leading role in future vehicles beyond the internal combustion engine?

Mr. Brown: To visit Ellesmere Port, to have confidence that the workers there can win the next model for Ellesmere Port and to know that 1.6 million
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cars are now being produced in Britain is to have faith in the future of British manufacturing, as long as it is modern and efficient.

In addition to all the other measures that we are taking, including the new institute to study environmental and energy technologies, there will be capital allowances available for investment in environmental technologies related to fuel. We are also working with Brazil, South Africa and Mozambique to develop bioethanol from sugar, which will contribute to our meeting our renewables obligation. We are determined to have the most environmentally efficient means of producing fuel in future.

Helen Southworth: The Northwest Development Agency has committed more than £50 million to develop Daresbury science and innovation campus. We now have a return on that investment, with 22 ultra-high-tech companies based at the centre. Will my right hon. Friend come to see world-class science in action at Daresbury and discuss further investment opportunities?

Mr. Brown: I am grateful to my hon. Friend, who has worked hard to promote new investment for that important scientific campus. I understand that the Northwest Development Agency is investing about £50 million in that campus, which is one of two science and innovation campuses. Not only are 22 businesses operating there, but considerable new infrastructure investment is being made to attract businesses for the future. That reflects our recognition that, in modern manufacturing, we need to promote advanced science and technologies so that in future we lead the world in key technologies. The north-west is an important part of the new investment.

Dr. Vincent Cable (Twickenham) (LD): How does the Chancellor explain the fact that, on the one hand, 80 university science departments have closed in the past six years because of the squeeze on university research and teaching of science while, on the other, he is handing out £1.5 billion of taxpayers’ money every year to private companies, which have access to shareholders’ funds and capital markets and which have rewarded his generosity by increasing R and D not one iota? Is there not a fundamental lack of coherence in the Government’s approach to science and innovation?

Mr. Brown: The lack of coherence is in the Liberal tax and spending plans that were announced only a few days ago. There seems to be a £20 billion gap in the spending plans of the hon. Gentleman’s party.

I hope that the hon. Gentleman will support the £1.5 billion in R and D tax credits so that Britain is a scientific leader in future. I hope that he supports our doubling of the science budget for the United Kingdom, so that instead of being behind the rest of the world as we were under the Conservatives, we are catching up and hope to lead the world. I hope that he also supports the money that we are putting into universities. It seems to me that in every part of the country the Liberals are making promises to spend on universities, science and R and D tax credits, but he must now explain his £20 billion spending gap.

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Mr. Michael Fallon (Sevenoaks) (Con): Who is the Chancellor fooling when he boasts about extra investment in science, given that the permanent secretary at the Department for Education and Skills told the Select Committee yesterday that overall funding was going to get tighter? If total education and science spending is to increase more slowly than transport spending, is it any wonder that we end up with 15 million people who the Secretary of State for Education and Skills says would not pass maths GCSE?

Mr. Brown: We will take no lectures from the hon. Gentleman. When we came into power, spending per pupil was £2,500. It is now £5,000 per pupil. We have doubled spending per pupil. When we came into power, spending on university students had been falling under the Conservative Government. It is now rising as a result of what we are doing. We have set the ambition that we will increase spending per pupil. By 2011, capital spending per pupil will equal that in private schools. I would have thought that Opposition Members would want to support our ambitions in this area.

Mr. Barry Sheerman (Huddersfield) (Lab/Co-op): Will my right hon. Friend remember when he listens to Twickenham Man that Twickenham does not have a university? Huddersfield does have a university. I was with Huddersfield, Bradford and York universities only last Friday. They are enthusiastic about the innovation, the science, the technology and the investment that has been going on over the past nine years. Will my right hon. Friend remember that I was told, “You don’t look at a university campus to find an entrepreneur.”? We need new ways to bring more entrepreneurial spirit and activity on to university campuses.

Mr. Brown: I am grateful to my hon. Friend, who chairs the Education and Skills Select Committee. He will be aware of the fact which I set out initially in the main answer to the question. It is that 200 companies are spun off from universities every year. That is three times what was achieved under the Conservative Government before us. There are 20 companies now listed on the stock exchange—this is in the past two years—that have a combined capital of £1 billion. The idea that Britain is not moving forward, as has been suggested by the shadow Chancellor, in high technology and science-based industries is completely wrong. We are making considerable advances and we shall continue to do so, but it depends on us making the commitment to both education and science, which we have done, but which other parties seem unprepared to do.

David Simpson (Upper Bann) (DUP): I am sure that the Chancellor will join me in congratulating three schools in my constituency that have received prestigious awards under the young enterprise programme for innovation. There has been a difficulty with funding throughout the United Kingdom. Has that problem been rectified? Lastly, I wish the right hon. Gentleman well for his trip to the Province on Monday.

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Mr. Brown: I am looking forward to visiting Northern Ireland on Monday and meeting representatives of all political parties. No doubt I shall hear some spending representations from many of them.

The enterprise insight programme in Northern Ireland has been a tremendous success. It has encouraged young people to take up business opportunities and many have started their own businesses once they have left school or college. At the same time, throughout the United Kingdom, thousands of school children are involved in enterprise programmes, particularly as part of enterprise week. We are determined to continue to fund them. I would be happy to meet the hon. Gentleman to talk about funding for his area.

Climate Change (Taxation)

3. Anne Snelgrove (South Swindon) (Lab): What recent assessment he has made of the effects of the climate change levy on carbon emissions. [77541]

4. Ms Angela C. Smith (Sheffield, Hillsborough) (Lab): What recent assessment he has made of the impact of the climate change levy on carbon emissions. [77542]

11. David Wright (Telford) (Lab): What his policy is on using taxation to tackle climate change; and if he will make a statement. [77552]

The Financial Secretary to the Treasury (John Healey): The climate change levy is playing a crucial role in enabling the UK to meet its Kyoto targets. An independent valuation conducted recently by Cambridge Econometrics has examined the levy. It concluded that the levy would, by 2010, deliver annual carbon savings of 3.5 million tonnes. That is far in advance of the forecast of 2 million tonnes of carbon when we introduced the levy.

Anne Snelgrove: This is an issue of great concern to growing numbers of my constituents, who are concerned that their children and grandchildren’s futures will be marred by global warming. Given that the climate change levy package has reduced emissions of carbon by 16.5 million tonnes and is a vital part of meeting our Kyoto commitments, how does the UK’s progress on meeting these commitments compare with our international colleagues?

John Healey: My hon. Friend is right. The UK led the way with introducing the climate change levy, and now it is the sort of measure that is required throughout the European Union. We led the way in introducing an emissions trading scheme, and we led the way also in setting up and strengthening the European Commission’s scheme. We are leading as well with our commitment to Kyoto. Along with the Netherlands and Sweden, we are one of only three EU member states, of 15 countries, in being on track to meet our Kyoto targets.

On climate change, the test for all parties is whether they will back the domestic action that is needed in Britain. In addition, can they wield the international
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influence that is required to secure the international action that is needed even more badly?

Ms Angela C. Smith: I am sure that every Government Member accepts that the levy plays a significant role in reducing carbon emissions. Does my hon. Friend agree that it is an industry-friendly measure, given the incentives that it provides to improve energy efficiency and thus the cost-effectiveness of British business?

John Healey: My hon. Friend will remember that when we introduced the climate change levy, we also introduced a 0.3 per cent. cut in employers’ national insurance contributions. She will be aware of the launch of a new campaign by the Carbon Trust, which is linked to the climate change levy. British businesses will waste more than £500 million over the summer if they fail to adopt energy efficiency failures, and the campaign demonstrates that the trust can help them by delivering an average 15 per cent. saving in energy efficiency and business costs. Clearly, the climate change levy package can help business and the environment, so I hope that it receives support from Members on both sides of the House.

David Wright: How can we better use the tax system to promote microgeneration in residential properties? The technology is expensive to install initially, and the payback period is very long, so can we incentivise home owners to invest in microgeneration technology at the front end to avoid that long payback period?

John Healey: My hon. Friend will be aware that we reduced VAT rates on all significant microgeneration technologies that are installed professionally in domestic or charitable buildings. That is the extent of the action that we can take under existing VAT rules, but he will know that my right hon. Friend the Chancellor announced in the Budget extra support to try to boost microgeneration technologies and build the market in Britain. Demand is still too low for the technology to take off, but we want that to change. As a Government, we are prepared to try to help, as we want the technology to spread much more widely across Britain.

Mr. Paul Goodman (Wycombe) (Con): The Chancellor recently claimed that one of his favourite memories is Paul Gascoigne’s goal against Scotland in 1996, but Whelan claims that, after the goal, the Chancellor was so upset that he would not speak to him for weeks. Which of the Chancellor’s claims is more credible—his claim that people support his climate change levy, rather than a proper tax or levy on carbon, or his claim that he will support England tonight?

John Healey: There are several questions at the heart of the challenge of climate change. Does the hon. Gentleman accept that the climate change levy has delivered greater reductions in carbon emissions than forecast and that almost a fifth of carbon savings in our Kyoto commitment have been delivered by the climate change levy package? Does he therefore accept
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that his right hon. Friend the Member for West Dorset (Mr. Letwin) was wrong when he said in the House:

Julia Goldsworthy (Falmouth and Camborne) (LD): Does the Minister consider it appropriate that revenues from green taxes as a proportion of the total tax take have fallen while emissions continue to rise?

John Healey: The hon. Lady, typically for a Liberal, takes a simplistic view. I have two things to say to her. First, the point of environmental taxation is not, contrary to the Liberals’ view, taxation for taxation’s sake: it is about the change in behaviour and opinion that those taxes can achieve. It is wrong to look at taxation simply in terms of the total tax receipts, because environmental taxes can influence behaviour and lead to a reduction in receipts. Environmental taxes can be used, as can discounts for biofuels and climate change agreements, to achieve significant environmental ends without raising the environmental tax take. Secondly, as the hon. Lady looks at the big black hole in her spending and tax plans and the £8 billion of environmental taxes that she would impose on people, I urge her to take a more sophisticated view, and we look forward to her plans in future.

Science Funding (North-East)

5. Mr. Kevan Jones (North Durham) (Lab): What recent discussions he has had on Government funding for science in the north-east. [77543]

The Chief Secretary to the Treasury (Mr. Stephen Timms): I have received a number of representations on regional funding, including on science and innovation, and will consider them in our work on public spending over the coming year.

Mr. Jones: Will my hon. Friend join me in congratulating Durham county council and the County Durham Development Company on their NETPark project, a major science park being developed in County Durham? Does he agree that it is important that such innovation has the full backing of all Government agencies, including the regional development agency? Will he look into why £4 million of funding has been withdrawn from the new plastic electronics centre at the site for budgetary reasons?

Mr. Timms: I gladly join my hon. Friend in congratulating Durham county council and I agree that it is an important issue for the region’s productivity. That is why I welcome the decision of One NorthEast to commit £200 million over five years to building up the scientific research and innovation of the north-east. I will certainly look further into the particular case that he mentioned. Last week, I met the chief executive of AddIt North-East, whose role is to pool public sector communications demand as a lever to build a world-class infrastructure for the region. That lever is being applied with particular success in the north-east.

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G8 Finance Ministers Meeting

7. Mark Lazarowicz (Edinburgh, North and Leith) (Lab/Co-op): If he will make a statement on the outcome of the most recent meeting of G8 finance ministers. [77548]

The Chancellor of the Exchequer (Mr. Gordon Brown): The G8 communiqué called for an enhanced dialogue between oil producers and oil consumers to bring greater stability to the oil and energy markets, supported the education for all initiative on international development and advanced market commitments for health. The communiqué also called for an urgent agreement on world trade to thwart the dangers of protectionism.

Mark Lazarowicz: My right hon. Friend referred to the education for all initiative and he will be aware that thousands of schools up and down the country, including Leith Walk, Trinity and Granton schools in my own constituency, supported the “My friend needs a teacher” campaign. What positive steps were Finance Ministers able to take to advance the commitments made on this matter at Gleneagles last year?

Mr. Brown: Hundreds of schools around the country are now linking up with schools in developing countries, and the Department for International Development is providing support to enable those schools to have teacher exchanges or contact between the pupils in the different countries. I applaud the initiative of the schools in my hon. Friend’s constituency. As to progressing the education for all initiative, 110 million children are not going to school today, two thirds of whom are girls. For $10 billion a year, we could provide education for every child. As the House knows, the British Government have set aside £8 billion over the next 10 years to make possible a major education initiative that will help millions of children into school, but we will need the support of other countries and also the fast-track initiative of the World Bank to expand to achieve that. We discussed with other countries on Saturday how to secure a co-ordinated campaign to enhance the number of children going to school. That will be a subject for the G8 meeting next month, which the Prime Minister will attend, and will also feature in the September meetings of the World Bank, where we hope to reach further agreements. It is a major international initiative and I hope that, by this time next year, we will have signed up all the major countries to make it possible.

Mr. Brooks Newmark (Braintree) (Con): Did the G8 Ministers discuss the importance of education in preparing our children for the highly competitive global economy in which we live, or did the Chancellor tell G8 Ministers the truth about his pledge instead, which is, in the words of the permanent secretary in the Department for Education and Skills, that it is a “pipe dream” and that

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