Previous Section | Index | Home Page |
Even Mr. Browns closest allies in the Commons are becoming frustrated with their preferred leader. Changing people who are set in their ways is very difficult according to one weary MP.
This is clearly a decision made in haste by a Chancellor on the look-out for short-term revenue-raising measures. In fairness to the Paymaster General, it must be said that, as so often happens, the Chancellor has made a difficult decision and expected his junior Ministers to front for him. His decision will impede the spread of computer literacy in our country, not least among modestly paid employees and their families, at a time when, according to Hewlett Packard, our international competitors such as China and India are between them churning out more than 100,000 IT graduates a year.
The bottom line is that the Government could have refocused the exemptions to protect revenue for the taxpayer, and still have saved the scheme. They had that option, but they did not follow it because they wanted every penny that they could squeeze. Nevertheless, I call on the Government one last time to reverse this erroneous decisionalthough, sadly, I believe I know the outcome even before I ask the question.
Dawn Primarolo: In Committee of the whole House, I made it clear that there were a number of reasons why it was the right time to remove the exemption. I shall briefly repeat each one.
The home computer initiative has been used extensively by groups whom we would not generally expect to experience difficulty in accessing information technology. Twenty-five per cent. of participants in the scheme are higher rate taxpayers, more than twice the proportion among taxpayers as a whole. Furthermore, nearly a third of participants are employed in white-collar industries. In March, the Low Pay Commission published the findings of its review of benefits in kind, salary sacrifice schemes and the accommodation offset. It found that take-up rates were often low and that many part-time low-paid workers would gain no advantage from salary sacrifice schemes for home computers and other benefits in kind. The analysis shows that those who can afford to do so have the computers and those who cannot afford to do so, do not. The recommendation was, therefore, to refocusnot to amendthe scheme.
David Taylor:
It may be that the benefit of the scheme was focused on the middle class, IT-literate, higher paid section of the population, but many people would have been happier had the savingssome £200 million over three yearsbeen refocused in a way that enabled access for older or less-well-off people in
certain areas. It could have been done perhaps through the community education system, which has had some problems in recent times.
Dawn Primarolo: My hon. Friend is right and I will come to that point.
The HMRC also had evidence that the tax exemption was being used beyond the scope of its original intention, not only in the equipment provided but in the marketing of the scheme, which implied that people could buy that equipment at prices offset against their salary sacrifice.
Julia Goldsworthy: Will the Paymaster General give way?
Dawn Primarolo: I shall come to the hon. Ladys points and, if necessary, give way then.
The investment for the groups that my hon. Friend mentioned was specifically addressed in the digital review and the Low Pay Commission report. I shall come to those points when I have finished explaining why the scheme was not appropriate. It was the correct time for the Government to remove the exemption and better focus support on the groups of people in our community that my hon. Friend mentioned, so as to increase access to technology for the poorest, the unemployed, the elderly and the low paid. Salary sacrifice schemes cannot provide that access.
During proceedings in the Committee of the whole House, I announced that we would establish a dedicated digital inclusion team. That team has now been set up by the Department for Communities and Local Government, and is working closely with the City of London Corporation. It will champion examples of excellence in using highly effective and efficient information and communication technology to tackle the key drivers of exclusion. It will also promote leadership and understanding and inform decisions.
I also announced that the Government would change the aims and objectives of the digital strategy to focus on digital inclusion. The Treasury will collaborate closely with industry on meeting the goals of the digital strategy, building on the success of more than 6,000 UK online centresmore than half of which are located in the 2,000 most deprived wards in England. Some 90 per cent. of the population live within 5 km of one of those centres, and that is precisely the type of investment that is needed to reach those groups.
It is stunning that every time the hon. Member for Falmouth and Camborne (Julia Goldsworthy) is asked about the Liberal Democrats spending commitments, we are told that they have a commission and are thinking about it. Then she berates the Government for investment in making progress on tackling social exclusion
Julia Goldsworthy: Will the Paymaster General give way?
Dawn Primarolo: I will give way to the hon. Lady if she will tell me where she will get the £300 million for the unfocused support of those who already have access to the technology and how she plans to tackle the exclusion of everybody else.
Julia Goldsworthy: Is it right that all the money saved from the withdrawal of the scheme will be reinvested in digital inclusion for vulnerable groups?
Dawn Primarolo: I have told the hon. Lady the Governments plans for spending the money. She has a flipping cheekI shall rephrase that. It is somewhat audacious of the hon. Lady to suggest that I should forecast future Government spending when she is not even prepared to make a current commitment on expenditure by her party on anything, let alone in this area.
I have made it clear that with the refocusing of the digital strategy, the setting up and use of the digital inclusion team and the discussions that we are having with industry, we are looking at how we can refocus support on targeted groups. I remind the hon. Member for Rayleigh (Mr. Francois) that if those people are low paid, unemployed or elderly, a salary sacrifice scheme will not help them, however it is amended. The point of the reports that the Government received was to demonstrate that the resources should now be directed at the groups I have mentioned.
The final question was about the remaining arrangements for when computer equipment is provided by employers solely for work purposes and the definition of significant in relation to private use. The HMRCs interpretation of not significant is that
where a computer is provided by an employer because it is necessary for an employee to have it available at home or in the office to carry out the duties of their employment, it is highly unlikely that any private use made of that equipment will be significant when compared to the business need.
It is assumed that the business need would outweigh any consideration of private use. To put that point beyond doubt, the HMRCin consultation with the employershas drafted guidance with detailed explanations of the point, which is currently being scrutinised. Employers can still provide computers for business need.
It is entirely appropriate that the Government should refocus the resources. There is no hidden agenda. The agenda is clear and it involves reaching out to those who are excluded from information technology and ensuring that the regime as provided is properly used. That is precisely what we have done.
Julia Goldsworthy: I shall be brief. Although the hon. Member for Rayleigh (Mr. Francois) may not approve, I am sure that many other Members will be grateful.
The unfairness still stands. People who could have benefited from the home computer scheme will not be able to access it and, as has been said in previous debates and again today, many of those people are in blue-collar jobs and low-income households. Businesses have closed as a result of the end of the scheme, so what confidence can the Paymaster General expect businesses to have in the Governments proposals to extend digital access to vulnerable groups? Why would they support or invest in future schemes, given their experience of the home computer scheme?
The right hon. Lady has not explained why the Government were not able to tighten the definition, when other countries were perfectly able to do so. For those reasons
Mr. Francois: Will the hon. Lady give way?
Julia Goldsworthy: Of course I will give way to the hon. Gentleman, provided that he is succinct.
Mr. Francois: I cannot give the hon. Lady an absolute guaranteethat is subject to the Chair.
Having heard the Governments explanation of what they have decided to do, we would very much like to join the hon. Lady in the Lobby if she decides to press the amendment to a vote. Does she agree that as the Paymaster General said that draft guidelines had been prepared on the not significant issue, it would be helpful if the Government placed a copy of the guidelines in the Library as soon as possible?
Julia Goldsworthy: I very much agree with the hon. Gentlemans last point. I was hoping to intervene on the Paymaster General to ask her to place in the Library the evidence provided to her by HMRC that the scheme was being used beyond its scope.
For the reasons I have outlined, I feel that the issue is still significant and I shall press the amendment to a vote.
Question put, That the amendment be made:
Next Section | Index | Home Page |