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Mr. Brown:
In recent weeks I have met many people who raised with me the question of how China and India are funding vast expansions of engineering training. Here in Britain we need more engineers and
we have to persuade more people to study engineering: partly through the reputation of science and engineering, which we must enhance; partly through encouragement to young people through vocational training in their schools, which we are expanding at present; and partly through the train to gain scheme, which is now in companies, where nearly 100,000 people are benefiting and gaining qualifications that they can add to. Some of those people will go on to become engineers. In those three ways, we will pursue a strategy to get more engineers in the economy and to value more the work that our great engineers do for this country.
Mr. Simon Burns (West Chelmsford) (Con): Does the Chancellor agree that there is something seriously cock-eyed in the relationship between skills in the work force and economic growth and performance, when people such as those at my local university in Chelmsford, who have trained for between two and three years to become highly skilled nurses, could not find a job when they completed their training because the local NHS trust had to make 250 nurses redundant last week?
Mr. Brown: The fact of the matter is that nearly 80,000 new nurses are being employed by the national health service. The fact of the matter is also that the NHS budget is rising by between —[ Interruption. ]
Mr. Speaker: Order. I have to say to the hon. Member for West Chelmsford (Mr. Burns) that he asked the Chancellor a question, so he should let him reply, and not shout at him— [ Interruption. ] I am not responsible for the Chancellor’s answer—that is one thing I am not responsible for.
Mr. Brown: There are 80,000 new nurses in the national health service and more than 20,000 new doctors. The health service budget will expand next year. I believe that nurses now in training will get jobs in the future, but the one policy that would prevent them from doing so, and prevent us from expanding the NHS, is to go for irresponsible tax cuts in preference to investment in public services.
Mr. Adrian Bailey (West Bromwich, West) (Lab/Co-op): Local black country business leaders assure me that skills and training are essential for the future economic well-being of my locality. Can my right hon. Friend assure me that in the spending review they will be given high priority in future spending plans?
Mr. Brown: I accept what my hon. Friend says. As he knows, the Leitch report is considering all aspects of skills for the future of our economy, and is looking into how we can persuade both those in the workplace, and those who will join the workplace later, to get the skills necessary for the future. I agree with him that that must be a priority for the nation as it faces the global challenges ahead, but let us be honest: that will require us to spend a higher share of national income on education and training, and it will require employers, as well as Governments, to spend more on education and training. We cannot do that if we have irresponsible policies, promising reckless tax cuts that would put our country’s public services, and the stability of the economy, at risk.
Biofuels
3. Miss Anne McIntosh (Vale of York) (Con): What pump-priming he plans to provide to research and development in creating biofuels from agricultural products. [97058]
The Financial Secretary to the Treasury (John Healey): We strongly support greater use of biofuels in Britain. The Chancellor’s announcements in the Budget of a new road transport fuels obligation and the extension of the duty discount on biofuels were welcomed by the industry and by this House. Those measures are helping to create the climate for new investment and expansion, and the latest figures show that sales of biofuels in Britain are about double last year’s levels.
Miss McIntosh: I welcome that answer, but could the Minister give the House an indication of how long allowances other than those to which he referred—how long the Treasury’s whole regime for supporting biofuels—will last? My understanding is that the allowances are time-barred for three years, and that they will not run for a fourth year until that first three-year period is finished. However, to defray costs, people investing in bioethanol plants, particularly sugar beet, which is a key crop in north Yorkshire, are looking to write off the costs over 10 years, so we need to boost confidence in such investment over a longer period.
John Healey: The guarantee on the duty discounts lasts for three years, and we deal with that on a rolling basis. The obligation is set at 5 per cent. until 2010-11, but we have made it clear that we want to extend it beyond that date. Another important element is the research and development tax credit, which is available to biofuels firms, just as it is to firms in other sectors. Some £1.8 billion has been claimed in R and D tax credits since we introduced them. That support is absolutely vital, as Britain’s capacity to compete internationally will in future depend ever more on our R and D, and on commercialising science and innovation. I can tell the hon. Lady that the prospects for the economy, the certainty that people want about biofuels, and the prospects for manufacturing, including in her constituency, would only be harmed by her party’s commitment to abolish the R and D tax credit.
Mr. Bob Blizzard (Waveney) (Lab): In East Anglia a new bioethanol plant will shortly come on-stream, and of course we have many acres of sugar beet that can be processed into bioethanol. However, not many vehicles can use bioethanol. What discussions is my hon. Friend the Financial Secretary having with motor manufacturers to make sure that full-flex vehicles, such as those in Brazil that can run off both traditional petrol and bioethanol, are available in this country?
John Healey:
My hon. Friend, who follows the subject closely, will know that the obligation relates to blended fuel, which can be used in conventional engines and delivered through pumps on the forecourt. On the future generation of biofuels, he will have noticed that part of the Budget announcement on
supporting biofuels concerned reducing vehicle excise duty for those with car engines that run on E85. Our ability to move further on the issue will depend partly on the European Union changing its fuel quality standards, and partly on the discussions that my right hon. and hon. Friends in the Department for Transport are leading with motor manufacturers, to ensure that there are improvements in engine technology that will allow greener future fuels to be used more widely in Britain, as elsewhere.
Environmental Taxation
4. Mr. Jeremy Hunt (South-West Surrey) (Con): What proportion of tax revenue was represented by environmental taxation (a) in 1997 and (b) in the latest year for which figures are available; and if he will make a statement. [97059]
The Chief Secretary to the Treasury (Mr. Stephen Timms): Revenues from taxes introduced for a specifically environmental purpose amounted to 0.12 per cent. of overall tax revenues in 1997, and that rose to 0.4 per cent. in 2005. The climate change levy has proved particularly effective, delivering more than 28 million tonnes of emissions savings so far.
Mr. Hunt: The Minister’s answer was carefully worded, but I remind him that the proportion of green taxes has fallen from 9.4 per cent. in 1997 to 6.2 per cent. this year. Is that what the Chancellor meant when he said, in this morning’s Financial Times, that he had got the balance about right in the economy? Is the Minister aware that CO2 emissions have gone up in six of the past eight years, and does he not agree that the only solution—
Mr. Speaker: Order. The hon. Gentleman has asked about three supplementary questions.
Mr. Timms: The problem with the hon. Gentleman’s metric is that it measures the wrong thing. That could increase with an increase in pollution, which is a bad thing, not a good thing. We need a balanced package of fiscal measures and trading, and that is what we have delivered. The hon. Gentleman should support the climate change levy, which is a big switch from taxation on employment to taxation on pollution, and delivers 6 million tonnes of carbon savings a year. I hope that he welcomes that.
Rob Marris (Wolverhampton, South-West) (Lab): My right hon. Friend will be aware that green taxation on company cars has resulted in a hugely positive change in behaviour, but will he assure me that he will resist the temptation to make revenue from green taxes central to Government funding, as that would lead to a huge black hole in Government finances if and when behaviour changed?
Mr. Timms: My hon. Friend is right. The company car tax changes are very important, as they save about a quarter of a million tonnes of carbon a year, which will probably increase to half a million tonnes by the end of the decade and more beyond that date. It is important not to create huge holes in the public finances. For example, abolishing inheritance tax would require an 18p increase in petrol duty. If that is the Opposition’s policy, we should know about it.
Mr. Mark Francois (Rayleigh) (Con): According to a poll published this week, only 4 per cent. of the population believe that Labour has made effective progress on climate change; presumably the Chancellor is one of them. Does not the fact that he suddenly mentioned the issue 15 times in his Budget speech, compared with a previous average of one speech reference—
Mr. Speaker: Order. The hon. Gentleman must ask a question. This is a supplementary question; he must not make a long speech.
Mr. Francois: The question is—because the Chancellor mentioned climate change 15 times this year, but only once the year before—is it not true that he is much more interested in political change than climate change?
Mr. Timms: The hon. Gentleman had the opportunity to support the climate change levy, which delivers 6 million tonnes of carbon savings a year. Almost uniquely in the world, we will deliver on our Kyoto objectives, and that is the result of the Government’s policies.
Employment
5. Andrew Gwynne (Denton and Reddish) (Lab): What recent assessment he has made of the effect of levels of employment on the UK economy. [97060]
The Economic Secretary to the Treasury (Ed Balls): Employment levels are the highest on record, and have grown year on year every month since 1997, contributing both to the strengthening of economic growth and an 800,000 reduction in child poverty under this Government since 1997.
Andrew Gwynne: Part of our success in areas such as Denton and Reddish stems from a combination of the new deal, the national minimum wage and tax credits, all of which help to make work pay. Does my hon. Friend agree that in future we need to do even more to invest in skills and training so as further to enhance employment opportunities in areas such as mine, and that that should be our economic priority, not unfunded tax cuts?
Ed Balls: I do agree, and I wish only that the shadow Chancellor agreed, too. We have increased employment since 1997 by 2.5 million jobs. In my hon. Friend’s own constituency, unemployment has gone down by 42 per cent., youth unemployment by 62 per cent., and long-term unemployment by 84 per cent. since 1997. [ Interruption. ] That is not good enough, however, as we still have too many people out of work on incapacity benefit, and we still have too many lone parents who want to work but cannot. The way to address that is to expand the new deal, not to abolish it.
Mr. David Laws (Yeovil) (LD):
What assessment have the Government made of the impact on employment of the tax credit system? As the Chancellor of the Exchequer has failed to answer a question on the issue in Treasury questions for 896 days, will the Economic Secretary tell us whether the
Chancellor has read the recent report from the Institute for Fiscal Studies that indicates that work incentives have become worse under this Government?
Ed Balls: I am proud of the fact that we have more than 1 million more single parents in work because of the way in which tax credits, with the new deal, have boosted thier employment prospects. The employment outlook from the Organisation for Economic Co-operation and Development states:
“There is a group of countries”
“where the policy-driven improvements in employment and unemployment over the period considered have been the most significant”.
The OECD is referring to what we have done on tax credits. Tax credits and the new deal have improved the employment prospects of single parents in our country.
Miss Anne Begg (Aberdeen, South) (Lab): The economy in Aberdeen is booming. We have very low unemployment. It is well below 2 per cent., which is effectively full employment. However, there is a labour shortage; employers are finding it difficult to find people to go into work. What else can the Government do to encourage more people who are on inactive benefits to get into work?
Ed Balls: My hon. Friend is right; we need to do more to help single parents get back into work with our support through the new deal and child care. We are also expanding the pathways to work initiative, which will help more people to move from incapacity benefit into employment. I hope that people in her constituency will be able to benefit from those measures as well.
Mark Pritchard (The Wrekin) (Con): Is the Minister aware that unemployment in Shropshire has risen by 36 per cent. over the past 12 months and that nationally unemployment is at a six-year high? I invite him, rather than reading tired and outdated ministerial briefs, to join the dole queues that are growing in Shropshire every single day of the week, and to come into the real world for a change.
Ed Balls: We have the lowest level of unemployment for 30 years. We have 255,000 more people in work this year than last year. People have long memories; they remember 3 million unemployed and the 1.5 million families in negative equity. They also remember that it was unfunded tax cuts that led not only to public spending cuts but to double-digit interest rates. Nobody wants to go back to those days and, under this Government, that will not happen.
Anne Snelgrove (South Swindon) (Lab): Is my hon. Friend aware that, during the summer recess, Honda in my constituency announced another 700 jobs to manufacture the new Civic? That is due in part to the success of the work force and management in doubling production of the new Civic in six months. Does my hon. Friend agree that Honda’s investment in manufacturing in Swindon demonstrates a world-class company’s confidence in the Labour Government’s world-class economy?
Ed Balls: I do agree, and there are similar examples all around the country. The most important thing driving that job creation and new investment has been the stability in our economy since 1997—stability through Bank of England independence and through our fiscal rules. That stability would be put at risk if we were to return to the old days of unfunded and uncosted tax cuts for a few, which would be paid for by higher interest rates and instability, hitting families all around our country.
Mr. Mark Hoban (Fareham) (Con): In 1995, the Chancellor said:
“Our plan is nothing less than to abolish youth unemployment. I will not make promises I cannot keep”.
Will the Minister confirm that the numbers of young people who are neither working nor studying are higher now than they were when the Government came into office? Is not that promise simply an early example of the Chancellor’s tendency to call for aspirations without a commitment to a specific timetable for delivery?
Ed Balls: If the hon. Gentleman looks at the figures, he will find that his claim is untrue. Since 1997, we have seen not only falling youth unemployment—down by two thirds—but falling inactivity among 16 to 17-year-olds. The fact is that we have more people going into apprenticeships and going to college —[ Interruption. ]
Mr. Speaker: Order. Mr. Osborne, the shadow Chancellor should not conduct himself like that.
Ed Balls: I am sure that you are right, Mr. Speaker, although I do not think that the House will be surprised that he is.
We have more people going to college and going into apprenticeships and all those people are included in the figures referred to by the hon. Member for Fareham (Mr. Hoban). There has been falling inactivity among that population group and, at the same time, there has been falling unemployment among young people. We should be proud of the achievements that we have seen since 1997, rather than trying to run them down with inaccurate figures.
Debt Relief
6. Lynda Waltho (Stourbridge) (Lab): What his plans are for debt relief; and if he will make a statement. [97061]
The Chancellor of the Exchequer (Mr. Gordon Brown): In addition to debt relief of $38 billion to 20 countries, 20 additional countries may qualify for relief of up to $50 billion. As a unilateral act, the UK is offering the equivalent of our share of 100 per cent. debt relief to a total of 80 countries and we call on other countries to follow.
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