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How is the Clunking Fist going to make that work?

Mr. Brown: We have created the most modern system of investigating fraud and I think that the hon. Gentleman will agree that the changes in HMRC and more generally in our approach to dealing with criminal fraud have been major and substantial. I do not quite understand the hon. Gentleman’s point when he says that relocation has been unbalanced throughout the whole of the UK. Relocations are also taking place in the south-east region, from the centre of London to some of the south-east’s higher unemployment areas. The House should know that, so far as the 10,000 reallocated jobs are concerned, 2,000 went to Yorkshire, about 1,000 to the midlands, 2,500 to Wales, 693 to the south-west, and the east of England and the north-east have also received some relocations. It is important to correct the misrepresentation, as these relocations are taking place right across the UK.

Mr. Brian H. Donohoe (Central Ayrshire) (Lab): The Chancellor will be aware that unemployment in my constituency has dropped since 1997 and that it continues to drop, even since last month’s announcement. Will my right hon. Friend tell me how I should campaign to get some of the relocated jobs into my constituency?

Mr. Brown: I am grateful to my hon. Friend, who has fought for jobs in his constituency. He is right that, as a result of the new deal and other Government initiatives, unemployment in his constituency is lower now than it was in 1997. A report will be published soon on the economic and social benefits of relocation. I suggest that, following that, we have a meeting to look into how jobs can be relocated to new areas that have not yet benefited from the relocation policy.

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Banking and Lending Services

4. Natascha Engel (North-East Derbyshire) (Lab): What steps he is taking to ensure that benefit claimants and people on low incomes have ready access to regulated banking and loans services. [104885]

The Economic Secretary to the Treasury (Ed Balls): The Government’s goal is to halve the number of people without access to a bank account. We have established a £120 million financial inclusion fund and an independent financial inclusion taskforce, which has recently reported to me that we are making good progress towards that goal. I can tell the House today that we have appointed two new members of the taskforce: Bridget McIntyre, the UK chief executive of Royal and Sun Alliance, and Danielle Walker Palmour, director of the Friends Provident Foundation.

Natascha Engel: The Farepak disaster has thrown a spotlight on the financial barriers and debt burdens faced by the poorest people in this country. How is the Treasury using this opportunity to promote the good work of organisations like credit unions and to warn against loan sharks and doorstep lenders?

Ed Balls: My hon. Friend is quite right to highlight the important role that credit unions can play. It is important that we crack down on loan sharks as we learn lessons from the terrible Farepak debacle. As she knows, we are putting £36 million into supporting credit unions for low-income lending. In addition, there are two pilot schemes—one of which I visited in Birmingham last Friday—for cracking down on illegal loan sharks. Over the past year or two, the Birmingham team has helped 1,000 victims and wiped out more than £1 million worth of debt. A team in Glasgow is doing the same work. We have put £1.2 million aside to continue those pilots for a further year and to extend them to Sheffield, Liverpool and west Yorkshire. The Government are determined to crack down on loan sharks and to make available the resources to do so.

Sir Nicholas Winterton (Macclesfield) (Con): I fully support the hon. Member for North-East Derbyshire (Natascha Engel), who put an important question, but in addition to ensuring that people on low incomes have access to resources should not the Government be doing more to prevent the financial services industry, particularly banks and credit card companies, from bombarding people to borrow money for irresponsible purposes? Can we do more to regulate those organisations to prevent them from tempting people on low incomes?

Ed Balls: As the hon. Gentleman knows, the Office of Fair Trading is responsible for such regulation. As a result of the Farepak problems, a review of the regulatory framework of such schemes is under way. The Department of Trade and Industry is also holding an investigation into the particulars of the case. In addition, we at the Treasury have asked Brian Pomeroy to carry out a review for us of the debt implications of hamper schemes and savings clubs. I have asked him to look into who uses hamper schemes, which are often poor value for money, why they opt for such schemes rather than mainstream financial services products, and in the light
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of that, to consider whether the savings needs and debts of those groups can be better met by mainstream financial services providers; and to consider what we can do to promote consumer awareness in that area. I hope that the hon. Gentleman can see that we are acting to try to make sure that we learn the right lessons from the problems of recent weeks.

John McFall (West Dunbartonshire) (Lab/Co-op): As the Minister is aware, the Treasury Committee has recently produced three reports on financial inclusion and I thank him for his ready co-operation with us. The main conclusion of those reports is that the poor pay more for their credit, and as 3 million people still have no access whatever to bank accounts there is still a mountain to climb. The Committee looked at one good aspect—the savings gateway, which, with matched pound for pound contributions from the Government, helps people on low incomes who do not benefit from tax relief. Will my hon. Friend ensure that the savings gateway pilot is encouraged throughout the country to help people on low incomes to save?

Ed Balls: I am grateful to my right hon. Friend; he and his Committee have played an important leadership role on those matters in recent months and we are studying his report in detail. He raises some particular issues about cheque clearing and generic advice, on which we are already acting. I hope that the review that I have asked Brian Pomeroy to carry out will tell us precisely what more we need to do to make sure that our savings mechanisms for low-income savers work well. I very much look forward to the report the Committee will soon produce on access to automated teller machines in low income areas. I know that my right hon. Friend has done important work on that subject and I hope that we shall be able to welcome the conclusions of the report. I can assure him that we are giving close consideration to all the issues he raises in his reports and we shall respond in the new year.

Red Diesel

5. Mr. Alistair Carmichael (Orkney and Shetland) (LD): What recent progress has been made in negotiations to extend the derogation from EU regulations to enable UK pleasure boats to use red diesel in 2007; and if he will make a statement. [104886]

The Financial Secretary to the Treasury (John Healey): I know that the derogation that permits the use of red diesel in Britain is highly valued by private boat owners and users. Thirty-four separate derogations from the directive are held by member states. None has yet been approved by the Commission and 14 have been rejected so far. Late yesterday afternoon, it was confirmed to me that the Commission had decided not to renew the UK’s application for a fresh derogation for private boats. I know that will be unwelcome news. As we have argued to the Commission, it could be highly complex and costly to implement the measure, so today I asked officials to meet concerned and affected organisations soon to discuss the implications of the Commission’s decision.

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Mr. Carmichael: I thank the Minister for that answer, and he is right that the terms of the Commission’s communication to the Council of the European Union are disappointing. Is he telling the House that that communication effectively kills the application for the derogation, as it is, of course, a communication to the Council? What can we do to ensure that the necessary pumps and facilities will be put in place in every marina and pier that will require them before 1 January? I have pursued the Minister on that point for a number of years. The issue could have been dealt with much more quickly and much sooner, if he had had the backbone to deal with it.

John Healey: We put the strongest possible case to the Commission, and we prepared that case in close co-operation with, and with contributions from, many of the organisations affected. We could have done little more to press the case. I have personally spoken with and written to the Commissioner on the issue, but there is no further stage in the process. First, we need to discuss the implications of the Commission’s decisions. Secondly, we will consult widely on implementing the directive. Thirdly, we will have to legislate, and implement the changes. I made it clear to the Commissioner that it is important to allow the UK a suitable period in which to translate the Commission’s decision into the implementation of the changes required. The Commissioner acknowledged that point, and we will work with the boating associations on that in the coming months.

Rob Marris (Wolverhampton, South-West) (Lab): The derogation relates to pleasure boats, but not working boats. Can my hon. Friend tell me how much tax revenue is forgone each year because of the red diesel tax concession for those engaging in aquatic leisure pursuits?

Hon. Members: Answer!

John Healey: It is fair to say that my hon. Friend has not been one of the strongest proponents for continuing the derogation. He is right that the derogation applies to private boat owners. Commercial boat owners and commercial interests will continue to benefit from reduced rates of duty on fuel. The revenue that we expect to gain if we are forced to implement the three derogations that we currently hold—and we have applied to the Commission for their renewal—totals about £10 million. The revenue gain is totally out of proportion to the cost of implementation, the complexity that may result for the industry, and the disadvantage to users. That was the core of the case that we put to the Commission, and I am disappointed that it rejected continuing the derogation for private boat owners.

Mr. Robert Goodwill (Scarborough and Whitby) (Con): The decision will be met with great dismay in marinas in ports such as Scarborough and Whitby. Does the case not expose the myth of the UK veto on taxation matters? A stealth tax is being imposed on us by the European Commission, against the wishes and the request of the British Government. Who runs Britain?

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John Healey: I know the hon. Gentleman’s constituency well and I recognise the concern that will be felt in Scarborough and Whitby. However, I must point out to him the source of the derogation. The principle that road fuel level duty should be applied to private boat owners was agreed not in 2003 under the energy products directive, but in 1992 under the mineral oil structures directive, by the previous Government.

Mr. Brian Jenkins (Tamworth) (Lab): I am sure that my hon. Friend will know that, as has been stated, the new regulation will be impossible to police, and it will add a further burden to our law enforcement agencies. However, is it not about time that we woke up to the fact that red diesel is outdated? It is just as polluting and bad for our environment as ordinary diesel. Should we not work towards cutting out red diesel? To meet the costs that that would mean for the industry and users, we could come to some tax arrangements that would allow us to phase in that change over the next decade.

John Healey: My hon. Friend is right that, in some respects, red diesel is more polluting than mainstream fuels. He will have noted that, yesterday, my right hon. Friend the Chancellor announced a special duty rate in the pre-Budget report to encourage rail operators to use biofuels mixed with red diesel to reduce the environmental impact. Red diesel is valuable to many commercial sectors that have been given permission to use it. The consequences of moving away from red diesel would be profound, but in the case of the derogation that we are considering this morning, its environmental impact is negligible, which was part of our case to the Commission for retaining it.

BBC Licence Fee

6. Mr. John Grogan (Selby) (Lab): What recent discussions he has had with the Office for National Statistics on whether the BBC licence fee should be treated as a tax. [104887]

The Financial Secretary to the Treasury (John Healey): There have not been any discussions between Treasury Ministers and the Office for National Statistics on the reclassification of the BBC licence fee, which is a matter solely for the national statistician, not for Ministers. It has been done solely for the purposes of compiling the national accounts, and it has been done consistent with national guidelines.

Mr. Grogan: Given that the Chancellor is one of the strongest advocates of modern British values, does my hon. Friend share my hope that, after careful scrutiny, he will decide to back one of the most trusted British brands—the BBC—and agree an adequate increase in the licence fee to allow a successful digital switchover, a move in production to Manchester and more quality programming, even if that annoys Mr. R. Murdoch, who would love to see a cash-strapped BBC and who opposes Government plans for a digital switchover.

John Healey: As chair of the all-party BBC group, I accept that my hon. Friend is more interested in the size of the licence fee than its statistical classification.
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However, he follows these things closely, so he knows that the licence fee has risen by 15 per cent. above inflation since 1997. He knows, too, that the BBC’s income has risen above that because of the growth in the number of households and improved clamping-down on evasion of the licence fee. We can settle the new licence fee for the next period at a level that is fair to the BBC and to the licence fee payer, and that allows the BBC to lead and fund the digital switchover, while making sure that it is available to everyone in the country.

Miss Anne McIntosh (Vale of York) (Con): In the absence of the chairman, with whom will the Government discuss the future of the BBC licence fee?

John Healey: The deputy chairman is acting as chairman pro tem, and we will hold discussions as appropriate. We will hold them with the new chairman when one is appointed.

Ian Lucas (Wrexham) (Lab): Does my hon. Friend support access to the licence fee for the community radio fund, so that in areas such as Wrexham, where the BBC refuses to provide a local radio station, the community radio station that will begin broadcasting in the new year will have access to public funding?

John Healey: We are considering all the relevant matters in decisions on the licence fee for the future period. We will make an announcement as soon as we can, when the work is completed.


7. Mr. Peter Bone (Wellingborough) (Con): What steps he is taking to tackle unemployment; and if he will make a statement. [104888]

The Chancellor of the Exchequer (Mr. Gordon Brown): I announced yesterday new measures to help lone parents and the young unemployed into work. Since 1997, 900,000 lone parents have benefited from the new deal, and 122,000 disabled men and women have found jobs. We have helped 316,000 young people and 283,000 of the long-term unemployed, which is one reason why there are now 2.5 million more people in work than in 1997. The answer is not to abolish the new deal but to extend it into a new deal for jobs and skills.

Mr. Bone: Last year, unemployment increased in 527 constituencies across the United Kingdom. In Wellingborough, unemployment increased by 17.6 per cent. There are, and I have checked my figures, more people unemployed in Wellingborough today than there were nine years ago. Is this “here today, gone tomorrow” Chancellor proud of that record?

Mr. Brown: I know more about Wellingborough than almost any other constituency in the country. The claimant count is down from 1,856 in May 1997 to 1,535 now. Youth unemployment in the hon. Gentleman’s constituency is down by 47 per cent. since 1997, and adult unemployment is down by 71 per cent. The count on employment shows that not a few
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hundred but several thousand new jobs have been created in his constituency since the last election.

I hope that the hon. Gentleman is more serious about creating jobs in the future. On April 15 2005, he said this in the Northamptonshire Evening Telegraph, “We want to get rid of red tape, but if that means unemployment, I am sorry, they will get another job. We are not here to create jobs.” I hope that he will support us on the new deal.

Mr. Dennis Skinner (Bolsover) (Lab): Does the Chancellor agree that as a result of the coalfield plan, we have made progress in coal-mining areas throughout Britain? I have spoken in many of those areas, where there have been 40 to 50 per cent. reductions in unemployment—at one time, many of those pit villages experienced unemployment of 15 per cent., and in some cases the figure reached 20 per cent. We will need a little bit more money for junction 29A, which goes straight into Markham pit yard. That is where we are going to get rid of all the pit tips and the lines of coke, which will be replaced by industrial premises and 5,000 jobs. Give us the extra money.

Mr. Brown: My hon. Friend has outlined the high road to employment. Looking at every region of the United Kingdom since 1997, there are 160,000 new jobs in the west midlands, 200,000 new jobs in the east midlands, 200,000 new jobs in Scotland and 200,000 new jobs in Yorkshire and Humberside. The one thing that the Opposition cannot say is that the 2.5 million new jobs that have been created in Britain in the past 10 years is not a record for this country. There is a higher proportion of people in work in this country than in most of the other advanced industrial economies. The Opposition should support the new deal, rather than trying to abolish it.

Greg Clark (Tunbridge Wells) (Con): According to the Joseph Rowntree Foundation this week, unemployment among adults under 25 has never fallen below 10 per cent. since the Chancellor came into office, is three times greater than for adults over 25 and is now rising. Does the Chancellor agree with the Joseph Rowntree Foundation? Will he accept that that is a problem? And why does he think that policy has so far failed that group of people?

Mr. Brown: The hon. Gentleman might also have said that unemployment has fallen in his constituency by 54 per cent. since 1997 and that it has fallen for the young people that he is talking about. It is important that the House knows the employment figures on 18 to 24-year-olds since 1997, despite what the Opposition say. There were 3,230,000 young people in work in 1997; by 2006, the figure was 3,600,000, which is an increase of more than 300,000.

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