The Economic Secretary to the Treasury (Ed Balls):
The Government yesterday set before the House new measures to deal with terrorist and criminal finance, including a new licensing system for money services
business, additional funding of £1 million for the Charity Commission and the creation of a dedicated Treasury asset-freezing unit. Today, the Treasury is publishing its first quarterly report to Parliament on the operation of the UKs asset-freezing regime, which shows that, in the quarter to December 2006, the Treasury made seven domestic designations under terrorism and al-Qaeda orders.
new safeguards on the payment of state benefits to the households of terror suspects.[ Official Report, 28 February 2007; Vol. 457, c. 85WS.]
He will be aware that I wrote last week to the Secretary of State for Work and Pensions to call for an urgent investigation into Abu Hamza and his household, and their benefit claims. They have been drawing income support while seemingly receiving rental income from a house and also paying private school fees to the King Fahd academy. Given the Ministers pledge yesterday, will he speak to the Secretary of State for Work and Pensions to ensure that the investigation finally takes place?
Ed Balls: I was not aware that the hon. Gentleman had written to the Department for Work and Pensions. I was aware of the fact that we had a meeting a few months ago and then an Adjournment debate, in which he promised to write to me. I am still waiting for the letter.
Rob Marris (Wolverhampton, South-West) (Lab): I was wondering whether my hon. Friend could say, given the many steps taken by the Government and those he has outlined today, whether he anticipates all-party support across the House for these sorts of measures.
Mrs. Theresa Villiers (Chipping Barnet) (Con): Why was the report 12 months late? Why does it fail to close the loophole that allowed Abu Hamza to transfer a £200,000 property to his son? Can the House have any confidence that the new asset-freezing unit that was announced will be any more effective than the dismally unsuccessful Assets Recovery Agency, which was shut down after it cost £60 million to set up and collected only £8 million in assets from criminals?
I fear that a cross-party consensus on tackling the financing of international terrorism is still some way away. I have answered these questions before in Treasury questions, and also in a letter to the hon. Lady, in a meeting and in an Adjournment debate with the hon. Member for Hammersmith and Fulham (Mr. Hands). Every time I have pointed out that the actions that we took were consistent with UN, EU and UK law and were taken on the advice of the police and the security services. She may not think that it is important to act on the advice of the police and the security services, but I do and so do the Government. The document has been drawn up with close co-operation between the Home Office, the police, the agencies and the Serious Organised Crime Agency. It is a state-of-the-art document that shows that we are
acting in the national interest to tackle these issues. I wish that we could have a bit more maturity in this debate and a bit more of a cross-party consensus.
The Chancellor of the Exchequer (Mr. Gordon Brown): There are 2.6 million more people in work than in 1997. There is higher employment in every region. Employment is at record levels and our pay announcements today will help to continue to increase employment in the economy.
Shona McIsaac: I thank my right hon. Friend for that answer. Is he aware that in January 2000 the unemployment rate in the Cleethorpes constituency was running at 5.8 per cent., but that this January it was down to 3.4 per cent.? That is excellent news, although obviously more needs to be done to reduce that rate further. What effect does he think scrapping the new deal would have on maintaining full employment?
Mr. Brown: To scrap the new deal would be to go against the advice of not only the Government[Hon. Members: Oh!] Yes, but it would also be to go against the advice of the Conservative Chairman of the Public Accounts Committee, who said:
The programme has been effective in reducing long-term youth unemployment,
Clearly many young people have been helped by this programme and it has led to a fall in the overall level of long-term youth unemployment.
My hon. Friend cited figures for her constituency. If Conservative Front Benchers looked at the figures for their constituencies, they would see that, since 1997, unemployment is down by 48 per cent. in the constituency of the shadow Chancellor and by 33 per cent. in the constituency of the shadow Chief Secretary to the Treasury. In the other constituencies, the figures vary from 27 to 40 to 58 per cent. In each of their constituencies, unemployment is down. That is why they should support the new deal.
Julia Goldsworthy (Falmouth and Camborne) (LD): Despite the progress on employment that the Chancellor describes, does he agree that income inequality is still a key issue to be addressed? Does he accept the findings of the Institute for Fiscal Studies, which points to growth in the top incomes as a driver of continued income inequality? Does he agree that that should be resolved through the taxation system, or does he think that it should be tackled through enforced charitable donations as one of his Cabinet colleagues has suggested?
I wish that the hon. Ladys party would support the tax credit system, which is helping people in work to get higher incomes. The minimum wage is effectively a minimum income when translated through the working tax credit to something like £7 an hour for work. Unfortunately, the Liberal party has failed to
support the tax credit system. The hon. Lady talks about helping low-income workers, but if I remember rightly her party also opposed the minimum wage. Is it not time that the Liberal party think again [Interruption.] The Liberals wanted a regionally varied minimum wage; they did not want the national minimum wage. They should go back to the drawing board on this as on other issues.
Dr. Gavin Strang (Edinburgh, East) (Lab): Following on from that, does my right hon. Friend agree that although one major reason why unemployment has fallen in recent years is his successful management of the economy, another factor is Labours tax credits, which mean that work pays for families who, under the Conservatives, were better off on benefits?
For the past 10 years, inflation has been low, the stop-go cycle has given way to continued economic growth and there has been full employment.
a period of unprecedented prosperity.
Mr. Brown: I am sorry that the hon. Gentleman has not been following Treasury questions. I said at the beginning that there is much evidence that the rate of job creation through private equity has been high. We have to distinguish between good companies which are long-termist and some companies that are too short-termist. I hope that he agrees that the measures that we are taking to try to increase long-term investment in the economy, based first of all on stability, are ones that he should support. That is why it is rather strange that Conservative Front Benchers want to change the macro-economic settlement that was agreed in 1997 and has given us the longest period of unprecedented growth in our history.
Barbara Keeley (Worsley) (Lab): We know that access to affordable child care is often an issue if parents are to find employment. Although the number of registered child care places doubled by the end of 2006, some people in some parts of the country still find it an issue. What priority does my right hon. Friend attach to continuing, and increasing, funding for that affordable child care?
I accept that this is a priority, particularly for single parents going back into work. The rate of single parent employment has risen from 43 to 57 per cent. over the past few years and will continue to rise as a result of policies that we will roll out to all areas of the country. My hon. Friend mentioned support for child care. In 1997, when we came into power, child care help was given to only 50,000 families in this country. As a result of the tax credits that the
Conservative party opposed, 300,000 families now have child care supportsix times as many as previously. I do not believe that there are people who receive that child tax credit who will support Conservative plans to take it away.
Mr. Jeremy Hunt (South-West Surrey) (Con): Given that the mother of a disabled child is seven times less likely to be in work than mothers of other children, and that half of all disabled children are growing up in or at the margins of poverty, what specific measures will the Chancellor introduce to end the poverty and benefits trap that makes it impossible for so many disabled people and their families to look for work?
Mr. Brown: I am pleased that the hon. Gentleman has asked that question, because I can tell him that a review is taking place of what help we can give to families with disabled children. Only last week I visited a carer who has been caring for 18 years for her disabled child and now wants to work. I was talking to her about how we could help to make it possible for her to do so. When the hon. Gentleman puts his question, he should acknowledge what is already being done. In his constituency there are 4,400 families benefiting from tax credits, including 8,000 children. I hope that he will make representations to the shadow Chancellor to keep child tax credits, and I hope that he will acknowledge that unemployment has fallen by 43 per cent. in his constituency since Labour came to power.
Mr. Brown: I think that my hon. Friend is referring to the proposals from the Scottish National party, but he should recognise that the party is fighting the Scottish Parliament elections on three separate proposals. One is to keep the British pound; one is to have a completely separate Scottish pound; and the other is to do what the Conservatives did with the exchange rate mechanism, and have a special relationship between a Scottish pound and an English pound. Each of those proposals [Interruption.] We did not support the mechanism when it led to 15 per cent. interest rates under the Conservative Government through the total mismanagement of the economy. On the day we left the ERM, the present Leader of the Opposition was standing next to Lord Lamont, having to accept that the country had 15 per cent. interest rates for a whole year. We are certainly not going back to the failed policies of the Conservative Government.
The Paymaster General (Dawn Primarolo):
As the hon. Gentleman will have heard me say in my answer to the hon. Member for Gravesham (Mr. Holloway), recovery of the tax credit overpayment can be disputed. However, if the process has been settled and the dispute
has not been upheld, the money is recovered. The only situation in which the money would not be recovered is when the claimant shows that recovery would cause severe hardship.
Mr. Amess: What a shambles of a Government! We all know who is responsible for this particular fiasco: the next Prime Minister. I wonder whether the right hon. Lady has any appreciation of the distress felt by the thousands of constituents who present themselves at our surgeries because they are worried about making the repayments. Will she apologise to the House for that mistake, admit that the system is over-complicated, and simplify it?
Dawn Primarolo: Perhaps, Mr. Speaker, it is because there are 5,800 families and some 9,400 children benefiting from tax credits in the hon. Gentlemans constituency. In the past six months, he has written to me just five times about the issue of overpayment, so his rhetoric does not match the reality in his constituency, where thousands of families are getting the money that they need, when they need it, and they welcome it. They fear that if his party were in government, it would take that away from them.
Mr. David Laws (Yeovil) (LD): In both of the past two years there have been more than a third of a million disputed tax credit overpayments. In 2005, in 46 per cent. of cases, the claims of overpayment were overturned and written off on appeal, versus 4 per cent. last year. Why is the appeals system getting tougher, when it ought to be getting fairer?
Dawn Primarolo: The hon. Gentleman draws completely the wrong conclusion, as normal. Perhaps he will understand that the overpayments should not be blamed on the Department, as he seeks to do, or on individual claimants; he should recognise that as we have a responsive system, the claimant has to make sure that the information given is correct. Under the Liberals proposals for a fixed system that he is peddling around the country, more than 700,000 families who benefit from tax credits would be worse off.
The Economic Secretary to the Treasury (Ed Balls): Macro-economic stability has allowed the Government to achieve growth with fairness. Since 1997, average incomes have risen by 2.9 per cent., but the greatest growth has been for the poorest 40 per cent. of families, whose incomes have grown by an average of 3.4 per cent. a year. We should compare that to the period of 1979 to 1997, when incomes grew by an annual rate of just 0.1 per cent.
Mr. Burrowes: Given UNICEFs assessment that relationships have a significant impact on childhood well-being, would Britain perform better if we followed the advice of the Secretary of State for Education and Skills, supported today by the Economic Secretary, not to give tax breaks to married couples? Or should we take the view of the Work and Pensions Secretary, which is that there should be support for couples who look after children? Will the Economic Secretary confirm that he agrees with the response given to the hon. Member for Wallasey (Angela Eagle), and that the Government do not support marriage as a means of promoting childhood well-being?
Ed Balls: I could not work out from that whether the hon. Gentleman supported the shadow Chancellors policy or that of the Leader of the Opposition. The UNICEF report was based on data that went up to 2000. Since then, there has been a substantial fall in child poverty. The House does not have to take my word for it, as an esteemed newspaper columnist told the BBC:
Im mildly sceptical about the Unicef report...some of its facts are mildly out of date...I think it was actually unfair to the Government.
The Financial Secretary to the Treasury (John Healey): The Governments macro-economic framework in the past 10 years has delivered unprecedented stability and rising prosperity, which means that households benefit from rising employment, strong income growth and low and stable interest rates.
Fiona Mactaggart: I know that householders will be grateful for low interest rates under this Government. Even the present, slightly increased interest rates are lower than those that prevailed for all but seven months of the years up to 1997. Has my hon. Friend noticed that our Governments record is significantly better than that in the 18 preceding years, in which interest rates were in double digits for 11 and a half years?
John Healey: My hon. Friend is absolutely right. It is tough to make household finances meet at the best of times, particularly if one has to make mortgage payments on top of other expenses. Clearly, it is very much tougher if interest rates are not at 5.25 per cent., as they are now, but at 10.5 per cent., which they averaged for the entire period in which the Conservative Government were in office.