| Previous Section | Index | Home Page |
Stewart Hosie:
We need to consider all the R and D funding pots in the round. The hon. Gentleman was right to refer to the one that he did, but he will know that there are separate funding pots for research and
development in Scotland—SPAR, SPAR plus and SEEKIT—with different programmes available in England, and some UK-wide ones. Some of the money that used to be in the pots to which he referred may now be in R and D tax credits. Yes, that is wrong, but we need to view the issue in the round and work out how we can increase total R and D expenditure rather than concentrating on what has been taken from one particular pot.
What the Chancellor did say today was a great deal about the environment. Perhaps the Government can answer a couple of questions. When will they finally act to end disparity in charges for connection to the national grid? This is an old story. It costs more than £20 per kW to connect to the grid in the north of Scotland, but a subsidy of £8 per kW can be paid in the south of England. The Government promised to do something about that. I raised it with the then Secretary of State for Trade and Industry, the right hon. Member for Kingston upon Hull, West and Hessle (Alan Johnson) during last year’s Budget debate, and with the Secretary of State for Environment, Food and Rural Affairs on 30 October last year.
The Chancellor also made great play of carbon capture and storage, but I fear that we have heard all that before. In the 2005 Red Book, he said:
“The Government is therefore examining how it might support the development of CCS in the Climate Change Programme Review, including the potential for new economic incentives.”
In his pre-Budget speech in the same year, he said:
“Carbon capture and storage protect the environment from carbon emissions by containing them at source”.—[ Official Report, 5 December 2005; Vol. 440, c. 612.]
In his 2006 Budget statement, he said:
“Following a joint study with the Norwegian Government, we have found that carbon capture and storage in the North sea can reduce emissions from gas and coal power stations by 80 per cent.” —[ Official Report, 22 March 2006; Vol. 666, c. 294.]
In the 2006 pre-Budget report, he said:
“Today, Norway and Britain are together launching the first feasibility study for a new infrastructure for carbon capture and storage under the North sea.”—[ Official Report, 6 December 2006; Vol. 666, c. 309.]
The Chancellor announced today that there would be a competition, about which the Minister for Trade will tell us at some point today or in the near future.
Talk is cheap, and there has been an awful lot of it. The President of the United States has made available a $90 million tax allowance for a carbon capture and storage pilot project in the US. After all the warm words we have heard, intended to reinforce our green credentials, the Chancellor had an opportunity today to announce how much would be provided for the Peterhead CCS project and how the funding mechanism would work.
The Chancellor referred many times to senior citizens. What he failed to do was end the shame of means-testing and introduce a proper living pension. Like the hon. Member for Burnley (Kitty Ussher), I welcome the change in income tax for pensioners—the new threshold will help those who were previously just above the threshold and were missing out—but one in five pensioners in Scotland still lives in poverty. Means-testing has been extended, and nothing was said
today to give me any comfort. With real pension inflation at about 9 per cent., the Government have missed an opportunity to provide a living citizen’s pension and to index-link it properly.
I do not recall the Chancellor’s saying anything about the Olympics, although I know he has done so on a number of occasions in the past. That may be because he, or a future Chancellor, has written a blank cheque. The cost has already reached £9 billion, and everyone assumes that it will “go north” to £15 billion or £20 billion. This is an open-ended spending commitment, and—as with the war in Iraq and the decision to extend the life of Trident—we will be paying the costs for generations to come.
4.43 pm
Rob Marris (Wolverhampton, South-West) (Lab): I agreed with some of what was said by the hon. Member for Dundee, East (Stewart Hosie), as he would expect—he is a learned Member when it comes to topics of this kind. However, I must cavil at his quibble over the current Chancellor of the Exchequer, who in round terms has been in charge for 40 of the 59 quarters to which he referred. He said that for four of those quarters—I do not know whether this is true, but I take his word for it—economic growth in Scotland had stuttered. He criticised the Chancellor for a 90 per cent. hit rate; I think that that is pretty good going.
Stewart Hosie: Everything in the garden is not rosy. I will give the hon. Gentleman figures later to show that in a large number of other quarters, growth was at 0.1 or 0.2 per cent.—absolutely minuscule. When I give him that information, we will see whether he is really proud of Labour’s record in government.
Rob Marris: I concede that I am somewhat greedy and that I want more growth, but growth is growth and that record is much better than that of many, if not all, of the Chancellor’s predecessors.
Things are difficult for the Opposition. The most recent Organisation for Economic Co-operation and Development economic survey described the United Kingdom as a
“paragon of stability”.
It expects us in 2007 to be the second-fastest growing G7 economy, the fastest being Canada with a growth rate of 2.7 per cent. as against 2.6 per cent. for the UK. I know a little about Canada’s economy and, as there is massive development at the tar sands at Fort McMurray and external investment is pouring in, it does not surprise me that Canada has a higher growth rate than us. Also, its proportional population growth is higher each year than ours. However, it is still only slightly ahead of us in terms of the growth forecast not of our Government but of the OECD.
We need to consider the robustness of the economic figures that we are given. The National Audit Office “Audit of Assumptions for Budget 2007” was ordered to be printed today. In that, the NAO looked at some—but not all—of the Budget assumptions. The report is only about 30 pages long, and I would not expect it to look at every Budget assumption, but it has
looked at four of them. Its conclusions underline the robustness of the Treasury’s model, assumptions and forecasts.
Paragraph 80 of the 2007 report states of the Budget 2004 direct tax and national insurance contributions compliance and enforcement package that there would be
“an estimated yield greater than the revised forecast, and it was therefore cautious on this basis.”
I want the Treasury to be cautious—not too cautious, obviously, because that can mislead people and it does not wish to do that—and it was suitably cautious on direct tax and national insurance contributions, albeit in the Budget 2004 as the NAO can look into such matters only in hindsight.
The 2007 report also studied what it calls the VAT gap assumption. I confess that I do not know exactly what that is, but I might have done if I had had time to read the whole report. Paragraph 82 states:
“The use of the VAT gap assumption over the Rolling Review period from 2003 resulted in forecasts which were cautious in three of the four years and over the Rolling Review period as a whole, underforecasting of overall VAT receipts.”
Therefore, it is not the case that the Treasury was wildly optimistic in terms of the figures forecast in previous Budgets. The NAO looked at them ex post facto to see whether they were or not, and they were not.
Tobacco revenues are even more difficult for the Treasury to forecast than VAT because of matters such as tobacco smuggling. The NAO report states at paragraph 89:
“The assumed rate of 3 per cent. per year decline in underlying duty paid consumption is consistent with the recent available data”.
However, the Comptroller and Auditor General states at paragraph 90:
“I recommend that the Treasury and HMRC closely monitor trends in the monthly data”.
Factor income shares are addressed at paragraph 91:
“The assumption of broadly constant factor shares was a reasonable one over the three year Rolling Review period”.
Debt interest is addressed at paragraph 92:
“I am satisfied that the calculations of debt interest payments were consistent with forecasts for central government’s net financing requirement and with current financing policy at the time of each forecast made since Budget 2004, and are for Budget 2007.”
The NAO looked at only a few aspects of Treasury forecasting, but income tax, national insurance and VAT are big aspects. It found that Treasury forecasting is pretty robust—those are my words. That gives me, as a Labour Member, confidence that the forecasts of the Treasury and the Chancellor today are likely to come true; the evidence of the past supports that. That gives me some hope about where our economy and society are heading.
Mr. Mark Field:
I accept the argument about growth forecasts. Indeed, it is fair to say that the Opposition have occasionally rubbished those forecasts in years gone by, and been confounded by the outcome. However, does the hon. Gentleman not accept that some of those forecasts have been met partly because of large-scale migration, which has added to the economy’s growth? Moreover, many other Treasury
forecasts, such as the overall debt forecast—and, therefore, the overall outcome of the Budget—have proved to be very optimistic. It is our contention that that pattern might well continue in respect of the overall public debt in the next three or four years.
Rob Marris: The hon. Gentleman is gracious in defeat, as ever. Of course migration has had an effect on growth, and some of that, although, as far as I am aware, not all of it—I am not in the Treasury—was taken into account by the Treasury in its forecasting. There are some questions on the national debt, and I will come to where we stand and where we were in that regard.
Our employment rate is the highest of the G7 advanced industrial countries, and is far higher than the EU27 average. Our unemployment rate is only about two thirds of the EU27 average. In one sense, that is a dry economic statistic, but in another, it is not. We are talking about people’s lives and independence and the dignity of work, so that figure means something very important to the 29 million people now in work in the United Kingdom—a figure that has risen by more than 2.5 million in the past 10 years. That is a fantastic step forward for many people. Besides their own families, work is the central thing in most people’s lives.
Mr. Devine: My hon. Friend is absolutely right. When the Conservatives were in power, unemployment in my constituency was in excess of 20 per cent. I worked in primary care psychiatry, and general practitioners were prescribing anti-depressants and Valium to people who, if they could have been prescribed a job, would have been nowhere near the health centre.
Rob Marris: My hon. Friend is absolutely right. A little Brown pill is much better than a little blue pill.
The flavour of what the Leader of the Opposition and the very knowledgeable right hon. Member for Wokingham (Mr. Redwood) seemed to be saying was that nothing has improved in 10 years: that we have spent all this money—yes, we have, and it is a jolly good thing—and it has all been wasted. The right hon. Member for Wokingham repeatedly used that word, and it was implied, if not used in terms, by the Leader of the Opposition. I do not know what it is like in Witney—I have not been there in probably 40 years—or in Wokingham, which I have never had the pleasure of visiting. However, I know what it is like in Wolverhampton, where I was born and have lived almost all my life, and which I have the honour to represent.
I invite the Leader of the Opposition and the right hon. Member for Wokingham to visit Wolverhampton if they think that nothing has changed, and to consider not just factors such as the dignity of work and people’s lives—I referred to them earlier—but the physical things that one can see, which is the simplest measure. There are all kinds of other things going on behind closed doors, if I might put it that way, but let them consider the physical factors. My partner and I have lived in the same house for more than 23 years,
and I know the streets in my area like the back of my hand. I know who has had double glazing in the past 10 years. It is not always possible to see round the back of people’s houses; even so, I know who has had a conservatory fitted in the past 10 years. [Interruption.] Opposition Members are having a little giggle, which is fair enough, but those are visible symptoms of increased prosperity. I can tell who has had a new roof, and so could the Leader of the Opposition, the right hon. Member for Wokingham or any other Member who visited the street where I live, which is in one of the most deprived wards in the country. I can see who has had their dormer windows done. Such prosperity is visible, but it is also visible on a public scale. The idea is that all the money has been wasted somehow, but those right hon. Members could come and see the new—well, it is about three years old—heart and lung centre at New Cross hospital, the acute hospital that serves my constituents in Wolverhampton and some of the surrounding areas. It is arguably—according to the professionals, not just to the politicians—the best in Europe. It is a fantastic facility. Consultants from other parts of the world visit. They look at the machinery and say, “We’ve got one of those: you’ve got one for every bed.” They are goggle-eyed at the centre, which was built under this Government. It was also financed by this Government, and it is not PFI, I am glad to say.
My hon. Friend the Member for Livingston (Mr. Devine) mentioned his previous career. He and others might wish to visit Penn mental health hospital in my constituency, which has been almost totally rebuilt and deals with out-patients and in-patients. The mental health trust run by the PCT has a three-star rating. Hon. Members could see the new building and the refurbished old building. They could also see the Tettenhall Wood institute community centre, which has had £500,000 of taxpayers’ money spent on it, half of which was euro-dosh. The children’s centre in my constituency is a brand new building near West park and around 300 m from my office. On a smaller scale, hon. Members could also see the Oakley Buckley community centre, which has been completely refurbished under this Government. The university has had a £70 million investment, including the new glass front on the Mick Harrison building. If my right hon. Friend the Paymaster General, who is in her place on the Front Bench, visited the university of Wolverhampton—I know that she knows it well, but has not visited it for a while—she would be amazed by the development that has taken place.
Mr. Mark Field: The hon. Gentleman is making a great case for Wolverhampton and we might all be tempted to go there. The argument that all the money has been wasted is not very nuanced, and of course not all of it has been wasted, but the question is whether the taxpayer has had value for money, given the amounts that have been put into the health service, education and the other things that the hon. Gentleman mentioned. A lot of public money has been spent in the public realm, but we would argue that much has been wasted and an opportunity lost.
Rob Marris:
I am in a marginal seat—Enoch Powell’s old seat, as many hon. Members know—so I guess that I will find out in two years’ time whether the electors think that it is value for money. They have thought so
thus far. They elected a Labour MP for the first time in 46 years in 1997 and re-elected me in 2001 and 2005. They thought that they had had value for money then and I think that they will still think so in two years’ time. The electorate will decide, and so they should in a democracy.
The new St. Jude’s school—costing £4.5 million—was recently opened by the Secretary of State for Education and Skills. Hon. Members should see the buildings and talk to the people who use them. The hon. Member for Cities of London and Westminster (Mr. Field) was a distinguished and well-to-do businessman before he entered Parliament—he might well still be, as I do not know whether he is moonlighting. So many hon. Members on his side of the Chamber do —[ Interruption. ] Perhaps he has a two-day a week cleaning job. I did not have as distinguished a business career, but I was a partner in a law firm with a turnover of some £30 million—not peanuts—so like the hon. Gentleman I know that not every investment, whether in the private sector or the public sector, is successful. That is in the nature of encouraging risk and innovation.
Can I say, hand on heart, that none of the money has been wasted? Of course I cannot. Do I think that overall and taken in the round—not on a project-by-project basis—in terms of both the bricks and mortar that I have mentioned, and in terms of the changes in people’s lives, we have had value for money? Undoubtedly we have. If we segment the provision, of course we are going to find, for example, a computer that should not have been bought because an office that already had two did not need a third. That can be said about the private sector as much as it can about the public sector, but I have absolutely no doubt that, taken in the round, we have achieved value for money.
The police do not get talked about much when we discuss Treasury matters, but I believe that we have achieved value for money with them, too. Of course, there is a long way to go on crime, and the recent knife crimes are very worrying. Parenthetically, may I say how pleased I was that the Home Office announced a knife amnesty the day after I lobbied Ministers on that issue last year? I do not know whether that was an example of cause and effect.
It is true that we have huge problems with violent crime, and gun crime is a massive problem in Wolverhampton, but what is the true story of crime, overall? The independent British crime survey shows that taxpayers’ money has been used in a way that has achieved value for money. It has been spent on the police themselves, and on the other forms of policing—the neighbourhood wardens, community support officers and so on—that we must now call the police family. It is difficult for the Opposition to attack us about that, as we have achieved value for money in our spending.
The private company Manpower UK Ltd. has sent me its employment outlook survey. On page 1, in answer to a question about how total employment might change in the three months to the end of June 2007 compared to the previous quarter, the report says:
“UK employers forecast a steady hiring climate for the second quarter of 2007”.
| Next Section | Index | Home Page |