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Mr. Straw: I note my hon. Friend’s concern and I commend him for it. I cannot promise a debate in the very near future, but International Development questions will take place next Wednesday, and I very
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much hope that he can raise this crucial issue with my right hon. Friend the International Development Secretary then.

Mr. Graham Stuart (Beverley and Holderness) (Con): May we have a debate on the performance of the local government ombudsman? The ombudsman who covers the East Riding of Yorkshire, of which my constituency is part, is overwhelmed with complaints and is unable to deal with them properly. A three-person team has been set up to deal with the backlog, but at the rate currently being applied in these extreme circumstances it will take more than a year even to start processing many of the complaints. Without proper coverage, we are letting down people with genuine complaints.

Mr. Straw: If the hon. Gentleman is lucky, he might get an Adjournment debate. However, it is very important that he say who controls that council, because it is certainly not an excellent Labour group.

Mr. Jim McGovern (Dundee, West) (Lab): May we have a debate on flexible working and job sharing, both of which have been hugely successful for thousands of workers throughout the UK, particularly single parents and carers? A debate on job sharing would also allow us to discuss the position of those Members of the House who believe it possible to combine holding down a job in this place with running a country of more than 5 million people—a view that I regard as a gross insult to the people of Scotland.

Mr. Straw: I commend my hon. Friend on his ingenuity. I would be very happy to see a debate on job sharing; indeed, there is every opportunity for him to raise these points during the Budget debate, bearing it in mind that we have made flexible working such an important aspect of our economic success.

Justine Greening (Putney) (Con): May we have a debate on the state of the youth justice system? This House has talked briefly about the tragic consequences of youth-on-youth crime in recent weeks, but the reality is that the youth justice system is creaking and unable to cope with the current number of young offenders. The secure estate for young offenders is full and contingency measures are being looked at. The community orders given to young offenders—two thirds of them will get such orders—are being routinely breached. Two thirds of drug rehab orders were breached last year, and 50 per cent. of intensive supervision and surveillance orders were breached. So may we have a serious debate in this House on the youth justice system, which is increasingly the gateway into the justice system for many offenders? I am convinced that, as it stands, it is not set up to succeed.

Mr. Straw: We all share concerns about young people who drift into crime and disorder. As the Minister who was responsible for setting up the major reforms to youth justice, I can say that, although they have not worked perfectly, they are infinitely better than the utter shambles revealed by the Audit Commission in a 1996 report. That report formed the basis of the very important reforms that we introduced, including significant expansion
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of secure accommodation for young people and much-improved and enhanced orders. These are difficult youngsters to deal with, and there is no question but that my right hon. Friend the Home Secretary has further improvements in mind; but my God, compared with where we were a dozen years ago, the situation is infinitely better.

Lynne Featherstone (Hornsey and Wood Green) (LD): On Tuesday, between 60 and 80 youths from two rival gangs rampaged down Lordship lane, in my constituency, and the result was four knife stabbings. Members in all parts of the House doubtless want to debate gang culture. Will the Leader of the House make time for that important debate? Stiff sentences are important, but all good heads need to get together to make a sustained, not just a short-term, effort to solve the gang culture problem.

Mr. Straw: We all share the great concern that the hon. Lady has highlighted about these gangs. For our part, the Government, along with local authorities, are doing everything that we can. I hope that she is fortunate in gaining an opportunity to debate that constituency issue on the Floor of the House or in Westminster Hall. I cannot promise anything, but we will also look for other opportunities to debate the matter more widely in the House.

Several hon. Members rose—

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. May I now please appeal for extreme brevity? I am sure that the hon. Member for Buckingham (John Bercow) will set a good example.

John Bercow (Buckingham) (Con): May we please have a statement from the Chancellor next week explaining his fetish for giving to the working poor with one hand and taking away with the other, so that those of us who wish to do so can argue that people on the minimum wage earning less than £10,000 a year should pay no tax at all?

Mr. Straw: The hon. Gentleman is a real radical. I am sometimes tempted to send him an application form to join a much better party that would suit his principles—the Labour party. If he looks at the Government’s record, he will see that we have been implementing the policies that he seeks.

Mr. Stewart Jackson (Peterborough) (Con): This week we learned that in the 12 months to April 2006 Cambridgeshire constabulary had to pay £800,000 of taxpayers’ money for interpretation and translation services, which is having a huge impact on policing and the burden on Cambridgeshire taxpayers. When may we have a debate in Government time on the impact across the country of the cost—I believe it is
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£21 million—of interpretation and translation services and the fact that that money is not therefore going into front-line policing?

Mr. Straw: There has been a significant increase in funding for the police, including extra grant for Cambridgeshire constabulary. Many police forces face those costs and there was every opportunity to debate the police grant when it was put before the House about three weeks ago.

Mr. Henry Bellingham (North-West Norfolk) (Con): Further to the question put by the hon. Member for Somerton and Frome (Mr. Heath), the overwhelming majority of small enterprises are innovative and entrepreneurial, but as they do not have heavy plant and equipment they will not benefit from the increase in capital allowances. Instead, they will be clobbered by the increase in small business corporation tax. What does the Leader of the House say to those small business organisations that all predict that wealth will be destroyed by those measures?

Mr. Straw: I simply do not accept that for a second and I invite the hon. Gentleman to look at the record over the past 10 years of small business formation, the increase in jobs generated by small businesses and the prospects for small businesses in the future.

John Penrose (Weston-super-Mare) (Con): When the Leader of the House was asked about the Lyons report, he had some entirely justifiable fun with the Liberal Democrats’ proposals. However, many pensioners in my constituency and many others on fixed incomes want to know what the Government’s reaction will be to the Lyons report. When may we have a statement or a debate on that?

Mr. Straw: My hon. Friend the Minister for Local Government issued a statement when the Lyons report was published yesterday and, in the intervening period before the matter is debated, I hope that everybody has an opportunity to read that thorough report. The hon. Gentleman is of the party of the poll tax and he should reflect on the fact that the council tax may be unpopular, but most of the alternatives to it, including the Liberals’ local income tax, would be infinitely worse. What Lyons has proposed for consideration includes, on the face of it, some sensible suggestions for improvements in the long term in the way in which the system operates.

I suspect that you are drawing business questions to a close, Mr. Deputy Speaker, so I wish to tell the House by way of a point of order, as it were, that my right hon. Friend the Chancellor of the Exchequer very much regrets that he will not be able to make the opening of the Budget debate in a moment because he is in a meeting involving representatives from Northern Ireland political parties in the hope—as I expressed, and I know that it met with the approbation of all Members of this House—that agreement can be reached by Monday 26 May and that the new arrangements may come into force.

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Orders of the Day


Order read for resuming adjourned debate on Question [21 March].


Question again proposed.

Budget Resolutions and Economic Situation

12.23 pm

Mr. George Osborne (Tatton) (Con): I of course accept what the Leader of the House has just said about the absence of the Chancellor of the Exchequer. What is slightly more surprising is the absence of any Labour Members in large numbers to defend the Budget —[ Interruption. ] Well, I suppose that there are some here, but not really the quality.

It does not take long for this Chancellor’s Budgets to unravel, but even by his standards, this one was a record. It was presented to this House 24 hours ago as a tax-cutting Budget, but it took less than 24 minutes to work out that everything that he was giving with one hand he was taking back with the other. It is here in the Red Book—£8 billion given away by cutting the standard rate, and then £7 billion clawed back by abolishing the 10p rate, which he introduced, and £1 billion clawed back by the national insurance hike. This was not a tax cut: it was a con trick. The public have seen straight through it.

The Chancellor said in his speech that he wanted

But when the Institute for Fiscal Studies looked last night at the small print, it was clear that 3.5 million working families mainly the lowest paid, will be worse off as a result of this Budget. Pretty much anyone earning below £18,000 a year will see their income tax bills rise because of the abolition of the 10p rate, which
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more than cancels out the cut in the basic rate. That is a tax rise on the lowest paid and that lot over there cheered it.

The Chancellor says, of course, “Don’t worry, they get the money back in tax credits.” Leave aside the sense of taking money in taxes from the wages of low-income families and then asking them to fill a form so that they can get it back, and leave aside the fact that only 60 per cent. of those eligible take up the working tax credit, because it is so complicated and poorly administered—there are still millions of low-income families who lose out. For a start, there are the ones without any children. For example, take a young couple who have not had kids yet, but are wondering how they will ever get on the housing ladder on their salaries. If they are each earning £13,000 a year, their income tax bill just got £224 higher. Then take two-earner couples on lower incomes with kids. Say one earns £7,500 part-time and the other earns £18,000 and they have one child. Even after tax credits, they will be £234 worse off —[ Interruption. ] Well, Labour MPs will have to put that on their leaflets at the next general election.

Jim Sheridan (Paisley and Renfrewshire, North) (Lab): Will the hon. Gentleman give way?

Mr. Osborne: Of course. Perhaps the hon. Gentleman will put those details on his election leaflet.

Jim Sheridan: I may take that opportunity. Can the hon. Gentleman set the tone for his contribution today—I will be more than happy to put it in my leaflet if he does—by confirming to the House and the wider British public that he will at least match the commitments of this Government?

Mr. Osborne: There is no tax cut, sadly, and that is the whole point. If one looks in the Red Book, it is not there. If there is a vote on the reduction in the standard rate of tax, which will not take place until after the next Budget, we would be happy to support it. By the way, for those who are wondering how we will vote next week on the second resolution on income tax, which states that for next year the starting rate will be 10 per cent., the basic rate will be 22 per cent. and the higher rate will be 40 per cent., I can confirm that we will vote for it. I wish to put that on the record —[ Interruption. ] That is the present structure of income tax. The hon. Member for North Durham (Mr. Jones) laughs: he probably does not realise what the present structure of income tax is.

Mr. Kevan Jones (North Durham) (Lab): To clarify the situation, will the hon. Gentleman give a commitment today to the House that the Tories will at least match the spending commitments outlined in the Budget?

Mr. Osborne: I am happy to match the spending commitments on education because the Chancellor is sharing the proceeds of growth. That is the extraordinary overnight story of this stealthy Budget. The Chancellor taxed the low paid to fund his con trick on middle England. He is, in effect, the sheriff of Nottingham.

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Mr. Michael Jack (Fylde) (Con): Did my hon. Friend notice the subtle adjustment in the withdrawal rate of tax credit in respect of increases in income—a fact that the Chancellor failed to draw to the House’s attention yesterday?

Mr. Osborne: My right hon. Friend, who was of course a Treasury Minister, has been eagle-eyed and he is right. The increase in the tax credit withdrawal rate will raise £600 million for the Exchequer. Like him, I missed that in the Chancellor’s speech.

As I was saying, the Chancellor taxed the low paid to fund his con trick on middle England. That is how desperate he has become. We can see why. He is attacked by those who have worked closest with him. He is less popular even than this Prime Minister. His tax and spend experiment is now deemed a total failure. If people want to know what this Chancellor would be like in No. 10, they should look no further than yesterday’s Budget—stealthy, sneaky and unable to tell the truth. He is not the man who can restore public trust in Government, because he is the reason why people do not believe a word that they say any more.

Mr. Douglas Hogg (Sleaford and North Hykeham) (Con): Will my hon. Friend give way?

Mr. Osborne: I will give way to my former employer.

Mr. Hogg: I am grateful to my hon. Friend for reminding me of my status and his. When commenting on the Chancellor, will my hon. Friend remind the House that the Chancellor failed to mention the phasing out of the 10p band, which is just the sort of omission that gave us the dodgy dossier on Iraq?

Mr. Osborne: My right hon. and learned Friend returns to the familiar theme of Iraq, and perhaps we should save it for a later debate. However, he is right to say that people at home listening to the Chancellor must have assumed that they would be better off as a result of a tax-cutting Budget. What the Chancellor did not tell them was that it was a con trick—that the cut in the standard rate of income tax would be more than paid for by the removal of the 10p starting rate and the increase in the national insurance band. It was a classic stealthy trick.

Ms Sally Keeble (Northampton, North) (Lab) rose—

Mr. Barry Sheerman (Huddersfield) (Lab/Co-op) rose—

Mr. Andrew Love (Edmonton) (Lab/Co-op) rose—

Mr. Osborne: I shall give way to the hon. Member for Northampton, North (Ms Keeble), who has one of the seats that we shall take at the next election.

Ms Keeble: The hon. Gentleman will be lucky! This Budget will help me keep my seat. The Chancellor made important changes to the child care element of tax credits, and women will be able to claim probably up to £10 more a week for child care. That will help them go out to work, and it is one of the good proposals that the hon. Gentleman has not mentioned.

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Mr. Osborne: If the people involved earn less than £18,000, their income tax bill will go up when they return to work. Perhaps the hon. Lady will make that point to her constituents at the next general election, because we certainly will.

On Tuesday, Andrew Turnbull, the man who has worked more closely with the Chancellor than anyone else—

Mr. Kevan Jones: Oh, that toff.

Mr. Osborne: Well, there is no point in the hon. Gentleman sneering at the man who was Cabinet Secretary in the Government whom he has supported for the past 10 years. The former Cabinet Secretary said of the Chancellor that

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