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School Funding

7. Paul Farrelly (Newcastle-under-Lyme) (Lab): How much he expects schools in Newcastle-under-Lyme to receive from changes made in the Budget. [130445]

The Financial Secretary to the Treasury (John Healey): As a result of the public spending plans announced in the Budget for the Department for Education and Skills, per pupil funding in England will rise from an average of more than £5,500 this year to more than £6,600 in 2010. Local authority allocations will be announced in due course.

Paul Farrelly: All schools in my constituency are pleased to see education at the forefront of Labour’s 11th successful Budget. May I put down a marker for my hon. Friend and any of his Treasury colleagues who might be moving on to new jobs in the future? An important review of the school funding formula is taking place, so will the very generous holders of the purse strings listen carefully to the arguments of Staffordshire and the F40 group of local authorities to make sure that the huge increase in education spending is shared evenly and fairly across the country?

John Healey: The settlement in the Budget continues the top priority that this Government give to investment in education and skills. My hon. Friend is right that we are currently consulting, which will continue until May, on reforming the school funding system. I urge him, his local authority in Staffordshire and the F40 group of local authorities to contribute. He is right that this is a very good settlement for education. He will be aware that an inflexible and ideological third fiscal rule would mean less funding for schools and services in Staffordshire.

Mr. Michael Fallon (Sevenoaks) (Con): In what form will schools in Newcastle-under-Lyme be told that the rate of growth in education spending will be halved over the next three years and will now flatline as a percentage of GDP?

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John Healey: The figures are very clear in the Budget. There will be a 20 per cent. rise in per pupil funding across the country, and Staffordshire, like the rest of the country, will share in that. The education settlement was part of confirming a total increase in public spending plans to £674 billion by 2010. The hon. Gentleman’s party cannot and will not match that, because of the third fiscal rule. They will have to cut spending. The question for the shadow Chancellor is—

Mr. Speaker: Order.

Mr. Barry Sheerman (Huddersfield) (Lab/Co-op): Does my hon. Friend agree that in Newcastle-under-Lyme, as elsewhere in the education system, people will be celebrating, because this Budget has reasserted the priority of education for this Government, which is a good news story? Does he agree that we need to nail down the fact that the money will be there for the wonderful building schools for the future programme over the next 15 years?

John Healey: As the distinguished Chairman of the Education and Skills Committee, my hon. Friend will recognise that the Department for Education and Skills is taking a greater share of the increased cash in this spending review than it did in the last one. He is right that there is a powerful and deep commitment on this side of the House to seeing pupils in the state system get the same opportunities as those in the private system, and the investment in capital and the increase in revenue spending per pupil will help us do that. The building schools for the future programme will play an important part in many local authority areas in bringing our schools up to the 21st-century level in which children deserve to learn and teachers deserve to teach.

Budget (Small Businesses)

8. Mr. Philip Hollobone (Kettering) (Con): If he will visit Kettering to discuss the impact of the Budget on small local businesses. [130446]

The Financial Secretary to the Treasury (John Healey): Treasury Ministers regularly visit all parts of the country. We are always ready to discuss with local business the beneficial impacts of reforms in the business taxation system. Having checked my diary this morning, I confirm that I currently have no plans to visit Kettering.

Mr. Hollobone: I am afraid that it was not the Minister who was invited, but the Chancellor of the Exchequer.

People in Kettering, particularly members of the East Northamptonshire branch of the Federation of Small Businesses and my constituent Mr. Steven Bellamy, who has written to me about this matter, would like the Chancellor to tell them in person about the bad effect that the rise in the small business corporation tax rate will have on their small service sector businesses over the next three years. If the Chancellor and the Minister will not come to Kettering, may I bring a small delegation of business men from Kettering to see them at Westminster to talk about this?

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John Healey: The hon. Gentleman’s constituent will be one of those who has benefited from the cut in the jobless rate by more than a quarter in the past 10 years, and his business might well be one of the more than 800 new businesses in Kettering since 1997. If he studies the Budget, he can tell his constituent that the revenues from increasing the small companies rate are entirely recycled to small businesses. I urge him not to make the mistake that the hon. Member for Tatton (Mr. Osborne) made yesterday by saying that 3.4 million of 4.3 million small businesses are not limited companies. They will benefit from the capital allowances and the new annual investment allowance, as well as from the cut in personal income tax made in the Budget.

Kitty Ussher (Burnley) (Lab): If my hon. Friend does not have time to visit Kettering, perhaps he will go a little further north and visit Burnley to reassure small businesses in my constituency that the Government will not at any point in the future pursue a double whammy of cutting taxes while at the same time attempting to raise expenditure, thereby threatening our macroeconomic stability.

John Healey: I do not think that a visit to Burnley is currently in my diary, but I dare say that I might be able to find a space for it. My hon. Friend is right. It is all very well for the Conservatives to call for more support for small businesses, but they voted against the small companies rate and against moves to take action against managed service companies. That leaves a hole of more than £1 billion a year in the finances, so the question for the hon. Member for Tatton is where he would make the cuts.

Tax Credits

9. Mr. Roger Gale (North Thanet) (Con): How many people have appealed against a demand for return of overpayments of tax credits since April 2006; and if he will make a statement. [130447]

The Chief Secretary to the Treasury (Mr. Stephen Timms): From April 2006 to February 2007 there have been 343,000 disputed overpayments.

Mr. Gale: Given the unavoidable absence of the Paymaster General, one or two of us had thought that the Chancellor of the Exchequer might have answered this question himself. It is interesting to note that the policy of leading from behind still prevails.

The Minister refers to 343,000 cases of personal misery directly caused by the failure of Revenue and Customs, which is trying to blame its errors on our constituents by saying that they should have known that they have made a mistake. When, please, may we have a wholly independent tribunal system so that these cases can be dealt with fairly and properly, not by a supine adjudicator or ombudsman?

Mr. Timms: I do not agree with the hon. Gentleman’s description. I remind him that tax credits are providing support to almost 20 million people, including thousands of families in his constituency. The current position is that Revenue and Customs sends out a one-page checklist of items to check on the tax credits award notice. If all the information about the
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claimant—for example, how many children they have, their bank account, and the money going into their account—is as on the notice, any overpayment will not be recoverable. That is a straightforward position. A new procedure is being piloted shortly for an independent review involving the adjudicator of disputed overpayments, and that might be helpful as well.

Clive Efford (Eltham) (Lab): Families that have money reclaimed can be put in serious financial difficulty, and I ask the Chief Secretary to examine the way in which money is reclaimed from some families on low incomes. Notwithstanding that, will my right hon. Friend reflect on the success of the working tax credit system in not only taking families out of poverty but removing the block to moving from benefits to employment? Many of us remember the position that we inherited when we came into government—the Conservative party created it as a matter of policy and we have ended it.

Mr. Timms: My hon. Friend is right. He knows that restrictions have been placed on the amount of overpayment that can be taken from families on low incomes. He is right that many families have been lifted out of poverty thanks to the tax credit system. That includes 600,000 children, and another 200,000 thanks to last week’s Budget. The tax credit system has also contributed to an increase of 2.6 million jobs in the economy since 1997 because so many more people find it worth their while to be in a job.

Mr. Andrew Mackay (Bracknell) (Con): Does the Chancellor’s human shield believe that the overpayment scandal and shambles is the cause of the relatively low take-up of tax credits, which means that the abolition of the 10 per cent. rate of tax harms so many low paid people in this country?

Mr. Timms: I do not know about low take-up: 6,900 families, including 12,000 children, in the right hon. Gentleman’s constituency benefit from tax credits. For households on incomes of under £10,000 a year that are entitled to child tax credit, take-up is approximately 97 per cent. Those who benefit the most from the tax credit system receive the money that they need. They benefit greatly from it and it is now worth while for them to be in work.

Keith Vaz (Leicester, East) (Lab): Of course, I welcome the tax credit schemes. However, in some cases, fresh information is presented after the conclusion of an appeal that casts doubt on the original facts that were before the person conducting it. What is the Treasury’s approach when new facts emerge after the appeal process is over? Is the approach to a mistake of fact different from that to a mistake of law?

Mr. Timms: The approach of Her Majesty’s Revenue and Customs is that all information should be taken into account when reaching a determination. If my right hon. Friend is aware of a specific case in which he is worried about the handling of new information, I would be happy to examine it.

Peter Viggers (Gosport) (Con): If the Chancellor of the Exchequer will not answer questions on his system,
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at least he can listen to them. Is not it clear that the return of overpayments causes untold misery to many families, that the take-up of some categories of working tax credit is only 25 per cent. and that, in several cases, the computer cannot handle the situation? Indeed, the system is bust. Is not it time that a different person reviewed the whole system?

Mr. Timms: I remind the hon. Gentleman that 6 million families today receive tax credits. Ten million children benefit and take-up is higher than for any previous form of family income support. We have done much better. The incomes of low paid people have been substantially increased and that has helped dramatically to reduce child poverty and the tax burden on families on lower incomes. I would have thought that he welcomed those achievements.

Mr. Mark Francois (Rayleigh) (Con): Yet another tax credit question, yet again the Chancellor takes the vow of omerta instead of responding in person. Let me ask his Chief Secretary a question in lieu of him. As the effect of last week’s Budget, especially the abolition of the 10p starting rate is to push ever more people into a highly complex tax credit system, in which more than half the payments are incorrect, has he ruled out, under any circumstances, a return to a fixed-term system of tax credits, were it to be reformed?

Mr. Timms: I do not agree with the hon. Gentleman’s characterisation of the system. The system is doing a great job— [ Interruption. ] Yes, it is. One of the great strengths of the present system is its flexibility. It can respond very quickly when a household’s income falls and extra help is needed. That would be lost if we were to change to a system that was based on the previous year’s incomes. We will of course keep the matter under review, but the hon. Gentleman’s solution does not look attractive to me.

Comprehensive Spending Review

11. Tony Baldry (Banbury) (Con): When he expects to announce the comprehensive spending review results for the Department of Health. [130449]

The Chief Secretary to the Treasury (Mr. Stephen Timms): As my right hon. Friend the Chancellor of the Exchequer announced in his Budget speech, the comprehensive spending review will be published in the autumn.

Tony Baldry: Am I correct in thinking that last week’s Budget made it clear that the Department of Health will be £900 million worse off in the financial year 2006-07 than was predicted by the Treasury at the start of the financial year; that the figures for the NHS announced in the Budget were recycled re-announcements of the figures from the previous comprehensive spending review; and that with the NHS breaking even this year only because of fairly severe cuts in centrally held budgets, the immediate prospects for the finances of the NHS—

Mr. Speaker: Order.

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Mr. Timms: No, the hon. Gentleman is not correct about that. My right hon. Friend made it clear in his Budget speech that the NHS in England will receive an increase next year in excess of £8 billion, which is the largest cash increase in the history of the NHS. It will build on the large increases that have led to a transformation in the health service in recent years and to great improvements in the services received by people up and down the country. The hon. Gentleman should, however, be worried about the failure of his hon. Friend on the Front Bench—

Mr. Speaker: Order. Other Members want to speak. I must call Back Benchers.

Mr. Andrew Love (Edmonton) (Lab/Co-op): Over the past few years, two new health centres, each costing more than £7 million, have been built in my constituency. In June this year, a new district general hospital is to be built at a cost of more than £111 million, with additional doctors and nurses to staff the facilities. Will my right hon. Friend ensure that the next comprehensive spending review builds on the success of this one?

Mr. Timms: I certainly will. I can confirm that there are now 33,000 more doctors and 85,000 more nurses, and that we have undertaken the biggest hospital building programme in the history of the NHS, involving 157 major new hospital schemes since 1997. There are now 80 NHS walk-in centres, compared with none in 1997. We are absolutely determined to build on that further. I know that my hon. Friend will pass on to his constituents the fact that, if the Conservatives were able to—

Mr. Speaker: Order. That is unacceptable.

G8 Summit

12. Robert Neill (Bromley and Chislehurst) (Con): Whether he plans to attend the G8 summit of Finance Ministers in Germany in 2007. [130450]

The Chancellor of the Exchequer (Mr. Gordon Brown): Yes. At the G8, we will continue to urge progress on the Doha development round and delivery of an aid-for-trade package for the developing countries. We will push for the universal education objectives of the millennium development goals and, ahead of the meetings, we are today publishing the UK’s annual report on the International Monetary Fund.

Robert Neill: I am grateful that the Chancellor at least feels able to answer questions on his personal diary in person.

Chancellor Merkel has said that tackling global poverty is to be a key priority of the G8 summit, and I welcome that. Will the Chancellor of the Exchequer tell us what initiatives he expects to be announced at the summit to tackle the rising level of absolute poverty in the United Kingdom?

Mr. Brown: This is absolutely typical of the Opposition parties. We will be discussing international development, trade and the general state of the world
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economy. I will answer the hon. Gentleman’s question, however. Absolute poverty in Britain has fallen as a result of the Labour Government. Poverty will continue to fall as a result of the Labour Government. What would prevent poverty from falling in the UK is the return of a Conservative Government, because they would not be able to match our spending plans, which guarantee that we are taking action to improve our public services. It is about time that the hon. Gentleman pressed his shadow Chancellor to make it clear what spending the Opposition are now committed to.

Tax Credits

14. James Duddridge (Rochford and Southend, East) (Con): How many people have appealed against a demand for return of overpayments of tax credits since April 2006; and if he will make a statement. [130452]

The Chief Secretary to the Treasury (Mr. Stephen Timms): I refer the hon. Gentleman to my answer of a few moments ago.

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