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Nick Harvey (North Devon): Hon. Members raise their concerns with me from time to time, but the Administration Committee has been carrying out an inquiry into the provision for and by the House of ICT services and equipment. That has of course covered matters relating to the performance of the network managed by PICT. A report is expected from the Committee shortly.
David Taylor: Having working in IT for three decades before I became an MP, I have to say that the service that we get from the blend of hardware, software and staff, in support and technical design and development, is excellent, but the remote service in the constituencies is a different picture. The performance and stability of the remote network is as lethargic and unpredictable as a teenager on a hot day. May we please have some focus on, and investment in, that particular area, for the benefit of all 646 of us when we are not here between Monday and Thursday?
Nick Harvey: I thank the hon. Gentleman for his positive remarks about the network in general. It is recognised that there are problems with the remote access to the network and a programme of work is under way to improve the way in which that operates. I hope that as time goes on that will prove to be successful and that external users will get the same satisfaction as internal users generally report.
Mr. Andrew Mackay (Bracknell) (Con): May I dissent, because I think that the network is the most unbelievably incompetent bureaucracy? We had a much better service from individual suppliers before, and we should think again and return to that system rather than the network.
The taxpayer would pay considerably more if 646 Members each procured their own IT arrangements rather than it being done collectively. Overall, the performance of the network is extremely reliable. It is recognised that there are problems with some of the other services, but the right hon.
Gentleman should not underestimate the scale of the task that PICT faces. These are early days. The joint department for the two Houses has only just been formed, and time will tell in the next few months as to whether it is able to improve the service. Generally, Members seem fairly satisfied with it.
Mr. Henry Bellingham (North-West Norfolk) (Con): On a point of order, Mr. Speaker. May I ask your advice? Last Wednesday, during the debate on the Pensions Bill, I asked the Minister for Pensions Reform, the hon. Member for Stalybridge and Hyde (James Purnell) about the pensions expert, Ros Altmann. He replied:
I have great respect for Ros Altmann, but...she never worked as an adviser to No. 10 or No. 11, as is often said.[ Official Report, 18 April 2007; Vol. 459, c. 329.]
Anne Main (St. Albans) (Con): On a point of order, Mr. Speaker. Perhaps you could help me. I gave the Minister more than three hours to research the case that I referred to, including the Child Support Agency number and the national insurance number. I wrote to the Minister on 26 March, so it cannot have been lost in the system. How much time does a Minister need to be able to find a case?
Damian Green (Ashford) (Con): On a point of order, Mr. Speaker. I seek your guidance on a written answer given on 16 April by the Minister for Local Environment, Marine and Animal Welfare, the hon. Member for Exeter (Mr. Bradshaw), in which he listed local councils that provide only fortnightly rubbish collections. He included Ashford borough council on that list, but that is factually wrong. Ashford borough council provides a weekly collection service
Mr. Speaker: Order. That is not a point of order. Sometimes Ministers get things wrong. They do not mean to do so, but sometimes they do, and points of order should not be used to try to put the matter right.
Mike Penning (Hemel Hempstead) (Con): On a point of order, Mr. Speaker. May I seek your advice about what happens when constituents lives are affected because they are misquoted by a Minister? Ros Altmann worked at No. 10, yet the Minister said that she had not. How is that lady to get compensation?
Mr. Speaker: The hon. Gentleman should go to the Table Office and put down a further question, or point the matter out at oral questions. Sometimes early-day motions are used to state that a Minister has got something wrong. There are ways to redress the balance.
At the time of the Budget, my right hon. Friend the Chancellor was able to set out an upbeat account of the state of the British economy. It was not just my right hon. Friend, however: I draw the Houses attention to the International Monetary Funds report on the UK economy in February, which referred to
a decade-long record of strong and steady macroeconomic performance,
growth of real GDP per capita was higher and less volatile than in any other G7 country.
We have seen a remarkable transformation of the British economy over the past decade. Uniquely among major economies we have avoided a downturn; 29 million people are in employment for the first time ever and gross domestic product per capita is up from seventh to second in the G7 and the economy is growing faster this year than in every other G7 economy. Locking in that new stability, avoiding risks to it and sticking to our fiscal rules are the immovable constraints around which the Budget and the Finance Bill were constructed.
Mr. John Redwood (Wokingham) (Con): Can the Minister explain why 1 million manufacturing jobs were lost in Britain over that decade and why 5.3 million people of working age are on benefit with no job?
Mr. Timms: As I have just said, and as the right hon. Gentleman knows, record numbers of people are in employment in the UK and unemployment is falling. The claimant count fell again in the most recent figures. Of course, there has been a shift from manufacturing to servicesas there has been across the developed economiesbut there has been positive news from the manufacturing sector in recent months, which I am sure the right hon. Gentleman and the whole House will welcome.
Rob Marris (Wolverhampton, South-West) (Lab): As a west midlands MP, may I remind my right hon. Friend that although it is sad that a huge number of manufacturing jobs have been lost, there is record employment in the economy and in the west midlands? Manufacturing output has continued to grow significantly over the past 10 years under the Government.
Mr. Timms: It has, with particularly strong figures in recent months, as I said, which reflect the strength in manufacturing across the economy. I particularly welcome the strength of the economy in my hon. Friends region, to which he referred.
Acknowledging intensifying global competition, the Bill takes the next steps to prioritise investment and innovation. It includes important measures to simplify business tax and to ensure that everybody pays their fair share. With measures to deliver further emissions reductions, incentives to encourage fuel and energy efficiency and further support for renewable energy technologies, the Bill strengthens UK leadership in tackling climate change.
Mr. Frank Field (Birkenhead) (Lab): On fair taxation, can my right hon. Friend tell me how many representations he has received from low-paid workers about the abolition of the 10p rate of tax? Constituents of mine who earn only one sixth of what we earn are paying £3 a week more, and I have tabled questions asking how many other people are similarly affected. Is my right hon. Friend satisfied with the balance the Government have struck, and when might I receive a reply to my questions?
Mr. Timms: I am absolutely certain that my right hon. Friend will receive answers shortly. I am sure that he has seen the analysis published by the Institute for Fiscal Studies showing that the great majority of households will be better off. The IFS also points out that the proportionate gain is highest for those on the lowest incomes, although of course the changes to which my right hon. Friend refers will be in the Finance Bill next year, rather than this year.
Mr. Field: But does my right hon. Friend not accept that some people will be worse off and that some of them might have noticed that they are thought to be so unimportant that they do not feature in the reasoned amendment opposing Second Reading?
Mr. Timms: My right hon. Friend may be correct about that. Some, no doubt, will find themselves a little worse off next year as a result of the changes in the Bill but, by and large, their position will have been considerably strengthened by the other changes over the past 10 years.
Julia Goldsworthy (Falmouth and Camborne) (LD): Will the Chief Secretary respond to the recommendations in the Treasury Committees report on the 2007 Budget, which raises two important issues? The first is that the winners and losers are not clearly identified in the Red Book and that this should be done in future. The second is that take-up of tax credits remains low and further efforts need to be undertaken to make sure that those who could benefit from tax credits actually do so. Many will lose out not only because of the tax changes, but because they are not claiming tax credits.
I welcome the report that has been published today. We will reflect on all the points that it makes. On the second issue that the hon. Lady raised, the report does welcome the recent initiatives, including the information that my right hon. Friend the
Chancellor gave to the Treasury Select Committee at its meeting on take-up, but there is no doubt that more needs to be done.
Mrs. Theresa Villiers (Chipping Barnet) (Con): May I clarify something for the House? The abolition of the 10p rate is not referred to in the reasoned amendment because it does not appear in the Bill. No doubt, the right hon. Member for Birkenhead (Mr. Field) will hear more about that issue later in the debate.
Mr. Timms: On tax, spending and borrowing, the balance that we strike is of crucial importance. Our commitment, with the golden rule, is to borrow only to invest over the course of the cycle, and the Budget reported an £11 billion surplus on the golden rule over the current cycle. On borrowing, to keep net debt sustainable below 40 per cent. of gross domestic product and consistent with those rules, this Bill sets the right balance and underpins our commitment to maintaining the new stability in the economy that has been so invaluable over the past decade.
Crucially, the Bill also provides the resources to equip us to meet future challenges successfully, enabling the new investments for education and skills, science and the other key areas that my right hon. Friend the Chancellor set out in the Budget to be made. With total spending rising to £674 billion in 2010, we are committed to continuing to invest. In a world economy in which competition is intensifying, technology is changing fast and almost every country faces challenges from global insecurity, investment is vital to enable us successfully to address the long-term challenges ahead.
Let me turn to the details of the Bill. First, on business and productivity, our starting point is a very strong one indeed. In the past year, total investment is up by 6Â1/2 per cent., business investment is up by 7Â3/4 per cent and inward investment is up by 15 per cent. Business investment is forecast to rise again by more than 7 per cent. this year. Maintaining that success requires a modern, corporate tax system that reflects the intense worldwide competition in the globalised economy, and the Bill introduces the changes that we need. From 2008, there will be a cut in the main rate of corporation tax from 30 per cent. to 28 per cent.
Inflation is currently at 3.1 per cent., and the hon. Lady may have noticed that the recent sending of a letter by the Governor of the Bank of England to my right hon. Friend the Chancellor was the first time it had happened in 10 years. At the outset, it was expected that that would be required every year or two. The system and the macro-economic framework that we have put in place have been remarkably robust and successful. Inflation at 3.1 per cent. is a great deal lower than the rates of inflation that obtained when the party that she speaks for was last in government. At that time, we had double-digit inflation and double-digit mortgage rates. The system continues to work extremely well and the fact that, after 10 years, it has been necessary for a letter to be
sent need not give rise to undue concern. Indeed, it is generally agreed by those who study these things that the rate of inflation will fall sharply towards target in the second part of this year.
From 2008, as I said, there will be a cut in the main corporation tax rate from 30 per cent. to 28 per cent. That is a lower rate than those of all our major competitors and has been widely welcomed by, for example, the Institute of Directors and the City of London Corporation, which said:
The City is very pleased that the Government is making such a clear commitment to keeping London competitive.
Justine Greening (Putney) (Con): I am listening carefully to the Chief Secretarys comments about corporation tax. Small companies in my constituency are concerned about the increase in the small companies rate. Will he go on to talk about the representations that he has received from the Federation of Small Business and others?
Mr. Timms: I shall come to the small companies corporation tax rate in a moment, but let me say a little more about how we are funding the welcome and significant reduction in the main rate. It is being funded by modernising and streamlining the capital allowances system, which has been largely unchanged for the past 20 years and which, in part, still reflects the needs of post-war redevelopment. This is the most extensive reform of investment allowances since the 1980s, better aligning allowances for buildings and plant with economic depreciation, removing tax-driven distortions in business decisions and giving incentives for long-term investment.
My right hon. Friend announced just two rates in future for capital allowances20 per cent. for short life assets and 10 per cent. for long life assets. Clause 35 paves the way for phasing out over four years industrial and agricultural buildings allowances, so removing a selective and outdated subsidy for some buildings, which is not available, for example, for commercial office space or for science parks. It is a strong package, pro-growth and pro-investment, which is expected to add 0.2 percentage points per annum to investment above the trend rate, strengthening our global competitiveness.
The Bill also sets the small companies rate of corporation tax at 20 per cent. for 2007. We have announced that we will raise it further to 22 per cent. from April 2009 as we remove incentives to incorporate solely for tax reasons. As the Red Book shows, setting out the figures for this year and the following two years, all the proceeds from that increase will be recycled to small businesses that invest, through a package that reduces the tax due from them and gives them incentives to invest, with current first year capital allowances for small firms maintained in the Bill at 50 per cent. until April 2008, and with the Finance Bill next year to introduce a 100 per cent. annual investment allowance of £50,000 for all firms. That shifts the incentives in favour of investment, which will further strengthen small firms.
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