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Mr. Brown:
I have to say to the hon. Gentleman that that was not a decision by the Treasury, if it was a decision by the Government at all. I shall look into the matter that the hon. Gentleman raises with me. I also have to say that I have had talks with many educational publishers and foundations about how to increase the supply of books to Africa. I have to tell the hon. Gentleman that we have doubled the amount of money invested in schools, teachers, books and education generally in classrooms in Africa. I hope that, whatever has happened to that individual charity, the hon. Gentleman will not deny the basic fact that we have
doubled expenditure on education, made £8.5 billion available for the next 10 years and done more than any other country to make such finance available, and are calling on the rest of the international community to join us.
Cremation Certificates
8. Mr. Bill Olner (Nuneaton) (Lab): Whether he plans to retain the exemption from VAT for fees charged by doctors on certificates required by the funeral industry prior to cremation. [136452]
The Financial Secretary to the Treasury (John Healey): The answer is yes. I can confirm that where fees charged by doctors for completing cremation forms are within the scope of VAT and are, from 1 May, no longer covered by the medical services exemption, VAT is still not chargeable. This is covered by the exemption in relation to services for burials and cremations. My hon. Friend is chair of the all-party funerals and bereavement group, and I hope that he and the other members of the group will welcome the announcement.
Mr. Olner: The whole industry will welcome what the Minister has just said. There was grave concern— [Laughter]—Pardon the pun. There was much concern within the industry that VAT would be levied at 17.5 per cent., so I am grateful for the Minister’s response. Will he continue his dialogue with the National Association of Funeral Directors, so that these services, which are very serious for many of us at a time of loss, are continued?
John Healey: Her Majesty’s Revenue and Customs will indeed continue its discussions with the National Association of Funeral Directors. My hon. Friend will recognise that the United Kingdom’s VAT system has some of the most generous and wide-ranging reliefs and exemptions in Europe, and the Government have fought hard to keep it that way. I am glad that we have been able to avoid imposing additional costs in this area, as this is clearly a matter of concern to many in the industry, and to bereaved families at a time of great concern.
Miss Anne McIntosh (Vale of York) (Con): I congratulate the Minister on securing that exemption, but is he committed to securing similar arrangements regarding the requirement for two doctors’ signatures in these circumstances? In cases of untimely and unexpected death, which cause supreme shock and loss to a family, will he confirm that the present arrangement involving two doctors will continue for the foreseeable future?
John Healey: We wish to operate a system that causes the minimum distress to bereaved families at a difficult time, while ensuring that the right kind of checks are carried out when the registration of a death takes place. I encourage the hon. Lady to join the all-party group on funerals and bereavement if she takes an interest in these affairs. I will look at the question that she has raised, and I will write to her.
Pension Schemes
9. Mr. Andrew Robathan (Blaby) (Con): What his latest estimate is of the number of people who have lost pensions through the collapse of company pension schemes following the entering into receivership of companies. [136453]
The Chief Secretary to the Treasury (Mr. Stephen Timms): One hundred and twenty-five thousand—and all of them will be entitled to help, thanks to my right hon. Friend’s Budget announcement on the financial assistance scheme.
Mr. Robathan: Will the Minister confirm, or categorically deny—he may confer—that when referring to the 125,000 extremely unfortunate people who have lost the prospect of a secure and prosperous old age through the collapse of their pensions, the Chancellor said, with his usual compassion, “These are not our people”?
The Chancellor of the Exchequer (Mr. Gordon Brown): I never said that at all.
Mr. Timms: No, that certainly was not said. Those people have suffered an appalling loss, and every Member of the House will have met people who have been in that position. Certainly no one on this side has made any such remark. I hope that the hon. Gentleman will welcome the expansion of the financial assistance scheme that my right hon. Friend has announced. That will mean that people will get 80 per cent. of the pension that they were expecting to get at 65.
Mr. Andrew Love (Edmonton) (Lab/Co-op): I know that my right hon. Friend will welcome the strengthening of company pension schemes over the past couple of years. With many companies now making record profits, what steps is he taking to persuade them to divert more of those profits into their company pension schemes?
Mr. Timms: It is certainly welcome that we have seen a big increase in employer contributions to pension schemes. Under Tory tax rules, companies were encouraged to take pension holidays and, in far too many cases, not to contribute to their schemes at all. One of the most important steps that we have taken to build confidence was to introduce the Pension Protection Fund, which is boosting confidence in pension savings. It is a scandal that although the US equivalent of that fund was in place by 1979, for 18 years the Tory Government did nothing to protect pensions. However, the fund is now in place.
Mr. David Gauke (South-West Hertfordshire) (Con): Perhaps the Chief Secretary would care to answer the question that the Economic Secretary did not answer earlier. According to independent experts, the abolition of dividend tax credits in 1997 has cost pension funds a minimum of £100 billion. What assessment has the Treasury made of this? Does it disagree with that figure, and if so, what is the figure?
Mr. Timms:
I certainly do not agree with that figure. As my hon. Friend the Economic Secretary said earlier, pension fund assets have risen. They actually rose
immediately after that announcement. I suggest that the hon. Gentleman look at the assessment made last year by the Pensions Policy Institute, which came up with a figure a great deal lower than the one usually cited by the Conservatives.
Andrew Miller (Ellesmere Port and Neston) (Lab): The workers at H. H. Robertson in my constituency are extremely grateful for the increases in the financial assistance scheme introduced in the Budget. Their pension scheme collapsed under the previous Conservative Government, partly because of the practices of that Administration. Will my right hon. Friend have a word with the usual channels to ensure that the regulatory changes necessary to bring about those Budget increases are brought before the House at the earliest opportunity? My constituents, whose scheme collapsed in 1996, are now getting elderly, and the small amounts of money that some of them get from their pension scheme are very important to their economic well-being.
Mr. Timms: I agree with my hon. Friend. The matter is urgent, and I shall ensure that his concern is passed on to my right hon. Friend the Secretary of State for Work and Pensions.
Identity Cards
10. Mr. Crispin Blunt (Reigate) (Con): What recent discussions he has had with the Secretary of State for the Home Department on a contingency budget to underwrite possible overruns in the costs of the identity card programme; and if he will make a statement. [136454]
The Chief Secretary to the Treasury (Mr. Stephen Timms): The arrangements for funding the identity cards scheme were agreed in November 2003. Costs will be met from existing departmental budgets, and from charges.
Mr. Blunt: It is rather alarming that the Chancellor and the Home Secretary have not had discussions about such an enormous issue. Perhaps the Chancellor’s famous inability to get on with Home Secretaries might be an explanation. The London School of Economics estimates that the cost of the identity cards scheme could run to £20 billion—four times the current projected cost—which will punch an enormous hole in the Home Office budget, creating a serious threat to the United Kingdom in terms of the Home Office’s inability to protect our country from terrorism. Is it not about time that proper contingency arrangements were made, as this massive IT scheme is being administered by the Home Office, and we cannot expect it to run to budget?
Mr. Timms: I do not agree with the hon. Gentleman. The project will be well planned and taken forward in partnership with private sector suppliers. The threat to the security of our country comes not from that source but from his right hon. and hon. Friends’ refusal to match our spending commitments in that crucial area.
Mr. Mark Hoban (Fareham) (Con): Clearly this is a good day to bury bad news, and that is why the report on the cost of the ID cards scheme has been published today, nearly a month late and in breach of the law. In an answer to my hon. Friend the Member for Rayleigh (Mr. Francois), the Chief Secretary said that despite the fact that the Cabinet backed ID cards, the Treasury had yet to approve the expenditure. Has approval now been given—or, once the Prime Minister and the Home Secretary are out of the way, will the Chancellor follow our advice and scrap the scheme that he once backed?
Mr. Timms: The procedure being followed in this case is precisely the same as with other major projects of this kind. Before substantive procurement begins, Treasury approval needs to be given, and it will be.
HM Revenue and Customs
11. Andrew George (St. Ives) (LD): What plans he has for the provision of Her Majesty’s Revenue and Customs offices in rural areas. [136455]
The Financial Secretary to the Treasury (John Healey): As the hon. Gentleman knows, HMRC is carrying out a series of regional reviews of all its office accommodation. It has more than it needs at present, and far more than it will need in the future. Every review will involve detailed consideration and an impact assessment of any proposed closure, and that will take account of the impact on staff, local areas and the local community.
Andrew George: I am grateful to the Financial Secretary for that response, but I am sure that the whole House will be interested in any calculations and assessments that Ministers have made of the impact of staff reductions on recoverable tax. Given his remarks, will he emphasise the extent to which the Government will satisfy concerns in constituencies such as mine, which includes west Cornwall and the Isles of Scilly, that the true socio-economic impacts should be taken into account, and the local community should be fully and properly consulted before final proposals are brought forward?
John Healey: I can give the hon. Gentleman that assurance. If there are proposals to close offices in Cornwall as part of the review, which is unlikely to kick off in full until next year, full consultation will take place among staff, with local communities also involved, and there will be a full impact assessment on the local economy and the local area. We will take into account the responses that we get during the consultation. That is an important part of the process, and the hon. Gentleman might like to look at our revised proposals for central London, which were heavily influenced by the responses during the consultation period.
Mr. Bob Laxton (Derby, North) (Lab):
May I tell my hon. Friend that there is already anger and concern in my constituency and the whole of Derby about the prospect of 430 staff being moved down the road to Nottingham—well over an hour’s journey? That does not make financial or economic sense, and it certainly does not make environmental sense. It is already clear
that the move should not take place. In relation to that specific case, will he consider not going ahead with the proposed moves?
John Healey: No decision on the closure of any offices will be made before Ministers have looked carefully at the results of the consultation and the assessments, and we will do that in the case of my hon. Friend’s area. The representations that he and other Members have made will be among the matters that we will consider. At present, however, HMRC has about 40 per cent. more office accommodation than it needs, and taxpayers expect us to use their money in the most efficient way to deliver good services.
Hywel Williams (Caernarfon) (PC): What assurance can the Minister give about the continuation of the Welsh language helpline, which for many years has been run from Porthmadog in my constituency? It may now be moved to Cardiff, where all employers report intense difficulties in recruiting Welsh speakers in the first place. Can the Minister reassure us that the line will continue to be run properly, from Porthmadog?
John Healey: Concerns and questions about the Welsh language helpline will be considered as part of the review of the office and the location of services in the hon. Gentleman’s area, but I can tell him this. We have given a clear commitment that in each and every case, an inquiry centre where taxpayers seek face-to-face advice will remain in its current location or, if necessary, move to another location in the same locality.
Fiscal Rules
13. Mr. Andy Slaughter (Ealing, Acton and Shepherd's Bush) (Lab): What assessment he has made of the effect of his fiscal rules on the economy. [136457]
John Healey: During the last decade the introduction of strict fiscal rules has been an important part of the United Kingdom’s macro-economic policy framework, which has delivered higher growth, lower inflation, more jobs and greater stability than existed in the years before Britain had a Labour Government.
Mr. Slaughter: I am grateful for that answer. I am also grateful for the consequences of the Government’s policy, which include the hundreds of millions of pounds being invested in my constituency. Two examples are the building schools for the future investment and the investment in Hammersmith hospital, which is bidding to become the first academic health science centre in the country. What, however, is my hon. Friend’s estimate of the prospect of that investment continuing if a third fiscal rule is adopted?
John Healey: We have two central fiscal rules which have played a big part in the fact that the level of stability, growth and jobs has been higher over the past decade than ever before. The third fiscal rule that some have proposed would inevitably lead to deep public service investment cuts, amounting to more than £20 billion in the current year alone.
Sir Peter Tapsell (Louth and Horncastle) (Con): If, as he hopes, the Minister’s right hon. Friend the Chancellor becomes First Lord of the Treasury, will the Minister—who, I am sure, will remain a member of his right hon. Friend’s team—urge on him that when helping to determine the Government’s future fiscal policies, he should agree with President-elect Sarkozy’s strong belief in the importance of retaining large national gold reserves, and with his fierce criticisms of the incompetent behaviour of the independent European Central Bank?
John Healey: We will continue to make such decisions in the very best interests of the United Kingdom, as we have done in the past.
Identity Cards
14. Damian Green (Ashford) (Con): What recent discussions he has had with the Secretary of State for the Home Department on funding for the identity cards project; and if he will make a statement. [136459]
Mr. Timms: There have been no recent discussions. As I told the hon. Member for Reigate (Mr. Blunt) a moment ago, the position remains as agreed in November 2003 and confirmed in the House in October 2005.
Damian Green: The Chief Secretary gave the House a laugh a few minutes ago by talking about well-run Home Office IT projects. Perhaps he should read the startlingly honest remarks of the Under-Secretary of State for Justice, the hon. Member for Bradford, South (Mr. Sutcliffe)—the prisons Minister—who told me last week in a written answer:
“These figures have been drawn from administrative IT systems, which, as with any large scale recording system, are subject to possible errors with data entry and processing.”—[ Official Report, 30 April 2007; Vol. 459, c. 1421W.]
If the Home Office admits that it cannot cope with processing 80,000 prisoners, what hope has the Chief Secretary? Why is he wasting billions of pounds of taxpayers’ money on trying to record the details of 60 million British citizens?
Mr. Timms: I hope that the hon. Gentleman will listen to the views of Lord Stevens, who is advising his party on these matters and who, as the Prime Minister pointed out yesterday, has acknowledged the absolute benefits of an identity card scheme. He may well find that he, along with his hon. Friend, must rethink his position.
Pension Funds
15. Ann Winterton (Congleton) (Con): What the Treasury’s most recent estimate is of the cost to pension funds of the abolition of dividend tax relief in 1997. [136460]
The Economic Secretary to the Treasury (Ed Balls): As I told the hon. Lady and her colleagues a few moments ago, we took that action to address the historical problems of under-investment and short-termism which had held back the British economy, and following that, the assets of pension funds in our country rose.
Ann Winterton: The Economic Secretary has not replied to the simple question posed earlier: exactly how much? Does he recall the dire warnings given to the Chancellor, which were put into the public domain only after a two-year campaign by The Times? Those warnings highlighted the groups of people who would be adversely affected by the abolition of direct tax relief, and said that the lower-paid would be worse off under the new rules, that pensioners due to retire would lose out immediately, and that businesses would struggle to adjust to the change. Will the Economic Secretary apologise to those groups?
Ed Balls: As I said a moment ago, that decision also involved the recycling of revenues back to pension funds and investors through corporation tax and other tax cuts. Some people feared that the stock market would fall in 1997; in fact, it rose. Some people feared that investment might go down; in fact, it went up. Some people claimed that pensionable assets would decrease in value; in fact, they went up. However, if Opposition Members think that that was the wrong decision, why will they not make a commitment to reverse it? The shadow pensions Minister has made that commitment, but the shadow Chancellor cannot tell us whether he agrees with the shadow pensions Minister or not. Until that is cleared up, there will be no clarity on this issue.
Mr. Speaker: On Tuesday, I paid tribute to Speaker Weatherill on behalf of the House. Lady Weatherill has told me how touched she has been by the generous support given to her by Members and staff of the House. Immediately after business questions, I shall call those Members who wish to pay their tribute to Speaker Weatherill.
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