Select Committee on Treasury Minutes of Evidence


Examination of Witnesses (Questions 440-459)

RT HON GORDON BROWN, MR JON CUNLIFFE, MR DAVE RAMSDEN, MR MARK NEALE, MS MRIDUL BRIVATI AND MR MICHAEL ELLAM

13 DECEMBER 2006

  Q440  Mr Mudie: I am very interested in their names, their buildings and their locations, because I would raise with you that my good friend and your good friend, Ken Purchase, told me over breakfast in the tearoom that Wolverhampton has not got one secondary school refurbished or rebuilt because they will not take a decision on the academy. Is this a Cabinet policy—that if you do not take an academy you do not get put in a programme?

  Mr Brown: There are 3,100 secondary schools going to come within this programme. It means that in areas where there are academies and areas where there are no academies schools are going to be refurbished. I was in Wolverhampton recently and I saw a huge amount of investment going into Wolverhampton University, so the college facilities there—

  Q441  Mr Mudie: That is not a school.

  Mr Brown: —are improving.

  Q442  Mr Mudie: Chancellor, things have changed from your day. That is not a school. Not one school has been rebuilt or refurbished in Wolverhampton because they will not take a decision on an academy. I find that appalling.

  Mr Brown: I would be very surprised if out of the 3,100 secondary schools to be renovated there is not one to be renovated in Wolverhampton. I think that is probably—

  Q443  Mr Mudie: It comes on good authority: Kenneth Purchase. I do not want to know from the DfES. I want to know from the DfES details of the schools, if you wish, but I want a financial note. We are the Treasury Committee and we are here to scrutinise public expenditure. Can I have a public expenditure note along the lines suggested? Jon, is that okay?

  Mr Brown: We will give you a list of the costs year to year of the schools programme.

  Q444  Mr Mudie: No, no. Chancellor, are you refusing what I have asked for? I have asked, and I have spelled it out and it is on the public record. Are you agreeing to give this Committee a note of the programme, the estimated outturn of the programme, the completions to date and the public expenditure to date on that programme, year by year? If you are, fine, but that is what I am asking for.

  Mr Brown: We can give you a note that we have from the Department for Education on the individual allocations for the schools, secondary and primary, over the course of the last few years, and we can give you a note of how much money has been spent on it, yes. [3]

  Q445  Mr Mudie: What about the starting point? You are the Chancellor.

  Mr Brown: The programme was launched in February 2004.

  Q446  Mr Mudie: When you agreed a 15-year programme you must have got an estimated cost for it. I am asking for that. I think that is a relevant question for somebody on the Treasury Committee to ask the Treasury officials.

  Mr Brown: We have allocated money now right through to 2011.

  Q447  Mr Mudie: If you are not going to we will take it up in our deliberations, Chancellor, if that is your last word. I find it unacceptable that you will not provide straightforward financial information to the Committee.

  Mr Brown: I am about to give you the figures for the amount of money spent, and I am going to get from the Department for Education the figures for the number of schools renovated, which is what you want.

  Mr Mudie: Thank you.

  Q448  Mr Breed: Chancellor, in the PBR you reiterated the Government's very laudable goal of eradicating child poverty in a generation. Of course, the commitment to those underlying targets has milestones to achieve that. If the Government is to meet its target of halving the number of children in relative low-income households by 2010-11 then child poverty needs to fall by half as much again in the next six years as it has in the past six years. Do you accept the findings of the IFS and others that an additional £4.5 billion will be needed if you are to actually reach that 2010-11 target?

  Mr Brown: No, I do not necessarily accept these findings, because there is a whole series of ways that you can reduce child poverty. The most important way, that I think the Committee would agree on, is to get people back into work. If people are in work, earning a wage and able to contribute to their children's upbringing that is the best way by which you can reduce child poverty. We are determined, obviously, to get more people into work. We have had some success—2.5 million more in work—but there is more to be done. That will be the principal means by which—getting more people into work—we give families higher incomes.

  Q449  Mr Breed: In order to achieve the targets, therefore, we are looking at a spectrum of things, of which additional money is only a part. There are no indications within the PBR of what those measures might be in trying to reach that particular goal.

  Mr Brown: I can tell you that one of them is getting more people back into work. In the last year I think it is true that 90,000 people have come out of inactivity and into work. Some people have come off incapacity benefit, and some people have come off single parent income support and gone into jobs. These are means by which, apparently, those previously on benefits are now receiving income from work. Some of them will also be receiving the working tax credit and they will also be receiving the children's tax credit. So they will be better off in work with a wage and the children's or work tax credit, or both.

  Q450  Mr Breed: Do you accept that at the present time we are a bit behind the curve in terms of the quarter and half milestone targets to achieving it?

  Mr Brown: Our target is for 2010. We actually met our previous target, which was for the first five years. So we met our previous target and we have got to do what we can to meet the next target but, as I say, there is a range of things that a government can do to meet these targets.

  Q451  Mr Breed: You have just mentioned tax credits. Tax credits have been modelled as a very effective way of targeting low-income families. In that case, why did you elect to extend the eligibility for child benefit rather than to extend the tax credits system?

  Mr Brown: This is a big issue about nutrition and support for mothers who are about to give birth to children and support for them at the point at which the child is being born. We do give a maternity grant on top of the other benefits to mothers in low-income families at 29 weeks. The £500 that is made available can be paid in stages from 29 weeks. However, I felt that we should look at how we can help all mothers at this particular point in their lives, and this is not simply the poorest mothers, it is all mothers; where there are additional costs there are also additional worries, there are issues about nutrition and about the health of the mother as well as issues about the health of the child. Just as we provide maternity allowances to every mother—and we actually provide, during the first year of the life, child tax credit at a higher level for every mother and, therefore, every child—I felt that we should look at what we could do for that rather critical period. I felt in these circumstances it is right to help all mothers and not just some mothers.

  Q452  Mr Breed: When you say "all mothers" that is all mothers of all income groups, including of course all those that would not necessarily be classed as low-income.

  Mr Brown: I believe in child benefit. The point I am making is that there are two parts to this policy. One is to recognise that every child in our community deserves support, and that we, society, should recognise the costs that parents have to bear in bringing up their children and in bringing their children into the world. This is a particular part of it, where there are huge costs associated with the last stages of pregnancy and there are huge difficulties if people are not properly getting nutritious food and everything else. Then there is a second aspect of this: how we can deal with low-income families in our country and help them? So on top of child benefit, which is universal, and a universal recognition of the costs of bringing up children, there is also, I think, some recognition for the low-income families (or, if you like, middle-income families in this country because child tax credit goes right up the income scale to over £50,000) of the costs that particular families that are not the wealthiest families have to bear as well.

  Q453  Mr Breed: However, you must accept that child benefit is not targeting the low income, in that sense.

  Mr Brown: No, but child benefit, I hope the Committee would agree, is a good benefit because it goes to every mother and to every child. It is a recognition that we in Britain have of the responsibilities of parenthood and society's duty, in my view, to help people with the costs of bringing up their children.

  Q454  Mr Breed: Is it not really an admission that the tax credits system has become so complicated now that to add another part to that would just exacerbate an already difficult situation.

  Mr Brown: You started your question by asking about child poverty. I think you would have to agree that the biggest single factor in reducing child poverty in this country in recent years, and the reason we met our first target and the reason we have reduced child poverty continuously, is because of the child tax credit. I just repeat: when we came into power the poorest child—

  Q455  Mr Breed: If it is so successful why are you not extending that?

  Mr Brown: I am sorry; I am saying there are two purposes in public policy: one is to recognise the needs of every parent and every child, which I hope you would agree is necessary, and the second is to recognise the particular circumstances of a large number of families in this country who need more income than simply the standard child benefit.

  Q456  Mr Breed: So you did not consider at all extending the full tax credits system to those with 29 weeks—

  Mr Brown: In case it is not known, support available for low-income families after 29 weeks includes a maternity grant at £500, which is paid in stages. That is something we introduced; it was £100 before and now it is £500, and we made it possible to be paid so that mothers could buy clothes and other things that a child would need when they were born. There is a second element of our help as well, and that is support for diet and nutrition, where we provide between £6 and £12 a week for mothers for the nutrition of the mother-to-be and, then for the nutrition of the child in the years from 0-1. So for low-income families, in addition to child tax credit at a higher level, there is also available the maternity grant and, as I have just said, help in particular payments for nutritious food, including milk and other baby foods. So I think we are doing quite a lot to help mothers at this stage in their pregnancy and at the point at which a child is born; I think the issue for us was that we wished to recognise the needs of every mother as well as the specific needs of low-income families.

  Q457  Mr Breed: Can I just briefly turn to transportation. The costs of motoring have, effectively, declined over a long period of time. In fact, the real costs of bus and rail travel have shot up, and we certainly know that in rural areas of Cornwall, which I represent. You decided against the reintroduction of a fuel duty escalator, which I suspect was a relief to lots of people, but if you are not going to do that how are we going to really ensure that motoring starts to be addressed and that we try and get down transportation costs in order to try to attract people on to public transport for all the environmental reasons?

  Mr Brown: I think you will find that the support that has been given to public transport over recent years, both locally and nationally, has risen very considerably. Our bus schemes for rural areas—

  Q458  Mr Breed: Do you accept that fares have really gone up very high?

  Mr Brown: You have also got to accept that provision in railways and in buses has also improved as a result of changes that we have made, and a very considerable amount of public money goes to help with bus fares and to help with rail fares. We have always got to get the balance right. In the end, this is an individual choice that motorists, or travellers, have got to make themselves. I think people have to be aware of the real costs in terms of emissions of different forms of transport, and we are trying to make people aware, but I do not think it is true to say that we have not supported public transport; we have supported public transport with a very considerable increase in support for the rail network, the Underground refurbishment, of course, is taking place, and also the road network.

  Q459  Mr Breed: Do you believe that the balance is right at the present time?

  Mr Brown: We always have to look at what is the best balance moving forward, and that is why we commissioned the Eddington Review, to look at some of the problems in transport that we now have to deal with. We have now got—and this comes back to the Chairman's question at the beginning—a period where people can absorb what the Eddington Review has said, give us their views on that as on the other reports, and it will allow us to make further decisions both in the Budget and then in the spending review.


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