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5. Mr. Malcolm Moss (North-East Cambridgeshire) (Con): What recent discussions he has had on the taxation regime for bingo clubs. [181414]

The Exchequer Secretary to the Treasury (Angela Eagle): Treasury Ministers and officials have met a range of stakeholders, including representatives of the bingo industry, to discuss gambling taxation issues.

Mr. Moss: Bingo is the only mainstream gambling product that is doubly taxed, by VAT as well as gross profits tax. That level of taxation has been a primary cause in the closure of 81 clubs and the identification of a further 108 clubs as at risk. Since each club closure costs the Treasury some £700,000 in lost tax revenues, does not the Minister see the sense in removing this unfair imposition of VAT on bingo? That would be tax revenue-neutral, would prevent further club closures and would secure this popular leisure activity for thousands of people.

Angela Eagle: Obviously, we keep all taxes under review and decisions about gambling taxes are made at the Budget. It is not at all clear that removing VAT on participation fees would be enough to make some of the marginal clubs viable. I must correct the hon. Gentleman, as bingo is not the only gambling sector to face both duty and VAT. Gaming machines are liable to VAT and amusement machine licence duty. I must also tell the hon. Gentleman that in 2003, bingo saw a big reduction in its effective tax rate from 35 per cent. to a rate that ranges between 20 and 25 per cent. That is in line with all the other tax impositions on other forms of gambling.

Paddy Tipping (Sherwood) (Lab): Last autumn, I had the very great privilege of calling the numbers at the Byron bingo and social club in Hucknall. Will the Minister listen to the concerns of staff and customers, at the Byron and across the sector, about the effects that the smoking ban and the taxation system have had on the industry’s future? Will she look closely at bringing forward proposals in the Budget to help secure that future?

Angela Eagle: I assure my hon. Friend that we keep all such matters under close review. The Government have done good things for bingo, not least among them the fact that we lowered the higher rate of tax in 2003. In addition, we have removed the 24-hour rule and the membership requirements, and we have allowed maximum stakes on prize gaming machines to be doubled. We have also allowed rollovers and created the potential for much larger prizes. My hon. Friend mentioned the smoking ban, so he has not fallen into the trap of thinking that all of bingo’s problems are the result of VAT rates. They are not.

Stewart Hosie (Dundee, East) (SNP): In a recent answer to me on this subject, the Minister said:

Bingo clubs provide important social benefits in many communities. What relevant factors did the Treasury consider that led it to conclude that bingo clubs should be taxed more than licensed betting offices and internet gambling?

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Angela Eagle: The issues with internet gambling and offshoring are obvious, but I must correct the hon. Gentleman: the changes made in 2003 knocked 10 per cent. off the effective tax rate for bingo and brought it into line with other forms of gambling. Bingo is not discriminated against.

Climate Change (Economic Impact)

6. Mr. Jim Devine (Livingston) (Lab): What recent representations he has received on the economic impact of climate change. [181415]

The Chief Secretary to the Treasury (Andy Burnham): The Stern review assessed a wide range of evidence on the impact of climate change and its economic costs. It concluded that the benefits of strong and early action far outweigh the economic costs of not acting. The intergovernmental panel on climate change has also assessed the economics of taking action, and come to similar overall conclusions.

Mr. Devine: I am grateful to the Chief Secretary for that answer. As he knows, the Stern report is iconic—a word that I understand could be attributed to my right hon. Friend! The report states that the Government should spend 1 per cent. of gross national product to mitigate the effects of climate change. Have we met that target? When can we hope to do so?

Andy Burnham: I am not sure that I have done anything to deserve such lavish praise from my hon. Friend, but he is right that the Stern report on the economics of climate change has changed the debate, in this country and around the world. It made it clear that the people who could suffer most from a failure to tackle climate change, or from a lack of ambition in our approach to it, are those living in the developing countries. They are the most vulnerable, and he is right to say that Stern said that the cost of not acting would be large. That is why the Government took various measures in the recent spending review to ensure that we are prepared to face the challenges posed by climate change.

Tony Baldry (Banbury) (Con): Should not the committee on climate change be set up now, as a matter of urgency? It is not due to report on the 2050 target or the inclusion of aviation in that target until late 2009, and the fact that it has not been set up yet gives an impression of a lack of a sense of urgency on the Government’s part. Setting up the committee as soon as possible would send out a very good signal that the Government are intent on taking this matter forward as fast as possible.

Andy Burnham: I hear what the hon. Gentleman says, but I assure him that every step is being taken to set up the committee as soon as possible. Every action that the Government are taking makes it clear that we recognise the urgency of the situation, and we have already asked that the committee consider the new scientific evidence being produced to see whether higher targets should be set—although the target of reducing carbon emissions by 60 per cent. by 2050 remains very challenging. The Bill currently being considered in another place is pioneering and groundbreaking, and it sends a very clear signal to the rest of the world about the level of this country’s ambition.

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Mr. Brian H. Donohoe (Central Ayrshire) (Lab): What assessment has my right hon. Friend made of the effect of the climate change levy on industries that are high users of energy, such as the paper-mill in my constituency?

Andy Burnham: The evidence that the Treasury has collected shows that the climate change levy has reduced harmful emissions overall and has produced revenue that is useful in the fight against climate change. I recall that the levy was introduced in the face of opposition from Conservative Members. It was a far-sighted decision taken back in the early days of this Government. That shows that the Government have always had climate change at the heart of their agenda, unlike others who came to the issue more recently.

Sir Nicholas Winterton (Macclesfield) (Con): With the rapid, dramatic rise in the cost of fuel, energy and food, and in council tax, will the Government be extremely careful about imposing any more additional costs on either the individual or industry? In respect of industry, to follow up on the last question, it would be easy to make British manufacturing industry far less competitive, but we would be a fool to do so, given that so much of climate change is caused by other places and not this country, and given that there remains considerable scientific debate about the impact of climate change.

Andy Burnham: The hon. Gentleman raises an important point. There is a tension between legitimate objectives, and there is a balance to be struck, but I hope to assure him that the Government seek to strike that balance in all their actions. However, he must recognise that the Stern review identified that there are economic costs to the country and its citizens of not taking action at the appropriate level. If we do not take action on climate change, the cost of food could rise well into the future. We need to consider both the short term and the long term. He rightly raised the issue of fuel bills; we, as a Government, must ensure that we take further steps to help people who are struggling with energy costs, particularly those who face the threat of fuel poverty. He will know that, to meet that objective, we have committed ourselves to the winter fuel payment for the duration of this Parliament.

Mr. Andy Reed (Loughborough) (Lab/Co-op): The Stern report rightly recognises that it is people in the poorest countries who will be affected most and first. In the Minister’s discussions, both at UK and European level and with China and India, will he ensure that any financial measures that are taken to impact on climate change in the UK are reciprocated in places across the globe? Given the growth in the economies of China and India, they will increasingly be at the forefront of having to tackle climate change. Will he ensure that any discussions are international, not just domestic?

Andy Burnham: My hon. Friend is absolutely right. I think the phrase that Stern uses is that hundreds of millions of people could suffer if we do not take appropriate action. It is true to say that those who would suffer most are those around the world who have perhaps contributed least to climate change. He is right to say that international action is the key. We should take some encouragement from the fact that the European Commission’s package,
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published this week, draws heavily on the Stern review. It shows that climate change is territory on which there needs to be constructive engagement at the heart of Europe; that is particularly relevant this week, as we have been debating those matters. We want to meet the challenges of this century, whereas others seek constantly to fight the battles of the last century, and constantly bang on about Europe.

Capital Gains Tax

7. Mr. Stewart Jackson (Peterborough) (Con): What assessment he has made of the impact of the capital gains tax proposals announced in the 2007 pre-Budget report on the decision-making process of small businesses. [181416]

The Chancellor of the Exchequer (Mr. Alistair Darling): Mr. Speaker, with your permission I propose to make a statement on the subject of capital gains tax immediately after Question Time.

Mr. Jackson: Would the Chancellor like to take this opportunity to apologise to the House for his half-baked, panicked proposals, which were driven by political considerations, as well as for the damage that he has done to small businesses’ planning and confidence, and for the failure properly to consult the business community? Perhaps after that he will say where he will get the money to fund his belated U-turn, which is to be announced later this morning.

Mr. Darling: I shall come to my proposals fairly shortly. The fact that we have more than 760,000 more small and medium-sized enterprises in the past 10 years is testament to the fact that this country is a good place for small businesses to carry on their operations.

EU (Co-ordinated Action)

8. Ms Patricia Hewitt (Leicester, West) (Lab): What discussions he has had with his European counterparts on co-ordinating action across the EU in response to turbulence in the US sub-prime market. [181417]

The Chancellor of the Exchequer (Mr. Alistair Darling): I met my French, German and Italian counterparts, along with the European Commissioner, in Paris last week to discuss current market conditions. In addition to that, the Prime Minister will meet his counterparts in London next week.

Ms Hewitt: In view of this morning’s announcement of very substantial losses by Société Générale, will my right hon. Friend say a little more about what practical proposals he and the Prime Minister will be putting forward to ensure that financial regulators, central banks and Governments work together right across the European Union to improve both transparency and stability in Europe’s banking sector?

Mr. Darling: I am aware of the reports from Société Générale in Paris. The Financial Services Authority is looking at the situation. As I understand it, that concerns something that happened in the bank’s operations in Paris, and I further understand that the French Treasury will make a statement later today. On my right hon.
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Friend’s more general point, it is important to recognise that many of the problems that we have to deal with transcend national boundaries, particularly in relation to the role of the International Monetary Fund and the forum for financial stability and what they can do to get better early warning, and the need to achieve agreement on how banks deal with off balance sheet structured investment vehicles in relation to the credit rating agencies. These are all areas where we must take international action.

We discussed some of these matters in Paris last week, and I very much hope that as we move towards conclusions, we can get the international community to move far faster than it usually does. It took 10 years to get Basel 2 agreed to, and we do not have 10 years to sort out the present problems. We need a combination of actions on the part of individual institutions to report the full extent of their exposure as quickly as possible, so that we can end some of the present uncertainty. That would help to restore stability. In addition, it will be necessary for action to be taken not just domestically, as I shall outline next week, but internationally. Above all, as I think my right hon. Friend would agree, whatever we do must be proportionate. We must avoid the temptation to have a rule and regulation for every possible eventuality, as the American Government did after the Enron difficulties earlier in this decade, which proved to cause as many difficulties as they thought they were solving.

Mr. Oliver Heald (North-East Hertfordshire) (Con): What are the implications for major infrastructure projects such as the expansion of Stansted airport, where a Spanish company which is already heavily borrowed is the lead on that project? What implications will the crisis have for such a project? Are other projects that the Government consider to be in the national interest—I do not happen to think that that is one of them—threatened by the crisis?

Mr. Darling: I wondered whether the hon. Gentleman was changing his line on Stansted. No doubt he is anxious to make that point for his constituents, if not others. It is for BAA, which owns Stansted, to decide whether the investment that it thinks is necessary can come forward. I very much hope that it can. Yes, we have an immediate problem in relation to credit and what is happening in the markets, but we should ask ourselves all the time what we will need 10, 20 or 30 years ahead. When it comes to aviation, as I have said many times, ever since I published the aviation White Paper in 2003, the problem that we have in this country is that on successive occasions when we should have been looking to the long term, short-term decisions were taken that prejudiced the development of transport infrastructure, in particular. That is why it is important that people ask themselves what Stansted will need in 10 or 20 years. I think BAA will take the long-term view, which is extremely important.

Sir Peter Tapsell (Louth and Horncastle) (Con): Has the Chancellor noted that there seems to be almost universal agreement in the United States that the threat of recession following the sub-prime mortgage and credit crunch crisis can best be warded off by a combination of lower interest rates and fiscal stimulus? Does he think that the response of the European Union and of Britain should be similar, and if not, why not?

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Mr. Darling: Mainly because the situation in the United States economy is rather different from the situation in our economy and in other major economies in the EU. As the hon. Gentleman rightly recognised, the big problem that the Americans have is that following the collapse of the US sub-prime market, the problem has gone on to affect the US housing market more widely. In America, the basic problem is that the supply of housing far exceeds the demand. In this country, we have the opposite problem: demand for housing exceeds supply, as we well know. What may be appropriate for the US economy is not always necessarily appropriate for other economies. As I have said on a number of occasions, because we have low unemployment, historically low inflation and low interest and mortgage rates, the Monetary Policy Committee has room for manoeuvre—as the Governor said in his speech in Bristol, I think of Tuesday evening—that was not available 15 years ago, when the previous Government got into such terrible problems. We will continue to do what is right for the UK economy, and at the heart of that is ensuring that we have a strong, stable economy and that we take the right decisions for the long term. If we do that, we can get through these problems, just as we have dealt with problems in the past.

Data Protection

9. Mr. Hugo Swire (East Devon) (Con): On how many occasions in his Department and its agencies confidential data has been downloaded on to CDs without encryption in the last 12 months; and if he will make a statement. [181418]

The Financial Secretary to the Treasury (Jane Kennedy): There is no central record, as across government the protective marking “Confidential” has a broad specific meaning, and is of a lower order than other security classifications. But it is a very good question, and one of the reasons why the Prime Minister invited Professor Walport to undertake a review of security arrangements across government.

Mr. Swire: We welcome the ruling by the Cabinet Secretary, Sir Gus O’Donnell, about not taking laptops or computer drives out of offices, but there are many people out there who still believe that the Government have been at best casual and at worst highly irresponsible, and cannot understand why the natural default position is not to encrypt personal data. The Minister has once again repeated her party’s position, hiding behind the report from Kieran Poynter. Does she simply not know the details at this stage? Can she guarantee that the Poynter report will not be slipped out on the eve of a parliamentary recess, and will be accompanied by an oral statement in the House?

Jane Kennedy: I am afraid that the hon. Gentleman prepared his supplementary before he heard my answer to his first question, because I did not refer to Poynter at all. But he brings me to an important point, which is that Her Majesty’s Revenue and Customs instituted new controls. We accept that what happened last November was a grave mistake and that is being corrected. Immediately, HMRC put in controls that required that all customer data transferred by CD be encrypted. I would expect that in his full report, Mr. Poynter will consider how
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internal processes and culture at HMRC can be strengthened to achieve appropriate data security in the future. The hon. Gentleman can be assured that the House will have the fullest opportunity to comment when Mr. Poynter is ready to report.

Mr. David Gauke (South-West Hertfordshire) (Con): I congratulate the Financial Secretary. This is about the first answer to a question relating to data that did not refer to the Poynter report, because the Government have consistently refused to answer perfectly reasonable questions about the missing data, about how many discs have been lost by HMRC, or even HMRC’s tracking procedures with private courier firms, by batting them away, saying that Poynter will report in due course. Given that Poynter will not report for some months, is it not about time that the Government abandoned their brazen attempts to kick the issue into the long grass, treated Parliament with a bit more respect and started answering some questions on this matter?

Jane Kennedy: I do not accept the premise of what the hon. Gentleman says. I take extremely seriously the changes that need to be made within HMRC and that are being made. Kieran Poynter, in his interim report, referred to the fact that many of his immediate recommendations had already been acted upon by HMRC in its immediate response to the circumstances. So the Government and HMRC have given a serious and considered response to the circumstance that HMRC found itself in last November. The matter is being taken extremely seriously indeed, and the House can be assured that Poynter’s final report will be presented to the House, I am sure by an oral statement.

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