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Investment in Schools
4. Mrs. Linda Riordan (Halifax) (Lab/Co-op): What recent assessment he has made of the effects on the economy of expenditure on secondary schools. [191844]
The Chief Secretary to the Treasury (Yvette Cooper): Investment per pupil in England has increased from £2,500 a year in 1997 to £5,600 a year in 2007 to 2009. That has supported a big increase in attainment, with more than 60 per cent. of pupils now getting five or more GCSEs, compared with 45 per cent. in 1997. As the Leitch report showed, increasing skills in education has a long-term impact on economic growth.
Mrs. Riordan: I thank the Minister for her reply. Will she assure me that she will continue to work with colleagues in the Department for Children, Schools and Families to ensure that teenagers who want a practical, rather than an academic, career continue to get that funding and investment? That will enable the economy in Halifax to continue to grow, through the welcome investment by the Government into secondary education in Halifax, where GCSE results are above the national average and three of our schools—Halifax high, Park Lane and Sowerby Bridge—are in the top 30 most improved schools in the country.
Yvette Cooper: My hon. Friend is right to say that there has been a significant improvement in the schools and education in her area. She is also right to say that that is a direct result of the additional investment that we have put in. I can assure her that I will continue to work closely with my right hon. Friend the Secretary of State for Children, Schools and Families on determining how we can sustain that investment and improve education in the future.
Mr. David Chaytor (Bury, North) (Lab): Does my right hon. Friend recall that one of the most welcome announcements by the former Chancellor was his commitment to close the funding gap between the per pupil spend in state schools and that in private schools? Does the Treasury still share that commitment? Will it be possible, in next week’s Budget statement, to give the House an update on the extent to which the funding gap has been narrowed?
Yvette Cooper: I can tell my hon. Friend that we think it right substantially to increase investment spending. In fact, that spending will rise as a result of the comprehensive spending review to £6,600 per pupil in 2010-11. It is not fair that those who are in private schools should get such a consistent advantage in investment and funding, and that is why we have set such great store by increasing investment—something that the Conservatives have repeatedly refused to support.
Mr. David Kidney (Stafford) (Lab): Given the national priority to raise skill levels as far and wide as we can, let me tell my right hon. Friend that when just one school in Stafford, the Sir Graham Balfour, was transformed through the private finance initiative from tired buildings on two sites to a modern state-of-the-art learning environment, attainment levels rocketed. The school is now oversubscribed, and with my and other people’s help, it has an excellent partnership with a local manufacturing business. Should my right hon. Friend soon be talking to Ministers in the Department for Children, Schools and Families about accelerating the Building Schools for the Future programme, may I assure her that Staffordshire offers very good value for money in every sense of the word?
Yvette Cooper: My hon. Friend is right that we should not underestimate the impact of good facilities on teachers, children and education as a whole. That is partly about the books, computers and facilities that we have invested in for teachers to use in the classroom, but it is also about the physical environment—the buildings in which people are able to learn. That is why we have allocated £9.3 billion for Building Schools for the Future and for academies; we want to see that money well spent.
Budget Deficit
5. Andrew Rosindell (Romford) (Con): What his most recent estimate of the UK budget deficit is; and what plans he has to reduce it. [191845]
The Chancellor of the Exchequer (Mr. Alistair Darling): I shall publish all my Budget forecasts next week.
Andrew Rosindell: The Chancellor will be aware that according to the European Commission’s economic forecasts, there is to be a structural deficit of 2.8 per cent. for the United Kingdom, compared with western Europe’s overall deficit of 1.1 per cent. On that basis, how will Britain be able to cope with an economic shock?
Mr. Darling:
Actually, we are well placed to deal with current times of uncertainty. Debt levels are lower now than they were in the 1990s. Our interest rates are historically low and our economy is much more resilient than it was. Government borrowing was 7.8 per cent. of gross domestic product in 1993-94, whereas it was 2.3 per cent. in 2006-07. What would, of course, exacerbate the situation and make it extremely difficult for the UK would be to follow the hon. Gentleman’s party’s policies, as the Conservatives have in excess of £10 billion-worth of unfunded tax
promises, not to mention other promises about prisons, the health service and even their green ISAs, where they had to admit that they had no idea how much those policies would cost.
Mr. Jim Devine (Livingston) (Lab): What contribution to reducing the national debt will be made by the privatisation of the Tote, as that decision will mean a reduction in choice for punters and invariably that one of the three big bookmakers will buy it at below market price?
Mr. Darling: As my hon. Friend knows, the Government are considering the sale of the Tote. I am not sure that I would agree with him that its sale would necessarily result in a reduction in choice, but that is the Government’s policy and it remains our policy.
Richard Ottaway (Croydon, South) (Con): Will the ceiling for the sustainable investment rule remain at 40 per cent. over the next economic cycle?
Mr. Darling: As I said to the hon. Member for Romford (Andrew Rosindell) a few moments ago, the fiscal rules that we set up 10 years ago have served this country well and enabled us to protect public investment, which Conservatives were unable to do in their 18 years in government. Those rules are important and it is also important to ensure that we maintain public investment and long-term sustainable finances.
Justine Greening (Putney) (Con): The Institute for Fiscal Studies does not agree with the Chancellor’s warm assessment of national debt levels. In fact, it recently concluded that it expects the sustainable investment rule to be broken. Given what he has just said about including Northern Rock and that having to react to that in national debt would be damaging to the economy, will he give the House a guarantee right now that the sustainable investment rule will not be broken?
Mr. Darling: As the hon. Lady knows, before any Budget or, indeed, any pre-Budget report, many commentators make forecasts. She, like the IFS and everyone else, will have to wait until next week to see what our forecasts are. What I can tell her—she ought to pay attention to this—is that under the Conservatives’ latest economic policy of having a rule stating that there cannot be borrowing when the economy is growing above trend, they would have had to have cut something like 85 per cent. of capital investment over the last 10 years. To pursue that policy would be to repeat the very mistakes that the Conservative party made when it was last in office. We are not going to do that. We have rules that ensure that we can have long-term sustainable growth, which is one of the reasons why our economy is in much better shape now than it was in the 1980s and 1990s.
Aviation
6. Norman Baker (Lewes) (LD): If he will introduce fiscal measures to require the aviation sector to meet its environmental costs. [191846]
The Exchequer Secretary to the Treasury (Angela Eagle): In the 2007 pre-Budget report, the Government announced their intention to replace air passenger duty with a duty payable per aeroplane. The reform will take effect on 1 November 2009 and will send better environmental signals, ensuring that aviation makes a greater contribution to covering its environmental costs as well as raising a fair level of revenue to support public services.
Norman Baker: I welcome the Government’s adoption of that Lib Dem policy, but will the Minister express her concern at the fact that it is usually much cheaper to fly to Manchester than to take the train, although flying produces far more carbon emissions per passenger? Is it not time that the Government sought to remedy that market distortion and somehow ensure, by means of Treasury levers, that the cost of travelling equates far more closely to carbon emissions than to the abstract formula that currently applies?
Angela Eagle: We have invested a substantial amount—over £10 billion—in our railways, with more to come in Government programmes. As we proceed towards decarbonising our economy over the medium to long term, the issues raised by the hon. Gentleman will have to be taken into account. That is why the Climate Change Bill is so important: it will make carbon budgets possible for the first time, thus enabling us to make decisions on all those issues.
David Taylor (North-West Leicestershire) (Lab/Co-op): According to its own calculations, aviation contributes about £13 billion to the United Kingdom’s economy—less than 1 per cent. of GDP—yet its tax-free status produces for the industry about £10 billion, which is £50,000 for each of the 200,000 employees in the sector. On grounds of fairness, economics and environmental impact, is it not about time we addressed that long-standing issue?
Angela Eagle: Taxing aviation involves international issues, which are dealt with in the Chicago convention. The Government are trying to ensure that the convention is renegotiated; that is not an easy task. They are also pursuing—with some success, and hoping for a final decision soon—the inclusion of aviation in the European Union emissions trading system, which would begin to address the points that my hon. Friend has rightly made.
Mr. Alistair Carmichael (Orkney and Shetland) (LD) rose—
Mr. Carmichael: There are few things more worrying than being cheered by Tories.
Does the Minister accept that, given the distances covered, a full plane is a very carbon-efficient way of transporting people around the highlands and islands? Does she also accept that the present system of per capita air passenger duty recognises the socio-economic importance of aviation to the remote communities in the highlands and islands, and will she ensure that it continues to be recognised when she constructs her new system?
Angela Eagle: Now that the hon. Gentleman has more time on his hands, I hope he will be able to respond to the public consultation on the design features of the tax. The consultation opened on 31 January, and will close on 24 April.
Mr. Brian Jenkins (Tamworth) (Lab): As my hon. Friend said, this is an international cause—and rightly so—fought on European ground. There will be little effect on our pollution if we tax aviation fuel in this country when planes are buying their fuel in France and then flying over here. Will my hon. Friend put more emphasis on the fact that we need to work internationally to solve the problem?
Angela Eagle: My hon. Friend is absolutely right. That is why we are trying to gather an international consensus to amend the Chicago convention, which is now anachronistic. It is also why we are working very hard with our partners in Europe—with, I hope, some success—to ensure that aviation is included in the EU emissions trading system. That would mean that the problem of aeroplanes diverting to airports in Europe where the tax is not payable would not arise.
Mr. Graham Brady (Altrincham and Sale, West) (Con): I welcome the Minister’s last response. Will she look in particular at air freight? That is a very competitive market, and there will be no environmental benefit at all if planes simply divert to near-European airports and there is then transhipment to the UK.
Angela Eagle: The hon. Gentleman is right. I have met representatives of the freight industry, who are engaging positively in our consultation, and we will take into account the issues to do with, and the effects of, the move to the plane tax, which his party supports, in its design.
Climate Change
7. Anne Snelgrove (South Swindon) (Lab): What recent discussions he has had with Cabinet colleagues on the effects of climate change on the economy. [191848]
The Chancellor of the Exchequer (Mr. Alistair Darling): The Government are committed to reducing carbon emissions by 60 per cent. by 2050 through both domestic and international action.
Anne Snelgrove: My right hon. Friend may be aware of my private Member’s Bill, which seeks to make public sector buildings more energy efficient and comes before the House on 25 April; all are welcome. Has he done any cost-benefit analysis on moving public sector buildings into the top quartile of energy performance?
Mr. Darling:
I know that my hon. Friend is introducing that private Member’s Bill, and she is right to raise the issue because it is important that at every single stage we do everything we can to reduce carbon emissions. I remind the House that through the Climate Change Bill that is currently passing through Parliament we will be the first Government in the world to impose a discipline on ourselves that will require us to meet the objectives we have set; there
will not be room for Governments to escape the consequences of that. It follows, of course, that all buildings must play their part in ensuring that we emit less carbon as a result of heating and lighting them.
Mr. Graham Stuart (Beverley and Holderness) (Con): When the Government came to power 10 years ago, they promised to move taxation from “goods”, such as employment, on to “bads” such as environmental emissions. They started along that line when first in power, but since then the percentage of taxes taken on environmental grounds has reduced over time. Will the Chancellor explain the rationale for that?
Mr. Darling: That is principally because the rate of increase in fuel duty was reduced after 2000. I recently listened to one of the hon. Gentleman’s colleagues castigating the Government for that, and I was waiting for him to say, “And a new Conservative Government would, if ever elected, at some stage put up taxes on fuel.” I suspect that the Conservatives are not going to say that. When the Opposition actually come up with a coherent set of policies that would tackle the environmental challenge we face, they will have rather more credibility than they do currently.
Lynne Jones (Birmingham, Selly Oak) (Lab): In 2006, Sir Nicholas Stern told the Chancellor’s predecessor that expenditure of approximately 1 per cent. of GDP would be necessary to avoid dangerous climate change, which could result in the loss of between 5 and 20 per cent. of GDP. In 2008, what is the Chancellor’s estimate of the proportion of the UK’s GDP that will be spent on reducing our carbon dioxide emissions?
Mr. Darling: It is important that we follow Sir Nicholas Stern’s advice. My hon. Friend is right that his findings, which I do not think have been disputed by any serious commentator, are that unless we are prepared to make the necessary investment now to tackle climate change, we will pay a heavy price in terms of loss of GDP not just in our country, but across the world. The Government will keep that under continuous review, and the sums that we are spending on tackling climate change are reflected in the additional money that has been given to Departments right across the piece. She is right that we must make the necessary investment over the next few years if we are to tackle climate change and ensure economic growth in the future.
Miss Anne McIntosh (Vale of York) (Con): The Climate Change Bill does not currently make clear what the relationship will be between the UK emissions trading scheme and the European Union emissions trading scheme. Will the Chancellor give a commitment to the House that that will be made clear in the Bill before it reaches the House of Commons, and that that relationship will not make our industry less competitive than its competitors in the European Union?
Mr. Darling:
As the hon. Lady knows, that Bill will be coming before this House shortly, and she will doubtless be able to express her concerns to my ministerial colleagues at that time. She makes an
important point; it is important that all of us meet our environmental obligations, and it would be wrong for us to discriminate against British businesses. Is that not all the more reason for us to work together in Europe? The sooner the rest of her Conservative colleagues realise that Europe is a reality that can benefit our country, not only in environmental terms, but in industrial terms, the better it will be for all of us.
Mr. Adrian Bailey (West Bromwich, West) (Lab/Co-op): The progress that we have made on the emissions trading scheme is universally recognised. What assessment has my right hon. Friend made of the willingness of other countries’ Finance Ministers to introduce other fiscal measures to tackle climate change?
Mr. Darling: The signs are encouraging. Finance ministries across the world realise that this issue is not something that they can leave to their colleagues who deal with energy or environmental matters. Tackling climate change and dealing with these problems must be central to everything that Treasuries across the world do. I shall give an example. At the previous meeting of the G7 countries in Tokyo, we reached agreement with Japan and the United States—other countries indicated their support—for setting up a fund to help tackle climate change, particularly in developing countries. That demonstrates how Finance Ministers’ thinking has changed over the past few years; most of us realise that we must deal with the economics and the problems of climate change together.
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