The Financial Secretary to the Treasury (Jane Kennedy): A final figure for the number of staff at HMRC who will receive bonus payments in 2007-08 is not available, because the period has not yet ended. Bonuses were received by 35,916 staff in 2005-06 and 38,179 staff in 2006-07.
Bill Wiggin: Can the right hon. Lady confirm whether the amount expected by those people will be more than £23 million? In light of the losses of 25 million peoples data on the twin discs and the Standard Life pensioners details, is she not concerned that the payments will be seen as a reward for failure?
Jane Kennedy: I am not going to be drawn into speculation about what the estimate might be for the end of the year. We do not yet know how many members of staff will have earned a bonus. It is important to remember that, in line with what happens in the wider civil service, bonuses are paid to encourage and reward performance.
Notwithstanding the incident to which the hon. Gentleman refers, HMRCs staff are working extremely hard to improve performance. They are making genuine progress in customer serviceI am sure that many hon. Members would be prepared to acknowledge that that
is happening in a number of fields, in particular tax credits. HMRC is internationally recognised as one of the leading tax administrations in the world, and when members of staff receive a bonus for their performance, it is because it has been very well earned. I do not accept that there is any indication of failure.
Dr. John Pugh (Southport) (LD): May I ask the Financial Secretary to give another estimate? What estimate does she make of the number of staff likely to lose their jobs as a result of the dramatic closure of tax offices in Merseyside and Southport?
Jane Kennedy: The hon. Gentleman knows that the existing network of offices does not match how HMRC will need to operate in the future. Like any other public service, it needs to examine its operations in detail and compare its processes and procedures with those of the best in the world. That is what HMRC is doing. All the staff affected by last Fridays announcements will be able to consult their managers to ensure that changes affecting them are handled in the most appropriate way for their circumstances. I hope that he will acknowledge that HMRC has an agreement with the trade unions, which handles this process in a good way.
Mr. Mark Hoban (Fareham) (Con): How will the HMRC bonus scheme deal with staff who apparently break rules designed to protect taxpayer confidentiality when posting tax returns between offices in order to cut costs and paperwork? Have no lessons been learned from discgate?
Jane Kennedy: If the hon. Gentleman has been studying the work that HMRC has been doing, he will know that it has implemented several changes already in response to lessons that were and are being learned as a result of the loss of the data. Opposition Members are seeking to exploit press speculation about what may or may not happen with bonuses. The HMRC staff who earn bonuses will have done so because of the efforts they have made to improve performance and to learn from experiences such as happened last year.
The Exchequer Secretary to the Treasury (Angela Eagle): The NHS will devolve 82 per cent. of its revenue budget to primary care trust control, giving more money to the front line than ever before next year. Local organisations supported within a robust national framework are best placed to secure value for money on local services, as they understand the real needs of their community.
Ben Chapman: I accept that value for money for patients is a primary determinant, but does my hon. Friend think that the controls on PCTs, both democratic and governmental, are sufficient to ensure that value for money is always obtained and that when, for example, GPs enter into joint ventures with the private sector for primary care premises, we can ensure that best value for health is obtained?
Angela Eagle: I believe that the system is robust. Local improvement finance trust schemes have already injected £1.3 billion of investment into primary care. In our area, as my hon. Friend will know, the Wirral PCT has just won a national award as the best in the country. Both his constituencys primary care facilities, and those in my constituency at the Victoria Central hospital, are achieving huge increases in investment, all of which was opposed by the Opposition.
Lynda Waltho (Stourbridge) (Lab): I recently had the privilege of opening a new £8.1 million primary care centre in my constituency, which left my constituents in no doubt that Labour is the party of the NHS. Will my hon. Friend continue to prioritise spending on health care so that they continue to receive the benefits of sound, costed investment, instead of being seduced by the promises and pipe dreams of the Opposition?
Angela Eagle: I agree with my hon. Friend. Over the past 10 years we have seen a 17 per cent. fall in cancer deaths and a 17 per cent. increase in operations, with 1 million more operations being done and 1.8 million more out-patient attendances. That is good value for money for the doubling of investment, in real terms, in the NHS that has happened under this Government, thanks to the success of our economic policy, which has provided money for us to invest in the things that people really care about.
Mr. Hollobone: Will the Chancellor of the Exchequer halt the proposed closure of the tax office in Kettering and its relocation to more expensive premises in Northampton? Given that it is Government policy to increase the local population by one third and create 46,200 jobs in north Northamptonshire by 2021, local residents and businesses need more locally accessible tax advice, not less.
Mr. Darling: I understand the point that the hon. Gentleman makes, and hon. Members on both sides of the House could make the same point. As the Financial Secretary has just said, it is necessary to reorganise how HMRC does its business. That will mean in many places that the configuration of offices and services provided needs to change. If the hon. Gentleman has specific concerns, he will no doubt make them known, but we all have to recognise that HMRC needs to adapt to be able to provide a service that is up to the mark. That will sometimes mean that office reconfiguration is necessary. If he wishes to make further representations, we will of course listen to them.
T2.  John Robertson (Glasgow, North-West) (Lab):
Many of my constituents are elderly pensioners and they have been hard hit by the energy price
increases introduced this year. Does the Chancellor think that it is now time to levy the energy companies and use that money to increase the winter fuel allowance from £200 to £300, which would help the elderly in the winter, when they really need it?
The Exchequer Secretary to the Treasury (Angela Eagle): My hon. Friend should also recognise that annual winter fuel payments, introduced by this Government, now total £2 billion. Warm Front, which has spent £1.6 billion on energy efficiency so far, has helped 1.4 million households to be more energy-efficient, including, I am sure, many in my hon. Friends constituency. He will have to wait until next week for more clarity on those issues.
Mr. George Osborne (Tatton) (Con): May I ask the Chancellor about the latest confusion at his Treasury: the future of the Barnett formula? Wendy Alexander says that the formula should be reviewed, and Lord Barnett says the same. The Prime Minister is dithering and, for once in his life, does not want a review. The Secretary of State for Justice and Lord Chancellor says that
the Government would need to engage on this issue...and to deal with concerns in English constituencies about the fairness of the current system.
Mr. Darling: I wondered when we would hear from the hon. Gentleman, who has been uncharacteristically quiet this Question Time. As the House will know, the Unionist parties in the Scottish Parliamentthe Liberals, Conservatives and Labourhave agreed to review arrangements under the Scotland Act 1998. As part of that, the Government have said that they will publish the way in which the Barnett formula has operated over the past 30 years. We are not currently reviewing it, but it will inform debate. There will have to be a lot of discussion. I hope that there will be agreement among those of us who believe that the Union is important. It is important that we have that debate, and I shall publish somethingprobably in the summerthat will contribute to it. I hope that all parties, the Conservatives included, who have supported the Barnett formula up to now will contribute to that.
Mr. Osborne: I am sorry that I waited 45 minutes to intervene. I almost lost the will to live listening to the Chancellor for 45 minutes. The whole House is dreading his hour-long Budget speech next week.
I have the minutes of the Cabinet Committee meeting in Downing street on 28 January, at which the Chancellor was present. I know that he is only the Chancellor of the Exchequer, but he did not express an opinion at all, according to the minutes. It says that there is concern in English constituencies about the Barnett formula and that the Prime Minister says that there needs to be a
period of debate and discussion before concrete proposals could be put forward.
Does the Chancellor agree that if there is to be a period of debate and discussion, as the Prime Minister wants, at the very least the Treasury paper that he wants to produce should make a needs-based assessment of how
spending will be allocated across the UK? That would give us the facts on which to have the discussionand he could show some leadership on the issue.
Mr. Darling: I know that the hon. Gentleman has the minutes, as I understand that they were inadvertently widely circulated, not only within Government but without Government, too. As I said, it is important that people understand the way in which funding of the devolved Administrations has been made for almost 30 years. If we are to change that, we must discuss the implications not only for the devolved Administrations but for the whole UK. I intend to publish the position on the Barnett formula, probably in the summer, but there ought to be a debate. I hope that all parties will join in, especially those that are committed to maintaining the UK, which I believe is of the utmost importance.
T3.  Ian Lucas (Wrexham) (Lab): The UKs economic stability has helped to secure a £20 billion investment for EADS and Airbus in north-east Wales. Does my right hon. Friend recall that, in 1981, the largest ever single job-loss announcement was made in the same constituency? Does he also recall which party was in power?
Angela Eagle: It is absolutely true that unemployment tends to soar when the Conservatives are in office and plummet when Labour is in office. My hon. Friends constituency is a case in point. There has been a 53 per cent. fall in unemployment in Wrexham and, as he points out, the new and very welcome investments in both Airbus and Toyota are bringing good, high-skilled jobs with good value-added capacity to the local economy. Unemployment is a Conservative phenomenon; employment is a Labour phenomenon.
T4.  Norman Baker (Lewes) (LD): Will the Chancellor use the Budget next week to announce the removal of his poll tax on non-domicile qualifiers, on the basis that it hurts small, independent people greatly while doing nothing at all to tackle the rich oligarchs of whom he is so enamoured? Can we instead have a seven-year period in which non-doms pay no tax, after which they pay normal tax, the same as everybody else? Would that be a fairer solution?
The Financial Secretary to the Treasury (Jane Kennedy): The aim of the residence and domicile changes that were announced in the pre-Budget report was to make the tax rules fairer while supporting UK competitiveness. I do not recognise the hon. Gentlemans description of the situation, but we do acknowledge that the special rules for non-domiciles make an important contribution to the overall attractiveness of the UK to international talent and investment. That is why those special rules are going to be staying in place.
T5.  Mr. Robert Goodwill (Scarborough and Whitby) (Con): Farmers who are struggling under a mountain of Government-imposed paperwork are likely to be extremely irritated if rules on income shifting require them to keep detailed records, including timesheets, of the family members who make a great contribution to the survival of their businesses. What assessment have the Government made of the cost that will be imposed on farms and other small businesses by the proposed changes?
Angela Eagle: The rules on income shifting are out to consultation. I hope that, if the hon. Gentleman has constituents who have worries about them, they will contact us and let us know. It is important for hon. Members to know that I have had many meetings with tax representatives who are worried about the matter, and we are listening. The idea of the rules on income shifting is to prevent people from gaining unfair advantages by shifting income from one person to another in a way that ordinary taxpayers cannot. That is what we are trying to get at, not genuine businesses that suffer from simplification or complication issues. I hope that the hon. Gentleman will talk to me about his constituents worries if he wishes.
T8.  David Taylor (North-West Leicestershire) (Lab/Co-op): The Chartered Institute of Purchasing and Supplys activity index for February was published yesterday, and showed the level rising to 54.0, the highest since 1996. That is a barometer of inflationary pressure and shows how right pensioners and others are to be concerned about inflation, as revealed by the consumer prices index. Will the Chancellor tell the House how our performance in relation to the CPI compares with the other countries in, for example, the G7, the euro area and the EU27?
Mr. Darling: The answer to my hon. Friends question is that inflation here is less than in the euro area and half that in the United States. The reason for that is that when we gave the Bank of England independence to deal with monetary policy and interest rates, we gave it a very clear remit. That has resulted in our inflation being historically low. We are in an infinitely better position than we were in the 1970s and 1980s.
T6.  Mr. David Heath (Somerton and Frome) (LD): I imagine that all hon. Members continue to have constituents who have problems with tax credits. Several of my constituents have gone to the tax credit office in the past few weeks and been sent from there to me to sort out their tax credit problems. Is that an innovative way of giving underemployed Members of Parliament enough casework, or is it, as I suspect, a way of fobbing off my constituents by not dealing with their problems properly in the first instance?
The experience of tax creditsgiven the other matter, he will have a lot more time to consider it. Will he write to me about the detail? I
would like to look into the allegation, which is serious. I assure him that HMRC staff are working extremely hard through the transformation programme to improve the service to customers. He will have followed closely the changes that we have made in the past year or so, and I hope that in future hon. Members will not have experiences such as those that he describes.
T7.  Mark Pritchard (The Wrekin) (Con): The Chancellor will know that the Post Office offers a very competitive savings account with a rate of 5.5 per cent. What advice would he give to sub-postmasters around the country who are seeing an outflow of those savings to an even more competitive savings accountthat of Northern Rock, which is offering a rate of 6 per cent., subsidised by the taxpayer? Is that not a further blow to the post office network as a result of this Governments incompetence?
Mr. Darling: No. I am not sure whether the hon. Gentleman was present earlier, when we discussed Northern Rock, but I made it clear that the board of directors of Northern Rock is looking at the products that it offers, with a view to ensuring that they are not competing unfairly against other financial institutions. As for the Post Office, the Government have made very substantial sums available to support it, which was not the case in the past.
Mr. Peter Lilley (Hitchin and Harpenden) (Con): I am grateful to the Treasury for its recent reply that revealed that the former Chancellors decision to sell the nations gold reserves cost the country more than $8 billion net of interest, which is more than the losses incurred by rogue traders such as Jérôme Kerviel and Nick Leeson and a multiple of the losses on black Wednesday, and cost every household in this country more than £200. In the words of my constituent, Sonia Chohan, who has referred the former Chancellor to the Guinness Book of Records, is not
Gordon Brown...the biggest rogue trader in history?