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13 Mar 2008 : Column 501

I come now directly to the hon. Gentleman’s point. He is quite right: the hon. Member for Tatton has put out press releases alleging that public spending cuts, especially in the NHS, were secretly included in the Budget. I am afraid that this is another example of the Conservatives’ inability to get it right. They are apparently simply incapable of following what the Budget documents say. The Budget tables reflect that the Department of Health has spent slightly less of its allocated budget for this year than was forecast in the October pre-Budget report, as a result of management improvements that have resulted in a surplus. Following the introduction of end-year flexibility into Government budgeting in the 1990s, Departments can now draw on such underspends in future years.

The hon. Member for Tatton has made a series of claims that are completely wrong and he has misunderstood how the public spending tables work, with underspends carried over from one year to another as part of end-year flexibility. In fact, the figures confirm big increases in health and education over the next three years, with no cuts in spending or planned spending. In particular, the health budget has doubled in real terms since 1997. The figures confirm a massive increase in health spending and no cuts. The tables reflect the fact that the surplus in the NHS this year comes as a result of management improvements.

The figures also confirm a big increase in education spending. Again, the tables reflect the fact that some capital spending will be carried forward from one year to another, which is something that the hon. Members for Tatton and for Bournemouth, East simply do not understand.

Mr. Ellwood: Will the Financial Secretary give way?

Jane Kennedy: I will happily give way to the hon. Gentleman one more time, to see whether he can get himself out of the hole that he has dug.

Mr. Ellwood: The only hole is the one that the Government have dug, and which has caused the mess we are in. Had we saved or invested when times were better, we would not face the problem that we face today. Let us return to health. I know, for instance, that Bournemouth and Poole primary care trust has been forced to make cuts in its budget. The Financial Secretary can stand at the Dispatch Box and say, “Oh yes, they’ve managed to make some savings,” but those savings have been forced on PCTs, which is why she can say that they spent less than they expected to.

Jane Kennedy: The hon. Gentleman’s party must explain its unfunded plans. Spending on the NHS has doubled, and if he is making a bid for even more funding to be committed to his constituency, he needs to explain how his party’s commitment to do that would be paid for. As yet, there has been no explanation of how it proposes to meet its commitments.

My hon. Friend the Member for Bradford, North (Mr. Rooney) welcomed us all as converts to his long-held view that work is the route to prosperity and, for poor families, out of poverty. I pay tribute to him for the role that he plays as Chairman of the Select Committee on Work and Pensions. Appearing before
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his Committee has always been a source of learning for me, both when I was a Work Minister and now that I am in the Treasury. In our work to achieve the target of eradicating relative child poverty by 2020 and halving it by 2010, my hon. Friend and his Committee shine a light on the areas of policy that are not working as well as intended.

My hon. Friend, like my hon. Friends the Members for Regent’s Park and Kensington, North (Ms Buck) and for Northampton, North (Ms Keeble), mentioned housing benefit and the impact of the taper and the disregards, which we have addressed in the Budget. He also spoke about how we pay child care costs. I draw the House’s attention to the report that my hon. Friend the Member for Regent's Park and Kensington, North, mentioned, which is extremely thoughtful and well worked through. I am grateful for her support and her thoughtful speech, which outlined clearly the stark reality of the struggle that some families face.

The recent report of the London Child Poverty Commission, of which my hon. Friend is an influential member, is an important contribution to the debate. In particular, it offers good advice on what might be done in London. The Minister of State, Department for Work and Pensions, my right hon. Friend the Member for East Ham (Mr. Timms), and I will want to work with her and the commission in the coming months as we seek to understand the remaining barriers to parents in London getting into work.

My hon. Friend rightly reminded us that we should judge the Opposition by their deeds, not their words. She gave the example of the behaviour of Westminster council, whose councillors should hang their heads in shame. I am grateful to her for the examples that she gave of the impact of housing benefit on people entering work.

Mr. David Burrowes (Enfield, Southgate) (Con): If the Financial Secretary wishes to present herself as a fighter against child poverty, perhaps with bare knuckles, will she acknowledge that 300,000 children are in poverty because of the couple penalty? If so, will she do something about it?

Jane Kennedy: I am always willing to listen to valid points. That point is made frequently, and we are considering it. If the hon. Gentleman takes time to look at the documents that we have published alongside the Budget, he will see that in the next 11 or 12 years, we will work—

Gordon Banks (Ochil and South Perthshire) (Lab): In government.

Jane Kennedy: Indeed. We will work to achieve our target not only for 2010 but for 2020. I hope that the hon. Member for Enfield, Southgate (Mr. Burrowes) will see that that work takes place and that many questions are asked. As my hon. Friend the Member for Bradford, North, said, we do not claim to have all the answers. That is why we will work in partnership with a number of organisations that have a great deal of expertise, to understand the issues involved. I agree entirely with my hon. Friend that it is now right to determine how best we can dismantle the remaining barriers to work that people who depend on welfare have to face.


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I agree with my right hon. Friend the Member for North Tyneside (Mr. Byers) that the Budget debate offers a prime opportunity, each spring, for the parties to set out their stalls. I thank him for his powerful speech and his encouragement. He made a number of important points, which I shall draw to the attention of ministerial colleagues. He talked about problems concerning tax credits, arguing that we should move in the opposite direction from current policy and reduce the range of income in respect of which a family with children is entitled to them. There was a degree of sympathy for that point throughout the House. However, the fact that we have been able to establish a tax credit system that carries with it absolutely no taint of being a welfare benefit—it is an entitlement—and enabled families with children to claim it has been a very significant factor in encouraging a high take-up. Given that success, I would be reluctant to dismantle such a policy framework. However, I am always happy to listen to comments.

Mr. Heald rose—

Jane Kennedy: I am always happy to listen to the hon. Gentleman.

Mr. Heald: Although I accept that tax credits do some important heavy lifting, does the Minister acknowledge the concern—expressed by citizens advice bureaux, for example—that overpayments and how they are recovered deter some people from making claims? How is she going to sort that out?

Jane Kennedy: I was right to give way to the hon. Gentleman, who makes a good point. He made a thoughtful and entertaining speech, and I am sorry that I was not able to hear all of it. His point is valid. As the Minister who works closest with Her Majesty’s Revenue and Customs, I am spending a lot of time looking further into the problem. HMRC and I are working hard, first, to reduce the overpayments and then to understand the causes of them. We have made many changes there by following up work that was started by my predecessor, my right hon. Friend the Member for Bristol, South (Dawn Primarolo). She invested much time and effort in improving the structure of the tax credit delivery system.

My right hon. Friend the Member for North Tyneside drew our attention to table 4.2, but I hope he will accept that, as the text explains, the increase in the figures is primarily due to the introduction of tax credits.

I pay due respect to the right hon. Member for North-West Hampshire (Sir George Young) for the experience he brings to the Chamber, including being the Minister for Housing and Planning in a previous Government. He touched on the personal debt-to- savings ratio, but I hope that he will accept that household assets are now £7.5 trillion—much higher than the £1.4 trillion debt to which he drew our attention. The stable macro-economic performance over the past 10 years has meant that households have had to worry less about saving for an unpredictable future. We are not complacent, however. We believe that saving is very much to be encouraged and we particularly want to encourage lower-income wage
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earners to save. That is the purpose of the savings gateway and why individual savings account limits are rising to £7,200 from April.

The hon. Member for South-West Hertfordshire (Mr. Gauke) always makes a thoughtful speech; he is always thorough and entertaining, and it is always a pleasure to listen to him. He highlighted the comments of the hon. Member for Tiverton and Honiton (Angela Browning) about income-shifting, and I shall return to some of her other comments in a few moments. We have received strong representations on the issue, and both the hon. Gentleman and the hon. Lady referred to them. We acknowledge the problem, but we need to take more time to ensure that the current arrangements are not being abused. That is one of the reasons why this area has been crying out for reform, but we must get the reform right. I heard the points made by both hon. Members.

The hon. Member for Tiverton and Honiton asked what was happening with the taxpayers charter. I can tell her that I was very pleased to announce on 10 January that, in tandem with HMRC, we will be taking forward work on the charter, which I agree could play an important role in ensuring that the tax system is usable and accessible to everybody. That work is very much in progress and I know that HMRC is particularly keen to see a positive outcome. I am pleased to be working with HMRC as we deliver on that agenda.

I would like to wish the hon. Member for Tiverton and Honiton well on her retirement. She will be a loss to the House, but I am sure she will find many other things to do. She referred to the case of one of her constituents. I do not have the letter in front of me, but I recall writing to the hon. Lady about it. I hope she will accept that the package of reforms introduced in the 2007 Budget will mean that four out of five households are either better off or no worse off. The average household is £100 better off and the average family with children £200 a year better off. She should also bear in mind the fact that 59 per cent. of pensioners do not now pay tax. I listened to her comments on pensions with a degree of incredulity, given that the Conservative party was in office throughout the pensions mis-selling crisis, and set out to undermine the state earnings-related pension scheme almost as a deliberate act of policy. We deserve credit for our reforms to the UK pension system, which will provide a strong foundation.

My hon. Friend the Member for Northampton, North and I have met to discuss many of the matters about which she is concerned. I am grateful for her support for our work on the child poverty target, and I hear what she and others have said about meeting the target for 2010. We are committed to working towards meeting that target. I readily acknowledge, and the Chancellor is happy to acknowledge, that the target is challenging. We take on board my hon. Friend’s comments, however, and I will examine her suggestions closely.

I loved the contribution of the hon. Member for Broxbourne (Mr. Walker). Let me tell him that we are all capitalists now. I thank him for his welcome and graceful speech, which was highly entertaining. He would find the Labour Benches very comfortable. It is important that the House acknowledge the contribution that resident
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non-domiciles already make. We value the role of the City of London, and it is important to sustain its position as the place for the world’s banking and financial community, among others, to come to do business, trade and, in many cases, live. We should not forget that sizeable numbers of resident non-doms have low incomes, which is precisely the reason why we raised the de minimis limit from £1,000 to £2,000, which I hope will help many in such circumstances.

My right hon. Friend the Member for North Tyneside was also right to emphasise the importance of maintaining a strong economy. There was much twittering on the Conservative Benches about the Government failing to mend the roof of the British economy as the storm approached. I suggest that the reforms put in place by Labour when we came into office in 1997—the reform of the Bank of England, and the introduction of the golden rule and the sustainable investment rule—were necessary to secure the foundations of the British economy. The economy is now in a much more resilient condition than what the Conservatives left behind. It continues to grow—much to their chagrin in some cases. Because of its strong foundations, it has already weathered two storms in the global economy—the dotcom industry failure and 9/11, for three years after which other economies faltered or went into recession. During that period, however, the British economy grew quarter after quarter and year on year.

I am proud to have been invited by my right hon. Friend the Prime Minister to rejoin his Government and to be asked to work in this role with this Chancellor. I am delighted to commend this Budget to the House.

Debate adjourned.— [Liz Blackman.]

Debate to be resumed on Monday 17 March.


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Post Office Closures (Clapham)

Motion made, and Question proposed, That this House do now adjourn. —[Liz Blackman.]

5.19 pm

Keith Hill (Streatham) (Lab): May I begin, Mr. Deputy Speaker, by asking you to convey my thanks to Mr. Speaker for having exercised in my favour that special discretion he has in the choice of Thursday evening Adjournment debates, and so secured this early debate? Although he has no choice but to be here, let me also express my thanks to my hon. Friend the Minister for his attendance at this debate. My hon. Friend, who is a decent man, has already responded to a large number of debates on post office restructuring and closure—I know that because I have read the reports of most of them—but I think I am right in saying that this is the first debate that has concerned just one post office and its future.

I make no apology for that, because I believe that Abbeville Road post office is a special case. I think that in proposing its closure, Post Office Ltd has made a bad mistake: it has simply got it wrong. I am not alone in that judgment. I have here a petition signed by well over 2,000 local residents who are passionately keen to keep their local post office. I shall be sending the petition, and a copy of my speech, to Ms Anita Turner of Post Office Ltd as my submission to the London area consultation, which closes on 2 April, and I urge as many signatories as of the petition as possible to write to Mrs Turner without delay if they have not already done so.

There is no doubt that the popularity and success of Abbeville Road post office are largely due to the character and commitment of its sub-postmaster and sub-postmistress, Shailesh and Smita Patel. Mr. and Mrs. Patel have run the post office in Abbeville road for 20 years, for the past 12 years at its present location, where they had the post office purpose-built in 1996. Over those 12 years, they have invested the very large sum of £200,000 to create a fully modernised post office. They are completely committed to the locality, and had hoped and expected to go on providing post office services for many more years to come. We can be entirely sure of one thing: the Patels are in this for the long term, which is more than can be guaranteed for the two alternative branches that are proposed to replace the Abbeville Road branch in the event of its closure. I shall say more about that later.

Mr. and Mrs. Patel run a modern, clean, efficient and attractive store combining a newsagent-cum-convenience store with the post office. They offer a wide range of post office services. They provide the usual range of Benefits Agency payments: pensions, income support, child benefit and incapacity benefit. They also issue the London Transport freedom pass, change currency to euros on demand, provide an online lottery and cash debit cards. Their Link machine has an exceptionally large weekly turnover—of which Post Office Ltd will be aware—in response partly to the cash transactions at the local farmers’ market and partly to the absence of a bank nearby. Indeed, local business people use the Post Office extensively for banking purposes. The store is easily accessible to wheelchairs and buggies via a ramp, and there is plenty of space inside.


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I emphasise that those services are provided all day from 9 am until 5.30 pm five days a week and from 9 am until 1 pm on Saturdays, and that they are provided from three counters. I hope my hon. Friend will also note that there are no lunch breaks, no Wednesday afternoon closing, and three, not two, post office counters—contrary to the so-called facts set out in the branch access report which purports to justify the closure. If Post Office Ltd is trying to make a case for closure, it might at least get its facts right. That does not inspire confidence.

Like all good post offices, the Abbeville Road post office is a focal point for the community. We hear a great deal in debates such as this about the importance of the village post office in rural communities, but there should be absolutely no doubt about the vital community role of the urban post office in the often more impersonal and anonymous setting of the city. It is the universal view of local residents that Abbeville Road post office acts as the hub of the local community. As one resident has told me, it actually helps to give the locality a village feel. It is, of course, a lifeline of human contact for its many elderly customers. Mr. and Mrs. Patel even deliver groceries to the sick and infirm as part of their newspaper round.

I hope that my hon. Friend the Minister takes from my description an impression of Abbeville road post office as a successful and thriving business, because that is just what it is. It is a model of what a post office should be.

Mr. Patel tells me that Abbeville Road post office does 3,000 post office transactions a week, and he has shared with me the details of the income he receives from Post Office Ltd. I have no intention of disclosing that information, as I respect his privacy—after all, Mr. Patel is not a Member of Parliament. We have, however, learned from other debates about the broad level of turnover that is required to make a post office profitable, and I have no doubt whatever that Abbeville Road is a profitable post office; it is inconceivable that it could be otherwise. Moreover, Mr. Patel also tells me that his area manager has said to him for years that Abbeville Road is a commercial post office—in other words, a post office that makes a profit, or one of that 30 per cent. minority of profit-making, commercially viable post offices.

I find it extraordinary that Post Office Ltd should in its search for a sustainable future be willing to close down a profitable post office. I also find it extraordinary that Post Office Ltd should as part of its London area plan be willing to close down a post office doing 3,000 transactions a week while elsewhere in the country keeping open rural post offices doing 13 transactions a week. I find it extraordinary, too, that Post Office Ltd is willing to close down a profit-making post office simply in order to meet its so-called access criteria. I also believe that even in the strict terms of meeting those criteria—deciding which post offices should close if disruption for customers is to be minimised—Post Office Ltd has got it wrong. We should remember that we are dealing with the disruption that is likely to be experienced by Abbeville Road’s 2,000 to 3,000 weekly customers in the event of its closure.


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