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of all households sampled with incomes less than £15,000, 41 per cent. had cars in current VED bands B or C.[ Official Report, 4 June 2008; Vol. 476, c. 927W.]
Will the Minister confirm that that must mean that 59 per cent. of those households that earn less than £15,000 have bought new cars in higher bands than B and C, and will therefore pay more VED? In some cases, the increase will be getting on for £250, which is more than a weeks take-home pay. How does the Minister expect those households to financially plan ahead when she will not even admit that this retrospective tax will hit them worst? Is it not time to drop this plan and listen to the [ Interruption. ]
Mr. Hamilton: While it is true to say that the £15 billion paid out in City bonuses last year has fallen back to £7 billion, which is a meagre drop, two directors have received personal bonuses of £200 million. Does the Chancellor understand why the public sector is asking why there is one rule for some and another rule for others? Surely such bonuses must have an inflationary impact, and we should review that position.
Mr. Darling: I do not think that that has a terribly significant inflationary impact, and of course, all bonuses are taxed, usually at the higher rate. However, when boards fix bonuses for their executives, they should ensure that they are tied to the long-term interests of their companies. That has not always happened in the past, as we have seen. It is important that people are given incentives to consider what is in the long-term good of the company involved, because that must be in the best interests of our whole economy.
Mr. Philip Dunne (Ludlow) (Con): As the Government are now the owner of one of the largest mortgage providers in the country, what inflationary impact has the Chancellor caused by paying £1 million to the chief executive of Northern Rock? Can the right hon. Gentleman name any other chief executive of a mortgage provider who earns more than £1 million a year?
Mr. Darling: The Government have indeed taken temporary ownership of Northern Rock. We had to employ staff, and we had to pay the appropriate rate. Frankly, I would rather pay the appropriate rate, get some good management in there, sort out the problems of Northern Rock and then return it to the private sector. I am sorry that the hon. Gentleman does not support that.
The banks exposed themselves too much. They took on too much risk. Its their fault. Theres no one else to blame.
But despite that reckless disregard of risk, the banks have rewarded the bankers, in particular, in both good and bad times. The Governor of the Bank of England and the Financial Services Authority have expressed concern to the Treasury Committee about that structure. Will the Government work with us in our financial stability and transparency inquiry to ensure that we have a payment system that rewards success only and not failuretoday, we have seen a profits warning from the Bradford and Bingley and the chief executive has departed with a golden nest egg?
Mr. Darling: I think that the chief executive of that bank is retiring for health reasons. On bonuses generally, I said just a few moments ago that I believe that boards should ensure that the way in which they reward their executives ought to be geared towards the long-term improved performance of their institutions, and that has not always happened. On my right hon. Friends general comments, it is quite obvious that a number of banks did not understand the nature and scale of the risks to which they became exposed. However, that does not help any of us in the immediate period, because we have to live with and resolve the consequences; but I agree that boards ought to be far more diligent in ensuring that they reward people for doing things that are right for the company in the long term, because the public and their shareholders expect that people should be paid for success and not for failure.
Mr. Henry Bellingham (North-West Norfolk) (Con): Does the Chancellor agree that the huge bonus paid to Adam Crozier is completely unjustified, when small but viable rural sub-post offices are being closed?
Mr. Darling: On post office closures, as the hon. Gentleman will know, a problem that has faced our Government and his Government before that is that, over the longer period, fewer and fewer people use post offices. The National Federation of SubPostmasters recognises that problem, which is why the proposals that I put forward a couple of years ago were designed to ensure that there was a viable network, but there is no getting away from the fact that we must ensure that the Post Office is properly supported. We have put a great deal of public money into the Post Office, but we must also ensure that the network is viable. To pretend that it can be easily fixed or to do something else would be quite wrong.
The Economic Secretary to the Treasury (Kitty Ussher):
The Government are committed to ensuring that everyone has access to financial services to meet their needs. In 2007, I chaired a ministerial working group
on financial inclusion, with colleagues from across the Government. That group developed a three-year action plan, which was published in December 2007.
Mr. Todd: I thank my hon. Friend for that reply. Does she agree that information and education are the crucial features in giving people better access to financial products and that that should be delivered at the youngest possible age? Some of the programmes that I see in schools that are designed to teach young people about financial products are, frankly, rather poor and not fit for purpose. Is there some sense perhaps in looking harder at whether the available materials are pedagogically suitable?
Kitty Ussher: I agree with my hon. Friend, which is why from September this year financial capability will be included in the personal, social and health education curriculum at key stages 3 and 4. My right hon. Friend the Secretary of State for Children, Schools and Families has announced £11.5 million precisely to provide educational support on financial capability in schools. I hope that we will shortly be in a position to announce who will provide that information.
Miss Anne McIntosh (Vale of York) (Con): The category that is most excluded is, of course, women, who tend not to present themselves for advice on taking up a financial package. What measures are the Government taking to include women more in those financial packages, and how does the Minister respond to newspaper reports today that women will be particularly affected by the removal of the 10p income tax band?
Kitty Ussher: Our policies are designed for all people, male and female, but an important strand of the financial inclusion action plan published at the end of last year is making sure that we use all the public sector agencies to reach the people who most need support and information. That is why every single person who visits a hospital to have a child will shortly be given the new parents guide to money through the midwife service. I have seen that scheme in action in my constituency, and I can heartily recommend it.
Kerry McCarthy (Bristol, East) (Lab): I know that the Minister is a great supporter of the role of credit unions in tackling financial exclusion, and I thank her for agreeing to speak at the inaugural meeting of the all-party group on credit unions at the end of the month. Does she agree that a fundamental review of credit union legislation is long overdue, if credit unions are to play the role that is needed within communities to tackle financial exclusion?
Kitty Ussher: I agree wholeheartedly with my hon. Friend, which is why we conducted a review of the environment in which credit unions and co-operatives operate. The results of the consultation were considered and published at the end of last year, on, I think, 31 December. We are working extremely hard to make sure that credit unions can play their full part in addressing the problems of some of the poorest people in our society by providing them with affordable credit and other forms of financial support. I hope to be in a position to announce more details shortly.
Mr. Adrian Bailey (West Bromwich, West) (Lab/Co-op): I am sure that the Minister agrees that educating children about financial management from the earliest age is essential if we are to combat long-term financial exclusion. Will she undertake to look at AweSum Challenge, a programme recently devised and launched in West Bromwich by West Bromwich Building Society with the support of the Secretary of State for Children, Families and Schools, to consider its potential for combating financial exclusion?
Kitty Ussher: I would be delighted to look at that programme in my hon. Friends constituency, and I commend him on his work on the issue. I believe that we can do far more through the education system, and through the various grass-roots organisations in some of our poorer communities, to drive up levels of financial capability. My hon. Friend will know that we commissioned Otto Thoresen to do some work on the subject and to provide a service that works for the whole population. The results of his work are currently being taken forward by the Financial Services Authority.
6. Angela Watkinson (Upminster) (Con): What estimate he has made of the income distribution of the 1.1 million households which will not be fully compensated for the abolition of the 10p rate of income tax by the measures announced on 13 May 2008. 
The Financial Secretary to the Treasury (Jane Kennedy): The announcement that my right hon. Friend the Chancellor made on 13 May means that four in five households that stood to pay more tax as a result of the abolition of the 10p tax rate have been compensated in full, and the remaining 1.1 million will see their losses more than halved. Details of the household incomes of the 1.1 million households that are not fully compensated are set out in the memorandum to the Treasury Committee for its inquiry on Budget measures and low-income households in annexe D on page 24.
Angela Watkinson: Does the Minister find it acceptable that if we take together the abolition of the 10p tax rate, the cut in the base rate and the increase of £600 in personal allowance, the loss in income is greatest for somebody earning only £7,755?
Jane Kennedy: That is why, as we have said, further work is being undertaken. The Treasury Committee is conducting an inquiry into the impact of the abolition of the 10p tax rate, as the hon. Lady knows. I do not wish to pre-empt the outcome of that inquiry, but further work is being undertaken, precisely because we have been concerned about the impact.
Mike Penning (Hemel Hempstead) (Con):
One group of people who are not included in the Ministers figures are the workers with occupational pension schemes who had their pensions stolen from them five years ago. The Government have introduced a compensation package for them, five years on, but many pensioners on low incomes will now be taxed at 20p in the pound, not 10p in the pound, as they would have been if they
had had their pensions five years ago. What are the Government going to do about this robbery of their pensions?
Jane Kennedy: That is rather excessive language, I think, coming from a party that dismantled the state earnings-related pension scheme, which was one of the greatest benefits to working people. As I said in my previous answer, precisely because we have been working hard to make sure that those who lose overall are compensated for the impact of the abolition of the 10p tax rate, further work is being undertaken and the Treasury Committee is taking forward its work.
Mr. Roger Williams (Brecon and Radnorshire) (LD): Mrs. Georgina Nolan wishes to stand outside the Treasury with a placard indicating that she is one of the 1.1 million people who have still not been fully compensated. She is in her early 60s, having worked all her life, and she is now feeling the pain and experiencing financial problems. She wants to be compensated now.
Jane Kennedy: Indeed. The changes that have been introduced will feed through into pay packets in September. It is the earliest possible change that could have been made. Mrs. Nolan ought at least to be pleased that she will see the changes taking place in September.
Mr. David Gauke (South-West Hertfordshire) (Con): In the 2007 Budget, the then Chancellor made great play of the fact that from 2009 there would be only two rates of taxation on personal income, because of the alignment of income tax and national insurance contributions. Indeed, the Minister took a Bill to that effect through the House. Given the changes in the income tax threshold announced as the compensation package for the 10p tax rate losers, will that still happen in 2009, or is that yet another tax policy that will collapse before it is even implemented?
Jane Kennedy: In the changes that we make to national insurance, all factors are taken into account and taken in the round. That is not signalling that the hon. Gentleman should take that as a yes or a no. I am obviously not in a position to say at this point exactly what we will do when we come to consider the rate of national insurance later this year.
7. Mr. Graham Stuart (Beverley and Holderness) (Con): What recent assessment his Department has made of the extent to which levels of public debt and borrowing comply with the Government's fiscal rules. 
these figures suggest that the sustainable investment rule could be breached in 2009
and it blamed the Treasurys excessively loose fiscal policy over the past 10 years. Does the Chancellor agree that it would be entirely wrong to blame him for this situation, when responsibility so clearly rests next door?
Mr. Darling: The discipline that we imposed on ourselves almost 10 years ago has served our country well. Among other things, it has enabled us to make up for the huge lack of investment in the transport system, education and health. As a result, we are now able to spend far more in investing in those services, which help each and every one of us.
In relation to what the hon. Gentleman says, as I said to the shadow Chancellor earlier, the Opposition would have far more credibility on this issue if it were not for the fact that, for the past few years, they have been calling not for less but for more public expenditure on every possible occasion, without being able to show how they would pay for it. So our rules are right and they have ensured that we have been able to make up for a massive backlog in public investment. That would never have happened under a Conservative Government.
Mr. Andrew Love (Edmonton) (Lab/Co-op): Will my right hon. Friend confirm that, in this period of economic turbulence, the fiscal rules will continue to be at the centre of his framework for maintaining stability in the British economy?
Mr. Darling: As I said, the rules provide usand, indeed, any Governmentwith the right disciplines to ensure that, over the cycle we borrow to fund investment and that we keep debt at a sustainable level. The fact that our debt levels are historically low is hugely beneficial to us, especially at the moment.
Peter Viggers (Gosport) (Con): The Prime Minister has criticised banks and other institutions for carrying assets and liabilities off balance sheet, thus giving a misleading impression of their financial health. Does it matter that if the Government included their own off-balance-sheet liabilities, such as Northern Rock and private finance initiatives, they would be carried way through the fiscal rules?
Mr. Darling: I am not sure that the Conservative party policy at the moment is to argue seriously that we should take Northern Rock on to the balance sheet. If we did that and applied the rules on the back of that, it would distort the economy, especially at the present time. It would make no economic sense and no sense whatever. I find it hard to understand why the hon. Gentleman is arguing that.
The Financial Secretary to the Treasury (Jane Kennedy):
Increases in fuel prices, driven by developments in the global oil and wholesale gas markets, inevitably continue to influence UK inflationary pressure. However, the
UK is better placed to respond to those challenges than in the past, given that employment is at record highs and that inflation is still low by historical standards.
Richard Ottaway: Yesterday, the Prime Minister said that he was addressing the root causes of high oil prices. Is the Minister aware that the chief executive of Total said yesterday that oil prices had been pushed up by speculation? That was confirmed by the well-regarded Global Research organisation, which said that
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