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Public Sector Debt

11. Mr. David Heathcoat-Amory (Wells) (Con): What estimate he has made of the peak amount of future public sector debt; and when he expects that peak to be reached. [314438]

The Economic Secretary to the Treasury (Ian Pearson): As set out in the pre-Budget report, public sector net debt is forecast to peak at 77.7 per cent. of GDP in 2014-15. Projections beyond that are consistent with debt falling as a share of GDP in 2015-16. Although the UK's public debt is rising in response to the recent shocks, it will remain in line with that of other advanced economies.

Mr. Heathcoat-Amory: That means that the national debt will reach £1.4 trillion. Is the Minister aware that if we repaid debt at the rate of £1 every second, we could repay £1 million in 12 days, but that it would take 44,000 years to repay the total debt to which he has alluded? Does that not strengthen the case for starting early?

Ian Pearson: As has been made very clear, we want to take action to curb the deficit and reduce debt. We have set out plans to halve the deficit over four years. The right hon. Gentleman should be aware that our figures for net debt compare pretty much with those of France and Germany and with the G7 average this year, not according to the Government's figures, but according to the International Monetary Fund's figures. I am sure he will welcome that.

Alcohol (Minimum Price)

12. Mr. Andrew Turner (Isle of Wight) (Con): What discussions he has had with ministerial colleagues on the revenue which would accrue to the Exchequer if proposals for a minimum price for alcohol were implemented. [314439]

The Exchequer Secretary to the Treasury (Sarah McCarthy-Fry): There are a number of different approaches available if proposals for a minimum price for alcohol were implemented. The revenue impacts, which could be positive or negative, would depend on the level of any minimum price and the way in which minimum pricing was implemented.

Mr. Turner: Does the Minister agree that such proposals might lead to increased prices on imported alcohol? How does she think our trading partners would react?

Sarah McCarthy-Fry: We would have to take such a consideration into account if we were introducing minimum pricing. Duty alone could not deliver minimum pricing for alcohol products, but when we consider changes to duty rates, we have to consider impacts on the industry, as well as on Exchequer revenues.

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Dr. Brian Iddon (Bolton, South-East) (Lab): Why is the Treasury so against a unit price for alcohol below which it cannot be sold by anyone, including supermarkets?

Sarah McCarthy-Fry: I thank my hon. Friend for his question. I refer him to the answer that I gave to the original question. We cannot use alcohol duty alone as a mechanism to deliver minimum pricing for alcohol products; there are a number of practical and legislative constraints. We are, of course, always willing to consider the matter further and to consult other colleagues about it.

Mr. Greg Hands (Hammersmith and Fulham) (Con): Like the hon. Member for Bolton, South-East (Dr. Iddon), the Health Secretary appears enthusiastic about minimum pricing, but it would hit responsible drinkers hard, without any benefit to the public finances. I know that much of the Government's economic policy is back to the 1970s, but setting the price of goods is surely a step too far. Instead of trying to fix prices, should they not try and fix the problem and raise taxes on problem drinks, rather than on responsible drinkers?

Sarah McCarthy-Fry: I must remind the hon. Gentleman that there is an EU rates and structure directive that means that beers and spirits must be taxed in proportion to alcohol content, and wines and cider must be taxed in bands of alcohol strength, which constrains what we can do on specific drinks. Also, alcohol duty is paid by producers. That applies equally, regardless whether products are sold in pubs or supermarkets. Many of the problems cited by hon. Members are not about responsible drinkers in pubs, but about the prices charged in supermarkets. As I said, alcohol duty alone cannot deliver a solution.

Early Intervention Policies

13. Mr. Graham Allen (Nottingham, North) (Lab): What assessment he has made of the effects on the economy of implementation of policies for early intervention; and if he will make a statement. [314440]

The Chief Secretary to the Treasury (Mr. Liam Byrne): The Government fully recognise the benefits of early intervention and the value for money that it brings. That is why I announced in the Command Paper that I laid before the House before Christmas a new programme of work designed to test innovative forms of finance aimed at boosting investment in early intervention.

Mr. Allen: We all seem to be agreed that we need to reduce the deficit by half over four years, but there are two ways to do that-either by reducing public expenditure, or by reducing the need for that public expenditure by intervening early in the problems that much public expenditure is spent on, so that that expenditure is not necessary. Will my right hon. Friend and the Treasury exercise due diligence in looking at the financial instruments that are being developed on the capital markets, which could raise money in the first instance to make sure that early intervention programmes can be sustained?

Mr. Byrne: I would like to put on record my personal thanks to my hon. Friend for the pioneering work that he has overseen in Nottingham, where there is a great deal for policy makers and for politicians to learn. Like him, I am keen that we explore new ways of drawing
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money into innovative projects focused on early intervention, and I hope the measures that we have announced to create in this country a social investment wholesale bank, together with social impact bonds that will be brought forward by the Secretary of State for Communities and Local Government and, I hope, the Secretary of State for Justice will be a substantial step in testing some of the ideas that are being pioneered now in Nottingham.

Fiscal and Monetary Policy

15. Mr. Andy Reed (Loughborough) (Lab/Co-op): What steps he plans to take to maintain the level of demand in the economy in the next 12 months. [314443]

The Economic Secretary to the Treasury (Ian Pearson): As my right hon. Friend the Chancellor said some moments ago, we will continue to provide fiscal support during 2010-11, alongside the monetary policy action being taken by the Bank of England.

Mr. Reed: My hon. Friend will not be surprised to hear that when I met representatives of 3M Health Care in my constituency, it said that it was quite clear that expenditure in the health service over the last 12 months had meant the difference between keeping the company going and it possibly folding. Will he ensure that moneys spent recognise the impact of such expenditure on the private sector as well as on the public sector? Those 600 company jobs in Loughborough are thanks to the excellent work of investing in the national health service.

Ian Pearson: My hon. Friend is absolutely right to highlight the importance of public procurement in supporting private sector jobs in this country. The figures show that more than 95 per cent. of Government spending on procurement goes to UK firms. I am sure that we all appreciate that. There is a direct link between Government spending, public procurement and jobs in the UK economy. We need to ensure that we get good value for money while at the same time supporting UK firms.

Sir Nicholas Winterton (Macclesfield) (Con): Would the Minister not accept that this country's elderly can also help to maintain demand in the economy? Bearing in mind that many of them rely on their savings, on which they getting a negative return because of inflation and taxation, is it not time that the taxation system enabled the elderly, who rely upon savings, to get some meaningful return for their responsibility?

Ian Pearson: I know the hon. Gentleman has always raised the issue of pensioners and is a champion of them. He will be aware, however, that this Government have taken many pensioners out of poverty through the measures we have introduced-for example, by increasing the limits on individual savings accounts in the 2009 Budget and by providing an opportunity for tax-free savings for the over-50s, including pensioners, which is to be extended to all savers from April this year. Those are welcome measures, and as a Government we will always want to acknowledge the vital role pensioners play in contributing to our economy-just because people are retired, it does not mean that they are not economically active citizens and are not contributing to our society.

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Topical Questions

T1. [314452] Annette Brooke (Mid-Dorset and North Poole) (LD): If he will make a statement on his Departmental responsibilities.

The Chancellor of the Exchequer (Mr. Alistair Darling): The Treasury's responsibilities remain as I have set out on previous occasions.

Annette Brooke: Given that this Government's policies have failed to reverse the rising income inequality of the Tory years, does the Chancellor agree that raising the basic tax allowance would help pensioners like Mr. Whitty of my constituency, who has very little and yet still pays income tax?

Mr. Darling: Over the past 12 years, we have taken measures to take an increasing number of pensioners out of tax precisely by raising their personal allowances. [Interruption.] I am sure that the hon. Lady is being unintentionally distracted by her hon. Friend the Member for Southport (Dr. Pugh), but I was making the point that because we have raised personal allowances for older people, we have been able to take more pensioners out of tax. On top of that, measures such as the winter fuel allowance and others have helped elderly people meet their responsibilities and enjoy a better standard of living than they would otherwise have done.

T2. [314453] Barry Gardiner (Brent, North) (Lab): Is my right hon. Friend aware that more than a year ago, the European Council took a decision to raise funds for carbon capture and storage projects by exceptionally permitting the Commission to auction new entrants reserve allowances for the emissions trading scheme-a decision that has resulted in a proposal to comitology today. Will the Chancellor confirm whether the UK Treasury has dropped its demand that it, rather than the Commission, control the auction of the UK share of these allowances, and that the entire CCS strategy of the Commission will now be able to proceed unhindered?

The Exchequer Secretary to the Treasury (Sarah McCarthy-Fry): I would like to assure my hon. Friend that HM Treasury remains fully supportive of carbon capture and storage. We are committed to the demonstration projects in the UK and we welcome the use of EU funds to bring those projects forward. It is correct that the negotiations and discussions in the comitology process are going on today, so I do not wish to prejudice them. Let me nevertheless be clear that any decisions to support the specific proposal will not in any way prejudice future negotiations on the auctioning of allowance under phase 3 of the directive.

Mr. George Osborne (Tatton) (Con): Yesterday, in response to a freedom of information request from us, the Treasury published a document to which it had referred-I have it here-citing international examples of spending consolidations. It has redacted pages and pages of it. It has even redacted the front cover. Can the Chancellor explain why?

Mr. Darling: I am sure that there was a good reason. As the hon. Gentleman and the House know, the Freedom of Information Act provides for advice to Ministers to
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be withheld. As for the document referred to, for the most part, it brings together contemporary literature on the question of fiscal consolidation.

It seems to me, however, that it is the hon. Gentleman who has the problem. Five times today he was asked what his plans were for next year, and five times he refused to answer.

T3. [314454] Mr. Gordon Marsden (Blackpool, South) (Lab): Treasury funding for Sure Start children's centres in Blackpool, of which there are now 12, has been crucial for the nearly 8,000 families in the catchment area. Will my right hon. Friend's fiscal plans for the future include a commitment to continuing support for Sure Start-not just the buildings, but the outreach staff and the people who go into the communities, whom we would fund and the Conservative party would not?

The Financial Secretary to the Treasury (Mr. Stephen Timms): We have committed ourselves to maintaining spending on Sure Start children's centres in real terms beyond next year. We will continue that spending in the following two years in order to protect the invaluable help for families that those centres provide, which my hon. Friend rightly supports and from which people across the country are benefiting.

T4. [314455] Danny Alexander (Inverness, Nairn, Badenoch and Strathspey) (LD): In the run-up to the last Budget, the Economic Secretary kindly met representatives of Highlands council and me to discuss the proposals for temporary relief from the council's huge housing debt repayments, which were intended specifically to create jobs in the local construction sector. Given the need to continue to support jobs and growth in the economy over the next year, will the Economic Secretary look again at the council's positive, constructive suggestion of a way to create jobs in the highlands?

The Economic Secretary to the Treasury (Ian Pearson): As the hon. Gentleman will remember, there was correspondence later which was followed up. However, I appreciate his concern about the impact of the problem in his area and the potential of the council's proposals, and I shall be more than happy to look at those proposals again.

T6. [314458] Mr. Ken Purchase (Wolverhampton, North-East) (Lab/Co-op): What arrangements is the Economic Secretary making in relation to international agreements about tax avoidance and evasion? I am thinking particularly of Belize, where I understand a major donor to the Conservative party may be avoiding taxation.

Mr. Timms: We have made a great deal of progress on tax information exchange agreements in the last year. I believe we have made more progress in the last year than in the previous 10 years put together. Last week the OECD published a report showing good progress across the board. In regard to Belize, however, I can tell the House that no agreements have been signed so far.

T5. [314456] Mr. Andrew Mackay (Bracknell) (Con): Just why did the Chancellor earlier duck a direct question from the shadow Chancellor, my hon. Friend the Member for Tatton (Mr. Osborne), about the future of the Prime
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Minister's Tobin tax proposals? Was it because he was embarrassed to take sides between the Governor and the Prime Minister?

Mr. Darling: The House will know that on 10 December last year the Government published a wide range of proposals relating to matters including transaction taxes, increased capital and the insurance levy. All those matters are still being discussed. The IMF has been asked to come up with proposals, which will be discussed at the spring meetings.

As I said earlier, there are problems which we know need to be dealt with at global level. We have constructive proposals for doing that, and we will work with other countries to ensure that this year we implement what we agreed to do last year. That is critical.

T7. [314459] Sandra Osborne (Ayr, Carrick and Cumnock) (Lab): People in Coventry can benefit from the boiler scrappage scheme, whereas people in Cumnock cannot because the Scottish Government refuse to implement it. Does the Minister agree that people in my constituency and throughout Scotland would benefit from the scheme, and will he make representations to that effect?

The Chief Secretary to the Treasury (Mr. Liam Byrne): My hon. Friend will know of the virtues of the scheme that was introduced in England. It can not only deliver a reduction in families' heating bills, but have an impact on reducing the country's carbon emissions. The requisite spending is a devolved matter in Scotland. Barnett consequentials were provided on the £20 million addition that was made to the budget of the Department of Energy and Climate Change, but the argument will of course need to be prosecuted in Scotland.

T9. [314461] Ann Winterton (Congleton) (Con): Is the Minister aware that Her Majesty's Revenue and Customs has acknowledged that there are errors in some of the tax codes currently being issued, caused, I understand, by the transfer of data to a new computer system? The advice is to ring to register that a tax code might be wrong, but the lines are constantly engaged, so people cannot get through. Will he look at that problem and sort it out?

Mr. Timms: I certainly will. It is the case that a new computer system is being used for PAYE this year. It is working very well and is enabling HMRC to hold in one place all the records on one person's employment and pensions, which was not possible in the past. As the hon. Lady has said, there has been an issue about tax codes, and HMRC will be working to iron out the problem well before the start of the new tax year. I will look into the issue about the phone line-for those who are interested, the number is 0845 3000 627.

T8. [314460] Mark Lazarowicz (Edinburgh, North and Leith) (Lab/Co-op): Earlier in Question Time, the Minister outlined some actions that the Government have taken to tackle extortionate credit offers by doorstep lenders and store cards. One of my constituents recently received an e-mail from PaydayUK offering a loan with APR interest of 1,737 per cent. Will the Government ensure that that type of online offer and newer forms of lending on offer in the marketplace are tackled, as well as traditional forms of lending?

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