The Tory party destroyed the great industries of Wales, especially coal, which we debated in the Chamber this morning. It never reinvested in reskilling our work force, and it left us a legacy of despair without so much as a second thought. [Interruption.] However, my valleys are beginning to bloom again with unemployment falling, new job opportunities being created and confidence in the economy.
Will my right hon. Friend accept from me that one of the Government's great successes has been the new deal? It has offered hope to a generation that had none before. To abolish the new deal, as advocated by the Conservative party, would be the greatest of betrayals.
At the beginning of my hon. Friend's question, Conservative Members were shouting that I was not responsible for the dereliction of industry under the Tories. That is dead right. I am not responsible. They were responsible for what they did.
Of course, my hon. Friend is right. The new deal is a vital part of giving hope and opportunity to people who have been denied it. It provides jobs and hope for the young and long-term unemployed, but it is opposed by the Tory party. The minimum wage tackles poverty pay, but is opposed by the Tory party. The working families tax credit helps low-income families, but is opposed by the Tory party. Bank of England independence gives stability in the economy, but it is opposed by the Tory party. If any of those points is unfair, when the Leader of the Opposition gets up, he can tell us.
Is not this morning's refusal by the French Cabinet to lift the beef ban a total humiliation for this spineless Government and this hopeless Agriculture Minister, who said in November that it would be lifted in the spring; in July that it would be lifted in August; and, last Tuesday, that it would be lifted tomorrow? Does not the Prime Minister now need a different policy and a different Minister? Does he still regard the principal achievement of his European policy to be the lifting of the beef ban?
The Conservatives do not want to get on to the economy, do they?
The sensible position to take on the beef ban is to take the French to court if they are unreasonable or do not accept what we have put before them. However, it is obviously preferable for us to persuade them to lift their ban, which is why we have met with them and will have a further meeting. if they do not agree, we will take them to court. The only reason we got the beef ban lifted was because this Government came in and cleaned up the mess left by the Conservative Government.
The French Cabinet has decided this morning not to lift the beef ban. The Prime Minister said in July that the beef ban had been lifted only because of the Government's constructive attitude to Europe. He said:
That is why we got the beef ban lifted, and it is another example of new Labour working.
Is not this an all too devastating example of new Labour working? Is it not the case that, on Monday, he gave the French the third way and, on Wednesday, they gave him the two fingers? Is not it time to lift our own ban on beef on the bone? Is not it time for the Prime Minister to get himself an Agriculture Minister who actually speaks to his counterparts? Will the right hon. Gentleman stop caving in and start standing up for this country?
The sensible way to proceed is to take the French to court, which we are able to do and will do if they do not agree with the scientific evidence, because the law, the science and the evidence are all on our side. However, it all depends on the objective. If the objective is to use this issue as the latest reason to whip up antagonism towards Europe—as it is for the Conservative party—fine. However, if the objective is to sell beef, the sensible thing is to persuade the French. If not, we take them to law. The alternative that the right hon. Gentleman and his shadow Minister have been pressing on me for the past few weeks—a trade war with France—would be totally disastrous. It would put thousands of British workers out of work, and it would not result in any British beef being sold. The sensible thing is to persuade and, if we cannot, to use the law, which we are—as a result of this Government's endeavours—now entitled to do.
Does my right hon. Friend the Prime Minister accept that the most important test by which his Government should be judged is how they tackle child poverty? Does he agree that the best way of doing that is by unifying the tax and benefits structure, as the Chancellor proposed yesterday, so as to deliver a single weekly payment of child credit directly into the hands of the mother? Does he agree that this would bring hope to the four out of every 10 children in this country who were born into poverty after almost 20 years of Conservative Government?
I am sure that it is right to proceed with the policies of increasing child benefit—which is very important—and putting in place the sure start scheme for better child care facilities and help for families. The working families tax credit will lift the incomes of low-income families substantially, and some 2 million families in Britain will gain. It is appalling that the Conservative party is now proposing to scrap each one of those measures that help Britain's children. We have lifted 1 million children out of poverty, and we will now proceed to carry out the rest of our pledge.
Does the Prime Minister agree, on a day on which he and many hon. Members of all parties have been meeting and congratulating the outstanding recipients of the annual disabled awards, that it is ironic, and somewhat tragic, that the Chancellor yesterday announced another tax break for entrepreneurs while Labour Members were being whipped through the Lobby to impose a benefit cut on the disabled? When he looks at the juxtaposition of those two events yesterday, which does he take more pride in: the tax break for the wealthy few or the benefit cut for the disabled many?
First of all, let us deal with the facts. Not a single existing benefit recipient is receiving a benefit cut. That campaign of the Liberal Democrats is just rubbish, and no one should be told that they are having their benefit cut when they are not. The second point is this—we are actually going to get more help to those who are severely disabled, including more than£25 a week to some of the people most severely disabled. The third point is that yes, we are reforming the welfare state, and in particular, we are reforming incapacity benefit. That is for a very simple reason. Over the last 20 years, the number of recipients of incapacity benefit has trebled. There are now more people claiming incapacity benefit than claiming unemployment benefit. That situation cannot possibly be sustained. What is important in the welfare state is that we help people into work who can work and give proper security to those who cannot. As a result of our measures, those who are severely disabled and the genuinely disabled will benefit, but we will not have the system abused.
That is not how Labour put it in opposition. That was not the rhetoric then. The right hon. Gentleman's own figures revealed yesterday that there is a £7 billion underspend in the social security budget, yet he is giving the poorest pensioners only 75p more. [HON. MEMBERS: "That is not true.] I appreciate the scale of the embarrassment on the Labour Back Benches; methinks they do protest too much. What will all the money accumulating to the Chancellor be spent on? Is not the growing suspicion that it is going to be used for pre-election tax bribes?
First, in respect of the money that has been saved on social security, the vast bulk is the result, I am pleased to say, of falling unemployment, and of the new deal, which the Liberal Democrats opposed. [Interruption.] They did, I am afraid. Put it like this: they opposed the way that we raised the money for it, but even they must surely now know that if we do not get the money in, we cannot spend it on the things that we need. The second point on disability is that in this Parliament we are actually spending £2 billion more on the disabled—but we are reforming the welfare state because it needs reform. That is not a promise broken, it is a promise fulfilled. We said before we were elected that we would reform welfare. Indeed, many people said that we would never dare do it, but we did.
The purpose of reform is to get the help to people who really need it. [Interruption.] The hon. Member for Colchester (Mr. Russell) can point to whatever he wants, but what I am telling him is that the important thing for the country is that we manage to get help to people who really need it. That is why we have got the £2 billion extra to the disabled, the £6 billion extra to children and the biggest ever programme for the young and long-term unemployed that this country has ever seen. I think that that is the way to reform the welfare state. As for pensioners, we are giving them the £100 allowance—we have now said that we will pay it every year—the free television licence for those over 75, the free eye tests and the minimum income guarantee. If the right hon. Gentleman is talking about manifestos, when we compare what we have done with what the Liberal Democrats promised, it shows that we are the people who are more generous, but we are acting in a way that is compatible with sound and sensible public finance.
Will my right hon. Friend confirm that yesterday's pre-Budget report will lead to genuine consultation in the run-up to the Budget next March? In the light of that, will he ensure that the Treasury's computer model is made available to the Leader of the Opposition, so that he can analyse the Conservative party's tax and spend proposals, especially the £10 billion hole in the public finances that would result if those proposals were implemented? My constituents are sick and tired of politicians such as the Leader of the Opposition and the leader of the Liberal Democrats, who constantly say that they support increased expenditure at the same time as they support cuts in taxation. That is dishonest politics and we should reject it.
As my hon. Friend says, the Conservative party's spending proposals would result in a £10 billion black hole. In the past few days, Conservative Members have tabled amendments worth £4 billion in extra social security spending, yet Front Benchers tour the country telling everyone how they will slash social security bills. Their sums simply do not add up, except in one set of circumstances, which is where they slash spending on schools, hospitals, the police and transport. The Conservatives have never yet given a coherent account of how they would boost spending, boost social security spending and cut taxes at the same time—perhaps we shall hear one.
Was the Prime Minister pleased to learn from Lord Levene that the City of London is doing extremely well, despite being outside the euro zone, or possibly because it is outside the euro zone? Does he agree that, ever since Britain's exit from the exchange rate mechanism, Britain's economy has done extremely well and has outperformed most economies in the European Union? Is it not a question of the longer we wait, the more we see?
I think that Lord Levene was saying how well the City was doing under a Labour Government, and I was delighted to hear it. In fact, just as he praised the Labour Government, I believe that he attacked the previous Conservative Government in respect of the exchange rate mechanism—[HON. MEMBERS: "You voted for it."] Come, come—calm down. I know that Conservative Members do not like to be reminded of such things. Lord Levene was speaking a lot of sense when he said that it was important for us to keep the option open, which is precisely what we are doing. It would be a disaster—I think Lord Levene said this in his interviews—if we ended up ruling out the euro for ever, or ruled it out for some arbitrary period of time, because that would damage Britain's standing, damage our influence, and damage our ability to decide to join the euro if it were in our interests to do so.
Has my right hon. Friend been following the case of Mr. Jeff McWhinney, chief executive of the British Deaf Association? This week, along with many thousands of profoundly deaf people in this country, Mr. McWhinney was told that he could not participate in jury service, simply because the law does not allow a 13th person—a sign language interpreter—into the jury room. Will my right hon. Friend liaise with the Lord Chancellor to ensure that that unnecessary discriminatory practice will be challenged and corrected at the earliest opportunity?
I understand the concern that prompts my hon. Friend's question. The Home Secretary informs me that we are reviewing the rules on that matter, because it should be possible for all people to take part in jury service. Jury service is a great public service and we should do all we can to encourage people to participate in it.
The announcement of the establishment of a Cabinet Committee on rural affairs is welcome to my constituents and to bodies that represent rural and countryside organisations. Does my right hon. Friend agree that, with 180 Labour Members of Parliament representing rural seats, we can claim to represent rural England just as much as we represent urban Britain? Will he repudiate Conservative policies that spell no change for the countryside, which demonstrates that the Conservatives did not listen when they were in government and do not speak for the countryside in opposition? Does my right hon. Friend accept that the real issues confronting people in rural Britain are the need for change, for affordable housing, decent jobs and proper public transport? That is rural Britain's agenda. Will my right hon. Friend confirm that it is also the agenda of the Labour Government?
Before they left office, the previous Government released some 1,200 hectares of greenbelt land for development and they allowed six out of 10 new homes to be built on greenfield sites. Whatever they may claim to want now, it is certainly not what they did in Government.
We are spending almost £200 million more on rural bus services and giving£500 million extra to shire counties to enable them to raise education standards. Everyone—whether in the country, the town or city—benefits from policies such as the new deal and the working families tax credit. People benefit from Bank of England independence for a more stable economy and from the rise in child benefit. The Conservative party would scrap all those policies.
We are cutting taxes. The right hon. Gentleman may not like it, but, if he looks at the figures, he will see that we are cutting taxes. The measures for pensioners that we announced yesterday will cut taxes.
It is no good the Chancellor whispering to the Prime Minister about stealth taxes now: he should have informed his right hon. Friend of them before. Does it not reveal a lot about the standards of truthfulness and honesty in this Government that the biggest tax increase in next year's Budget was not even mentioned by the Chancellor yesterday? Is it not true that even the Prime Minister will find it difficult to twist, distort and disguise the fact that hundreds of thousands of people who reach 65 next year will pay up to£500 a year more in tax—which more than cancels out anything that the Chancellor announced yesterday? Will the Prime Minister confirm that that£500 figure is correct?
No, because it is not. The married couples allowance has been retained for pensioners. As a result of all the changes we have made—particularly taking pensioners out of tax—people in this country will be better off. As a result of our plans—in particular, the direct tax cut—the average tax burden on the average family will fall next year to its lowest level ever. If the right hon. Gentleman is saying that he intends to reverse the changes that we have made, perhaps he will explain now where the money will come from.
Has the Chancellor not told the Prime Minister that the married couples allowance will be phased out for people who become pensioners after next April? Perhaps he should whisper that to the Prime Minister. I do not know what the Chancellor told the Prime Minister earlier, but, in the knowledge economy, if one puts garbage in, one gets garbage out—as illustrated by the previous answer.
As the Prime Minister does not want to tell the truth about pensioners, I will ask him about charities. Will he confirm that the relief on charitable giving announced by the Chancellor is more than cancelled out by the £400 million in extra tax that charities will have to pay as a result of the loss of dividend tax credits—another stealth tax that is now in place?
The right hon. Gentleman is wrong on that point also. The Charities Aid Foundation welcomed the measures that the Chancellor announced yesterday—and they are not the only changes. Corporation tax, income tax and small business tax have been cut, and there is a l0p starting rate. We have introduced the working families tax credit and reduced capital gains tax. More than any of those things, as a result of running a stable, steady economy, people's living standards are rising. If we went down the right hon. Gentleman's path—which involves top-rate tax cuts for a few and tax cut plans that he could not possibly pay for—we would return to the boom and bust of the late 1980s.
The Prime Minister's officials and the Chancellor should have given him the full quotation, because the National Council for Voluntary Organisations gave a cautious welcome to the Chancellor's announcement and said that it would not fully compensate for the abolition of advance corporation tax relief. Once again, we have garbage in and garbage out.
The independent figures from the House of Commons Library, which are available today, show that the tax burden is higher now than at the last election, will be higher next year than this year, and will be higher the year after that. The Government make announcements for pensioners and then hit people who will be retiring next year with£500 more tax. They pose as the friend of charities and then are happy to raid their collection tins. Are not people sickened by the sight of a Prime Minister who will not give straight answers on tax the day after a Budget announcement, and is not that the new corruption of politics in this country?
First, let me give the right hon. Gentleman the facts from the Treasury report. The tax burden will fall next year and the year after. What is more, I have done a comparison with the spending and tax plans in the Conservatives' last Budget. [Interruption.] Well, the right hon. Gentleman was a member of that Cabinet, so I think that I am entitled to mention the plans. The comparison shows that the tax burden next year and the year after under the Labour party will be less than it would have been under Tory spending plans.
The right hon. Gentleman shakes his head, but I have the figures here which show that the tax burden will be less. Under the Tory plans, the tax burden would have been 37.1 per cent. next year and then 37.6 per cent. Under our plans, the figures are 37 per cent. and 36.8 per cent., so the right hon. Gentleman is wrong on that.
More than that, what the right hon. Gentleman is now advocating through his policies is spending plans that cannot possibly be paid for. He has now put in place his tax guarantee, which cannot possibly work unless there are massive public spending cuts. Hon. Members should not take my word for it. The right hon. Member for Wokingham (Mr. Redwood) is still, I think, a member of the shadow Cabinet. He is one of the gang running the Tory show nowadays. A few weeks ago, he said:
Labour's big mistake was to announce huge increases in public spending.
Was it? He continued:
The Opposition recommends reducing future spending plans.
Do they? [Interruption.] One of them shouts out "welfare". Right, they are going to cut welfare.
I shall be generous. I shall leave aside the fact that in the past few days the Opposition have announced£4 billion of extra social security spending. They say that they oppose our extra welfare spending. [Interruption.] Let us have a little bit of quiet. Which spending plans do they oppose? [Interruption.]
Do the Opposition oppose the working families tax credit? [HON. MEMBERS: "Yes."] Do they oppose child benefit? [HON. MEMBERS: "Yes."] Do they oppose the extra money for pensioners? [HON. MEMBERS: "Yes."] Do they oppose the new deal? [HON. MEMBERS: "Yes."] Well, that is what the country would get if it ever voted Tory again.
Will my right hon. Friend join me in congratulating Cambridge university on its exciting new venture with the Massachusetts Institute of Technology in the institute of entrepreneurship? Does he agree that the generous Government financial contribution to the venture shows that this Government are keen to promote competitiveness and productivity in the new knowledge-based industries of the future?
The venture between MIT and Cambridge university is immensely exciting. I pay particular tribute to my right hon. Friends the Chancellor and the Secretary of State for Education and Employment for having put it together. The venture will serve all the regions of the country, and it comes on top of the largest increase that we have ever seen in investment in Britain's science base. Many of the new companies will be the direct result of the collaboration between those two institutions. It is a very great thing for them to have decided that Britain is the place to base MIT.