Topical Questions

Oral Answers to Questions — Treasury – in the House of Commons at 10:30 am on 10th July 2008.

Alert me about debates like this

Photo of Alistair Darling Alistair Darling The Chancellor of the Exchequer

The core purpose of the Treasury remains to ensure the stability of the economy, to promote growth and to manage the public finances.

Watch this

Photo of Stephen Hesford Stephen Hesford PPS (Vera Baird QC, Solicitor General), Law Officers' Department, PPS (Mr Michael Wills, Minister of State), Ministry of Justice

Of course we must recognise that the economic downturn is a worry for our constituents, but it is shared across the world. Siemens in Germany has made redundancy announcements, the Federal Reserve in America is having to make more provisions for its banking sector, and the Irish economy is stuttering. Does my right hon. Friend share my further worry that, while there is a downturn— [Interruption.]

Watch this

Photo of Michael Martin Michael Martin Chair, Speaker's Committee on the Electoral Commission, Speaker of the House of Commons

Order. Will the hon. Gentleman please have a seat? I must reiterate that these are topical questions, and the questions should be punchy. They should not be speeches. The Chancellor will try to reply to what the hon. Gentleman has said so far.

Watch this

Photo of Alistair Darling Alistair Darling The Chancellor of the Exchequer

My hon. Friend is right. The slow-down in the world economy is affecting every single country—our own, and others in Europe and across the world. In a short time the Prime Minister will report on the outcome of the G8 summit that has taken place in Japan over the past few days.

In many key areas, whether they relate to financial stability, oil or world food prices, we need to act together. Britain has taken a lead in trying to encourage countries to take action, but it is necessary for us to take action at an international level as well as, of course, doing all that we can to ensure that our economy gets through what—as I said earlier—will be a very difficult period.

Watch this

Photo of Andrew MacKay Andrew MacKay Senior Parliamentary & Political Advisor To David Cameron

Why did the Prime Minister tell the Leader of the Opposition that the new road tax proposals would benefit the majority of motorists, when figures just published by the Treasury make clear that that was patently untrue?

Watch this

Photo of Alistair Darling Alistair Darling The Chancellor of the Exchequer

What the Prime Minister said on many occasions was that the majority of motorists would either gain or be no worse off.

Watch this

Photo of Ben Chapman Ben Chapman Labour, Wirral South

At a time when families are indeed suffering economic difficulties, I welcome the Government's announcement of a scheme to provide personal advice on money matters in the north of England to the tune of £30 million, but can the Minister tell me how it is to be delivered? Will it be wholly internet-based, will it be provided through organisations such as the citizens advice bureaux, or will there be a combination of those arrangements? Will the Minister also tell me to what extent— [Interruption.]

Watch this

Photo of Kitty Ussher Kitty Ussher Economic Secretary, HM Treasury

I thank my hon. Friend for his kind words. The money guidance pathfinder, which will start early next year in the north of England—including his constituency—will offer free, impartial advice through a variety of organisations and channels, not just the web but the telephone, and also face to face.

Watch this

Photo of George Osborne George Osborne Shadow Chancellor of the Exchequer

May I press the Chancellor on the answer that he has just given my right hon. Friend Mr. Mackay? He knows full well that the Prime Minister told my right hon. Friend the Leader of the Opposition last month

"If the right hon. Gentleman looks in detail at the proposal"

—on vehicle excise duty—

"he will see that the majority of drivers will benefit from it."—[ Hansard, 4 June 2008; Vol. 476, c. 765.]

It is clear from the Treasury figures published yesterday that that is not the case. Will the Prime Minister be apologising to the House?

Watch this

Photo of Alistair Darling Alistair Darling The Chancellor of the Exchequer

As I told Mr. Mackay a few moments ago, I saw what the Prime Minister said at Question Time on 14 May. He said:

"the majority of motorists benefit or pay no more in vehicle excise duty as a result."—[ Hansard, 14 May 2008; Vol. 475, c. 1380.]

That is what the Prime Minister said.

Watch this

Photo of George Osborne George Osborne Shadow Chancellor of the Exchequer

May I press the Chancellor on this? On 4 June, the Prime Minister said that a majority of drivers would benefit from the VED changes. The Chancellor knows perfectly well that that is what the Prime Minister said. Is this not the substance of the issue? Nine million families face higher car taxes at a time when few can afford them. Poorer drivers will be penalised because the tax is retrospective and hits second-hand cars. Any pretence that it helps the environment has been demolished by Greenpeace, which says that it gives green taxes a bad name.

Everyone knows that the Labour party is sleepwalking into another 10p tax fiasco. Will the Chancellor perform the necessary U-turn, or do we have to wait for Heathcliff to come down from "Dithering Heights" before they abandon this disastrous plan to tax families already feeling the squeeze?

Watch this

Photo of Alistair Darling Alistair Darling The Chancellor of the Exchequer

I noticed that the hon. Gentleman had been scribbling for the last 40 minutes, composing his question. The crux of the issue is how we encourage people to use less energy and motor manufacturers to produce more efficient cars. I see that as recently as yesterday the shadow Chancellor mentioned his commitment to raise the proportion of tax taken through green taxes. Less than 24 hours later, he seems to have lost interest in the matter.

Watch this

Photo of Desmond Turner Desmond Turner Labour, Brighton, Kemptown

My right hon. Friend will undoubtedly agree that many of the economic ills from which the world is suffering at the moment are down to the lending policies of banks and other financial institutions, varying from the extreme foolhardiness that led to the sub-prime problems, to the current extreme caution on the part of banks and building societies, which is causing economic contraction in the UK. Has my right hon. Friend got any thoughts on what could be done by way of regulation to moderate those extremes?

Watch this

Photo of Alistair Darling Alistair Darling The Chancellor of the Exchequer

My hon. Friend is right. As I said earlier, if some of the banks—especially some of those in the US—had had a better idea of the basis on which they were lending, and of the fact that some of the people to whom they were lending money were not in a position to repay it when interest rates increased, they would not be in their present difficulties. It is important for any institution, wherever it is—the US, here or anywhere else—to ensure that it knows what it is doing when it lends money. It is also important to ensure that the regulators have in place a regime that ensures that companies are properly focused on the risks to which they might be exposed. In this country, we are in discussions with lenders to try to ensure that the difficulties that some people face are dealt with properly. The general point that my hon. Friend makes about ensuring that institutions are properly alive to the risks to which they may be exposed is very important.

Watch this

Photo of Peter Lilley Peter Lilley Conservative, Hitchin and Harpenden

The last time a massive increase in oil and commodity prices brought to an end a decade of growth, the countries that weathered the subsequent stagflation best were those that had used the period of growth to reduce their debt and taxes. Which of the legacies that the Chancellor inherited from his predecessor does he most regret—the fact that we have the highest deficit of any country except Bangladesh and Hungary, or that we have had the worst rise in taxes of any country in the developed world?

Watch this

Photo of Alistair Darling Alistair Darling The Chancellor of the Exchequer

I am surprised that the right hon. Gentleman raises that matter, as when he was in the Cabinet we had two of the deepest recessions this country had ever seen in the last century. As I have said, our debt is lower than it was—certainly than when he was a member of the Government—and is lower than many other countries. Obviously, as we go through this period, it makes sense to ensure that we support the economy, and that is why borrowing has risen, but we are in a much better position than we were in the early 1990s. I am sure that he remembers that time well, because he was Secretary of State for Social Security at the time, and one of the big problems for the then Government was that more than 3 million people were out of work.

Watch this

Photo of Nigel Griffiths Nigel Griffiths Labour, Edinburgh South

I have a very topical question, Mr. Speaker. Will the Chancellor ensure that the money that he gives to Europe is withheld in respect of the expenses of Conservative MEPs until they adopt the same independent auditing that Labour MEPs have had for some time, and until the Leader of the Opposition insists that that is done now, not next year?

Watch this

Photo of Angela Eagle Angela Eagle The Exchequer Secretary, Member, Labour Party National Executive Committee

I note the trouble that the Leader of the Opposition is having with his MEPs. I note also that for eight years Labour MEPs have had independently audited expenses that are published.

Watch this

Several hon. Members:

rose —

Watch this

Photo of Michael Martin Michael Martin Chair, Speaker's Committee on the Electoral Commission, Speaker of the House of Commons

Order. May I say that I was distracted, but I would not expect a question like that again and certainly not a ministerial reply?

Watch this

Photo of Patrick Cormack Patrick Cormack Chair, Northern Ireland Affairs Committee

Would the Chancellor tell us whether the country would be in a better state had his predecessor modelled himself on Mr. Micawber rather than on Heathcliff?

Watch this

Photo of Alistair Darling Alistair Darling The Chancellor of the Exchequer

As I have said on many occasions, the actions taken by the former Chancellor, who is now Prime Minister, over the past 10 years have meant that our economy has grown for more than 10 years. The hon. Gentleman could never have said that of the Government whom he supported. Our economy has grown and remains resilient. Although we are in a difficult time and are going through a pretty turbulent period, we are better placed to deal with that turbulence than this country ever was in the past.

Watch this

Photo of Lindsay Hoyle Lindsay Hoyle Labour, Chorley

Are my Front-Bench colleagues aware that they are overseeing the economics of a madhouse? What I mean by that is that the tax office at Chorley, which was not meant to close, is now down for closure, whereas the tax office at Blackburn, which was down for closure, is now staying open, yet it costs more to operate. Is there something about these tax offices that means that Secretaries of State's tax offices remain open in Blackburn, St. Helens and Bolton yet a Back Bencher in Chorley loses his tax office, even though it costs less to operate and is purpose-built? What will the Minister say to that?

Watch this

Photo of Jane Kennedy Jane Kennedy Financial Secretary, HM Treasury

My hon. Friend makes his point forcefully, and my colleagues and I have heard it. I am sure that if he looks at all of the reforms that HMRC is introducing and appreciates that HMRC says that it needs 40 per cent. less office space than it has—

Watch this

Photo of Lindsay Hoyle Lindsay Hoyle Labour, Chorley

So that is why it has saved Blackburn, Bolton and St. Helens.

Watch this
M

The MP for Chorley shows he is on the ball in...

Submitted by Mr Smith Continue reading

Photo of Jane Kennedy Jane Kennedy Financial Secretary, HM Treasury

I hear my hon. Friend's point.

I will make a final decision shortly on the consultation on all the proposals and representations that I have received. I understand that there will be an Adjournment debate next week when we will debate the future of offices in the north-west. My hon. Friend might wish to join us on that occasion.

Watch this

Photo of Nicholas Winterton Nicholas Winterton Conservative, Macclesfield

Would the Government review the impact of the proposed VED changes on livestock farmers who need to tow livestock on a trailer? It is necessary to have a 4x4 in order to do that safely. Will the Government look exceptionally at the position of livestock farmers, not least those who operate in the hill country?

Watch this

Photo of Angela Eagle Angela Eagle The Exchequer Secretary, Member, Labour Party National Executive Committee

I note that some 4x4s are not in the higher VED bands. If the hon. Gentleman wants to see me, I am happy to listen to any representations that he wishes to make about the subject.

Watch this

Photo of David Kidney David Kidney PPS (Rt Hon Rosie Winterton, Minister of State), Department for Transport

The Treasury has made a great announcement about law changes and more funding to support credit unions and defeat unscrupulous loan sharks. As part of promoting credit unions, I urge the Treasury to take more practical steps to raise the profile of the credit unions, to ensure that communities have access to their services and to ensure that if they are partnered with outlets other than the credit unions, those partners are trusted partners.

Watch this

Photo of Kitty Ussher Kitty Ussher Economic Secretary, HM Treasury

I agree entirely with what my hon. Friend has just said. That is why I was delighted to announce recently that the Government will bring forward a legislative reform order precisely to empower credit unions and to give them greater ability to partner other organisations, to expand their membership and to grow.

Watch this

Photo of David Heath David Heath Liberal Democrat, Somerton and Frome

Following on from the point made by Mr. Hoyle, how will it provide a better service for local businesses, how is it fair to loyal staff and how does it make any sense in environmental terms to close the tax offices in Frome, Wells, Yeovil, Bridgwater and Weston-super-Mare and to relocate their business in expensive and congested Bristol?

Watch this

Photo of Jane Kennedy Jane Kennedy Financial Secretary, HM Treasury

It is no reflection whatsoever on the staff in the individual offices when offices are proposed for closure. I accept entirely that they are dedicated, loyal staff who have served Her Majesty's Inland Revenue or HMRC for a long time. They deserve credit for that, but HMRC is under an obligation that we have placed on it—and as the hon. Gentleman would acknowledge that his constituents would expect—to get the maximum benefit in return for the public expenditure and taxes that we commit to its services. It cannot be right that we should continue to maintain uneconomic offices.

Watch this

Photo of Fiona Mactaggart Fiona Mactaggart Labour, Slough

The Dormant Bank and Building Society Accounts Bill completed its House of Lords stages on 26 February, but we still do not have a date for Second Reading in this House. Why is that?

Watch this

Photo of Kitty Ussher Kitty Ussher Economic Secretary, HM Treasury

I understand that the Bill will return to the Commons immediately after we return from summer recess.

Watch this

Photo of Graham Brady Graham Brady Conservative, Altrincham and Sale West

Does it remain the Chancellor's intention to publish his factual report on the operation of the Barnett formula before the summer recess?

Watch this

Photo of Alistair Darling Alistair Darling The Chancellor of the Exchequer

I hope to publish it as soon as I can.

Watch this