HC Deb 17 December 1997 vol 303 cc320-9
Q1. Mr. McNulty

If he will list his official engagements for Wednesday 17 December.

The Prime Minister (Mr. Tony Blair)

This morning, I had meetings with ministerial colleagues and others, and I shall have further meetings later today.

Mr. McNulty

Has my right hon. Friend seen the letter from Sir Patrick Neill's inquiry to the treasurers of all political parties which asks all parties to supply information from 1992, from home and abroad, on all donations and from whom they come? Will my right hon. Friend ensure that the Labour party complies with that request? [Interruption.] I shall let the children settle down. Will my right hon. Friend exhort all other party leaders to do the same because if they do not, people will rightly ask, "What have the Tories got to hide?"

The Prime Minister

We welcome the consultation document that was published today by the committee on party funding. It is obviously important that, to do their job properly, the members of the committee should have all the information that they need. They have written to all parties requesting information about party income going back to 1992. That is entirely right. Speaking for the Labour party, I can say that we shall provide them exactly with the information that they require and I hope that all other parties will do the same.

Mr. Hague

Speaking for the Conservative party, I can say that we shall provide the Neill committee with all the information that it has asked for. As he raised it, I wonder if the Prime Minister has read the whole of what the Neill committee issued today. On the first page there is a section entitled "Honesty" which states: Holders of public office have a duty to declare any private interests relating to their public duties and to take steps to resolve any conflicts arising in a way that protects the public interest. Since the new code of conduct for Ministers, which was drawn up by the Prime Minister, states that Ministers should remain entirely detached from Government decisions that could affect their private interests, is the right hon. Gentleman satisfied that the Paymaster General is entirely detached from decisions that could affect his private interests?

The Prime Minister

First, if I may, I should like to unite the House by offering our heartiest congratulations to the right hon. Gentleman on the celebration on Friday of his wedding. On behalf of us all, I wish him and his fiancée a very happy married life thereafter. Now I shall turn to his question. The answer quite simply is yes: I am satisfied of that.

Mr. Hague

On the first part of his answer, I thank the Prime Minister for his kind words. They give me the opportunity to thank hon. Members in all parts of the House who have been so kind to my fiancée and to me. I am delighted that you, Madam Speaker, will be joining us at our wedding. [HON. MEMBERS: "Oh".] I hope that you will not be required to call for order on that occasion. The Prime Minister will forgive me for suggesting that just as his honeymoon is coming to an end mine is about to begin.

On the second part of the right hon. Gentleman's answer, with which I was not quite so happy, normal hostilities will now resume. Treasury officials have admitted that the Paymaster General has been working on the law relating to offshore trusts. The Paymaster General has £12 million in offshore trusts. The Paymaster General has admitted to having influence over those trusts. By what twist of logic has the Prime Minister come to be satisfied that the Paymaster General is entirely detached from Government decisions on these matters?

The Prime Minister

First—not to carry on the discussion too long—the marriage that the Labour party enjoyed with the electorate is one that we intend to continue at the next election.

In answer to the right hon. Gentleman's question, my hon. Friend the Paymaster General has followed the advice of the Permanent Secretary to the Treasury and has acted at all times in line with the ministerial code.

Mr. Hague

I have no doubt that advice has been taken, but look what the Paymaster General himself has said. He told journalists on Saturday that he had been working on policy which affected his own financial interests—he even told journalists that he could show them internal Treasury documents about it, which is an interesting admission in itself. That is what he said. How can that be squared with being entirely detached from Government decisions that affect him? Is it not time that the Paymaster General did the honourable thing and resigned?

The Prime Minister

No is the answer to that. There is a clear ministerial code and my hon. Friend the Paymaster General has followed that ministerial code. I think that it is good that we have people who are highly successful business people and who have come to work for the Government. My hon. Friend is doing an excellent job for the country, without even taking a ministerial salary.

Mr. Hague

I think that that is good, but the Paymaster General is not an entrepreneur who has just been tempted into the Government; he has been a Labour Member of Parliament for 21 years. We have now established that the Prime Minister, almost alone among people who have considered these matters, does not think that there is a conflict of interest. Does he at least agree with the Deputy Prime Minister, who said that the Paymaster General had said one thing and done another? If a conflict of interest is not a resigning matter in this Government, is gross hypocrisy a resigning matter in this Government?

The Prime Minister

No, that is not correct—[Interruption.] That is not correct, either in relation to what my right hon. Friend the Deputy Prime Minister is supposed to have said, or in relation to the point at issue.

Mr. Hague

What we have here is a Paymaster General who has put a new tax on middle-income savers, but has millions of pounds in an offshore tax haven; who has denied influencing his trust, but then admitted doing so; and who has claimed no conflict of interest, but has then admitted working on offshore tax policy. Are not taxpayers throughout the country going to be appalled if he remains in office as Paymaster General, collecting their taxes? Is it not time, not only for him to become entirely detached from ministerial consideration of his own interests, but for him to become entirely detached from ministerial office itself?

The Prime Minister

The short answer to that is no. I do not accept that at all. In case anyone is interested in the facts, my hon. Friend the Paymaster General has not avoided UK tax—he has paid probably more UK tax than either me or the Leader of the Opposition, as a matter of fact. He is a highly successful business man, he has contributed a lot to public life and he is working without a ministerial salary. I personally think that it would be very unfortunate if people who are successful in business were put off or discouraged from joining a Government and working in the public interest. I do not intend to have people so discouraged.

Q2. Mr. Donald Anderson

One of the many election promises that have been delivered by the Government is to have a referendum which has paved the way for a national assembly for Wales. In conformity with the spirit of Christmas and in consultation with my right hon. Friend the Secretary of State for Wales, will my right hon. Friend the Prime Minister bring tidings of comfort and joy to the people of Swansea by selecting Swansea guildhall as the site for the new Welsh Assembly, which is cost effective, which is an all-Wales solution, and which will be received enthusiastically by the people of Swansea and south-west Wales?

The Prime Minister

I do not want to promise my hon. Friend a bleak midwinter, but, quite honestly, I have to say that there is a decision to be taken, a review is under way as to the best site for the assembly and it is probably sensible that I wait for the outcome of that review.

Mr. Ashdown

In any end-of-year report on the Government, "Made good progress in some areas that they promised they would", could be a fair judgment; but, "Must do better next year", would be the right judgment in other areas. In which areas does the Prime Minister think that the Government can and must do better next year?

The Prime Minister

I remind the right hon. Gentleman that we have put through a Bill to cut class sizes for all five, six and seven-year-olds, which we promised to do; we have put in place the £1.3 billion schools building programme, which we promised to do; we have provided extra money for the national health service over and above what we promised to do; we have initiated a £3.5 billion welfare-to-work programme; we have put through a Bill for the removal of handguns; we have signed the land mines treaty; we have held referendums in Scotland and Wales; we have provided £50 for the poorest pensioners; we have reduced VAT on fuel; and just today we have announced better treatment for cervical cancer screening and help for the homeless. There is lots of good news.

Can we do more next year? Yes, of course we can, especially on waiting lists and class sizes. We will do more. We were not elected for just seven months; we were elected for longer than that. We will do more and we can achieve more. As for the right hon. Gentleman's end-of-year report—[Interruption.] Well, it is Christmas.

Mr. Ashdown

Indeed, and I do not want to break the spirit of Christmas. I fully understand the mess that the Prime Minister was left by the previous Government. I also fully understand that the right hon. Gentleman cannot do everything at once. However, I remind him of his early pledges to cut waiting lists—they are now at record levels and rising; to reduce class sizes—they are now at a seven-year high and rising; and to increase the number of police on the beat—now 300 fewer than when the right hon. Gentleman was elected.

If, by the time of the next Budget, there are still no improvements in delivering those early pledges, will the Prime Minister at least consider that what may be wrong is not so much his policies, as his decision to enact the spending cuts of the Government whom Labour replaced?

The Prime Minister

I accept, of course, that there is more to do on waiting lists and class sizes. That is precisely what I said earlier and it is why extra money is going to those areas next year. We will put in the extra investment, and along with that will come the reform programme to improve both the health service and schools. However, that will be done against the background of a need to keep a tight rein on public resources. That is right, sensible and prudent. It is best for the long-term future of the country.

Since the election, we have taken difficult decisions on interest rates and public finances, but they are right for the long term. However difficult they may be in the short term, it is right that we put in place the stability that will guarantee investment and security for our people long term. That is what we were elected to do.

Q3. Mr. Bill Michie

May I take this opportunity to thank my right hon. Friend and the Government for their far-sighted and historic decision to site the National Sports Institute in Sheffield? I am sure that it will be a tremendous boost to athletes throughout the United Kingdom and will be a great success.

On a different but just as important a point, will my right hon. Friend give the necessary support to the British Aerospace Airbus 340–500/600 programmes, to ensure that United Kingdom industry is working on a level playing field with our European partners?

The Prime Minister

On my hon. Friend's first point, of course we are delighted that the Sheffield bid was successful. Our aim is to increase the excellence in British sport. In fact, there were superb bids all round from many parts of the country, but obviously the institute can be sited in only one of them.

On my hon. Friend's point about launch aid and British Aerospace, we strongly support the Airbus project; we always have. Obviously, the launch aid application has to be judged on the same criteria as everything else. It is under active consideration and as soon as we have the results we will publish them.

Mr. Salmond

Can the Prime Minister explain to my constituents why four Peterhead families were left, in their bereavement, to raise the funds required to raise the fishing boat Sapphire, return it to Peterhead and allow their loved ones to have family funerals? Does the Prime Minister detect no sense of public obligation or duty in such matters? If he does, can he explain why no Minister, Government Department or agency lifted a finger to help those families in that extreme position?

The Prime Minister

First, I should say that there were Ministers and officials who were in close touch with people throughout the course of this matter. A decision had to be taken. They considered very carefully the report that was commissioned, but they came to the view that the best decision was to leave the situation as it was. I understand the distress that that caused many of the families and it was a difficult decision, but we took it genuinely believing that it was in the best interests of everyone.

Q4. Mr. Eric Clarke

May I congratulate the Prime Minister and the Government on their interim policies on the coal industry, but does he agree that this country needs a national integrated energy and fuel policy because, if we leave it to the laissez-faire market, we will rue the day—we will lose the independence that we have in this country?

The Prime Minister

I say to my hon. Friend, who has long experience in the mining industry, that it is important that we address our energy needs on a long-term basis. Obviously, I am pleased that the generators and RJB Mining have come to an agreement for the short term. That has been done, incidentally, without any Government subsidy being paid at all—it is important to emphasise that. However, we need to use this period to conduct a proper review of what the long-term energy needs of the country are. All I would say is that the review has to be based on long-term energy needs, but that must not become an excuse for not having a highly competitive industry at the same time. Putting those two things together will be the purpose of the review that we are conducting.

Q5. Mr. Green

The Prime Minister has already made it clear this afternoon that he sympathises with the Paymaster General's plaintive question, "What have I done wrong?" Does the Prime Minister acknowledge that a Minister who one weekend issues a statement through his solicitors saying that he has no influence over a trust, and within seven days admits that, on two separate occasions, he directly influenced the actions of that trust, is not fit to command public confidence? Why is the Prime Minister clinging to that Minister, who is doing nothing but sullying the reputation of his Government?

The Prime Minister

As I said earlier to the Leader of the Opposition, I simply do not agree with that. Indeed, as has been accepted by Conservative Members throughout, there is not even the allegation that my hon. Friend the Paymaster General has done something improper. Therefore, the answer that I gave to the Leader of the Opposition is the same answer that I give to the hon. Gentleman.

Q4. Mr. Wareing

Does my right hon. Friend accept that if the British people were asked to choose between spending more money on building the millennium dome or on providing proper benefits for disabled people and to provide for the windchill factor in severe weather payments, the British people would choose the latter?

The Prime Minister

First, in relation to the windchill payments, the money that has been announced by the Chancellor of the Exchequer in the pre-Budget statement is far greater than anything that could possibly be given through taking the windchill factor into account, where the sums of money involved are extremely small. From recollection, we acted on the advisory body's view that that was not the right way in which to help people who face difficulty with their heating bills. Secondly, in respect of the millennium experience, I simply ask him to study carefully today's report from the Select Committee on Culture, Media and Sport, which endorses the Government's decision to proceed with the dome and describes it as both magnificent in conception and likely to be breathtaking in execution". It was the right decision to proceed with that. The previous Government began the process. We have taken it on. It is right. These things are always difficult, but, in 2000, people will see that the right decision has been taken.

Q7. Mr. Flight

Does the Prime Minister regret the lack of consideration given to the proposals for individual savings accounts and the way they were handled? Does he realise the fierce resentment that he has aroused in middle England, not only because the playing field has been changed but because people in middle England who have completed their tax planning will be hit with a £50,000 limit? [Laughter.] Labour Members may laugh, but middle England's fury towards the Government is considerable. Does the Prime Minister realise that it will be impossible to regulate individual savings accounts because they fall into three different areas and, as all regulators will tell him, there cannot be three different financial products in one? Does the Prime Minister further realise that ISAs offer nothing to the lower income groups that was not available through personal equity plans and tax-efficient special savings accounts? [HON. MEMBERS: "Hurry up."] Will the Government reconsider their proposals and the Minister responsible for them?

The Prime Minister

First, the proposals amount to £50,000 worth of tax-free saving for an individual, and £100,000 for a couple. These are quite significant sums of money. First, just to correct the hon. Gentleman on two points, that is the amount of money that people can pay into the fund; it is not necessarily the value of the fund, which can rise to far more than that. Secondly, the proposals are not retrospective, as the hon. Gentleman suggests.

As for the lower income groups, it is estimated that around 6 million more people could get the chance to save. The hon. Gentleman talked as though ISAs were a bad deal for TESSA holders. There are 4.5 million TESSA holders, but the limit on TESSAs is £9,000 and the money has to be tied up for a considerable period. Under our proposals, the sum can rise to £50,000 and the money can be withdrawn at will. There is also an ability to put cash in, too. I suggest that that is rather a good deal for low-income savers.

Q8. Mr. McAllion

On the eve of the publication of the Scotland Bill, I warmly welcome the imminent return of Scotland's Parliament and, with it, political decision making, to Scotland. In that devolutionary spirit, will my right hon. Friend confirm that control over the £450 million tax-raising power will be vested in the Scottish Parliament, and in the Scottish Parliament alone? Will he also confirm that, despite a certain rival claim to sovereignty, we on this side of the House, as good democrats and even better socialists, acknowledge that ultimately sovereignty can rest in only one place—with the people?

The Prime Minister

Of course sovereignty does rest with the people, which is why we gave them the chance to vote in a referendum in Scotland, which personally I always thought was a good idea. As for the Bill that is to be published tomorrow, it will set out the correct position in relation to the tax-varying powers and everything else. I welcome the fact that the Scottish Parliament will come about and that, as a result, we will get a better, more decentralised constitution fit for the 21st century.

Q9. Mr. Gibb

In a written answer, the Chancellor referred to statements issued by the Paymaster General. To one such statement, the Paymaster General attached a copy of his solicitor's letter to The Observer. It stated that the trustees of the Orion trust were not influenced by the Paymaster General. Given that it is now abundantly clear that the Paymaster General does influence the trustees of the Orion trust, has not the Chancellor unintentionally misled the House, and does the Prime Minister agree that the Chancellor is duty bound to come to the House to put the record straight?

The Prime Minister

No, I do not agree on any count. As I pointed out earlier, it is simply incorrect to say that my hon. Friend the Paymaster General sought to avoid UK tax. He has not, so the basis of the allegation that is being made is completely and totally wrong. It has been wrong from the beginning and remains wrong now.

Kali Mountford

My right hon. Friend will not be aware that my doctor has told me that many parts of my constituency are practically under quarantine because of a dreadful flu virus that often causes problems in terms of NHS beds. Is not the best Christmas present that the NHS could have had the injection of money that it has received, so that this winter we will not have the crisis that we experienced every year under the previous Government?

The Prime Minister

My hon. Friend is absolutely right in pointing out what those extra resources—an extra £300 million over and above what was promised by the previous Government—will do for the national health service. Yesterday, in a hospital, I saw for myself how £270,000 is being used to bridge the gap between social services and hospital treatment of the elderly, which will relieve some of the pressure on beds. Precisely that type of measure can be introduced because of the extra money. If a problem remains in the national health service, we will—over time, and in the manner that we have set out—get it cured. We will be reversing the appalling destructive legacy that we were left by the previous Conservative Government.

Q10. Mr. Whittingdale

The Prime Minister has still not answered the question. Is he aware that the statement in the letter of the Paymaster General's lawyers that he has no influence in any way over the decisions of the Orion trust has now been clearly shown to be untrue? Does he therefore accept that the Paymaster General's credibility is destroyed, and that he should now resign?

The Prime Minister

No, as I have already said, I do not accept that. The question may be the Tory briefing of the day, but I have already set out the position absolutely clearly. My hon. Friend has followed the advice that he was given by the Treasury and is in the ministerial code. He has not avoided United Kingdom tax. That is the position.

Q11. Mr. Cranston

May I congratulate my right hon. Friend and the Government on their agenda on constitutional change, and particularly on the White Paper on freedom of information? Does he agree that, in five years' time, the British people will say, "Yes, this is another matter on which a Labour Government have made a difference—in this case, in favour of openness and accountability"?

The Prime Minister

My hon. Friend is absolutely right—[Interruption.] It is remarkable that, whenever someone mentions the health service or raises other issues that concern the people of this country, Opposition Members have absolutely nothing to say. My hon. Friend is quite right on his point about freedom of information.

Q12. Mr. Prior

May I ask the Prime Minister, for the third time, to answer the question? On 8 December, the Paymaster General issued a statement—which was confirmed, on 12 December, by the Chancellor of the Exchequer—that he did not in any way influence the trustees of the Orion trust. Over the weekend, the Paymaster General reversed that statement. Should the Paymaster General not now ask the Chancellor of the Exchequer whether he might come to the House to clarify the position?

The Prime Minister

The answer is no.

Mrs. Ellman

Is the Prime Minister aware that the Economic and Social Research Council is recommending a change in the categorisation of British society, to include, for the very first time, "the underclass" as an official category? Does he think that that is not only a very suitable epitaph for 18 years of Tory rule, but a measure of the enormity of the task facing the new Labour Government?

The Prime Minister

That is correct, of course—[Interruption.] Opposition Members shout boring, but I do not think that it is boring to try to tackle some of the social problems that we have in this country. The essence of what we are doing is providing—next year, through our £3.5 billion programme—real opportunity for our young people and the long-term unemployed, but demanding responsibility in return. As has been shown again today, in an initiative on those who are sleeping rough in the streets of London, it is possible to take action if the political will is there to do it. It was not there under the previous Government—that was to their shame—but it is with this Government.

Q13. Mr. Walter

Perhaps I can provide a little relief to the Prime Minister and not ask him about the opinions of the permanent secretary or legal advice to the Paymaster General. I ask instead for his view on whether it is not both incompatible and hypocritical for a Minister to propose a tax shelter for ordinary citizens that is limited to £50,000 while simultaneously having for himself a tax shelter of £12 million?

The Prime Minister

No, for the very reason that I have just given, which is that my hon. Friend has not avoided United Kingdom tax, has followed the ministerial code completely and has acted in accordance with the advice that he was given.

Mr. George Turner

The whole House will recall that, as a matter of policy, the Conservative party in government underplayed consistently the dangers of BSE. Does my right hon. Friend acknowledge the consistency of the Leader of the Opposition in continuing that policy? Does he agree that Government lotteries should be confined to the newsagent and not extended to the butcher's shop?

The Prime Minister

My hon. Friend is absolutely right. We are dealing with the £4 billion legacy of the chaos and incompetence that the previous Government engendered. The last people from whom we will take lessons on how to deal with the crisis are members of the party that created it.

Q14. Mr. Loughton

I really do want to help the Prime Minister. Let us pretend for a moment that the Paymaster General is a model taxpayer. Let us cast aside all the questions about trustees and the Channel Islands. Does he agree that it would be better if the Paymaster General, any Labour Member or any member of the British public simply held their assets and their money in this country—[Interruption.]

Madam Speaker


Mr. Loughton

Would it not be better if the Paymaster General—if he has nothing to hide—held all his assets in this country, fully subject to the rigours of the Inland Revenue?

The Prime Minister

The hon. Gentleman said that he wanted to help, and I think that he did. This little exhibition at Question Time demonstrates the cheek of that lot there. We remember their record throughout the past few years. As we are talking about foreign money, perhaps we could find out how much foreign money they got in funds for their political party. For them to shield themselves in the robes of financial probity is a joke. It is seen and regarded as a joke. They have no credibility whatever.