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1996 - PMQT 3rd December 1996

Below is the text of Prime Minister's Question Time from 3rd December 1996.

PRIME MINISTER:

Engagements

Q1. Mr. Butler: To ask the Prime Minister if he will list his official engagements for Tuesday 3 December.

The Prime Minister (Mr. John Major): This morning, I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.

Mr. Butler: What advice can my right hon. Friend give to the many constituents of mine and of other hon. Members who are excellently served by innovative and increasingly comprehensive GP fundholders, in the light of Labour's repeated pledge to destroy such practices?

The Prime Minister: My hon. Friend is right about the helpful changes that have been made to the health service over recent years. More than 4 million extra patients have been treated since 1979--a million since the reforms began. There is no doubt that the reforms, including GP fundholding, have been an enormous success. I very much regret that the Labour party cannot accept what is successful and, instead, threaten it.

Mr. Blair: Will the Prime Minister say clearly, without any qualification, that his statement of 3 April on behalf of the Government that at the next election he will not rule out the option of joining a single currency in the next Parliament, remains unequivocally the position of the Government?

The Prime Minister: That remains unequivocally the position of the Government.

Mr. Blair: It is right to give the Prime Minister credit for such a clear reply. Let us see whether we can get another little clear reply. Can he tidy up one small loose end? Does he agree with the Deputy Prime Minister's statement on the radio at lunchtime, when he said of that position:

"We are not going to change our position in the election campaign or in this Parliament"?

The Prime Minister: My right hon. Friend said that; that is our position.

Sir Michael Spicer: The assurances gained by my right hon. and learned Friend the Chancellor of the Exchequer in Brussels yesterday are to be warmly welcomed. Does my right hon. Friend think that it is now important that those assurances are written into the treaty of Rome, given the experiences that we have had with the European Court of Justice and the way in which it has interpreted the treaty of Rome? Will he press for such amendments at the Dublin summit?

The Prime Minister: As my right hon. and learned Friend the Chancellor said to the House the other day, the elements of the stability pact would not affect the United Kingdom unless we were part of stage 3 of economic and monetary union. As my right hon. and learned Friend will tell the House in his statement shortly, our position is legally protected under the treaty, but we intend to ensure that the detailed regulations leave no room for ambiguity.

Mr. Ashdown: Ordinary people in Britain will pay more tax under the Conservatives at the next election than they paid under the Conservatives at the last election. The Treasury figures show that, the Treasury's Red Book confirms it and Treasury Ministers admit it. Why is the Prime Minister the only person left in Britain denying it?

The Prime Minister: I am afraid that the right hon. Gentleman is misleading the House and I shall explain gently to him how. If one earns more, one pays more tax. That is certainly true but, as my right hon. Friend the Chief Secretary made clear, if we had not changed direct taxes at all since before the election, a family on average earnings would have paid more next year under the old regime than they will as a result of our tax cuts. The increase in taxation is a result of increased earnings. Unless the right hon. Gentleman would like marginal earnings to be untaxed, that is inevitable.

Mr. Sumberg: Has my right hon. Friend had the opportunity to read the bulletin of the Bury and Bolton chamber of commerce, which reports a dramatic upturn in business confidence and business activity in my constituency? As it is the chamber's Christmas lunch on Friday, which I shall attend, will my right hon. Friend send my constituents a message of congratulations on that achievement and his best wishes for a new year of greater prosperity under a new Conservative Government?

The Prime Minister: The strict answer to the first point about whether I have read the bulletin is no, I have not, but it clearly provides comforting reading. There is no doubt that the economy is improving, unemployment is falling, growth is continuing and manufacturing is doing extremely well in Bury and Bolton, and across the country. That is the result of the policies that we have been following, and we shall continue to follow them.


Q2. Ms Walley: To ask the Prime Minister if he will list his official engagements for Tuesday 3 December.

The Prime Minister: I refer the hon. Lady to the reply I gave some moments ago.

Ms Walley: Given that the Government have now been forced to admit, contrary to what the Prime Minister said to the right hon. Member for Yeovil (Mr. Ashdown), that the Budget was a tax-raising Budget, and given that changes to direct tax mean that income taxes have gone up, will he now take down his untrue posters that falsely claim that honest John has given lower income tax?

The Prime Minister: All I can say to the hon. Lady is that she should read the answer I gave to the right hon. Member for Yeovil (Mr. Ashdown) and she will find that the premise of her question is wrong.

Dr. Twinn: Will my right hon. Friend support an inquiry into economic incompetence in local government and will he start that inquiry with the London borough of Enfield, which in this year alone has failed to spend £5 million on housing maintenance and £1 million of single regeneration budget money, due to be spent on industrial renewal in my constituency? Is that not another example of new Labour, new incompetence?

The Prime Minister: There are many examples of that and it might be difficult to inquire into all of them. In view of my hon. Friend's remarks, I shall draw the situation to the attention of my right hon. Friend the Secretary of State for the Environment.


Q3. Mr. Betts: To ask the Prime Minister if he will list his official engagements for Tuesday 3 December.

The Prime Minister: I refer the hon. Gentleman to the reply I gave some moments ago.

Mr. Betts: I refer the Prime Minister to the comment of the Chief Secretary to the Treasury on Sunday--that direct taxes have risen during this Parliament--and to his own comment a few moments ago that direct taxes have risen only because earnings have risen. Will the Prime Minister accept the figures produced independently by the House of Commons Library, which show that, during the course of this Parliament, families on average earnings will not only pay more in direct taxes absolutely, by more than £2 a week, but--as a proportion of their earnings--their direct taxes will rise from 20.2 per cent. to 20.7 per cent? Will he now accept that the Chief Secretary was right to make those comments on Sunday, and will he withdraw his statement that the Government have kept direct taxes down, as it is simply not true?

The Prime Minister: People who are receiving larger incomes and are moving up the tax bands of course distort the figures. The reality is that people will be £1,100 better off next year, allowing for tax and inflation, than they were before the last election. The hon. Gentleman and his hon. Friends do not like that and, under Labour, no one would be richer but everyone would still have to pay more tax, as is inevitably the case under a Labour Government. Everyone knows that there would be higher tax rates under Labour, and I do not know how the hon. Gentleman has the effrontery to pretend otherwise.


Q4. Mr. John Marshall: To ask the Prime Minister if he will list his official engagements for Tuesday 3 December.

The Prime Minister: I refer my hon. Friend to the reply I gave some moments ago.

Mr. Marshall: As First Lord of the Treasury, my right hon. Friend is responsible for providing much of the finance for local government. Is he aware that many local authorities with high council taxes give poor services to their constituents? Does he agree that those who cannot run Islington or Hackney are incapable of running the country?

The Prime Minister: New Labour hopes to produce a revolution in government, but I am astonished that it has utterly failed to do so in the element of local government that it already controls. There are a large number of examples of inefficiency that one could give, including a council that has not collected 20 per cent. of its council tax, is owed £16 million in arrears, has a debt of more than £800 million, pays interest of £91 million, has the sixth-highest council tax in the country and has the worst education results. That council should be well known to the Leader of the Opposition--it is his council in Islington.


Q5. Mr. O'Hara: To ask the Prime Minister if he will list his official engagements for Tuesday 3 December.

The Prime Minister: I refer the hon. Member to the reply I gave some moments ago.

Mr. O'Hara: The Prime Minister boasts about 25 tax cuts. Will he confirm that, to qualify for them, a taxpayer must--among other things--be a small company, drive a vintage car and be dead?

The Prime Minister: The hon. Gentleman is very amusing, but wrong.


Q6. Mr. Matthew Banks: To ask the Prime Minister if he will list his official engagements for Tuesday 3 December.

The Prime Minister: I refer my hon. Friend to the reply I gave some moments ago.

Mr. Banks: Will my right hon. Friend confirm that my right hon. and learned Friend the Chancellor of the Exchequer has cut some 25 taxes in the previous two Budgets, and that, since the last general election, the average family now have some £1,100 more to spend? Do not such facts show the contrast between the Conservative and Labour parties?

The Prime Minister: I agree with my hon. Friend. The reality is that the basic rate of income tax is at its lowest level for 60 years. [Interruption.]

Madam Speaker: Order. The hon. Member for Ceredigion and Pembroke, North (Mr. Dafis) will remove himself for the remainder of this day's sitting--I will have order in this Chamber--I am cautioning the hon. Gentleman. I will have no more of that in the Chamber.

The Prime Minister: As my hon. Friend the Member for Southport (Mr. Banks) intimated, we now have the lowest basic rate of income tax for 60 years and people's living standards are rising. There is no doubt that Labour's appetite for European-style regulation would provide European-level taxes.


Q7. Mr. Mackinlay: To ask the Prime Minister if he will list his official engagements for Tuesday 3 December.

The Prime Minister: I refer the hon. Member to the reply I gave some moments ago.

Mr. Mackinlay: Can we cut out all the claptrap? The top 10 per cent. of earners in this country have done very well, and people earning more than £64,000 are not paying higher taxes under the Tory Government. But the poor people--the most disadvantaged in our society-- have seen their incomes fall and their tax demands go up. Is that fair? Should not the broadest backs bear the heaviest burden?

The Prime Minister: If the hon. Gentleman wants to cut out claptrap, he should remain seated in future. The reality is that, as they were at between 83p and 98p when the Conservative Government came to power, it is hardly surprising if those upper rates of taxation have fallen. At the moment, one in four taxpayers--28 per cent., to be precise--now pay tax at only 20p in the pound and we seek to bring more people within that rate, so that the basic rate becomes 20p in the pound. That is a fair tax system, and we are delivering it.

Dr. Spink: On a day when the Palace is graced with the presence of the forces' sweetheart, Dame Vera Lynn, will my right hon. Friend send a message of good will to everyone in the British armed services who will be serving abroad over Christmas, and will he pay tribute to our armed services, which are the most professional in the world?

The Prime Minister: I am happy to pay tribute to our armed forces, both abroad and at home, and I am delighted to see that, on this issue at least, I have the whole-hearted support of those on the Opposition Front Bench.