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Tag: 1997

  • Gordon Brown – 1997 Speech at the Centrepoint Annual General Meeting

    Gordon Brown – 1997 Speech at the Centrepoint Annual General Meeting

    The speech made by Gordon Brown, the then Chancellor of the Exchequer, at the Centrepoint Annual General Meeting on 2 December 1997.

    Let me say what a privilege it is to be at this annual general meeting, to be here to discuss with you some of the great social and economic challenges we face together in Britain today.

    And I want to start by congratulating you, the staff and supporters of centrepoint, on this the twenty eighth anniversary of centrepoint – on all the work you do, the service you offer, the time and hours you give up and the dedication and commitment you show.

    If ever there was a confirmation that community involvement and social commitment is alive and well and thriving in London and in Britain, it is the work of centrepoint and all its sister projects to combat not only homelessness, but hopelessness.

    This year, tragically, centrepoint has lost a loved, respected and deeply committed patron – Diana, Princess of Wales.

    And I want to assure you that the committee to commemorate and continue her work that we are setting in being today and the charity advisory group that will be announced later will have a membership that reflects her life and her work as the people’s Princess.

    And our task will not only be to provide a lasting memorial to her work. It will also be to look at how, in very practical ways, we can help the work that she started continue and flourish.

    And I want to assure you at centrepoint also of the support of thousands of people, of all political persuasions and none, right across the social and political spectrum for your work. And I want to pay tribute to your sponsors who through their generosity, enable you to improve the lives of so many of our young people – their continuing support is vital, and I would encourage others too, to make a difference by giving their support.

    And in particular I want to congratulate you on the expansion of the work of entrepoint over the years

    The scale of your work is now such that with centrepoint’s 500 bed spaces, you help 3000 young people a year, half of them from ethnic minorities, a third of them under eighteen, and nearly half who have slept rough.

    the refuge for runaway children under sixteen;
    the emergency direct access shelter for teenagers;
    off the streets shelters for young rough sleepers;
    the young women’s hostels, one helping pregnant women and children;
    the intake house;
    Baffy house;
    Centrepoint kings cross;
    streets ahead, the recruitment agency linking the homeless to employers;

    And I would like to wish Centrepoint every success in running the admiralty arch winter shelter which will provide 60 bed spaces for young people.

    From work to provide immediate relief and emergency help to tackling the multiple causes of homeless and poverty

    And of course the network of foyers, starting in London, linking training to housing provision, now flourishing round the country – soon to provide 4,000 places, with a target of 16,000 by 2001-2002.

    And I am delighted to meet again young people here today from Centrepoint Camberwell foyer some of which I met back in may .

    You find unemployment homelessness and poverty an offence against standards of decency. So do I. And we must together tackle the problem

    What people remember of the in the 1930s is unemployed men Standing on street corners.

    What people identify with the eighties are youngsters begging and sleeping rough in our city streets.

    If the 1980s are remembered for social exclusion I want the 90s to be remembered for inclusion – when individuals, the voluntary sector, and government worked together with shared purpose for a common endeavour.

    Your aim is to tackle the causes of homelessness, worklessness and poverty, a blight on every community in the country and on a society that calls itself civilised .

    Homelessness and poverty not only means deprivation and isolation, it means: hopes crushed, aspirations stifled, potential wasted, indignities and miseries visited upon the poor.

    For 28 years you have been working as a voluntary group mobilising support.

    I can tell you today that tackling homelessness and poverty is no longer solely the ambition of voluntary organisations like you.

    It is now the ambition of the country’s government .

    And your values – to support the vulnerable and build a society in which everyone has a contribution to make – are now the values shared by this government.

    And let me say what that change means at a personal level.

    For years as a labour opposition, I and my colleagues were angered by the injustices we saw, but we were powerless to take the action in government that we knew was needed.

    Now we can take action and we recognise the responsibility that places upon us. But we will only achieve success if we work together.

    So I want today to discuss with you how our economic approach in government ties in with the work you are doing, and to explain how the common theme of empowering individuals through providing opportunity lies not only at the heart of your approach to tackling homelessness, but our analysis of the economic challenge our country faces.

    Of course our energies must ensure relief where there is suffering. But our ambition is not limited to bricks and mortar; it is to enable young men and women bridge the gap between what they are and what they have it in themselves to become. So we must
    not only deal with the consequences of poverty, we must tackle its causes.

    So I want to discuss with you how the government’s economic approach, for which I have responsibility, is aimed at tackling the root causes of homelessness and poverty in our country, and our shared task in doing so.

    Let me start with what I believe is common ground.

    Poverty diminishes not only an individual but the society which tolerates it. We are indeed our brothers and sisters keeper, and we must not walk by on the other side.

    So we start from the recognition that everybody needs decent and affordable accommodation and that no young person should have to sleep rough in Britain. Something close to the heart of centrepoint’s aim it is to ensure that no young person is at risk because they do not have a safe place to stay.

    that is why we have made a start with the phased release of capital receipts from council house sales: an additional 900 million pounds – over the next two years – which will increase the stock of housing for rent. And we encourage the foyer movement to seek assistance from local authorities which have access to more funds via the capital receipts initiative.

    and we have refocused the rough sleepers initiative to provide 20 million pounds for 13 rough sleeper projects outside central London. With 1 million pounds of pump priming funding over the next 18 months to support new rough sleeping strategies in six other areas. And 8.1 million pounds in the spring, specially targeted at single homelessness, particularly amongst the young;

    and we want to encourage more partnerships to help tackle homelessness and follow the example of crash – the construction industry group which encourages firms to provide materials for winter shelters provided through the rough sleepers initiative.

    But this is not enough. Only by tackling the cause of homelessness and poverty – in unemployment, the lack of opportunity and skills for employment – can we build a better future for the long term.

    So our anti-poverty strategy for this country, starts from the importance of providing opportunities for work.

    Its founding principle is that we must tackle the causes of poverty, not simply deal with its consequences.

    It is built around a new deal programme that offers new opportunities directly to young people.

    It rests on rights and responsibilities going hand in hand – rights to work: responsibilities to work – rights and responsibilities of government and people together, so that together we tackle the problems we face.

    So work is central to our anti-poverty strategy.

    And last night, in downing street, I met teenagers from Newham to hear from them what they thought had to be done to improve prospects for young people. They said jobs.

    The true scale of poverty, published in the last few days by the treasury, is a terrible indictment of the past and a call to action for the future. Despite an official rate of under 6 per cent unemployment 3 1/2 million households in Britain have no one in work.

    And in Britain today there are nearly 400,000 young people out of work – where there really should be no young person wasting their talent, doing nothing.

    And our strategy is built on recognising that poverty is caused from the workplace outwards – lack of job opportunities, inadequate skills, inadequate income to make proper provision for accidents, retirement and sickness. And the measures we propose include not just benefits reform, but tax changes, new learning and education measures and the introduction of a national minimum wage.

    In this way a new anti-poverty strategy for Britain is now being implemented.

    So what are our proposals?

    First everyone in need of work should have the opportunity to work – young people, lone parents, and disabled men and women who want to work.

    And for young people we are creating a new deal – four options:

    a job with an employer;
    work with a voluntary organisation;
    work on the environmental task force;
    and, for those without basic qualifications, full time education or training.

    From January these options will be available in 12 pathfinder areas to young people who have been unemployed over six months. And from April, the programme will go nationwide – available in every community in Britain.

    Our new deal recognises that some young people will require more intensive support to ensure that they are able to take up one of the four options on the programme and have a chance of benefiting fully from it.

    And I am very glad that foyers, who are already doing excellent work with young people throughout the country, are bidding for provision of elements of the new deal gateway. And I would also like to encourage foyers to bid as providers for the education and training element of the new deal.

    So we want to work in conjunction with Centrepoint, the foyers and other organisations to maximise the help given to our young people.

    And I am very pleased that the Camberwell foyer has been closely involved in designing the gateway to the new deal programme in the Lambeth pathfinder area, and I expect them to be heavily involved in delivering the programme too.

    So I believe it was right to tax the privatised utilities to raise the 5 billion pounds to help a generation of people – today excluded from the chance of prosperity – to have new opportunities.

    And I am pleased that some of the country’s best known businesses are now agreeing to take part in the new deal project:

    Allied Domecq, who have said they will offer at least a 1000 opportunities;

    Tescos, who have guaranteed an interview for all new deal clients who apply to work in their new stores.

    Ford, who have agreed to raise substantially the number of training places they provide for unskilled young people;

    Nat West, who have agreed that their small business advisers will promote the new deal to employers.

    And other companies are coming up with ways they can support the new deal – BAA, Radisson Hotel Group, Lloyds-TSB, Dixons, Marks and Spencer, Sainsbury’s, Unipart, Amersham International, Northern Foods, Grand Metropolitan, GEC, Rover, Jaguar, Peugeot, The Prudential, Tarmac – along with many others.

    But I want to emphasise that the new deal is just the first part of this government’s mission to create a more just and fair society – starting with jobs and the chance to gain work skills – but continuing by modernising a welfare state that too often stifles talent and denies opportunities to men and women.

    Our goal is not just to take people off the streets for a few months, but to make the unemployed fully employable and to rebuild the welfare state around the work ethic.

    So second we must ensure work is worthwhile and it pays.

    650,000 people in Britain face a poverty trap where the lion’s share of every extra pound earned goes in tax.

    So there is no solution to poverty that does not involve a fundamental restructuring of the tax and benefit system.

    That is why our pre-Budget statement proposed an integrated tax and benefit plan involving action at every level.

    To maximise the rewards from work, a 10p starting rate of tax and a reform of benefit tapers will be introduced when it is prudent to do so.

    To ensure that work pays for families with children, we propose a working families tax credit, backed up by affordable child care.

    And to ensure the rewards of these reforms flow directly to the employee, we are committed to a statutory national minimum wage.

    To improve rewards from work, to simplify administrative burdens on employers, and to encourage them to take on more people, we are considering the scope for bringing the national insurance structure for the low paid more closely into line with income tax.

    And to ensure parents can work, our national childcare strategy.

    But everyone who seeks to advance through employment and education must be able to make the most of their talents and potential. We will also create a new ladder of opportunity that will allow the many, by their own efforts, to benefit from opportunities once open only to a few.

    The relationship between skills, employment and wages is clear – half the unemployed under 35 have no qualifications worth their name, 75 per cent of those unemployed for five years or more have no skills.

    That is why we need to invest in our poorest communities with resources for education. It is why we put an emphasis on nursery education early on. It is why we want more young people to stay at school and more to go to college and university. It is why we place emphasis on lifelong learning with every employee entitled to an individual learning account and a university of industry which uses modern communications, satellite, cable and interactive technologies. To give educational opportunities to men and women in their homes and workplace.

    That is why in the pre-budget report we also announced our skills initiative – pilot projects nationwide under which any employer who takes on and trains a young or long-term unemployed person and keeps them on, can now receive up-front three quarters of their new deal allocation thus giving immediate help with training costs – in the case of young people about 1700 pounds and for the long-term unemployed, 1500 pounds.

    So we tackle homelessness, but we also tackle the causes of homelessness – and offer new opportunities in education, for jobs and for making work pay. Full employment is not, for us, a slogan; it is about providing employment opportunity for all.

    It will take time to right the wrongs. But let me say: not only have we made a start by working together, but we will do more year on year.

    But with 3 1/2 million households out of work, we do not deny the scale of the task we face, and the circumstances in which we came to power. I know more than anyone the cost the country has had to pay for 18 years of avoiding the problems, so I wont pretend solutions will be instant it will take time and none of our decisions will be easy.

    We have had to and will continue to have to make hard decisions about where our resources are to go. Our priority is to put the money that we have available into new job training and child care opportunities for lone parents rather than just on benefit. While we could have given even more tax relief to those who have already accumulated considerable savings, our priority is to put some of the 1 1/2 billion pounds resources we are spending on encouraging savings to do more to help those who do not at the moment save – up to 6 million new savers. Our priority is to encourage more people to attend college and university by sharing the costs of higher education, rather than continue to limit higher education to an elite of the country’s young people. And our priority is to put money into the new deal for the young through the cash we raised from a windfall tax on the privatised utilities.

    Difficult choices, but necessary choices. For we are starting out on a long journey with a route map and a clear destination – to make Britain a country where everyone, no matter their circumstances today, from wherever they come or whatever they have done, whoever they are – everyone has opportunity to make the most of their potential. That is my aim. And I believe that working together that can be our achievement: a new Britain where everyone has a contribution to make.

  • HISTORIC PRESS RELEASE : Membership of Diana, Princess of Wales, Memorial Committee [December 1997]

    HISTORIC PRESS RELEASE : Membership of Diana, Princess of Wales, Memorial Committee [December 1997]

    The press release issued by the Treasury on 3 December 1997.

    The membership and terms of reference of the committee which will consider possible memorials to Diana, Princess of Wales, was announced today by the Chancellor, Gordon Brown.

    The Chancellor, who is to chair the Committee, said:

    “Diana, Princess of Wales was greatly loved, and I consider it an honour to have been asked by the Prime Minister to chair this important committee. The  public have responded magnificently to my request for proposals for commemorating the work of the  Princess of Wales.  Every one of the 7,000 proposals so far has been carefully read and every one will be taken into account.”

    NOTES FOR EDITORS

    The Prime Minister asked the Chancellor to chair a committee To consider possible memorials to Diana, Princess of Wales.   The Chancellor’s new committee is to be made up of:

    • the Lord Chamberlain, Lord Airlie, representing the
      Royal Household;
    • Lady Sarah McCorquodale, representing Earl Spencer
      (who will also attend meetings when he is in the
      country) and the Princess’s family;
    • Lord Attenborough;
    • Mr Paul Burrell;
    • Baroness Chalker;
    • Diane Louise Jordan;
    • Mr Anthony Julius;
    • The Hon Rosa Monckton;
    • Jane Tewson.

    Its terms of reference are:

    “To advise HM Government as to how the life of Diana, Princess of Wales, can best be commemorated, complementing the work of the Diana, Princess of Wales, Memorial  Fund. In taking forward this work, the Committee will take into account the views of   members of the public, and have regard to the charities and causes which the Princess supported.”

  • HISTORIC PRESS RELEASE : Treasury and Bank of England Open Up the Books [December 1997]

    HISTORIC PRESS RELEASE : Treasury and Bank of England Open Up the Books [December 1997]

    The press release issued by HM Treasury on 2 December 1997.

    The first edition of a new quarterly report providing greater detail of the UK’s holdings of foreign currency and gold was published jointly today by the Treasury and the Bank of England.

    The report shows for the first time the size of the UK’s forward foreign exchange position and the currency composition of the UK’s foreign currency assets.

    On publication of the report the Economic Secretary, Helen Liddell said:

    “This report is another key step in the Government’s drive towards greater transparency in economic policy making.

    “Greater openness improves the quality of economic decisions, strengthens their legitimacy and credibility, and reduces the likelihood of unpredictable and counterproductive reactions in financial markets.”

    The report shows that the level of the Government’s reserves, including the forward book was $42.3 billion at end-September, an underlying increase of $50 million on end-June. Net forward holdings of foreign currency were $1.24 billion at end-September.

    The level of the Bank of England’s holdings of foreign currency and gold was $1.98 billion at end-September.

  • Queen Elizabeth II – 1997 Christmas Broadcast

    Queen Elizabeth II – 1997 Christmas Broadcast

    The Christmas Broadcast made by HM Queen Elizabeth II on 25 December 1997.

    At the Christian heart of this United Kingdom stands Westminster Abbey, and it was right that it provided the setting for two events this year – one of them almost unbearably sad, and one, for Prince Philip and me, tremendously happy.

    Joy and sadness are part of all our lives. Indeed, the poet William Blake tells us that:

    “Joy and woe are woven fine,
    A clothing for the soul divine,
    Under every grief and pine
    Runs a joy with silken twine.”

    This interweaving of joy and woe has been very much brought home to me and my family during the last months. We all felt the shock and sorrow of Diana’s death.

    Thousands upon thousands of you expressed your grief most poignantly in the wonderful flowers and messages left in tribute to her. That was a great comfort to all those close to her, while people all around the world joined us here in Britain for that service in Westminster Abbey.

    But Prince Philip and I also knew the joy of our Golden Wedding. We were glad to be able to share this joy at Buckingham Palace with many other couples, who are celebrating their 50th anniversary this year.

    Then, on our own anniversary day, came a very different service at Westminster Abbey, this time the “silken twine”, a service of thanksgiving for our 50 happy years together. After that service we had a chance to meet and chat to so many different people.

    I will never forget that day, nor a day five years ago when Windsor Castle suffered a terrible fire. More than a hundred rooms were badly damaged. But out of the disaster came opportunities for all sorts of people to display their range of skills, their love of history, and their faith in the future.

    Last month the restoration of the Castle was completed and it is shortly to be open again for all to see. It is a mixture of the original with later additions and alterations – and, the result, a vigorous blend of the old and the new.

    And so it has been in the Commonwealth. Prince Philip and I were touched by the way the Canadian people welcomed us again to Canada. We were delighted to be invited to Pakistan and India on the 50th anniversary of their Independence, and to celebrate their achievements since 1947.

    The Prince of Wales represented Britain when the people of Hong Kong marked their return to China – in spectacular fashion. Many of you might have felt a twinge of sadness as we in Britain bade them farewell, but we should be proud of the success of our partnership in Hong Kong and in how peacefully the old Empire has been laid to rest.

    Out of the old Empire sprang the Commonwealth family of nations that we know today, and that, too, has grown and changed over the years.

    In October, 51 representatives of Commonwealth governments met in Edinburgh, very much in the spirit of a family gathering. We all enjoy meeting old friends and making new ones, but there was also important business to be done. The world saw that the Commonwealth can make a major contribution to international relations and prosperity.

    The meeting also showed that unity and diversity can go hand in hand. Recent developments at home, which have allowed Scotland and Wales greater say in the way they are governed, should be seen in that light and as proof that the kingdom can still enjoy all the benefits of remaining united.

    Being united – that is, feeling a unity of purpose – is the glue that bonds together the members of a family, a country, a Commonwealth. Without it, the parts are only fragments of a whole; with it, we can be much more than the sum of those fragments.

    For most of us this is a happy family day. But I am well aware that there are many of you who are alone, bereaved, or suffering. My heart goes out to you, and I pray that we, the more fortunate ones, can unite to lend a helping hand whenever it is needed, and not ‘pass by on the other side’.

    St Paul spoke of the first Christmas as the kindness of God dawning upon the world. The world needs that kindness now more than ever – the kindness and consideration for others that disarms malice and allows us to get on with one another with respect and affection.

    Christmas reassures us that God is with us today. But, as I have discovered afresh for myself this year, he is always present in the kindness shown by our neighbours and the love of our friends and family.

    God bless you all and Happy Christmas.

  • Caroline Spelman – 1997 Maiden Speech in the House of Commons

    Caroline Spelman – 1997 Maiden Speech in the House of Commons

    The maiden speech made by Caroline Spelman, the then Conservative MP for Meriden, on 19 June 1997.

    I am grateful for the opportunity to make my maiden speech. I thank the House in advance for listening, given the foreshortened length of the debate. The House will appreciate that I pay tribute to my predecessor, Iain Mills, with a note of sadness. He was much respected in Meriden as a good constituency Member. He worked hard for those in need, especially in Chelmsley Wood in the north of the constituency, where he helped to secure a local Benefits Agency office. The sad circumstances of Iain’s death must be a challenge to us all not to let a colleague down and to try harder to help colleagues facing problems or ill health. The House will want to reassure his widow that Iain’s tragedy will strengthen our resolve to care for each other in the years ahead.

    I wanted to speak in the debate on agriculture because of the acute pressures on the countryside in my constituency, especially the Meriden gap, a narrow corridor of green belt only six miles wide at its narrowest point between Coventry and Birmingham. As a newcomer to the area, selected only 11 weeks before the general election, I was struck by the fragile character of this rural area. Meriden, as the name implies, lies at the very centre of England and boasts excellent communications. With Birmingham international airport, the west coast main line and the midlands motorway network passing through, one can reach London, Bristol, Manchester, Paris or Amsterdam in an hour and a half—except on a bad day, in which case one would be jolly lucky to get to Wolverhampton in that time.

    Meriden has conceded some of its best countryside to the prestigious national exhibition centre, a beneficiary of those good communications. That illustrates the willingness of my constituents to move with the times and be well connected, to welcome the facilities of modern business and transportation. However, that comes at a price. One can still find idyllic green country lanes in the villages of Barston, Berkswell and Hampton in Arden, but rising over the brow of the hill one is soon reminded of the proximity of the cities by the sound of traffic and the glow of lights.

    What happens to the Meriden countryside will depend on the future shape of the common agricultural policy. The beef crisis has placed an exceptional strain on small family farms devoted to dairy and beef farming. Uncertainty has probably been the greatest strain. As we have heard that the incidence of BSE has fallen from 1,000 cases a week to 100 and that there is a prospect of eradicating the disease by 2001, a timetable for lifting the ban must now be possible. Meriden’s small farms are small by British standards, but they are far from small in European terms. It is the Meriden-sized farms that may fall through the gap between very small farms, which are supported to prevent the desertification of the countryside as in rural Greece or Portugal, and the large farms typical of the Beauce in the Paris basin, which could probably survive with no support at all. I hope that the Minister agrees that any move towards modulation would be counter-productive to efforts to reform the CAP into a more market-oriented policy. It would disadvantage British farmers and could result in Meriden’s farms going under concrete for ever.

    Meriden’s farmers will also struggle to compete if the support system for the CAP is not overhauled before the enlargement of the European Union. Anyone who has visited the vast collectivised farms of eastern Europe will realise the competitive advantage that they would enjoy, with their economies of scale and low wage costs. Unless the CAP is reformed into its separate economic and social aspects, it will collapse under the strain of supporting huge east European farms with unrealistic subsidies. I urge the new Government to fight hard to prevent British farmers from being disadvantaged by CAP reform and to watch out for the national aids that are often used by European countries to offset the impact of reform but distort agricultural markets.

    Only a small percentage of my constituents are farmers, but the land that they tend, and the environment that it offers, is what attracts many more people to quit the city and raise their families in a relatively healthy, safe and harmonious environment. Those who choose to live in the leafy suburbs of Knowle and Dorridge have weighed up the benefits of dwelling poised between town and country. All too often, I am shown new developments where once stood bluebell woods and open fields. Residents are right to protest at the loss of the rural amenity for which they originally moved to the area. This is where the values of middle England are nurtured: honesty, fairness and mutual respect. To undermine this fragile framework, in which young people are brought up and the elderly retire with security and pleasure, would be a step backwards from the rural legacy that made England a green and pleasant land.

  • Caroline Spelman – 1997 Speech on Women in Sport

    Caroline Spelman – 1997 Speech on Women in Sport

    The speech made by Caroline Spelman, the then Conservative MP for Meriden, in the House of Commons on 27 June 1997.

    I congratulate my right hon. Friend the Member for Horsham (Mr. Maude) and my hon. Friend the Member for Teignbridge (Mr. Nicholls) on their appointment to the Opposition Front Bench and wish them much success and a run of good form in their time in their new capacity. I also congratulate the Under-Secretary of State for National Heritage, the hon. Member for West Ham (Mr. Banks); as a new Member, I very much look forward to witnessing his renowned quickness of wit.

    Sport is central to the British way of life. Although we probably have more of a tendency to watch than to participate, just over half the adult population plays some form of sport once a month. We all know that that frequency of playing sport is not likely to benefit our overall condition. It is also a fact that women are less likely to play sport than men.

    I approach the debate from the perspective of the fitness that sport can confer. “The Health of the Nation” initiative, set up under the previous Government, set a goal of reducing obesity among women by one third by the year 2005 and by 25 per cent. among men. The third progress report of that initiative, which was published in July last year, showed that no significant step had been achieved towards either of those targets. Another finding of the progress report was also worrying, in that the proportion of children aged 11 to 15 who smoke has risen by 50 per cent. since 1988.

    The promotion of sport among young people is vital if the health of the nation is to be improved. The Sports Council currently allocates £4 million per annum to various sporting initiatives involving young people. However, there is patently more success in encouraging sports uptake among young men than among young women.

    In 1993, a shoe company undertook some research, which showed that three out of five teenage girls played no sport at all outside school. For young women, the only sporting activities being undertaken twice a week are cycling, walking, keep fit and weight training. Further research shows that 66 per cent. of girls dislike the kind of sport on offer in schools and particularly object to competitive sports where there are winners and losers. It is different for boys: only 38 per cent. said that they disliked sports with a competitive element, which shows a different approach to sport and exercise among men and women.

    Another marked contrast is that only 30 per cent. of 14 to 16-year-old girls undertook sport to be with their friends, which compares with 52 per cent. of boys. That shows that the social aspect of sport is less important for women, although that may have something to do with the type of sport on offer.

    Sport for young women does not enjoy a good image. In the modern idiom, we would say that it is not cool for a young woman to do sport. I urge the Minister to think of ways to change that. Let us consider media coverage of women’s sport. Of all the television sports coverage in this country, only 6 per cent. is devoted to women’s sport, and the figure for newspaper coverage is only 13 per cent.

    To take up the point made by the hon. Member for Bassetlaw (Mr. Ashton), it is no good being glib about sponsorship. Commercial sponsors are not interested in sport if there is very little media coverage, which is what women’s sports suffer from. Commercial sponsors are reluctant to back women’s sports because they do not get the television and newspaper coverage that they need.

    It is therefore no wonder that even committed teenage sportswomen could name only one famous British sportswoman. I am sure that we could all name her, too—Sally Gunnell—but what about our other athletes such as Kelly Holmes and Tessa Sanderson? In addition, it is really only athletes and tennis stars who have become household names in women’s sports.

    Mr. Ashton

    Is it not a fact that many young women go in for aerobics and classes or even dance in nightclubs, and that they provide their main forms of exercise? That is why women do not go out on to a muddy football field.

    Mrs. Spelman

    I am coming to that very point in relation to the national curriculum’s contribution to sport.
    The problem is that young women often lack a well-publicised role model. Perhaps the Minister for sport and the Department for Education and Employment could look at ways in which the profiles of successful sportswomen could be raised in education, so that young women have a wider range of role models.

    The image of women’s sport is not helped by the way in which it is reported. The back page of The Mirror on 25 June—I am not sure how many hon. Members had the chance to look at it—had what can only be described as an uncompromising photograph of the world-class tennis player Monica Seles in action, with disparaging remarks about her weight gain. Young women need positive role models, not the running down of the sporting achievements of stars.

    The previous Government launched a number of initiatives to promote sport for young people, one of which was the introduction of two hours of physical education into the national curriculum. I am glad that the Heart of England school at Balsall Common in my constituency has shown how that time can be used creatively, taking account of the attitudes towards sport of young men and women that I mentioned earlier. Girls and boys can choose a sport from a range of options. They have an opportunity to try those sports and then pursue them in more depth. The sports teachers also use that time for modules about anatomy and physiology, so that young people learn about the way in which exercise can keep them in good shape. The school recognises that young people need a positive experience of sport. Forcing teenagers into strange and unmodish sports kit to do a sport that they would never choose can be detrimental. The school has proved that embracing the times with aerobics and dance classes can be fun and beneficial.

    I think nostalgically of my time at school, where sporting attainment was held in equal esteem with academic achievement. The dedication of teachers who gave up their Saturdays to promote our school teams left a great impression on me.

    I was encouraged to hear the hon. Member for Bassetlaw suggest that we could do more to promote the use of sports facilities out of school hours. Even if that is not supervised by professional teachers, it could be done by ex-professionals. Fathers often put in time at weekends to run sports coaching these days. More often than not, that is for boys’ sports. What can be done to encourage mums to show up on a Saturday and give a good example to young women, by giving up their free time to encourage them in their sport? The teaching profession could also be encouraged to reconsider such a contribution on a Saturday morning. Such dedication from a mentor who gives up their free time to encourage a child to pursue a sport in depth has a wider lesson for life than just the pursuit of a sport. That willingness to make a sacrifice rests with us when we think back to the time when we were encouraged at school.

    I am greatly concerned about the future funding of sport if national lottery funds are diverted into mainstream public policy areas such as health and education. The lottery has made a real difference to sport. The Secretary of State said today that the number of national lottery awards to sport has risen to more than 3,000 and that £540 million of lottery money is going to sport. That dwarfs the Government’s £50 million of dedicated core funding for sport in the past year. Small clubs and groups all over the country have benefited from improvements to their sports facilities—the refurbishment of a sports pavilion, the purchase of a new set of goalposts or the installation of a ramp to make facilities accessible to the disabled. Taking away the profit motive from running the lottery may sound “cute”, as the Financial Times said, but the victims will very likely be the good causes the lottery is purportedly set up to serve. It is decision time for the new Labour Government. We need to know where the academy of sport and the national stadium will be. The uncertainty does not serve the industry. How will the Government prevent the dilution of sports funding from the national lottery? When will their election pledge of a youth sports unit be fulfilled? How will they shift a generation of potential couch potatoes into regular exercise and invest for the health of the nation in the next millennium?

  • Alistair Darling – 1997 Comments on the Barnett Formula

    Alistair Darling – 1997 Comments on the Barnett Formula

    The comments made by Alistair Darling, the then Chief Secretary to the Treasury, in the House of Commons on 27 November 1997.

    The Government have made it clear that they intend to keep the existing arrangements. The Government’s position was clearly set out in the two White Papers on which the referendum campaigns in Scotland and Wales were fought and won.

  • Alistair Darling – 1997 Speech on Pension Reform

    Alistair Darling – 1997 Speech on Pension Reform

    The speech made by Alistair Darling, the then Chief Secretary to the Treasury, in the House of Commons on 9 July 1997.

    I beg to move, To leave out from “House” to the end of the Question, and to add instead thereof: condemns the failure of the last Government to foster security in retirement for either today’s pensioners or pensioners of the future; supports the present Government’s objective of a decent income for all in retirement; believes that the best way to achieve this is by developing second pensions building on the foundation of the basic state pension; commends the Government’s decisive action on the past mis-selling of private pensions; endorses the measures taken in the Budget, particularly the reforms to corporation tax, which will help to create a climate encouraging higher investment and a higher sustainable growth rate increasing the capacity of the economy to support decent pensions; supports the Government’s welfare-to-work proposals, which will improve the employment opportunities for thousands of people, enabling them to save for their own retirement; and welcomes the Government’s commitment to review pensions and achieve security in retirement for all. I shall deal in turn with each point of substance raised by the right hon. Member for Hitchin and Harpenden (Mr. Lilley).

    The motion mentions misselling. The right hon. Gentleman said at numerous points during his speech that he would come to the subject of the misselling of pensions that took place, to a large extent, while the last Government were in power, but unfortunately he did not get around to addressing that central point. Rather like his right hon. Friend the Member for Cities of London and Westminster (Mr. Brooke)—who is here now, and who said the other night that the business of pensions misselling was something of a “hare in another field”— the shadow Chancellor ignored the fact that misselling is a running sore which, sadly, has yet to be cleared up.

    Mr. Peter Brooke (Cities of London and Westminster)

    I hope that the Chief Secretary will accept that the point that I sought to make was that his intervention on misselling was not a defence of what the Government were doing, although I acknowledge that it was a fair debating point.

    Mr. Darling

    I shall return to Government policy, but first I should like to deal with misselling, especially as the Opposition have referred to it in their motion. That reference demonstrates the Tory party’s brass neck because, over the 10 years between the start of misselling and the time that they left office, they did little to sort out the problem.

    It is ironic that, on the day my hon. Friend the Economic Secretary to the Treasury publishes a further list showing what little progress has been made by many pension companies to solve the problem, the Opposition should choose to use the term “misselling”. Many of the 700,000 people who were affected will wonder why the Conservatives, who were in power for so long, did nothing to prevent the problem in the first place and, when it arose, did little to resolve it. It was not until a few weeks before the election that there was the slightest flicker of interest in the Conservative Government in clearing up the problem.

    It was obvious to us on taking office that the Conservative Government had done precious little to put pressure on the companies that were guilty of misselling. I wonder why. Perhaps the Opposition could do with a lesson in history. Let us look at Conservative Government policy in the late 1980s. Their hostility to public provision is well documented, and it extended to the public provision of pensions. Their policy was designed to get people out of occupational pensions and into private schemes.

    My hon. Friend the Member for Northampton, North (Ms Keeble) drew attention to advertisements—which, I may say, were paid for by the public—which the Government promoted not just in text but on television. They wanted people to believe that the very act of going private was spiritually and materially enriching. People were persuaded that, if they took out a private pension, they would be better off, almost by definition. It is interesting to recall the name of the junior Social Security Minister at the time that policy was promoted—it was the shadow Chancellor. The other Minister, although perhaps now it is a matter of historical interest, was the man who was Prime Minister for some six years.

    Mr. Lilley

    That is not true. I was never a junior Social Security Minister. I was only ever Secretary of State.

    Mr. Darling

    It has nothing to do with the right hon. Gentleman. Is that not typical of the Conservative party?

    Mr. Lilley

    On a point of information, Mr. Deputy Speaker. Is it not customary for someone who makes a false accusation to apologise rather than, after recognising that the person accused is not guilty, letting it be a matter for further derigration?

    Mr. Deputy Speaker

    That is purely a matter for debate.

    Mr. Darling

    A former Minister complains that he has been falsely accused of being a Minister. I can understand why he feels guilty about that. If he thinks that it is an insult to say that he was a junior Social Security Minister, of course I am sorry for insulting him. I did not realise that it was insulting to say that someone was a member of a Government.

    Mr. Tim Boswell (Daventry)

    My right hon. Friend was a junior Minister in the Treasury at that time.

    Mr. Darling

    He cannot deny that he was a member of the Government when these problems arose, or is that an insult, too? Is it insulting to say that someone was a member of the Conservative Government? It may be; I do not know.

    The Conservative Government created the climate in which it was possible for unscrupulous salesmen to go into communities, especially former mining communities, and persuade people to leave their occupational schemes and enter private ones that were wholly unsuitable. People who should never have been allowed to sell pensions were let loose among some extremely vulnerable people and, sadly, the managements of some companies turned a blind eye to the problem.

    When we add to that the problem of lax regulation—Tory self-regulation—and the far too many vested interests that were quite happy to turn a blind eye to what was happening, it is not surprising that many people were wrongly sold personal private pensions. The Conservative Government were culpable, collectively and in some cases as individuals, because, during all the time they were in power, they did nothing about that.

    It is to the credit of Sir Andrew Large, the outgoing chairman of the Securities and Investments Board, that he brought the matter to public attention in the early 1990s. His battle, along with other regulators, was fought largely by the regulators on their own, without help from the Government, in the new climate that began to prevail in the past three or four years. Despite the misselling over the past 10 years, little progress has been made. My hon. Friend the Economic Secretary today published a report showing a lamentable lack of progress by the 24 firms that have most cases to review. Of course, there are others.

    Mr. Geraint Davies

    In many cases, the commission charged on pensions was 25 per cent. That is more than the 20 per cent. tax credit about which the Opposition complain. They complain about the withdrawal of the tax credit, which is good for the public Exchequer. Will they condemn the massive commissions that were paid to people who missold thousands of personal pensions?

    Mr. Darling

    For a long time, I have said that the regulator should look at the impact of commission on selling. It can put undue pressure on people who sell pensions, and that can have unfortunate consequences.

    Mr. Campbell-Savours

    I was a member of the Committee that examined the Financial Services Bill. Four years before the rows about misselling broke out, we moved amendments about the disclosure of commission and the hon. Member for Bournemouth, West (Mr. Butterfill), who was also a member of that Committee, and some people who have now left the House, opposed such disclosure. The public should know that, if our amendments had been accepted, the great misselling scandal of pensions in the 1980s might not have occurred, because people would have known that they were being ripped off.

    Mr. Darling

    My hon. Friend is right. If there had been the transparency that now exists, many of the problems that occurred in the late 1980s would have been avoided.

    Mr. Butterfill rose—

    Mr. Darling

    The hon. Gentleman is desperate to intervene. According to the Register of Members’ Interests, he is well qualified to intervene on this matter. No doubt he will draw the attention of the House to that if he makes a speech.

    Mr. Butterfill

    The hon. Gentleman is right: I advise the Independent Financial Advisers Association and the British Insurance and Investment Brokers Association. However, that is not the point that I wish to make. Will the hon. Member for Workington (Mr. Campbell-Savours) reconsider what he said? I did not at any time oppose the disclosure of commission. In 1986, I opposed purely the disclosure of commission when it was often necessary to disclose all the other costs of direct selling companies. In many cases, such costs were much higher than those incurred by companies that employed independent financial advisers. I urged the Committee to legislate to disclose all the costs of all companies and not single out one area, as the hon. Gentleman wished to do.

    Mr. Darling

    It is interesting to note that Opposition Members, whether on the Front Bench or the Back Benches, are trying to disclaim all knowledge of what went on in the 1980s. I am intrigued that hon. Members such as the hon. Member for Bournemouth, West, who opposed the disclosure of commission, always said that such opposition was for the greater good and that many other things needed to be known as well. I would not have minded if they had argued at that time in favour of disclosing not just commission but all other factors in the make-up of the sale of a product. That is important.

    Mr. Butterfill

    Will the Minister give way?

    Mr. Darling

    The hon. Gentleman should contain himself. I may give way to him later. I was about to be nice to him, so perhaps he will sit patiently. In debates on the Finance Bill and in other debates, he can make helpful suggestions. In debates on a Bill on financial services, which we propose to introduce during this Parliament, I am sure that his comments will be helpful.

    Mr. Butterfill

    The right hon. Gentleman is completely distorting the facts and what I said. I urged the Committee to disclose all costs, including commission paid to salesmen, but it was the Labour party and the hon. Member for Workington who did not want all costs disclosed—the hon. Gentleman wanted only insurance salesmen’s commission costs disclosed. It was precisely because I felt that all costs should be disclosed that I made a principled stand on the entire subject.

    Mr. Darling

    I can see now why the hon. Gentleman is retained at such generous rates. He clearly does his best for the industry.

    Mrs. Teresa Gorman (Billericay)

    Will the right hon. Gentleman give way?

    Mr. Darling

    Perhaps I could deal with one point at a time; at some point, I should like to get on to the matters raised by the right hon. Member for Hitchin and Harpenden.

    I was making the point that many people, including the hon. Member for Bournemouth, West (Mr. Butterfill), used to argue against disclosure of commission simply 968because they did not want that aspect disclosed. The House may remember that we are discussing this matter because my hon. Friend the Member for Croydon, Central (Mr. Davies) raised the impact of commission on the selling of financial products. I think that all of us agree that the regulators need to examine the matter. I am all in favour of giving incentives to sales forces to sell products, but we have to watch the impact of those incentives and their propensity for encouraging the misselling of pensions.

    Mrs. Gorman

    Is it not a fact that the people about whose plight the right hon. Gentleman is agonising, shedding some crocodile tears along the way of course, are the very people whose individual pension funds are to be raided by the Government—about 5 million of them? They are paying modest amounts of around £1,000 a year, and they will have to find another £100 to £150 a year to keep their savings intact—because of the depredations that the Government are about to inflict on them.

    Mr. Darling

    The answer is no.

    The point that I was drawing to the attention of the House is that many people who were missold pensions have still not received the compensation that is due to them. I say this in response to the point that the right hon. Member for Hitchin and Harpenden made, at which the hon. Member for Billericay (Mrs. Gorman) may have been hinting. Frankly, I have little time for the argument that is now advanced by some pension companies that they could be making great progress, if only there had not been any change to the corporation tax regime. That might have been a statable case had they been making any progress, but many of them have not.

    When hon. Members read the parliamentary answer of the Economic Secretary to the Treasury, which will now be published, of course, they will find that the progress has been lamentably slow. In nearly every company, the percentage of cases that has been dealt with is in single figures, and that cannot be satisfactory. I hope that the pension companies that follow these proceedings will understand that the public will not tolerate such lamentable progress, when so many people are awaiting redress and cannot understand why on earth there is a delay.

    Mr. Oliver Letwin (West Dorset)

    Will the right hon. Gentleman give way?

    Mr. Darling

    In a moment.

    We will continue to publish regularly companies’ progress, or lack of progress, because we believe, unlike the Conservative party—presumably, if it had believed that openness was a good idea, it would have done something about it—that openness is essential. I should like to move on to some of the other points raised, but, as the hon. Gentleman seems desperate to intervene, let him do so.

    Mr. Letwin

    I was merely going to inquire whether, after some 15 minutes of eloquence, the right hon. Gentleman intends to move to the subject of the debate.

    Mr. Darling

    If the hon. Gentleman had sat quietly, I would have got to the points about which he asks some 96930 seconds sooner. I have been asked questions and, as a member of the Government, I thought that it was my duty to answer them. Ministers are accountable to the House, and some important points have been made. The performance so far has been unacceptable, and I hope that the National Association of Pension Funds and the Association of British Insurers can find time, when they are not criticising the Government, to put some pressure on their members to resolve the matter.

    The other step that the Government are taking, which the previous Government would not take, despite being pressed to do so, is substantially to reform the Financial Services Act 1986, to ensure that we have a proper regulation system, an end to self-regulation and regulation in the public interest, which will benefit both the industry and the public. We are committed to doing that, and legislation will be introduced during this Parliament, but Conservative Members, despite this debate, still cannot answer this question: why did they so nothing about the problem when they had all the time in the world to do so?

    Let me deal with another point to which reference is made in the Opposition motion but to which, although I may be wrong about this, the right hon. Member for Hitchin and Harpenden, the Opposition spokesman, did not refer—the windfall tax. I am interested in this because, when the shadow Chief Secretary to the Treasury summed up for the Opposition at the end the Budget debate, he did not mention the windfall tax either. Over the past year or two, and certainly during the general election campaign, I got the impression that the Conservative party thought that the tax was so bad that it would form the centrepiece of its opposition to us in government, yet, in two major speeches, Opposition spokesmen did not mention the tax.

    Mr. Bernard Jenkin (North Essex)

    Will the right hon. Gentleman give way?

    Mr. Darling

    Not just now. I do not want to be accused of taking up the valuable time of the House answering Conservative Members’ questions.

    It is interesting that, in the Opposition motion—never mind Conservative Members’ speeches—the Conservatives are no longer defending the privatised utilities, and no wonder, because they have accepted the Budget proposals. I notice that their shares have increased since the Budget, which suggests that what we are doing is reasonable, but the new line from the Opposition is that the tax is an attack on pension funds.

    I want to make a basic point. The reason we have implemented the windfall tax is to fund a programme to get people back into work, which will enable them to make a contribution for themselves and their families, to save for their retirement and to contribute towards their pensions, so the tax is a sensible step. The Government have raised a windfall tax that will get people into work. Instead of paying increased social security bills, about which the right hon. Member for Hitchin and Harpenden certainly knows something, we can give people the opportunity to contribute. The windfall tax is entirely justified for that reason, and is widely accepted to be so. Given the strength of feeling on the Conservative Benches over the past few years, I am surprised that the tax was not referred to, although it was in the Opposition motion.

    One matter was mentioned: the allegation that there was an absence of consultation. The Opposition motion contains the words shoddy, hastily prepared and ill-thought-out”. I have heard those words before and not too long ago. I heard them in March when the then Government introduced basic pension plus, which I do not remember being introduced with much consultation. In fact, there was not even a statement in the House.

    Mr. Jenkin

    Will the right hon. Gentleman give way?

    Mr. Darling

    In one moment.

    The right hon. Member for Hitchin and Harpenden, in a sotto voce exchange with the Minister for Welfare Reform, said that the proposal was prepared in secret. If that is true, the Conservative party is in no position to criticise us. I also caution the Conservative party about dressing up in new, ill-fitting clothes as the pensioners’ friend. We have to remember what we are dealing with here. The Tories’ record as the pensioners’ friend does not bear close examination. If one considers the central plank of basic pension plus, one will remember that the tax changes that the then Government were going to make would have cost a person on average income with an occupational pension some £600 extra a year.

    Mr. Jenkin

    Will the right hon. Gentleman give way?

    Mr. Darling

    In one moment.

    Talking about consultation and openness, I think that basic pension plus was the first pensions policy ever to be announced without a Government Actuary’s report, which is unusual in relation to social security, so for the Conservative party to accuse us of doing something that was “ill-thought-out” and without consultation simply does not stand up.

    Mr. Iain Duncan Smith (Chingford and Woodford Green)

    The right hon. Gentleman is busy comparing the Budget to proposals that preceded a Green Paper from the previous Government. Is he suggesting that this section of the Budget will be pushed out to a Green Paper? If he is not suggesting that, he should stop this ludicrous comparison.

    Mr. Darling

    I am simply drawing attention to the fact, that just before the election, the then Government—that is what they were, despite sometimes appearing not to be so—put forward major proposals for the reform of pensions. The then Prime Minister and Ministers—I hope that I am not being rude to Opposition Members by accusing them of being Ministers—all gave the impression that that was their policy and that that was what they intended to do. When we are discussing an Opposition motion, I am entitled to draw attention to the fact that they had a proposal that would have cost someone on an average income about £600 extra a year.

    In addition, the previous Government could never say how their proposals were to be funded. At one point, over the next 20 to 30 years, the cost was rising to about £7 billion a year.

    Mr. Bernard Jenkin rose—

    Mr. Darling

    I will give way in a moment.

    It was not just we who criticised the Government or got the wrong idea about their policy—if that is what they are now telling us. Many newspapers were critical of it. The Financial Times said: look at the fine print and it is clear that the scheme will involve either higher borrowing or higher taxes for 45 years”. In The Times, Graham Searjeant said: Privatising the basic state pension … will raise the tax burden.

    The Consumers Association pointed out: Young people will be paying for their own pension, to meet their retirement needs, but at the same time they will be paying for their parents pension. My point is that the Conservative Government put forward proposals just before the election which would have hammered pensioners. They cannot stand before us today and pretend somehow to be the pensioners’ friend.

    Mr. Jenkin

    Basic pension plus would have given pensioners a better rate of return on their money than the present basic state pension. Will the right hon. Gentleman bear in mind the fact that we are spending time discussing his Budget proposals on advance corporation tax because the tax raised by that measure makes the windfall profit tax look rather modest by comparison? If we had followed the example that he has set with these proposals, we would have kept basic pension plus a secret until after the election.

    Mr. Darling

    Some of the hon. Gentleman’s hon. Friends may have some sympathy with that point.

    Before I turn to the central point raised by the shadow Chancellor, I want to talk about the pensions industry. Despite the fact that we are rightly critical of the performance of some of these companies in clearing up the misselling of pensions problem, it is sometimes easy to lose sight of the importance of the industry as an employer, a wealth creator and a service provider.

    Mr. Letwin

    Will the right hon. Gentleman give way?

    Mr. Darling

    Not just now.

    It is the purpose of the Government to encourage people to save and invest and to make provision for themselves. We intend to create an economic climate where we have growth and investment that will create the wealth that will enable everyone to enjoy a higher standard of living now and in their retirement. The pensions industry plays an important part in that.

    I want to return to our proposals on corporation tax—[Interruption.] Conservative Members are always complaining that we are being high-handed and are not responding to their questions: now they are complaining because I have been answering their questions.

    I shall start with an important point. The shadow Chancellor said that when Norman Lamont introduced the changes in his Budget in 1993, it was simply a matter of bringing tax rates into line. I notice that the Opposition motion opens by saying: this House condemns the Government’s assault on pension funds through the removal of tax relief on dividend income of pension funds in direct betrayal of their election pledges”. It reminded me that that accusation could more properly be applied to what happened in 1993. The shadow Chancellor told us that it was a matter of bringing tax rates into alignment, but I wonder whether he would refresh his memory and see what Norman Lamont said in his Budget speech. When talking about the reforms, Mr. Lamont said: they are central to the strategy of this Budget, and they raise significant amounts of revenue. He went on to say that it would save the Exchequer

    no less than £1 billion a year.”—[Official Report, 16 March 1993; Vol. 221, c. 185–86.] At that time, the Conservative Government were not proposing to reduce the rates of corporation tax, but were simply taking that money into the Exchequer. We have to rely on the words of the then Chancellor, Norman Lamont, as I do not remember any Minister denying that that was the Government’s intention. Therefore, the shadow Chancellor’s assertion that all that was happening in 1993 was a minor adjustment to ensure that the rates were the same for corporation tax as for other taxes does not stand up.

    Mr. Andrew Tyrie (Chichester)

    Will the right hon. Gentleman give way?

    Mr. Darling

    The hon. Gentleman was not a Minister at the time, but I think he knew something about it. I will give way, as long as he does not accuse me of taking too long.

    Mr. Tyrie

    Does the right hon. Gentleman have the end of the 1993 speech? He will find that the then Chancellor confirmed that the intention was to align all the rates at 20 per cent., that there was no intention to bring the rate to below 20 per cent. and certainly no intention ever to consider abolition.

    Mr. Darling

    The point is that the then Chancellor told the House in clear terms that the purpose of his adjustments in the taxation of dividends was to raise money for the Exchequer—£1 billion of it. [Interruption.] I am just about to come to another passage which Opposition Members might find illuminating.

    Mr. Caplin

    I was not in this place in 1993, but I wonder whether my right hon. Friend can refresh my memory as to whether anyone on the Treasury Front Bench at that time or the now shadow Chancellor criticised the then Chancellor for the tax change.

    Mr. Darling

    I believe that, at the time, there was great criticism among members of the Government, but it involved Europe rather than tax changes. Two of the Opposition Members on the Front Bench will recall that.

    I shall press on in case Opposition Members are in any doubt about what their Government were doing. I know that they were not all on the Committee considering the Finance Bill in 1993, and they may not know what went on. I thought that I would see whether the Government ever threw any more light on why they changed the taxation of dividends. The then Financial Secretary, the right hon. Member for Charnwood (Mr. Dorrell), told the Committee: We needed to raise revenue in a way that did least economic damage … my right hon. Friend decided that to collect extra revenue he would do so from pension funds

    from a group of people with taxable capacity, but who are not taxpayers, in a way that does minimum economic damage, recognising the substantial tax benefits available to pension funds as collective savings vehicles. I wonder whether Opposition Members would like me to read that again. It tends to suggest that what the then Government were about was a raid on pension funds and that they were not proposing any other measures to compensate for that. [Interruption.] I see that the shadow Secretary of State for Social Security wants to intervene but is being held back by the shadow Chancellor, and no wonder.

    Mr. Duncan Smith rose—

    Mr. Darling

    I will let the hon. Gentleman have his moment.

    Mr. Duncan Smith

    In line with his point about the taxation of dividends, I wonder whether the right hon Gentleman can explain what he said on 31 May 1996. He said: Britain lives in a global economy and the minute you even suggested taxing dividends people would go out and invest in other parts of the world. The right hon. Gentleman has just agreed with his Chancellor that he has taxed dividends. How does he explain his volte face?

    Mr. Darling

    If I remember rightly, I believe that I was being asked about the taxation of investment income at a different rate. If the hon. Gentleman will allow me to see the article, I will be able to confirm that I made the remark in that context.

    The argument from Conservative Members that they were simply aligning tax rates does not stand up. If all I could produce in evidence was the quotation from Mr. Norman Lamont, they might have got by, but the quotation from the Financial Secretary in the comparatively quiet waters of the Standing Committee must be borne in mind. I shall repeat it. He said: We needed to raise revenue in a way that did least economic damage. He said that he was raising money from pension funds

    from a group of people with taxable capacity, but who are not taxpayers in a way that does minimum economic damage, recognising the substantial tax benefits available to pension funds as collective savings vehicles”.—[Official Report, Standing Committee A, 15 June 1993: C. 377.] It is worth bearing it in mind—although listening to the right hon. Gentleman, one would not have been aware of it—that pension funds have been paying tax since 1993. Our proposed changes will not alter the fact that pension funds will continue to be free of tax on income in the form of capital gains and ordinary shares, as well as on other sources of investment income. That has a net cost to the Exchequer, but one that we feel is justified.

    It is wrong to suggest that what we are proposing is new. In fact, the Conservative party started the process. It is equally wrong to suggest that pension funds will be left without tax advantages.

    Mr. Campbell-Savours rose—

    Mr. Darling

    I will give way, but I want to make some progress.

    Mr. Campbell-Savours

    Should not my right hon. Friend circulate to all Members a copy of the 1993 quote by Mr. Lamont? Many hon. Members would like to see it, and might wish to use it extensively in their constituencies.

    Mr. Darling

    I am happy to make arrangements to do that, subject, as always, to the public expenditure implications. I might even pay for it myself and send it to the National Association of Pension Funds and Mrs. Robinson.

    I want to explain our proposals. We believe that it is necessary to reform the system of tax credits because it contains a major distortion, under which shareholders are better off if companies pay out profits as dividends than if they retain them for reinvestment. It is right in principle to remove that distortion. The principle that underpins our changes to the corporation tax system is absolutely right. It is for the management of companies and the shareholders to make the decisions, not for the tax system to provide an inbuilt bias.

    In the United States, where a similar system exists, pension funds take decisions on their economic merits. An important point to note is that they are as keen on the capital appreciation that then results as they are on dividends. Greater emphasis on capital growth is important. It will help companies and offer them high, long-term growth. It will ensure that they are not starved of capital by the tax system. Indeed, the importance of capital growth is something on which actuaries and others in this country might want to reflect further.

    I was pleased to note that, after the Budget, the Daily Telegraph—which I do not think is yet converted to the cause of new Labour; it certainly was not during the election, but it may be about to turn—said in its business section: The quality of life in retirement … depends on the growth in the economy, reflected in the prices of shares where the contributor’s money is invested. This is the point of the Brown Budget that the pension funds would do well to grasp. That is absolutely right. I want to emphasise that the reason we have taken this decision is right in principle. I wait to hear whether the Conservative party would repeal it were that party ever to return to power.

    The American experience is worth bearing in mind. The central thrust of the Budget is to create a climate in which the level of investment is raised. It is important to keep our eyes on that fact. Currently, the level of investment is lower than it should be at this stage of the economic cycle.

    I was interested in the speech delivered by Sir David Cooksey a few days ago, when he looked at some emerging US companies in 1975 and compared their position then with their current position. He noted that they had expanded dramatically, which is a common feature of the American economy. He said: It is also notable that very few of those companies pay dividends to their shareholders who prefer to benefit from growth in capital value as the companies reinvest all of their profits in the business. He said that that contained a lesson which we should learn.

    The value of a pension depends, to a large extent, on the value of the fund available when someone retires. Someone retiring at the height of the recession would have done less well than someone retiring now because the value of the stock market has increased; indeed, it has increased quite a bit since we came to power. It is important that those who follow these proceedings bear in mind the fact that, at the end of the day, the value of a pension depends largely on the prospects for the economy.

    I very much hope that when actuaries assess the results of our decisions, they will remember that capital growth is an important matter to take into account. When considering our proposals, they should remember that the well-being of the economy as a whole is the most important feature. Not only have we reduced corporation tax for large and small companies, but we have doubled capital allowances.

    Our goal is a long-term one—to improve this country’s investment performance. For many years, our performance has lagged behind that of our major competitors, and continues to do so despite the current recovery. That may be because, in the past, there was so much concentration on the short term. Investment for the long term and for better growth will greatly benefit companies and, therefore, pension funds, which will gain in the long term. Many of those who have commented on the impact of the corporation tax changes have ignored the long term. Indeed, that is far too common a tendency in Britain. The long term is the central point of the Government’s economic strategy.

    Actuaries, who often value shares largely on the basis of prospective income and take relatively little account of market values, should begin to think long and hard about what they have been doing. They have tended to inflate the effect of the loss of tax credits. Over the past few weeks, there has been much comment in the press about that. Actuaries should change their approach. In the United States, actuaries pay much more regard to market values. That is beginning to happen with some funds in this country, but it is necessary for both pension schemes and actuaries to sit down and take a long, hard look at the real effect of the loss of tax credits and to understand the Government’s strategy in the long term.

    Sir Nicholas Lyell rose—

    Mr. Darling

    I will not give way, because I have been speaking for too long already. We have had four days’ debate on the Budget. We are now having an Opposition day, which is substantially on the Budget. Tomorrow, there will be Second Reading of the Finance Bill, and there are further days of debate in the House next week. No one could say that we are curtailing debate on these matters.

    Mr. Lilley

    This is an Opposition day.

    Mr. Darling

    It is an Opposition day, and I am replying to the right hon. Gentleman’s points.

    The steps that the Government are taking will stand this country and its economy in good stead in the years to come. For the first time in many years, Britain has a Government who are looking to the long term and who will create an environment in which there is growth and investment. That will be good not only for companies and pension funds but for all the people of this country.

  • Alistair Darling – 1997 Statement on the Spending Review

    Alistair Darling – 1997 Statement on the Spending Review

    The statement made by Alistair Darling, the then Chief Secretary to the Treasury, in the House of Commons on 11 June 1997.

    With permission, Madam Speaker, I should like to make a short statement about our approach to public spending in the medium term and to the comprehensive spending review promised in our manifesto.

    We set out our spending plans for this year and next in our manifesto. We made it clear that tough decisions would be needed, but that such an approach was essential. We shall maintain that approach. This statement looks beyond the next two years to the medium term.

    We will deliver prudent and sound management of the public finances to provide a stable platform for investment and growth; and we will ensure that public spending achieves the objectives that we have set ourselves—objectives which are based on our key principles of opportunity, fairness, employment and investment. To achieve that, we must put the public finances into proper shape.

    Since 1990, public sector debt has almost doubled as a proportion of national output. In 1994, we were told there would be a Budget balance in 1998–99; in 1995, we were told it had slipped a year to 1999–2000; and last year, it slipped again to 2000–01. As a result, after five years of growth, we are still borrowing to cover our current spending: the current deficit was about £20 billion last year and the last Budget forecast that we would stay in deficit for the next two years, despite making some questionable assumptions. In order to rebuild public trust in the management of the public finances, my right hon. Friend the Chancellor has asked the National Audit Office to review the forecasting assumptions he set out in the House on 20 May.

    The public have a right to know not only that total spending is affordable and prudent, but that their money is being spent on their priorities, that it is being spent efficiently and that the spending is effective. The Government spend more than £300 billion, equivalent to over £5,000 a year for every man, woman and child in the country. We will reorder that £300 billion to meet our objectives, which were endorsed by the people on 1 May.

    Public spending needs to be clearly focused, and we will achieve that objective. There is no better time for a root-and-branch reappraisal of public spending priorities than at the start of a new Government.

    We showed the way when we were in opposition. We said that we would provide nursery places for all four-year-olds, and we will find the money by scrapping nursery vouchers. We promised to cut waiting lists in the national health service, and we will release the funds by releasing savings from red tape and bureaucracy. We promised to reduce class sizes for five, six, and seven-year-olds, and we will find the money to pay for it by abolishing the assisted places scheme.

    We have already made a start in delivering those promises, within weeks of the election. We will continue this approach in government, stripping out ill-targeted programmes that benefit only the few, and redirecting spending towards the priorities of the many.

    The comprehensive spending review I am announcing today will carry on that process. It will set out clear objectives for all Departments. It will examine how we can achieve our objectives of improving standards in education, modernising the welfare state and getting people into work—in short, delivering our manifesto commitments as efficiently and effectively as we can.

    Every Department will scrutinise its spending plans in detail from a zero base, and ask, how does each item of spending contribute to the Government’s objectives as set out in our manifesto? Why are we spending this money? Do we need to spend it? What is it achieving? How effective is it? How efficiently are we spending it?

    Every objective will be costed and Departments’ effectiveness in achieving them will be scrutinised. We will make sure that we know how much we are spending on each objective, and that we can demonstrate to the public what we have achieved as a result.

    We will consider how best to provide services. What should be provided by the public sector, the private sector, or a combination of both in public and private partnerships? As my right hon. Friend the Prime Minister has said, what counts is what works.

    As well as looking at spending in each Department separately, we will look at issues that cross departmental boundaries. Those cross-departmental reviews will ensure that we are not hidebound by the existing structure of government. The review will be co-ordinated by the ministerial committee on public expenditure, which will look at spending across Departments.

    We will look in particular at Departments’ efficiency in making the best use of their assets. We have asked Departments to draw up an inventory of their assets—something that no Government have ever achieved before. We need to know what the Government own, and whether they need those assets. If not, we shall reallocate the proceeds where they are needed most.

    The review will be thorough and far reaching. All Departments and all Ministers will be involved. It will take 12 months to complete and its conclusions will inform a new set of public spending plans for the rest of this Parliament—a set that reflects our priorities and meets the country’s needs beyond that. It will take the long-term view.

    The review process is already under way. Terms of reference for the departmental reviews will be published shortly. The Government have already shown their determination to achieve their objectives. The comprehensive spending review will provide us with a clear sense of direction and the long-term view that every Government need. We will ensure that the Government spend public money wisely and fairly, so that public spending matches the people’s priorities.

  • Owen Paterson – 1997 Comments about the European Union

    Owen Paterson – 1997 Comments about the European Union

    The comments made by Owen Paterson, the Conservative MP for North Shropshire, in the House of Commons on 12 November 1997.

    I shall be brief. During my business career, I have travelled widely throughout Europe. I should declare an interest in that I am president of the European Tanning Confederation, I speak a couple of European languages, and I struggle by in English.

    I draw the attention of smug, complacent Labour Members to the people of Europe. I have been in the Chamber for most of the evening and I have been astonished by the debate’s lack of touch with the real businesses and the real people who are trying to make a living in a sclerotic Europe, struggling under burdens such as the social chapter and over-regulation.

    My hon. Friend the Member for Arundel and South Downs (Mr. Flight) spoke eloquently about the social chapter. I point out that Professor Patrick Minford of Liverpool university has calculated that the social chapter and other burdens could reduce gross domestic product by 20 per cent. They had such a devastating impact on the unemployment figures that the computer could not handle them.

    I remind hon. Members that, the last time the people of Britain were consulted, they voted to join a free trade area. They believed that they were joining a club of independent sovereign states that would work together in the interests of free trade. We are here for only a short time: power and sovereignty should rest with the people. Smug Labour Members should reflect upon who has sent them here and to whom they are handing powers.

    Qualified majority voting is increasing in 16 areas. The gentleman from Amsterdam, the hon. Member for Finchley and Golders Green (Dr. Vis), attended today’s hearing of European Standing Committee A, at which hon. Members considered landfill. He saw how qualified majority voting will clobber many British businesses whose waste goes to landfill. Incineration—which is proposed by the directive—is not suitable for this country.

    Dr. Vis

    I must admit that Amsterdam is not my constituency. I represent the constituency of Finchley and Golders Green.

    Mr. Paterson

    I apologise, but that was the only geographical reference that the hon. Gentleman gave.

    In the dying two minutes, I draw Labour Members’ attention to the people of Europe. It is horrendous to see powers being taken from them and given to institutions. The people of Europe cannot vote for the removal of those who decide matters that govern their lives. I was in France last year during the by-election at Gardanne, the run-off for which was contested by the Communist party and the National Front.

    Mr. MacShane

    Who did the hon. Gentleman support?

    Mr. Paterson

    I am sorry, but I am making a desperately serious point.

    The vote is going increasingly to undemocratic parties that support the sovereignty of nations. The Vlaams Blok is a deeply unpleasant group that has taken 25 per cent. of the vote in Antwerp. Herr Haider in Austria is also attracting a substantial vote. I believe—as does everyone on the Opposition Benches—in a club of independent states going further into eastern Europe. We should be bringing in the newly free countries. The Amsterdam treaty does nothing for that; it increases the power of an unelected European elite and does down the people of Europe. The consequences will be serious.