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Column 164The Minister will be aware that the European Community has instructed Her Majesty's Government to reduce the size of the British fishing fleet by about 25 per cent. What recent discussions have taken place between his officials and those of other Government Departments on the introduction of a decommissioning scheme, which would reduce the fleet in a humane-- [Interruption.] --and fair-minded way?
Mr. Lamont : We have not taken any new initiatives or made any announcements on a decommissioning scheme, although there have been discussions on the subject. I shall ask my hon. Friend the Financial Secretary to see whether, when he replies to the debate, he can give any further details.
I was saying that the first room for extra expenditure has been created by the reduction of debt interest. The second saving that we have achieved has occurred as a result of the dramatic turnround in the nationalised industries. As a result of improvement there and of privatisation, we are saving about £5 billion each year, a sum approaching the cost of the whole of the wage bill for nurses in England this year.
The third point is that the strength of the economy in recent years has produced substantial savings as the number of unemployed has fallen and the cost of unemployment likewise. Those savings on debt interest, the nationalised industries and on benefits to the unemployed add up to a substantial amount. Those savings have enabled us to pull off the trick-- which puzzles the hon. Member for Newham, North-West (Mr. Banks)--of keeping overall spending tight but at the same time giving large increases to programmes such as health, transport and education.
The expenditure plans in the 1990 public expenditure White Paper are firmly in the same tradition of overall control, with substantial increases in the most important areas. Resources for health in this year's White Paper will be nearly £3 billion higher next year than this. By 1992-93, spending on national roads will be twice as high as last year. Spending by central Government and public corporations on fixed investment is to rise by £2 billion between this year and next.
There are a number of smaller but important increases, including over the next two years about £250 million to relieve homelessness, and an extra £75 million for the arts, which, pace Sir Roy Strong's remarks at the weekend, received a wide welcome.
Mr. John Battle (Leeds, West) : Does the Minister agree that one of the most important areas should have been housing, remembering that the Conservatives have reduced the housing budget by £7 billion in the past 10 years--a cut of 67 per cent.? Does he regard that as a wise way to reduce homelessness in Britain?
Mr. Lamont : I do not believe, as the hon. Gentleman believes, that the answer to dealing with homelessness lies in building more council houses. The solution lies in other areas, including the revival of the private rented sector ; and the absence of available accommodation in the south-east has added greatly to the housing problem.
Column 165There is a tight outcome to this year's spending negotiations. The additions, substantial though they are, have been made only because they can be afforded within the overall strategy for public spending.
As has been noted, we have not automatically compensated Departments for inflation. Indeed, if a cash planning system is to be effective, it cannot be based on accommodating inflation. As a result of that tough approach, we have been able to keep the ratios of public spending to national income for 1990-91 and 1991-92 at exactly the same levels as in the previous plans--39 and 38.75 per cent. respectively. The downward trend of the ratio of public expenditure to GDP is continuing and is set to continue.
Many of the increases in this year's White Paper are in areas that should be welcomed by the Opposition. They are in some of the areas that they have highlighted. The right hon. and learned Member for Monklands, East (Mr. Smith), now that Socialism has been ditched everywhere in the world, wants to persuade us that Socialism--though he is careful never to use that word- -consists only of more miles of motorway and more students at polytechnics. That is breathtakingly daring in its boldness of vision and in its radicalism.
This year the right hon. and learned Gentleman is getting plenty of miles of motorway and more students at polytechnics. We shall spend next year £1 billion more on national roads, a 50 per cent. increase in real terms. Investment by British Rail and London Transport will be £700 million higher, an increase in real terms of nearly 60 per cent. In the next three years, British Rail and London Transport will be investing about £6 billion.
There are a large number of important schemes now in the pipeline. One could mention many of them and read from a long list. But whatever else this is, it is not the neglect of infrastructure. For anyone with eyes to see, who observes the cranes at work in our cities and machines at work on our roads, it is clear that what is going on is an extensive modernisation of our infrastructure. That modernisation could not have been afforded by the Labour party. Indeed, it would not have been necessary had Labour been in power, because the demands for better transport facilities, better roads and so on are a product of the growth and expansion of the economy in recent years.
That investment in transport is part of a huge programme of investment across the public sector. Overall, investment by central Government and public corporations in creating new capital assets for the nation will be about £2 billion higher next year than this, an increase of 7.5 per cent. in real terms.
Ms. Diane Abbott (Hackney, North and Stoke Newington) : The Minister is right. In Hackney in my constituency, in the south of the borough where it borders on the City, we can see cranes and development work. The problem is that that building work is in the private sector, because the Government are not releasing resources for the public sector to invest in the Underground, house building and the building of hospitals.
Column 166GDP. We do not want, as the hon. Lady seems to, public investment crowding out private investment. Private and public investment are both needed.
Within the overall settlement, and taking into account the additional funding announced for the review body pay awards, there is also another huge increase of nearly £3 billion, or over 6 per cent. in real terms, in spending on the National Health Service. It will allow continuing improvements in health care and higher capital spending. We already have under way the largest ever programme of hospital building. In England, 500 major schemes, each costing over £1 million, are in various stages of design and construction. The new plans mean that gross capital spending in the Health Service in England next year will be no less than 55 per cent. higher in real terms than in 1978-79.
Dame Elaine Kellett-Bowman (Lancaster) : May I thank my right hon. Friend for the fact that one of those schemes is phase 3 of the hospital building programme in Lancaster, for which we begged the Labour party in vain? We are delighted that it is going ahead.
Mr. Lamont : In the debate on the Autumn Statement--indeed, it was also reflected in one of the comments made from a sedentary position and no doubt not recorded in Hansard --various Opposition Members tried to minimise the scale of the increases. They tried to talk them all away because of demography, increases in the price of drugs and increases in the cost of medical equipment. No matter how much we spend, whether it is £500 million or £2 billion, as they were urging us to spend, they make out that every sum is in reality a cut. The position is different ; today we are spending about 45 per cent. more in real terms on the Health Service than we did a decade ago. Several Hon. Members rose--
The White Paper plans also include substantial extra provision for the science budget, something dear to the heart of the right hon. and learned Member for Monklands, East. The increase comes on top of the increases announced after the 1988 survey. After a 15 per cent. increase between 1988 -89 and 1989-90, a further 8 per cent. growth is provided for next year. As a result, the science budget will be 25 per cent. larger in real terms than it was a decade ago.
Investment in research compares well with that of our competitors. As a percentage of GDP, Government support for research and development is as high as in West Germany and higher than in Italy and Japan ; and the Government's support for civil research and development surpasses that provided by the Government of the United States of America, again as a proportion of GDP.
The White Paper again contains further additional resources for education. Provision for spending on education and science by central Government will rise from £5.75 billion in 1989-90 to £6.59 billion in 1990-91, a cash increase of 14 per cent., or over 9 per cent in real terms. In addition, local authority spending on schools in England will benefit from education standard spending of £15 billion in 1990-91, which will be 9.5 per cent. more than the comparable figure for the previous year.
Column 167With those considerable extra resources, which mirror what happened in previous years, it is no surprise that record numbers of students are choosing to stay on and study beyond the age of 16, something that Opposition Members urge on us but seem to be unaware is happening already. In 1980-81, 29 per cent. of 16 to 18-year-olds chose to stay at school or colleges of further education ; in 1987-88 nearly 35 per cent. did so.
There is also in this year's plan a large increase for higher education, to provide for 27,000 more students than forecast in the previous plans. During the period since 1979 we have made substantial progress in making higher education available to increasing numbers and also to an increasing proportion of the age group that wants it. By the end of the previous Labour Government, 12.3 per cent. of young people benefited from full-time higher education. This year the figure is 16 per cent. and it is projected to rise to 19 per cent. by 1992-93.
Those increases are substantial by any standards, but I do not seek to disguise the fact that there are some areas where we have felt it proper to make cuts because, if one is to control overall spending, one must find the resources for the priority areas. We have cut the budget of the Department of Trade and Industry. We recognise that investment is important, but the offer of increasing subsidies does not lead to worthwhile, high quality investment. We do not seek to encourage the right attitude in companies by bribing or bullying them to do the things that they should be doing in their own interest. Companies do those things if they are allowed to build up profits to finance investment. That is what we have done. Since 1981, profitability has increased by 300 per cent., a staggering increase about which we do not hear much from the Labour party. That is why we have had an investment boom and why it is right to make cuts. Mr. Robert Sheldon (Ashton-under-Lyne) rose--
Mr. Sheldon : In detailing the cuts, the right hon. Gentleman did not mention cuts in maintenance, which cause so much decay and dilapidation. The road maintenance programme has been bitten into. In the hospital programme, £1.8 billion of maintenance has not been undertaken. There may be new schemes, but the maintenance of our estate and our national heritage is in danger.
Mr. Lamont : There is substantially increased provision for maintenance of the fabric of buildings in some of the plans, particularly for higher education and hospitals. Local authorities also have some responsibility for road maintenance.
We have made reductions in the programme for training. Those reductions follow very much the reduction in unemployment. Our training programme has been geared towards the unemployed. As unemployment has fallen dramatically and substantially, it is right to make adjustments in training, given that there are fewer young people coming on to the labour market.
Opposition Members seem to think that nothing is happening in training unless money is spent by the public sector. There is tremendous investment in training by the private sector. Employers are spending about £20 billion a year on training. By any standards, that is a substantial
Column 168investment. Indeed, the latest figures published by the Eurostat labour costs survey show that the share of labour costs spent on training is broadly the same here as in Germany.
Opposition Members love to paint a picture of this country with an ill- educated, ill-equipped, untrained labour force. If that were the position, we should not attract the largest proportion of any European country of Japanese and American investment. Opposition Members may think that our work force are the ill-educated serfs of Europe, but that is not the view of Toyota, Honda or Fujitsu when they invest here. They know that we have a skilled labour force able to handle the most sophisticated processes.
Mr. Denzil Davies (Llanelli) : If everything is going so well, why do we have the highest inflation rate in western Europe and the worst balance of payments deficit? Can the right hon. Gentleman answer that?
Mr. Lamont : We do not have the highest rate of inflation in western Europe. I am happy to debate the economy on any occasion and we have had many debates on that, but we are now trying to debate the public expenditure White Paper.
One important aspect of presentation in the format of the White Paper, on which my right hon. Friend the Member for Worthing, who, as I said, is the Chairman of the Select Committee on Treasury and Civil Service, and the Committee commented, is the new definition of planning total. The new definition distinguishes more clearly between central and local responsibilities. It includes central Government's support for local authorities ; it excludes what local authorities spend from their own resources. That is a change that brings us into line with practice in many other countries. It is a change that the Select Committee welcomed shortly after we first announced our proposals in summer 1988. Above all, it is a change that recognises the way in which decisions are taken in the real world. It was a point on which we commented in our reply to the Select Committee. There is much material in the White Paper about efficiency measures and measures to increase value for money. Value for money is neither a gimmick nor, as the Opposition allege, a euphemism for cuts in spending. It simply means getting the best possible value for the taxpayers' money put into a service. Unlike the Labour party, we are serious about efficiency and we are getting results from a series of initiatives over the past 10 years.
Dr. Godman rose--
Mr. Lamont : Those savings and value-for-money improvements are either being ploughed back into the same service or redeployed to other initiatives. Taken together, the figures are substantial. The figures are for the National Health Service cost improvement scheme, the departmental efficiency scrutinies, better Government purchasing, market testing and contracting out and local authority efficiency savings. Together, they add up to £2 billion each year and they are the result of measures that we have introduced, the vast majority of which were opposed bitterly by the Labour party and which would not be available for the Labour party should it ever assume responsibility.
The Labour party likes to portray the Government's attitude as, "public spending bad, private spending good."
Column 169That is not our attitude, but we believe that public spending should be limited to what is affordable. All public services, such as health, education and transport, are ultimately dependent on the strength and growth of the economy. We all know what happened to public spending when the Labour party was in office. Public spending was on the big dipper. We had zooming, unaffordable increases up to the sky followed by crashing cuts. But what would have happened if the Labour party's policies had continued throughout the 1980s? What would be the state and size of the resources put into the Health Service if the Labour party had remained in office throughout the 1980s?
Let us suppose that Labour's straitjacket of high taxation and high spending had been kept in place for the past 10 years and that Britain had remained bottom of the European growth league, just as we were when the Labour party was in office. What would have happened? The economy would have been a good deal smaller than it is today. If Labour spent the same share of that smaller economy as it did in 1979, it would probably be spending about £3 billion less today on the NHS. What would that mean for the Health Service? It would mean that we should probably be spending about 12 per cent. less than we are now. Twelve per cent. fewer nurses would mean 60,000 fewer nurses. Twelve per cent. fewer doctors would mean 10,000 fewer doctors. Twelve per cent. fewer in-patient treatments is almost 100,000 fewer patients being treated. That is the reality and that is what would be likely to happen if we followed Labour's policies of uncontrolled spending and high taxation. Labour's irresponsible attitude would ultimately have been self-defeating and would have resulted in less provision over the medium term.
In the Autumn Statement debate, I said that we welcomed the appointment of the hon. Member for Derby, South (Mrs. Beckett) and we are certainly looking forward to her first House of Commons speech devoted exclusively to public spending. We were looking to her for some answers-- [Interruption.] --to the questions that the hon. Member for Dunfermline, East (Mr. Brown), when he was shadow Chief Secretary, refused to answer. It is not only the Labour party's policy towards local government finance, but its attitude to central Government finance, which is a mystery wrapped in enigma. I was a little disappointed when I read that the hon. Member for Derby, South had been appointed not to cost Labour's programme, but to stop members of the shadow Cabinet saying anything. She may find that difficult with the hon. Member for Dagenham (Mr. Gould).
The hon. Lady went on Sky television shortly after she was appointed and told us that the Labour party would not increase taxation. That might be believable if she were about to welcome the increases in the White Paper as reasonable, affordable and generous, but we know that she will not. We know that she will describe them as inadequate and mean. How is it that the hon. Lady is unable to answer the two basic questions : how much will the Labour party's programme cost, and what will be the consequential increase in taxes? If the hon. Lady will not tell us that, perhaps she will give us the answer to a far more modest question : when will the costing of the
Column 170programme be made available to the public? I am not very optimistic about receiving an answer to that limited question.
The Leader of the Opposition appeared on "The World at One" on 4 October and told us that the costing of Labour's programme might have to wait. The audience waited. Would he say six weeks, six months or nine months? He then told us that it might have to wait until after the election. Is that the responsibility and accountability that Labour Members assume? It is not an attitude that they would accept from anyone else and Labour cannot go on indefinitely dodging the question because the British public demand to know. We have spelt out our spending priorities for the British people, which are based on the same principles as those which have brought a record improvement in living standards for the British people in the past decade. They are combined with affordable and realistic improvements in vital public services, and I commend them as such to the House.
Mrs. Margaret Beckett (Derby, South) : I beg to move, to leave out from "House" to the end of the Question and to add instead thereof : regrets the Government's continued failure to recognise the threat to long term prosperity of inadequate levels of investment in manufacturing, in training and in infrastructure ; deplores its refusal to play its own part in the manner of the governments of this country's major competitors in promotion of these objectives ; and recognises that this refusal further jeopardises the United Kingdom's future in the Single European Market.'
This is the first public expenditure White Paper in the 1990s. It reflects the Government's judgment of the contribution that public spending should make to the nation's needs not only in this year of grace 1990 but, at least in outline, in the two succeeding years. Frankly, it is terrifying in its complacency--at least if it is viewed without the blue filter. After a decade of Tory rule and a decade of unprecedented wealth flowing from the North sea--£87 billion accruing to the nation's coffers under this Government, which was not available to any of their predecessors--we enter the 1990s with an equally unprecedented balance of payments deficit of potentially catastrophic proportions, with inflation higher by any measure than that faced by all our major competitors, with interest rates higher than those of our major competitors and with the most decrepit public services and the most run-down infrastructure of all our major competitors.
Although the Government no longer talk quite so much about an economic miracle, they still call this "success". The position in which we find ourselves would be alarming at any time. To find ourselves so placed two years away from the completion of the European single market is even more frightening. To find in all the circumstances that the Government have learnt nothing from the missed opportunities of the past 10 years is terrifying. We could not catch up with those whose Governments have prudently invested in their future if we started now to follow their example, but we are not starting now. According to the policies revealed by the White Paper, we are not starting at all. It is still, "Steady as she sinks". I shall address three main points in the debate. First, I shall examine the Government's stewardship of the nation's assets. Their record is one of the pieces of evidence that enables us to judge their future commitments. I shall then look at those commitments, as revealed in the White
Column 171Paper. Thirdly, I shall consider whether what the White Paper reveals shows that we are squaring up to the challenges of 1992 and beyond.
I listened with keen interest to the brave and cogent speech of the Chief Secretary to the Treasury setting out as best he could how great everything has been, is and will be in future. The trouble is that it is the speech that we heard from that Bench last year, the year before and the year before that. The scene and the cast change, but the scriptwriter goes on and on.
To be completely fair, the script shows some textual amendments that are of key interest and significance to scholars. It seems only yesterday--and it was not all that long ago--that the then Chief Secretary, now gloriously translated to the Chancellorship, was telling us that firm control of public expenditure in itself brings interest rates down. We have all noticed that, haven't we? That was before interest rates rose to their present giddy heights. There are no longer the same mystic incantations that were once a feature of all economic debates, calling on the gods of monetary policy to bless their faithful disciples. We no longer hear the reading of the runes and the targets for M3. Whatever happened to M3? Nor do we hear respectful references to M4--rising at 18 per cent. when last sighted. Even good old MO--the only one that the Government still target-- is still outside its target limits.
As if to make up for those failings, what remains of the text is chanted with ever-increasing fervour--one might almost say desperation. The Chief Secretary tells us that the Government have been wise stewards of our economy. He says that public spending has been reduced as a proportion of our income, which he claims is a desirable thing in all circumstances. He tells us that due to the Government's firmness in cutting out waste and their determination to obtain value for our money it has still been possible to meet the nation's real spending needs. Bunkum! It is bunkum on a truly grandiose scale. Whatever else the Government may lack, they possess gall and bravado in astonishing proportions.
Let us take the question of waste and value for money. During the Government's tenure of office, amazingly for a Government who rejoice in the title of Conservative, they have mounted a vast sale of the nation's assets, which was well described by the late Lord Stockton as selling the family silver. I suspect that his Lordship did not contemplate even then the extent to which the proceeds--as with the windfall revenues from the North sea--would simply be blown away on buying victory at three successive general elections.
Whatever the merits or otherwise of what was a dogmatic decision to sell, the conduct, timing and manner of the sales owed everything to the Government's political convenience and nothing to the efficient management of assets or to obtaining value for what the Prime Minister likes to call our money.
The history of privatisation abounds with cases where the Government spent our money on advice about the mechanics of the sale which they then ignored. The inevitable result was overall losses to the taxpayer on a heroic scale. They include losses from debt write-offs, special offers to make sales more attractive, advertising and marketing costs and low asset valuations. Estimates of debt write-offs alone suggest a loss to the taxpayer of about £16 billion. That money was spent on fattening industries for privatisation. In the cases of gas, electricity and water, the losses were not just to the taxpayer but
Column 172disproportionately to those who are too poor to pay tax. In those industries everyone had to pay increased prices jacked up by the Government to make the industries even more attractive to buy. The loss to the taxpayer from artificially low sale prices and badly timed or imprudent marketing decisions is estimated by Price Waterhouse at a further £31 billion. The costs of advertising and underwriters' fees come in at a mere £1,400 million. That is a grand total of net and irretrievable losses to the taxpayer of our money of approaching £50 billion.
I have a better analogy for that rip-off than that of selling the family silver. It is as if a great house had been put into the custody of the nation. When, after a period of years, the trustees return, they find that the appointed stewards have sold off all the contents cheap on the spurious ground that it was a lot of trouble to look after them. The man who got the removal fees and the new owners are all delighted with their bargains, but that does not alter the fact that the original owners have been rooked by those trusted and paid to look after their interests. Nor have the proceeds been reinvested. The former stewards do not care if the roof falls in. They have stashed their cut. If they are sacked, they will be off to pastures new and possibly even more lucrative.
I recognise that the Prime Minister's line is that we have had a jolly good deal. We paid mugs to relieve us of a burden and what a good thing it was too. What exactly is the right hon. Lady saying? Is she saying that all those purchasers have been conned and that they bought a pig in a poke? When it comes to taking people to the cleaners, my money is on that simple soul Professor Smith any day, rather than any Minister in this Government.
Of course, it ain't so. Those in a position to buy are now sharing in British Telecom profits of nearly £700 million this year. Presumably, next year or whenever it comes to light, the shareholders in the electricity industry will benefit from the £1 billion or so profit that that industry paid to the Treasury this year. With every day that passes, more examples of the Government's poor stewardship come to light. Recently, just one of Sealink's ferries was resold for more than the total price that the taxpayer received for the whole enterprise.
Those are not the only examples of waste and misappropriation. Spending on Government advertising has increased by about £50 million in the last five years. Government advertising included such notable examples as the media launch of the National Health Service White Paper. What a waste of our money that was. It also included adverts for the Government's employment training scheme. Particularly close to the 1987 general election --a mere coincidence of course--it was concentrated not in the parts of the country or sections of the media where the unemployed were most likely to see them but those where they might convince a doubting electorate that the Government were trying to do something about unemployment.
The Government spent £1 million of our money on unsuccessfully prosecuting the "Spycatcher" case. While the armed forces were condemned by the Public Accounts Committee for letting their stock of public housing fall into disrepair, the Prime Minister spent £1.2 million on doing up No. 10--although she will not tell us what she
Column 173spent it on any more than she will tell us what it cost to put gates on Downing street. So much for the record and stewardship of the Tory party.
Mrs. Beckett : The hon. Gentleman cannot have been listening. My point was the incompetence of the way in which the Government have marketed privatisation and the enormous losses to the taxpayer that have accrued. That point is not affected by the fact that people are coming here to consult. As my hon. Friends said, it is more than likely that they are coming to find out how not to do it. That brings me to my second point. The Government's argument--and the Chief Secretary reiterated it again today-- is that they have been able to spend not just sufficiently but generously on our public services.
Mr. Barry Porter (Wirral, South) : The hon. Lady referred to Professor Roland Smith. I assume that she was referring to British Aerospace and Rover. She implied that Professor Smith had bought Rover for a knockdown price. To whom else would Rover have been sold and for what price would a Labour Government, if they ever came to power, have sold it?
Mrs. Beckett : I imagine that if British Aerospace had not been offered the deal that it apparently was offered by the Government--I do not wish to prejudge any consideration--one of the other people who were competing to buy it might have done so. There were several alternative buyers, of which, as I recall, Ford was one. Toyota was another.
Mrs. Beckett : The hon. Gentleman says that there were not alternative offers, but Ford and Toyota say that there were. Frankly, I prefer to rely on their knowledge of their bids rather than that of the hon. Gentleman.
Mr. Graham Allen (Nottingham, North) : As sedentary interventions are often not put on the record, it is worth pointing out that Professor Smith has not yet parted with a single penny for the Rover deal. I understand that he will not pay anything until 31 March. That may assist the hon. Member for Wirral, South (Mr. Porter) in his financial analysis.
Mrs. Beckett : I shall go on to the second point that I want to raise. As I have said, the Government have argued that they have been able to spend generously on our public services, whether they are local authority-provided or within the National Health Service. That squares ill with the White Paper's indication of support for local authority spending, which is predicted to remain at an effective standstill. Where does that leave the needs of the nation's school children? Where does it leave all the grand statements about community care? It leaves them with the
Column 174last part of the Chief Secretary's speech-- in the realm of myth and fantasy with, no doubt the Government hope, local authorities of all political shades carrying the can.
The National Health Service is the area of the greatest Government boasts--
Mr. Ian Taylor (Esher) : I congratulate the hon. Lady on her debut as an Opposition Front-Bench Treasury spokesman. She is reading extremely well so far. At some point would she care to comment on the Labour party's expenditure plans, how much they will cost, and how they will be financed? Is The Independent's assessment that Labour's tax proposals will cost anyone earning between £18,000 and £30,000 another £4,000 per year correct? Is that how the Labour party intends to finance its plans?
Mrs. Beckett : I did not hear all the hon. Gentleman's remarks, but I intend to say something later about our own approach to public spending. The article to which he referred-- [Interruption.] I thank the hon. Gentleman, but I shall say this in my own way. The article to which he referred was extremely inaccurate and unworthy of comment. It was so far- fetched and so wrong that it is not worth my taking up all its details.
As the Minister repeated again today, the National Health Service has received what he described as £2,600 million "extra"--presumably on the grounds that if he keeps repeating the figure, those who say that the Government do not care will be confounded. However, anyone who looks at the figures will at least raise an eyebrow. We believe that the residual sums left for patient care may amount to only £500 million, because, although the Chief Secretary does not like it, we first have to take out the figures for inflation, and then the extra figure for inflation in the National Health Service. That is not new money, although the Government seem to imply that it is.
Then I deduct the "creative accounting" sum of £150 million or so for cost improvements, because that is not money at all. It is a wholly imaginary figure. It is unrelated to any factual information and represents what the Government have decided that health authorities could save this year by cutting out waste and inefficiency. It is not based on any survey, assessment or information. To my knowledge, the health authorities have been telling the Government for several years that they have reached the end of any such savings that they could ever have made without cutting patient care, unspecified and unplanned as those savings always were. However, although the figure is a complete fiction and is money that the health authorities never see, it still appears because it bumps up the spending total.
We then have the figure of about £300 million for implementing the Health Service White Paper. That is the money to provide for hospitals to opt-out and to introduce, at a wholly unrealistic speed, thousands of accountants, computers and billing procedures into our Health Service. Before anyone asks, I make it perfectly clear that we are not against proper, efficient accounting because there may well be an argument for saying that there was room for improvement in the record-keeping and cost- management in the Health Service. If I were asked whether I would bring in more doctors and nurses, more therapists and radiographers, more ambulance staff, or more accountants, I fear that, at least temporarily, my vote would go against the accountants.
Column 175I wonder how many people have looked at the scale and scope of the accountancy procedures that the Government have envisaged over time and for which those substantial sums are being provided. I refer, for example, to the listing of capital assets down to the last iron or electric kettle and to the details about how, when assessing depreciation, the lifts must be on a different time scale from the buildings themselves. That may be prudent, but is it really what we should be spending our money on?
Mr. James Arbuthnot (Wanstead and Woodford) rose
Mrs. Beckett : If I may, I shall continue for a little longer. I refer also to the procedures that are needed to cost and bill what the document calls "every episode" of patient care. The document explains that in the long term the Government want to be able to list, cost and to send out a bill for all patient care episodes, not only for in-patient admissions, but for out-patient visits and ultimately for community care. Every district nurse visit, every home help, and every out-patient clinic will be listed and billed. Although that is the long-term perspective of the White Paper on the Health Service reforms, it is the perspective and it will be very expensive.
Mr. Arbuthnot : In view of the things that the hon. Lady is suggesting that we should look at, has she herself looked at the sheer numbers of new doctors, dentists and nurses that we have brought into the National Health Service?
Mr. Arbuthnot indicated dissent.
Mrs. Beckett : It is no good the hon. Gentleman shaking his head because, as he is well aware, that money is not being spent on doctors and nurses or on any of the other staff who work in the Health Service ; it is being spent on accounting procedures which seem to be so detailed that they cannot possibly be needed for anything other than a privatised Health Service.
The final insult is the £40 million that is allocated to help to subsidise the Prime Minister's private health insurance. It is more than has been given for the special waiting list initiative for the whole National Health Service. My hon. Friend the Member for Livingston (Mr. Cook) has calculated that the outturn of the expenditure could be far higher if we examine the actual costs of private health care. Experience suggests that his warnings are justified. The Chancellor, at least, will remember--because he shared the responsibility for putting it on the statute book--the 2 per cent. bribe that was paid from the national insurance fund to persuade people to gamble their retirement income on personal pension plans. He may even remember that the then Secretary of State for Health and Social Security, his right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler), costed the expenditure at a mere £60 million. In the first year of payment, covering a period of almost two years, £900 million or so was paid in place of the predicted £60 million. This year and for the next couple of years, unless the law is changed--
The Chancellor of the Exchequer (Mr. John Major) indicated dissent.
Mrs. Beckett : It is no good the Chancellor shaking his head--this material is from parliamentary answers. Unless the law is changed, about £500 million per year will be paid this year and for the next couple of years for the same purpose. What was that about prudent fiscal management and about avoiding extravagant and uncosted promises? Frankly, £60 million is too much for that purpose. If the scheme is to people's financial advantage, why should the state waste money giving them more? If it is not to their financial advantage, how dare the state use our money to persuade people to act against their own long-term interests?
What can we learn from the White Paper about this country's investment needs? I believe that it is now widely acknowledged--even to some degree inside the Government--that our training and education are woefully inadequate, compared with our competitors. The Chief Secretary was strong on that, saying that it was all nonsense, so it is a pity that that was exactly what his right hon. and learned Friend the Secretary of State for Employment said a few days ago. Central Government spending on education is to be cut between this coming year, 1990-91, and 1992-93 by £85 million in real terms, while spending on city technology colleges-- individual prestige schools in certain areas--will reach £135 million over the same period. Despite the present fall in pupil numbers, the all- important pupil-teacher ratio has not fallen in the past three years and even the Government admit to a teacher shortage of 3,600, affecting the education of about 60,000 children. However, the teacher unions believe that the shortfall is more like 8,000 and that the education of 250,000 children is at risk. It is true that the Government have found some money for education, although the Chief Secretary did not refer to it. They are to spend £500 million more for student loans than the cost of uprating the existing grants would require.
Spending on training programmes this year is £190 million less than the Government originally planned and, by 1992, will have fallen even further. When pressed to explain that, the Government talk vaguely about the falling number of unemployed people. The Chief Secretary did it again today.
The White Paper shows that spending per head on youth training, employment training for the adult long-term unemployed, and training for the disabled and for those in work--in many ways the most neglected group of all--will fall. All that is happening at a time when the bottlenecks and inflationary pressures of skill shortages are once more evident. The Government are washing their hands of the country's training needs.
Research and development are part of the key to our future. Government spending on civil R and D has been cut in real terms by 2 per cent. since 1984-85, when we were already behind the spending of our competitors. It appears from the figures in the White Paper that spending is set to fall another 8 per cent. between 1992 and 1993. I listened with great interest to what the Chief Secretary said about that, and I shall look again at his justification for his figures. That does not alter the fact that there are fewer research studentships now than in 1986 and spending on the science budget is set to fall in real terms from next year onwards.
Support for industry has been cut once again, by 2.5 per cent. in real terms by 1992-93. Support for the regions is also being slashed by £75 million in cash terms over the
Column 177same period. By 1992-93, the year of the single market, for which our colleagues and competitors in Europe are pulling out all the stops, assistance to the regions and general industrial support will have fallen by 37 per cent. from the not overgenerous levels of last year. To complete the picture of a Government displaying total indifference to the welfare of its wealth-creating sector, spending on export promotion services will be frozen for the next three years--a fall in real terms of 16 per cent.--while the Export Credits Guarantee Department budget is to be slashed by £100 million next year.
Most hon. Members are now familiar with the anxieties expressed by, among others, the Confederation of British Industry about the costs and inefficiency caused by our neglected transport system. My right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) described that precisely. The White Paper shows that every class of road in Britain is in a worse state of repair than it was 10 years ago. The helpful little diagram from last year's White Paper with its categories of "better" above the line and "worse" below the line, which my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) used to such effect in last year's debate has--surprise, surprise--disappeared. [Laughter.] I thought that the civil servant who had drafted the White Paper had gone down the oubliette, but we shall see.
The lack of maintenance identified ties in, if not with the diagram, with the day-to-day experience of people who are, increasingly, bouncing from pothole to pothole as they drive along the nation's roads. That is apart from in the south-east where, for much of the time, there is no bouncing because the traffic is not moving at all. Only a Government who have taken complete leave of their senses would, in those circumstances, decide to abolish the subsidy to Network SouthEast. It has been said before, but bears saying again, that if there is one part of the country where the last thing people need is a financial incentive to travel by road, it is the south-east. I can see only one possible explanation for such utter stupidity. The Government were forced, by the weight of public opinion, to say that they would meet the bill for the safety improvements recommended following the tragedy at Clapham. I do not doubt that they will. The savings from cutting the subsidy will be returned to meet the safety bill. That will give the Government lots of kudos at no extra cost. Public funds for British Rail are being cut again, so that the much-vaunted and more than welcome investment plans will be paid for by higher fares, land sales and British Rail borrowing. That is a neat financial trick, but a short- sighted policy.
This careful study of the White Paper reveals where, and in what context, the Government are cutting or reining back on their previous plans and commitments. Of greater importance than all those details, revealing though they are, is the question : why? Why do the Government ignore the pleas for greater investment in training, education, research and development and transport? Why do their plans show that they will still cut where they can conceal it, and give false reasons for those cuts? They did so with training, claiming that the cut was due to the fall