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Ms Eagle: They will never do it.
Mr. Hughes: I agree. The hon. Lady makes a point that I was just about to argue, based on a case that I know full well from my constituency.
In the 1980s, the then Secretary of State for Education and Science established the city technology colleges programme. It was boldly proclaimed that 80 per cent. of the money would come from the private sector, and 20 per cent. from the public sector. There were to be hundreds of CTCs. But the programme ran into the ground after about 20 had been established. The figures are clear, including for my constituency. Eighty per cent. of the money came
from the public sector and 20 per cent. from the private sector, because it did not think that was the best way to spend its money.
Ms Eagle:
Is the hon. Gentleman aware that the Confederation of British Industry is on record as being extremely sceptical that the Government's optimistic forecasts have even a remote chance of being met?
Mr. Hughes:
That is completely correct.
The most objective test of all is in the Library research paper 95/113 on investment, which the hon. Lady may have seen. It includes a section on the private finance initiative, and in its summary of criticisms quotes the Financial Times of 10 November:
It is clearly the case that capital expenditure not met by the public purse now is being avoided in return for payments over years to come. To the risk of an uncertain outcome--the NHS, for example, may not inherit a hospital--the PFI adds the costs over 50 years. There is no guarantee that those costs will be less for those of us who pay than capital funding now.
We are not stupid. The reason for the private finance initiative--apart from the Government's belief in such a partnership, which we share--is so that the Budget can show a holding down of public expenditure and there can be tax cuts. That is not an illusion--it is obvious--but the Chancellor ought to be honest.
There has never been a manifesto commitment that the NHS hospital building programme will be put out to the private sector. The British people have never endorsed such a proposal, and it has never been formally endorsed even by the House. That policy has never been tested by the British people. If it were tested and the public agreed, that would be one thing--but effectively putting the hospital building programme entirely in the private sector, which looks like happening, is something to which I and my colleagues cannot subscribe without qualification.
That proposition has never been put to the nation, and I am sure that the public would have all sorts of doubts, quite apart from those of the CBI and the Financial Times. We would want convincing evidence that the risks of the PFI are not considerably greater than the benefits.
As to community care, the Secretary of State, referring to Thursday's announcement, said that there will be a 4 per cent. increase in special transitional grant for community care funding, which is the additional cost to local authorities of funding the threshold of £16,000, instead of £8,000, before which people pay a contribution. I welcome that increase, and ask the Secretary of State to confirm that the figure required by local authorities is £60 million, and that it will be met in full.
The hon. Member for Carshalton and Wallington was accurate and generous enough to say that we are at least being straightforward with people. We have said that we will vote against the tax reduction tomorrow night-- unlike Labour, which apparently will abstain. We believe that the additional money being put into the health service should be used in a different way. We are committed to restoring free eyesight tests and dental checks, and to
freezing prescription charges for those people who pay them. Labour should commit itself to the same. The public want those changes, but the Government did nothing to respond.
If we favour a national health service from the cradle to the grave, and if the Chancellor is making a great point about putting additional money into the NHS, I cannot understand why the Government continue with policies that prevent people taking their own preventive health care steps, by charging for eyesight and dental checks and increasing prescription charges whatever the individual's ability to pay.
Mrs. Jacqui Lait (Hastings and Rye):
I am pleased to take part in the debate, which has been dominated by the national health service--but not one that I recognise. I was a health authority chairman before entering the House, and the vision of today's health service offered by Opposition Members is very much that of the NHS as it was before 1991, when it was inefficient and incapable of making decisions. Patients were treated as lumps of meat and not as people. [Hon. Members: "No."] Patients were required to turn up en masse for bulk appointments instead of being given specific times. They were pushed from pillar to post and not given information. [Hon. Members: "Not true."] Believe me--I was a health authority chairman and I had specific and clear evidence of that happening in the east end of London.
Even in those days, we were debating priorities and the need to ration services. One area that we felt we could begin by approaching was whether the NHS should provide cosmetic operations for varicose veins and tattoo removal. That clearly shows how priorities and requirements have changed to meet the needs of the patient. The NHS today is a patient-oriented service and no longer a producer-oriented service.
My constituency has a brand new hospital--a hospital that was cancelled under the 1976 cuts and which was only built because of Conservative investment in health. The turf was turned for phase 2 of the hospital by the Minister for Health in the summer. Moreover, my right hon. Friend has allocated extra money to East Sussex so that our much-needed mental health strategy can go ahead. So as we move into phase 3 in Hastings and Rye, a comprehensive pattern of health care which has been missing until now is emerging. Hitherto the system had always been ad hoc; doctors and nurses worked under extreme pressure and were unable to deliver the health services that my constituents deserve. All of that has now changed and we are approaching a health service, provided by the taxpayer, of the highest quality.
I for one do not disagree with the need to increase the number of managers in the health service. To deliver the service that people require we need to manage it more efficiently and effectively. The lack of such management was the fundamental flaw before we brought in the purchaser-provider split. Some of the managers, however,
are still not of the quality needed to develop the service further. I therefore look forward to more reform of the management of the service, to bring in many more highly skilled people. I should also like medical schools and nursing schools to train doctors and nurses in management techniques so that they, too, can bring those techniques to the treatment of patients.
Today we have also been discussing the Budget in broader terms. Like all other Members, I am sure, I spent the past weekend in my constituency being apprised of the views of my constituents, going around Christmas fairs run by charities and other worthy organisations--and thank goodness I did, as it was the only way I could have done my Christmas shopping this year. The message from my constituents is that, once the changes come into effect in April, they will feel considerably better off and more in control of their own spending. The cumulative effect of the increased allowances, the widening of the 20p band, the reduction in tax on savings to 20p in the pound, and the 1p cut in the basic rate of income tax, will give them more money in their pockets which they can choose how to spend. That is a basic tenet of Conservative party policy, which I should not need to repeat here.
On Friday I also met some local industrialists and found them appreciative of the tax changes and the changes in the uniform business rate. Like many others, they commend the idea of introducing plain English to taxation law. I look forward to the first legislation to be written in plain English.
I consulted many local businesses before the Budget to find out what their owners wanted included in it. Broadly speaking, the Chancellor delivered what they were looking for. They are still hoping for a further reduction in interest rates, because, like most home owners, they will enjoy a distinct improvement in their cash flows when interest rates come down. I believe that the Chancellor's Budget was geared to such a reduction even if he could not say so at the time.
There has been some debate about the private finance initiative. At the risk of boring hon. Members again on the subject of our road communications, I should point out that it gives me pleasure to welcome the inclusion in the PFI of a number of crucial sections of the A21. Unlike Opposition Members who are deeply sceptical about the PFI, I am enthusiastic about it. It provides one way for the construction industry to invest, to help it out of its current difficulties, which have to do with the long-term changes in the housing market. Right across the construction industry, the PFI will come as a tremendous fillip. I look forward to speedy applications by a number of companies to build sections of the A21.
Like one of my colleagues last week, I also urge on the Government the idea that the PFI panel should include as many private sector members as possible, with minimal civil service influence. Civil servants' writing of specifications and contracts often seems more geared to ensuring that those contracts are not met or tendered for, rather than encouraging people to tender for them. I note that the Financial Secretary to the Treasury appears to agree with me, and I hope to hear confirmation of that later.
My travels around my constituency at the weekend brought me into contact with a number of farmers. This time last year they were warning me about possible
changes to vehicle excise duty for tractors. I am glad that that problem has been solved, but farmers are becoming increasingly worried about large increases in the duty on gasoil. Last year's Budget and, I am told, this year's both increased the duty. I should be most grateful if the Treasury would stop increasing the duty on gasoil excessively. Such increases constitute a deterrent to farming and an additional cost for an industry which, although recovering, is still not so profitable as it might be.
A constituency such as mine contains a large number of pensioners, many in straitened circumstances. In the context of long-term care, they therefore welcome the increase in the allowance ceiling from £3,000 to £10,000. I am worried, however, that the floodgates will be opened to applications for services provided and paid for by social services departments. I still entertain strong doubts about the ability of social services departments, not just in East Sussex but in other areas, effectively to deliver services at competitive cost.
I have long complained, for instance, that East Sussex pays itself £100 per week more for rest home and nursing home care than it pays the private sector, even though the latter provides similar if not better care. That is a waste of about £4 million a year. I am also conscious that some of the assessment and reassessment services are, to say the least, extremely slow. Sometimes doctors need to admit emergency cases but social services will not speed up their processes, and poor souls in deep distress find themselves caught between medical requirements and social services bureaucracy.
An enormous amount still needs to be done, and it will be done only when we introduce the purchaser-provider split to social services as well. At present, social services are judge, jury and prosecutor. Until we allow them either only to provide or only to purchase we shall not be able to introduce to the provision of long-term care for the elderly the sensible services that people need and pay for through their taxes.
I am pleased that longer-term changes will be introduced to ensure that the increasing number of retired people with substantial occupational pensions and savings will be able themselves to provide for any care that they may need in their later years, while at the same time retaining capital to pass from one generation to the next.
I welcome the increased provision that will be made available to the counties for education, including the one in which my constituency is placed. I am sure that many of my right hon. and hon. Friends would join me in deploring the campaign that was waged to terrify parents, governors and teachers. Threats of cuts were based on the economics of the madhouse as opposed to those of reality. We must ensure that the increased moneys pass straight to the schools. I believe that the campaign of misinformation may backfire. So many people were distressed by it. I would not be surprised if parents did not start to demand ballots for schools to go grant-maintained to ensure that they never again have to face such an appallingly political and distressing campaign.
It would not be a speech on the Budget from me if I did not mention smuggling. I am delighted that my hon. Friend the Paymaster General is on the Government Front Bench because one of his responsibilities is excise duty. I never believed that in the Budget we would see, in effect,
a freeze on excise duty on most forms of tobacco and alcohol. I thought that if we were lucky we might see a minor increase. Instead, we have seen a reduction in the duty on whisky, while excise duties on beer and wine remain the same. The freezing of the duty on hand-rolling tobacco is a bonus for small businesses, breweries, tobacconists, restaurants and cafes, which have all suffered dramatically from bootlegging.
I am concerned that the increase in tax in the Budget will make it more profitable to smuggle cigarettes. It is a fact, however, that the most profitable area of bootlegging is still hand-rolling tobacco. There is a potential profit of about £5 for a 50g bag. I understand that the small-time smuggler who would bring in seven to 10 kg of cannabis now finds it more profitable to bring in a car boot full of hand-rolling tobacco. The Treasury must take more seriously yet the difficulties that businesses find as a result of the differentials in excise duty rates between those in the United Kingdom and those elsewhere in Europe.
We must take seriously the threat to health faced by youngsters who have access to cheap tobacco. More and more young people will be encouraged to take up the pernicious weed. Our high-tax policy has deterred them from doing so for so long, but as access to cheap tobacco becomes easier, our policy is no longer a deterrent.
I ask my hon. Friend the Minister to give us an idea of what happened in Lisbon on 13 and 14 November. I understand that the meeting was to discuss excise duties throughout the European Union. It would be useful to know whether any progress has been made.
"Critics of PFI--and they are everywhere--fall into two broad groups."
The Treasury was not persuaded of the merits earlier this year, and there is strong evidence against the PFI, for obvious reasons.
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