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8.56 pm
Mr. Paddy Tipping (Sherwood): I have the privilege of being a neighbour of the Chancellor, which gives me the opportunity to watch him deliver his Budget--both the style and substance of it--in Nottingham and London. I have the opportunity to see him play both at home and away, and, like all football teams, one changes one's tactics, and the Chancellor certainly does. Last year, he told the local paper, the Nottingham Evening Post, that the Budget was
- "a cash bonanza for Nottinghamshire".
This year, according to last night's Nottingham Evening Post, the Chancellor has taken a different approach.
Is this a buoyant Budget for Nottingham and the nation? The theme of today's debate has been social security, so let me start there. In the run-up to this Budget round, considerable pressure has been put on the Secretary of State for Social Security to take account of chronic bronchitis and emphysema, and to extend the range of industrial injuries to acceptance of the recommendations of the Industrial Injuries Advisory Council. I am grateful for the fact that the Secretary of State has done that. The cost has been £20 million in the first year, plus £5 million in administrative costs. The benefit will start on 1 April next year.
Last week, I had an opportunity to go to the Department to argue the case for retrospection. I will continue to press that case. I know that it will cost £70 million, but I think that a debt is owed to men who have given their health and, in some cases, their lives to giving coal and comfort to all of us. If the criteria are right on 1 April, there is a strong argument for backdating the benefit to 1993. The matter will have to come before Parliament, and new regulations must be passed, but the Secretary of State can be sure that the campaign will continue. Miners in
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Let me now refer to another issue that affects people with disabilities, in Nottinghamshire and nationally. The Budget increased the special tax allowance for blind people by more than the rate of inflation. I welcome that, but I wonder whether the Secretary of State will consider extending the provision to other disabled people, if only to mitigate the worst effects of the early taxation of incapacity benefit. The Disablement Income Group wrote to the Chancellor, who, in January 1996, replied that the blind person's allowance was anomalous, and was always
There is a strong case for re-examining that issue, and looking at a range of people with disabilities. I hope that the Secretary of State will at least agree to listen to the representations of the Disablement Income Group. I feel that people who are in work with real disabilities often need extra help, and that one way of helping them is the granting of tax allowances rather than benefits.
An aspect of the Budget that has received considerable attention is the issue of local government finance, and, in particular, education spending. The Chancellor commented on the toughness of the public spending round, saying:
Only yesterday, the Secretary of State for the Environment also accepted how difficult things would be. In a press release, he said:
The problem springs directly from a reduction in the amount of external finance that the Government are making available to councils. The Red Book makes it clear that, between now and 31 March 2000, councils will lose £4 billion. As a consequence, council tax will have to rise. There is nothing new in that; it is a direct result of planned Government policy. The Government's stated intention is to switch the burden of local taxation from central Government back to local government.
Given the large reduction in grant, it is clear that the council tax is set to rise by 20 per cent. in the next three years. It has been suggested that that is equivalent to 2p on income tax. The Chancellor gives with one hand and takes away with the other. I believe that the council tax will rise next year by 6 per cent. The Government set the level of expenditure for local councils, they can cap
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Ministers argued that it is important to give schools priority in any budget settlement. Indeed, the Budget allows an extra £633 million to be spent on education--a 3.6 per cent. rise. Many local authorities will passport that through to schools, because they accept that schools are a priority. As the Chancellor and I know, Nottinghamshire has announced that it will give schools priority, as it did last year. That is important.
Class sizes are rising. I undertook a survey in north Nottinghamshire earlier this year, which showed that half the classes had more than 30 pupils, and eight out of 10 schools have class sizes of more than 30. The extra money will not, by itself, reduce class sizes. Individual schools have used balances to keep class sizes down. Those balances have now gone, and, on top of that, pupil numbers are rising.
As a consequence of giving priority to education, other council services will be cut. The 2 per cent. cap increase for most county councils, including Nottinghamshire, is tight and restrictive. Nottinghamshire will be allowed to spend £13.5 million. It will spend £10.9 million of that on schools, which will leave £2.5 million for all other services. That implies a 5 per cent. cut in the other services provided by the county council.
I do not believe that that cut can be covered by efficiency savings alone. Efficiency savings have been made year after year, but ultimately there will be no more to be made. I expect that highway maintenance will be reduced, day centres for the elderly will close, meals-on-wheels will be reduced, the fire brigade will be put at risk, libraries will reduce their opening hours and adult education and discretionary awards to students will become virtually non-existent.
The Budget provides an extra £500 million capital for education. Let me put that in context. To repair Nottinghamshire schools would cost £110 million. In Rushcliffe, the Chancellor's constituency, there is £6.7 million-worth of outstanding repairs. The school closest to his home, Rushcliffe comprehensive, has £1.5 million-worth of outstanding repairs.
In Nottinghamshire, services will be cut and the council tax will increase. It is the same old story: we have to pay more for fewer services. Should the Chancellor be so buoyant about the Budget? It is all very well to drink whisky and smoke cigars at No. 11, but what about the consequences of the rest of the Budget? It gives with one hand and takes away with another. It takes 1p off income tax, but insurance premiums are up, air passenger tax is up and council tax will go up.
Mr. Geoffrey Clifton-Brown (Cirencester and Tewkesbury):
I am delighted to be called to speak in the debate this evening, Madam Deputy Speaker. When I first entered the House I spoke in the Budget debates for the first two years; I am delighted to reconvene the habit. Like my right hon. Friend the Chief Secretary in his expenditure target, I am being squeezed, so I shall just make a few brief remarks from what I had intended to be a much longer speech.
I am delighted that my right hon. and learned Friend the Chancellor has come back into the Chamber. I have a few words of praise for him. This is a welcome and restrained Budget, building on five years of successive growth--which is no mean achievement after the deep recession at the beginning of the 1990s. It is a cautious Budget. My right hon. and learned Friend could well have been tempted to produce a Budget with a huge bribe to the electorate in the hope of winning the next election. However, he has had a successful tenure of office building a sound enterprise economy for jobs and growth and it is important to continue on a sound path of growth so that there is more money in the economy to spend on the services that are needed most. I am delighted to note that Britain has one of the highest growth rates in the European Union--2.5 per cent. compared with an EU average of 1.5 per cent. That is no mean tribute to my right hon. and learned Friend.
My right hon. and learned Friend's speech was in marked contrast with that of the Leader of the Opposition, who spent his entire speech criticising our policies, but not saying one word about Opposition policies nor giving one figure for the cost of any of their policies. Are they committed to their stated aspiration of a lower tax rate of 10p? What will that cost? I understand that it might cost up to £8 billion, but we have not been told. As we move towards the next election, the Opposition's policy of non-speak will become less and less credible--they will have to come clean with their policies.
"Puffing a cigar (up 7p a packet) and sharing his Scotch (down 26p a bottle) Chancellor Kenneth Clarke was in buoyant mood when he spoke to the Evening Post ... in the library at No. 11 Downing Street."
I contrast that buoyant approach with the attitude of the hon. Member for Sutton and Cheam (Lady Olga Maitland). Some people are well housed and can smoke cigars and drink whisky; but others do not have much and, in all good faith, we should try to help them.
"regarded very much as a special case confined to a section of the community who command considerable public sympathy and who are readily identifiable."
He went on to reject the idea of extending the benefit.
"we had to keep the rest of public spending within the tightest possible limits".--[Official Report, 26 November 1996; Vol. 286, c. 158.]
The consequences of that statement are now becoming clear to local councils in Nottinghamshire and throughout the country.
"Even in the climate of a tight settlement, the provision for next year will allow them"--
the councils--
"to meet priority needs across the range of their functions".
I stress the words "priority needs". That constitutes a recognition of the fact that not everything can be done--that hard choices must be made, and that some services will have to be cut.
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