| Previous Section | Index | Home Page |
Mr. Matthew Taylor: The hon. Gentleman is simply wrong, and he was not listening to my speech. I confirmed our policy position and pointed out that the real Government expenditure on education is nothing like as much as our commitment. The Paymaster General attempts to defend her position by giving cash figures for the Government and real figures for the Liberal Democrats. That should not fool anybody; it certainly should not fool the hon. Lady, whose job must be, if nothing else, to understand the difference between the two.
Mr. Rammell: Nothing in the hon. Gentleman's intervention denies the fact that at the general election, the Liberal Democrats' manifesto contained a commitment to spend an extra £9.5 billion on schools over five years and an extra £3.5 billion on the health service. That is what the Liberal Democrats said they would do; we have done significantly better in a three-year spending review.
There is also a complete lack of coherence in the Liberal Democrats' arguments, particularly on the new deal and the windfall tax. On the one hand, we hear that they support the principle of the new deal, but they oppose the principle of the windfall tax and voted against it. Let us follow that logic: if we had a Liberal Democrat Government, and they did not raise the £5 billion to fund the windfall tax and the repairs programme for schools, the money would have to come from elsewhere, and would cost the equivalent of 2p on the standard rate of income tax. We have never heard from the Liberal Democrats where that money would come from.
One of the Liberal Democrats' most hypocritical positions is on pensions, with their critique of this year's 73p rise, which has been levied in line with prices. I wish
that we had been able to do more, and I hope that we will be able to do so in future, but the Liberal Democrats' manifesto promised that pensions would rise in line with prices. If we had a Liberal Democrat Government, a 73p increase would still have been levied this year, so it is audacious of them to attack us on pensions.
A few weeks ago, the Liberal Democrats performed a parliamentary stunt when they voted against the uprating. If they had succeeded in their vote, there would have been no increase in pensions this year. They were indulging in gesture politics, and pensioners understand that.
Mr. Webb:
Is the hon. Gentleman saying that if the Government had lost the vote that night, they would not have come back with a further uprating statement?
Mr. Rammell:
I am saying that the Liberal Democrats have had an opportunity to present a fully costed alternative to that pension uprating proposal, and they failed to do so, as they consistently fail to do every time the issue is discussed.
There is a total lack of candour in the Liberal Democrats' spending plans. We hear their repeated attack on the penny that will come off the basic rate of income tax on 1 April this year. The Prime Minister has made it clear that the penny off the basic rate of income tax is to compensate for other tax changes in the system. Were the Liberal Democrats to succeed in denying that 1p cut, they would be imposing a burden of significantly more than a penny on the basic rate of income tax, because of other tax changes. However, we never hear that mentioned in debates.
I am a politician who believes in progressive taxation. I want us to build support for progressive taxation. With the greatest respect to the Liberal Democrats, one does not make the case for progressive taxation by constantly promising people more than one plans to raise through taxes.
Mr. Leslie:
On the subject of promising more than can be delivered, does my hon. Friend recall the statement made by the hon. Member for Gordon (Mr. Bruce) before he was replaced? The Liberal Democrats wanted to increase the income tax personal allowance to £10,000 per head at a cost of about £28 billion. Does he believe that the penny on income tax will stretch quite that far?
Dawn Primarolo:
They have moved on again.
Mr. Rammell:
Yes, the Liberal Democrats have moved on, but my hon. Friend exposes the fantasy politics that is always involved in their budget-making.
With regard to our plans for public spending, I do not pretend that everything is perfect in the funding of public services. When we came to power, we had to remove a huge budget deficit that we inherited from the Conservatives. Furthermore, there had been a consistent problem in the funding of public services over 18 years.
I do not pretend that that was due to year-on-year cuts under the previous Government. Instead, there was sporadic funding. In the run-up to a general election, public spending would be jacked up, especially in schools and hospitals, and immediately after the election, the funding would come down. In contrast to that, the Labour Government are introducing step-by-step improvements in the funding of public services.
Let us analyse an example of that step-by-step approach--the £21 billion settlement for the health service over the current three-year spending review period. I asked the House of Commons Library to carry out an analysis based on the percentage increase in real terms of health service spending over the past 25 years. That shows that the current three-year spending increase for the health service is the second best three-year spending commitment over the past 25 years.
I do not pretend that that is the end of the story, and that everything is perfect in the national health service. We never promised the country that we could turn the health service round overnight. We said that we would tackle the task stage by stage. I hope and believe that the current three-year spending increase can be carried forward into the future.
Mr. Paul Burstow (Sutton and Cheam):
From the research that the Library has done for him, will the hon. Gentleman confirm that in the first two years of this Administration, we had one of the worst settlements for the health service in probably 20 years?
Mr. Rammell:
That was exactly the commitment that the Liberal Democrats made in their manifesto. They said that they would stick to the Tory spending limits for the first two years. Both parties committed themselves to that tight fiscal framework in the first two years in order to get rid of the budget deficit that we inherited from the Conservatives.
Let me identify some of the other areas in which we are making step-by-step improvements. Under the new deal, £3.5 billion has been allocated to fund the best quality training and job scheme that there has been in this country. The other £1.5 billion from the windfall tax is being used to double the budget for repairs in our schools.
In the first three years of the current Government, child benefit, which was frozen during all those Tory years, has been increased by 25 per cent. As for housing, which particularly concerns me in my constituency of Harlow, the release of capital receipts has made possible a 33 per cent. increase in expenditure in the first two years, and a 50 per cent. increase in the past three years. The working families tax credit has given an enormous boost to people on low incomes: 2,000 people in my constituency are, on average, £24 a week better off.
How have we achieved that progress? Most important, we have achieved it through sound economic management--by removing the budget deficit, not borrowing more than we could afford over the economic cycle, granting operational independence to the Bank of England and introducing transparency and openness to the operation of our public finances. That was crucial: without it, we could not gain the trust and confidence of the business community and investors that we need if we are to secure the economic growth that, over the longer term, represents the only sure-fire way in which we can obtain the extra investment in public services that we need.
Mr. Letwin:
If transparency of public finances was the Government's prime aim, why did the hon. Gentleman's colleagues, throughout last night, resist the establishment of an independent body to set accounting standards?
Mr. Rammell:
It is difficult to remember exactly what the Conservative party was trying to achieve during its
If we adopted the Liberal Democrats' approach, that successful management would be blown apart. In a short time we would have a huge budget deficit. We would not be funding our spending plans, and there would be a downturn in economic growth leading to cuts in public spending. However, I do not think that that would happen under a Liberal Democrat Government. If we had a Liberal Democrat Government--and I recognise that it is a big "if"--I do not think that they would act in that way. The spending commitments would not materialise, and that would undoubtedly lead to a degree of disillusionment among Liberal Democrat supporters.
| Next Section
| Index | Home Page |