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Mr. Fabricant: Does my hon. Friend appreciate--because clearly Labour Members do not--that we are already seeing a large expansion in private health care? Is he aware that BUPA has announced that four times as many private operations were performed in the past 12 months as in 1997? That is because of the state of the NHS under the Labour Government.
Mr. Taylor: My hon. Friend is correct to say that the current state of the health service after two and a half years of a Labour Government is worrying, and that that is forcing people into the private sector. However, I do not want to see a conflict between the two. The purchasing criteria in the health service may, from time to time, require the purchase of operations and procedures from the private sector. We need to see the totality of resources devoted to health care, rather than people in the private sector being regarded as renegades, or people being forced out of the NHS because it is not good enough.
I received a letter from the Ember centre, in association with Age Concern Elmbridge, which covers my constituency, listing several people who have received worryingly poor treatment by the NHS. It states:
During those four years, there will be terrific pressures on the drugs budgets, as new procedures arrive and people expect them. Only one drug, Relenza, has been held back
by NICE, but in the future several drugs may be resisted on value grounds and the Government will get into difficulties, especially once the genome project has been realised and the pharmaceutical and biotechnology industries start to produce treatments that arise from understanding our genetic structures.
The welcome news on the NHS is almost a challenge to the Government. They have to prove that their approach will deliver better quality of care. Ultimately, the public worry less about where the money comes from and more, and increasingly, about the quality of care they receive. I would like the NHS to be a service that is broadly free at the point of need, but that service is no longer sufficient if it does not deliver the quality of care.
I said earlier that I welcomed one or two points in the Budget, and that is true. The Chancellor is right to try to stimulate e-commerce, and I disagree with the comments of my right hon. Friend the Member for Fylde (Mr. Jack) on that subject. On occasions, a stimulus in certain aspects of economic development is important. It might be temporary, but it could be crucial. The trouble is that more and more people are now aware of the dynamism of e-commerce and the importance of getting online, but very few have the strategies to do so or the investment plans to enable them to do so. We cannot afford to slip behind--and in internet time, one year is a very long time. Action this day is crucial if we are ever to meet the Government's target of making this country the best place in the world for e-commerce.
Mr. Jack:
One of the characteristics of many of the enterprises my hon. Friend describes is that they are yet to make a profit. Therefore, offering them a tax allowance is not perhaps the most relevant approach.
Mr. Taylor:
I agree, in terms of the newest dot.coms. Indeed, it is widely understood that their value will go down once they make a profit. At that point, they will be valued in more traditional terms, instead of the multiplication of the number of customers. I am less interested in the dot.coms, which will make a sensational impact for a while, than in companies that are more established moving into a position to offer their services online. The adaptation of offline companies into the online world is one of the biggest challenges we face. Numerically, that includes the bulk of companies in this country.
If we are to achieve the real dynamism that anyone who goes to silicon valley on the west coast of the USA instantly observes, we will have to stimulate entrepreneurs. I do not know whether it is fashionable to say so, but the Chancellor is right to understand that entrepreneurs should not be ridiculed as rich people who, because they have made money, should be regarded as social pariahs. That was old Labour. If new Labour's attitude is that somebody who has generated ideas and made money should be held up as a virtuous example, because they have created wealth in society and the Chancellor has then been able to spend that wealth on other matters such as health, that is a dramatic change and I welcome it.
The Government's moves to encourage wider share ownership and stock options for employees and to improve the treatment of capital gains tax are profoundly to be welcomed. My only caveat to the Minister is, "Don't let the Inland Revenue get at those proposals." I remember
the brainwaves of my right hon. and learned Friend the Member for Rushcliffe and my right hon. Friend the Member for Fylde that were designed to stimulate aspects of the economy, but once the tentacles of the Inland Revenue had got them, the details in the Finance Bill showed that the idea had been crucified--so I give the Minister a little bit of friendly advice to be alert. It is good to encourage stock options, but they should not be crucified by a continuing burden of national insurance charges. It is good to have lower capital gains tax, but Ministers should allow it to be exercised instead of wrapped up in red tape and exemptions. In many cases, it is the detail that frustrates businesses. The idea is good, but its application does not make sense.
The new ability to reward up to 15 key people in a company with options is a good scheme and will be much welcomed. If I understood the proposal, and I have not yet read all the small print, the fact that the schemes are over a four-year period, instead of the much longer times that used to apply, indicates that the Government are up to speed with some of the aspects of the new economy. I welcome all those proposals.
Some of the incentives for pensioners, especially those who have been thrifty, are overdue, and the Government have hit the nail on the head. I welcome those proposals. In my constituency of Esher and Walton, pensioners who are not blessed with generous multiple pensions have experienced difficulties and will welcome the incentive in the Budget.
Let me take a slightly wider view of the macro-economic judgment and the fiscal balance. There is some confusion as to whether or not the Government are being virtuous and tightening the fiscal balance, as the Chancellor claimed to be doing. That judgment has yet to be made. There are genuine questions, particularly about public expenditure. They arise from the fact that the Chancellor locked in real annual growth in public expenditure of 2.75 per cent. against assumed economic growth of 2.25 per cent. There are worries about how generous the Chancellor has been. One headline in the Financial Times reads "Prudence or Profligacy?".
I hope that the Monetary Policy Committee genuinely believes, as the right hon. Member for North Durham (Mr. Radice) said, that the Government have been responsible and maintained a fairly tight fiscal balance. If not, there may well have to be interest rate rises and that could create problems. If the Chancellor wants to give Britain the opportunity of joining the euro in the next Parliament, as is his professed aim, our interest rates will need to converge with those within the eurozone. I consider that to be a necessity for other reasons.
It is not sustainable for our short-term interest rates to be at such variance with those on the continent. However, it is likely that short-term interest rates on the continent will rise as the German and French economies are growing at 3 per cent. and there appears to be a positive outlook. That is important for our export markets, given that approximately 50 per cent. of our exports go to the eurozone. The Chancellor must recognise that interest rates will have to converge, and that brings me to the real problem--fortunately, the Opposition do not have to face it now--that there will be more active adjustments to the fiscal balance.
The Government do not control monetary policy and interest rates--they are set by an independent Bank of England and I approve of that. However, the Chancellor has to take that into account and give signals to the Monetary Policy Committee that if the economy does not perform as he expects, he will need to make upward as well as downward adjustments in taxation or spending or vary the savings ratio. That is why the debate about the tax burden has become so sterile. There will be occasions when it is virtuous in the wider economic interest to increase the burden of taxation so that the pressure of anti-inflationary policy does not impact only on monetary policy.
I hope that no party--I cannot think which--pledges to reduce the burden of taxation over the lifetime of a Parliament without taking into account the fact that the Government will be unable to control certain elements in the equation. I direct that warning to Ministers and anyone else who cares to listen.
We are still suffering from the high value of the pound, which is having a serious impact on UK manufacturing. Let us be quite clear that our failure to be part of the eurozone has political and economic costs. That is why I am keen for the Government to organise the economy so that we have at least the chance to join early in the next Parliament.
As my right hon. and learned Friend the Member for Rushcliffe said, it is no accident that one reason for BMW's decision on Rover is the high value of the pound and the lack of clarity about the time scale of the Government's policy for joining the euro. Ford and other car companies are making similar noises. My argument has always been not that we should join the euro today, as we are not in a position to do so, but that we should do our best to make that a possibility. We must also make it clear that such a timetable exists, as any indication that we were likely to remain outside for a protracted period would have considerable negative implications for investment decisions. Those are the key criteria.
Our exclusion from the eurozone is impacting on jobs and unless the Government follow through their warm but vague words about entry, the problems will continue. They could prove to be one of the biggest risks to the Chancellor's confidence in the four-year view that is set out in the Red Book in respect of the way in which the economy will grow, the effect on unemployment and ultimately the balance of public expenditure.
Although the Budget represents good news for the national health service, it is not good news for other Departments. One of the glummest people on the Government Front Bench yesterday was the Deputy Prime Minister, who got only £280 million for all his huffing and puffing. As the hon. Member for Waveney said, transport is a crucial factor in economic growth, as well as enabling individuals to get around. It is vital that the Government realise that, relatively speaking, this year's Budget has starved transport, and that the public will suddenly wake up to the fact that in order to give a Lord Winston settlement to the national health service, other Departments have not done so well. Unless there is a public expenditure review in the autumn, there will be some squealing in the shires and elsewhere--and certainly among business--about the settlement for transport.
It would be intriguing if the Financial Secretary, in her reply to the debate, let us know what is happening to the £3 billion that has been raised so far through the auction
of the third-generation Universal Mobile Telephone System--an auction that I devised back in 1996-97. It was in our election manifesto and the incoming Labour Government shrewdly picked it up. I am all in favour of the auction, but as the figure is £3 billion and rising, it would be interesting to know what the Government intend to do with it. Is it to go into e-commerce to stimulate further improvements in the allocation and utilisation of radio frequency? Is it to go into the national pot as a way of bailing out the Department of the Environment, Transport and the Regions for the Deputy Prime Minister? I do not know, but I am sure that the Financial Secretary has it at her fingertips.
It saddens us to have to make these representations to you but we hope that you will agree that these experiences show that conditions in our Area need to be vastly improved and what is hard to understand is why the Health Authority is not more vigilant and making inspections--or following up complaints--to ensure that this state of affairs does not continue or ever arise again.
We do not point the finger and say that the health service is awful because there is a Labour Government, because I know that we faced the same problems when we were in government. What I do say to the Minister is that money alone will not cure the problem. Considerable reform is needed if health authorities are to perform their jobs and the trusts and the primary care groups are to be enabled to provide a proper quality of care. I welcome NHS Direct, for example, because it is a good initiative. However, all the changes must be carefully considered if, in four years' time, after vast amounts of money have gone into the health service, we are not still to have the problems that constituents have experienced with quality of care. That really would be a crisis, and the Government would have proved that money from the state was not sufficient to deliver the quality of service now expected by the public.
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