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Mr. Bercow: The hon. Gentleman talks of the importance of debt reduction, although he does so very much at national rather than local level. If the issue is of importance to him--it is right that it should be--will he tell the House what assessment he has made of the impact on the size of interest repayments on local authority debt of the change in the rules on the use of capital receipts from the sale of council houses?

Mr. Cunningham: The hon. Gentleman should not throw that red herring into the debate. The issue of capital

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receipts was always mixed, depending on which local authority one spoke to. It was a Conservative Government who told local authorities that they could keep all their capital receipts only to start to plunder them. The hon. Gentleman should do his homework.

Lower unemployment means lower social security costs. In the past, the Opposition have criticised social security; they talk about cutting the budget and introducing swingeing measures that would make it almost impossible for people to claim social security. In fact, the cost of social security under my right hon. Friends, is down by about £4 billion--that must be welcome. In effect, it means that in order to achieve our other targets we do not have to make it more and more difficult for people who need social security to claim it.

During the period from 1979 to 1997, 42p in every pound was being used to pay off debt. That is down to about 16p at present. All in all, we must congratulate my right hon. Friends--especially on the reductions in corporation tax and capital gains tax and, more important, the assistance to be given, through reduced VAT, to small businesses with turnover of up to £54,000, and £100,000 for larger businesses. Those reductions should certainly be helpful.

Inner-city regeneration has caused much consternation and debate over the years. Under previous Governments, improvement grants were available, but people in inner-cities would now find it extremely difficult to obtain them because the Conservative Government cut them. I welcome the new initiatives to reduce VAT, to encourage inner-city regeneration--whether of property or by setting up small businesses.

Once again, I congratulate my right hon. and hon. Friends on an imaginative Budget, which gives something to everybody. I hope that they have noted the concerns that I highlighted and that, at some point in the future, they will revisit them.

5.43 pm

Mr. Phil Willis (Harrogate and Knaresborough): It was a pleasure to be in the House to listen to the speech of the right hon. Member for Huntingdon (Mr. Major). It was a pleasure to listen to a speech that was part of the debate, that entered into it and offered information and informed opinion. The right hon. Gentleman's speech was in stark contrast to the comments of the Leader of the Opposition--especially the speech about "a foreign land" that he made in Harrogate two weeks ago. The right hon. Member for Huntingdon did not give the House that impression today. It was delightful to hear the right hon. Gentleman forgive his former friend, Lord Lamont--although I suspect that Lord Lamont has never forgiven me for defeating him at the general election.

I want to quote a wonderful remark made by the right hon. Member for Huntingdon--he may intervene if I do not get it right. In 1997, when the right hon. Gentleman was asked to comment on the Labour Government's policy of "education, education, education", he replied that he thought it was a good policy but that he would have put it in a different order. That brings me to a critical comment on the right hon. Gentleman's Government.

Although I would not challenge the right hon. Gentleman's knowledge and understanding of economics, I would certainly challenge the fact that successive

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Conservative Governments, one of which he presided over as Prime Minister, left 7 million adults functionally illiterate and only one in four adults functionally numerate. That legacy was unacceptable, and it behoves all of us, irrespective of political party, to address that huge deficit and to ensure that future generations do not face the world without the basic skills that they need to operate successfully.

I, too, welcome this debate and echo the comments made at the beginning of the Budget debate by my right hon. Friend the Member for Ross, Skye and Inverness, West (Mr. Kennedy), who said:

The hon. Member for Lewisham, East (Ms Prentice), who is no longer in her place, hit the nail on the head. The one thing that I took from the Budget, and the one thing that the House should praise, was the concentration on removing child poverty. Without ending child poverty and ensuring that fewer of our young people begin life and spend their early years in poverty, much of the rest of what we do is reactive rather than proactive; it is a sticking plaster.

In terms of my right hon. Friend's comments on 7 March, two main issues were not dealt with in the Budget, and they have been addressed by Labour Members during the debate. First, there was nothing in the Budget on the care of the elderly. That was a huge omission; it is one of the most pressing issues that we face. It is not simply a pensions issue--clearly, we have had many debates about pensions--but one of how we care for our elderly. The way in which the long-term residential care needs of our population are looked after distinguishes a caring from an uncaring Government, an idea to which the hon. Member for Coventry, South (Mr. Cunningham) alluded in his speech.

There was nothing in the Budget to support local authority social service departments, which are desperately struggling with the costs of residential and nursing-care placements. It was rather sad that there was nothing to support the cross-over between health authorities, health care trusts and social services in trying to meet those needs. The Chancellor, who had the resources available, could more wisely have used his money in that way.

Mr. John Hayes (South Holland and The Deepings): The hon. Gentleman may want to consider the fact that Library figures show that, in the first two years of this Government, the Chancellor reduced personal social services expenditure to the detriment of the very vulnerable groups that he describes.

Mr. Willis: I accept the hon. Gentleman's comments, but he must accept that, certainly in each of the five years before the new Labour Government's election on 1 May 1997, the resources given to local authorities for social care use were reduced, year on year; and that, more perversely, capping arrangements meant that council tax rises could not compensate for those reductions, so I would say, "A plague on both your houses!"

This debate is primarily on education, so I shall return to education as soon as possible. It was rather sad that the hon. Member for Maidenhead (Mrs. May) spent virtually

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all her contribution offering a diatribe without ideas, regurgitating the same old accusations, mostly on behalf of The Guardian and Nick Davies, about the Government's spending plans.

The hon. Lady and the Tory party offer one specific response to our schools' needs--free schools. The response that she gave to my question about funding was appropriate, because it goes to the heart of the debate on the Tories' proposals for free schools. They seem to be suggesting that every school will be funded centrally, so I asked whether every child would receive the same level of funding. Interestingly, the answer was no. There would have to be a formula to distribute resources and that is one of the issues that has bedevilled Governments in their attempts to provide equitable resources to individual schools.

I have often discussed the issue with the hon. Member for South Holland and The Deepings (Mr. Hayes). The tragedy of the Tories' proposal becomes clear when one considers which of the services that are currently offered by local authorities to schools would have to be offered by the schools themselves as part of the package. The costs for special educational needs for schools in an inclusive education system can be horrendous if they are not largely picked up by the central administration. The idea that each school would have to meet the requirement does not bear the critical examination that such a policy should receive. The idea that head teachers want to be responsible for school transport and want to organise buses and taxis is beyond belief. Again, the suggestion that the service could be provided more cheaply if it were run by each individual school rather than by a local authority does not bear critical examination.

One of the key suggestions that the hon. Member for Maidenhead constantly makes to head teachers relates to disruptive pupils. Under a Tory Government--God forbid--schools would be able to kick such pupils out, but where would they go and how much would it cost to look after them? All the evidence shows that it costs at least five times more to educate a pupil in a pupil exclusion unit than it does in school. Where would that money come from, and what would happen if the number of units were expanded? My authority does not have such a unit. It would have to build one, and that would have to be resourced centrally.

In my role as education spokesman for the Liberal Democrats, for the past two years I have had spats with the Secretary of State and accused him of all sorts of things. However, I would never accuse him of not being interested in, or committed to, education. From the age of four, I have spent my whole life involved with various Secretaries of State in one guise or another. In 1944, my father was presumed killed in the war and that was the year I attended my first nursery school. Since then, I have been involved, in one way or another, with every Secretary of State. Perhaps Butler to Blunkett does not sound as good as Huxley's cradle to the grave, but the Secretary of State will be right to be proud of many achievements if he leaves the Department for Education and Employment and goes to the Home Office.

Sadly, however, the Secretary of State's legacy will not be as good as it should have been. In 1997, the whole education world welcomed a change and expected that things would be different. I was a head teacher in 1997

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and I know that schools were demoralised then. The whole education system was demoralised and underfunded and there was a 20-year backlog of repairs to school buildings. The situation was dire. So it is rather sad that the Government have abandoned the proud ambitions with which they came into office. They have squandered them on spin, triple accounting and knee-jerk reactions. Above all, the Government have put their faith in the likes of the former chief inspector of schools, Chris Woodhead, who betrayed not only the Secretary of State, but the education system.

The Budget was announced as we look forward to a general election and I support much of what the Chancellor said last week. I welcome the fact that much additional money will go to head teachers to spend on books and equipment. When I was a head teacher, I would have welcomed greater flexibility in the spending of part of my resources, and I am sure that most heads welcome the proposal.

However, the Government should not be able to claim that a huge sum of extra money was announced in last week's Budget. The £1 billion was an underspend from previous years. It was not new money, but money that had been regurgitated. If we take account of the Barnett formula and subtract the money for Scotland, we are talking about £800 million over three years, of which £200 million will go towards earmarked recruitment and retention packages. The money for each school will thus be about £10,000 to £11,000 a year, and a school's future cannot be planned on the basis of such funding. That is the huge mistake that the Government continually make. Year after year, they drip-feed money into our schools and they attract major headlines, but they do not attack the root cause of the major underfunding in the resource budgets of all our schools.

Let me give some examples. A head teacher in the royal borough of Kingston upon Thames has written to the chairman of the Conservative-led council. Kingston is reducing school budgets, because it is anticipating the money that the Chancellor will give directly to schools. Exactly the same thing is happening in North Yorkshire--again a Conservative-controlled authority--which is top-slicing its school budgets by £2 million. Although Harrogate grammar school--which, by the way, is a top-class comprehensive school--will receive an extra £12,000 from the Budget settlement, it will lose £40,000 because of the reduction in funding from the county council. I recall what the hon. Member for Coventry, South said, and point to the nonsense of the current funding arrangements and to their lack of transparency.

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