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Mr. Tom Levitt (High Peak): We are all pleased to hear that the hon. Gentleman can count to three. Does he not accept that the additional money that the Chancellor is giving to schools will go into their budgets this year and that the national insurance changes will affect them next year?

Mr. Green: And every year thereafter, as the hon. Gentleman well knows. Schools will be even worse off in the long term. I am happy to continue to talk about school spending if that is what the hon. Gentleman wants. In 1997, the Labour party promised that education would be its No. 1 priority. It said that it would

However, spending on education as a proportion of gross domestic product in the 1997 to 2001 Parliament was 4.7 per cent. Under the last Conservative Government, between 1992 and 1997, the average figure was 5 per cent. So the Labour Government managed to reduce the proportion of GDP spent on education in their first term. If Labour Members find that difficult to believe, they do not have to take it from me. Professor Howard Glennerster of the London School of Economics said:

in 2001

So much for priorities.

It is worse than that, however. Even when the Chancellor announces in successive Budgets and comprehensive spending reviews that the Department for Education and Skills will receive more money, it does not necessarily spend it. The Department's total underspend since the Government came to office totals more than £4 billion. In the past two years alone—2000 and 2001—

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it underspent by £1.4 billion. From careful reading of the Budget figures, we have discovered that in the past year the Department managed to underspend by £800 million. The Department is so incompetent that even when the Chancellor pretends that he is being generous to it, it cannot spend the money on our schools and universities. It would have been helpful had an Education Minister spoken in the debate so that we could have probed why that is happening.

Mr. Bryant: What about responding to the debate?

Mr. Green: I was coming to that. The hon. Gentleman should calm down.

The Prime Minister said in Prime Minister's questions that our education system is now among the top eight in the world precisely because of the investment, but that ranking is precisely not because of that investment, as we have seen. There has not been as much investment as the Department thought and when it does get it, it cannot spend it.

I was struck by a memorable remark from the hon. Member for Birmingham, Erdington (Mr. Simon), who said that the Prime Minister used to have a principle. I can tell him that the Prime Minister still does have a principle: when in doubt, dissimulate. His complacency about education is breathtaking. I assume that the figure that puts us among the top eight in the world comes from the programme for international student assessment—the Pisa study—which recently reported on comparative education systems across western Europe.

I must explain to the Prime Minister and any other Minister who might want to quote that study that it is based on 15-year-olds in 2000. Education Ministers and, indeed, some of the more honest Members on the Labour Back Benches made it clear that the Government spent their first term dealing with the primary education sector and are only now moving on to the secondary education sector. Those who were 15 in 2000 did not attend primary school at all after 1997, so this Government can have done nothing that had a beneficial effect on the education of the cohort included in the Pisa study. If that shows an improvement in good standards in the basics of education, it is a tribute to the Conservative education reforms of the 1980s. I hope that the Government will recognise that what they have said is complacent and misleading, and that the real state of British education is one where truancy is rising, where discipline is falling, where teachers are leaving as never before and where the rise in standards that we have seen over the past 10 years has stalled. The Government cannot afford to be complacent about education, and the Budget has done nothing to help Britain's schools.

Nor has the Budget done anything to help Britain's hard-pressed universities. The Association of University Teachers said that the Chancellor

that is in the Budget—

It says:

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That seems enough to be going on with after five years of Labour Government. That is an indictment from one of the sectors that most welcomed the Labour Government in 1997; the university sector thought that its problems would be solved by the Labour Government, and it was cruelly misled.

Mr. Kevan Jones: Clearly the hon. Gentleman is attempting to talk down higher education. If no extra money is going into HE, who is paying for the brand-new campus at Consett for Derwentside college, which will be of great benefit to my constituency and to that of my right hon. Friend the Parliamentary Secretary to the Treasury?

Mr. Green: Many of the people paying for it will be the students. As we learned this morning, they are now on average £10,000 in debt, despite the fact that before the 1997 election the Government promised that they had no intention to introduce tuition fees. That was the precursor of all the betrayals on tax that the Government introduced later, not least in the Budget. Things in education will not become better as long as the Government remain committed to their centralising agenda.

My hon. Friend the Member for Fareham (Mr. Hoban) was right when he said that far too many heads are frustrated by the micro-management of their schools by the Department for Education and Skills. As teachers, heads and governors know, they are not being allowed to get on with their respective jobs. They will continue to become disillusioned and leave. That poses the greatest threat to long-term standards of education in our schools.

The Government have always claimed that education and training should be one essential underpinning a successful economy. I think that we all agree with that. However, breathtakingly, the Secretary of State for Trade and Industry, who opened the debate, seemed to suggest that the US model of a low-tax, low-regulation economy was another essential factor in a successful economy. The Opposition agree with that analysis, but the right hon. Lady does not seem to recognise that she was praising a Budget that moved decisively away from that model.

A number of Members talked about the general economic climate and specific sectors in the economy. The hon. Member for Twickenham (Dr. Cable) said that growth would be lower as a result of the Budget. I agree. My hon. Friend the Member for Sevenoaks (Mr. Fallon) made a similar point. All the economic numbers are put under threat by the Budget. It does nothing to help a savings ratio that is at its lowest for a decade. At a time when we are lagging behind many of our European partners it does nothing to encourage productivity. In particular, it does nothing effective for small business, as my hon. Friends the Members for Galloway and Upper Nithsdale (Mr. Duncan) and for Hertford and Stortford (Mr. Prisk) made clear.

Not content with the prospect of making small business and especially the self-employed suffer, the Government do not recognise that these sectors are essential for future prosperity and future job creation. Yet the Government have chosen to increase taxation through national insurance contributions, which is especially harmful to those sectors.

My hon. Friend the Member for Billericay (Mr. Baron) was right to say that attacking business in this way—an attack launched by many Labour Members, especially the hon. Member for Telford (David Wright)—will not create a climate that will result in a reduction in poverty.

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My hon. Friend the Member for Bury St. Edmunds (Mr. Ruffley) was right when he called the Chancellor of the Exchequer the tax-raiser general. We have heard various quotes of what Ministers said, including the Prime Minister, during television interviews in the run-up to the election. I think that, as ever with new Labour, the briefings are more accurate than the on-the-record quotes. The briefings to journalists from the Chancellor of the Exchequer seem to be especially relevant in this context. On the BBC 6 o'clock news on 22 May, Mark Mardell said:

I think we know what that means—

Even further up the BBC hierarchy, Andrew Marr said on the same programme:

No; it seems to be true. So the macro-economics of the Budget are damaging and not a little dishonest, and my hon. Friend the Member for Lichfield (Michael Fabricant) was right to raise fears about future tax rises, including in council tax, occurring as a direct result of the tax rises in this Budget.

The other half of the Budget lies in its attention to the NHS, about which we have heard fascinating contributions from those on the Labour Benches. I must say that I have a sneaking fondness for the hon. Member for Coventry, North-West (Mr. Robinson), mostly because of his sheer shamelessness. He said that the NHS funding method was decided on the basis of the Wanless report. Decided after what debate and over what period? How arrogant of the Treasury to take this decision in private over a period of six hours. At least the hon. Gentleman could never be accused of naivety.

Sadly, the hon. Member for Bexleyheath and Crayford (Mr. Beard) simply told us that Wanless had spoken and that we should therefore accept what the oracle said and stop thinking for ourselves about health care. Since when did Labour Back Benchers have such blind faith in retired bankers? It is not beyond argument that a 1948 model of funding and delivery is the only possible one. My hon. Friend the Member for Poole (Mr. Syms) was right: we must be open-minded as a nation about how best to promote better health care.

I am glad to observe that once again, my party is the truly internationalist party in this House. As many of my hon. Friends have made clear in this debate, we are attracted to a United States economic model without too many intrusive taxes and regulations, and we are also interested in many western European methods of delivering public services—especially health, education and transport. We are prepared to consider why these other European systems provide better health care, especially for the poor and disadvantaged. They may well also provide less bureaucracy, as the hon. Member for Belfast, South (Rev. Martin Smyth) pointed out. The contrast is that we want to combine the best of the US economic model with the best of the western European public services model, while perversely, the Government want the worst of the high-tax, high-regulation aspects of

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the western European economic model, combined with the top-down centralist model of the old eastern European delivery of public services.

It is a standard cliché for Ministers—the hon. Member for Rhondda (Mr. Bryant) repeated it—to say that they will take no lessons from us. They have now reached the stage when they will take no lessons from anyone on anything. Apparently, every other country is out of step on health care: left-wing and right-wing Governments from Scandinavia to Australia are all wrong. On the future of British business, every business organisation is wrong. The CBI has consistently been abused by Labour Back Benchers, and I have to tell them that its members will have been listening. Whether it is the Institute of Directors or the Federation of Small Businesses, we are told that none of them has any knowledge about business, and that only those on the Labour Back Benches know best how to run a business. They will not learn even from other parts of the UK. They have seen the levels of health spending in Scotland and Wales, which are higher than those in England but provide worse health care outcomes. In the case of Scotland, those outcomes are getting worse by the year.

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