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Mr. Barker rose

Mr. Levitt rose

Matthew Taylor: I shall finish my point and then give way to both hon. Members.

In fact, the situation is worse, because Labour released funds and the Chancellor found money. What did he find it for? Tax cuts. We are told that Labour could not spend extra money because it was not there, but a penny came off income tax. Although the measure was hugely unpopular, the Chancellor made that choice; it is the very penny that Labour has in effect put on the national insurance system.

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What else did we see in the run-up to the general election, only just over a year ago? The Chancellor announced some £3.6 billion of tax cuts for this year and £4.2 billion for next year, describing them as

The Secretary of State for Trade and Industry described them as prudent.

The money was there, but Labour believed those on the Conservative Benches who said, "You can't win an election if you promise tax rises. You can't win an election except by bribing the electorate with their own money." Labour was wrong. It should have told the truth: first, invest the money, which was there, then turn the NHS around and present to the electorate the case that Labour now makes—the money must be found.

Mr. Levitt rose

Matthew Taylor: I shall give way to the hon. Gentleman, because I want to ask him some questions. Does he honestly believe that, just a year ago, the Chancellor had no idea that taxes would have to rise now? Between 1997 and 2001, how was the Chancellor able to change his position from being able to pledge no national insurance rises to being unable to do so if he did not know that he had to increase taxes? How could he ask Wanless to report on NHS funding if he did not know that there was a problem with it?

If the Chancellor knew all those things, why did he cut taxes just before the general election and refuse to admit during that election that he would increase them? Indeed, only months later, he has announced that taxes must increase. We do not disagree, but Labour should have been honest enough to say that it would happen. Perhaps the hon. Member for High Peak (Mr. Levitt) was honest enough to say so in his constituency.

Mr. Levitt: I am grateful to the hon. Gentleman for allowing me to answer. Of course my right hon. Friend the Chancellor looks to plan for the future—that is why the changes in national insurance contributions come into force next year, and not this year, as the hon. Gentleman seems to suggest. It is a matter of planned investment over a number of years.

I want to return the compliment and ask the hon. Gentleman a question. Does he honestly believe that it would have been possible and sustainable to have a capital programme in the NHS of the size that is proposed in the Budget at a time when inflation was three times the current level, and interest rates were twice what they are now? That is what the Government inherited. Moreover, in their early years they had competing priorities, such as paying for 2 million unemployed.

If the Government had tried to embark on an investment programme of this scale in 1997 they would have been doomed to fail because of the economy's underlying weakness.

Matthew Taylor: I would agree with the hon. Gentleman had the Government at the time tried to spend borrowed money, but the Chancellor has now admitted that the strategy was wrong because the money could have been found through taxation. The Liberal Democrat party

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was right to argue for an increase in taxes. The share of national income spent on services has had to be increased, and that could have happened five years ago.

In addition, I advise the hon. Gentleman to look again at the Wanless report. It shows that, even allowing for the private finance initiative contribution, the Government over the years have been investing less in capital terms than their predecessors. They have not exceeded Conservative spending in even one year.

I understand the confusion among Labour Back Benchers. They are being told two different things at once. They are told that, only a year ago, the Government had no idea that they would have to raise taxes and make the largest-ever spending increase in the NHS. However, the Sunday papers contain reports quoting friends close to the Chancellor to the effect that the Government have not changed strategy, and that this move was planned two, three or even 10 years ago. That latter figure means that, even in opposition, the Government knew that they would have to introduce these measures. It was all a matter of stealthily taking the public along with them. I can understand why Labour Back Benchers might find it hard to interpret the different briefings that they get from different members of their Front-Bench team.

Mr. Barker: A little time ago, the hon. Gentleman mentioned the myth that it was the Chancellor's prudent management of the economy that reduced the national debt. That is a canard. The reality is that the reduction in the national debt was due overwhelmingly to the bubble in internet share prices that pushed telecommunications, media and technology share prices to ridiculously high and unsustainable levels. As a result, there was a frenzied auction, at which the companies involved bid an unprecedented £22 billion. Even the Treasury thought that the amount that landed like a golden egg in the Chancellor's hands was ridiculous. That money accounts for the record fall in national debt, not some wonderful powers of economic management.

Matthew Taylor: I do not agree. Just a little distance behind and along from the hon. Gentleman is sitting someone who probably agrees with that analysis even less: the right hon. and learned Member for Rushcliffe (Mr. Clarke). The major reason why the Government were able to eliminate national debt was that they chose to follow his Budget plans.

Incidentally, I believe that the right hon. and learned Gentleman would agree that, if he had remained in office, he would not have followed the spending plans that he had set out, as his Government's annual spending review would probably have meant that spending would have gone up. However, the Labour Government decided to follow his plans and make real-terms cuts in spending. The cuts in social services spending, for example, are among the factors that led to the rise of the problem of bed blocking for elderly people who would be better off in nursing homes or residential homes.

The Labour Government got rid of the deficits incurred by their predecessors and balanced spending. However, in their early years, they did nothing but cut the public services that they had been elected to save.

I am glad that the hon. Member for Bexhill and Battle (Mr. Barker) intervened, because I want to turn my attention to the Conservative party. We cannot let

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Conservative Members off the hook and say that they have no ideas about the NHS, for we know that, behind the scenes, they do have some ideas on the matter. Unfortunately, he is not present, but the shadow Chancellor has changed his use of language in the past few days. The right hon. and learned Member for Folkestone and Hythe (Mr. Howard) used to talk about the Stalinist NHS. He used to ask, "How can we expect it to work? It is a Stalinist creation". That is an odd view of history because the NHS developed from the ideas of a Liberal, but we shall put that to one side.

The shadow Chancellor used to say that the NHS was a Stalinist creation but now he says, in new softly modulated tones and with an expression of complete reasonableness, "We support extra investment; we are not going to vote for it, but we support it. We want an NHS that works. We do not actually believe in it, but we want it to work." The word "Stalinist" no longer passes his lips.

I hoped that the right hon. and learned Gentleman would remain in the Chamber because I wanted to ask him whether he still believes that the NHS is a Stalinist creation. In fact, it is clear that a focus group has told the Conservatives to stop saying what they think. They have stopped saying what they think about an even more fundamental issue. They have stopped their health spokesman saying anything about what he thinks. He is allowed to say it only to delegates at the Conservative conference, behind closed doors, but we know what it is. He believes that they need to run down the NHS, persuade people that it cannot work and then introduce self-pay. Self-pay means that people will not get treatment unless they can afford to pay for it. They will have to pay for it when they are sick rather than through taxes funding the health service. People who have the means will pay for themselves, instead of everybody contributing to a national health service. The Conservatives do not want to reform the NHS but to dismantle it.

Chris Grayling: The hon. Gentleman is no more a shadow Chancellor than Lord David Sutch was a peer.

Does the hon. Gentleman realise that many of my constituents have no choice but self-pay? The reality confronting them is that they must either wait a year for their operation or pay for it themselves in a private hospital. Does he think that that system is fair? If he thinks that it is not fair, why does not he share the desire of my party to consider every possible way of creating a better health care system in this country, rather than accepting the single option presented to us by the Chancellor?

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