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David Taylor: Would my hon. Friend add to his list such people's need for higher standards of policing and tackling of criminality? Poorer people in working class areas are much more subject to the actions of criminals, which damage their lives far more than those of other sections of the community.

Mr. Turner: The list could almost be added to ad infinitum, but my hon. Friend makes a valid point.

Many of the services that I mentioned are provided not only by local authorities, but by police authorities and health trusts—primary care trusts and local hospital trusts.

If we are to eradicate poverty, the agencies that I mentioned need to be funded not only properly but fairly. That does not happen currently. The standard spending assessment and health funding formulae are manifestly unfair. I have heard the description, "postcode lottery of underfunding". The author of that term, the Conservative party, is guilty of a foul calumny because "lottery" suggests chance; it implies dealing a card, spinning a bottle or tossing a coin. That is nonsense.

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The SSA was designed to discriminate. It was not envisaged that all local authority leaders would troop down to Queen Elizabeth hall every November to watch money being drawn out of a hat and to exclaim, "Oh look, Westminster's won yet again. What a surprise." The SSA was never meant to be a lottery; it was designed to ensure a shift of resources from deprived, Labour-voting areas and councils to Tory-voting councils. It achieved precisely that.

I do not doubt that pockets of deprivation exist in Wandsworth and Westminster, but they sit alongside areas of great wealth. Indeed, there are fewer than 150 houses in band H in the whole Wigan borough, which has 212,000 properties. There are streets in Wandsworth and Westminster with more band H houses than the whole of Wigan. Those authorities have the wealth to deal with deprivation, but what do they do with the largesse that they receive from the SSA that the Conservative party designed? Do they tackle their pockets of poverty with it? No. They use it to ensure low council tax rises year after year.

Chris Grayling: The hon. Gentleman obviously does not understand the pressures on many local authorities in the south-east, where housing costs have made it difficult to get teachers for schools and nurses for hospitals. Does he not realise that pushing up the council tax in those areas makes it more difficult for young teachers, nurses and doctors to stay there? Simply diverting resources to other parts of the country would mean that swathes of Britain could not man their public services effectively.

Mr. Turner: I do not understand the hon. Gentleman's point. Does he not accept that people in Wigan have the same problems in paying their council tax as people in Westminster? It is even more difficult in Wigan because our band D council tax is so much higher than that in Westminster and Wandsworth. Those boroughs also receive significantly larger amounts of money through the area cost adjustment, which is designed to deal with the hon. Gentleman's points.

The borough of Wigan includes the constituencies of Leigh, Makerfield and part of Worsley. I am therefore speaking not only about my constituency but those of my right hon. and hon. Friends. Our local education authority is acknowledged to be good; it has received three stars under best value and gets better results than its demographics would suggest. Despite that, 24.3 per cent. of people in the Wigan borough have no formal educational qualifications compared with 18.4 per cent. nationally. Yet the SSA for education places Wigan 134th out of 150 local education authorities.

Our social services received a superb social services inspectorate report, which describes joint working, joint budget, lead commissioning and service integration. It proves that Wigan is good at dealing with those matters. The report states:

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In other words, it is an efficient authority.

Mr. Patrick McLoughlin (West Derbyshire): I did not catch all the hon. Gentleman's point, but he was talking about SSA. If he believes that it was designed specifically to help Tory areas and to damage Labour areas, why has it taken the Government so long to change it?

Mr. Turner: If we had come into office with an absolutely wonderful legacy from the Conservative Government, that would clearly have been a high priority. Unfortunately, we had an awful lot of problems to deal with, and we are now going to deal with this one. I shall come to that shortly.

Good things are happening not only in local government but in health. The clinical governance review has congratulated my local health authority on the way in which it has set up its primary care trust. The standard of health in my constituency is, however, exceedingly poor. We have tremendous problems with morbidity and mortality rates, which are well above the national average, but that is not reflected in the funding formula for health.

Unemployment is another area in which the formula does not accurately reflect the needs of a community. It takes a simplistic count of the unemployed, without taking into account those who are incapacitated, yet those are the very people who place huge demands on local authorities, social services and the health service. On a claimant count, Wigan has 4.2 per cent. unemployment and is 73rd most deprived out of 354 authorities. On income deprivation, it is ranked 30th out of the 354, and on employment deprivation, it is ranked ninth, reflecting the large proportion of people in the borough who are too ill to work.

None of those factors is accurately reflected by the formula, either for the local authority settlement or for health funding. No one doubts the need to raise individual incomes. A stable and growing economy is essential, and the measures in the Budget will assist that. Many people, however, do not—and never will—have the capacity to have a good quality, high-paying job. The individual enterprise that we want to achieve, particularly in deprived areas, has to be backed up by the collective provision of public services. That will be achievable only by funding regimes that rigorously reflect the real needs of communities, which are identifiable and measurable.

In response to the point made by the hon. Member for West Derbyshire (Mr. McLoughlin), the Departments responsible for health and local government are undertaking fundamental reviews of the funding formulae. I welcome the Secretary of State for Health's agreement to meet members of SIGOMA—the special interest group of municipal authorities—to discuss that issue. The additional money for health will provide the opportunity to speed up the equalisation process.

Solving the problem of poverty of the individual is essential, but if we do not take this opportunity to tackle the inequalities in public services such as health, education and social services, it will be a lost chance. We shall doom the individual to failure if we do not ensure that the means to tackle individual poverty and public service inequalities advance at the same rate.

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5.42 pm

Mr. Kenneth Clarke (Rushcliffe): I refer the House to the interests that I have declared in the Members' register.

I see from this morning's newspapers that this is probably the most popular political U-turn that we have seen in modern history, or, certainly, for a very long time. It is certainly a very dramatic one. Prudence was being scorned last year, but her defenestration is now quite complete. This is a reckless return to a policy of tax and spend—spending on one service in particular—of a kind that was completely ruled out by the new Labour project only two or three years ago.

In the short term, the Budget has had a popular reception, but this is not the first time that I have said in a Budget debate that Budgets that have a popular reception in the short term do not have a good history either of delivering results or of remaining popular for very long. The Budget of 1977 has already been cited as an example of that. In 1987, I seem to remember sitting surrounded by people waving their Order Papers at Nigel Lawson's most popular Budget. The responses to both those Budgets presaged complete disaster, and I fear that something similar might happen if this country does not have some good economic fortune in the next few years.

I have some concern for the Chancellor; I feel a slight responsibility for the well-being of my successor. He and I have presided over 10 years of growth with low inflation. We have not had a negative quarter for 10 years, although the present Chancellor has had some damned close run-ins and has nearly got there. However, he has presided over the second and least distinguished half of that period. In the public interest, I should like us to maintain the combination of growth and low inflation. It is the essential pre-requisite for funding the improvement in our infrastructure and public services which the country deserves.

The economic judgments behind the Budget are deeply flawed. The prospects for the NHS, to which I will devote the second part of my speech, are undoubtedly not as rosy as they have been made to appear. The Government are making one of the mistakes that they have frequently made since coming to office: they are raising public expectations of what will be delivered to incredible heights. If the public feel as disappointed and cheated as they did at the last election, the Government could be in for a big surprise at the next election.

The politics dominate this Budget. All Budgets are political, but I cannot remember one in which the political presentation has so dominated the content. The Prime Minister and the Chancellor of the Exchequer were obviously both in a panic about the fact that they were having to break their election promises and raise personal taxation, which is what they have done. I agree with the hon. Member for Truro and St. Austell (Matthew Taylor) that the increase in the employees' national insurance contribution is the Liberal penny, which was so derided and ruled out at the last election. It is not enough to pay for the promised expenditure but it clearly breaches the public commitments that the Government gave in spirit and almost to the word.

I cannot remember such a cynical Budget since the mid-1950s or such a cynical move before and after election to office. I will not repeat the largely excellent speech of the hon. Member for Truro and St. Austell, but the Government cut taxation on the eve of the election

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and then raised personal taxation on incomes as soon as they could in the next Budget. That ranks with the type of political cynicism that we have not seen for more than a generation.

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