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12 Feb 2003 : Column 886—continued

Sir Peter Tapsell (Louth and Horncastle) rose—

Mr. Brown: I cannot resist the hon. Gentleman.

Sir Peter Tapsell: I am grateful to the Chancellor.

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The right hon. Gentleman is talking about his fiscal policy, but the great fault of his policies throughout his chancellorship has been the mismatch between his fiscal and monetary policies. We see that clearly at present when his Monetary Policy Committee is reducing interest rates just as he is about to put up national insurance. It is illogical for fiscal and monetary policy to operate in different directions.

Mr. Brown: I have a great deal of time for the hon. Gentleman, mainly because he attacks his party more than he attacks ours. However, may I remind him of what he said in the House of Commons, just after our announcement of rises in public expenditure? He said that

Neither has happened.

For fairness, we should consider the fiscal policy alternatives being offered by the other parties. The—

Matthew Taylor (Truro and St. Austell): Will the Chancellor give way?

Mr. Brown: I am happy to give way to the other shadow Chancellor.

Matthew Taylor: At a time when the Chancellor is asking everybody to pay more in order to invest in health and education, which is right, is he happy that the Inland Revenue disposed of its property to a company based in a tax haven in Bermuda in order to reduce costs to the Treasury?

Mr. Brown: I am grateful to the shadow Chancellor for raising that point. His hon. Friend the Member for Yeovil (Mr. Laws), who is a member of the Treasury Committee, has been giving radio interview interviews on the matter. The report of the Select Committee will be studied in great detail by the Treasury. We have made a number of changes as a result of what we already know. We shall respond to the Select Committee and take whatever action is necessary. As a result of that, we do not believe that such a situation will be able to occur again.

The hon. Gentleman's intervention allows us to focus on the policies of the Liberal party. Conservative Members, too, will be interested in that. As we know, for the past 10 or 20 years, the Liberals told us that we needed more public spending to deal with every problem that we faced. However, I have a letter written by the shadow Chancellor—the one who lives in Truro—to Liberal Democrat MPs. The letter is about "Alternative Budget 2003"; it is dated 8 January and begins: "Dear Friends". The hon. Gentleman sets out views that we should share with every elector in every part of the country. He wrote:

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I am grateful for that private, if belated, acknowledgement of what we are doing to make public services—

Mr. Laws rose—

Mr. Brown: The hon. Gentleman may want to be shadow Chancellor, but I shall give way only to the shadow Liberal Chancellor on this occasion. The Liberal Democrats should forget every promise that they have made to groups of pensioners and others over the past few years. They should drop their offer to spend billions on education, because it is unrealistic. What happened in the first few days of this month? Press releases issued by members of the Liberal Democrat shadow Cabinet and others said that more money was wanted for teachers' pay, and referred to a "derisory" increase; and that there should be more bonuses for members of the armed forces; more beds for care homes after "chronic" Government under-investment; more housing for key workers; and more for the Post Office, because £2 billion was just sticking plaster. Those were the press releases of just a few days from the Liberal Democrats—the party that is supposed to believe in freedom of information.

Mr. Eric Forth (Bromley and Chislehurst): On a point of order, Madam Deputy Speaker. Is it not the normal courtesy for speakers, whether on the Front Benches or Back Benches, to address the Chair? Is it not totally discourteous to yourself, Madam Deputy Speaker, when the Chancellor persistently turns his back on you?

Madam Deputy Speaker (Sylvia Heal): That is the normal courtesy but not one that is always followed by right hon. and hon. Members in all parts of the House.

Mr. Brown: Liberal Democrat Members should tell their constituents that which they have said among themselves in private—that they cannot make additional public spending commitments and that it is dishonest to do so. They should return to their constituencies and prepare to tell the truth.

Matthew Taylor : The Chancellor has revealed nothing by saying that Liberal Democrats welcome the Government's belated spending increases. We will lay out our alternative. We do not believe that the Government are spending their money well. Just today we discovered that thousands of old people are blocking hospital beds much needed for treatment because the Government are overseeing cuts in private nursing sector provision. It is possible to spend the money better than the Government are doing—

Madam Deputy Speaker: Order. That was a lengthy intervention.

Mr. Brown: We face the next local elections and the Scottish and Welsh parliamentary and assembly elections with the nationalists proposing to cut spending, the Conservatives proposing to cut spending massively and the Liberals unable to say, as they always have done, that they would spend more. That is a welcome tune and welcome honesty from the Liberal Democrat party, and it should be explained to voters in every constituency.

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Conservative Members said that they would not make any public spending commitments while in Opposition but would wait until they had evaluated the circumstances, yet at the Conservative party conference, among the 20 commitments to public spending was one, not to the national health service, but to private health care in this country. The first priority of the Conservatives as set forth by their shadow health spokesman is full tax relief for people taking out private health insurance—a policy that Nigel Lawson, when at the Treasury, rejected as a wasteful use of public money.

If Conservative health priorities, whether in Folkestone or elsewhere, are to prefer private health care funded by tax relief, with all the deadweight costs to the NHS, I do not think that the shadow Chief Secretary's review can yield anything but disaster for the British people. The Government are running the economy in the interests of all, not a few. The Government are running public services for the people. The Government believe in the health service. I commend the amendment to the House.

1.43 pm

Matthew Taylor (Truro and St. Austell): The Conservative party called the debate, so it is right to begin by commenting on its extraordinary proposition. Anybody reading the Conservative motion could conclude only that part of the Conservatives' proposals is a tax cut and a cut in public spending to go with it. The motion condemns current policy and the money that is to be put into the health service and education.

The Conservatives say that the problems of the British economy are predicated on tax levels under the present Government. However, the shadow Chancellor cannot or will not give any indication of Conservative tax and spending cuts. We heard not a single proposal for a tax cut from the shadow Chancellor, who says that the problems of the British economy are built on tax. Neither did we hear a single proposition for a cut in health or education spending.

Dr. Liam Fox (Woodspring): The hon. Gentleman's colleague and spokesman on health recently told the House that the Liberal Democrats would increase health expenditure through a new tax. Will that tax be set at such a level that health expenditure would be lower, the same or higher than it is currently?

Matthew Taylor: We welcomed the Government's increased taxes and argued that national insurance should pay for investment in the health service. We do not trust the present Government or future Governments to ensure that the extra tax will continue to go into the NHS, so we said that we would dedicate national insurance to the health service, ensuring that in future it will share in this country's increasing wealth, which it failed to do for many years in the past.

Dr. Fox: Will the hon. Gentleman answer my question?

Matthew Taylor: I have just said that we welcome the Government's expenditure and will make sure that it is

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dedicated to the NHS. I have not finished answering. I have a question for the hon. Gentleman: last year, he told the BBC that he conceded that taxes might have to rise for the NHS. He was immediately slapped down by his party leader, who insisted on taking him through a vote against increases in NHS funding. We know that the hon. Gentleman's position now is to spend billions less on the health service. Alternatively, he intends to raise the money by introducing charges for NHS operations. That is the position that he articulated before the last general election, and he has not said that he was wrong.

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