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9 Apr 2003 : Column 310—continued
Mr. Stephen O'Brien (Eddisbury): My right hon. Friend may not have had a chance to see all the associated documents that go with the Red Book, which include a so-called discussion document entitled "Public services: meeting the productivity challenge". It seems that the Chancellor has just woken up to the fact that he has spent the money, but did not get the reform, and that no wonder productivity is collapsing.
Mr. Redwood: My hon. Friend moves me on to the penultimate section of my speech. What should be done about the dilemma in which the Chancellor finds himself? The vital issue is that of public service reform. My right hon. Friend the Leader of the Opposition is right: we do not begrudge money if it is well spent in the public services, but we think that it is absurd to take so much money and tip it into the wrong areas without first reforming the services to ensure that it is likely to be well spent.
Hon. Members will be pleased to know that I cannot go into detail on all the services today. However, the general theme that I would recommend to the Chancellor is one that is more beloved of the Prime Minister than of his own Treasury—that is, that he should trust local management and the choices made by users of services rather more, and that he should start to dismantle the huge bureaucracy that he has created nationally, regionally and in the principal councils to try to monitor, regulate, overrule and interfere in public service management on the ground. Extra money needs to be spent in hospitals on nurses and doctors and in schools on teachers and the equipment that they need to teach; far less needs to be spent on all the intermediate levels between Ministers and those operating units; and we need to trust patients and parents far more by giving them real choice.
If I could sum it up in a single phrase that should certainly appeal to Blairites in the Labour party, if not to other members, we need to back choices for people who cannot afford choices. I do not want to live in a world where those who are very rich can buy themselves all the best possible health care, when they need it and of the kind that they want, and can pay for a really superb school at a very high price out of their taxed income, but where everyone else has nothing like that degree of choice in getting the health care that they need, when they need it, or schooling of the quality that they want.
I want people in my constituency who are on more modest incomes than those who send their sons to Eton or go to the best private hospital to have a real chance of access to a high-quality school of their choice, where all or most of the money is supplied by the state—all of it if they want a free place, or most of it if they are prepared to pay a top-up fee. I want real choice, and I want it to give those who live in the middle of London or the middle of Birmingham the same life chances as those who live in the better suburbs and shires where there are really good schools and hospitals—they do exist in some places.
We all need that greater choice and we all need far more capacity in the health and transport systems. Transport is a good example of where we could achieve a great deal in expanding rail capacity and road capacity if we really used the private sector. People are used to paying for their transport, and it can be financed entirely privately. We do not want expensive public-private partnerships and private finance initiatives, which deliver too much risk to the taxpayer and too little money to the service itself. The Government should have the courage of some of their convictions and let the private sector do far more to relieve the taxpayer of the enormous burden of tipping huge sums of money down the drain on to Network Rail and finding that the railway system is worse a year after the partial renationalisation than it was before.
My final point is that the Government's overall economic strategy is going disastrously wrong. The course that they must adopt is one that reins in wasteful spending so that they have to borrow less, and starts to deal with the very damaging tax rises that they have imposed, which are now reaching the point whereby they will stop the growth in revenue that the country so desperately needs. It will be difficult, because the well-managed and strongly performing economy of the late 1990s has been badly gummed up by too much tax, too much regulation and some very foolish public spending priorities, but not impossible. Billions of pounds are being wasted on areas such as Network Rail, the quango world and regional government. A civil service of 500,000-plus is far too big. The Government should get a grip and start to reduce those expenditures so that they have some leeway.
If the Government decide not to bother about that and to believe the bizarre and over-optimistic forecasts and figures in the Chancellor's Budget documents, we will get into a difficult pickle. Productivity will not grow in the way that is wanted; public services will not respond to the patient or the parent, because they will not be allowed to; there will not be the improvements that we want; and there will be no real choice. Public services will get a lot dearer, but will not deliver. The private sector will be starved of more and more cash and
will not be able to make the investment that is required, which will limit the growth of the productive economy. That, in turn, will cut the tax base in future. "Fifty-three tax rises" will be written on the tomb of this Chancellor unless he stays in office for long enough to impose the extra ones that his Budget will require when the money runs out in the not-too-distant future. This is a Chancellor of tax and waste; a Chancellor of boom and bust; a Chancellor of fiddled figures. This is a Budget that we should vote against.2.59 pm
Mr. James Plaskitt (Warwick and Leamington): It all sounds very woeful in Wokingham; the situation feels very different in my constituency.
In the run-up to the Budget I have spent a fair amount of time taking the pulse of the Warwick, Leamington and south Warwickshire area. In the past three months, I have visited more than 20 companies in my constituency. I have spoken at length with the chambers of commerce, the Federation of Small Businesses, the Engineering Employers Federation and some of the intermediate bodies that the right hon. Member for Wokingham (Mr. Redwood) mentioned and disparaged so much—for example, Advantage West Midlands, our regional development agency, and the local learning and skills council. Between them, I have been sounding out a good cross-section of business opinion.
I have spoken to sole traders, small and medium-sized enterprises, medium-sized firms and local firms that are part of global companies. I have also spoken to a mix of manufacturing and service companies. Within manufacturing, I have spoken to different types of businesses—lower as well as higher technology. In my constituency, the car industry is a strong presence—both design and build and also component supply. By taking all that on board, I have had a good opportunity to take the pulse of the economy in the west midlands. It has given me a platform from which to assess whether the Chancellor's handling of the economy in general and the particular measures he described today are responding to the needs of the business sector as I hear them in my constituency.
In my discussions with those companies, three main issues have emerged as important to them. First, they stress the importance of maintaining underlying economic stability. They made an extensive number of points on the tax and red-tape issues that are of great importance to Conservative Members—they are also important to companies in my constituency and I shall deal with them in a moment. All the companies said, however, that tax and red-tape grumbles and issues pale into insignificance when set alongside the damage that would be done if the economy turned into recession. They recall previous recessions and the damage that they did to their companies. Recessions drove companies out of existence in my constituency and caused unemployment to soar—today, it is running at 1.5 per cent. which is a different story from what it was 10, 15 or 20 years ago.
All my companies say that the most important thing that the Government can do is to maintain economic stability. They say that they will have arguments with us about other things that are happening, but above all, they tell us to maintain economic stability. So they are
impressed with the Government's record on that central point—the fact that we have had positive gross domestic product growth for every quarter since the Labour Government have been responsible for managing the economy.Last year, our growth was bettered only by the United States and Canada. Our growth forecasts are now running well ahead of those in Euroland. As an economy, we are well placed to cope with the global slowdown. We have low interest rates, low inflation and stable public finance. Given that background and in those circumstances, it is prudent and sensible now to borrow to support economic activity; not to borrow at irrational or dangerous levels—we are not going anywhere near the 8 per cent. of GDP recorded under the Conservative Government—and the borrowing levels envisaged in the Chancellor's statement do not even reach 3 per cent. of GDP.
Businesses recognise that that is a sensible way to manage public finances. It is the right posture to adopt towards public finances during this global dip. They are telling me and the Government, "Maintain that economic stability." It is crucial for maintaining the United Kingdom's favourable performance against so many other countries—many of the crucial investment decisions made for companies in my constituency, which affect my constituents, are made abroad, not in this country, by the foreign owners of those companies. The United Kingdom as a place for investment is judged against rival locations and capital is now highly mobile. Therefore maintaining the competitiveness and strength of our economy is important.
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