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Mr. Bercow: My hon. Friend is making a characteristically robust contribution. In the context of taxes, is he aware of the sage verdict of the noble Lord Hattersley? In an article in The Guardian of 13 June 1995, he said that Labour could be either the party of higher taxes and proud of it, or the party of higher taxation that it is ashamed to describe, afraid to admit to and incapable of calculating with any accuracy.
Mr. Cameron: I am afraid that, as someone who writes a column for The Guardian website, I take the
view that The Guardian is something to write for rather than to read. So I did not read that article, but I shall look it up.In the time remaining, I shall try to answer two questions: has most of the extra money spent by Labour on our public services been wasted, and if so, why? Those are the two most important questions in British politics today, and the answers to them will probably determine the outcome of the next general election.
Of course, no one would claim that all the money has been wasted, but the case for saying that tax and spend, as an approach to improving our public services, has failed is overwhelming. We know that tax revenue has increased from £271 billion in 1996–97 to £429 billion in the forthcoming year. That amounts to an extra £6,300 for every family in this country. It has not all gone on paying off debt, because Government spending has increased from £317 billion in 1997 to £488 in the forthcoming year—a similar increase. Of course, the Government can and do point to building projects either completed or under way, and some successes on outcomes. I grant that in some respects, notably for primary school results, but the overall picture, as we have heard from many Conservative Members, is pretty dire.
In our hospitals, there are a million people still on waiting lists, with mean and median waiting times for in-patient treatment up over the last four years. In our schools, truancy is up by a fifth since 1997, with 33,000 children leaving school each year without a GCSE. On our streets, violent crime is up by two-thirds, with gun crime doubled, yet the Home Office budget has increased by two-thirds over the Government's period of office.
I believe that anger against the Government has been sharpened by three distinct questions being formed in the public mind. The first is a question about price. When inflation is low and the price of some goods in the shops is falling, people are asking why the cost of government and the public services is rising so rapidly.
The second question is about quality. Families enjoy ever greater choice, and usually greater quality, in the areas of expenditure that they control, such as the family holiday or the family car. They are asking why the quality in the areas that they do not control—usually in the public sector—is often so poor.
The third question is about how the moneys to pay for Labour's tax and spend experiment have been raised. Put simply, the question people ask is why Labour never admitted to plans for a tax and spend programme before introducing one. Before the last election, we heard nothing about national insurance increases and nothing about council tax increases. There was never any admission that we were moving into a tax and spend era, yet we all know that there have been 60 tax rises.
For a while, the stealth tax approach of raising money through ever more ingenious routes actually worked. The raid on the pension funds was not felt immediately. The hikes in stamp duty were felt by those who moved house, but not by those who did not. It was the increase in council tax—up 70 per cent. since 1997—that affected every family in the country. Interestingly, opinion polls show that almost everyone accepts that the principal
cause of the increases is central Government. The same goes for national insurance contributions, because people see the money coming out of their pay packets.Conservative Members aim to prove that much of the extra money raised in taxes has been wasted. I would argue that when even the Chancellor himself admits that 40,000 jobs can be cut out of the public sector, and £20 billion saved, without cuts to front-line services, we are well on our way. I commend my right hon. Friend the shadow Chancellor for his work on those problems.
We also have to explain why the Chancellor has failed in his mission to transform public services through tax and spend. Such a "narrative", to use a new Labour term, is not important for presentational reasons alone; it should form an important part of winning the intellectual argument about how we would do things differently and why a different approach would work.
The Prime Minister's mantra about public services is "investment plus reform". He has a neat addendum when he says that Conservatives are against the investment, and that Liberal Democrats—and most of his own Back Benchers—are against reform. That is his neat mantra, but in order to explain why the money has been wasted, we have to prove that the reform has been a chimera and has not happened. I believe that it is easy to demonstrate that, which is exactly what I shall do in my remaining time.
A key part of the task is to explain the different stages of Labour's reform since 1997. The Opposition have not said nearly enough about that, but the fact is that since taking office, Labour has completely changed direction on public services. Stage one was ruthless centralisation, scrapping almost every area of Conservative devolution and choice: nursery vouchers, trust hospitals, fundholding GPs, the internal market and grant-maintained schools. Anything that devolved power in the public services went.
The second stage, which took place under the right hon. Member for Holborn and St. Pancras (Mr. Dobson) when he was Secretary of State for Health, and the current Home Secretary, who was then Secretary of State for Education and Employment, was rigorous centralisation and control from Whitehall. Stage three, now under way, is a complete reversal of stage two, with a new emphasis on decentralisation. The rhetoric accompanying that decentralisation was powerful. The Prime Minister's rhetoric is always extremely powerful, I find, but the reality is rather more flimsy. Foundation hospitals are a sort of return to trust hospitals, but the concept does not have much meaning. Financial flows are the new thing in the health service, but they are like a half-baked return to the internal market.
The best example of new Labour's lack of clear thinking on how to reform the public services is the Education Act 2002. The House will recall that that legislation was about earned autonomy—that is, giving successful schools the right to manage more of their affairs. We debated it for months: it was passed two years ago, but the earned autonomy powers have never been introduced. Apparently, the Government have decided to give all schools more autonomy, so earned autonomy has gone out of the window. Have schools got more autonomy now? Of course not.
Another element in explaining the Government's failure over public services is the web of bureaucracy on which their reforms rely. That is a subject that deserves
more comment. Any major piece of new Labour reforming legislation has at its heart the requirement that plans and strategies be drawn up and published. Such plans include those for policing and for combating antisocial behaviour; indeed, local government now has more plans than Soviet Russia used to have. To rephrase the John Lewis slogan, local government is never knowingly underplanned.Individually, the plans sound harmless, or even quite attractive. Taken together, however, they have spawned a culture of paperwork and bureaucracy in the public services. The best example is in policing, where every stop and search has to be recorded, and the paperwork involved in processing one arrest now takes up to five hours.
A third element in an explanation of why the waste has happened is more widely understood. It is the over extension of targets set by central Government. As my hon. Friend the Member for Cotswold said earlier, many of those targets and public service agreements have been scrapped. The Government are now in headlong retreat, scrapping the targets that they introduced with such fanfare only a few years ago. However, the damage has already been done: the Government set off in one direction, they are now heading in another, and the taxpayer has been wholly ripped off meanwhile.
A fourth and little noticed element in the story of waste, and of why Government reform has not worked, is the continuing strength of trade union influence. That may surprise people in this day and age, but anyone involved in the purchase or provision of private finance initiative projects will explain how schemes have been stalled while unions seek guarantees that they will be wholly staffed by public sector workers. I know one or two people in that area of work, and they tell me that rumours abound that the Chancellor tends to bend to such requests, in return for pledges of union support in a future Labour leadership contest. Who are we to question—
Mr. Cameron: I see that the hon. Member for West Bromwich, East (Mr. Watson) is chuckling at that. I believe that he has something of a trade union past. He probably knows more about it than I do.
Mr. Watson: I know that it is complete nonsense.
Mr. Cameron: My fifth point in explaining Labour waste, and why Government money has been wasted, is that an analysis of what I can only call "the new salariat" is needed. A vast new industry has been created, made up of regulatory bodies and agencies carved out of Government Departments. For instance, the Department for Environment, Food and Rural Affairs spawned the Food Standards Agency, the Department for Culture, Media and Sport produced Ofcom, and the
Department of Transport gave birth to the Strategic Rail Authority. Those are three examples, but I am sure that Opposition Members could name another 33.
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