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Mr. David Laws (Yeovil) (LD): As ever, I enjoyed the Chief Secretary's speech, although it could perhaps have done with a few judicious cuts of its own. I hope that that chair in the Ministry of Defence is never found, because if it is, he will owe the hon. Member for Tatton (Mr. Osborne) more than a pint.
I welcome the fact that the Conservatives have given us not only an opportunity to debate the Government's strategy on public services and delivering value for money, but an early opportunity to discuss some of the material released in the James report earlier this week.
The Chief Secretary is usually a fair, calm and dispassionate man, as I am sure that he himself would acknowledge, and he was a little unfair to criticise the Conservatives on the extent of the information that they have published so far. I remind him of the caution that his own Treasury team and the Chancellor of the Exchequer showed before 1997, when nowhere near as much information was provided. Indeed, the right hon. and learned Member for Rushcliffe (Mr. Clarke), who does not always support his Front Benchers on all matters, is quoted today as saying that
Certainly, they are considerably more detailed than those set out by the Conservatives before they got into power in 1979 or the Labour party before it got into
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power in 1997. There seems to be an inverse relationship between the amount of information that parties publish when they are in opposition and their proximity to power. If my theory is right, and if the comment by the right hon. and learned Member for Rushcliffe is accurate, the Conservatives may be very far away from getting back into powerperhaps as far away as at any time in their recent history.
Mr. Borrow: The hon. Gentleman suggests that the amount of detail in the Conservatives' proposals reveals their distance from power. Does he think that the same applies to his own party, whose proposals are truly incredible?
Every party, including mine, has had its own review of public expenditure. It is important that we have this debate and that all parties engage in it, because it is inconceivable that an organisation with a budget the size of the Government's, with £550 billion of public expenditure, will not have various areas where savings can be made. However, it is pity that neither the motion nor the speech by the hon. Member for Tatton made more acknowledgement of the need for an increase in public expenditure not after 1997, but after 1999 when the Conservative spending plans came to an end. What is missing in all the discussion of waste and higher taxes is any acknowledgement of the important role of public expenditure in improving our infrastructure and securing improvements in public services, where there were major inherited problems following the 18 years of Conservative Government.
I understand that today the Conservatives signed up to the Government's commitments in respect of overseas development assistance. That is very welcome, and it reminds us that public expenditure is not simply a matter of waste and taxation but of achieving very important objectives. However, I remind the hon. Member for Tatton that when the Conservatives were in power, as opposed to matching commitments in opposition, real expenditure on overseas development assistance to Africa fell by about one third between 199293 and the end of that Parliament. I hope that the Conservatives have reviewed their approach to issues such as public sector investment and overseas development expenditure, but that is not evident in the motion or from the remarks of the hon. Member for Tatton.
I want to turn to issues relating to value for money and explore them in the context of the James report, which is extremely helpful and detailed. We should all be concerned about securing value for money. It is clear that the public's appetite for additional increases in taxation is limited, as people want to see delivery in exchange for the additional taxes that they have paid. We have many concerns about the Government's performance in that respect, not least because of their excessive control over public expenditure and
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centralised control of targets, which is often extremely wasteful. We should prefer a considerably greater devolution of power. We share some of the concerns expressed by the hon. Member for Tatton about productivity in the public sector and the fact that it is falling behind that of other countries in relation to the private and public sectors, although it is important to bear it in mind that many of the additional investments in public expenditure since 1999 have been in areas where one would not expect any evident improvement in productivity.
I shall give an example from my constituency, where the ceiling of a hospital fell down six months ago. The hospital was built before the second world war, which predates the national health service, and sticking plaster wasalmost literallyapplied over the past couple of decades to keep the building together. That solution failed to the extent that the hospital has almost fallen down, but it will be rebuilt. That will not necessarily appear in the productivity data on public expenditure but it is nevertheless a worthwhile investment.
The hon. Member for Tatton put taxation centre stage in his speech. The motion states that there have been 66 tax rises since Labour came to power. That is not a helpful way in which to consider taxation because, as was said earlier, one needs to examine the net balance between tax increases and tax cuts. In addition, as the motion states, there is a need to consider the rate of change of taxation. The motion calls for
The right hon. Member for Charnwood (Mr. Dorrell), who is not in his place, raised that issue a couple of times and invited the Chief Secretary to comment on the fact that the Government's public expenditure and taxation documents suggest that the tax burden will increase in the next few years. However, the right hon. Gentleman did not appear to realise that his intervention constituted something of a boomerang for his Front Bench, which is signed up to the same plans, minus a small, moderate reduction in taxation of £4 billion.
This morning, the Institute for Fiscal Studies said that the proposed Conservative tax cuts would offset only about one seventh of the increase in the tax burden as a share of national income that the Treasury has pencilled in for the next five years. In other words, the Red Book shows that the tax burden will rise from 36.2 per cent. of national income in 200405 to 38.4 per cent. in 200910. The hon. Member for Tatton, who is normally candid in his responses, ducked my question. I asked him to acknowledge that, even after the £4 billion of tax cuts that he intends to implement, the tax burden would increase substantially. Indeed, it will rise from 36.2 per cent. to 38 per cent. of GDP. The tax burden under Conservative plans for the next Parliament will therefore increase by 1.8 per cent. If I am wrong, I would be happy for the hon. Gentleman to intervene. However, I take his silence to show that the Conservative party is signed up in its expenditure and taxation plans to an increase in the tax burden in the next Parliament.
The right hon. Gentleman knows that we set out clearly our plans for the abolition of the council
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tax, which is a most unfair tax, and its replacement with local income tax. Our only taxation proposal is for the 50 per cent. upper rate of tax, which would abolish tuition fees and reduce the burden of council tax. However, that does not answer the question that I posed to the hon. Member for Tatton. I take Conservative Members' silence as an acknowledgement of what they would perhaps prefer not to admit: if the Conservative party won the election, the tax burden would increase by almost 2 per cent. of GDP under its current plans.
Mr. Maude: The hon. Gentleman is an intelligent and fair man. He asks my hon. Friend the Member for Tatton (Mr. Osborne) to answer a specific question about the Conservative party's plans. Surely he must acknowledge that, if he wants an answer, he must answer the same question about Liberal Democrat plans.
Mr. Laws: My party does not make the same claim as the Conservative party to reduce taxes. The Conservative party is trying to give the impression that if it came to power in the general election that will be held in a couple of months, the tax burden would reduce. The truth about Conservative expenditure and tax plans is that the tax burden would increase considerably, and that is why Conservative Front Benchers do not want to intervene on me.
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