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Mr. David Borrow (South Ribble) (Lab): Eight years ago, in the run-up to the 1997 election, I was asked on the doorstep what Labour's plans were for tax and spending. The party's promises at that time were very specific, and they were of the sort that one could fit on an A4 piece of paper. The promises were very specific and narrow because the Labour party believed that it would become the Government. It did not come out with a document containing pages and pages of detailed savings that it felt it could make when in government, because until one is in government, one is not in a position to say that savings can be made. One cannot do that until one has had a detailed look at the books.
The Labour party was right to be cautious at that time. It identified ways in which savings could be made and in which the tax burden could change. The key ingredient of that was having measures in place to reduce unemployment, principally the new deal, for which the Labour party had identified a pot of money. As a result of the new deal and continued economic growth, 2 million new jobs have been created in the past eight years. The amount of taxpayers' money that was being wasted on unemployment has plummeted. In addition, the amount of tax revenue coming into the Treasury because 2 million more people are in work has gone up. That has allowed the Labour Government, at this point in time, to begin to identify other savings, which can then be used in front-line services.
In many ways, the Gershon report's conclusion that we could make savings of £21 billion, which would involve a reduction in public sector jobs of 70,000, was challenging. Achieving that will be a huge task. I hope that my Front-Bench colleagues have their figures right
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and have done the necessary work, but I know that delivering that in the next term of a Labour Government will be immensely difficult and will create considerable pain. The bulk of the £21 billion savings is to come not from reductions in the number of public servants, but from better private sector procurement. From speaking to companies in my constituency, I know that they are beginning to feel the pinch when it comes to dealings and negotiations with central Government.
I therefore find it difficult to read reports this week that the Conservative party in opposition can suddenly find not £21 billion of savings, but £35 billion, and that it can pretend that that will be painless and that extra cuts in public sector jobs, whether 64,000 or 160,000, will make no real difference. It is bound to make a difference. When public sector workers in my constituency come to me with their concerns about the Government's proposed cuts and savings, I need to be assured by Ministers that if the numbers of people working for the Government will be reduced, whether in the Department for Work and Pensions or wherever, that will not mean a reduction in the service given to my constituents. It is not right that the taxpayer should pay to employ people to do unnecessary jobs. However, if people are working for the public sector doing necessary and good jobs, if we decide to get rid of those jobs we must be honest and open about the effect on services. If, as a result of investment in IT, certain jobs can be done more efficiently, that is a step forward. If certain jobs do not need to be done because we do not have large numbers of people unemployed, that is good and that money can be spent elsewhere. We need to be open and honest about all that.
What concerns my constituents most when it comes to tax and spending is whether they can afford to pay and whether they are getting decent services for the money that they pay. After eight years of a Labour Government, we have steady economic growth, the lowest interest and mortgage rates for 30 years and more, and unemployment in my constituency now at 1.2 per cent. —which is a huge contrast to the situation 10 or 15 years ago. With that economic stability, steady economic growth and low unemployment, people in my constituency can decide whether they can afford to pay a bit more tax, or whether they want to pay a bit less, in relation to the quality of public services that they receive.
I had a couple of meetings recently with the Lancashire police authority, which has been carrying out consultation exercises over the past few years, on whether the people of Lancashire would be prepared to pay above-inflation increases in council tax to the police authority if they got better services. All the indications are that if the police authority were to increase the council tax element for the police by 10 per cent. or so, and if that led to more front-line police officers, people would be willing to pay for that. If they believe that they are getting a better service, they are prepared to pay for it. If they do not think that they are getting a better service, they are reluctant to pay for it. Therefore, when we talk about investment in public services the key question that people must ask themselves is: are we getting value for money? Is it right for us to continue to pay through taxes rather than buying privately?
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Over the past eight years, I have visited schools in my constituency on a regular basis. Every one of them has had major investment in staff and equipment, and virtually every one has new building projects under way. This Friday, I shall go to the opening of a £1 million-plus sports hall at Tarleton high school. The same school had a new £500,000 block built three or four years, with computer suites and so on. That is typical of the schools in my constituency. Parents in my constituency can therefore see from the schools to which their children go that extra investment in education is leading to visible improvements. There may be a question as to whether that investment has led to the sort of improvements in performance that some of us would like, but when I remember what many of those schools were like eight years ago, I defend the need for this Labour Government to put in major capital investment. If a school has inadequate buildings, with leaking roofs, bad windows and inadequate areas for sport and assembly, spending a lot of money on improving that may not automatically lead to better GCSE or key stage 2 results. In a prosperous, wealthy society, however, I would have thought that all Members would agree that it is important to spend that money, and I can certainly say to my constituents that it is money well spent.
The same applies to the health service in my area. We have had dialysis units and cancer units. The doctors' surgery across the road from my office in Leyland seems to have had extensions and improvements every few years as it has expanded and delivered extra services. A new drug and alcohol abuse centre was opened in my constituency a few months ago, which we have all been wanting for many years. Those are tangible, visible improvements in public services, and people can make a judgment on whether it is right to pay for them.
I agree with those who have said today that we may have reached more or less the limit of what most people want to pay as a proportion of the overall level of tax. As sensitive Members of Parliament—
Mr. Mark Hoban (Fareham) (Con): Will the hon. Gentleman explain how he would fill the Government's £8 billion black hole—the gap between their spending plans and their taxation?
Mr. Borrow: I am sure that as the years unfold we will see whether it is a fictitious or a real black hole. During every year that I have been in the House, I seem to remember hearing Opposition Members talk of doom and gloom, saying that there would be a recession, that there would not be the expected tax revenues, that expenditure would be higher than expected and that the Chancellor would be unable to balance his books. Every year those critics have been dumbfounded by the fact that the Chancellor has been right and they have been wrong. If the Chancellor continues what he has been doing over the last few years, I have no reason to believe that he will not be able to deliver the public sector investments and improvements that I want to see, as well as ensuring that the books balance over the economic cycle.
I want to say a little about why some of the investment that the Opposition parties want to get rid of is, in fact, crucial. That applies in particular to the new deal. Members may ask why the new deal is important to
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a constituency like South Ribble, which has full employment. Two or three years ago, Tesco built a new store in Leyland and we were able to persuade it to become part of a new deal partnership. It recruited many of its employees from the long-term unemployed register. Using new deal money, it put them through a detailed programme to prepare them for work. People who had not worked for many years, and in some cases had not worked at all, eventually found secure, stable jobs with Tesco. Without the new deal, that would not have happened.
Employers often say to me—given that my constituency has full employment—that there are people out there without jobs, but they do not have the skills and the confidence to obtain work. Hundreds of workers in my constituency have been brought in from overseas—from eastern Europe and South Africa, for instance—and are doing excellent work, particularly in horticulture. However, I know that there are probably similar numbers in my constituency who, if we as a society were prepared to invest in them and give them confidence, skills and the work ethic, could be doing those jobs and making a productive input.
That will not be cheap. In the years ahead, the new deal programme may have to be altered to meet the needs of the future. I have no doubt, however, that if we want to make a difference to society, securing employment for people who, in many ways, are seen as being unemployable will be crucial. Breaking the cycle for people who have never worked and whose parents often do not work is one of the real challenges facing us. We have low unemployment and ours is a prosperous society, but a sizeable chunk of the population is not part of the work force and could be brought into it. Simply saying, "Here is a job, go and get it, go for an interview" will not bring them in—what is needed is investment by the community in those individuals. Working with employers and the wider community, we must give them the skills, talents, experience and confidence that are so important to getting them into work. That will have a knock-on effect on crime, disorder and all the other things about which concern is often expressed. Making people part of mainstream society is one of our key tasks.
My patch is one of the lucky, relatively privileged parts of the country—a nice area with nice houses, nice schools and very low unemployment. Even there, however, there are people who should be given the opportunity to work, having not worked for many years if they have even worked at all. That is a key part of the programme, and I think the two Opposition parties are wrong to want to get rid of that programme.
I want to make some criticisms of the Liberal Democrats' proposals, particularly their proposal to abolish the Department of Trade and Industry. I was in Toulouse yesterday to see the unveiling of the Airbus. The Prime Minister said that once the A380 was under way, in full production, there would probably be about 100,000 jobs in the UK linked to and dependent on it. Many smaller companies will be involved as well as the two main companies, Rolls-Royce and Airbus Industrie.
In proposing to abolish the DTI, the Liberal Democrats fail to recognise its importance to projects such as the Airbus. On several occasions during the eight years for which I have been in the House, I have lobbied
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both the DTI and the Chancellor for launch aid for the Airbus, which has been crucial to the UK's status as a major partner in the project. The idea that we can simply abolish the DTI puts our aerospace industry at risk. Moreover, the DTI provides export credit guarantees, which are crucial to the aerospace industry that employs thousands of people in my constituency in military aircraft production. Without the guarantees, exports of military aircraft from Wharton and Samlesbury in Lancashire would not be possible.
While I am having a little go at the Liberal Democrats, let me point out that I shall take great care to ensure that my constituents who work to produce the Eurofighter in Wharton and Samlesbury know that if there were a Liberal Democrat Government, one of their first acts would be to tear up the contract that was signed by the Secretary of State for Defence for the second tranche of the Eurofighter. That, too, would put thousands of people in Lancashire out of work—work on something that people like me have supported for many years.
It will be interesting to see whether the Liberal Democrat candidates in Lancashire include in their election manifestos, in a prominent position, their proposal to sack thousands of military aircraft workers in the county, or whether they will ensure that the proposal is seen only in parts of the country where military aircraft production is not an issue. The Liberal Democrats are very good at saying different things to different people, and because they are the third party their programme will never be properly scrutinised by the media. When their leader is interviewed, interviewers do not ask him for details of his party's spending and taxation programme because they know, as I do, that the Liberal Democrats will not form the next Government.
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