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Dr. Gibson: The last time that the shadow Chancellor estimated cuts that the Tories would impose, he disappeared into the depths of Dorset or somewhere down there. Does my hon. Friend recall that happening during the last election?
Mr. Love: I certainly do, and the figure that was estimated then was considerably less than the current figure that the hon. Gentleman is trumpeting. It is interesting to note that, a month or two ago, the Opposition were announcing that they would reduce public expenditure, but they are now saying something quite different. I suspect that one of the Tory Front Benchers will disappear as we approach the general election.
I also congratulate the Chancellor on staying within his fiscal rules. If we compare that with what has happened in Europe with the growth and stability pact, it shows how clearly the Chancellor has the confidence of the international community because he sets rules and stays within them. We have heard a lot in the past few days about the mythical so-called black hole, but the Chancellor's forecast in the Budget is that at the end of this economic cycle, under the golden rule, we shall be at least £6 billion in surplus. As to the sustainable investment rule, £57 billion will be the measure of his
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ability to sustain investment in the economy. Even with the private finance and other initiatives that do not appear on the Government's balance sheet—the Opposition continually talk about them, even though they are only 43 per cent. of overall PFI credits—the Chancellor still remains well within his sustainable investment rule.
I also congratulate the Chancellor on reducing the burden of regulation. We have not heard much about that from the Opposition, despite the fact that it is one of their constant themes. However, we have heard from small business and other business organisations how welcome are the changes to the requirements for the reporting of VAT, which will significantly reduce the burdens that businesses face. The reduction in the number of regulatory bodies—we shall have to see how it pans out in the future—is also very welcome to the business community. Speaking as a member of the Regulatory Reform Committee, I accept that we have to change the culture in Whitehall and get it to think about reducing regulation as well as increasing it. Only when we have institutionalised that here at Westminster will we get the changes that we want.
I want to comment on the household savings ratio. I was going to say that it had not been mentioned by any Conservative Member, but in fact the hon. Member for Worthing, West did mention it. He forgot to tell us, however, that all the Jeremiahs on his side had previously said that the savings ratio was too low; now that it is beginning to increase, they no longer mention it. I am pleased that it has risen to 5.6 per cent.
Two proposals in the Budget have particular merit, but I would like to see the Chancellor going further with them in the next Budget. I welcome the significant investment—the education sector is relevant—going into public infrastructure. We have invested substantially in recent years, and it is pleasing to see that public investment will rise from 2 per cent. to 2.25 per cent. of gross domestic product in the next couple of years. Over the next few years, a brand new hospital will be built in the most deprived part of north London, which lies in my constituency, and a second hospital in my local authority area will receive significant investment in new facilities. My constituents will be able to use both hospitals and receive a significantly improved service as a result.
My constituency has also had two new schools—a secondary and a primary school—in recent years and there has been an enormous improvement in the facilities in all our primary and secondary schools. There is a proposal for a local academy and I look forward to it going ahead in the next couple of years. The Budget particularly highlighted the "Building Schools for the Future" initiative, which is an exciting prospect that should help to deliver a completely refurbished secondary sector and additional improvements to the primary sector. It amounts to £9.4 billion-worth of investment over the next five years, which will make a significant difference.
The Budget statement predicts that by 2009–10 we will invest £6.7 billion in our schools, in comparison with £700 million in 1996–97. That provides a good measure of the investment that Labour is putting into our public infrastructure. All that will bring about
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higher standards, better results for our kids and real achievements for pupils who live in the more disadvantaged areas.
Mr. Francois: I am confident that the hon. Gentleman will be in the Chamber for the winding-up speeches, so I assure him that I shall respond directly to all the nonsense he has been spouting about the £35 billion cuts. We shall take that at the correct time.
As education is part of our focus in this debate, how does the hon. Gentleman respond to the fact that the National Association of Head Teachers, traditionally a moderate union, believes the working-time agreement to be unworkable in schools for non-contact time and is not prepared to implement it?
Mr. Love: I shall listen carefully to what the hon. Gentleman says about the £35 billion-worth of cuts that the shadow Chancellor wants to make. People tell me that the differences between us are in the rate of growth, but the reality for my constituents is that they will have a choice between the Labour Government and the official Opposition and the difference between the Government and the Opposition is £35 billion-worth of cuts in our public services. It is critical that we get that message across to the electorate, so I assure the hon. Gentleman and all his colleagues on the Opposition Benches that we shall indeed do our utmost to ensure that the message gets across to our constituents between now and whenever the general election is held.
I take on board the hon. Gentleman's comments about the head teachers union. I understand that teachers have some difficulties, but I hope that they will continue to discuss the issue with the Government. It is an important initiative and it should be introduced. I am confident that the NAHT will be able to reach an agreement in the not-too-distant future.
I want to touch briefly on some other issues. I was pleased that the Chancellor announced an increase in the inheritance tax limit to £300,000 in two years' time. A considerable number of my constituents are affected by the tax. I am sure that it was never the intention to include so many people in that regime, so I strongly welcome the change. We need more comprehensive reform, however, and I hope that once the general election is out of the way the Treasury will consider the matter more seriously. We must ensure that inheritance tax does not affect families with moderate incomes, but reaches only those who are well-off enough to sustain the burden it imposes.
On council tax, I strongly welcome the £200 to be paid to every pensioner aged 65 or over. I say "every" advisedly, as that is an important consideration. Our opponents, both the Liberal Democrats and the Conservatives, have been telling everybody all the good things that they are going to do for pensioners, but the official Opposition forgot to say that everyone in the household has to be over 65 to receive the benefits they are offering. That proposal falls adversely on the less well-off. The Conservatives would pay more to the well-off and less to the less well-off. Our proposal would reach more pensioners and provide more support to the poorest pensioners, which is important.
The Liberal Democrats forgot to tell better-off pensioners that their income tax proposals will have an impact on them. If the Liberal Democrats were more
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honest about the impact of their so-called local income tax, they might recognise the merit of what we have been saying: our proposals will improve the situation for more pensioners.
Angela Watkinson : The hon. Gentleman said that our £500 discount applied only to pensioner households where both members were aged over 65. He may be pleased to hear that it will also apply to couples aged over 65 who are caring for a younger son or daughter who has learning difficulties or a disability. The fact that there is a younger person in the household will not affect the eligibility of the couple aged over 65 to the discount.
Mr. Love: I genuinely welcome that comment, but the official Opposition appear to be making yet another change on the hoof. Only two days ago that was not the case, but now things seem to have changed, so it just goes to show what a miraculous thing a good Budget is. It has an impact not only on the Labour Benches, but forces the Opposition to change their mind and to improve the situation.
Mr. Stunell : The hon. Gentleman commented on the Liberal Democrat proposals to replace council tax with a local income tax and suggested that there had been a failure to describe the winners and the losers. In fact, we have made it clear that half of the pensioners would be beneficiaries, a quarter would have no change in their current payments and a quarter would pay more. The quarter who would pay more would be people with large private pensions that brought their income above £27,000 a year. That is not a secret. We have made it very clear. We believe it right and proper that those with the greatest means should make the greatest contribution. Is not that a principle that the hon. Gentleman accepts, too?
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