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Sir Stuart Bell (Middlesbrough) (Lab): I am grateful to the right hon. Gentleman for raising the issue of proportional representation. It is clear from the election result that many Labour voters actually voted Liberal. How can it be fair, honest or right that there be proportional representation, when such a switch of votes would lead back to a Labour Government with a Liberal element?

Mr. Kennedy: In the closing stages of the campaign—to be fair to the Prime Minister, during last week's press conference at No. 10 he was unusually candid on this matter—the Prime Minister was urging people not to be tempted into voting Liberal Democrat because they might end up with a Conservative Government. If I had been in his shoes—at the end of eight years in office that were buttressed by three-figure majorities, and in the closing stages of a campaign in which he was seeking this historic Labour third term—I would have had something a bit more positive and persuasive to put to the public than the argument, "Don't vote for that lot, even though you don't like me and us, because you
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might end up with somebody even more to your disliking." What kind of contortion and absolute distortion of people's votes is that?

I come now to some of the headline legislation before us today. We will certainly maintain our consistent and principled opposition to a system of compulsory national identity cards. We have been through many of these arguments before and we look forward very happily—particularly in the light of a reduced Labour majority—to replaying those arguments and to seeing how attention to them may have shifted with opinion in the parliamentary Labour party and, indeed, in the wider country.

Our views on health, education and benefit reform were set out at the general election. We need to look closely at the legislation before us, but it is clear that there are differences between the parties over the shape of the required reform. We oppose the imposition of top-up fees and tuition fees on our students. I heard the hon. and learned Member for Redcar speak movingly and sincerely about her ability to get up the ladder of social opportunity. I simply ask her and her colleagues this question: to what extent has that ladder been pulled up behind us, away from the current generation whom we are trying to help?

We also oppose the centralisation of targets in the health service, which, as we argued during the election, is distorting clinical priorities; indeed, there is agreement on this issue in many respects. We also continue to favour reducing class sizes in our schools and the accompanying boost to the teaching profession. We are all for diversity in the provision of quality public services. However, what most of us realised during the campaign is that real choice means people knowing that they can receive for themselves and their families at the point of need—and based on need, not ability to pay—quality local provision, whether it be at the school, the hospital or whatever. That is preferable to the false idea of having massive choice, which really involves travel, complexity and all the rest of it, and it is certainly the approach that we shall continue to advocate.

Angus Robertson (Moray) (SNP): What advice would the right hon. Gentleman consider appropriate for reforming the health service in England on the basis of the Scottish example, where the Liberal Democrats are in government but waiting times are up?

Mr. Kennedy: My advice to the hon. Gentleman, given that we have all been through the democratic experience, is that the Liberal Democrats, who are in the coalition Executive in Scotland, must be doing something right because they are now, for the first time ever in a general election, second in Scotland. I am also delighted to say that the Scottish National party, like Plaid Cymru in Wales, is emphatically down—[Interruption.] I am going to move on, Mr. Speaker.

The issue of terrorism was highly contentious both here and in the other place in the run-up to the election, but I know that this Parliament is going to return to anti-terror legislation. We all understand why there was a partisan atmosphere in the run-up to the election, but I nevertheless hope that, when we revisit the legislation, it may yet prove possible to establish an all-party consensus on the matter. Such a consensus must surely
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remain true to the principles that several of us argued for in the last Parliament—not least the principle that key decisions about individual liberty should never be in the hands of an over-mighty Executive, but should remain under long-established judicial control. At the same time, we have to balance that alongside the continuing need to be vigilant about combating terrorism.

Mr. John Redwood (Wokingham) (Con): Will the right hon. Gentleman tell us how negative and partisan it was to spend the entire election complaining that Labour and the Conservatives were fighting negative campaigns?

Mr. Kennedy: I was simply responding to consumer questioning on that matter. To be fair to the right hon. Gentleman, although I am about a million miles removed from most of his opinions, I pay tribute to him as a parliamentarian who is often a generator of fresh thinking and ideas, which he puts forward for public debate. I would encourage him to continue to do so, as I believe that it also helps the Liberal Democrats on many occasions.

There is another area in which it is vital to re-establish what was a long-standing all-party consensus until the Conservatives arbitrarily broke it when they were in government. I refer to long-term pensions policy. By definition, such policy should be something on which the individual citizen can rely with a degree of certainty, irrespective of the vagaries of elections and which parties find themselves in office. When we see the further report of Adair Turner later this year, I hope that it will be possible to return to a sane debate in which Conservatives, Labour and Liberal Democrats work together, as happened in the early 1970s after years of dispute. It should be possible for us to revisit that and have a more co-ordinated and less disjointed approach.

Penultimately, there is local taxation reform, on which we advanced positive views during the election. They proved controversial—much criticised by some, warmly applauded by others, which is what elections should be about.

Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab) rose—

Mr. Kennedy: I shall carry on, if the right hon. Gentleman will forgive me.

It is clear that the Government will return later this year to the funding of local government and I hope to see a more informed debate based on sensible proposals rather than a rejection of each and every idea that comes from every other quarter than the Government's. The Conservative party introduced the council tax and the Labour Government will have to reform it. They know as well as anyone else how deeply unpopular and regressive that tax is, and it is clearly not sustainable. The Conservatives introduced it only in response to the complete and hideous shambles that was the poll tax, which led to the demise of their leader at the time.

The poll tax and the council tax followed on from the old rating system. That, too, was completely unsustainable, but had been supported by both Labour
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and Conservative Governments. Therefore, I shall take no lectures from people who presided over such a mess in respect of local taxation. That is why I shall continue to make the case for a local income tax.

Tom Clarke: Will the right hon. Gentleman give way?

Mr. Kennedy: I am sorry, no.

My final point has to do with Britain's role in the world. There was, rightly, much discussion of the Iraq issue during the election campaign. We remain of the view that we should be planning a responsible and phased withdrawal of our troops from Iraq, not just in this Parliament but in this calendar year.

There were obvious controversies and leaks during the campaign, but I regret that we did not have a broader discussion of Britain's role in the world. Whatever happens in the French referendum to be held in a week or two, this Parliament is bound to be dominated by the European debate, and correctly so. It is time for us to make a positive case for Europe—one that engages and persuades the public. Those. Members of all parties who had informal contact in the previous Parliament must work as never before. Moreover, the Government must be seen to be heavily engaged in the argument. We must go out and make the positive case for Europe and ensure a yes vote in whatever referendum comes down the track. The pro-European parties secured 58 per cent. of all the votes cast in the election. That is very encouraging, but we must be prepared to build on it.

The outcome of the election confirmed one of the developments of recent years in politics. There is a need for the Liberal voice to be heard in party politics, in Parliament and in public on many of the issues that face us today. The Labour Government won only a marginal mandate, but they want to introduce illiberal measures. They can be assured that they will receive a Liberal response from those on these Benches—and that that will be good for the quality of our politics as a whole.

4.12 pm

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