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The Paymaster General (Dawn Primarolo): The past two days of the Budget debate have covered a great deal of ground, with hon. Members asking several questions that I will do my best to answer in the remaining time. Let me start by mentioning the specific questions that the hon. Member for Bournemouth, East (Mr. Ellwood) asked about the announcement of the new fund to support victims of terrorist attacks here and outside the UK. I hope that he accepts that it would be better if I wrote to him in order to do justice to a subject about which he is very concerned and with which he has been deeply associated, because I could not do it justice in this short time.

This has been a wide-ranging debate to which the contributions made by Conservative Members can be summed up thus: "We want to discuss climate change but we've got nothing to add, we want to discuss pension policy but we've got nothing to add, we want to discuss the national health service but we've got nothing to add, and we want to discuss education but we've got three different commitments." First, we had the hon. Member for Chipping Barnet (Mrs. Villiers) telling us that the Conservatives will not honour the commitment on the expansion of education. Then we had the right hon. Member for West Dorset (Mr. Letwin) saying today, "It sounds like a nice idea—we'll think about it." Then, by this evening, we had the hon. Member for Wycombe (Mr. Goodman) saying, "Yes, we will match it." The problem throughout the debate has been that the Conservatives have no policy with which to engage in it.

Keith Vaz: On the hon. Member for Chipping Barnet (Mrs. Villiers), who was of course missing from her Front Bench during the opening speech, I was e-mailed a copy of "In Touch", the Conservatives' newsletter in Oakleigh ward, with a picture of her and the caption,

Is not that a call by the hon. Lady for more expenditure, not less?

Dawn Primarolo: I think that the case is made. The hon. Lady, like many Conservative Members, wants to stand in this Chamber and decry public expenditure and call for it to be cut, then they go back to their constituencies and demand more expenditure and investment in public services. During today's debate, the
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hon. Member for Mid-Sussex (Mr. Soames) was the only Conservative Member to show the good grace to give credit to the Government where it is due.

The Budget announced yesterday by my right hon. Friend the Chancellor demonstrated a vision for a modern Britain leading on enterprise and prosperity and leading in opportunities and fairness. It sets out world-class public services and an ambition to build on a platform of stability and growth. As my right hon. Friend said, we have had 54 quarters of consecutive growth—the longest expansion in British history. This is a stable economy, with inflation at the 2 per cent. target, interest rates low and record employment. The crucial difference between this Government and the previous Government is record levels of employment, with more than 2.3 million more jobs since 1997.

My hon. Friend the Member for Leicester, East (Keith Vaz), who spoke eloquently in support of the success of the Budget, referred specifically to the textile industry, on which he has campaigned a great deal in this House. The UK remains a good place to start and grow a business, with the World Bank study, "Doing Business in 2006", placing the UK at the top in the European Union, with the best business conditions. Support for local business environments through the local enterprise growth initiative, worth £50 million next year, is an important contribution to that, as is the improved access to finance for small businesses through the enhanced incentives to invest in small businesses through venture capital trusts.

Gregory Barker rose—

Dawn Primarolo: If the hon. Gentleman will let me make a little progress, I will certainly give way to him if I have time.

Yesterday, my right hon. Friend revealed a vision for modern Britain and detailed the reforms that will effect it and make the UK the location of choice for business, with more investment in skills and education. Those reforms will help us to meet the challenge of climate change. I shall deal with the points that hon. Members made about that shortly. The reforms will be embedded in our public services for long-term efficiency.

Let us be clear about the economy's current position. The UK economy has coped well with the challenges in 2005. They include sustained higher oil prices, weak euro area demand and a subdued housing market. Under the stewardship of the Conservative party, all those factors would have driven the economy into recession. The Organisation for Economic Co-operation and Development described the UK economy as a paragon of stability. The International Monetary Fund emphasised that macro-economic stability remains remarkable in the UK. In the nine years since 1997, the UK economy has grown by 24 per cent. In the previous nine years, under a Conservative Government, it grew by 15 per cent. If growth in the past nine years had been the same as in the preceding nine years, the average household would be more than £3,300 worse off than it is today.

Conservative Members also try to manipulate figures when describing tax revenues and rises. It is crazy and demonstrates why they are not fit to run the economy. They tell us that, by excluding North sea oil revenues, we
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somehow have the highest tax take. That is simply not sensible. What are they thinking about? If they take out North sea oil, will they also take out the financial sector and its receipts when it is doing well? Of course not.

Gregory Barker: Will the Paymaster General give way?

Dawn Primarolo: No, not at the moment. When North sea oil is included, the tax take is not as high as the peak in 1984. The OECD measure—the approved, internationally comparable measure of the tax burden—states that, in the UK, we rank below the OECD average and the European average. Indeed, every year since 1997, the tax burden has been below the peaks that were reached in 1984–85. Let me remind Conservative Members that some of the choice measures that they included in their previous Budgets included VAT on fuel and increasing VAT to 17.5 per cent. The Conservative Government cut advance corporation tax in 1993 and had the same effect on funds as they claim that the Government are now having.

Gregory Barker: Will the Paymaster General give way?

Dawn Primarolo: No, I shall answer the questions that hon. Members have asked and, if I have time, give way to the hon. Gentleman.

The hon. Member for Mid-Sussex made many points about pensioners. I agree that every hon. Member should be concerned about that, but I want to remind him of a few factors. Reforms to pensioners' tax and benefits since 1997 have meant that pensioners are, on average, £27 a week better off and the poorest third of pensioners are £39 a week better off. Let me put it another way: 2.1 million pensioners have been lifted out of absolute low income between 1996–97 and 2004–05, and more than 1 million have been lifted out of relative low income in the same period. They became the victims of low income and poverty under the previous Government's policies.

I stress to the hon. Member for Mid-Sussex that, of course, it is important to have an effective pensions system in future. Lord Turner's contribution to the debate and the Government's response will ensure that a carefully considered programme that balances the principles of personal responsibility, fairness, simplicity, affordability and sustainability, is implemented.

The hon. Member for Belfast, North (Mr. Dodds) also asked about the ombudsman's report. He acknowledged that the Department for Work and Pensions had made a considered response to it and I do not believe that I can add anything to that. However, in May 2004, the Government set up the financial assistance scheme, covering 15,000 people, and we have made a commitment to review the fund for the scheme.

The health service was mentioned repeatedly. Let us get a few things straight. The Government's plans for the NHS were set out in the Budget of 2002, providing clear plans for right up to 2008, offering long-term certainty for the NHS in order for it to plan. Since 1997, UK health spending has risen from the £33 billion that we inherited from the previous Conservative Government to £97 billion, representing a 7 per cent.
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real-terms increase per year. Now, 99 per cent. of people suspected of having cancer are seen by a specialist within two weeks, and we no longer have to listen to horrendous stories in our surgeries resulting from Conservative Government policy. If the Conservatives want to know where the money went, I shall tell them. It has gone towards 660,000 more operations and 1 million more elective admissions each year. These represent increases of 88 per cent., 89 per cent. and 108 per cent. in people's treatment.

Alongside that, there are now 79,000 more nurses and 27,000 more doctors. By the end of the 2004 spending round, the NHS will have 90 per cent. higher spending in real terms than it did in 1997. The money has not gone to pay for managers' salaries, as Conservative Members insist on saying. NHS managers now comprise 3 per cent. of the staff, whereas that figure was 5 per cent in 1997, so the percentage is falling under this Government.

The hon. Member for South-West Hertfordshire (Mr. Gauke) made a measured contribution, in which he mentioned productivity. He had the good grace to acknowledge that, in the public services—including the national health service—measuring and improving productivity presented a challenge. However, the NHS report shows improved productivity as a result of lower levels of staff sickness and the reduced use of agency staff in 2004–05, which freed up about £60 million more for patient care. But, of course, it cannot end there.

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