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4.51 pm

Mr. Charles Kennedy (Ross, Skye and Inverness, West): To boil all that diatribe down, it seems that the leader of the Conservative party is rather upset that the Chancellor is behaving like a politician this afternoon. That was basis of the Leader of the Opposition's critique. The Chancellor is behaving like a politician and he is certainly behaving like the chairman of the Labour general election campaign--there is no doubt about that.

Let us put all that we heard from the Chancellor in a political and financial context. In terms of the expenditure that has been announced today, he is devoting five times as much financial priority to tax reductions as he is to investments in health and education. That is the truth of the matter. That comes on the back of a four-year Parliament in which, with a colossal parliamentary majority, for the first half of that Parliament he stuck to Conservative spending plans that his predecessor said on air in an interview the other day he would not have stuck to. As a result, we have had persistent underfunding in vital public services. So before the Chancellor blows his own trumpet to such a huge extent, let us remember the truth of the matter and the context against which this pre-election Budget must be judged.

Let us also consider a few facts. Secondary class sizes are at their highest since 1979; the number of people waiting to see a hospital consultant is higher now than when this Government came to office; police numbers are down by 3,000 and violent crime is up; public transport has effectively been immobilised in many areas; and last year--this is a terrible reflection on modern society--there were a record number of winter deaths among pensioners in this country. Those are the facts, and that is the backdrop against which the reality of the Budget and the looming general election should be judged.

There are measures to welcome. I do not think anyone in the House of any political party could fail to agree with the Chancellor when he rightly spoke about social policy

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and the need to tackle the absolute evil that is the drugs problem in our society. Additional hope and help for families are important. The greater emphasis on individual savings accounts is welcome. However, we must look at the detail of the social policies so that we are clear and specific about the extent to which we might end up loading extra costs on people and organisations, not least small businesses.

As for our hospitals, schools, pensioners and the fight against crime, so much more could have been done if only the Government had not displayed such a poverty of ambition over the past four years. That is the truth of the matter. We need front-line police on the streets and in communities, preventing as well as detecting crime.

The Chancellor has succeeded in reducing the Conservative deficit and replacing it with a Labour war chest. Yet spending on all the major heads of public services has been squeezed savagely as a result. He said that it is right to choose the prudent course for Britain. I know that he is fond of the word "prudent", because he uses it often. Such has been his prudence that official figures show that spending as a proportion of national income on schools, hospitals and pensioners is lower under this Government than it was under the previous Conservative Government. That is an undeniable fact.

What was missing from the Budget? I raised the countryside and the plight of the farmers with the Prime Minister earlier, but the Chancellor did not have an extra word--far less an extra penny--for the agricultural community. Although we welcomed the additional compensation, the Government have to understand that it is not just the farmers who are suffering considerable knock-on consequences and losses because of the foot and mouth crisis. I appreciate that Governments have never paid compensation for so-called consequential losses, but these are unprecedented times and precedent must not be an excuse for inaction. I hope that the Government will reconsider that issue as a matter of urgency, because the knock-on effect goes further than our rural communities. For sad reasons, the crisis is uniting urban and rural Britain, because no one is immune from the effect of the catastrophe. The Government have to address that.

Surely the mark of a society is what sense of opportunity it gives its youngsters and how much security it offers the most elderly and vulnerable. There was nothing today about the imposition of tuition fees. Like me, the Chancellor of the Exchequer represents a Scottish constituency and is a Scot. He must know what the figures reflect. The statistics show that student applications in Scotland are increasing, which is a result of the partnership Government in Edinburgh--at the insistence of the Liberal Democrats--abolishing student tuition fees.

The story elsewhere in the United Kingdom is that such applications are decreasing. Youngsters--I spoke to some in Devon at the end of last week--tell us that they cannot envisage taking up a university or college course because they know that they will take their first step on the job ladder saddled with £12,000 to £16,000 of debt. There was not a word about that in the Budget, despite all the money that is available. It would cost £0.7 billion to get rid of student tuition fees for Britain as a whole. The Chancellor has been boasting to us of the extent of the funds at his disposal, but he has chosen not to do that.

That matter is at one end of the age spectrum; at the other end is long-term residential care for the elderly. Again as a result of Liberal Democrat insistence,

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the Scottish Parliament and Executive have committed themselves to free provision of such care. The situation is not the same elsewhere in the country. That is what we can do when we are given the opportunity. The big choice that the country faces will provide a real chance for real change in, probably, a few weeks' time, and that chance comes not from an over-hyped pre-election Budget, but from an honest, rational and sincere Liberal Democrat alternative.

5 pm

Ms Sally Keeble (Northampton, North): I am grateful to have the chance to speak in this debate. I want to talk in particular about the many benefits that the Budget holds for women and families. The Liberal Democrats have tried to depict it as a purely tax-cutting Budget, instead of looking at the tangible benefits that it provides. For me, the essential point is that it redistributes wealth, including, in part, a transfer from the wallet to the purse or, to be more accurate, from the Coutts bank account to the purse.

I shall consider some of the significant changes which have already been greatly welcomed, particularly by women in my constituency. There has been criticism of the working families tax credit and the child care tax credit, but they are some of the most important benefits that the Government have already given people in my constituency. Some 3,200 families in Northampton already receive the working families tax credit, and many of them also receive the child care tax credit. I have heard stories from women who receive those benefits which leave me in no doubt that they are one of the Government's flagships and have probably done more to change the living standards and lives of women and children than almost anything else.

The Conservatives have pledged to destroy these benefits, but I do not think that they have even begun to comprehend what they plan to do. I have talked to women in my constituency who, having applied for the new deal, are better off by £60 or £65 a week because their child care is paid for and they can get out to work. Now that they have had a taste of economic independence, a threat to send them back to the kitchen spells absolute catastrophe.

The Conservatives and Liberal Democrats have not got their heads round the fact that the tax credits benefit not only traditional communities with high unemployment, but areas such as my constituency, which has long had high employment, but where many families have split up and there are lone parents who need to go back to work. I went to a reception for lone parents and met a woman whose child had been at music class with my own child two years ago. She had then been happily married with a mortgage and a car. Two years later, she had lost all that, but she was benefiting from the new deal and receiving the working families tax credit, so she had been able to get her life back on course. The Conservatives need to understand that family breakdown changes many of the dynamics in society, and we have rightly reflected that in the tax and benefits structure.

It is no good the Conservatives saying that the Budget measures are merely for the election. Last weekend, I was talking to people in my constituency, and one woman said that she had already switched her loyalty from the Conservatives because of the effects of the package of the working families tax credit, the child care tax credit and

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the new deal. That is a sign of the dynamic for change that can be achieved through the proper use of the tax and benefits structure which the Government have begun.

Increases in benefits have been announced, and I shall refer especially to the child care tax credit. The increase will be a real help for women who need money to pay for child care. The expense of child care is one of the greatest barriers faced by women who wish to work, or who want to get a reasonable job instead of a small part-time job.

Yesterday--can I say Baroness Jay, Mr. Deputy Speaker, or am I not allowed to mention her in that way? I cannot remember.

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