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Ms Keeble: On the savings ratio, which the hon. Gentleman has been going on about, I have now had a chance to have a look at the new edition of the Red Book. On page 170, we see that although the ratio went down for a while, it stood at 3.75 per cent. last year, is 4.75 per cent. this year and is projected to reach 5 per cent. and 5.25 per cent. in the next two years.

Mr. Nick Gibb (Bognor Regis and Littlehampton): The hon. Lady should look at last year's Red Book.

Ms Keeble: Yes, but will the hon. Gentleman accept that, although the rate went down for a while, it is now going up and that that trend is projected to continue?

Sir Michael Spicer: I am grateful to the hon. Lady for that intervention, because she confirms the fact that the rate has gone down. It has been going down, give or take a few years, throughout this Government's term of office. The projections that are being made are a matter of hope.

Ms Keeble: Up.

Sir Michael Spicer: Well, the "up" bits are the projections, the forecasts, the hope, the aspirations. They have nothing to do with the facts. Governments can put any figure that they want on personal savings projections in the Red Book, if that is what they are inclined to do.

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However, the fact is that, throughout the period, taken on average, personal savings have been low and are going down.

Mr. Desmond Swayne (New Forest, West): It might be of assistance to the hon. Lady if she realised that she needed to look at last year's Red Book to see how those forecasts have changed and been revised downwards.

Sir Michael Spicer: That is very helpful. The aspirations may well go down. [Interruption.] The hon. Lady keeps putting her thumb up, but she should put her thumb down, because that is the direction that personal savings have taken. As my hon. Friend has just mentioned, the revisions have gone downwards rather than upwards every time they have come out.

I was making the point that there was an explosion in public spending throughout the western world from the 1960s to the end of the 20th century. Britain followed much of that pattern, except for the fact that, during the 1980s and very early 1990s, we got our public spending under some sort of control. We left the flock and showed a downward trend in public spending relative to GDP during that period, but the rate subsequently started to increase rather rapidly.

The effect of the public expenditure increase was pretty benign in the first part of the 20th century in terms of economic growth, employment and social welfare. In all countries--I am not making a party political point here--the turning point came in the mid-1960s, just as public expenditure began to take off. The turning point came in terms of the effect of public expenditure from the mid-1960s onwards. From then on, growth rates--for instance--began substantially to slow down across the board in those countries, except, latterly, in the United States, where public expenditure is lowest, relative to other countries.

Unemployment, especially in high public expenditure countries such as France and Germany, began to rise dramatically as public expenditure began to rise dramatically. Perhaps most interestingly of all, income distribution, which, in the latter half of the past century was the primary reason for the explosion of public expenditure, especially on social services and public health, was brought virtually to a standstill. There has been almost a negative effect on income distribution as public expenditure has expanded for the precise objective of spreading income more widely.

As the authors say on page 96 of the study:


That adds up to a picture that is familiar to Conservative Members. When the state takes over, everyone, after a certain point, becomes poorer, especially the poor themselves. An example of that is the virtual collapse of this country's public services. We have the worst health service, the worst transport system, the lowest state pensions and, arguably, the worst education system in the western world. Examples have already been given for education and other sectors.

In health and with respect to guaranteed pensions, we need an average percentage improvement not of 5, 10 or even 20 per cent., but one that would probably stretch into the hundreds. Given the exhaustion of the taxpayer,

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that can be achieved only by the application of a mix of private and public resources with the taxpayer supporting those who cannot, for whatever reason, buy their own insurance policies. On health, the necessary massive injection of extra private resources would not only improve the motivation and morale of those working in the service, but achieve real accountability to the customers, which no amount of Government-run consultative bodies could ever achieve.

Sir Raymond Whitney (Wycombe): Is my hon. Friend aware that, on present NHS funding, it would be possible to give every man, woman and child in this country a voucher for £800 to go towards health care and still leave an adequate reserve for national priorities at the centre?

Sir Michael Spicer: I thank my hon. Friend for providing that interesting figure, which very much supports my argument.

Ms Keeble: Does not the hon. Gentleman accept that it is nonsense to say that the health service could be funded out of private means? That £800 would not go very far. For example, a constituent of mine was having particular problems getting care and, in 15 months, he spent £6,200 on cancer treatment. In terms of treatment that is needed, £800 is nothing. The need for equity and access is what makes the NHS so crucial to our country.

Sir Michael Spicer: I could never expect the hon. Lady to accept what I am saying because she is a member of a socialist party and that is her philosophy, but I ask her to think about the fact that I am referring to a mixture of public and private resources and that such a mix occurs in all western countries, which have far better health services than we do.

Let us talk about France, not America. Precisely because the French are applying private as well as public resources in a way that we are not even contemplating, especially because we have a socialist Government who will never achieve that, they get far better quality and put far more resources into their health services than we can possibly put in off the back of the taxpayer, which is what is proposed here. I cannot hope that the hon. Lady or her party will ever be imaginative about the matter, but I assure her that that is what is happening in every single country in the western world. They have health services of far better quality than ours and that is the way that we shall have to go eventually.

Of course that could never happen under a socialist Government. There was a brief moment when we thought that something like it might emerge, but the sacking of the right hon. Member for Birkenhead (Mr. Field) put paid to that. It will be left to a Conservative Government to pick up the pieces and reform our public services, which we began to do with our productive industry and services in the 1980s. Today's Budget is a move in precisely the opposite direction.

5.40 pm

Ms Diane Abbott (Hackney, North and Stoke Newington): Even as we speak, my colleagues are surging through the television studios hailing a Budget that provides a marvellous election-winning platform. It is a

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masterly Budget, presented in a masterly fashion, and it is no surprise that Opposition Members are struggling to attack it.

Having sat through at least 14 years of Budget statements, I know better than to reach a final conclusion before reading the finer print. Any more detailed comments on this Budget will have to wait until I have had time to study the Red Book. I can say, however, that some changes in principle will be welcomed by my constituents in Hackney, notably the extension of maternity pay from 18 to 26 weeks. I speak as one who was not given one day of maternity leave from the House when I had my son in 1991. As we were in the run-up to a general election, there was no time for maternity leave. I voted here three days before my son was born, and I was voting again eight days after his birth. Nevertheless, I welcome the extension.

I also welcome the principle of providing paid adoption leave, and two weeks' paid paternity leave for working fathers. The extension of the right to adoptive parents is a long-awaited change. I welcome, too, what appears to be a move towards changing the structure of value added tax to allow free access to museums.

There are many changes in principle to welcome, but I must tell my hon. Friends who will welcome--and have already welcomed--the cascade of children's tax credits, working families tax credits, pensioners tax credits and other tax credits that, sadly, a system of relieving poverty through such credits cannot reach millions of poor people in constituencies such as mine, particularly single mothers of very young children. It is easy enough to say that those ladies--those women--should leave their children aged one, two or three and find jobs, but it is easier said than done.

As I have said in our debates since 1997, at the end of the day we want, as a Government, a structure that allows poor single mothers a choice. Of course the majority of single mothers whom I meet in Hackney want to go out to work, but they should not be driven out to work by a system of benefits and tax credits that, bit by bit, forces single mothers who have young children and cannot work into a position that makes them relatively worse off than they would be otherwise. Millions of people up and down the country did not vote Labour to see the creation of a structure widening the gulf between working single parents and single parents who choose not to work.

I note from the small print that we are introducing compulsory interviews about work for all single mothers, however young their children may be. I realise that such interviews are supposed to acquaint single mothers with the benefits of work, but people do not need to go to the dole office for an interview to find out how much better off they might be if they worked.

Practical issues, such as training, access to jobs and child care, stop very many single mothers in areas such as Hackney from working. As I have said before, underlying the thinking of my right hon. Friend the Chancellor, who is the most modern of Chancellors--he is a masterly Chancellor, who has presented a masterly Budget in a masterly fashion--there is a very old-fashioned notion. It is the belief that there are the deserving poor--those who are prepared to leave their children, however young, and go out to work--and the

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undeserving poor, such as women who choose to stay with their children at least to school age. I tell him and my other Front-Bench colleagues that the Victorian distinction between the deserving and the undeserving poor which is embedded in the tax credit system does not reflect well on a 21st-century Labour Government. [Interruption.]

In the 14 years in which I have been an hon. Member, I have always striven to do my job. My job is not to say that which is popular--or that which will secure me advancement or the sunny smiles of the Chancellor of the Exchequer--but to speak up for my constituents in Hackney. That is what I am paid to do, and that is all that I can do. In the words of Martin Luther, I can do no better.

I should like to deal with a matter in which very many hon. Members will not be much interested, although it is a passionate concern for those of us who live in London. That matter is public transport, which is a key factor in considering economic growth, helping poor communities and looking to the future. For Londoners, the future of the London underground is a key issue.

Extraordinarily, given the range of his Budget speech, the Chancellor did not find time to touch on that issue. In the stirring passages at the beginning of his speech, he reminded us of his £23 billion surplus. However, that will make Londoners wonder why it is so difficult to find a way in which to fund properly, under proper democratic arrangements, a 21st-century transport system for London.

As some hon. Members may not use public transport in London--perhaps they drive--I should remind the House that public transport is more important to people in London than it is to those in other big cities. Public transport in London is not only a means of transporting people from place to place, but a key issue. Transport links are key to regenerating communities. No other single action could do more to regenerate my constituency in Hackney than for the Government to find the money to build the Chelsea-Hackney line, which would produce for the first time an underground station in the centre of my constituency and link us to the Jubilee line. Public transport is about regeneration. It is about people's lives--getting them to jobs--and about urban redevelopment.

What action has there been? Last year, as part of fulfilling our manifesto commitments, a Labour Government restored local government to London and gave us a Mayor. Although, sadly, there were a few hiccups along the way, finally, right triumphed and the people's choice, my colleague the hon. Member for Brent, East (Mr. Livingstone), became the very first duly elected Mayor.

The future of London Transport was the central policy issue in that mayoral campaign. It was at the heart of everyone's manifesto--Labour, Tory and Liberal Democrat. There can be no doubt that, in that election, the majority of Londoners, including very many Conservative- voting ones, voted emphatically against the Government's proposed system of public-private partnership for renovating and improving the underground.

Before colleagues say that I am old fashioned and stuck in the past and ask me what is wrong with private investment in these big public sector projects, I say that no one is opposed in principle to private investment, least of all my colleague the hon. Member for Brent, East. It is, after all, a matter of new Labour, new Ken Livingstone. He is the darling of the City and of business. They are

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wholly behind him in his opposition to the Government's PPP proposals. It is not a question of opposing private investment. The point at issue in the mayoral campaign, and in the fraught negotiations in the run-up to the general election, is how that private investment should be structured.

Treasury Ministers, as opposed to Ministers in the Department of the Environment, Transport and the Regions, have proposed the system of public-private partnership. Every commentator has said that the proposed system has all the worst characteristics of that deployed in the disastrous privatisation of British Rail. If the system is introduced, Londoners will find themselves in the same position as rail travellers before the Hatfield crash.

If a safety risk such as a broken rail arises, there will be no one in charge of transport in London able to deal with the problem immediately. The people responsible will have to talk to contractors, who will talk to subcontractors, who will perform a survey and then perhaps hire other subcontractors. In the end, the problem will be put right, but the resolution of safety risks will take an indirect and circuitous route.

The Hatfield rail crash showed that the delays, the complications, and the layers of bureaucracy introduced by privatisation can mean that safety problems are addressed too late to save lives. The Treasury advocates that London's transport system should be split up between three different companies. Unified management control will be lost, but the Treasury is trying to impose that structure on Londoners.

I do not accuse all my colleagues on the Treasury Bench of acting in bad faith. Ministers in the Department of the Environment, Transport and the Regions--and especially the Under-Secretary of State, my hon. Friend the Member for Streatham (Mr. Hill)--have negotiated with a view to cutting the best deal for Londoners. My hon. Friend is a loyal member of the Government, and a Londoner, and he negotiated in good faith with my hon. Friend the Member for Brent, East and the city's transport commissioner, Mr. Bob Kiley. The negotiations went on with the utmost energy and dispatch for many weeks. All sides believed that a deal had been reached.

Everyone wants there to be private investment in the tube, but we do not want the PPP to replicate the worst features of rail privatisation by not allowing the unified managerial control of repairs and safety precautions that will secure the safety of Londoners on the underground. Ten days or a couple of weeks ago, after weeks of negotiations, the Department thought that a deal had been reached, but then the Treasury stepped in. A few days ago, it said that the negotiations had gone on long enough and that nothing else would do but the PPP system originally proposed.

I accept that token concessions have been made.


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