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Mr. Andrew Love (Edmonton): Will the hon. Gentleman give the House an idea of when that convergence will take place, and when expenditure in Scotland will be the same as that in England?

Mr. Swinney: I think that the Chancellor would be able to give the hon. Gentleman a better projection on that issue than I could. However, the pattern is taking its course and is being vigorously implemented by this Chancellor. People should be aware that that is the pattern of our public expenditure.

Rev. Martin Smyth (Belfast, South): On that point, is the hon. Gentleman aware that we are discovering in Northern Ireland that health expenditure will be cut year by year in the near future because of the implementation of the Barnett formula?

Mr. Swinney: Let us be clear on this point. In the present context, public expenditure on health will increase

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at a slower rate in Scotland--and, I assume, in Northern Ireland and Wales--than it will in England. That is the real impact of the Barnett formula: it is designed to bring about convergence. That is a challenge for those of us representing Scottish constituencies. I hope that the very worthy Scottish National party candidate standing in the North Tayside constituency at the general election will be able to come to the House and inform it of his concerns about the Barnett formula for a limited period in the years to come, before he returns to an independent Scottish Parliament.

Mr. Home Robertson rose--

Mr. Swinney: I shall give way to the hon. Gentleman in just a moment.

The purpose of the Barnett formula is to bring about the convergence of public expenditure in Scotland, Northern Ireland, Wales and England. The challenge for people interested in promoting and expanding public services in Scotland will be to secure access to the resources that will allow us to do so, and to maintain a high quality in those public services. I have a solution to that challenge, but I shall wait until I have heard the intervention from the hon. Member for East Lothian.

Mr. Home Robertson: I want to pick up the hon. Gentleman on the point about the peregrinations of SNP politicians. Does he believe that the hon. Member for Banff and Buchan (Mr. Salmond) is really a true Brit, and that he will stay here, or does he think that he will return to the Scottish Parliament again?

Mr. Swinney: My hon. Friend the Member for Banff and Buchan (Mr. Salmond) has a distinguished record in the House, and he is a formidable campaigner and champion of Scottish interests. He has fought a valiant campaign on behalf of Scotland's fishing industry over the past few weeks, which the Scottish Executive would do well to listen to. I think that they are probably listening to it in Edinburgh even as we speak.

I am sure that my hon. Friend the Member for Banff and Buchan will serve in this House for just as long as it takes to secure Scottish independence, and then return to the Scottish Parliament. He might see the hon. Member for East Lothian there, if the hon. Gentleman manages to hold on to his seat long enough to continue to serve in that other place. However, I must return to the Budget debate before I am reprimanded, Mr. Deputy Speaker.

A vigorous debate is emerging about the long-term funding of the Scottish Parliament. The right hon. Member for Haltemprice and Howden (Mr. Davis), the Chairman of the Public Accounts Committee, recently made an interesting speech about fiscal autonomy--I intervened on the hon. Member for East Lothian on that point--whose purpose was to acknowledge that the Scottish Parliament needs the fiscal responsibility to take major decisions on public services, public expenditure, taxation and revenue raising on behalf of people in Scotland. Most important, certainly from my point of view, it should be able to manage and steward the natural resources of Scotland, take decisions about our revenues and our expenditure and pay to the United Kingdom Parliament a sum in respect of services provided to Scotland in the longer term.

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That debate about fiscal autonomy is vigorous and within it lie the answers to the limits placed on our public expenditure because of convergence under the Barnett formula. I hope that other political parties in Scotland will engage with the debate because it contains the germs of the next development of the constitutional argument, which will further strengthen the Scottish Parliament. That will be good for Scotland and good for the public services of Scotland.

The Budget is heavily based on the spin that we have become accustomed to from the Chancellor. He suggests that he has cut taxes and increased spending, but he has of course done neither. At the forthcoming election, the public will show whether they have seen through him. As a result of the Budget, being seen through is what he deserves.

7.31 pm

Ms Claire Ward (Watford): It is always interesting to listen to Opposition Members. The hon. Member for Bury St. Edmunds (Mr. Ruffley), in response to an intervention by my hon. Friend the Member for Workington (Mr. Campbell-Savours), suggested that paying off our debt is a good idea if we have the money. I take that as an official response from the Conservative party, which I understand has given a commitment to equal the public services spending announced by my right hon. Friend the Chancellor. Yet the Tories also talk about making bigger tax cuts. Their sums do not add up: the funding is not there to achieve all that.

The hon. Gentleman said that the Conservatives would find savings of £8 billion, but the information on the Opposition's alternative Budget, which I have read, suggests that it is based on a number of false premises. One is that £250 million could be saved from money being spent on regional government. Obviously it has escaped Opposition Members' attention that the Government are not spending that money, so it cannot be saved. That point highlights the problems of the Conservative Opposition and their inability to run the economy, which was apparent in the past.

Mr. Letwin: Is the hon. Lady accusing her own Front Benchers of deceiving the nation in their latest annual report, which says that they are on course for regional government?

Ms Ward: That is not the issue, as the hon. Gentleman well knows. He knows from his party's policies that the Conservatives claim that they would save money that is already being spent, but that money is not being spent. That is crucial.

Mr. Letwin rose--

Ms Ward: The hon. Gentleman is very keen, so I shall let him intervene again.

Mr. Letwin: Would it help the hon. Lady to know that the planned savings that we have specified vis-a-vis the Chancellor's plans relate to 2003-04? As far as I am aware, that year has not yet occurred.

Ms Ward: That is true, but the proposals relate to spending that has already been undertaken and cuts in

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spending on regional government. The hon. Gentleman shakes his head but, according to the Conservative budget, that spending has already been allocated, even though the money is not being spent by the Government.

That is just one issue on which we heard from Opposition Members. The right hon. and learned Member for Rushcliffe (Mr. Clarke) suggested that he is not terribly confident about the projected growth of the economy as forecast by my right hon. Friend the Chancellor. Indeed, I think he said that he would not bank on it. If he is not prepared to bank on it, perhaps he is prepared to bet on it, because the Chancellor has made betting free. Such a bet would be a good investment. I am not a gambler, but I respect the right of others to gamble and the proposal will encourage companies that took betting offshore to return to this country, which will benefit not only those who bet, but Government revenue. Everybody is a winner on that one.

The Budget is welcomed by my constituents, who will benefit from a range of policies. They will certainly benefit from the announcements on continued investment in the national health service made by my right hon. Friend the Secretary of State for Health this afternoon. I welcome the opportunities to encourage the recruitment of more general practitioners and more nurses through additional payments. In the area that I represent, it is increasingly difficult to recruit and retain people in the public sector because even though there are so many jobs available in Watford and around London, the cost of living is incredibly high.

When people have a choice about where to work, they do not automatically choose a hospital in the south-east, for example, if they can choose one in London. Costs in the south-east are the same as in London, so I welcome the proposals and hope that my right hon. Friend will recognise the needs not only of Watford, but of other areas close to London that need investment and encouragement for public sector workers to live in the area.

On a point of information, this afternoon I attended the opening of two new key worker houses in my constituency, which were established for police officers. That is an example of how a partnership involving housing associations, local authorities and the public sector can provide the sort of accommodation that is vital to encourage and enable people to live in the constituency and serve in the police force. I hope that such arrangements will be extended to other public sectors, especially health.

We already have a good record on the health service. In the Watford constituency, West Hertfordshire health authority has gained significantly from the Government. In 1996-97, it received a percentage increase of only 3.2 per cent., which was a real-terms increase of only 0.5 per cent. For 2001 and 2001-02, there will be 8.6 per cent. increases--6 per cent. in real terms. That will make a massive difference to the service that the health authority and the hospitals are able to provide to my constituents.

The number of patients being treated has increased and the number of nurses has risen significantly. In September 1997, qualified nurses in West Hertfordshire's area numbered 1,468. In September 2000, there were 1,983. That represents a significant improvement in the health service for my constituents. There is a lot more good

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news, but I am not complacent and we still have a long way to go to improve our NHS. The steps taken today to encourage more people into public services such as the national health service will, in my view, reap real benefits in the future.

Education has also benefited from significant improvements in the past thanks to the present Government and, thanks to the Budget, can enjoy great hopes for the future. Primary schools will receive between £13,000 and £63,000, and secondary schools will receive between £68,000 and £115,000. That money will go directly to schools, enabling head teachers to decide their priorities along with governors.

That is not to say that I want education authorities to be removed or undermined. I believe, however, that the Government's attempt to convey additional money directly to schools is vital, enabling priorities that can be understood by schools and by head teachers working from day to day to be met.

The flexibility involved in the use of the money is also important. As I said earlier, one of our problems in Watford, in Hertfordshire and in the south-east generally is the high cost of living, which makes it difficult to recruit and retain staff. The extra money will allow head teachers to increase new teachers' pay, over and above the national increases that the Government have announced. This is flexibility determined by local circumstances, and I expect schools in my constituency to welcome the new money.

Overall, the Budget sets out a stable and strong economy for the future. It builds on the successes of the past--of the last four years--and it enables my constituents to plan investments in the knowledge that their mortgage rates will not soar out of control. Businesses will also be able to make important investments, knowing that they can begin to recruit people with the additional skills that are being made available while ensuring that they too will receive investment.

I grew up under Conservative Governments during the 1980s and 1990s. For me, the lasting images of those years were provided by the news bulletins that I watched every night. A map would appear on the screen, with pinpoints denoting the thousands of jobs that were being lost.

Another lasting memory of those times is that of the large increases in interest rates, causing more and more people to face repossession. Young couples or families just starting out invested their money, their hopes and their dreams in their first house, only to find not much later, in the years of Conservative government, that they could not afford to maintain those dreams and hopes--that they had been dashed by Conservative policies. The Chancellor's greatest achievement has been to get rid of the boom-and-bust policies of the last Government, which says a lot about his stability, strength and competence and that of the present Administration.

One important factor is, of course, employment. My constituency has done incredibly well out of a Labour Government. Between 1997 and now, we have seen a 48 per cent. drop in unemployment. There has been a significant increase in the number of jobs: indeed, it is now difficult to fill many of the vacancies that exist in Watford. I am keen to encourage those who have retired early to consider returning to employment, as, given the number of jobs available, not enough younger people who

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are currently working are able to take them up. Of course we want better opportunities for training and skills, which would enable us to meet the needs of employers in Watford and the surrounding areas.

A major industry not just in Watford but in Hertfordshire is the film industry. Film-making now accounts for 8 per cent. of Hertfordshire's gross domestic product; millions of pounds are going into the area. My constituency contains Leavesden film studios, where the Harry Potter film is currently being made. It is a great British film based on a book by a good British author. I believe that other Hertfordshire constituencies will also benefit from investment in the film industry. Steven Spielberg has been making "Band of Brothers", and successful films have been made at Elstree and other studios and locations in the county.

For the position to improve, however, we needed an assurance from the Chancellor that he would extend the tax breaks made available just three years ago. Working with the Minister for Tourism, Film and Broadcasting, who has just entered the Chamber, I was keen to ensure that we campaigned and lobbied the Chancellor on that issue, given its importance not just to my area but to the whole British film industry.

Those in the film industry, and those responsible for finding finance for British films, are--to say the least--ecstatic about the Government's policy. That is clear to me when I talk to them. This is the first Government to recognise the importance of British films, and the first Government to do something about it by making investment real. More films have come to the United Kingdom, and many more are likely to do so in the future as a result of the extension of tax breaks for the next three years. I congratulate the Chancellor and the Treasury on their introduction of a specific policy that will make a real difference not just to the British film industry, but to my constituency and the county of Hertfordshire.

This is, overall, a very good Budget. It maintains the stability that we have seen over the past four years, while increasing opportunities for investment in the health service and education. I believe that our constituents will gain real benefits from it in the coming years, and will not be conned by a Conservative Opposition who think they can offer tax cuts, investment in the public sector, a reduction in debt and all the other things that they promise when that clearly does not add up. I am sure people in Britain will recognise that when the time comes for them to judge this Government, and their ability to deliver a good, strong and stable economy.


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