Budget Statement

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Dr. Hywel Francis (Aberavon): I warmly welcome this Budget, with its commitment to fairness and enterprise, for three reasons, all of which relate to a commitment to social solidarity. First, the rebuilding of the NHS is essential to the people of Wales. Secondly, the specific commitment to fairness is welcomed by those of us in Wales who are committed to building a fairer and more socially just society. Thirdly, it is a reaffirmation of the modern, social democratic values that are so important—to Wales, Britain and Europe.

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The massive investment in the NHS strengthens the principle of health care being universally available and free at the point of delivery. The Budget's commitment to the NHS is deeply rooted in the social history of Wales—the liberalism of Lloyd George and national insurance, and the community socialism of Aneurin Bevin's Tredegar Medical Aid Society. For at least a moment, this Budget draws a line under the unwarranted attacks on the NHS since its inception in 1948. The people of Wales welcome it for that reason, not least because of the disproportionate scale of ill health in our communities—for example, one in four adults in Wales suffer from arthritis.

The Budget emphasises using enterprise and sound fiscal policies to build a fairer society, tackle pensioner and child poverty, increase employment opportunity for all, deliver high-quality services and protect the environment. It reminds everyone, if they need reminding, that this is a radical and reforming Budget from a radical and reforming Government.

To illustrate that important commitment, let me give hon. Members one example. I refer to community rebuilding through support for voluntary organisations, and specifically community amateur sports clubs. I have recently spoken to people in several sporting organisations in my constituency, who remind me of the time when I wrote a history of Seven Sisters rugby club—my local club—appropriately called ''Magnificent Seven''. Sport plays a large part locally in the development of active citizenship, improving health and enhancing social cohesion.

At Glyncorrwg last weekend, I met the bowls, rugby and soccer clubs. At Skewen, I recently met the rugby club, the Monkstone sailing and cruising club and—most important of all, of course—Aberavon rugby football club, whose tie I proudly wear today. They all play a central role in community capacity building, and welcome the Budget commitment to their activities.

By contrast, I look forward to the next spending review and Budget achieving fairness and greater opportunities for homeless young people. While housing is a devolved matter and the Minister for Finance, Local Government and Communication, Edwina Hart, is dealing with it with imagination and passion, we in Westminster have a responsibility to assist young people who have no homes of their own.

Recently, the all-party group on children in Wales, led by my hon. Friend the Member for Cardiff, North (Julie Morgan), met two young people from the Bays project and their support agencies from Swansea, who identified two basic problems: an unfriendly benefit system and a need for the Government to take their parenting role more seriously. Those young people have produced a video called ''Cold Light'', made by Kickstart Films, which has the emotional impact of ''Cathy Come Home''. Young homeless people need to be assisted from a state of barely surviving to a state of living with some dignity.

I urge the Chancellor in his next spending review to reconsider the low rate of entitlement up to 25, the

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difficulty of claiming benefit at 16 and 17, the single-room rent restriction and the fact that benefit for young people in full-time education ceases at 19, when so many of those who have been homeless start their education much later than that.

Julie Morgan: I am sure that my hon. Friend remembers one of the young people saying that a loaf of bread costs the same whether one is 16 or 26.

Dr. Francis: Yes, indeed.

Young homeless people are probably the most besieged section of our community. Let us make it a priority, in the spirit of fairness and enterprise, that in the next spending review as much importance is attached to their needs as to the abolition of child poverty.

My final reason for supporting the Budget is that it represents the antithesis of what happened in France at the weekend. The values of social democracy are deeply embedded in Wales, and in Britain and Europe as a whole. Those values are based on social solidarity, citizenship and internationalism. I despise the racist and neo-fascist slogans, ''France for the French'' and ''Wales for the Welsh''. The Chancellor's Budget reminds us of our duties to one another as citizens, and I warmly welcome it as a great Budget for the people of Wales and as a measure as significant as Aneurin Bevan founding the national health service in 1948.

12.54 pm

Lembit Öpik: First, I should say that coming to the Committee to debate the Budget today has given me a sick feeling in my stomach. That is because I got food poisoning last night. I thank my hon. Friend the Member for Brecon and Radnorshire for providing a good meal. He is a very nice man, and the food tasted nice at the time. With the general progress of inquiries in the Assembly, I fully expect the police to open an inquiry to see whether Mike German did the cooking. [Interruption.] While I may be sick in body, I hope that I am never short on spirit. I believe, as some other hon. Members do, in reintroducing vision and soul into politics. There is no more important point at which to do that than when discussing the Government's Budget priorities, because that is where the rubber really hits the road.

Overall, we welcome the Budget. That is not surprising because, just as the welfare state was created by Beveridge and implemented by a Labour operative, so this Budget was conceived in the 1997 Liberal Democrat manifesto and implemented five years later by this Government. We are not looking for gratitude from hon. Members, but we are certainly willing to clear up any remaining confusion with regard to policies that involve honest tax and spend.

At the heart of this debate is the question of what to do about the health service and whether the Government are right to effectively increase direct taxation. We can play with words and talk about direct income tax versus national insurance, but the ordinary person on the Cardiff omnibus will regard the measure as a tax increase. What is interesting is that they do not mind. There is conditional acceptance

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of the policy—the condition being that it should deliver results.

The Liberal Democrats have been saying for many years that if politicians do not patronise the public—if we give them a clear choice and are honest about the cost—they will respect us for it. That is probably why our share of the vote in the general election went up, even though we were the only party to promise tax increases. I am encouraged that the Government have taken a leaf out the Liberal Democrat book, bearing in mind that there was no promise to increase direct taxation in the Conservative or Labour manifestos.

Huw Irranca-Davies: Does the hon. Gentleman accept that the essence of politics, as with comedy, is timing? The public are ready for such increases because this Government have provided the most stable economic base that we have had for many years.

Lembit Öpik: I think that the essence of politics is telling it like it is and trusting the public to take an informed decision. I have had interesting conversations with the hon. Gentleman about that. Of course, a degree of political management is necessary in order to win elections rather than lose them. However, the Government got it wrong. If they had had the courage of their convictions at an earlier stage, we would be five years into implementing the measures.

The hon. Gentleman makes a fair point about political management. However, I am suggesting, and the Liberal Democrats have proved, that such management is unnecessary on the issue of tax, because the public, when respected, respond to that compliment sensibly.

I want to deal with some elements of the Budget in roughly the order that they were resolved. The priorities of my speech go from one place to another, but some specific relevancies need to be raised.

First, one measure that has not been mentioned yet, but which is very important, is the change in duty on

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beverages made with spirits—effectively alcopops. That is important not just because it will raise £210 million by 2004–05, but because such drinks are generally consumed by young people. I am realistic enough to know that this increase probably will not reduce underage drinking, but it acknowledges that we should start thinking seriously about the social problems that we engender through our attitude to different spirits.

Small breweries abound in rural areas. In conversations at a top-level meeting with representatives of the Campaign for Real Ale last night, it was suggested that—[Interruption.] I am sure that the real ale that they recommended in the Strangers Bar, which was appropriately called Rebellion, was not responsible for my malaise. The Campaign for Real Ale said that places such as Wales, especially rural Wales, will benefit a great deal from the change, which will not cost the Government very much.

On vehicle excise duty there were welcome changes, with an environmental agenda. That is very important. We probably should be doing more, but we will have to take that a step at a time. I am pleased that, once again, motor cycles have received fairly favourable treatment. I declare an interest in that I am vice-chair of the all-party motor cycle group. We sometimes need to consider different ways to decongest our roads, especially in places such as Cardiff, which suffers from terrible congestion. Two wheels may be an important element in the strategy to achieve that. In 1997, the governing party said that it would put motor cycles at the heart of its traffic strategy.

It being One o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till this day at Four o'clock.

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Prepared 24 April 2002