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Mr. Jim Cunningham (Coventry, South) (Lab): It has been interesting to listen to the tone of the debate, but at least we are talking about resources. If we go back pre-1997, as some Conservative Members did, I remember that we were talking about high interest rates and hospital closures. The Government have been attacked on their handling of the NHS, but do hon. Members remember people sleeping on trolleys because they could not get beds? That is the Tory record that the Conservatives want to inflict on us if they ever get into power again. The House will no doubt remember the 3 million to 4 million unemployed. Many of those were young people.

The Government have pumped significant resources into education—a subject that we have discussed a great deal tonight—and the NHS. However, while I accept that they have pumped a lot of money into research and development and skills, they are still not doing enough, as has emerged in tonight's debate. The west midlands economy, for example, has a turnover of £77 million, which suggests what can be generated in a region that I have always considered to be the country's economic
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powerhouse. The midlands must keep an eye on investment, whether in research and development or in skills, on which tonight's debate has centred.

It could be argued that the west midlands is starting to swing away from manufacturing into service industries, but the region's MPs must make sure that there is proper investment in skills and manufacturing so that we can bolster manufacturing. As the House probably knows, Peugeot has still not made a declaration about the Coventry plant. I do not want to be alarmist, but people in Coventry want to know what is going on. I accept, however, that Ministers have taken part in discussions with the company about future investment. We should not forget the problems with Rover in the past few years, including recent problems in Coventry when some Jaguar operations moved from the city to other parts of the west midlands. We have not lost jobs overall in the west midlands, but we did lose jobs from the home of the Jag. Only two or three days ago, however, Ford announced more investment in research and development operations at Whitley, where 2,000 to 3,000 jobs will be created. Overall, Coventry has received about £4 billion in investment in the past few years, which says a lot about the Government, who have been accused of burdening business with red tape by some people.

I welcome the fact that free travel for pensioners is to be extended following a campaign that has lasted many years.

Mr. Brian H. Donohoe (Central Ayrshire) (Lab): While the Government's proposal to extend free travel for pensioners is welcome, does my hon. Friend not think that we should work towards synchronising free travel for senior citizens across the country? He will know that in Scotland they already enjoy that benefit.

Mr. Cunningham: Wherever possible we must work towards harmonisation in the UK, and free travel is one service where we can achieve that. Most people, including pensioners, like to travel, so why not offer free extended travel across the border? From certain parts of Northumberland it takes only an hour to travel to Edinburgh, which enhances the case for free travel.

I accept that the Government have done a great deal over the years for pensioners. However, as my right hon. Friend the Member for North Tyneside (Mr. Byers) said, politicians from all parties must stop playing political football with pensions and achieve consensus so that we can solve the problem. I do not accept that it is all the Chancellor's fault, because there are a number of factors at play. Nevertheless, there is a pensions problem and people up and down the country are awaiting the outcome of the Federal-Mogul case. Some hon. Members will have constituency experience of that case, as many people have been waiting two or three years to find out the future of their pension. Federal-Mogul is locked in the American courts, so I welcome the fact that the Government established the Pension Protection Fund. However, we must consider whether we should increase that fund, as there will be many demands on it in future. I believe that we should certainly look at ways and means of doing so.

I recognise the Government's tremendous investment in the health service, but we must be extremely careful about reorganisation. In the midlands, we believe that
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the important thing is not to lose touch with the sharp end. Whether it is the reorganisation of the police force or the health service in the west midlands, we must not lose touch with the sharp end; otherwise the public will become disillusioned with the service that we are trying to provide.

The other issue that is causing concern in places such as Stafford is the amalgamation of the ambulance service. People think they have a very good ambulance service and are worried that if it is amalgamated with the west midlands service they may not enjoy a service of the same standard in the future. We west midlands politicians must continue to put pressure on the Secretary of State to make sure that that does not happen.

We cannot duck the issue of budget deficits in the health service. Those are not necessarily caused by the Government. The introduction of any new system—in this case, a system of payment by results—inevitably causes turmoil. That is recognised by most people who know about change and management. A further problem that has emerged in the health service, although we do not yet know the scale of it, arises from the use of a different method of accounting. It appears that in some instances deficits have been hidden for a number of years and are only now coming to light. The management of the health service needs to be sorted out, and its financial structure must be better managed and accounted for. I hope that compulsory redundancies can be avoided and that we can get some form of agreement with the trade unions.

We heard earlier about a possible series of strikes over local authority pensions. We must get talks going to resolve the matter. It is not in the interest of those who will receive the pensions, any more than it is in our interest, to see such disputes continue. People feel that their pensions are to be changed, despite promises made to them by employers. We should repeat to the public sector what we have said to the private sector: employers should try, as far as possible, to meet those aspirations and the commitments that they gave.

Finally, the Budget was steady—some might say neutral. It contained some encouraging items, such as nursery provision and an increase in family tax credits. The Government have continued to focus on poverty. Britain might be wealthy but there are pockets of great social deprivation, and as politicians of whichever party, we should never lose track of that. I welcome all the measures in the Budget that deal with social deprivation.

8.52 pm

Mr. Philip Dunne (Ludlow) (Con): I remind the House of the interests declared in the register against my name.

The matter that I draw to the attention of the House is the credibility of the Chancellor in the context of his Budget speech. I shall highlight a few issues that were included in his speech and a few that were not. On the subject of today's debate, education, there is a credibility issue relating to the skills gap to which a number of hon. Members have referred.

I am pleased that we have had an opportunity to focus on the skills gap, not least because in the survey of more than 1,000 businesses that I undertook in my
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constituency in the run-up to the Budget, the overwhelming cause of concern was the poor quality of school leavers presenting themselves for employment. This is not a criticism specifically of the schools in my constituency, which do a very good job. However, of the businesses that responded to my survey, 64 per cent. raised skills as the main problem for them, and of that group, 72 per cent. said the problem was getting worse, not better. This is a fundamental issue for the competitiveness of the United Kingdom, and it needs to be addressed.

Instead of raising the skills of our work force, one of the ways in which the Government have been tackling the skills gap has been to import skills from elsewhere. For example, my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski), whose constituency borders mine, regularly reminds the House that the shortage of dentists has been filled by dentists from his homeland, Poland. I have always taken his comments with a pinch of salt, but the point was graphically illustrated by the recent publication of an e-mail in which the British ambassador to Warsaw, Ambassador Crawford, stated that Her Majesty's Government have

Much has been made of the announcement of extra money for schools and the aspiration to raise school spending per head close to the level achieved in the independent sector. I welcome more money for schools, although I have not been overwhelmed by the increase, which appears to be close to 1 per cent. of the total schools budget, but it is welcome none the less. To echo the comment made by my hon. Friend the Member for Mid-Worcestershire (Peter Luff), I urge the Government seriously to examine the allocation policy.

In Shropshire, our children receive approximately £3,300 a pupil—that places the local education authority 10th from bottom of the 150 education authorities in this country—which is barely 75 per cent. of the average spending per pupil in this country as a whole. One area in my constituency is among the top 25 most deprived areas in this country. The issue does not solely relate to urban areas, because deprivation occurs in rural areas, too, and I urge the Government to examine the funding formula.

On further education, the Secretary of State for Education and Skills has referred to a level playing field, which I would welcome, too, but I do not welcome the levelling of buildings. In my constituency, Bridgnorth college was closed last year and the site is being prepared for levelling. I urge the Financial Secretary to make a commitment in his winding-up speech that the proceeds raised by the sale of the sites of colleges of education that are being shut down in rural areas will be reinvested in the area where the facilities have been shut rather than being transferred to supposedly more deserving areas, which leaves even less provision for those in rural areas.

The hon. Member for Dundee, East (Stewart Hosie) has welcomed the Chancellor's announcement of independence for the Office for National Statistics. Like all Conservative Members, I welcome that decision, because it was a Conservative policy, and it is reassuring to see the Chancellor in this, as in so many other areas, picking up our policy—the current consensus in politics
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is clearly working. That change was needed because of the credibility gap, which is of the Chancellor's own making.

Since the Budget, many commentators have referred to problems with the presentation of statistics. On Sunday, The Business carried an article in which its correspondent, Allister Heath, discussed the way in which the Chancellor has chosen to portray productivity in this country as improving rather than the actual trend, which is declining. When the Chancellor was appointed too many years ago, he saw productivity as one of the main benchmarks for his success, and the article discusses that point:

which was the last period of Conservative government, and fell to

It declined further to 1.3 per cent. between 2001 and 2005. In the past 12 months, it has declined even further to 0.4 per cent. So much for the Chancellor's productivity growth. I look forward to seeing how the ONS will portray that.

I turn to something that I suspect arrived in the Budget as an afterthought—the assault on the trust industry. Several Members have referred to the impressive growth in, and our reliance on, financial services. The trust sector is a critical part of that. By seeking to impose such significant taxation changes on accumulation and maintenance trusts and other trust types, the Chancellor will drive a coach and horses through that industry and force it offshore. He may not have appreciated that many of these trusts have nothing to do with inheritance—they are to do with protecting assets, initially for minors and then for other young people while they are still in their formative years. Some were set up during the crusades to help estates not to fall into the wrong hands in the event of knights being toppled from their chargers overseas. This is a serious measure to propose with the flick of a pen.

In the brief time that I have left, I should like to raise three issues that were not mentioned in the Budget. First, there is the credibility gap over pensions. The right hon. Member for North Tyneside (Mr. Byers) devoted much of his speech to that. I think that he was a bit economical as regards the way in which the Chancellor chose to present some of the pension-related measures in the Budget. A year ago, the Chancellor made great play of the fact that the council tax rebate for pensioners was being doubled from £100 to £200. That was not mentioned last week when it was abolished, with the result that pensioners' council tax will have soared by more than 20 per cent.

The right hon. Member for North Tyneside also talked about Labour's responsibility for dealing with the pensions crisis that has been created. There is indeed a responsibility. I look forward to seeing what happens with Turner and deeply regret the fact that the Chancellor did not refer to that.
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I reiterate my concern that the Chancellor did not mention the NHS in his speech. I hope that he will be listening tomorrow when protestors from all over the country come to highlight the cuts that are being made in our community hospitals.

9.2 pm

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