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9.11 pm
Mr. David Heath (Somerton and Frome): I recall an amusing book written by Jane Austen in her early days, called something along the lines of, "A Partial and Prejudiced History of England". The subtitle promises that the history will contain very few dates. I hope to make a partial--but, I hope, not prejudiced--speech on the Budget that will contain very few statistics. It is more important to concentrate on the outcomes of the Budget statement than to bandy about figures in the sterile way that is so often evident in such debates.
As we have already said, the Liberal Democrats applaud many of the measures in the Budget. Many of the policies are moving in the right direction, although some are not moving far enough and others are not quite in the right direction, but veering off to one side. However, there is much to recommend and many policies that we have advocated over many years. I hope that the moves on child care are as successful as the Government intend. The reforms to national insurance, the long-overdue support for carers, the also overdue change of heart on the ISA--on which many of us have argued with Treasury Ministers--and the help for the unemployed are welcome.
The outcomes are what counts. My constituency is a genuinely rural constituency--not green welly rural, but black welly with mud on rural. The Budget will not have all the effects that the Government desire in my constituency, simply because so much is not applicable to the area. To borrow a phrase from my hon. Friend the Member for Torbay (Mr. Sanders), the Budget seems to have bypassed Somerset in many ways.
There is nothing for pensioners. I have more pensioners in my constituency than the average. Nothing in the Budget commends itself to them or makes their lives easier. Instead, measures such as increases in petrol costs, which affect people on fixed incomes more than others, work in the opposite direction.
I see nothing in the Budget on housing. Housing in rural areas has been a problem for a long time. The right-to-buy policy denuded many of our villages of any social housing for ordinary people, and the housing stock tends to be older, in more exposed positions, and damp. We should have seen a Government initiative to change the structure of VAT on home insulation--not just for specific schemes, but on a wider basis--to make a real difference to the lives of many people.
Farming communities in my constituency have never had it so bad as they do now. The strong pound is a major influence on the difficulties that farmers face, yet the Budget has been judged in such a way that the pound has risen to a more unsupportable level than previously. That will make life more difficult, yet we have received no satisfaction from the Minister of Agriculture, on the specific help that he will give to the dairy or beef sectors in areas such as Somerset.
The Budget will not help the smallest businesses, although there was welcome help for smallish companies. It is hard to see where help is coming from, for the small
companies in the non-incorporated sector. Some measures should not have formed part of the Budget, but should, of necessity, have formed part of the Government's overall programme--for example, the major reform of the uniform business rate, which is positively inimical to small business.
Mr. John M. Taylor (Solihull):
The concept of a small business is one that we are all fond of, but it may have a plurality of definitions. What does the hon. Gentleman think is a small business?
Mr. Heath:
The hon. Gentleman is right to say that there is a plurality of definitions. It depends on the context and the sector that we are talking about. I am talking about small, non-incorporated businesses, such as a lone trader, a partnership or a small retail business that has been crucified in recent years and to which the Budget is of little assistance.
I wish to refer to car tax. It is absolutely right that we should stress the difficulty in the Government's proposals. As is common knowledge, we have campaigned for a long time for a shift in taxation, so that we increase the proportion on fuel, and balance that by a substantial reduction in vehicle excise duty. That is not only environmentally friendly, but means that for many people in rural areas who depend on their cars as the principal means of transport, there is a neutrality or even a benefit because of the typical mileage done in a year.
Many households in isolated villages have to have more than one car to allow people to live a life at all. The cars tend to be older, and the people will not be helped by the speculative Government suggestion about changes in excise duty. Most important, they will not be helped by the fact that the Government have gone ahead with an increase on petrol duty immediately, but are not prepared to change vehicle excise duty for another two to three years, if at all. That is the crux of the proposals.
Mr. Adrian Sanders (Torbay):
My hon. Friend mentioned farmers, small business men and the problem of increased petrol duty, which affects tourism. He has not mentioned pensioners, but I am sure he will. [Hon. Members: "Yes, he has."] Does my hon. Friend agree that, from a west country perspective, this is not a good Budget for the south-west?
Mr. Heath:
I agree. My hon. Friend may have missed the passage of my speech in which I mentioned pensioners, but Ministers on the Treasury Bench have noticed that I mentioned them once or twice. He is absolutely right, however, in saying that the Budget is not good for the south-west.
I commend the Government for at least making a start on the important issue of public transport. It is extraordinary to hear Conservative Members talk about the iniquity of providing only £50 million for rural transport. Rural transport is so atrocious because of deregulation, which the Conservative Government introduced, and because they starved local authorities of money for years, so that public transport could not receive the necessary support. Nevertheless, £50 million will not go far in providing adequate support to meet the needs of people in rural areas.
The additional expenditure on the health service is welcome but, again, it does not go far enough. I am worried that, because of their pledges, the Government
will concentrate on waiting lists to such an extent that there will be a reduction in primary health care and in the number of community hospitals in rural areas. Moreover, there seems to be nothing to improve policing in rural areas, which is another major issue.
My prime concern, however, is education, in which I have been involved for the past 12 years, as leader of a county council and chairman of a local education authority--it is something about which I care passionately. I welcome the extra money for education, but once the various elements--the effects of inflation and the adjustment to the deflator--have been taken into account, that money is whittled away and little benefit remains.
Setting aside the total amounts and the general picture, I must ask about the distribution of the money that will be made available. In this respect, I shall be openly parochial about Somerset. Recently, the Under-Secretary of State for Education and Employment, the hon. Member for Pontypridd (Dr. Howells), visited schools in my constituency--I hope that he liked what he saw--but those schools are working against a background of a starvation of funds that has continued year after year.
We hear the Government's rhetoric and their promises of additional money for education, but that money does not come to Somerset schools. Last year, the council tried to spend more on the education service, but it was capped--by a Labour Government applying Conservative policy. We looked to this year's local government settlement for extra expenditure, but we found a real-terms reduction. We applied for money that was released as a result of the scrapping of the assisted places scheme, but we were given nothing.
The effect is that teachers are being lost and class sizes are becoming larger. Children, including my own, in Somerset schools have seen no benefit from the change of Government; indeed, things have got worse. Until people start to notice a difference in our schools, why should they believe the Government's rhetoric?
People see that the local education authority is spending massively above its standard spending assessment--they do not doubt its commitment to education--but also that the expenditure per child is low. They also see that, on any register, the authority's efficiency is high--in Somerset, the number of vacant places is among the lowest in the country, and the administration costs per child are, by a long way, the lowest in the country. They ask why Somerset and the west country are not receiving the benefits that the Government have promised.
Mr. David Willetts (Havant):
I begin by commiserating with the Financial Secretary, who seems to be rather light on support this evening. Three Labour Back Benchers have spoken in this debate, and two of them criticised the central macro-economic judgment of the Budget.
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