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Mr. Gordon Brown: The Liberal Democrat spokesman should tell the full story, which is that £1 billion is being spent on the disabled this Parliament, £6 billion extra on children, and £3 billion extra on pensioners. That is what the Government have been able to do.
The hon. Gentleman talked about health and education, and referred to manifesto pledges. His manifesto promised a 1p in the pound rise in tax to spend on education, which is less than £2 billion a year. We are spending more than £6 billion a year extra on education. He promised£700 million for health, and we are spending something in the order of £7 billion extra a year. Instead of pretending that he can add up when he patently cannot, he should admit that we are spending more on the disabled, pensioners and children, and that we are providing more resources and doing things in the health service that he can only dream about.
Mr. Taylor:
The Chancellor is wrong, and I am glad that he has given me a chance to nail him. It is clear that our education pledge promised an immediate increase equivalent to a penny on income tax, and that that related to current spending. We would be spending, in real terms, an extra £2 billion a year in every year of this Parliament. According to their plans, the Government will be spending around half that amount by the end of the current Parliament--and that does not allow for the fact that we have never suggested that we would not spend more on the basis of growth, as all Governments do. What we said was that we would spend on the basis of a static budget, making no assumptions about growth, and that the expenditure was guaranteed.
The fact is that schools would be better off under our proposed measures than under the Chancellor's. First the Chancellor tries to ignore issues of inflation, secondly he tries to ignore the fact that there was growth planned anyway, and thirdly he tries to pretend that lumping together current and capital expenditure will make a difference to teachers in the classroom, and to books, equipment and class sizes. None of that is true.
Mr. Brown:
The hon. Gentleman should tell the full truth to the House of Commons. The Liberal Democrats opposed the new deal; they opposed the windfall levy; they opposed the additional capital expenditure of more than £1 billion on schools that has now raised £2 billion through public-private partnerships. As well as spending nearly £20 billion extra on education, we have managed
Mr. Taylor:
The Chancellor is wrong. We did not oppose the new deal, although we did argue that the windfall tax was not the right way in which to fund those measures. [Interruption.] We shall have plenty of time to return to the issue, and I shall enjoy doing so, but let us now consider the future. I raised the subject of the comprehensive spending review at Treasury Question Time. The hon. Member for Bolsover (Mr. Skinner), who is not present now, said--echoing, I suspect, the views of many Labour Back Benchers--that the new comprehensive spending review, which will double up on the third year of the current spending plans, 2001-02, would provide an opportunity for increased public expenditure, reflectingthe very good economic circumstances on which I congratulated the Chancellor earlier.
The Financial Secretary to the Treasury, however, has said more than once that there is no possibility of changing the third year of the present plans, and that they are set in stone. Will the Chancellor now tell us whether, when the new plans for 2001-02 are announced next year, the existing plans will prove to be set in stone, or whether people can hope for increased public spendingon education, health and the police--just in time, coincidentally, for the general election? I do not detract from that; I simply want to know whether the Chancellor will answer that fundamental question. If people are to submit to the review on a coherent basis and argue the case--Labour Back Benchers, or Liberal Democrats--we need to know whether the plans for 2001-02 are set in stone.
The Chancellor does not want to answer that question, which makes us wonder whether there is not, after all, a secret war chest. The Chancellor says that he is prudent, that there is no war chest, that there is no money to spend. I am sure that Labour Back Benchers are horrified to learn that there is nothing to come for schools, hospitals and the police in time for their leaflets--but there he is, the prudent Chancellor. Or is he not replying because he plans to release the money not now, when it is needed by children in schools, but in time for the general election? Those are bust-boom economics.
Let me turn to an issue on which we may be able to agree. I am glad that the Government are at last dealing with the issue of environmental taxation. They are finally getting something right in regard to the environment.
Mr. Campbell-Savours:
Will the hon. Gentleman give way?
Mr. Taylor:
I am very aware of the time, and I must make haste. The hon. Gentleman refused an opportunity to intervene earlier.
On environmental taxation, the Government have started to move in the right direction. They have accepted that the energy levy as originally designed was a complete disaster for both the environment and industry. It was introduced in one lump, giving industry no time to make the capital investment to adjust. It should have been introduced gradually over time, so that industry could respond.
The levy was not even good for the environment because it taxed all energy sources, whether they were environmentally beneficial or not. That is the difference
between our policy of the carbon tax and the Government policy of snatching money from industry without giving it any chance to get it back, not worrying whether it was environmental.
The Chancellor has improved the policy by attempting to make it relate to those industries that pollute, but he has failed to do it well. For example, hydro and industrial combined heat and power schemes will still be taxed. The process through which he is doing it--he has ruled out a carbon tax--simply does not work well. On the other side, he is having to let some industry off.
Mr. Leslie:
I ask a genuine question. Can the hon. Gentleman elaborate on what he means by "carbon tax"? Is he talking about fuel duty, or a levy on energy consumers? What sort of carbon tax is he talking about? It will have to be fairly considerable to cover the £20 billion cost of his £10,000 tax allowance.
Mr. Taylor:
I do not want to delay the House at length. I would be happy to show the hon. Gentleman not only our workings, but those of the Institute for Public Policy and Research and the Institute for Fiscal Studies, all of which show how such schemes would work. I suspect that he would have some support for the IPPR.
The carbon tax would be levied at source on the carbon content of the fuel--that is the point of the tax. It would be introduced gradually, so that it gradually increases the income to the Exchequer and stabilises energy prices, which are falling. Incidentally, if the hon. Gentleman is worried about road fuels, they would be exempted because, unlike other energy sources, they are already extremely heavily taxed.
I ask the Chancellor another question that he can perhaps help to answer. He has said that the road fuel duty escalator will no longer be in place and that road fuel duty increases above inflation will be used to pay for public transport. I notice that, in the transport press and motoring journals, the policy is presented as the end of the fuel duty escalator, but that, to environment groups, it is presented as the way in which the Government will fund public transport. I ask a simple question. Is it the end of the increases, or the way to fund public transport? It cannot be both, yet the Chancellor seems to take credit for both.
Mr. Loughton:
On the subject of escalators, it is not clear from the hon. Gentleman's last point whether he agrees with the policy that was initiated by the hon. Member for Weston-super-Mare (Mr. Cotter) at the time of the Budget--that the Liberal Democrats favoured an energy tax escalator.
Mr. Taylor:
I have just described the carbon tax. I cannot elaborate further on that now, but, if the hon. Gentleman wishes to see the policies that we have presented on the matter--I said that it would be gradually introduced--he can see the material. A carbon tax has been looked at not only by ourselves, but by the Institute for Fiscal Studies and the IPPR, so, wherever people are on the political range, in that material, they should have something to read that they find interesting and informative.
I finish with a final question. It is a simple one; I do not know why the Chancellor has felt unable to get up to answer my previous questions. He was critical of the Conservative Front-Bench team for not responding to his
questions. I am not sure why he has found it difficult to respond to many of ours. I will give him a simple one, to which he must know the answer.
The Chancellor will know that Liberal Democrats believe that we should move towards euro entry. We believe that it is important to establish a target range for the exchange rate--to have some sense of where we want to go in at. That fundamental issue is not in his criteria, surprisingly, but he has set a number of other criteria, many of which are important.
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