Orders of the Day — Budget Resolutions and Economic Situation

Part of the debate – in the House of Commons at 5:20 pm on 7th July 1997.

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Photo of Stephen Dorrell Stephen Dorrell Shadow Secretary of State for Education 5:20 pm, 7th July 1997

The hon. Gentleman's timing is perfect. I shall give way to him before I conclude my remarks if he finds a better point at which to intervene.

The final aspect of the Chancellor's objectives was his intention to deliver improved public services. In particular, we were asked to consider the extra money provided in the Budget for education and health. The Prime Minister has repeatedly said that the welfare-to-work package will release money and thus allow extra spending on education. That proposal does not stand up, given the evidence of any welfare-to-work package anywhere in the world. The Chancellor has clearly seen that evidence, because he recognises the need to provide extra money for the welfare-to-work programme and for education. For him, there is no question of a trade-off: he has provided more for schools and more for hospitals.

That proposal was the only element of last week's Budget that every Labour Member clearly understood: there was a lot of waving of Order Papers and a throaty roar. It was clear and simple: more money for public services. Labour Members—indeed, many of my hon. Friends—welcomed the fact that more money was being made available to provide better schools and better hospitals. It is not quite as simple as that. The Chief Secretary will be able to pay for that within the spending total only if he imposes a 1.5 per cent. spending cut on everything else.

In the debate last week, the Secretary of State for Education and Employment, my hon. Friend the Member for Maidenhead (Mrs. May) and I discussed the extent to which the money for education could be guaranteed for schools. That exchange showed how flimsy the Chancellor's construct is, even on the subject of extra spending on education. My hon. Friend asked the Secretary of State whether she had correctly understood that the money will not be ring-fenced to ensure that it goes to the education budget: instead, it will be allocated to the authority's general budget and it will be up to councillors to determine whether it goes to schools. The Secretary of State replied: I am delighted that I have been so clear that the hon. Lady has got it".—[Official Report, 3 July 1997; Vol. 297, c.439.] So there we are. There is no extra money for schools in the Budget. There is an extra allocation for standard spending on education and extra money for authorities, but the authorities are completely free to choose how they spend it.