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Amendment of the Law

Part of Budget Resolutions and Economic Situation – in the House of Commons at 9:52 pm on 21st March 2000.

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Photo of Lynne Jones Lynne Jones Labour, Birmingham, Selly Oak 9:52 pm, 21st March 2000

I think that the sooner we can join the euro, the better. However, I should like there to be better management by the European Central Bank[Interruption.] That is not inconsistent. Fundamentally, the European economy is sound. Bankers should have greater confidence in that fact and not try artificially to stimulate the euro by increasing interest rates. The euro should be allowed to fall to its natural level, after which it will start to bounce back. However, whenever the euro rallies slightly, that seems to encourage major holders of the currency to sell, which is counterproductive in reaching the ultimate objective.

The euro could be managed better. If the bankers took advice from the Chancellor, I am sure that it would be better managed, and that we could eventually have a more competitive pound and an enhanced ability to join the common currency.

In this Budget, we are starting to see a Labour Government recognising that taxation is not such a bad thing. We pay our taxes because we receive services in return. As the fourth most wealthy country in the world, we should be able to afford excellent public services. The Government realise that, despite the extra cash that has gone into the health service, a great deal more needs to be done.

I do not necessarily believe that, ultimately, health spending must be increased to the same level as that in other European countries. The NHS, by its very nature, is more efficient in the provision of services. Nevertheless, we need a more service-oriented approach in health provision—as I discovered to my cost yesterday. After sustaining a small injury to my hand, I had to sit for two hours, with a whole crowd of other people, in my local hospital's casualty department. We expect to be able to make appointments in the private sector—whether it is to see a hairdresser, to reserve a table in a restaurant or to have a car repaired—and we do not expect to have to wait. We should demand the same level of service in the public sector, in our NHS, as we demand in the private sector.

The Governments who have been pandering to the idea that we have to keep taxes down have artificially prevented the British people from spending more on health and education services. As society becomes more wealthy, we expect to have excellent public services. I congratulate the Chancellor on his announcements on spending boosts for those services.

I have some concerns, however, about other matters. I thoroughly agree with my hon. Friend the Member for East Carmarthen and Dinefwr (Mr. Williams) when he points out the need for greater capital investment. Although the extra money for transport—£250 million—is welcome, in the west midlands, Birmingham city council is arguing that we should be increasing investment in public transport by about £400 million, although obviously not all in one year. We need such up-front capital investment to boost business investment and to encourage greater investment in our region.

The Chancellor said that he was committed to balanced economic development across the regions. We need more capital spending on our infrastructure. Even with the planned increases, we shall still not return to the capital investment level as a percentage of gross domestic product that was reached in 1994–95 by the previous Government. We are still far from the capital investment levels achieved by previous Labour Governments.

There is no need for us to use private finance for public sector capital investment. I am not advocating that we should let borrowing rip, but there is clearly scope for investment that will reap dividends in future revenue income. Transport is a very good example of that. If we make up-front capital investment, we can introduce environmentally friendly congestion charges, which would pay for that capital investment. It would also be beneficial—