Hospital building programme to be announced

Extra Funding For Education and Health

Gordon Brown has announced that the Government will be allocating billions of pounds of extra funding to health and education. He said that a hospital building programme would soon be announced across the country.

The Chancellor said the Government would dismantle the "inefficient internal market" and added that it would no longer spend money promoting competition and paying for "innumerable short-term contracts" at the expense of patient care.

He said that £1.2 billion of the £5 billion 1998-99 contingency reserve would go to the NHS and added that health spending would increase in line with the Government's projection for the growth of the economy.

This money is being granted on the firm agreement that the administrative reforms in the health service will be fully implemented and front-line patient care will benefit.

"Schools for the 21st Century" by Les Gibbard © BBC

There was also good news for schools as Mr Brown announced an extra allocation of £2.3 billion to education. Of that, £1 billion will come from the 1998-99 reserve and £1.3 billion will be raised from the windfall tax over the life of the Parliament. The cash raised from the windfall levy will be for schools to invest in buildings and technology.

The Chancellor said that education was the Government's priority and that it held the key to Britain's future: "We cannot run a first rate economy on the basis of second rate education. In general, economic success tomorrow will depend on investing in our schools today."

The announcements won praise from even the most die-hard 'old Labour' supporters. Dennis Skinner, MP for Bolsover was delighted at the extra funding for health and education.

"For me that's the most important thing, because they couldn't have got through this financial year without extra money. They desperately needed the money," he said. Mr Skinner added that he thought the extra money was the equivalent to putting 2p on income tax.

Members on the Opposition benches were less impressed. Sir Archie Hamilton, Chairman of the 1922 Committee, was critical of the windfall tax: "Mr Brown thinks he can just make money appear out of the sky and the windfall tax won't have any effect on jobs or industries.

"Where does he think the money is coming from, falling out of the sky like rain?"

The Liberal Democrats are set to oppose the Budget because they do not believe the Government is doing enough for education. Their Treasury spokesman, Malcom Bruce, said: "We will vote against today's Budget because, in spite of the £234 per taxpayer total rise which it contains, it fails to deliver the most important ingredient for Britain's long-term economic future - significantly higher investment in education."