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Wednesday, 27 February, 2002, 14:31 GMT
Kennedy's pledge for public services
Charles Kennedy
Mr Kennedy: Party is taking "bold" stance

Few would disagree with Charles Kennedy that the future of public services is currently the biggest challenge facing Britain's political leaders.

For the Liberal Democrat leader, it is delivery in health, transport and other services - and not ideology - which he says remains at the top of the agenda.

Mr Kennedy on Wednesday outlined the initial findings of the party's policy review for the public services.

The document contains no firm decisions, but highlights themes for further debate at the Liberal Democrats' spring conference in Manchester next month.

They include the possibility of a "hypothecated" NHS tax, greater local control of public services and encouraging public service workers to set up co-operatives to provide services.

The last Liberal Democrat manifesto included a plan to increase basic income tax by one pence, with the money allocated to education.

Now the policy review says existing National Insurance contributions could be redesignated a health contribution to fund the NHS.

Alternatively, the paper says part of income tax could be used by splitting the tax into a health tax and a general tax.

The document also examines the role of the private sector in public services - an issue which has already seen the party facing similar splits to those which have plagued Labour.

Tony Blair
Mr Blair has raised the possibility of tax rises
The review promises to make for heated exchanges at the conference and beyond as the Liberal Democrats seek to further consolidate their electoral position and set out their future direction.

The party faces a split between those who want to win more support from disaffected Conservatives and those on the left resisting a "Blairite"-style transformation.

And the Liberal Democrat stance on the future funding of public services is at the heart of the debate.

MEP Chris Huhne, who is chairing the policy review's working group, said the working group had been asked to "look fearlessly at all the options for reform and improvement of public services."

He said a culture of the "best solution" should be adopted for public services - and that could mean the public sector, private sector and not-for-profit organisations.

Key selling point

Mr Huhne and Mr Kennedy said they believe that, in recognising the need for further resources for the health service in particular, Labour and the Conservatives are moving into their terrain.

But they are both sceptical of the commitment of their rivals and believe that their approach has a key selling point neglected by the other parties.

Mr Kennedy said he welcomed the recognition that there was a need for increased funding for public services, but said he doubts there is a consensus across the political divide.

"The Conservatives don't instinctively subscribe to the ethos of public services," he said. "The jury remains out on the government."

What makes the Liberal Democrats different, Mr Huhne argued, is a commitment to move decision-making away from Westminster and to local communities.

That way, he said, taxpayers funding services would have more political control over how their money is being spent.

"It is a ridiculous situation when people feel that the only effective complaint can be made in Prime Minister's Questions," he said, referring to the much-publicised case of NHS patient Rose Addis.

Stimulate debate

"The buck has to stop closer to people who use public services."

Mr Kennedy argues that coupling an NHS tax with more devolved government would stimulate debate and lessen apathy about the political process.

He said people would be able to see how their money was being spent and would then be able to judge how effectively it was being used.

Last week, Prime Minister Tony Blair, while rejecting the idea of a hypothecated tax for the health service, gave a clear hint that tax rises were on the way to increase health spending.

Mr Kennedy believes that by launching what he called a "bold, ambitious and politically and intellectually self confident" debate, his party is streets ahead of Labour in addressing the crisis facing the country's public services.

The chances are, however, that he will not be able to reach final conclusions without the sort of battle for the soul of his party which Labour knows all too well.

See also:

25 Sep 01 | Politics
25 Sep 01 | Politics
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