Blair wants better-off to pay for more public services

Tony Blair raised the prospect yesterday of the better-off being charged for some public services by extending the principle behind his proposal for university top-up fees.

Questioned for two and a half hours by senior MPs, the Prime Minister admitted that "co-payment" - under which the Government would share with people the cost of new or expanded public services - was on Downing Street's long-term agenda.

Behind the proposal lies a recognition the public is unlikely to back further tax rises. But extending charges would be controversial and would provoke criticism that people are "paying twice" for services already funded by taxpayers. Labour MPs fear "co-payment" will amount to a backdoor privatisation of state-run services if the party wins a third term.

Mr Blair's policy advisers are studying plans for a universal childcare scheme that would be free for the poorest families but would provide a paid-for service for others. The idea could also be applied to "lifelong learning", with people in work paying to upgrade their skills. There are also plans for the employed paying more for, congestion charging and motorway tolls, while the elderly could pay for "premium services" such as takeaway food instead of the standard service of meals-on-wheels.

The Prime Minister sought to reassure Labour MPs charges would not apply to education and health. He said: "I think there is an issue for the long term about how - not for core public services which, by tradition, we fund out of general taxation - but for other issues - like skills, for example - that we look at ... co-payment."

He admitted he could have presented a better case for university top-up fees, which was approved by the Commons by a five-vote majority last week after more than 70 Labour MPs opposed the move. "In retrospect, it would have been better had we published a lot more information about the nature of the problem than we did. I accept that and one of the things I try to initiate internally in the Labour Party and then externally is to try to put more public information out on a policy like this.

"So sometimes I have people saying to me, 'why didn't you tell us this about the universities and all that' going back a year. Actually we did but people were not terribly interested in it."

Giving evidence to the Commons Liaison Committee, composed of the select committee chairmen, Mr Blair also conceded he should have held a consultation exercise before abolishing the post of Lord Chancellor and setting up a Department of Constitutional Affairs in his so-called "botched reshuffle" last June. He said: "I agree ... there were particular circumstances there, and I think probably, in retrospect, we could have done that better, I would accept that. On the other hand, I have to say I think the change was absolutely right."

Mr Blair faced a series of hostile questions from MPs worried about his "top down" style of government, with the main decisions being taken by Downing Street rather than Whitehall departments.

He said it was "difficult to have a completely open policy debate" when any idea that entered the public domain was seen as a "hard and fast policy" by the next morning. He argued plans for foundation hospitals had not come out of the Downing Street ether but from hospitals saying they wanted to be freed from bureaucracy. "I never understood, frankly, what the fuss was about on foundation hospitals," he said. The Prime Minister said that it would be wrong to see government-set targets for public services as a bad thing, insisting they had helped reduce NHS waiting times and waiting lists. But he conceded that they had had a perverse impact in some instances.

He also said he believed global warming was the most important long-term challenge facing the world and said the two issues of meeting aviation demand and reducing pollution were potentially in conflict.