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Mr. Alistair Darling (Edinburgh, Central): Will the right hon. Gentleman give way?

Mr. Hunt: No. I have said that I will give way to the right hon. Member for Kingston upon Hull, East. For the sake of the record, I should say that I noticed that the hon. Member for Edinburgh, Central (Mr. Darling) has

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spent much of the debate so far trying to brief the right hon. Gentleman. I seek no apology for that, but will he excuse us if we point the finger at him when we ask who is making the policy of the Labour party, and ignore the deputy leader? We are talking about the deputy leader of the Labour party on live television making a clear commitment without qualification.

Mr. Darling: The right hon. Gentleman was a member of the Cabinet at the time of the last election. He will recall that the Conservative party had stood on an explicit platform of cutting tax year on year. He was in the Cabinet when that promise was made, and it was broken. He is in no position to lecture anyone.

Mr. Hunt: We were in a recession that had continued for longer than anyone, including the hon. Gentleman, had expected. The context of the world recession has been set out in the speeches that we have already heard. When it came to a balance between cutting NHS and education spending--crucial and critical spending--or increasing taxes, I had no hesitation in going for increasing taxes. The hon. Gentleman seeks to deflect me from my point. I will not be deflected. I shall return to it in one moment. I take pride in the fact that, although there have been tax increases to maintain and increase public expenditure on critical services such as the NHS, there have been 25 tax reductions.

Mr. Darling: Can the right hon. Gentleman refer us to the precise passage in the 1992 manifesto in which it was made clear that the pledge to reduce taxes year on year was qualified to the extent that, if it turned out that there was a recession, the pledge would not be kept?

The Conservatives knew all about the recession at the time of the last election. The Prime Minister is on record as saying the day after the election that he knew that his Government would be deeply unpopular. Where in the 1992 manifesto is there any qualification of that pledge? Is not the truth of the matter that the right hon. Gentleman and his colleagues deliberately misled the British people and fought an election on tax promises which they knew they could not sustain? That is why no one trusts them, and why they lost Wirral, South.

Mr. Hunt: That is untrue and incorrect. There was no question of any such deliberate intention. I have clearly said that, when it came to a choice between cutting public expenditure and increasing taxation to maintain critical levels of spending on crucial public services, I had no hesitation in approving tax increases. Of course we had to increase taxes, in view of the background economic situation.

Mr. Jacques Arnold: Does my right hon. Friend agree that the significant difference is that the Government faced the realities of coping with the economy under the pressures of a world recession, whereas the Opposition have responsibility for nothing, and their policy changes from one week to the next? The only difference is that the hon. Member for Hartlepool (Mr. Mandelson) has overruled the deputy leader of the Labour party.

Mr. Hunt: I am grateful to my hon. Friend, but it is difficult. We still have not received an answer from the right hon. Member for Kingston upon Hull, East on

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the specific points that I have put to him. I do not know whether the hon. Member for Edinburgh, Central will be replying to the debate, but perhaps he could have one of his characteristic conversations with the right hon. Gentleman, and perhaps the right hon. Gentleman will give us a reply before the end of the debate.

Mr. Clive Betts (Sheffield, Attercliffe): Will the right hon. Gentleman give way?

Mr. Hunt: I should be happy to give way to the right hon. Member for Kingston upon Hull, East, but he has not sought to intervene.

I am angry that things were said in the Wirral, South by-election that were patently untrue. I warn the right hon. Gentleman that I am carefully monitoring what electors tell me was said to them by a series of Labour Members of Parliament by telephone and on the doorstep. I have given one example, and the right hon. Gentleman has not sought to deny it. I have the transcript and the video. It is shameful that he misled the electors in that way.

The right hon. Member for Kingston upon Hull, East said in his speech that there were great difficulties with the European social model at the moment. According to the right hon. Member for Livingston (Mr. Cook), that model will be our economic policy under a Labour Government. I do not know whether the right hon. Gentleman has disclosed to the Opposition spokesman on foreign affairs that he believes that there are great difficulties with the model, but it is the model that this poor country will face if it were ever to elect a Labour Government.

There is another example of deliberate misleading. I have here a survey by Merrill Lynch entitled "UK economics: weekly perspectives". Under the heading "The Social Chapter: does it matter?", it says that the key question for Britain is whether we should have the social model or the British enterprise model, which has proved so successful. Merrill Lynch poses several questions. It says:


It says that the claim is made that


    "once in, the UK can veto measures it does not support. As Mr. Blair said at the CBI, 'Each piece of legislation will be judged on its merits. I have no intention whatever of agreeing to anything and everything that emerges from the EU'".

That was from 14 November 1995.

Merrill Lynch then proceeds to analyse over several pages whether that statement by the Leader of the Opposition is true. The conclusion of that independent body is that the statement is "not true". That is a nice way of saying that someone has told an untruth. The paper says:


I had the privilege to serve in the Cabinet as Secretary of State for Employment, and I attended Employment Council meetings. I know the dangers of signing up to the social chapter, and I shall just give one or two examples from other countries. Indeed, their Employment Ministers

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used to share their frustration with me because they were subject to the following provisions of the social chapter. In Belgium, for example, all planned overtime must be notified in advance to the authorities. In Spain, overtime is limited to--

Mr. Prescott: This is not directly to do with the social chapter.

Mr. Hunt: Yes, it is.

In Spain, overtime is limited to under two hours a week, which is equivalent to 80 hours a year. In Sweden, parents are entitled to a minimum of 450 days of paid leave between them following the birth of child.

Mr. Prescott: That is nothing to do with the social chapter.

Mr. Hunt: The right hon. Gentleman may shout that from a sedentary position, but when I was Secretary of State for Employment, fighting the United Kingdom's interests in the Social Affairs Council, there was a proposal that we should introduce a parental leave regulation. The acceptance of such burdensome provisions was intended to bring us into line across Europe. I vetoed that proposal. If this country had signed up to the social chapter, I would not have been allowed to exercise that veto.

We always had informal working lunches with our opposite numbers on the Social Affairs Council, when my colleagues used to say to me, "I wish we had a veto. I wish we had the courage of the United Kingdom to stand out against the European social model." The right hon. Member for Kingston upon Hull, East admits that there are great difficulties with that model at the moment. Could he please have a word with his colleagues on the Labour Front Bench and persuade them to back off from their commitment to sign up to the social chapter? Indeed, all our partners in the European Union would like us to do that. They, too, would like to resile from the social chapter.

I have met many European partners who have told me, "If only we had the same flexible labour market as the United Kingdom. We would then see our unemployment rate coming down as it has done in the United Kingdom."

I listened to the right hon. Gentleman, and I am extremely depressed, disillusioned, and still angry. The sort of nonsense that he is peddling really means that voting Labour at the next election will mean voting people out of a job.

6.51 pm

Mr. Robert Sheldon (Ashton-under-Lyne): Much of the debate so far has been about guessing Labour's future expenditures, but we have the facts about the Government's expenditures. After 18 years, there are a load of facts about how they have projected their expenditures, not necessarily in the interests of the country, and where they have been excessive in their expenditures and not received value for money.

My right hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) quite rightly referred to the possibility of an audit on the Treasury. When I first became Chairman of the Public Accounts Committee, the Treasury suggested that it could do an efficiency audit on

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the National Audit Office--a move which I did not welcome. I countered that by suggesting that perhaps the NAO might first do an efficiency audit on the Treasury. We never heard anything after that.

It might be thought surprising that the Government have given a day to debate expenditure when they are so vulnerable, because the facts are there to see. I understand that an annual debate on expenditure is necessary to determine priorities and to get the views of Members. I agree with the suggestion that we should get rid of the autumn Budget, with its expenditure implications, because that presupposes that we can do a trade-off between revenue and expenditure.

We know that that has not happened, because no one outside the Government can propose increases in taxation. There is no possibility of increasing expenditures, either. One is left with a phoney debate about the relationship between income and expenditure. As a result, we have messed up the parliamentary year. The sooner we revert to a spring Budget, as suggested by my hon. Friends, the better.

I should have thought that, given the facts on the Government's expenditure, they would want to keep them quiet. They might have thought about debating that record on a Friday afternoon, approaching the summer recess, when it would not be exposed. Let us look at the record of Government expenditure. Let us not look to the future, about which very little is known, when we can consider the past and present, about which a great deal is known.

All Governments have expenditures that they have come to regret, but this is the first occasion when a day has been set aside unnecessarily just to consider certain types of expenditure that need to be questioned. First, I should like to refer to central Government net debt interest. In 1979-80, the net debt was £8 billion--I agree that that was in the then current terms--and today it stands at £24 billion. Is a leap from £8 billion to £24 billion a sensible use of public expenditure? The Government have had to spend that money because of the way in which the economy has been run. That expenditure is wholly unacceptable, and not very prudent.

The eighth report of the PAC dealt mainly with fraud and corruption. I was pleased when the then Financial Secretary, the right hon. Member for Ealing, Acton (Sir G. Young), gave a full endorsement of the report's proposals. I welcomed very much the November issue of "Regularity and Propriety", which contained everything that the PAC wished to see. It is important to note that that was wholly admirable.

It was important that the eighth report should ensure that the levels of fraud and corruption were looked at carefully, but it also drew attention to the inadequate stewardship of public money and assets. We referred to


We referred to


    "Inadequate oversight by those in authority . . . failure to ensure that delegation of responsibility is accompanied by clear lines of control and accountability, leading to the waste of large sums of public money."

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    We also drew attention to the


    "Failure to take prompt corrective action when things begin to go wrong."

We made a blanket criticism of many of the things that had gone wrong.

Let us consider the actual detail of what has happened. I will not go back into the long distant past; I will confine myself to something rather more recent. The Pergau dam, for example, cost £234 million of public money. How was the decision made to spend that amount? Did we get value for money? We found out that an assessment of the dam was made by two people, who were sent to Malaysia to study the site on behalf of the Overseas Development Administration. They spent just two days there, and then came back and said, " It's okay." After just a two-day visit, the decision was made to spend £234 million. I am not even certain that they got to the site.

I note, of course, that that project had political overtones. One should not forget the famous note of dissent from Sir Tim Lankester, who pointed out that it represented an unreasonable expenditure of public money. That was his right, and when he came before the PAC he could claim that the fault did not lie with him because he had been overruled. We found that the path led to the Minister for Overseas Development, the Foreign Secretary and the Prime Minister. It then became a matter with political overtones. Nevertheless, it did not represent a good example of spending public money.

Then let us consider the Ministry of Defence's management of fire risks. The tale of the major weaknesses in its fire risk policy is almost unbelievable. In 1983, there was a conflagration at the Army store depot at Donnington, when £170 million of Government stores of various kinds went up in smoke.

The elementary fire precautions had not been taken. The PAC produced a stinging report on that failure, and received assurances that there would be improvements. Then, in 1988, another fire occurred at Donnington--the same place, the same sort of fire. There was £180 million-worth of damage this time; it was more expensive because some of the stores had been replaced, although we presume that they would not have replaced those stores that were not quite so essential.

In 1996, we looked at the problem again. There had been two fires in the same place and there had been a failure to take the obvious precautions, yet in 1996 we found that the Ministry of Defence did not even have a full record of the buildings it occupied, let alone whether they were at risk of fire. That, after 15 or 16 years of Conservative government. If the Government were really anxious about public expenditure and the control of public expenditure, they should have been looking at such matters. The Government did not lack reports--the problems did not come out of the blue--but they failed to take the action that had been recommended and strongly urged.

Let me turn now to part of the works programme for the management of the Trident programme, referring to Faslane, the Clyde base which services submarines. Construction of that base was started before the designs were completed--a risky task, which, when involving £1 billion, becomes even more serious. In 1984, the programme was expected to cost £694 million--£1.1 billion at 1994 prices. The total spent up to 1994 was, in fact, £1.9 billion--a stupendous overrun of £800 million.

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Why did that happen? It happened because of inadequate management and inadequate practices. The PAC report stated that the Committee was "astonished"--a word that is rarely used by the sober members of that Committee--by the ways in which the money had been spent. The PAC is experienced in the ways of the world, but its examination led to that strong language being used. At the peak of the work, and at one time--this is unbelievable--1,000 consultants from 67 firms were employed, at a total cost of £360 million. How did people get into the base with 1,000 consultants milling around? I could not believe that money had been spent in that way, but the Committee found that it was true.

So there we see another example of public money being wasted by a Government who are supposed to be concentrating on matters of public expenditure. I know that all Governments have made mistakes of that sort, but they do not come to the House on a Thursday afternoon and have a debate on them. They leave the matter quiet, and hope that people will not notice. They hope that, when they say that certain matters will be put right later, we will accept their assurances.


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