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Mr. Waldegrave: Will the hon. Gentleman give way for a second?
Mr. Darling: Do not worry, it will be just for a second, but in a moment. Will the right hon. Gentleman tell us the exact cost of implementing the proposal to extend the number of cadet corps in schools? Where will that money come from?
Mr. Waldegrave: It is not that it has not been costed, but that we have made no new policy in that area.
Mr. Darling: It was in The Daily Telegraph. The Government have made no secret about it; it was all over the news outlets. Talk about hinting, giving an impression and failure to deny. The Tory party was quite happy to give the impression that it wanted to extend cadet corps. Perhaps it is an aspiration. Perhaps it is an aim. Whatever it is, we do not know the cost of it.
That is typical of the Government's attitude to tonight's debate. The Deputy Prime Minister, the Chief Secretary and the Prime Minister have on numerous occasions on television and radio made bogus allegations against us, yet when we ask them where money is to come from--for example, to fund pensions with a cumulative cost of £150 billion, to fund the royal yacht, or to extend all the schemes that the Conservatives come up with and will continue to come up with between now and the election--they cannot tell us. In their heart of hearts, they know that the game is up and that no one will ever ask them again where the money will come from. They know that what awaits them after the election is not running the country but squabbling among themselves and fighting for the succession to whatever is left.
I was surprised that the Deputy Prime Minister did not treat us to his usual exhortations and encouragement, saying that we face the best economic prospects for a generation. I do not know of what that generation is--a normal generation is 10 or 15 years, but he might be talking about a generation of fruit flies for all I know. The fact is that, when we compare this country with others in Europe and the rest of the world, we realise that we are not doing as well as the Conservatives would have us believe.
We have one of the highest inflation rates in Europe--our long-term inflation rates are higher than most of our competitor countries. Yes, unemployment has been falling, but only one person in three coming off the unemployment list has actually found employment. The Conservatives claim that living standards are rising, yet
the Chief Secretary admitted last year that people's take-home pay had fallen over the previous few years. In addition, there is the overlay of job insecurity--it is only the President of the Board of Trade who says that that is simply a myth. We are told that we have the fastest growth rate in Europe, yet if we look at the record for the Conservatives' period in office, we see that growth has been less than was achieved by the last Labour Government. A substantial part of inward investment comes, not from new companies coming in and setting up, but simply from takeovers of privatised utilities.
The Chief Secretary to the Treasury (Mr. William Waldegrave):
The hon. Member for Edinburgh, Central (Mr. Darling) overran his speaking plans by about 85 per cent., which I suppose will be the sort of overrun in the expenditure plans if he ever becomes Chief Secretary, so I shall not emulate him in that respect. He might profit by reading the speeches and articles of his hon. Friend the Member for Birkenhead (Mr. Field) on the truth about security of employment and pensions--a subject to which I shall return later. The hon. Member for Birkenhead has the sense and the courage to recognise that the measures introduced yesterday are basically right.
My right hon. Friend the Member for City of London and Westminster, South (Mr. Brooke) made the point that the fundamental shift that has occurred during the course of this Government is that the worsening cycles that took place during the 1950s, 1960s and 1970s have been reversed. In every one of those cycles, unemployment was higher at the worst point and inflation was higher at the subsequent recovery point than in the previous cycle. In 1975-76, Mr. Peter Jay, the then son-in-law of the then Prime Minister, wrote a series of famous articles in The Times warning that if that worsening widening of the cycle continued, we would face catastrophe. I believe that his then father-in-law began to pay attention, because there was a change in atmosphere towards the end of that Government--a change in which the present Chairman of the Public Accounts Committee, the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), probably played a part.
Since then, that worsening series of troughs and peaks has steadily evened out. I agree with the hon. Member for Edinburgh, South--
Mr. Waldegrave:
I beg the hon. Gentleman's pardon. I agree with the hon. Member for Edinburgh, Central that we should take no delight in the problems on the continent of Europe, our major trading partner. The quicker that a recovery is found there, by a return to the roots of liberal economics on which those countries established their success after the war, the better for all of us. They now find themselves in the position in which we found ourselves once upon a time: each trough is deeper in terms of unemployment, each recovery higher in terms of inflation. We have reversed that trend in this country. It is part of my argument that part of the reason for that is that we have turned round the trend in the growth of public expenditure.
The hon. Member for Edinburgh, Central is extremely skilful at focusing on the short term. I want to direct him to the wider picture. As my right hon. Friend the Member for City of London and Westminster, South said, under Labour and Conservative Governments in the 1950s and 1960s, the trend of public expenditure was up, as it was in other countries. It works equally well whether one measures that growth from peak to peak or trough to trough or draws the average line. The peak in the 1950s was 37 per cent., that in the 1960s was 42 per cent., that in the 1970s was 47 per cent., that in the 1980s was 45 per cent. and that in the 1990s was 43 per cent. The troughs reveal the same pattern. Unquestionably, there has been a long-term turn-around in that trend line.
Other European countries marched in step with us upwards and continued upwards after 1979. That is why they now find themselves with public expenditure as a proportion of gross domestic product at 50 per cent. and in some cases 60 per cent., with the big countries at 50 per cent. or slightly higher, whereas we have separated from that pack and have returned to a clear trend line, which will be continued if a Conservative Government are returned to power.
Through the 1980s, the underlying level of spending fell by about 4 per cent. of GDP--about £28 billion. The hon. Member for Gordon (Mr. Bruce), the spokesman for the Liberal Democrats, laid before us a strategy on these matters. It may be my fault, but it was the first time that I had heard it. It was a clear strategy--relatively clear, at any rate. He said that he wanted to hold the growth rate of all public expenditure programmes, except two, below the trend growth rate of the economy. If the growth rate of the economy is about 2½ per cent., which may be slowly but surely increasing, most programmes should be kept below that. The hon. Gentleman would finance the remaining two--health and education--with higher taxes, but their trend growth should be higher.
Broadly, I take it--I may be simplifying slightly--that the hon. Member for Gordon believes that the proportion of GDP spent by the public sector should be broadly in tune with overall growth in GDP as a whole, with some programmes growing more slowly but two programmes growing faster. I may be putting words in the hon. Gentleman's mouth, but perhaps that means that Liberal Democrat policy is that public expenditure should broadly
shadow the growth in the economy, so it should stay at about 42 per cent. That is a perfectly legitimate policy; I shall posit some arguments as to why it is not a good one, but it is at least a policy.
As usual, the Labour party obscured things. Labour Members made brilliant debating points on the short term--brilliant knockabout stuff about what someone said on Tuesday that was contradicted by someone three years before, and so on--but presented no underlying policy.
The hon. Member for Kingswood (Mr. Berry) has a policy all right, because he, I believe, is a proper socialist. I guess that he wants the public sector to take a bigger role. I do not think that I would be putting words in his mouth to say that. [Interruption.] I just happened to notice the hon. Gentleman there, and I thought that I would record for his constituents the fact that he was there. I suspect--I may be wrong--that he is someone who actually believes in the public sector.
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