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Mr. Darling: It would be wrong of me not to congratulate the right hon. and learned Member for Rushcliffe (Mr. Clarke) on his showing in yesterday's leadership election. We wish him well, although we appreciate that the feeling may not be shared by all the Members on the Opposition Front Bench. I also welcome him and what is left of the former Government's Treasury team to the Opposition Front Bench, as only two of them made it through the general election.
The last time that my right hon. Friend the Chancellor made a statement, the right hon. and learned Gentleman complained bitterly that he had not had time to look at it. I understand that he received my statement at 1.30 pm, although one might not have realised that for all he had to say about it.
Let me deal with the questions that the right hon. and learned Gentleman put. When it comes to fairness, the Conservative party is in no position whatever to lecture us or anyone else. Everyone in the country remembers the poll tax, which said everything that anyone needs to know about the Conservative party's lack of fairness. Nor is the right hon. and learned Gentleman in a position to lecture us on waste. This country is paying an extremely high price for the problems that have arisen as a result of the BSE scandal to which the previous Government contributed through their short-sighted decisions.
As for the right hon. and learned Gentleman's question about whether we would keep the share of public spending below 40 per cent., every year the Conservative party announced a total, and every year they failed to meet that total. It is therefore in no position to lecture us on keeping to promises. [Interruption.]
The right hon. and learned Gentleman asked a number of specific questions--[Interruption.] If Conservative Members would stop bawling and shouting, they might hear the answers. I shall deal with the questions in turn. First, on provision by the public and private sector, we have always made it clear that our approach is pragmatic. What counts is what works. The Conservative party was hidebound by a dogmatic approach that was both inefficient and wasteful.
The right hon. and learned Gentleman also said that our approach to the National Audit Office was about smoke and mirrors. On the contrary--it is to shine some light on public finances. Because of the position we inherited, we asked the National Audit Office to look at some of the assumptions that had been made. I should have thought that, in the interests of open government, the right hon. and learned Gentleman might have welcomed that. He also asked about the PFI definitions. We are determined to make the PFI work, unlike the last Government, who spoke a lot about it but had precious little to show for it, whether in health or any other area.
I agree that the Euro-PES system is a useful discipline, not just in this country but to keep a check on European spending. The Barnett formula has been in place for some 20 years, and the Conservative Government did nothing about it. The right hon. and learned Gentleman's
comments were therefore a bit rich. After all, he used to be one of the most passionate supporters of devolution, with, I believe, tax-raising powers.
Mr. Robert Sheldon (Ashton-under-Lyne):
I welcome the statement, especially in the light of the important intervention that the Government have made in public expenditure. We should also welcome the most fundamental review that we have seen in recent years and look forward to seeing its effect. It will bring fresh light into the annual public expenditure debate, and I hope that the next one we have will take that into account.
Will my right hon. Friend inform us whether the House of Commons will be involved in such a debate? We do not want to wait for a whole year to pass before we see some of the possibilities that will now be open to us.
Mr. Darling:
I am grateful to my right hon. Friend, and congratulate him on all the work he did as Chairman of the Public Accounts Committee over the past few years. He conducted the Committee in an entirely non-partisan way, which will be a good example to his successor.
My right hon. Friend asked about the involvement of the House. The terms of reference of the reviews will be published shortly. My right hon. Friends the heads of Departments will welcome input from wherever it comes--inside or outside the House. As the reviews proceed, the House will become aware of the results. It is expected that the fruits of the reviews will be announced in different ways and at different times, as and when the work is completed, but there will be ample opportunity for the House to pass judgment on them.
The object of the exercise is to introduce as much transparency as possible, so that people can see what the Government's objectives are and judge us on whether they are achieved. At the same time, they will have an opportunity to make contributions to policy development as the process continues.
Mr. Malcolm Bruce (Gordon):
The Liberal Democrats welcome the Government's announcement of a full review. A new Government with a new set of priorities must clearly examine all departmental spending and determine how it should be changed in the light of new Government priorities.
During the period of consultation, will there be open sharing of the discussions that are going on, so that the House will have some opportunity to influence the outcome?
The Chief Secretary's review will concentrate on how spending might change in two years' time--it is very much for the medium term. That reminds me and the House of Keynes's dictum that, in the long term, we are all dead. Is it not strange--the Prime Minister's answer was inadequate--that if, in the course of the review, serious savings can be found, the Government are not prepared to transfer a single penny out of any departmental spending to meet a cash shortfall that occurs anywhere else? Is that not unrealistic and unnecessary?
In spite of the very small commitments that the Government have made, will not the crisis in education and health continue for the next two years, with rising
class sizes, more teachers being dispatched and increasing NHS waiting lists? How on earth will the Government tackle that? What will they do about it?
Mr. Darling:
I appreciate the support from the hon. Gentleman and his party for the review generally. He is right to say that it looks to the medium and the long term. I can assure him that the Government intend to be around in both the medium and the long term, so he need have no worry on that score. It is important that the Government look to the long term, and do not conduct their affairs simply to react to crises and problems that arise year on year. The Government must have a long-term view, as I think the hon. Gentleman would accept.
With regard to the next two years, we set out our position in the manifesto. It was made entirely clear, as it was by the Prime Minister a few moments ago. Before any question of raising additional money arises, surely it makes sense to ask ourselves, in each and every Government Department--the same applies to local government--where the money is being spent at present. Is it being spent in the most appropriate way? Local authorities should be asking themselves that all the time.
The difference between the Labour party and the Liberals--apart from the fact that we knew that there was every chance that we might win the election and therefore did not make promises unless we were prepared to keep them--is that we are also prepared to conduct a root-and-branch examination of where the public money is spent, so that we can influence and underpin the future decisions that we will take.
Ms Joan Walley (Stoke-on-Trent, North):
I welcome the review, because it is important for us to make best use of what we have. With regard to its terms of reference, may I bring to my right hon. Friend's attention my concern about education, and about the fact that local authorities such as my own in Stoke-on-Trent and Staffordshire have been underfunded year on year on year, without any level playing field? Will my right hon. Friend consult local authorities closely to make sure that the urgent and long-term educational needs of our children are addressed in the review?
Mr. Darling:
I am grateful to my hon. Friend for her kind comments. She will know that, as we made clear during the election campaign, we have pledged in our manifesto to increase the amount of national income that is spent on education over a five-year Parliament. She is correct when she says that the Departments of Education and the Environment must keep in touch with local authorities. All hon. Members have schools in their constituencies and are well aware of the difficulties that they face.
I repeat that, if we are to build for a successful future and to ensure that expenditure on education is spent well and that standards are raised, we must be satisfied that existing expenditure is allocated appropriately.
Sir Nicholas Lyell (North-East Bedfordshire):
Is the right hon. Gentleman aware that, every time he drives north through Bedfordshire on the A1, he negotiates one of the most dangerous stretches of road in Europe? It is imperative that several small road safety schemes be
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