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Mr. Eric Pickles (Brentwood and Ongar): The Chief Secretary to the Treasury said that he is keen to have transparency. In the interests of transparency, will he tell the House whether, in this extensive review, he anticipates any changes in the definition of what is and what is not public expenditure? In particular, does he intend to look at the definition of public expenditure as performed by local authorities?
Did the right hon. Gentleman really mean to suggest--as he did in reply to an earlier question--that the current criteria for capping will have to wait until the review is completed and, therefore, will not be effective for the next two years?
Mr. Darling:
I had not realised that the hon. Gentleman was such a fierce opponent of capping, but I am sure that my right hon. Friend the Deputy Prime Minister, who is reviewing these matters, will listen with great care to what he has said.
So far as changing definitions is concerned, the House will be aware that there are no shortcuts. Fiddling definitions to achieve an end is not justified and we do not intend to do it.
Mr. Peter L. Pike (Burnley):
When the Prime Minister referred at Question Time to the interest rates on the national debt, did he not underline the need for this review if the Government are to deliver their strategic priorities for welfare, education and the national health service, and deliver them with efficiency and fairness?
Mr. Darling:
My hon. Friend is quite right. The public would expect public funds to be used wherever possible to deliver front-line services such as education rather than on repaying debt. As the Prime Minister has said, the national debt doubled under the Conservatives between 1990 and the election.
Mr. Ian Taylor (Esher and Walton):
The Chief Secretary is obviously right to conduct a review, but, given that the stated objectives in the review he has announced today are motherhood and apple pie, I think that we have a right to probe a bit further.
Is it the right hon. Gentleman's purpose to try to set the trend for changing priorities between Government Departments or is it a set of priorities within one
Government Department that cannot have a virement to another Government Department? Is he attempting to try to inject more private capital into the public system? Is he attempting to change the Euro-PES system, under which I, as a former DTI Minister, suffered considerably, or is this whole thing a smokescreen to try to keep his own Back Benchers happy for the next two years while he struggles with the existing spending plans?
Mr. Darling:
I know what the hon. Gentleman is saying about Euro-PES, but it is important to keep discipline, not just in UK public spending, and to maintain pressure on European spending.
On private capital, the hon. Gentleman will know that the Labour party has been committed to public and private partnerships for many years. Indeed, my right hon. Friend the Deputy Prime Minister first raised that before the 1992 election. Where it is appropriate, the introduction of private capital in the provision of public services is something we support. My hon. Friend the Minister of State, Department of Health made an announcement about that yesterday.
So far as the hon. Gentleman's general welcome is concerned, he will appreciate that he would have been on far stronger ground if the Government had declined to examine what they spend their money on. Indeed, I should have thought that the hon. Gentleman, as a member of the previous Government, might have urged his colleagues to do the same thing when they were in power.
The hon. Gentleman also asked about the money within Departments, as opposed to across Government as a whole. We have told heads of Departments that, if they want to reallocate resources, they must consider that; but any Government, and the Chancellor in particular, must review the allocation of spending between Departments overall. Of course, ultimately, the Cabinet has responsibility for all public spending to ensure that its programme and objectives are delivered right across the board, and we will do that.
Dr. Lynne Jones (Birmingham, Selly Oak):
Will my right hon. Friend assure the House that no area of spending will be exempt from the review? For example, will the review include spending on Trident and Eurofighter? Will he also be looking at the long-term revenue consequences of using private funding to finance capital projects, as against the revenue consequences of public borrowing?
Mr. Darling:
On the latter point, my hon. Friend will no doubt be aware that the Government, like, I think, the previous Government, are committed to introducing resource accounting, which will enable us to make better comparisons between public and private provision. The present system of public accounting leaves much to be desired and, in the view of some, is rather old-fashioned and inappropriate for today's practices. That will enable us to obtain a better comparison between the two, which is clearly important, because we must be satisfied that, whichever way we procure public services--whether publicly, privately or a combination of both--we are obtaining value for money.
My hon. Friend will also be aware that, some two weeks ago, my right hon. Friends the Secretary of State for Defence and the Foreign Secretary announced a
defence review. But I can assure her that, right across the board, the comprehensive review means exactly what she might think--it will be looking at all aspects of public expenditure.
Mr. Cynog Dafis (Ceredigion):
Does the Chief Secretary accept that there will be a suspicion that what he is about is kicking the whole issue of public expenditure into touch at a time when there is a crying need for additional public expenditure in so many areas? Does the right hon. Gentleman subscribe to the view that public expenditure should be no more than 40 per cent. of GNP, and on what basis of rationality does he approve of that target? Finally, does the right hon. Gentleman see lottery money as part of public expenditure?
Mr. Darling:
My right hon. Friend the Chancellor will clearly have more to say on public spending as a percentage of GNP in his Budget statement. However, I disagree with the hon. Gentleman that this is somehow an attempt to kick public spending decisions into touch--far from it. If we did not start thinking now about the problems that we may face during this Parliament and beyond, he might have been on strong ground for criticising us.
The Government are taking a long-term view of public spending; because it sometimes takes a long time to change the pattern of spending to make provision for three or four years' time, it is only right that we should start the review immediately on entering office.
Mr. Gareth Thomas (Clwyd, West):
Does my right hon. Friend agree that the spending review must ensure that efficiency becomes the watchword of the Government? Does he agree that the Opposition's record is one of waste and inefficiency, as exemplified by the BSE and poll tax fiascos?
Mr. Darling:
My hon. Friend is absolutely right. As I said, the Government spend some £5,000 for every man, woman and child in Britain, and the public expect that all public expenditure, whether by the Government, local government, quangos or whatever, should be efficient. My hon. Friend is right that the previous Government's record in that regard left much to be desired.
Mr. Quentin Davies (Grantham and Stamford):
I sincerely congratulate the right hon. Gentleman on his appointment. I wish that it was possible to say equally sincerely that he has made a good start. However, he has spectacularly evaded all the key questions asked by my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke)--including, for example, the question whether if additional spending is voted by a Scottish Parliament, that will be compensated for by public expenditure reductions elsewhere or whether that would simply be a way of driving a coach and horses through the Government's public expenditure totals with impunity.
If the right hon. Gentleman insists on running away from that question, let me ask another. He said that he will have an asset review and that public expenditure will depend on the result. Does that mean that if he identifies additional possibilities for privatisation, the proceeds of those privatisation sales will finance additional public expenditure rather than be used to reduce indebtedness;
and that, therefore, the undertaking by the Chancellor of the Exchequer that, for the next two years, the existing public expenditure departmental totals will be respected, is now--how shall I delicately put it?--inoperative?
Mr. Darling:
The hon. Gentleman is just wrong on his final point. We made our position clear on departmental spending, not only in the manifesto but subsequently. I am sorry if the hon. Gentleman could not welcome what I said. I fear that he will be on Finance Bill Committees for many years to come, so we shall cross swords there, if not on the Floor of the House, in the future.
Ms Beverley Hughes (Stretford and Urmston):
I warmly welcome my right hon. Friend's statement and the clear direction that it gives. He referred to exploring the potential for further public-private sector partnerships. As a former leader of a metropolitan authority, may I ask him whether the Government will build on the outstanding record of Labour local authorities in initiating, sustaining and developing partnerships between the public and private sectors?
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