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Mr. Nick Gibb (Bognor Regis and Littlehampton): The right hon. Gentleman mentioned the two rules that the Government have introduced. Does he accept the view of Professor Buiter, a member of the Monetary Policy Committee, who said:


Mr. Darling: Professor Buiter made several comments. I strongly believe, as do most commentators, that the

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Government's commitment to fiscal prudence will be of the utmost importance in the years to come because, time and again, successive Governments--Conservative and Labour--have found that any attempt to expand the economy has been undermined by capacity constraints. All too often in the past, an increase in public spending has had to be reigned back as soon as the economy begins to turn the other way.

We believe that stability is the essential foundation for public services and long-term economic growth, which is why, among other actions, we cut borrowing, gave the Bank independence--which has achieved those long-term interest rates--and significantly tightened the fiscal stance by some 2.5 per cent. of national income. We have taken action to tackle the long-term weaknesses in the British economy by supporting British business, making cuts in corporation tax and setting up the new deal--

Several hon. Members rose--

Mr. Darling: If hon. Members can contain themselves, I will give way in a moment.

The new deal is the biggest employment programme in this country for decades. Taken together, the tax cuts and the structural reforms will stand this country in good stead for the future. That essential foundation is necessary if we are to support the public spending that hon. Members on both sides of the House want.

Mr. Ian Taylor (Esher and Walton) rose--

Mr. Darling: I will give way to the one Conservative Member here who is not a Euro-sceptic.

Mr. Taylor: I am grateful to the right hon. Gentleman, who rightly identifies me as not being a Euro-sceptic. Given that the Government are committed to endeavouring to join the euro some time at the beginning of the next century, will he clarify what effect that will have on the fiscal balance?

Fiscal prudence sounds of virginal character, but, in reality, there will be some tough decisions on the fiscal balance if there is a single monetary zone in Europe. There will be problems with, for example, trying to ensure that mortgages do not explode as interest rates fall when we join the euro. Will he abolish MIRAS? Will he raise taxation as a lever to control the balance of the economy in a fixed monetary zone? He is avoiding all those questions.

Mr. Darling: It is not the Labour Government who want to abolish MIRAS; the hon. Gentleman should have a word with his right hon. Friend the Member for Horsham. The steps that we have put in place are good for the British economy, whether or not we join the single currency. Those fiscal rules are essential for this country and its long-term economic development. We would be adopting this fiscal stance and rules whether or not there was any question of joining the euro after a referendum.

Mr. Nick St. Aubyn (Guildford): Will the right hon. Gentleman give way?

Mr. Darling: Not just now, if the hon. Gentleman does not mind. I want to make some progress, and many hon. Members want to take part in the debate.

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I want to explore the Opposition's approach to public spending, which appears to be confused and contradictory. It is not clear whether they believe that we are spending too much or too little; and, if we are spending too much, what would they like to cut. What taxes would they like to put up? We know that the Tory Front Bench has moved to the right. As we have seen this afternoon, it is more hostile to Europe than ever before.

This week is the 50th anniversary of the national health service--one of the greatest achievements of the Labour Government of 1945. In the view of many people, it was the foundation of the welfare state. Yet look at what the shadow Chancellor has said--we must assume that he speaks for all the Tory party, because we know that it is united now. In 1995, he said:


He said that at the Hayek memorial lecture--where else? It highlights the difference between the new right-wing Tory party and the Government.

The NHS embodies our values. It is more efficient, effective and fair to contribute to a health service that is there when we need it, on the basis of need and not on the ability to pay. I should be interested to know how the right hon. Gentleman squares that with what he said in 1995.

Mr. Maude: It is reassuring that the right hon. Gentleman has spent so much time reading my old speeches. There is a great deal for him to learn from them. Does he accept that the analysis that I set out in that lecture is precisely the analysis that the Minister for Welfare Reform has been putting forward?

Mr. Darling: It is no part of what my right hon. Friend the Minister for Welfare Reform has been saying. He does not believe, as the right hon. Gentleman does, that the provision of public education and health services is harmful. He would not want to go back--

Mr. Maude rose--

Mr. Darling: I will let the right hon. Gentleman intervene in a moment.

Mr. Maude: The right hon. Gentleman is misrepresenting me.

Mr. Darling: I shall let the right hon. Gentleman intervene in a moment. In 1995, he was saying that the growth of the welfare state in the first half of the century went a long way to destroy what he described as


and


    "health".

The clear implication is that he would like to return to that. Indeed, I have read some of his other speeches, in which he gives the distinct impression that the Conservative party is still wedded to private provision in education and health, and that public provision would

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simply be residual, for those who could not afford to pay. That is the precise inference that I take from his speech--a position from which, I believe, he has never departed.

Mr. Maude: The right hon. Gentleman has obviously been studying my speeches at great length, which is terrific, but he must not draw improper conclusions from them and certainly must not misrepresent them. The fact that the private provision and the mutual provision--the self-provision--of many of those services was harmed by the introduction of the welfare state in the first half of this century is incontrovertible. If he can provide evidence that that is not the case, let him do so. [Interruption.]

Mr. Darling: As the Economic Secretary to the Treasury and many of my other hon. Friends are saying, thank goodness for that in the health service, because a national health service to which everyone contributes, and which exists on the basis of need, not ability to pay, is the hallmark of a decent, fair and just society. If the right hon. Gentleman disagrees, I shall just have to put up with that.

I do not know whether the right hon. Gentleman was complaining or complimenting me on reading his speeches, but I read some more, and I noticed that, at the Tory party conference last year--probably the best place for such a speech--he made an interesting observation:


I suppose it is worth trying anything in the Conservative party. That seems to conflict with what Michael Portillo told the same conference; he seemed to suggest that he wanted to regain the centre, and that the Tories should be more compassionate.

I wonder what the shadow Chancellor's position is on public spending. Last year, at the Tory conference, he said:


I wonder whether that is the view of the entire party. Let us hear it from someone more on the wing of the Conservative party than the hon. Member for Esher and Walton (Mr. Taylor).

Sir Michael Spicer (West Worcestershire): It is flattering of the right hon. Gentleman to spend so much time on the Conservative party's policies, but the sad fact is that he is Chief Secretary; he is in government. Now that he is in the public expenditure section of his speech, surely it is fair for him to say something about the implications of his public spending plans. Does 2.75 per cent. growth in spending mean higher taxes? If not, does it mean higher borrowing? Does higher borrowing mean higher interest rates? Let us have some answers on the implications of his expenditure policy.

Mr. Darling: I had always thought that one point of an Opposition day was to examine what the Opposition had to say, and I was thoroughly enjoying doing so. Only a week ago, my right hon. Friend the Chancellor set out our position at length in the Economic and Fiscal Strategy report and when, shortly, we set out the conclusions of the comprehensive spending review, the difference between the Government and the official Opposition will be clear for all to see.

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However, I want to explore the point that the shadow Chancellor made when he said that there was


I wonder whether everyone in the Conservative party is fully on board, because it seems to me that one or two Conservative Members are off-message. The shadow Chancellor says that we have gone soft on public spending, but, given what some of his colleagues have said on health, perhaps he should tell that to some of his colleagues.

The hon. Member for Rutland and Melton (Mr. Duncan) said:


So there would have been more spending under the Tories! It is not true, of course, because we have increased spending on the health service.

The shadow Health Secretary, who surely could not be accused of having no moral content in what she does, said:


so she wants more money to be spent.

When we announced £2½ billion more in the education service, the right hon. Member for Charnwood (Mr. Dorrell)--who, sadly, is no longer on the Front Bench--said,


so he wants to spend more public money.

The former chairman of the Tory party, the right hon. Member for Sutton Coldfield (Sir N. Fowler) agrees that there should be more public spending. He said that


He wants more spending--despite the fact that we are still dealing with the spending plans fixed by the previous Government.

The shadow Chancellor says that there is too much public spending, whereas his colleagues say that there is too little. As my hon. Friends have pointed out, the shadow Chancellor--I know that he is new to the brief--really should have a word with his Tory colleagues serving on the Committee considering the Finance Bill. They voted for no less than £6 billion of extra spending--which is 3p on tax. They make the Liberal Democrats look a model of fiscal responsibility. The Liberals want to increase tax by only 1p to cover their modest list of promises--


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