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Mr. Robert Sheldon (Ashton-under-Lyne): My right hon. Friend has received international acclaim for his responsible handling of the economy. Many knew that that was likely to be a prelude to action, and we waited two and a half years to see what my right hon. Friend would do. What we have had today is an astonishing range of proposals. It will obviously take some time for us all to digest them. What does my right hon. Friend propose to do about some parts of the infrastructure, especially transport, which will have to underpin so much of his imaginative statement today?
Mr. Brown: I am grateful to my right hon. Friend,who is a distinguished former Chairman of the Public Accounts Committee and has done a great deal to promote the cause of British manufacturing industry. He is right to say that our three-year expansion on transport is necessary to improve an infrastructure that was left neglected for 20 years. He is right to say that the new announcement today that any real-term rises in fuel duties will go directly to a fund for roads and public transport is a step forward for transport. My right hon. Friend the Deputy Prime Minister is preparing new plans on transport so that we can improve the infrastructure of this country. We inherited an infrastructure that was out of date and neglected, and we are in the business of improving it.
Mr. Matthew Taylor (Truro and St. Austell): May I be the first to congratulate the Chancellor on his new appointment to run the Labour party general election campaign? I am sure that his colleagues on the Back Benches will feel that he has made a good start, but patients, parents and those who are disabled may feel rather differently when they discover at the end of all this that class sizes for the over-eights will continue to rise, that hospital waiting lists for out-patients will continue to
rise, and that those who heard that they were to have their incapacity benefit cut and will see that happen tonight will find that the Government are pressing ahead, despite the tax breaks for millionaires that the Chancellor has announced today.
Is it not a fact that, despite small amounts for health and education, the Chancellor is continuing to build his war chest? Why is he not using the substantial funds available to him to tackle rising waiting lists, cut class sizes for the over-eights and restore the benefit cuts for disabled people?
Can the Chancellor confirm something that appeared in his statement but may have been missed? Is the comprehensive spending review--the prudent decision to set spending over a three-year period--to be torn up a year early? Having announced that the CSR is coming forward a year, will the Chancellor confirm that the third year of the existing plans will remain, or whether he intends to increase spending as he approaches the general election?
Mr. Dennis Skinner (Bolsover):
I hope he does.
Mr. Taylor:
We all hope that the right hon. Gentleman does.
Does the Chancellor realise that on the figures that he gave today for growth in the economy, the proportion of the national wealth devoted to education, which was 5 per cent. in his original plans, will have lost some £2 billion?
In relation to tax, does the Chancellor agree with the editorial in today's Financial Times, which accuses him of endless tinkering with the tax system, and of introducing "meddlesome tax privileges"? Surely recent experiences have taught us that simplification, not complication, is the answer.
In relation to the environment and the announcement that the planning system will be required to take competition into account, does that include retail? If so--to talk about the friends of the Chancellor and of the Prime Minister--is that the payback for sherry at No. 10 for the Wal-Mart executives?
The Labour Government claim to be for the many--not the few. However, is it not true that many millionaires will benefit from today's tax loopholes, while a few of the poorest disabled people will lose from tonight's legislative decisions? The Chancellor has amassed a war chest, as the figures will show when people examine them in detail. His announcements on education and health will do nothing to cut class sizes for the over-eights; they will do nothing to cut waiting lists for out-patients. They will not deliver what people voted for at the last general election. Is not the Chancellor taking his election job too seriously and his chancellorship too lightly?
Mr. Brown:
I welcome the hon. Gentleman as the Treasury spokesman for the Liberal party. We shall be meeting on the joint consultative committees--we should leave a section of our meetings for education on basic facts in today's economy. The hon. Gentleman says that the Liberals would spend more on education. At the election, they promised £1.8 billion a year--we are spending more than £7 billion extra a year. At the election, they said that they would spend £500 million on health--we are spending £7 billion extra a year. It is about time for the Liberals to admit that what we are doing is far beyond whatever they propose, or could deliver.
The hon. Gentleman should be absolutely clear about incapacity benefit and should not incite fears throughout the country. No person claiming incapacity benefit at the moment is worse off. It is completely mischievous of the hon. Gentleman to give any other impression.
In relation to the general position of the Liberal party on public spending, the hon. Gentleman now tells us that we should spend more. The weekend press was full of headlines that he would clamp down on public spending claims made by the Liberal party. He stated:
Mr. Giles Radice (North Durham):
The Select Committee on the Treasury will want to question my right hon. Friend on his important and detailed statement, especially on jobs, share ownership, child poverty and pensions. Does he agree that the key to flourishing enterprise and to high-quality public services is a stable and strong economy, with the low inflation, low unemployment, steady growth and healthy public finances that, currently, we so fortunately enjoy?
Mr. Brown:
I am grateful to my right hon. Friend, who chairs the Treasury Select Committee; I look forward to meeting the Committee to discuss the details of my statement as well as other matters. I entirely agree with him. During the past 30 years, this country has lacked stability and steady growth. That requires us to move away from the stop/go of the past, and our policies are determined on that course. That is why we are tough in our fiscal discipline and why we are determined, with our new monetary arrangements, to meet our inflation target. The rewards are rising investment in our public services.
Mr. Kenneth Clarke (Rushcliffe):
Does the Chancellor recall that the first thing he did on taking office was claim to discover that the target figure for safely sustainable growth was, at 2½ per cent., too high and, in the name of prudence, to reduce it to 2¼ per cent? He now seems to have found bogus reasons for putting it back to 2½ per cent. Is that not a cynical exercise in lowering expectations and then raising them again, so that he can ridiculously oversell the current modest recovery in the economy? Although he can say with relief that we missed a recession by a whisker, does he accept that for six months last winter there was no economic growth in this country, that manufacturing went into recession and that agriculture is in recession?
The Chancellor's new figure of 1¾ per cent. growth this year means we are being outperformed, not only by the United States of America, but by France, Germany and
Spain, despite his inheriting the fastest growing major economy in western Europe. When he rises to explain the reason he is now so proud of our underperformance relative to the performance of our competitors, compared with whom our productivity and competitiveness are falling, will he acknowledge that it is the result of his placing a burden of tax on business, on pensions, on savings, and on fuel which no number of gimmicky announcements of new tax breaks--which, when the details emerge, will yet again turn out to be little or nothing in practice--can correct? The Chancellor has set the country on a course of lower expectations for future economic growth and uses smoke and mirrors to present it as a triumph.
Mr. Brown:
I know that the former Chancellor of the Exchequer cannot be seen to agree with me--at least, not in the House in Commons. He mentioned the first thing the Labour Government did, but the first thing we did was make the Bank of England independent. It is interesting that the right hon. and learned Gentleman supports that policy and has said so; it is only his right hon. and hon. Friends on the Opposition Front Bench who continue to oppose it. The reason we made the Bank independent was to tackle his central point, which is that the average annual growth of the economy over the previous 20 years had been less than 2 per cent.
"We always doubted that the Government would maintain its position"--
that is, being tough on public spending over three years. The hon. Gentleman continued:
"The worry is that this was designed to allow a relaxation of policy to make headlines in advance of the election."
Far from being a person who wants to spend more money, the hon. Gentleman poses, in the Financial Times, as someone who wants toughness and less spending. I gather that he proposes a pledge card for the Liberals at the next election. Pledge one will be to tell some people that they are increasing public spending, while pledge two will be to tell other people that they are cutting it. I look forward to that. Pledge three will be to raise taxes, and pledge four will be to tell other people that they are cutting taxes. I look forward to future debates with the Liberal party.
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