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Mr. Phil Willis (Harrogate and Knaresborough): I am grateful to the right hon. Gentleman for giving way, and I apologise for arriving late for the debate. Does the Minister agree that the real challenge in our education system is not to raise the number of five A to C grades achieved but to deal with the 9 per cent. of young people who, under this Government, as under the previous Government, leave school with no qualifications and have no jobs or training? What target is the Minister setting for those young people? That is how people will judge the success of the Government's education policy, not by an arbitrary target of obtaining five or more grades at A star to C.

Mr. Smith: We are doing those things. There are targets for the numbers who will gain qualifications. We want to lever up the performance of those who leave

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school with no qualifications. We are introducing education and maintenance allowances and giving extra help to those who have been denied it in the past. In our overall settlement, moreover, there is a particular concentration on the most deprived areas, which is where the problems of underachievement to which the hon. Gentleman refers are most acute.

Our next objective is to build responsible and secure communities across our country, where everyone has the opportunity to participate. In his statement to the House yesterday, my right hon. Friend the Home Secretary announced that he will tackle crime, with increases in spending over the next three years of some 3.8 per cent above inflation--money to recruit more than 4,000 police officers and to ensure that they are fully equipped with the latest DNA technology and modern communications, so that they can provide the service that every member of the community wants.

In return, the Home Office will meet its public service agreements; car crime will be cut by 30 per cent., burglaries by 25 per cent. and robberies in our major cities by 14 per cent.

Mr. Tim Loughton (East Worthing and Shoreham): In the event that the Home Office fails to meet those public service agreements, will its funding be cut? Will the Home Secretary have to come to the House to announce that the 4,000 promised policemen will not be funded?

Mr. Smith: The appropriate response in any instance of Government or agency policy underperformance is, first, to analyse properly the variations in performance and to adopt good and accurate measures of efficiency. Recently, the public services productivity panel published proposed measures of efficiency on that very issue.

Secondly, those measures should be applied, with a proper strategy to lever up standards of performance; resources should be available in return for performance and there should be graduated intervention--from improving strategy to changing personnel. That will be a crucial test of the efficacy of our investment. That is why we have set out performance targets in the spending review White Paper.

Mr. Bercow: Will the right hon. Gentleman give way?

Mr. Smith: I have given way several times; I am anxious to make progress.

We have announced plans for a neighbourhood renewal fund; £100 million, and thereafter £300 million and £400 million will be allocated to raising the quality of life in our most deprived areas. That crucial dimension of our settlement again sets us so much apart from the Opposition. When they were in government, they showed every sign of not caring for the poorest and most disadvantaged communities. The previous Government were content to tolerate conditions that they would not have wanted for themselves or any member of their family. That is why the Labour Government are investing in public services for all. We want to narrow the gap between the most disadvantaged in our community and the rest. The neighbourhood renewal fund will make an important contribution to that.

Mr. John Wilkinson (Ruislip-Northwood): Will the right hon. Gentleman give way?

Mr. Smith: No. I want to make some progress.

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Strong communities must mean healthy communities. On Tuesday, my right hon. Friend the Chancellor confirmed the allocation for our health service announced in the Budget: an average 6.1 per cent. real-terms increase--more than double the rate of growth achieved by the previous Government. Next week, my right hon. Friends the Prime Minister and the Secretary of State for Health will give more details of our vision for Britain's health. The resources are in place. The investment is committed. Our communities--individuals and their families--are benefiting from a commitment by the party that created the NHS, believes in the NHS and invests in it.

Our next objective is to raise Britain's productivity and to provide enterprise opportunity for all. For too long, the under-investment that has plagued our science and research base has hindered the development of our economy. The failure to match enterprising and innovative talent with resources has set Britain back. We have announced a major package of resources, covering every part of the country, to improve our productivity and to extend new enterprise opportunities so as to rebuild Britain's reputation as a global leader in scientific research. The spending review provides a real-terms increase in funding of about 5 per cent. a year until 2003-04, to improve our science and engineering base. That includes the £1 billion science research investment fund set up in partnership with the Wellcome Trust.

The plans announced this afternoon by my right hon. Friend the Deputy Prime Minister are crucial to our economic performance. We are doubling public sector investment in our transport system. In a modern economy, work force mobility is a key driver for economic success and increased productivity. By sharp contrast with the short-termism of the Conservatives, the initiatives set out today will make Britain a better place in which to do business, with a modernised infrastructure and better-quality public service provision.

I realise that there will be a time limit for Back-Bench speeches, so I shall draw my remarks to a close. In summary, the investment announced in the spending review is not only for individual initiatives or Departments; it will prepare our economy and our country for a new role in a modern world. Our approach is forward looking--based on stability and built on our fiscal rules. We are investing in our public services and in our science and skills base. We are strengthening our communities and our infrastructure and building a Britain where there is opportunity and security for all.

The policies of the Opposition are in complete and evident disarray. The Opposition have failed the most elementary economic tests. They failed to recognise the need to invest; they failed to see the damage that their policies did in the past and would do again, if they were given the chance. They divided Britain with cuts to services, underinvestment, short-termism and boom-bust--the same old mistakes from the same old Tories.

Our priorities are clear: investment in our infrastructure, in our skills and research base, in education, in our communities and public services. Those are investments not only in individual services, but in the well-being of our whole economy and society and in our country's ability to succeed in today's global economy.

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While recognising that to flourish we must invest in our infrastructure, we realise the importance of investment for the long term, within prudent limits and supported by the fiscal rules that guide our planning at present as they will continue to do in the future. Those are the guiding lights of our economic approach and of the spending review.

The Government have made their choices: between stability and the stop-go of the Conservatives; between employment opportunity and unemployment; and between investment and public service cuts. Our choices and priorities reflect the priorities of the British people. I commend the spending review to the House.

2.48 pm

Mr. David Heathcoat-Amory (Wells): On Tuesday, the Chancellor drew a large cheque on the future. The figures are already disintegrating. Yesterday, the Institute for Fiscal Studies pointed out that the Chancellor's calculations were based on a hypothetical figure and that the figure of £43 billion was not meaningful. That was the amount that the Chancellor boasted would be allocated to front-line services.

If we compare last year with 2003-04, the real figure for the total increase in public expenditure is no less than £99 billion. That is almost 12 digits--a telephone number amount. It is a colossal amount and wholly unsafe.

That figure is not merely an aspiration. The Government are making an irreversible commitment to spend those sums over the next four years. Whatever happens to the economy, whatever happens to the global economy and whatever happens to the business cycle, the Government are locked into an expenditure commitment of that scale, way above their own projected growth rate for the economy.

It is not surprising, therefore, that the Bank of England has taken fright. It was told of these figures in advance, and the minutes of the last meeting of the Monetary Policy Committee record the fact that many of its members believed that if this was attempted, interest rates would have to rise in future. [Interruption.]

Mr. Deputy Speaker: Order. We cannot have these interventions from a sedentary position. The House listened very carefully to the Minister and it should do the same now.


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