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Dr. Ladyman: Will the right hon. Gentleman give way?

Mr. Heathcoat-Amory: I am sorry but I do not have time. The hon. Gentleman spoke in his time and I am sorry that I cannot reply in detail to his remarks. This is almost as interesting.

The Deputy Prime Minister hit back:

Has he only just discovered that? We knew it years ago.

Mr. Coaker: So did we.

Mr. Heathcoat-Amory: When the brothers fall out, they do not do it by half measures. They were going to get together earlier this year. A photocall was planned between the hon. Member for Brent, East and the Under-Secretary of State for the Environment, Transport and the Regions, the hon. Member for Streatham (Mr. Hill), who describes himself as the Minister for London. They were to get together in a new show of togetherness over what was called the "generous" settlement, but that was cancelled when the mayor of London said that he was "too busy" after all. So I am afraid that that has not taken place. Instead, we get allegation and counter-allegation as the so-called generous sums disintegrate when anyone tries to pick them up.

My hon. Friends also talked about the macro-economic risks being run by the settlement. My hon. Friend the Member for Bury St. Edmunds (Mr. Ruffley) in particular emphasised the huge risks being run by the Government, who are relying on continued growth in the economy and think that they have abolished the business and trade cycles. My hon. Friend is absolutely right to say that there is simply no room in the economy for both the private and public sectors to grow in the way indicated. Public expenditure in total is set to grow over the next four years by £99 billion. That must be at the expense of private consumption, investment and growth.

That very point has been picked up by the Bank of England--members of the Monetary Policy Committee have spotted it. They say that unless we shrink the private sector and cut consumption, we will have an inflationary problem on our hands. Interest rates will go up, the exchange rate will strengthen further and we will again have a very real macro-economic problem.

My hon. Friend the Member for Westmorland and Lonsdale (Mr. Collins) pointed out that triple accounting and the spin put on all the past figures have completely blown any credibility or reputation for straightforwardness and truth that the Government hope to enjoy. He, too, believed it highly questionable that we will ever see the much trumpeted £43 billion of extra expenditure going to front-line services.

That point was also made by my hon. Friend the Member for Chichester (Mr. Tyrie), with his usual technical mastery. He also made the point that the Government are frittering away the efficiency gains that they inherited from the previous Government in areas

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such as health. They are going backwards when it comes to delivery and efficiency, and no amount of gross expenditure in the world will compensate for that inability to turn taxpayers' money into the services that people want.

It has been amply demonstrated in this short debate that the second comprehensive spending review will be no more successful than the first. The same sort of money has been promised--it was £40 billion two years ago and it is £43 billion now. The same outputs and results have been promised.

I do not know what has happened to the Cabinet Committee--we did not hear anything about that today. Presumably the Government will resurrect an important spending tsar, who will clamp down and remove money from Departments that fail. In a year or two, when they do fail, the Government will say, "We never really meant that--it was all much too difficult and embarrassing."

We have seen the same old reliance on the economy continuing to deliver the growth so that the Labour party can tax it for their expenditure ambitions. All we can say is that the result will be just the same--disillusionment, and another spectacular failure to deliver.

6.42 pm

The Financial Secretary to the Treasury (Mr. Stephen Timms): We have had a very interesting debate--I can agree with the right hon. Member for Wells (Mr. Heathcoat-Amory) about that. We have been offered a clear choice this afternoon--investment with Labour, or cuts with the Tories. That is the choice before Britain. We have heard not a word from Conservative Members about where the £16 billion-worth of cuts would fall.

Our first task after the election--the foundation for everything else that we wanted to do--was to secure a new stability in the economy. That stability was not only to give individuals, families and businesses the chance to plan their long-term future, but to spur on the creation of new investment and jobs and prosperity. That is what we are delivering--a platform of stability and steady growth, with inflation low and the public finances firmly and sustainably under control.

As a consequence, more people are in work than ever before in the history of the United Kingdom. In Scotland, more people are in work than since England won the world cup, as my hon. Friend the Member for Edinburgh, North and Leith (Mr. Chisholm) said. Across the United Kingdom, there are 1 million vacancies on offer.

Inflation in Britain has been lower for longer than at any time in the past 30 years. In contrast with the deficit of £28 billion in the public finances in 1997, in the last financial year we made debt repayments of £18 billion.

We have built a strong, credible platform of economic stability, and we are determined to keep it that way. Now, building on that greater stability and a stronger work ethic based on opportunity and responsibility, we need to take the next leap and ensure that the benefits of this new prosperity are enjoyed by not just a few, but by all. We want a Britain where everybody is able not just to work, but to work their way up, to gain promotion, to start a business if they want to, to become self-employed, to upgrade their skills throughout their working life and to do as well as their talents and potential allow.

We are putting to rest for good the legacy of decades of under-investment across our public services and setting our sights on the long-term national ambitions that we have set ourselves for the first decade of the new century.

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I shall refer to several of the contributions to the debate. First, like almost every other speaker, I congratulate my hon. Friend the Member for Tottenham (Mr. Lammy) on a moving and effective maiden speech. He paid an effective tribute to his predecessor, Bernie Grant, whom I first knew when he was an employee of Newham council. My hon. Friend's election slogan was

He spoke with great feeling of the community in which he grew up and that he now represents. We all very much look forward to hearing more from him in the years ahead.

My hon. Friends the Members for High Peak (Mr. Levitt), for Burton (Mrs. Dean) and for South Derbyshire (Mr. Todd) all referred to improvements to schools in their constituencies. My hon. Friend the Member for High Peak mentioned 30 major improvements in his area. My hon. Friend the Member for South Derbyshire told us about the rebuilding of William Allitt school and about an arts centre for the adjoining secondary school. Throughout the country, 17,000 schools--a huge number--have benefited from the new deal for schools, with funding of £1.375 billion.

My hon. Friend the Member for High Peak made the point that, whereas there had been 30 major improvements in his constituency, none at all had been made in the previous Tory decade. That contrast demonstrates the change that has taken place during the past three years.

The right hon. Member for Wells made the criticism that staff numbers in the Inland Revenue had been rising. The right hon. Gentleman has us bang to rights. I confess that staff numbers in the Inland Revenue did grow--from 55,400 in 1996-97 to 63,800 last year. That is a rise of 8,400. However, that was because the Inland Revenue took over functions from the Department of Social Security. The national insurance contributions office is now part of the Inland Revenue so, during the same period, staff numbers in the DSS fell by 11,000. The overall staffing of central Government Departments is lower than it was in 1997--by 30,000.

Mr. Heathcoat-Amory: As I pointed out, those figures do not stack up as an explanation. Since 1997, the number of staff in the Inland Revenue has risen by 12,500; the number of staff in the DSS dropped by only 9,000. There is a net increase in the two Departments of 3,500.

Mr. Timms: The figures are as I set them out. Overall, the staffing of central Government Departments is lower, by 30,000, than it was in 1996-97--contrary to the impression given by the right hon. Gentleman.

The hon. Member for Truro and St. Austell (Mr. Taylor) spoke about the overall amount of Government spending. It is true that total managed expenditure as a proportion of gross domestic product is lower than it was under the previous Administration. However, the key point is the change in the nature of that spending--significantly more is being spent on those services that we have identified as priorities and less on the costs of worklessness and debt. Our commitment was to make that important transformation and we are achieving it.

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Mr. Matthew Taylor: I, too, gave figures that excluded debt repayment and social security, although my point was valid even for departmental expenditure.

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