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Mr. Timms: As the hon. Gentleman is aware, we are achieving substantial increases in public spending on key public services to deliver--as he pointed out--important real-terms rises. I shall say more about the effect of that in a moment.

The hon. Members for Sevenoaks (Mr. Fallon) and for Bury St. Edmunds (Mr. Ruffley) and the right hon. Member for Wells seemed to misunderstand the targets set in the comprehensive spending review. Those targets will stand for the whole period of the review--1999 to 2002. We are monitoring them throughout that period. We are reporting regularly on them and we will continue to do so until the end of the CSR period. My right hon. Friend the Chief Secretary told the Select Committee on the Treasury that we are either delivering or on track to deliver 90 per cent. of the targets that were set, and we shall continue to keep that process closely under review until the end of the CSR period.

Of course, for the new spending review there are new targets. Things have changed and new targets have been set. That is a reflection of the improvements that have been made since the beginning of the CSR period. But the point that Opposition Members made--that targets set in the CSR are no longer being monitored--is quite wrong. They are being monitored, and they will continue to be monitored until right at the end of the CSR period.

Mr. Tyrie: The Minister said that there will be a new set of targets with the new spending review. Does that mean that next year, when we have a new review of spending as I am sure that we shall, all the existing targets will be torn up?

Mr. Timms: No. The hon. Gentleman, with many of his hon. Friends, seems fundamentally to misunderstand the process. The comprehensive spending review was for three years--1999 to 2002--and the last year of the comprehensive spending review becomes the first year of the new spending review process. That is the basic fact that quite a number of Opposition Members appear not to have grasped.

My hon. Friend the Member for Jarrow (Mr. Hepburn) made an eloquent plea for shipbuilding. Last year, the Government established the shipbuilding forum to work with the industry on boosting the competitiveness of United Kingdom shipyards. The recommendations of that forum are being considered, and the conclusions will be reported in due course.

The hon. Member for Ruislip-Northwood (Mr. Wilkinson) and several Opposition Members have made it very clear that they support the spending cuts proposed by the shadow Front-Bench team, but the hon. Gentleman did not tell the House where he believes that those cuts should fall. There was not a word about that. Many Opposition Members said that there should be less spending than is proposed. None of them, however, proposed any categories where those savings could be achieved.

The hon. Gentleman was also mistaken about the reaction of the Monetary Policy Committee and the City to the announcements. Let me refer him to some of the remarks that have been made since the spending review announcement.

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Mark Millar of Morgan Stanley said that there are

The fiscal position this current year seems

Robert Barrie of Credit Suisse First Boston said:

Many statements have been made along those lines.

My hon. Friend the Member for Edinburgh, North and Leith drew attention to the need for us to look at the way that housing benefit works, and I agree with him about that. The hon. Member for Bury St. Edmunds was one of those who agreed that there was a need for cuts, but again he did not tell us where any of the cuts should come from. My hon. Friend the Member for Bolton, North-East (Mr. Crausby) welcomed the additional resources for the health service.

My hon. Friend the Member for Don Valley (Caroline Flint) welcomed the housing improvements that have been achieved in her constituency. Through the spending review, 500,000 houses will be brought up to a decent standard by 2004. I am glad that she latched on to that very important element of the spending review.

The hon. Member for West Aberdeenshire and Kincardine (Sir R. Smith) asked about the effect of the working families tax credit on wages. The key thing is that the taper with working families tax credit is less, at 55 per cent., than it was with family credit, and I believe that the position is the reverse of what he was fearing.

My hon. Friend the Member for South Thanet (Dr. Ladyman) quite rightly said that road schemes in Kent certainly would not survive a programme of £16 billion of cuts.

However, let us just have a look at education. Average increases in education spending will be 5.4 per cent. a year for the next three years. That means that, at long last, the rate of increase in investment in state schools will start to keep pace with the rate of increase that we have seen for years in the private school sector. We want to more than double capital spending in cash terms on education to £1.5 billion by 2003-04. We shall have decently funded schools at last, after two decades of underinvestment. That is a huge breakthrough, and is a consequence of the way in which the economy has been managed over the past three years. It means that instead of spending more and more on debt charges and unemployment benefits, we can now spend on our schools. We shall be able to devote to them the sort of resources that should have been available to them for the past 20 years. That is the historic breakthrough that this week's announcement achieves.

What is the Tory party's response? It is exactly what it has always been--cuts. I think that we have been given a sort of assurance about health service spending. Let us take that at face value and accept for the purposes of the debate that at least the Tory party will change its spots and match our spending commitments on health. However, where would the Tory party find its £16 billion-worth of spending cuts that central office announced yesterday? We know the answer. There would be cuts in education, law and order and transport, the

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services in which the Tories have always under-invested. We have had decades of underinvestment in our schools. Now, for the first time in a generation, we have a chance to put that right. What is the response of the Tory party? It is one of cuts. It would take us back to the bad old days that Britain rejoiced to be liberated from in 1997.

My right hon. Friend the Chief Secretary to the Treasury said at the start of the debate that in the five years of our two spending reviews, education spending would rise in real terms by more than it increased during the 18 years of Tory government. That is the scale of what we have achieved.

On unemployment, the Tories would scrap the new deal, which has helped to deliver the highest number of people in work in our history, the lowest rate of unemployment for 20 years and the lowest rate of long-term youth unemployment in a generation. They say that the new deal is a waste. No, it is not.

For example, building on its long-term partnership with the city council, the diocese of Birmingham helped to deliver the new deal voluntary sector option. The diocese was asked to find a new deal placement for a youngster who was shortly due in court on 117 counts of burglary. He was placed on a project to improve a church hall, and he struck up a friendship with a part-time church administrator. When the time came for him to appear in court on the charges of burglary, the administrator spoke up for him and asked that he should be given another chance. He was given that chance and the project was completed to a high standard. The young man has gone straight, and he is now setting up a business of his own. At the ceremony to mark the conclusion of the work, one of those who turned up was the young man's mother. She met the church administrator and said:

The Tories say that it is a waste--that is, giving people who have never had a chance the prospect of a decent future. It means work instead of welfare. It enables people to set up a business instead of ending up in prison. The new deal has made all that possible yet the Tories say that it is a waste. No, the truth is that it is bringing about the changes that Britain needs. The number of young people out of work for six months or more is down now to 50,000, and that total is falling. It reached 500,000 under the previous Government. We now have the lowest number of people in that position for a generation, and it is less than at any time under the Tory Government.

Surely all of us can see the huge benefits for everybody now that so many of our young people are familiar with the habits and disciplines of work. So many of them were robbed of that experience for so long. We are all better off for the change.

The personal adviser service is working with my constituents on the new deal for disabled people. The week before last, a disabled man found a job after five years of unemployment. We need more of that, not abolition. An independent assessment shows that the new deal is largely paying for itself through reduced benefits and additional tax revenue.

In the past, every time the economy started to deliver, the Tories blew it. They blew the proceeds of North sea oil and privatisation on current spending instead of investment. That is why the costs of failure spiralled under the previous Government--the bills for unemployment

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and for debt interest. We are locking in the new stability for good. We are using the proceeds of the spectrum auction to pay off debt. That is why the unemployment and debt bills have been turned into extra resources in the long term for our priority services--health, education, transport and policing. That is what people want.

There have been 1 million extra jobs since the election, 100,000 more small firms and a new culture of enterprise. For the first time in a generation, we have the resources that will deliver for public services. I refer to health, education, law and order, transport and housing. We have made our choice, and that is for investment. The Tories have made their choice--

It being Seven o'clock, the motion for the Adjournment of the House lapsed, without Question put.

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