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Mr. Barry Jones (Alyn and Deeside): After 18 years of Conservative Governments, this was a report worth waiting for. It used the language of social justice, and it also shot a good many Tory foxes.

I particularly welcome my right hon. Friend's ingenious approaches to the pensioner, the haulier and the farmer. In Deeside and throughout Wales, the increase in the basic state pension will be widely welcomed as a measure of social justice. May I say that we want the right hon. Gentleman to say loudly throughout the land that there is a choice between this report and £16 billion worth of cuts in public services?

Mr. Brown: I entirely accept what my right hon. Friend says. I know that he is a long-standing fighter for the needs of the pensioner community, as well as for the industrial needs of his constituency.

My right hon. Friend is absolutely right: the country will face a choice--the choice whether to invest in the future, or return to the stop-go of the past. The choice is whether we are prepared to make money available to expand our public services and help pensioners, or whether we are to return to a Conservative agenda that would cut a massive £16 billion from our public services.

The shadow Chancellor himself admits that that is the record of the Conservative party--a record that he is having to defend. As he said in his lecture to the Tory party conference in October 1997 that Tories were linked to harshness, thought to be uncaring about unemployment, poverty, poor housing, discipline and single parenthood and that they were thought to favour greed and the unqualified pursuit of the free market, with a devil take the hindmost attitude, I do not need to add any more to those remarks about the Conservative party.

Mr. John Townend (East Yorkshire): Given the amount of the taxpayer's money that the Chancellor has had in his election war chest, does he accept that motorists in my constituency who must have cars to get to work, take the children to school and go shopping will be very disappointed by the parsimonious reduction of only 2p per litre? Will he confirm that the extra cost of sulphur-free petrol is 1p a litre? Will he also confirm that he has put up the price of petrol by 15p per litre since he went into No. 11, and that, despite the latest reduction, our tax on petrol will still be the highest in the European Union? The right hon. Gentleman has proved today that he is an anti-motorist Chancellor in an anti-motorist Government.

Mr. Brown: I do not think that the hon. Gentleman heard the shadow Chancellor say that we had been far too

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generous. It is difficult to know what the Conservative party's position on these matters now is. Perhaps the Conservatives should call another meeting of the No Turning Back group, and try to reach a conclusion on whether they can agree on anything nowadays.

I have been following the hon. Gentleman's comments with considerable interest. It was he who said in the House two years ago, after that pre-Budget statement,

I will think twice about whether to listen to all the advice that I receive from the hon. Gentleman in the future.

As for the cost of travel, I believe that motorists in the hon. Gentleman's constituency and throughout the country will welcome the fact that, while we are maintaining a very tough fiscal discipline--indeed, we are repaying £28 billion of debt this year, and have reduced the debt ratio to 30 per cent.--we are still able to help the transport and haulage industries. I wish that the hon. Gentleman had welcomed the justice for pensioners from which thousands of his constituents will also benefit, despite his failure to advocate their case.

Mr. Derek Twigg (Halton): I welcome my right hon. Friend's statement today. Constituencies such as mine were ignored by the previous Tory Government, but it is clear that they will benefit from today's further redistribution of wealth, which will devote more resources to those who need it most.

Pensioners in my constituency accept that this Government have done more than the Tories, but they expect more from us because we are Labour. They have got more today, which is why I welcome the statement.

Land in my area suffers badly from chemical contamination. My constituents will welcome the acceleration in tax relief that my right hon. Friend announced today. When he talks to my right hon. Friend the Deputy Prime Minister, will the Chancellor ensure that areas where there is chemical contamination of land get priority in that respect?

Mr. Brown: My hon. Friend describes the measures that he would like my right hon. Friend the Deputy Prime Minister and me to take up, and we will certainly examine what he proposes. We welcome what he says about the urban regeneration measures. I believe that we are tackling the problem in a way that will bring results.

I also welcome what my hon. Friend said about pensioners in his constituency. Our aim is to ensure that every pensioner shares in this country's rising standard of living. We know that the world has changed over the past 50 years, and that different groups of pensioners have different needs. We will raise the basic pension by £5 a week from April next year and by £3 a week the year after, and we also intend to raise the winter allowance. Our new proposals are very important, as they will do more than a restoration of the earnings link would do for those pensioners who need the help most and whose savings must be rewarded.

I hope that my hon. Friend will join me in getting that message across to the country.

Mr. Quentin Davies (Grantham and Stamford): Does the Chancellor believe that he has managed to abolish the

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trade cycle somehow? If not, what would happen if a recession occurred while the right hon. Gentleman was still Chancellor? Would he carry on with his supposedly immutable spending plans and run into uncontrollable debt, or would he have to introduce no doubt very massive tax cuts?

Mr. Brown: I am grateful to the hon. Gentleman. I understand that he is an Opposition Front-Bench spokesman, but his line seems completely different from that expressed by the Leader of the Opposition yesterday morning. The right hon. Member for Richmond, Yorks (Mr. Hague) said that there was more money around and that the Government should be spending it. He also said that today's announcement would not do enough, but today the hon. Member for Grantham and Stamford (Mr. Davies) says that we have done too much. The Opposition really must decide what their position is.

Mr. Davies: Answer the question.

Mr. Brown: I do not know whether the hon. Gentleman heard me say that we had taken action, and that our surpluses and fiscal disciplines had left this Government better prepared than others in the past for the ups and downs of the economic cycle.

Of course economic cycles occur--growth is higher in some years than in others. However, we must avoid the mistakes by those members of the Conservative party who were in charge of macro-economic policy in the 1980s. They pushed the country into a violent recession in the early 1990s, when growth collapsed, because they had not invested. The previous Conservative Government made tax cuts that they could not afford, and they had no monetary or fiscal discipline.

The hon. Gentleman supported the independence of the Bank of England long before Opposition Front-Bench spokesmen even considered doing so. I hope that he, like the former Chancellor, the right hon. and learned Member for Rushcliffe (Mr. Clarke), will recognise that the Government have brought a monetary and fiscal discipline to the conduct of economic policy that did not exist in the 1980s. Because that discipline did not exist then, the country suffered from the policies of boom and bust that I have described. The hon. Gentleman supports the independence of the Bank of England: he should also support the Government's fiscal rules.

Mr. Stuart Bell (Middlesbrough): As Second Church Estates Commissioner, and on behalf of the Church, may I welcome my right hon. Friend's statement that VAT on church repairs will be cut from 17.5 per cent. to 5 per cent? I do not want to appear in any way bipartisan, but the campaign to reduce that charge has been all-party and has gone on for 30 years. I welcome the fact that my right hon. Friend is the first Chancellor in 30 years to have listened to the Church's representations.

Will my right hon. Friend devote his energies and endeavours to ensuring that any European Union directive that has to be modified or promoted in respect of the proposal comes into force as soon as possible, so that the VAT payable can be reduced?

Mr. Brown: I am grateful to my hon. Friend, who does a tremendous amount of work as a Church Commissioner.

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I applaud the case that he has made for those changes; I know, too, that it is an all-party campaign. We will push the European Commission for a change in policy. We recognise that although churches receive money from the lottery and from other funds, particularly from the Department for Culture, Media and Sport, they have bills that must be met, in some cases in areas where they cannot raise money easily from charitable donations. We therefore want to do what we can to help.

It is part of our policy to preserve and advance community life in areas in which there are old buildings that should be kept in existence and undergo the necessary repairs. I have met the Archbishop of Canterbury to talk about these matters and we will continue to talk to the churches. It is our determination that they will have the additional money that is needed.

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