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Mr. Edward Davey (Kingston and Surbiton): The right hon. Gentleman will have noticed that there was a disruption in the Strangers Gallery earlier, and the pensioners who were shouting into the Chamber threw down some blue leaflets because they wanted to ask him a particular question--
Mr. Deputy Speaker: Order. There is only this Chamber; we cannot speak of places outside it.
Mr. Davey: I am sorry, Mr. Deputy Speaker.
Does the right hon. Gentleman think that a 73p a week increase in the basic pension gives senior citizens their promised rightful share in our nation's growing prosperity?
Mr. Brown:
Why does the Liberal party not recognise the three measures that we have introduced, the first of which was the £100 winter allowance for every pensioner household--[Interruption.] I do not know whether the Liberal party supports that. Why does it not recognise what we have done for pensioners aged over 75, with the free colour television licence? The week before the pre-Budget report the Liberals said that they did not support that idea any more--[Interruption.] Oh, apparently now they do. They issued a statement saying that they would not support the idea of free television licences; now they--[Interruption.] Do they support them or not?
Mr. Matthew Taylor (Truro and St. Austell):
The Chancellor knows that we consistently argued for free television licences for pensioners over 75, but said that free television licences for all pensioners would be too costly. There has been no change in our policy. If the right hon. Gentleman is looking in his notes for a quotation
Mr. Brown:
I have looked at the billions of pounds worth of Liberal spending commitments, and the week before the pre-Budget report the Liberals withdrew their support for the free colour television licence, which we have now introduced. Why do they not also support the minimum income guarantee that we have agreed for between 1.5 million and 2 million pensioners? As a result of that, and all the other changes that we have made, the poorest pensioner, the pensioner aged over 75 or 80, is receiving £15 a week more than when we came to power, and the poorest couple aged over 80 is receiving £20 a week more.
The Liberals have to grow up in relation to public spending. They support public spending on everything as each cause becomes fashionable, yet they tell people in other parts of the country that they support toughness and rigour in public spending. They say that they support tax rises to spend on this and that, yet they tell people in Tory areas that they are against tax rises. They must sort out their position on public spending. On the main issues of health, education and pensions, we have done more than any Liberal ever dreamed of doing.
We have announced the new interdepartmental reviews of the spending round, which is part of our policy for fiscal and monetary stability, the foundation of which is the independence of the Bank of England. That is the first divide between ourselves and our opponents. We support the independence of the Bank of England, and monetary and fiscal stability under the clear rules that we have drawn up; we have had no answers from the Opposition.
The second difference is that we support constructive action in Europe, whereas the Conservatives are unprepared to do so; indeed, they would leave us isolated. The shadow Chancellor is only one step away from saying that he would never in any circumstances support the single currency for Britain--which puts him at odds with the hon. Member for Grantham and Stamford, his neighbour on the Front Bench, who is very keen on it, and regards as unacceptable the rejection of a single currency in principle.
The third area of division between us is employment policy. We have cut youth and long-term unemployment by half since we came into office, employment is up by more than 700,000 and there are more people in work now than at any time in our history. Unemployment is at its lowest for 20 years. I believe that one contributing factor to that is the existence of the new deal. I would like to think that right hon. and hon. Members on both sides of the House would support the new deal as being effective and for delivering the results.
Sir Teddy Taylor (Rochford and Southend, East):
Is the Chancellor willing to say something about the astonishingly sharp fall in the value of the euro since its launch, from 71p to its lowest ever value, recorded
Mr. Brown:
The hon. Gentleman has enough experience of the House to know that no Finance Minister has been prepared to make running commentaries on exchange rates. However, in the past year, growth in America was making the greatest contribution to the development of the world economy while Europe and Japan were not making the contribution that we wanted of them. The contribution from Europe is starting to increase this year as growth in Europe picks up. Like me, I think that the hon. Gentleman would want to welcome the fact that we have balanced economic growth worldwide, where Europe, Asia--including Japan--and America make their full contributions.
To be able to influence the policy of the European Union on the single market and other issues, we must take a constructive attitude to Europe and not remain isolationist in the way that the Conservative party now wants to do.
The three dividing lines between ourselves and the Opposition are first, our support for stability and their reversion to boom and bust; secondly, our support for the new deal and their rejection of it; thirdly, our support for a constructive attitude in the European Union. Unfortunately, the Conservative party is isolationist.
The fourth area of division is on public services. We have invested £40 billion in education and health cumulatively over the coming three years. We have built 1,600 extra classrooms and provided for 4,500 more teachers. By next year, all five, six and seven-year-olds will be in classes of 30 or fewer. We have doubled capital expenditure on schools. We are on track to meet our promises on waiting lists, and we are determined in future to finance the health and education services in a way that did not happen under the previous Government.
The Conservative party cannot escape the fact that, over the past year, it said that our spending plans were a "reckless spending spree". It said that spending was going through the roof year after year. At the Conservative party conference, the shadow Chancellor said that we had lost control in the biggest spending spree for a generation. On the "Today" programme, the right hon. Gentleman said that it was madness to embark on the public spending programme. The Conservative party also said that we had entered into extremely irresponsible and reckless commitments to which the country should not be committed. The shadow Chancellor has said that total spending is at a reckless level. Even this August, the shadow spokesman for the environment said that Labour's big mistake was to announce huge increases in public spending and said that the Opposition recommended reducing future spending plans. The shadow Chancellor was at it only a few days ago to the Financial Times when he said that Labour threatened yet another spending spree.
Let the Conservatives explain to the public how they will cut public spending without affecting the resources that are available to health and education. Let them explain to the country how they will meet their tax guarantee and maintain the levels of public services that
people want to see. I think that Conservative Back Benchers will be surprised to know that, in the Hayek memorial lecture that the shadow Chancellor gave when he was out of the Government in 1995, he asked whether it was possible to change things. Then, he was criticising the Conservative Government for spending too much and for introducing too much regulation. He asked whether it was within the realm of practical politics to reduce the share of national income taken and spent by the state from the then current 41 per cent. share to, say, 25 per cent. He said that he supposed that, if his case for its overwhelming importance was accepted, then the question answered itself. He said that it had to be made possible and that politics was the art of making possible what one believed to be right. He argued that there could not be soft options; it required much more toughness.
Let us consider that 25 per cent. figure in public spending. Bizarre as it sounds, it would require a cut in public spending of £144 billion. As the Conservatives now favour 25 per cent. public spending, I shall take the House through the implications of that.
Spending on defence and foreign affairs accounts for about 3 per cent.; agriculture about 1 per cent.; and law and order about 2 per cent., which the Opposition want raised. Spending on transport and the environment together account for about 6 per cent.; and interest payments are about 4 per cent. Three per cent. is spent on pensioners--we had a debate last year, when the shadow Chancellor insisted that he did not want to abolish, cut or means-test the basic state pension, so we assume that he would pay that money out. Spending on disability and on education bring the total to 30 per cent., even before we have discussed the NHS.
What is the Conservative attitude to the public services? How would the shadow Chancellor get to 25 per cent? He may want to intervene now and give us more details of the Conservative economic policy. As he knows, I have been prepared to deal with interventions, and I will give way to him. In his 1995 lecture, ominously entitled "One Nation Revisited", he said:
When the Conservatives published their plans for a common-sense revolution, I noticed that they never committed themselves to maintaining the levels of expenditure. I noticed that they said that public spending would be cut and that, in that document, they gave no commitment whatever in relation to the overall level of spending in the national health service.
"What I am arguing for is a strategic long-term shift in direction that takes us gradually away from compulsory collective state provision to private voluntary collective provision."
Is that not what the Opposition health spokesman is telling people round the country? He is going around saying that non-urgent operations should be moved out of the NHS. He has been saying that he is about to unveil a plan for private medical insurance so that people can take up such insurance, or perhaps they will be forced to do so. The shadow Home Secretary has been going around saying that she wants charges in the NHS.
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