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Several hon. Members rose--

Mr. Brown: The right hon. Member for Wokingham (Mr. Redwood) certainly believes in a balanced budget.

I have given the shadow Chancellor my two rules. He may disagree with them, but they are the two rules. Does he believe in a balanced budget--yes or no?

Mr. Portillo: The Chancellor's rules are inadequate. I will impose extra disciplines; I have set out and named five disciplines. Will the right hon. Gentleman tell us whether he will raise Government spending faster than the growth rate of the economy for only three years, or beyond? If it is beyond, that means extra taxes and he should be honest with the British people. If it is only for three years, it is boom and bust, bad spending and a bad policy. Of course, it is a bad policy anyway, as it squeezes out the private sector. Why cannot he tell us: three years or more than three years?

Mr. Brown: The House will know that I have answered the question. The fiscal rules will be observed. We have observed them over the past three and a half years and we will do so over the next period. We are investing where it is necessary to do so, subject to a debt to GDP ratio that has fallen from 40 per cent. towards 30 per cent. Those are our two fiscal rules. Does the right hon. Gentleman believe in a balanced budget? If he cannot answer that question, everything that the Leader of the Opposition is saying about tax cuts is hollow.

The shadow Chancellor denied that he had said that there was a difference of £16 billion between our spending plans and what could be afforded. I have the statement that he issued.

Sir Peter Tapsell (Louth and Horncastle): Before the Chancellor moves on from the question of the balanced budget--

Mr. Brown: I know that there are many factions in the Conservative party, but I want to deal with one at a time. I know that the hon. Gentleman does not share the views of the shadow Chancellor.

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Under the headline, "Labour Return to Tax and Spend say Conservatives", the shadow Chancellor was quoted directly as saying:

Worked out over the 28 million taxpayers, that is £16 billion. Does the right hon. Gentleman deny issuing that statement?

Sir Peter Tapsell rose--

Mr. Brown: That is a question for the shadow Chancellor

Sir Peter Tapsell: If my right hon. Friend will not answer, I will have to do so.

Mr. Brown: The hon. Gentleman might wish to be the shadow Chancellor--and would, indeed, be more effective in that role--but the right hon. Gentleman has refused to answer our question: does he believe in a balanced budget or not? I thought that that was simple. It is simple for some Back Benchers.

Sir Peter Tapsell: It is too simple. I shall explain why if the right hon. Gentleman sits down.

Mr. Brown: The hon. Gentleman will get his chance. I am pleased that he is not asking a question about Europe today. Or perhaps he is.

The shadow Chancellor can now answer my question. Did he or did he not say:

That is £16 billion. Will he confirm or deny that statement? He gave the House the impression that he had never used those figures.

Sir Peter Tapsell: Has the Chancellor given way?

Mr. Deputy Speaker: Order. I must tell the Chancellor that if no hon. Member is offering to intervene, there is little point in him sitting down for a long time. If he does so, another hon. Member will inevitably fill the gap.

Mr. Brown: I am grateful, Mr. Deputy Speaker. Let us put on record that the shadow Chancellor has refused to tell us what his fiscal rule is. The Conservatives used to say that it was a balanced budget or working towards a balanced budget, but the right hon. Gentleman has refused to tell us. We know why he cannot do so. If he gives the impression that he supports a balanced budget--I believe that he probably does--he will be admitting that he cannot afford any tax cuts. That is the position. The right hon. Gentleman can now correct me by telling us whether he believes in a balanced budget, but I believe that this has already been a very illuminating occasion.

The right hon. Gentleman claimed that the Tories never had in mind the £16 billion figure. I have just read out the statement to which my hon. Friend the Member for

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Rotherham (Mr. MacShane) referred--£600 per taxpayer, or £16 billion. The Conservatives believe that £16 billion cannot be afforded above what has been allocated--properly, in their view. They would prefer cuts of £16 billion. The statement issued by the shadow Chancellor proves that to be the case.

Mr. Portillo rose--

Mr. Brown: I shall give way if the right hon. Gentleman can confirm that statement.

Mr. Portillo: I set out very clearly the fact that we intend to vary the Government's spending plans by £8 billion, and to give tax cuts to pensioners, savers, businesses and all the people who have been clobbered by the Chancellor of the Exchequer. The independent economics editor of the BBC, Evan Davis, said:

Why does the Chancellor go on with this rubbish? Is it simply because the Labour party has invested so much in posters and leaflets that will now have to be torn up? Why cannot it address reality? Why does it have to distort and spin and twist the truth in every single instance?

Mr. Brown: The shadow Chancellor seems to want to believe the economics editor of the BBC before he believes himself. The right hon. Gentleman said:

That amounts to £16 billion. That statement was issued by the shadow Chancellor; it is in his name. It states:

on Tuesday 18 July 2000. It even has a time for the release of the statement.

We have established two things today that will be very significant in future months. The Conservatives cannot tell us whether they believe in a balanced budget or not. They have no fiscal rules. The shadow Chancellor made a statement about the £16 billion figure, and he is unable to deny it, other than by quoting a secondary source. Given that it was he who made the statement, it would be better if he were able to deny it himself.

Several hon. Members rose--

Mr. Brown: I shall give way to the hon. Member for Louth and Horncastle (Sir P. Tapsell), the right hon. Member for Wokingham and the hon. Member for Stratford-on-Avon (Mr. Maples), and then I shall make some progress.

Sir Peter Tapsell: All this time-wasting waffle with which the Chancellor has been padding out his speech is nonsense. He keeps making the absurdly over-simplistic point about there being some wonderful rule based on a balanced budget, which will be for the lifetime of the cycle. The economic community does not take that very seriously because nobody knows the length of the cycle. If only the Chancellor could grasp that. We do not know how long the cycle will last, or whether it will be one of prosperity or depression. Mr. Greenspan and all of the

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economic community in America are locked in an intellectual argument about whether there will be a soft landing or a hard landing. The Chancellor is not addressing his mind to those serious points; he is just talking schoolboy economics.

Mr. Brown: When the previous Conservative Government said that they would balance the budget over the cycle, that should never have been believed, either.

I give way to the right hon. Member for Wokingham.

Mr. John Redwood (Wokingham): My constituents understand that the Government have put taxes up a lot. They can see and feel that, and they are prepared to believe that this Government are spending more than the previous Government. However, what they find odd is the fact that they do not have enough policemen, teachers, doctors or nurses. They have fewer of many of them than under the previous Conservative Government. When will some of that money get through to pay the wages of the people whom we want, instead of buying an army of spin doctors and bogus advice for the Chancellor?

Mr. Brown: The right hon. Gentleman is now a supporter of public spending. That is a conversion indeed. He said at lunchtime in a speech that was issued by the Press Association that the divide in the Conservative party was not really between the mods and the rockers, because there was only one rocker, namely, the shadow Home Secretary, but between the Europhiles and the Eurosceptics. I believe that that is the position from which he comes on just about everything.

On the right hon. Gentleman's question about public spending, will he support the £5 billion extra a year that we are putting into education? Will he support the 20 per cent. rise in transport spending--our £180 billion plan for transport--that we are proposing, which the shadow Chancellor refuses to support? Will he support the extra expenditure on law and order--the 6 per cent. real terms increase a year? Will he therefore now support our public spending plans? I think that he would agree with me that it is impossible to get doctors, nurses and other people to serve in our public services unless we have the money to pay their salaries. If he agrees with that, he has become a supporter of the Government's plans and will be, once again, at odds with the shadow Chancellor.

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