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Mr. Redwood: The Queen's Speech said that the Government would ratify the Nice treaty. Now that the Irish people have voted no in a referendum, does the Chancellor think that no should mean no and that is the end of it, or that the Irish people should be told that they need to think again, vote again and answer yes? We would like to know how strongly he supports referendums.

Mr. Brown: Trust the right hon. Gentleman--when we are talking about child poverty, he starts talking about the Nice treaty. The Irish Prime Minister has already answered his point. The Irish people will be asked to support the Nice treaty. This is a matter for them to resolve as they choose, and they will do so in the next few months. The right hon. Gentleman's intervention on Europe carries some menace for whoever takes over the leadership of the Conservative party.

Mr. Redwood: Answer the question.

Mr. Brown: I have answered the right hon. Gentleman's point. The Irish people will resolve this

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matter, as their Prime Minister has said. The menace is that the right hon. Gentleman remains committed, under all circumstances, never to consider joining a monetary union and wants to renegotiate Britain's membership of the European Union. He would set this country back many years. That is another sign that the Conservative party, far from having a debate based on candour and frankness with people being prepared to talk fairly among themselves, is about to enter into a big conflict on Europe.

Since 1997, we have raised child benefit by 40 per cent. in cash terms. We have introduced the new children's tax credit, which for 5 million families is a family tax cut worth up to £520 a year. We have reduced the direct tax burden for a single-earner family on average earnings from 21 per cent. to 18 per cent., which is the lowest level for 30 years. In this Parliament, we shall introduce a tax credit Bill that will provide for a new, seamless system of support for children.

From the foundation of a universal child benefit for all, which is £15.50 for the first child, the children's tax credit--which is the family tax cut--raises the income of 5 million families by £25.50 or up to the weekly payment for children, which is now £51.50, with most going to those who need help most. The Secretary of State for Work and Pensions is today announcing the transfer of the Child Benefit Centre to the Inland Revenue, so that universal child benefit and the new integrated child credit will be delivered by a single agency with a single aim, which will be to ensure that every child and family have the financial support that they need.

With the under-one credit set at £1,000 and maternity pay at £100 a week guaranteed for six months, more support is now available. Soon there will also be 1.6 million child care places for families when they need it most: when their children are youngest.

Caroline Flint (Don Valley): I welcome how much the Government have done in the past four years to improve family life, but could I direct my right hon. Friend to a report by the Daycare Trust, published today, called "Children's Centres", which says that despite the advances being made, and despite the money that has been put in the pockets of working families, there is still a shortage of day care places, the cost of which is still prohibitive? I recommend that my right hon. Friend reads the report and considers whether there are better ways of avoiding the 45 funding streams that child care providers currently have to use to get money to establish child care services.

Mr. Brown: That is an important point. We have increased the working families tax credit payment for child care. We are also delivering our proposals, with money, to develop the 1.6 million child care places. I agree with my hon. Friend that more needs to be done more quickly. The difference between us and the Conservative party is that we are committed to a national child care strategy for the first time in this country, and we are committed to funding it properly. It is not clear whether that is the Conservative party's policy.

We spend £3 billion a year on children's social services, on sure start and on the new childrens fund. Now that the emphasis has switched from dealing with the consequences of neglect to the prevention of neglect, and now that there is a wide range of providers involving the

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voluntary and charitable sectors and community action centres, it is right that there be a new review across Departments of all services for children at risk, to ensure that in the next spending round the children in greatest need, wherever they live, have the services that can best meet their needs, so that no child is left out or left behind.

As part of our spending review, a second review of the voluntary sector will examine how Government and voluntary sectors can best work together to help families and communities in need. In addition to the work done under sure start, to be taken forward in the spending review, a third review of our spending round on health inequalities will tackle the persistent and unacceptable inequalities in infant mortality and in child health.

Mr. Michael Fallon (Sevenoaks): Will the Chancellor give way?

Mr. Brown: I will, but then I must move on.

Mr. Fallon: Now that the Chancellor has entered the realm of social policy--which is somewhat unusual for a Chancellor--can he clear up one point? Can he confirm that the Deputy Prime Minister has been moved to the Cabinet Office to be in charge of public services, that the Office of Public Service Reform reports to the Prime Minister, and that he himself is still in charge of cross-cutting reviews and public service agreements? Who is actually responsible?

Mr. Brown: I am talking about the spending review for next year. I know that very strange things happened under the last Conservative Government, but I think that spending announcements were still made by the Chancellor of the Exchequer, and that is precisely what we intend.

As for public spending control, the public service agreements are an innovation introduced under the Labour Government. They are designed to relate the expenditure of money to the targets and objectives set by the Government for meeting its programmes. The amazing thing is that in 18 years of Conservative government no real attempt was made to relate the spending of money to the priorities and targets set by that Government. I should have thought that the hon. Gentleman, as a member of the Treasury Select Committee, would welcome the fact that our spending review takes into account the public service agreements that set outputs and targets for the future.

All the measures that I have announced on child poverty today--the new integrated child tax credit, which will form part of the legislation in the tax credit Bill, the transfer of the Child Benefit Centre, and our three reviews of the voluntary sector, children in need and health inequalities--show that, for us, tackling child poverty and ensuring that no child is left behind is not just an economic and social imperative; it is, for us, a litmus test of any political party running for office.

I hope that all in the House understand that we could not move 100,000 lone parents back into work and lift as many as 1 million children out of poverty if we had done what some argued that we should do--abolished the working families tax credit, removed benefits from lone parents with teenage children, cut the social fund, and abolished the new deal for lone parents.

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I believe in eradicating child poverty, and I believe the country understands very well that when lone parents are simultaneously denied help to find jobs and faced with a cut of £50 a week in their incomes--as was proposed by the Conservative party at the election--all the rhetoric in the world about social liberalism cannot obscure the fundamental economic extremism of that position. If the Conservative party wants to do some rethinking, this strikes me as a very appropriate place to start.

Let me turn to the public finances. Some staked their reputation on saying that our public services plans could not be afforded, that they were inflationary, and that they were unsustainable. I can tell the House that we will implement our public spending plans in full, and that we will now prepare for the spending round from 2003-04 to 2005-06. I can also say that, as well as providing free television licences for the over-75s and raising the basic state pension this April, we plan to pay the winter allowance of £200 this year; and our new pension credit, introduced in 2003, will reward rather than penalise modest occupational pensions and savings, to ensure that every pensioner enjoys a share in rising prosperity.

Mr. John Bercow (Buckingham): Will the Chancellor give way?

Mr. Brown: I have given way enough.

Our obligations are international too. Diseases such as tuberculosis, malaria and HIV-AIDS are avoidable, and drugs are available to make them preventable and curable. This week the Secretary of State for International Development will announce further contributions from our Government to a new global health fund to tackle those diseases.

Our public service agreements--setting targets and demanding results--are key to securing value for money across Government. In advance of our decisions next summer on matching the resources in our public spending review to reform, the Chief Secretary to the Treasury is setting up seven interdepartmental reviews to examine how we match our spending priorities for the next period with a stepping-up of modernisation and reform to ensure for the public the best outcome and results. The reviews will deal with central themes set out in our manifesto: children at risk, health inequalities and the role of the voluntary sector, public sector labour market issues, improving the use of public space, science and research and small business support.

Under the previous Government, Britain spent more on debt interest than on schools. The reason that we can invest more in health and education is that we have managed to transfer resources from paying the bills of failure to investing in future success. A total of £9 billion has been cut from the typical annual cost that Conservative Governments paid to tackle debt and pay for unemployment. That has meant that, each year, there is £9 billion more for the national health service and for education. That is what we mean by putting hospitals and schools first.

There is an even bigger question for the future of our public services: how to meet demographic, technological and expectation-led demands. Instead of the fundamentalist calls to shrink public spending on those services, the challenge for the future is to secure additional public investments as well as the reforms that

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we need without putting at risk the economic stability that is so crucial. The detailed new policies that the Government are pursuing in the Queen's Speech--the tax credit Bill, the enterprise Bill and the other public service reforms--are central to the direction of our country in future. There are big questions about the role of Government which every political party will have to answer.

I understand from The Times this morning that the shadow Chancellor will announce in the debate that he will support all-women shortlists and more international aid. We welcome conversions to our policies but we remember what happened over the minimum wage: we supported it, the Conservatives opposed it; we succeeded, they recanted. We can explain our support and they cannot. Their new positions raise prior and profound questions about whether they are changing their policies because of opportunism or because of principle. Does the shadow Chancellor believe that decent minimum standards and social justice are necessary for a modern efficient economy?

Basic questions of principle inform the Queen's Speech. I ask the Opposition to address them, too. On economic management, it is not enough to say that the old era of rigid monetary targets is over. The question is whether we are to reject and set aside the short-termism of the old free market dogma in favour of not just a solid commitment to monetary and fiscal disciplines, but an industry, regional and skills policy that works with markets and businesses to equip this country for change.

On employment, it is not enough for the Conservatives to tell us as part of their rhetoric that they support full employment. The first question that we must answer--it is the pre-condition for a modern employment policy in the global economy--is will we reject the old, flawed laissez-faire policy and invest in an active labour market policy that is based on rights and responsibilities, but that lifts people from welfare to work?

On inclusion and opportunity for all, is it to be the illusion of inclusion for millions, or will we commit the substantial resources that everyone knows are needed if we are to tackle child and pensioner poverty? On health, do we choose to invest more in our NHS, as we have chosen, or do we instead make health care in Britain dependent, as some people want, on imposing new charges and private insurance?

Do we just talk about being internationalist and about Britain in Europe rather than Britain against Europe; or do we follow the logic for the national economic interest, as I do, that there are circumstances in which we will join the euro? No amount of policy launches, listening exercises or rhetoric about social liberalism can obscure the fundamental choices that have to be made.

Are we just to talk about good public services, or are we to modernise with the scale of money that is needed, rather than putting across-the-board tax cuts before the needs of public services and stability?

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