Previous SectionIndexHome Page

The Secretary of State for Work and Pensions (Mr. Alistair Darling): Talking of continental Europe, I understand that the shadow Secretary of State for Work and Pensions is going to Germany tomorrow to address his sister party on the revival of conservatism. One cannot help but have a great deal of sympathy for the audience that he will address. I hope that what he has to say tomorrow will be rather more illuminating than what he had to say about the Budget this afternoon. I am sure that his audience will be absolutely fascinated by his critique of the wiring of the Child Support Agency computer system and by the fact that his mind has gone completely blank in relation to what happened to poverty 10 years ago, when he was advising the then Conservative Government.

Had the man from Mars arrived in the Chamber this afternoon, he would have been forgiven for not believing that this is the first day of four-day Budget debate, not least because the shadow Chancellor is not even in the Chamber—let alone opening the debate, as used to be the case on such occasions. The shadow Secretary of State certainly could not be accused of concentrating on the big picture. He had precious little to say about health. In particular, he could not tell us whether the Conservative party proposed to match the increased funding that we announced yesterday. He could not tell us whether he believed that we should spend more or less on the fight against poverty and helping families with children. He had absolutely nothing to say on the economy—which, after all, ought to be central to any Budget debate.

One of the key differences between this debate and the Budget debates that we used to have years ago is that my right hon. Friend the Chancellor set out his Budget proposals yesterday from a position of almost unprecedented strength and stability in the British economy. Five years ago and in successive Budgets, we set a course for stability in the economy not just for one or two years, but for the long term. We took the necessary tough decisions right at the start of that Parliament, and we took more necessary decisions yesterday.

It is interesting that the shadow Secretary of State gave us credit for one policy—giving independence to the Bank of England. As he rightly said, that has been one of the principal ingredients in building that long-term economic stability. The hon. Gentleman then had the gall to say that the Conservatives were secretly in favour of that policy and were working towards something that we always thought they opposed. That casts new light on what was going on in the Treasury when they were in government: they were making steady progress towards something that they said on every occasion they were against.

Indeed, the only time that I ever heard Conservative politicians say that they were in favour of an independent Bank of England was when a Chancellor left office. When they made their resignation speeches, they said that they were in favour of something that they had always said they opposed. Perhaps that explains why 10 years ago to this very year, the Conservative Government presided over a catastrophic mess in the economy, which largely contributed to their defeat four years later.

18 Apr 2002 : Column 743

Sir Michael Spicer (West Worcestershire) rose

Mr. Darling: I shall now give way to somebody else to whom Labour Members owe a great deal, because he, too, contributed substantially to his party's defeat five years ago.

Sir Michael Spicer: On the Monetary Policy Committee and the independence of the central bank, is it not the case that, if that has been a success, one reason is that the Government have been protected from their own Back Benchers when they have pressed the Government to break the inflation target? When I was on the Treasury Committee, we were constantly faced with Labour Members trying to get the Government to break the inflation target. Is it not right that the reason why the Government have not is that they are hiding behind the Monetary Policy Committee?

Mr. Darling: The hon. Gentleman knows a thing or two about the trouble that Back Benchers can cause their Government. If the last Prime Minister were here, he would have something to say about the hon. Gentleman; indeed, my recollection is that he had a very unparliamentary term for the hon. Gentleman and some of his colleagues.

We gave the bank independence, which helped to produce stability, low interest rates and lower mortgage rates, but we have introduced other important policies. The latest figures show that 1.5 million more people are in employment, which is a significant achievement when the House remembers that in the mid-1980s more than 300,000 young people were on the dole for over a year; today's figure is about 4,500, which is a measure of how far we have travelled and the changes that we have made. It is not just about the monetary decisions we have made, but about the other decisions that the Chancellor has made.

Yesterday, building on that strength and stability, the Chancellor outlined the three challenges facing us: encouraging enterprise; taking the next steps to end child poverty and providing more support for families with children, as well as making work pay; and building on our investment in public services, especially the health service, to which I shall return shortly.

Mr. Michael Jack (Fylde): Will the right hon. Gentleman give way?

Mr. Darling: I want to deal with the steps that we have taken over the past five years to achieve our goals, but before doing so, I shall give way to the right hon. Member for Fylde (Mr. Jack) who, I recall, spent many happy years in the Treasury secretly working towards the independence of the Bank of England.

Mr. Jack: May I refresh the right hon. Gentleman's memory? The British economy has been growing for the past 10 years—five years under the Labour Government, and five under the Conservative Government. Yesterday, the present Government reaffirmed the 2.5 inflation target which we set and worked towards. We strengthened public finances, admittedly after a period of economic difficulty resulting from a cyclical downturn. Will the Secretary of State at least acknowledge that under the

18 Apr 2002 : Column 744

chancellorship of my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke), the foundations for the strength of the British economy were put in place?

Mr. Darling: I know that the right hon. Gentleman is a great supporter and admirer of the right hon. and learned Member for Rushcliffe (Mr. Clarke), if not his predecessors. He referred to economic difficulties; they could also be characterised as two of the longest and deepest recessions of the last century. In the five years since we came to office there have been two economic downturns, the most recent caused by what happened in the United States last year. The key difference between Britain now and Britain in the past, not just under the right hon. Gentleman's Government, to be fair, but under Labour Governments as well, is that we could weather those downturns because we took steps to ensure that we have a fundamentally strong economy.

I dare say that, later in our debate, the good professor will bleat about what we ought to have been done in the first two years of the last Parliament. However, because we made a difficult and tough decision to stick to the spending totals that we inherited, we were able to repay huge amounts of debt to put the economy in a much stronger position. That is the key difference between what we have done in the past five years under the stewardship of my right hon. Friend the Chancellor and the miserable rollercoaster regime of the last Government, of whom the right hon. Member for Fylde was a member.

We established stability; building on it, we have been able to switch spending to our priorities. In addition, because we have cut debt and unemployment, we have been able to release resources to spend on public services and help families and pensioners, which simply did not happen in the past. It is worth remembering that as a result of the reduction in debt interest payments, we have released £8 billion and saved almost £5 billion in unemployment costs because we have been able to help more people into work. By cutting debt and unemployment, we have been able to tackle the backlog of under-investment that we inherited.

All that has been going on for the past five years. Yesterday, my right hon. Friend the Chancellor set out the way in which we can build on that work, setting out both the money that is now available for the next spending review period and, critically, plans to put more money into the health service, which everyone agrees is necessary.

Several hon. Members rose

Mr. Darling: Before I deal with what we are doing to get people into work, I happily give way to my hon. Friend the Member for Falkirk, East (Mr. Connarty).

Mr. Connarty: My right hon. Friend may cover the point I wish to make when he talks about work. The Opposition gave money away to their friends when they privatised the utilities, but we took it back to create the new deal and put people back into work. They looked after the few, but we looked after the many, which is why we have the reward of so much employment while they had so much unemployment.

Jonathan Shaw (Chatham and Aylesford): But they were thinking about doing what we did.

Next Section

IndexHome Page