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Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I am sorry to interrupt the right hon. Gentleman. The hon. Member for Brent, North (Mr. Gardiner) must know to behave better than that.
Mr. Letwin: I am grateful to you, Mr. Deputy Speaker, but to avoid any embarrassment on the part of the hon. Gentleman, I will give way to him.
Mr. Barry Gardiner (Brent, North) (Lab): The right hon. Gentleman was gracious enough to say that the my hon. Friend the Member for Glasgow, Cathcart (Mr. Harris) asked a sensible question. What he failed to do was provide the answer. The question was: how much money would the pensioner have to contribute? The right hon. Gentleman said what the subvention would be, but he did not say how much the pensioner would have to contribute. Will he cast his mind back and inform the House what his policy is?
Mr. Letwin: I know from previous debates that the hon. Gentleman is intelligent, so I assume that he is merely being purposefully obtuse. My argument was perfectly clear. Currently, pensioners have a choice. They can receive free treatment in the NHS, or they can pay a large sum to receive treatment in the private sector. Under our proposals, pensioners will be able to receive free treatment in the NHS at no additional cost—zero cost. If pensioners wish, however, they will be able to receive treatment in the private sector at less cost to them than at present. The upshot is that, one way, pensioners do not gain or lose financially, and the other way, they gain financially. The point of the system is to create competition, contestability and efficiency. The Government are so signally failing to produce those things that they are managing to put 37 per cent. extra into the system to get 5 per cent. extra out. That is the characteristic of the colossal structural mistake that the Chancellor has made. As I have said, his recent utterances serve only the purpose of masking that mistake.
There should have been bold moves to turn the public services round, but to do that the Chancellor would have to admit that the consumer has to be king, and he will not do that. In this Queen's Speech, there should have been effective proposals to rein in the tendency of Whitehall to regulate, plan and control, and to put a brake on the engine that drives the expansion of the burgeoning bureaucracy. However, to do that the Chancellor would have to admit that the culture of the open wallet and of total control have established themselves in Whitehall under this Government, and he will not do that.
The Queen's Speech should have begun with an acknowledgment that the Government have taxed, spent, wasted and failed. It should have acknowledged that a fundamental change of direction is needed, but it
is utterly unimaginable that the Chancellor would admit to any such thing, and without repentance there is no redemption. The challenge for the Government is to combine prosperity with real and fundamental reform of the public services, to offer value for money, to make public services accountable and attuned to local needs and to offer people real choice over their hospitals and schools and the kind of policing that they want. For six years the Prime Minister has promised such things, but he has been constrained by his Chancellor. The people of Britain should not have to wait for a general election in order to overcome those constraints and fulfil those ambitions, but I fear that that is exactly what they will have to do.2 pm
The Chancellor of the Exchequer (Mr. Gordon Brown): In welcoming the shadow Chancellor to his new post in this Queen's Speech debate, I should point out that he has made three astonishing admissions already. First, he has admitted that he would abolish the new deal because he considers it an expensive failure, a point to which I shall return. Secondly, he has admitted that he would reduce public spending to 35 per cent. of national income. That is an £80 billion cut in public expenditure, which would be the equivalent of wiping out most of the health service. Thirdly, he has admitted that under his proposals, the pensioner who has an operation in the private sector would have to pay several thousand pounds. [Interruption.] If I may, I shall give the right hon. Gentleman the figures. The cost would be £5,000 for a hip joint operation, £7,000 for a knee joint operation and £9,000 for a heart bypass. That is health care based on ability to pay, rather than on need.
Mr. Jonathan Djanogly (Huntingdon) (Con): Will the right hon. Gentleman give way?
I turn to the most remarkable aspect of this afternoon's debate. This is the debate on the economy—and industry. The right hon. Gentleman is not just the new shadow Chancellor; he also has the title of shadow Secretary of State for Economic Affairs. Yet not one mention has been made of the fact that we have had the lowest inflation rates for 40 years, the lowest interest rates for 40 years, the longest period of economic growth for 50 years, and more people in employment than at any time in our history. All this has happened under a Labour Government.
The right hon. Gentleman fails to mention the economy because if we were to compare our record with his, he would have to admit that while he was an economic adviser in No. 10, under a Conservative Government interest rates went to 15 per cent., inflation rose to 10 per cent., 2 million jobs were lost, 1.5 million people had negative equity as a result of their policies, and taxes had to be raised 22 times simply to pay for their additional borrowing of £80 billion, contrary to every promise that they made during the 1992 general election. Perhaps most significant of all, if he talked about taxation he would have to admit to his one claim to fame: he claims to be one of the authors—indeed, one of the inspirers—of the poll tax. When we have these
debates on taxation, perhaps he will explain to us why he said that the poll tax had to be abandoned not because it was wrong or unfair, but because it was
- "grotesquely mis-implemented because it should have been phased in over a long period of time."
Mr. Andrew Turner (Isle of Wight) (Con): Now will the right hon. Gentleman give way?
Mr. Brown: I am very happy to give way. And perhaps the hon. Gentleman will explain how he will tell his constituents of the effect that an £80 billion cut in public expenditure would have on his hospitals and schools, and how many doctors, nurses and teachers would lose their jobs.
Mr. Turner: If that were our policy, we would of course have to explain it. The Chancellor needs to explain why the people in my constituency, for example, who live in modest bungalows and terraced houses are paying for private operations that they cannot get on the NHS, at the prices that he quoted and above, and why the number of such people has multiplied threefold since his party came to power.
Mr. Brown: I know precisely why there would not be more operations in the national health service if the hon. Gentleman's party were to implement a policy of cutting public expenditure. He says that if it were his party's policy to reduce public spending to 35 per cent. he might defend it, but what is its policy? The shadow Chancellor said in an interview:
- "There has to be a third guiding rule which has to do, over time, with reducing rather than increasing the tax take, or . . . not allowing it to climb".
- "We would like to head downwards to 35 per cent of GDP. It is 190 per cent realistic to cut spending growth this way."
- "The story as written in the Financial Times is a perfectly accurate representation of comments made by me to the FT."
Mr. Djanogly: I thank the Chancellor for giving way. He mentions the low interest rate economy, but fails to mention that it has resulted in business not investing in the way he said it would. He also fails to mention that 300,000 jobs in manufacturing have gone. Perhaps he would care to explain the implications of his policies in that regard.
Mr. Brown: The hon. Gentleman attempts to talk down the British economy, but in the past few years it is the only economy that has avoided recession. America,
Japan, Germany and France have been in recession, but Britain has continued to grow. Business investment has of course been affected in every part of the world, but in the United Kingdom such investment, as a share of national income, has risen under a Labour Government, partly as a result of our cuts in corporation tax and our changes in investment allowances.
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