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Mr. Andrew Mitchell (Sutton Coldfield) (Con): Will the Chancellor of the Exchequer help us all out by confirming, notwithstanding the more than 60 tax increases made during his time as Chancellor and rocketing levels of council tax, that he is still planning to borrow from the markets over the next three years nearly £100 billion?

Mr. Brown: The hon. Gentleman's opening remark is contentious. If he looked at what he called 60 tax rises, he would see that many of them are tax avoidance measures. Is he telling me that he would not support measures to deal with tax evasion and tax avoidance in this country? Are the Conservatives saying that they

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would never have introduced many of the measures among those 60 increases? As for borrowing, I am not going to take any lectures from the Conservative party about that. It borrowed the equivalent of £80 billion and raised the national debt to 44 per cent. of GDP. It took a Labour Government to come in and sort out the problem.

Lynne Jones (Birmingham, Selly Oak) (Lab): Given the historically low level of net public sector debt under my right hon. Friend's chancellorship, but also the congestion on our roads and the associated break in economic growth and the shortage of affordable housing and the misery that that causes, would it not be prudent for him to budget for substantial and sustained investment in our transport infrastructure and council housing, the most efficient form of affordable housing? Is not an increase in the supply of council housing, which could be made available to economically active families of modest means, the best way of combating the stigmatisation of council housing, which was referred to in Kate Barker's report?

Mr. Brown: If my hon. Friend looks at the detail of the pre-Budget report she will find that in the past few years, and until 2006, we have been doubling public investment, doubling investment in housing and doubling key transport investments. The Government are prepared to make the necessary investment and, in the case of the national health service, ask people to pay a higher rate of national insurance so that we can do so. Those are the right decisions for the future of the country. That is the difference between the Government, who will make those investments, and the Conservatives, who have a policy of cutting public expenditure to 35 per cent. of national income and would make an £80 billion cut in public expenditure. They should be ashamed of themselves.

Mr. Nick Gibb (Bognor Regis and Littlehampton) (Con): Table C4 of the Red Book shows net debt for 2003–04 of £27 billion. The Chancellor has now announced that that figure should read £37 billion—£10 billion higher. The rest of the five-year projections are £7 billion, £7 billion, £5 billion and £2 billion higher, making a total of £31 billion higher. Can the Chancellor explain why those figures have been revised upwards by so much in just nine months, and what would they be if they included all the private finance initiative liabilities?

Mr. Brown: First, on the PFI liabilities, we do exactly the same as the previous Conservative Government in assessing public-private partnerships and the responsibilities for off-balance sheet borrowing. If the Conservatives are now telling me that they regard every PFI project as an on-balance sheet project and that in their plan to cut public expenditure to 35 per cent. of GDP they want to cut out every PFI project as well, they are announcing a new policy today. As for the figures mentioned by the hon. Gentleman, I shall look at them. He mentioned net debt, but I think that he was talking about net borrowing. The figures for net borrowing are exactly as I announced in the pre-Budget report to the House this afternoon. There are detailed figures, both on the numbers and percentage of national income, and he should agree that while debt in other countries is

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rising to 50 per cent. and even to 80 per cent. in Japan, our debt is roughly a third of GDP, rising to, I think, 35.5 per cent. at the end of the cycle in 2008.

We have the best record on debt of the G7 countries, because we made difficult decisions, which the Conservative party would not have made, to reduce debt when we came to power and use the spectrum sale, which it would have used for other purposes, to cut debt further. That is why we have low debt interest payments, and why our record of economic management is very different from the failures of the Conservative years, for which the Opposition should still be apologising to the country.

Mr. George Foulkes (Carrick, Cumnock and Doon Valley) (Lab/Co-op): The Chancellor's measures for children will be welcomed as much by grandparents as by parents. However, will he confirm that all the measures, including the children's centres, apply as much to Scotland and Wales as to England? If not, will he have discussions with the devolved Administrations to ensure that they do?

Mr. Brown: All the measures on children's benefits apply to the whole United Kingdom, so the £3.50 rise is for 7 million of 12 million children in this country, and will mean £180 per child, whether in Scotland, Wales, Northern Ireland or England. As for the measures on children's centres, that is a matter for the devolved Administration in Scotland, but my right hon. Friend will notice that at the end of my statement I announced £400 million more for UK public spending and £340 million for England. There is an element for Scotland, Wales and Northern Ireland. The Scottish Executive will decide how Scotland's money will be spent, but I know that it wants to invest in children's services. As for tax relief on child care, national insurance and income tax would no longer be paid on that £50 by the employer or the employee, and the measure will be applicable to the whole United Kingdom.

Mr. Quentin Davies (Grantham and Stamford) (Con): The Chancellor congratulated himself this afternoon because, while the cost of pay-as-you-go national pension schemes on the continent have, in some cases, reached 15 per cent. of GDP, the equivalent figure here is 5 per cent. However, that 5 per cent. is another characteristically bogus Labour statistic, and the Chancellor must know—he certainly ought to—that it makes no provision at all for the cost of the pension credit, housing benefit and other benefits, the burden of which is growing a great deal, as more pensioners become increasingly dependent on means-tested benefits. Will he tell us what the real figure for the state's liability for pensions is? It certainly is not 5 per cent. Am I not right in thinking that it is about 10 per cent.?

Mr. Brown: The hon. Gentleman, not for the first time, is totally wrong. Pension expenditure and pension credit expenditure are included in the 5 per cent. figure that I announced. He is wrong to allege that we deliberately excluded pension credit expenditure from it and that we are misleading anybody about this. He should know that if one links pensions to earnings, one has a bill to pay not just in this Parliament or the next Parliament, but right across the board. That is why it is

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appropriate to count the exact cost of meeting that bill not just in one Parliament, but right across to 2050. If the hon. Gentleman looks at the figures—perhaps he has not done so—he will find that there are deficits that arise from that, which are of the order of 3 per cent. of national income for that one item alone.

That may be why the shadow Secretary of State for Work and Pensions said that "many campaigning pensioners would like to see the earnings link restored. . . it is not affordable and would not be well targeted. . . It is a wild and uncosted policy, so it is a dangerous intervention to support it." Those are the words of the shadow Secretary of State for Work and Pensions about the pensions policy of his party. It is interesting to note that the shadow Chancellor says that he does not have a clue how it can be funded. The Conservative party should go back to the drawing board.

Mr. Andy Reed (Loughborough) (Lab/Co-op): I am sure that many Labour Members, in particular, welcome the stability in the investment in public services. As my right hon. Friend knows, I have a keen interest in sport and as a rugby player still every Saturday afternoon, and it gave me almost as much pleasure hearing a Scot congratulating the England team as it did being in Trafalgar square on Monday.

On the extension of community amateur sports clubs, although it is important that that tax relief is included, will my right hon. Friend take representations between now and the Budget on increasing the amount of Exchequer funding for sport? We have seen the effect of improving sport at national level, but we need to do that at community level. By supporting community amateur sports clubs throughout the country, we can make a real difference to obesity and the nation's future.

Mr. Brown: I said that this was turning out to be an expensive afternoon. My hon. Friend should be praised for all the work that he has done. It is in no small measure due to his efforts and the efforts of his colleagues in the all-party group on sports, which considers these issues, that the 80 per cent. rate relief has now been given to community amateur sports clubs. I am able to announce today the corporate tax exemptions that will enable more sports clubs to have greater resources to devote to sports and to the community.

I was lucky enough to meet many members of the England team at No. 10 Downing street earlier this week. The Leader of the Opposition was there as well. He seemed to come in the front door, not the back door. From talking to Clive Woodward, the coach who deserves so much praise for his leadership and recognition for what he has done, it is clear that he wishes to see the rebuilding of sports at an amateur and community level. There is enormous good will in the country for what my hon. Friend is recommending. In the course of the spending review, we will look at what we can do for school sports and community sports. I hope he will agree that we have made a good start today by providing better help for 100,000 sports clubs. That, as I said, is probably 100 sports clubs in each of our constituencies.

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