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"The Government's introduced a very good system of independent management and monetary policy . . . They've also introduced some very sensible rules for taxation and which relating to debt and the deficit and they've largely stuck by them."
As for the hon. Gentleman's next point about the costs that have to be met, he will know that there is a reserve, and it is the reserve from which we pay for Iraq. As far as identity cards are concerned, the Prime Minister announced the figures yesterday. On the pensioners winter allowance, I have announced the figures today; £250 will be the payment for over-70 households, and it will be £350 for over-80s.
What the shadow Chancellor does not seem to understand is that it is because we rejected the other policy proposals that he put forward that we now have a successful economy capable of creating growth and generating revenues. It is because we rejected his policy to abolish the new deal that we have cut unemployment, so the bills from unemployment are down by more than £3 billion a year. It is because we did not accept his proposals to raise the national debt in our early years that we have reduced it and the bills from interest payments are down £4 billion a year. It is because we are generating growth, not by following his policies, but by following our policies, that more people are in work, there is more growth in the economy, businesses are investing and we are therefore generating the revenues to pay for our public services. It is for that reason that we are both meeting our fiscal rules and able to sustain the public spending commitments that we made.
I suggest that the Liberals need to do some thinking at this stage as well. Yesterday, I pointed out that the hon. Gentleman said that he was going to fix the share of public spending in national income at 200304 levels41 per cent. If he were to do that, he would have to cut public spending by £10 billion now. Yesterday, he conceded to go half way in that direction, and said that he would have to cut public spending by £5 billion. Will he be honest enough to tell every constituency in the country about the £5 billion of cuts that a Liberal party election manifesto should be making?
Mr. John McFall (Dumbarton) (Lab/Co-op):
I welcome the assurance that the Chancellor has given that the fiscal rules will be observed. No doubt, we will have further questioning on that in the Treasury Committee on 15 December. The child care and family policies that he has introduced are particularly welcome. Surely, as a result, no child in any of our constituencies will be left behind.
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On financial exclusion, the £120 million is most welcome for families who are both socially and financially excluded. Will the Chancellor indicate how the banks and not-for-profit organisations such as credit unions are going about this business? Does it not make it even more essential that the consumer credit Bill is implemented in the next few months?
Mr. Brown: I am grateful to the Chairman of the Select Committee, who has taken a big interest in this issue. Of course, he has been meeting the banks and financial institutions to look at issues of financial inclusion. The £120 million is precisely to do what he wants doneprovide better advice to people; help people escape the loan sharks and others who have been charging interest rates that are too high; and create a range of potential providers of low-interest loans and credit for people from low-income families. I hope that he will be able to work with citizens advice bureaux and other organisations, which I think will welcome this new package for financial inclusion. I thank the banks for co-operating in what is a joint effort to persuade more people to open bank accounts and get the benefits that come from having a bank account, and not to be dependent on private and sometimes unsavoury loan agencies. I shall write to him about his first point. The important point is that we welcome the work of the Select Committee on financial inclusion.
Mr. Kenneth Clarke (Rushcliffe) (Con): The Chancellor introduced the institution of pre-Budget reports. Is it really sensible to turn it into this annual ritual whereby he comes along with a string of detailed policy announcements about education, health and other domestic areas that he would like to have more charge of and produces a great deal of political rhetoric about Conservative Governments of the 1980s and about what Conservatives might do if they came into power now in order to obscure discussion of the mounting problem of the public finances, which are his principal responsibility? Does he accept that, if his critics are rightthere are now myriad criticsthat public spending is rising at an unsustainable level, that tax revenues are failing to meet his forecasts year in, year out and that public borrowing figures are getting more and more worrying as the situation deteriorates, this not only challenges his ingenuity in trying to demonstrate how he is meeting his fiscal rules but poses a very real and growing threat to the future health of the British economy, which somebody will have to deal with if he continues to be in denial about it for very much longer?
"Our gloomy Chancellor is going to bust our economy without any risk of a boom coming first. I have been forecasting doom and gloom for the British economy in my column in Financial Mail for most of the past year".
The former Chancellor is not the only one who has come to the House to make announcements on health, education and other matters. He said that he would not have frozen public spending for the first two years, but
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we did, and I hope that he agrees that we have been raising public expenditure and getting it to the vital public services. He should support our policies, against Conservative Front Benchers.
Mr. Martin O'Neill (Ochil) (Lab): I congratulate my right hon. Friend on today's statement. Does he agree that many so-called forecasters have been mis-selling pensions and other financial services for a long time, and that they are as bad at selling as they are at forecasting? Although it is worth while and important to look towards international challenges from India and China, we have serious industrial challenges at home. He has correctly identified that those industrial challenges are not having a dramatic impact on inflation; none the less they impact on a number of businesses that depend on energy. Now that the emissions trading scheme is coming into play, will he re-examine the climate change levy, in order to reduce the burden on energy-based industries in this country and to allow businesses that are alive, well and working at the moment to survive?
Mr. Brown: I am grateful to my hon. Friend, who chairs the Trade and Industry Committee. I know that his work is part of his determination to ensure the future strength of British manufacturing industry. As he knows, we have frozen the climate change levy and look forward to the successful working of the emissions trading scheme. At the same time, he must recognise that when we introduced the climate change levy, it was part of a package agreed with business and the Government following the Marshall review. We cut national insurance for employers at the same time as we introduced the climate change levy. If we are to secure changes in both energy efficiency and the reduction of emissions, we must move forward with measures such as the climate change levy. I hope that my hon. Friend will continue to support the climate change levy, which is essential for a balanced policy for both the environment and the economy.
Sir Peter Tapsell (Louth and Horncastle) (Con): When the Chancellor was calculating the figures for his statement, did he remember that when he sold more than half of this country's gold reserves, I repeatedly warned him that he was selling at the bottom of the market? Now that the price of gold has risen by about $200 an ounce, will he apologise for costing the British taxpayer some £1.5 billion by not accepting my warnings?
I do not accept that point. The previous Government, who failed to balance our reserves by making the gold sales a lot earlier, should take responsibility. It is right to have a proper balance in our reserves, which we have now achieved. The hon. Gentleman will have noticed that every other major country, apart from America, has been involved in gold sales. That includes France, which has announced gold sales in the past few months. I have always been willing to listen to the hon. Gentleman's advice, but whether it is on the Bank of England or on public expenditure, his record shows that he invariably gets things wrong.
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