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Mr. Osborne: I do not think that the hon. Lady was listening to me. We accept the Gershon savings—indeed, we will be significantly better at implementing them than the present Government—but we go beyond, with the James savings. In the document that we have produced this week—I am happy to give her a copy if she has not managed to get hold of one—we have listed at least £12 billion of savings additional to those referred to by Gershon.

I know that we will fight about these decisions as we approach the general election. For example, we will get rid of the new deal, because as the NAO and many independent studies have shown, it does not work. It does not deliver value for taxpayers' money.

Mr. Bailey: Will the hon. Gentleman give way?

Mr. Osborne: I have given way twice to the hon. Gentleman, and I do not think that I shall do so a third time.

Only a third of people who go through the new deal find sustained employment, and the figure is even lower for those in long-term unemployment. We propose an alternative called "Work First", which is partly based on the Australian model, although we have also looked at what happens in Wisconsin. Above all, however, we have examined what happens in the 13 employment zones that already exist in this country. We are modelling our proposals on the existing zones because they are considerably more effective at getting people into work than the new deal. We would thus save a substantial amount on the new deal and we argue—indeed, we will prove—that our plan will help people who are unemployed to find work.
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The Small Business Service will go. The Prime Minister suddenly became a champion of it half an hour ago, but less than a fifth of small businesses know that the Department of Trade and Industry offers such a service, and fewer than one in 20 uses it. At a cost of £500,000, we do not think that it is giving especially good value for taxpayers' money. Some 168 quangos and public bodies will go.

Mr. Mike Hall (Weaver Vale) (Lab) rose—

Mr. Osborne: I shall give way to my constituency neighbour in a second, but first let me ask him whether he can do without the Government office for London, the Commission for Integrated Transport, the Office of Public Services Reform and the Prime Minister's delivery unit.

Mr. Hall: Do the proposals to scrap quangos involve English Partnerships? If so, what will happen to the £30 million that it is giving to stabilise the town centre in Northwich? Is that value for money?

Mr. Osborne: I am pretty sure that English Partnerships is not on the list of 168. [Interruption.] It is not on the list, then—I give myself no let-out clause.

Mr. Mark Francois (Rayleigh) (Con): It is not there.

Mr. Osborne: My hon. Friend helpfully reminds me that it is not on the list. We are only getting rid of things that do not perform an especially useful function. We are merging bodies that can be merged and getting rid of bodies that provide no value for taxpayers' money. It is a good list of 168 bodies, and I am sure that the hon. Member for Weaver Vale (Mr. Hall) would agree that the whole lot could go.

We will also get rid of 235 bureaucratic posts, although I accept that some of the Labour party's funders will find that controversial. [Hon. Members: "Two hundred and thirty-five?"] No, 235,000.

Chris Bryant (Rhondda) (Lab): You said 235.

Mr. Osborne: I am happy to be corrected by the hon. Gentleman. The correct figure is 235,000. No doubt the public service unions that back the Labour party's election campaign will kick up a big fuss about that, but we believe that the posts do not deliver real value for money. However, unlike the Government's proposals, which involve compulsory redundancies, we will set aside almost £6 billion to pay for generous voluntary redundancy programmes for civil servants in posts that will go.

Regional assemblies and all the apparatus that goes with them will also go. I do not know whether Treasury Ministers noticed that there was a recent referendum in the north-east of England. The people of this country do not want regional assemblies or regional bureaucracy, so it should go.

We have identified total savings of £12 billion in non-priority areas. The savings will not be made on paper-clips, or through the intangible efficiencies about which the Chancellor talks, but through a reduction in Government activity in areas in which the taxpayer is
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not getting value for money. The savings can and will be achieved by a conscious act of political will. Of the £12 billion savings, £8 billion will be set aside to fill the structural deficit and £4 billion will be used to give back to taxpayers some of their own money. I know that Labour Members will want to know which taxes on hard-working families we will cut. Let me assure them, especially those defending marginal seats, that those taxes will appear on billboards near them soon.

One of the most amusing sights of the week was the Labour party's attempt to rubbish the James report. The Secretary of State for Transport, acting in his new role as the Government's chief spokesman on spending, produced with a great flourish 10 things that did not stack up in the James report. He said that we could not possibly merge the Food Standards Agency and the Meat Hygiene Service because they were merged already. We got on the phone to the Food Standards Agency and Meat Hygiene Service and asked the names of their chief executives. One said that he was called Chris Lawson and the other said he was called Dr. John Bell. That sounds like two separate bodies to me, although I know that the Government get confused about such things, because they too have two chief executives.

The Transport Secretary said that the savings that we aimed to make in the Rural Payments Agency were incredible because they exceeded its entire administrative budget. I suggest to the Chief Secretary to the Treasury that the problem with letting the Transport Secretary do this sort of thing is that he is not up on the detail. He had obviously not read the annual report of the Department for Environment, Food and Rural Affairs, because it says clearly that the agency is spending £188 million on administration, which is a huge amount given what it does. The cost is considerably greater than that which would be expected if the agency was outsourced, and much greater than the £112 million of savings that we set out in our document. I think that the Chief Secretary to the Treasury gave a little nod there, because he agrees that the Transport Secretary is not very good at that job.

Our spending plans are credible. The Institute for Fiscal Studies says that they add up. They will mean that the country will spend what it can afford and taxpayers will get value for money. We have an answer to the black hole in the public finances. We can make credible savings and protect vital public services. We can fill the deficit and reduce taxes. What is the Government's answer? Which of the options set out by the OECD will they choose: "a slowdown in spending", or "a rise in taxation"? Not the slowdown in spending.

Chris Bryant: Will the hon. Gentleman give way?

Mr. Osborne: I am happy to give way to the hon. Gentleman, because he can let me know whether he would choose to increase taxes or reduce spending.

Chris Bryant: For the avoidance of doubt, I shall answer a question that the hon. Gentleman asked everyone else, but chose not to ask me. I disagree with the Financial Secretary to the Treasury, if he said the words that the hon. Gentleman cited earlier.

The hon. Gentleman inserted the little phrase "protect vital public services" in his speech. As far as I am aware, those services include only the NHS and
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schools—not all education. Does that mean that the youth service and special educational needs will be protected?

Mr. Osborne: The hon. Gentleman needs to read the document, which spells out the position on schools, the NHS, international development, the police, pensions, transport and children's social services. The difference between the policies on which the hon. Gentleman and I will campaign during the election is that our plans are published and say how we will fill the black hole. The Government currently give no indication that they will do that, so we will use the debate to try to tease out some answers from the Chief Secretary to the Treasury.

Mr. Jenkin: It is extraordinary for a Labour Member to complain about special educational needs. The Labour Government are forcing the closure of special schools throughout the country, but we would keep them open.

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