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The Secretary of State for Transport (Mr. Alistair Darling): I, too, welcome the opportunity to return to old pastures. It is some years since I last debated across the Floor of the House with the hon. Member for Havant (Mr. Willetts). Some of the things he referred to bring back happy memories. In the olden days, it might have been thought that the shadow Chancellor would open the Budget debate on behalf of the Opposition—that is certainly what used to happen—but, during the last election, I recall that when it became clear from a leak to the Financial Times that the shadow Chancellor, the right hon. Member for West Dorset (Mr. Letwin) wanted to cut £16 billion off public expenditure, he disappeared for virtually the rest of the election campaign.

Mr. Maude : Will the Secretary of State give way?

Mr. Darling: I certainly will in a moment.

Obviously, the shadow Chancellor now advocates cuts worth £35 billion, but it is like pulling teeth to get any Conservative Front-Bench spokesman to confirm that. Perhaps the hon. Member for Havant is aware that, throughout London today, it is difficult to find any Conservative Front-Bench spokesman who can bring himself to admit that their policy is to cut £35 billion from public spending. That is probably why the shadow Chancellor has vanished and is not here today.

Mr. Maude: Will the Secretary of State give way?

Mr. Darling: I promised to give way to the right hon. Gentleman, and I will. None the less, I shall then very happily debate with the hon. Member for Havant, not least because he raises a number of matters from our past that I would certainly like to touch on before turning to the Budget debate generally.

Mr. Maude: Does the Secretary of State recollect how Budget debates have changed? The convention used to be that the Chancellor would respond to the points made in the Budget debate. The only Chancellor, certainly in my experience, who has not done that is the current Chancellor, who is not that good at engaging in debate—what he likes to do is come here and roar; responding to the debate is not his strong point.

Mr. Darling: My recollection is that the right hon. Gentleman was one of the many Conservative Members who shadowed my right hon. Friend the Chancellor, and I seem to remember that his predictions were wrong on each and every occasion that he made them. My right hon. Friend the Chancellor has just said to me how much he recalls and relishes those days, when he used to debate with the right hon. Gentleman. In fact, I seem to recall that the right hon. Gentleman predicted a
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recession—a recession that never came—although he now says that he did not do so. My right hon. Friend is happy to debate such matters with anyone. What is more important is that his record bears very close examination, compared with the predictions made by the Conservative party, including those made by the right hon. Gentleman.

Mr. Maude: The Secretary of State says that the Chancellor is keen to debate, but, as I say, every Chancellor before him used to respond to the Budget debate—this Chancellor has never done so. As we know, he never really wanted to be Chancellor; he regarded the job as a waiting room for becoming Prime Minister. Just for the sake of pure historical accuracy, I never predicted a recession; I predicted a downturn, which took place, and a manufacturing recession, which also took place.

Mr. Darling: My recollection is that the right hon. Gentleman was one of a number of Conservatives who kept going on about recessions made in Downing street—recessions that never materialised.

Mr. Maude rose—

Mr. Darling: I will give way again later, but there is a difference between a debate and a conversation. I know that the Government are in favour of big conversations and I promise the right hon. Gentleman that I will let him intervene again, but I wish to make the point that the hon. Member for Havant, who opened the debate on behalf of the Conservatives, was good enough right at the start to commend the Chancellor for being right on so many of his predictions. We much appreciate that acknowledgement.

The hon. Member for Havant mentions pensions, but I recall from our last meeting that he was passionately opposed to restoring the earnings link. In particular, I remember him saying on television:

In reply to a point made by our absent friend the hon. Member for Northavon (Mr. Webb) in a debate in the House on 8 June 2000, the hon. Gentleman said that restoring the earnings link was

I was somewhat surprised therefore to read a few months ago that he now thinks that it is a jolly good idea to restore the earnings link—but only for four years because he knows that he would not have the money to sustain such a policy after that time.

I also remember the time when the hon. Gentleman said that he wanted to abolish the winter fuel payment and was met by universal opposition, not least from Conservative Back Benchers. Moreover, when they started to look at his pension policy, he had to do a rapid U-turn and change things. His pensions policy has not worked, but it is great pity in relation to his proposals on the new deal that he does not recognise—although he has studied such things and he is generally pretty fair-
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minded—that the new deal has helped more than 1 million into work. On any view, unemployment is a fraction of what it was 10 or 20 years ago. Youth unemployment, to which he referred, is down as well. We have only to go around our constituencies to see the difference, which is shown by not just statistics, but the evidence. We can see in every constituency that unemployment has fallen.

To listen to the hon. Gentleman, we might think that we were living in a time of mass unemployment. In fact, 2 million more jobs have been created in the past eight years, despite the Leader of the Opposition's predictions about the minimum wage. The hon. Gentleman proposes to get rid of the new deal now, but it would be a tragedy if the new deal were scrapped at the very time when, yes, some people are still finding it difficult to get into the labour market—for example, people on incapacity benefit. My right hon. Friend the Secretary of State for Work and Pensions has made proposals to remedy such problems.

The hon. Gentleman proposes the Australian model, as I understand it, whereby the process of getting people into work is largely privatised. I have visited Australia—no doubt he has done so, too—and I would say two things about that model: first, it is not cost-free, because there is still a cost to the state, even if someone else is paid to put people into work; and, secondly, that model has not been as successful as ours in getting people into work. If we go were to back to higher unemployment, it would inevitably involve higher benefit payments. I remind him that one of the most telling things that my right hon. Friend the Chancellor said yesterday is that, 10 years ago, 75 per cent. of all new expenditure went on servicing debt or social security—the bills of failure—but the position today is completely the opposite. Getting rid of the new deal, which one of the hon. Gentleman's fellow Front-Bench spokesman described as being painful—so much for cuts not making a difference—would be a tragedy for many people in this country.

Mr. Ivan Henderson (Harwich) (Lab): On winter fuel payments, does my right hon. Friend recall, as I do, the years when we campaigned for the wind chill factor to be taken into account? Pensioners had to freeze in their homes for days on end just to get £10, which, in fact, they very rarely got. The Tories said that they would not put VAT on fuel, and then did so. Does he agree that pensioners will not trust the Tories to keep their promise to retain winter heating payments?

Mr. Darling: My hon. Friend is right. I remember in the previous Parliament that the hon. Member for Havant announced a plan to get rid of concessions such as the winter fuel payments and free television licences, which he said were bitty and inappropriate. He had an alternative, but he had to abandon it because his colleagues thought that it would be unpopular. He said that restoring the earnings link was "not affordable" and that it would not be "well targeted", but he has performed a complete U-turn and now accepts the policy. It is possibly no wonder that he has been taken off the case when it comes to writing the Tory party manifesto, but that change of heart is curious, to say the least.
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The hon. Member for Havant is also strongly against the state second pension, introduced when I made the reforms to which he referred. It has benefited 18  million people, most of them women and people with broken work records such as carers, but he wants to scrap it. If that happened, 18 million people would be worse off.

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