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I have also looked into the Queen’s Speech debates and at the discipline that the shadow Chancellor has been able to exercise over his colleagues. We should remember that this is the party whose fiscal rule
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requires cuts in public expenditure, yet there is more money for the NHS promised by the health spokesman on 22 November, more money promised for the Home Office by the shadow Home Secretary on 23 November, more money from the shadow Transport Secretary on 23 November, more money demanded by the shadow Defence Secretary, the shadow children’s Minister, the shadow Energy Minister and the Opposition Whip. There is more money for hauliers and for rail, for example. Clearly, none has any discipline in respect of the commitments made and it is no use the shadow Chancellor press-releasing his commitment to stability if at the same time all his shadow Ministers are announcing that they have to spend more.

The Conservatives put up a website last week about borrowing and people getting into debt. It said that it might sound “boring”, but that people should remember to keep to their “spending budget”—and I suspect that that is what the Conservative party should be doing. The problem is that the Tories want to tell people who doubt their credentials that they are in favour of public services so they will spend more, but then they want to tell the No Turning Back and Cornerstone groups that they are in favour of tax cuts so they will spend less.

Philip Davies rose—

Mr. Brown: I am not giving way.

I have also looked at the first report of the Conservative public services policy group. It may have been undisciplined, but it was going to see the light in future. But no—there is more money promised for school federations, more money for expanding schools, more finance for social care, money to review prescription charges, more tax credits for carers, more incentives for insurance for care, the provision of more social housing, more money for community land ownership schemes and more money for housing associations.

In 1992, we decided as an Opposition that we would not make expensive commitments that we could not afford— [Interruption.] We decided—

Mr. Bone rose—

Mr. Brown: I will give way to the hon. Gentleman in a few moments.

Mr. Peter Atkinson (Hexham) (Con): On a point of order, Mr. Deputy Speaker. It may help the Chancellor to know that the figures have arrived in the hands of the hon. Member for Ipswich (Chris Mole). Is it in order for them to be passed from him to the hon. Member for Cardiff, West (Kevin Brennan) who is sitting behind the Chancellor and who is a Whip and acting as an unpaid Parliamentary Private Secretary tonight, and then to two other Parliamentary Private Secretaries behind the Chancellor?

Mr. Deputy Speaker: Fortunately, I am not responsible for notes passed around the Chamber.

Mr. Brown rose—

Mr. Bone rose—

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Mr. Brown: I am prepared to give way. I hope that these are the figures for 1997.

Mr. Bone: I apologise to the Chancellor for not having the figures earlier, but unemployment in Wellingborough in October 1997 was 1,501 and in October 2006 it was 1,535. I believe that that is an increase.

Mr. Brown: The hon. Gentleman is absolutely wrong, as we came into power in May— [Interruption.]

Several hon. Members rose—

Mr. Brown: I am sorry, but we got the new deal moving— [Interruption.]

Mr. Deputy Speaker: Order. I am sure that the House would wish the Chancellor to be able to clarify the point.

Mr. Brown: The figure is 1,856, reduced to 1,500. The hon. Member for Wellingborough must know that, in the first few months of a Labour Government, the growth rate of the economy and the employment creation through the new deal were such that we were getting people back to work incredibly quickly. [ Interruption. ] I am not going to apologise for giving the number of people unemployed in May 1997—1,850.

I have just listed all the Conservative party’s spending commitments, but what about all the tax commitments? One would think that the shadow Chancellor, having at one and the same time allowed spending commitments to grow even though he has the third fiscal rule, would be bearing down heavily on tax commitments, but what about the Forsyth commission, which he says sets the framework for the future? There are £21 billion of tax cuts in the Forsyth report. So there is a range from £21 billion to the Cornerstone group’s £40 billion and the No Turning Back group’s £50 billion, while the right hon. Member for Wokingham, who is chairman of the economic competitiveness group, suggests sums of even more than £50 billion. How do those figures add up?

Let me tell the House that I remember exactly what happened. I have the Conservatives’ election manifesto from 1992. What did they promise then? They said that they would bring stability. [Hon. Members: “More!”] They said that they would cut taxes; they said that they would raise spending; they said that they would lower spending as a share of national income. They said that all those things could happen at one and the same time. What did they call that in 1992? They called it sharing the proceeds of growth. They said that a dividend would be paid between tax cuts and spending rises.

The Conservatives are in favour of recycling. What we are seeing is the recycling of the 1992 promises. They talk about stability; they say that there will be tax cuts; they promise spending rises; they say that they will bear down on spending; and it ends up in what happened after 1992. It ends up not in tax cuts, but in 22 tax rises; it ends up not in spending rises, but in massive spending cuts; and it ends up in the shambles of an economic recession, with 15 per cent. interest rates, thousands losing their jobs, mortgage repossessions and negative equity.

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Perhaps the House should be aware that, when the final humiliation came in 1992 —[ Interruption. ] Conservative Members do not believe that it was a humiliation. Well, 15 per cent. interest rates were a humiliation. When the final humiliation came in 1992, who was standing next to Lord Lamont, the then Chancellor of the Exchequer? It was none other than the principal economic adviser, who is now the Leader of the Opposition. The Conservative party cannot face up to the country’s challenges. The Conservatives cannot face up to those challenges if they go for tax cuts, spending rises and no discipline. They cannot face up to the big challenges on education and training. They cannot face up to the big challenges on poverty and dealing with public services. They cannot face up to the big challenges on skills and the innovative future that our economy needs. The only party that can face up to the challenges is the Labour party and this Government.

Hon. Members: More!

Mr. Deputy Speaker: Order. We must continue with the debate.

4.58 pm

Dr. Vincent Cable (Twickenham) (LD): I first wish to focus on the second paragraph of the Queen’s Speech, which is about economic stability, and then on two of the big long-term issues that have been presaged by Sir Nick Stern’s report on climate change and by the Turner report on pensions, both of which have given rise to two important Bills and, indeed, to long-term policy.

When I made this speech last year, I started by congratulating the Conservative spokesman on having acceded to his new post. I note that he is receiving at least some good advice, because I see that quite a few of my policies and speeches appear in his after a short time lag. Most recently, my 10-point plan on debt reappeared as the Conservatives’ six-point plan on debt. I had been puzzled as to what was wrong with the other four points until I worked out that they all related to problems concerning mortgages and repossessions, which may be an area of policy over which the Conservatives wish to draw a veil.

My main point of difference with the shadow Chancellor at the moment relates to my lack of a sense of humour. I fail to appreciate what is hilarious about the Conservative website describing people who have got into debt as “feckless tossers”. I thought perhaps that, with my advancing years, the problem was that I had lost my schoolboy sense of humour. However, having tried the words out on various age cohorts including schoolboys, I realise that they do not see what is funny about them either.

As far as the Chancellor is concerned, I realise that the boxing metaphor is getting a little bit worn. He may recall in a way that is perhaps not terribly helpful to him that, before Lennox Lewis came along, British heavyweight boxers were notoriously ineffective. Indeed, they eventually earned the nickname of “horizontal heavyweights”. That is how they tended to appear on the canvas. However, after an hour of Punch and Judy politics, the Chancellor has shown a certain talent for that. Indeed, beating up Judy is something
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that he is a master of, but we now need to move on to a slightly more serious level. I apologise if I move into that vein.

I first wish to focus on the issue of economic stability. The obvious points are stark.

Mr. Redwood: Why do the hon. Gentleman and his party still think that joining the euro would be good for our stability, given the awful experience of the European exchange rate mechanism, which his party and the Chancellor wrongly recommended?

Dr. Cable: Most of us in the House, whatever our party, would agree that it would be foolish to rule out the option for ever, which I think is the right hon. Gentleman’s option. I am not sure that that fits with the views of those on the Conservative Front Bench.

Let me return to the issue of stability. The Chancellor is absolutely right—and this is a sensible place to start—to say that we are in a successful economy and that we should be proud of that. I have never quite understood why the Conservatives have such difficulty saying that and claiming some of the credit, rather than arguing that we are in a constant state of economic collapse. The British economy is in good shape and, as the International Monetary Fund said recently, our rate of growth is somewhat above the G7 average and certainly more stable. The issue is not whether that happens—it clearly is happening—but whether it can be sustained. The question is whether the growth that we have at the moment is sustainable or more similar to the experience that we had in the 1950s, which I grew up with as a teenager, when we also had more than a decade of stable growth, low unemployment and low inflation. However, we were building up imbalances in the economy and they eventually spilled over in the form of balance of payments crises. We cannot have them any more because we have a floating exchange rate.

None the less, serious imbalances are building up in the British economy and it will be a major challenge for the Chancellor and whoever succeeds him to deal with them. One of them relates to public expenditure, which is growing significantly faster than the British economy. We have no quarrel with the increase in public expenditure that has occurred—or much of it; much of it has been valuable—but there is an issue of sustainability. The other big challenge is that of personal debt.

On public expenditure, the Chancellor challenged the Conservative spokesman about some of his spending commitments, and he was right to do that. However, the Chancellor is also making major spending commitments that will be difficult to sustain over the difficult periods ahead. Public expenditure will not be able to grow much faster than the British economy over the next period.

I want to take the Chancellor over some of the spending commitments that the Government are entering into and challenge him to justify them. He started his speech by referring, I think with some pride, to the spending that the Government were undertaking on what he called security. That includes the war in Iraq. We have a different perspective on that, because we regard the £4 billion spent on that war as having been wasted. He may say, “That’s water under the
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bridge. Let’s look at the future.” Last weekend, the Chancellor committed the Government to spending an extra £100 million on reconstruction. One might say, “Fine. That’s good. Whatever our views on the war, surely we are in favour of reconstruction.” I am challenging that. I do not know whether the Chancellor is aware, but a few weeks ago, the Iraqi Government committed themselves to the latest big tranche of spending: a total of $40 billion, which is more than £20 billion, in reparation payments. That is Iraqi oil money. It is not being used for reconstruction or to raise standards for people in Iraq; it is being used to pay reparation for damage supposedly incurred in the first Gulf war. Much of it is going to Kuwait, not just for the damage that was inflicted by Saddam Hussein but for continuing penalty payments. Bizarrely, much of it is going to private companies such as Halliburton, Bechtel and even Kentucky Fried Chicken. They are being paid compensation for profits that they lost as a result of the first Gulf war. My question to the Chancellor is: why should the British Exchequer—the British taxpayer—be plugging holes in the Iraqi budget when the Iraqi Government are making those enormous, obscene payments? There is no justification.

Let me take another heading under the issue of security. The National Audit Office recently produced a compilation of defence estimates: the 20 biggest projects under the Ministry of Defence—20 big projects costing £20 billion. It was subsequently presented by Lord Drayson as a great success story. However, it emerged from the analysis that the projects were collectively £2.6 billion over-budget and cumulatively 36 years behind schedule. Clearly, if there is going to be a tightening of Government spending, some of that stuff will have to be looked at. We have argued, for example, that some of the third tranche of the Eurofighter project, which is estimated to cost £16 billion—although we do not really know, because the figures have been concealed under commercial secrecy—has to be scrapped. The Government are going to have to face up to that too. Sooner rather than later, we want an analysis of where that spending is going.

To take another set of spending commitments, I have recently been trying to trawl through parliamentary questions about what is happening in relation to Government computer projects. The projects currently in operation that I have had a reply about—about half—have a cumulative overrun of 47 years. The overrun costs are enormous. Much of that expenditure has to be analysed critically. We would question the usefulness of continuing to press ahead with the full NHS IT project at a time when the NHS budget is under a great deal of pressure.

We have had a debate about the principles of the ID cards scheme. The Home Secretary referred to it in his contribution to the debate on the Queen’s Speech. However, we need to ask questions about the costs and who will pay for the scheme. The Government have never properly answered that. It has always been understood that as long as the scheme was voluntary, it would be paid for by user charges. However, when the former Home Secretary, the right hon. Member for Norwich, South (Mr. Clarke), was in post, he indicated that when the scheme became compulsory—as it would in the next Parliament—it would be made free or would be heavily subsidised at a cost of somewhere between
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£5 billion and £20 billion. We have never had a proper explanation of where that money is going to come from, how it will be accounted for, or how it can be justified.

My colleagues and I thought that the Prime Minister’s energy report, which was published by the Cabinet Office in 2003, was an admirable summary of all the issues involved in energy policy. It covered the ground well. Security of supply, energy poverty and the environmental cost were well balanced. The report came to the conclusion that new nuclear power was unnecessary. A year later the policy changed and we now have an open-ended commitment to supporting new nuclear power. Again, it is unclear how that will be funded. Much of it will happen through the charging policies of the electricity utilities. The Government appear to have entered into a new set of commitments in relation to decommissioning and, possibly, the acquisition of land for the new plants to be established. Again, that has to be factored into public expenditure.

Mr. Ian Davidson (Glasgow, South-West) (Lab/Co-op): The hon. Gentleman has raised several points about spending without telling us where the Liberals stand on them. For clarification, does he agree with the position adopted by his colleague Lord Garden, who indicated that he wanted the aircraft carriers to which the Government are committed to be built in the United States, rather than on Clydeside and elsewhere in the United Kingdom?

Dr. Cable: I am not familiar with the details of the argument about the contract for aircraft carriers, but we would want to ensure that it was dealt with properly and cost-effectively. They should be bought where the equipment is cheapest and fit for purpose, wherever that happens to be. There is no role for protectionism in this field, as the Government acknowledge. The hon. Gentleman also asks what we would cut. I have listed a series of areas of public spending that we would cut to finance our priorities.

Let me raise a topical matter. Last week, the question of Olympic costs was raised. There was all-party consensus on supporting the project on the basis of a set of cost estimates that was produced with the Olympic bid. Those estimates are proving to be hopelessly and wildly unrealistic and the considerable limitations in the project management skills of Mr. Ken Livingstone have been exposed. When the Chancellor signed up to an open-ended public liability commitment, as is required by the International Olympic Committee, why did he not check the costs? What is his estimate of the public liability and, especially, of the element of that liability that will fall on the national Exchequer? The Government have big questions to answer about those elements of public spending.

Mr. Mike Weir (Angus) (SNP): The hon. Gentleman mentioned an all-party agreement on the Olympics. He was not quite correct, because Scottish National Members pointed out those very flaws right at the beginning. I recall his leader shouting at us angrily for pressing the matter to a vote because of our concerns about the escalating costs of the Olympics.

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