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In case anyone missed the point, someone described as a

helpfully explained to the papers what it meant, saying that

The former Chancellor was right about that. If we had kept the rebate, we could have paid for 27,000 more police officers or 31,000 more teachers, and still been able to do up Lord Malloch-Brown’s apartments in the Admiralty.

Now the Prime Minister is asking his new Chancellor to introduce it and us lot to pass it. Well, he will not have our help in doing so. There is a broader point. No one doubts that the Government are spending large sums of public money. But the entire country is asking where all the money has gone. In the last month, we have had some answers—£500 million on literacy programmes that have not made any difference to literacy
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rates; £885 million on truancy, but truancy levels continue to rise; and £84 billion in total spent on a welfare-to-work programme that the first Minister to have responsibility for it described this weekend as a “failure”. When the Prime Minister says “British jobs for British workers”, Labour Members blush, because they know that borrowing slogans from the National Front is no substitute for a proper welfare-to-work policy. [ Interruption. ] I should be amazed if anyone were prepared to repeat the slogan that the hon. Member for Vale of Clwyd (Chris Ruane) has just uttered from a sedentary position.

Then there is the £19 billion that the London School of Economics calculated might have to be spent on identity cards. We know what the Chancellor really thinks about them because he once made the mistake of telling us. Identity cards, he said,

If that is the case, why did he take the job as the Prime Minister’s Chancellor?

Not only the individual projects waste money, but an unreformed public service is failing to get money to the patient and the parent. Slowly but surely, just as we predicted, the roadblocks to reform are emerging under this Prime Minister: giving local education authorities greater control over academies, cancelling hundreds of millions of pounds of private sector contracts in the national health service and the backsliding on the Freud report on welfare. A strong Chancellor who cared about value for money would be dismantling those road blocks to reform, not helping to erect them. However, he will not dismantle them because he is incapable of challenging the Prime Minister’s policy of throwing taxpayers’ money at any problem without any proper regard to how well it is spent.

The Queen’s Speech was supposed to be the moment when the Government drew a line in the sand, but instead it was the moment when they dug a hole and kept digging. Now they drift from one crisis to another, buffeted by events, lacking any clear vision about what they are planning to do in the next week, let alone the next year. Back in the glorious days of June, the Prime Minister promised us a Government of all the talents. In one sense, he has delivered. We have exceptional naivety at the Foreign Office, fantastical incompetence at the Home Office and exceptional weakness at the Treasury. The job of the Chancellor of the Exchequer is to be the rock in the storm, yet this Chancellor’s indecision and poor judgment have contributed more than most to the heavy weather that the Government now find themselves in.

At a time of financial instability and a period of great economic change, Britain needs a strong Government and a strong Chancellor to guide us through. We have neither. The sooner the election comes that will bring about the real change this country needs, the better.

2.2 pm

The Chancellor of the Exchequer (Mr. Alistair Darling): There was a time when the Queen’s speech was an opportunity for the Government to set out their programme for the coming Session and for the Opposition to set out
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their vision, too. When I saw the amendment that has been tabled by the Leader of the Opposition, which criticises us on the vision for the future economy, competitiveness and a range of other measures, I thought that the shadow Chancellor might be telling us his vision for the economy over the next few years and setting out the measures that he would put in place to make us more competitive in the future. However, we heard absolutely nothing.

The other thing that is striking is that it is the second major speech that he has made, after his conference speech, in which he has not mentioned once what he would do to tackle the major problem of child poverty here and abroad. One would have thought that the shadow Chancellor would have a view on whether poverty should be abolished or whether he was going to do anything about that pressing problem, but there was nothing on that, nothing on climate change and nothing on how he would help to deal with the competitive challenges that we will face in the future.

I understand why the hon. Gentleman cannot do that. Over the past few weeks, he has got himself into a position where he has made promises on tax and spending that he knows he cannot possibly afford to deliver. In the space of just a couple of days at the Tory party conference he made promises on tax that amounted to some £6 billion, yet he can scarcely point to £500 million to pay for the proposals. When he knows that he has that black hole in his spending and that he is in no position to make any commitments on health, education and tackling child poverty, it is no wonder that he has completely avoided addressing any of those issues of substance. They affect each and every one of us as we enter an undoubtedly uncertain time, when we will see rapid economic change. This country will have to compete with growing economies in China, India and elsewhere in the world. Those are the big challenges that we face, yet the hon. Gentleman had nothing to say about them.

Miss Julie Kirkbride (Bromsgrove) (Con): The Chancellor is talking about child poverty. Does he believe that poverty is absolute or relative? If it is relative, how can it be abolished?

Mr. Darling: I know this—I know poverty when I see it. I represent a pretty prosperous part of a pretty prosperous city in Europe. However, I remember when I entered the House of Commons 20 years ago that parts of my constituency in Edinburgh had nearly 25 per cent. of people out of work and a second generation of people who had never worked. The hon. Lady ought to remember that. The Conservative Government of the 1980s and 1990s damned an entire generation to failure because they allowed poverty to grow. In 1997, we had the worst record in Europe for child poverty. We are putting that right, in relative and absolute terms, and I am determined to continue to do so.

Mr. Stewart Jackson (Peterborough) (Con): Does the Chancellor disagree, therefore, with the right hon. Member for Birkenhead (Mr. Field), who conceded recently that the number of children in poverty, not including housing costs, went up in the past fiscal year by 100,000?

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Mr. Darling: Some 600,000 children have been taken out of relative poverty, while 1.8 million children have been taken out of absolute poverty since 1998. I should have thought, as I seem to have stirred an interest among the Conservatives on the issue of child poverty, that the question should be about what we are all doing, together, to end the scourge of child poverty. We are committed to that, and I hope that the Conservatives would be, too—yet the shadow Chancellor has had opportunity after opportunity to say something about it and has said absolutely nothing.

Julia Goldsworthy: We share the ambition of abolishing child poverty, but in my constituency problems such as the fact that we have the highest water bills in the country prevent the Government from hitting their targets on tackling child poverty. Does the Chancellor agree that we need more than a one-size-fits-all approach, and that specific issues have to be tackled in specific areas, such as water bills in the south-west?

Mr. Darling: I agree that a range of issues have to be dealt with in order to help people on low incomes. Of course, one of the major things that we have done to help people on low incomes is to introduce child tax credit, of which Liberal Democrats in some parts of the country have been critical. To be fair, they are in favour of it in other parts of the country, depending on which way the wind happens to be blowing at the time. The main point is that all of us, in all parties, ought to be committed to ending child poverty. It has no place in one of the richest countries in the world. We are on the way to achieving our ambition to eradicate child poverty within a generation. I intend to do that.

Mr. Jim Devine (Livingston) (Lab) rose—

Michael Gove (Surrey Heath) (Con) rose—

Mr. Darling: I shall give way to my hon. Friend the Member for Livingston (Mr. Devine), who has been very patient, but then I want to make some progress.

Mr. Devine: The shadow Chancellor has described the state of the economy as a tragedy. The tragedy was 3 million unemployed, 15 per cent. interest rates, 12 per cent. inflation rates and record numbers of house repossessions. That tragedy affected the people of this country, and the Conservatives were in power.

Mr. Darling: I agree with my hon. Friend, who represents an area that was on the receiving end of some of the neglect of the Conservative party’s policies in the 1980s, when the mining industry declined and there was absolutely nothing in the place of it. Now, I shall give way to my old friend, the hon. Member for Surrey Heath (Michael Gove), who I remember meeting on a picket line in Aberdeen many years ago.

Michael Gove: I am grateful to the Chancellor for giving way, and for the solidarity that he showed me when we were comrades in struggle all those years ago. Talking of comrades, the Secretary of State for Work and Pensions and I attended a recent conference held by Barnardo’s to discuss child poverty. The Secretary of State was asked why the £3.8 billion that could have been used to meet the child poverty target by 2010 was
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being used to cut inheritance tax, and he said that the Government had to appease middle England. That is calculation, not conviction. Will the Chancellor explain why he chose to follow the path of calculation, rather than the path of conviction that he is attempting to persuade us that he would rather follow?

Mr. Darling: On this occasion, I cannot stand shoulder to shoulder with the hon. Gentleman as I did against the wickedness of the then press barons of the north-east of Scotland.

We are able to devote considerable sums of money to reducing child poverty, although we have other obligations as well. The hon. Gentleman’s comments are a bit rich since, as well as our other differences on inheritance tax, he wanted to spend even more money on a tiny minority of the wealthiest estates in the country.

Rob Marris rose—

Mr. Darling: I shall give way once more, but then I want to make some progress.

Rob Marris: I am grateful to my right hon. Friend for his generosity. May I correct him? The hon. Member for Tatton (Mr. Osborne) did set out a vision today. It was a vision of tax cuts—inheritance tax cuts, tax cuts for small business, corporation tax cuts and stamp duty cuts. The hon. Gentleman’s vision is to take the country back to 1992 when in five years the national debt doubled because there were unfunded tax cuts. His vision is to take us back to economic instability. His vision is a complete failure to confront the global challenges that the country faces.

Mr. Darling: My hon. Friend is right. The Tories are getting into the business of making promises to cut taxes. I did not mention earlier that during the two or three days of the Tory party conference a few weeks ago they also promised more money for the Army and for schools, more money to combat MRSA, more money for stroke drugs and more money for high-speed railway lines. They even rivalled the Liberal Democrats in fiscal incompetence; there is no way that anyone can make those promises if they do not have the money to fund them without getting into the very difficulties that the Tories were in during the 1990s.

Mr. Bernard Jenkin (North Essex) (Con): Will the Chancellor give way?

Mr. Darling: Perhaps later on, but it would be a good idea for me to make progress— [ Interruption. ] I will happily give way to the hon. Gentleman later.

As I said earlier, the objective of the Queen’s Speech is to help us meet the aspirations of the British people and to prepare for the rapidly changing new world we face. I agree with something that the shadow Chancellor said in his conference speech: we face a real competitive challenge from the emerging economies. Asia now out-produces Europe. China alone produces half the world’s clothes, half the world’s computers and more than half the world’s digital electronics. China’s
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and India’s share of world trade has more than doubled in less than 10 years and both are looking to compete at the top of the market, not at the bottom.

The pace of change will define our world in the future. Globalisation, which is transforming the scale of the challenges we face, means that at home in the UK and across the world we must prepare and equip our country for the future. The changes are an opportunity for us. New markets for trade are opening in the emerging economies and new jobs will come from new technologies. Britain is well placed to seize those opportunities, because we have a strong and stable economy and we can make the right investments for the future.

In the face of such changes, people rightly look to the Government whom they elect not to stand by—as Governments have done in the past with disastrous consequences—or to stand against inevitable change, but to stand with them, on their side, preparing and equipping individuals, as well as the country, for the changes ahead. That is what the measures in the Queen’s Speech do. Along with the measures that I set out last month in the pre-Budget report, they will help us to meet those challenges in the future.

The difference between us and the Tories is that we are prepared to make the necessary changes and we have the money necessary to back up the reforms—crucially in education and skills, which are essential for the future, but also in transport infrastructure. We are introducing measures to ensure secure and cleaner energy supplies and to deal with housing. We have legislative proposals on those and other things, yet the Conservatives and the shadow Chancellor have absolutely nothing to say about them.

At a time when we need to make fundamental changes to face the challenges ahead, we would have thought that the Conservative party might have something to say; but no—absolutely nothing.

Mr. Redwood rose—

Mr. Darling: I will give way to the right hon. Gentleman. Whatever else one might accuse him of, he sometimes has some forward thinking, although we may not always agree with it.

Mr. Redwood: I am grateful to the Chancellor for his kind words. Will he tell the House which account the £23 billion to re-finance Northern Rock came from and how it will appear in the Government accounts?

Mr. Darling: I shall come to Northern Rock shortly, because some pertinent questions were asked and I want to try to deal with them. The money to which the right hon. Gentleman refers, which was lent to Northern Rock, comes from the Bank of England.

At this time, it is important that the Government use their strength and influence to ensure that each and every one of us and all our businesses can respond to the future. That is why we have increased the amount we are spending on science and why we are ensuring that UK invention and innovation can be converted into goods and services that we can sell. That is why we are putting so much more money into universities. The situation is completely different from that of past decades, which is why, to meet our big ambitions in
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education and transport, we are putting in resources. The Conservatives cannot do so because they know that their promises on tax and spending are unfunded, so they could not meet the commitments that we are entering into.

Sir Robert Smith (West Aberdeenshire and Kincardine) (LD) rose—

Mr. Darling: I give way to the Liberal Democrats.

Sir Robert Smith: The Chancellor talks of the importance of preparing for a difficult future. From his experience at the Department of Trade and Industry he will know that the North sea sector is going through a period of transition. While world oil prices are high, the sector might be seen as attractive for investment, but the reality is that in many of the North sea fields oil is mixed with gas so the real price of oil is about two thirds that of the world price, and the costs of production are going up dramatically. Does the Chancellor recognise that we face a much more challenging time in the North sea and that we need a sophisticated approach to ensure that we maximise returns in the long run?

Mr. Darling: I am aware of the difficulties faced by the North sea field. I am particularly aware of the fact that, as gas prices have fallen, there has been pressure on some of the North sea producers. As ever, we shall do whatever we can to make sure that we get as much as we possibly can from the North sea. The hon. Gentleman and I both realise that the resources are finite, and I think we both agree that it is absolute madness for the Scottish National party to pretend that Scotland could live off the North sea. I see that the SNP leader is now claiming the entire assets of the North sea, including those that in any view of their division would not come to Scotland. However, it is important that we do everything we can to extract every last drop of commercially viable oil and gas.

John McFall (West Dunbartonshire) (Lab/Co-op): I share the Chancellor’s disappointment that the long-term challenges that the country has to face have not been dealt with by other parties today. As he is aware, a few weeks ago the Treasury Committee produced a report on globalisation that indicated that we need to get on the front foot in terms of education and science, and that if we do not the UK’s high-tech and professional jobs could be threatened. We have asked the Government to look into the possibility of holding an annual debate in the Chamber on globalisation in order to make us and the country aware of the challenges that we face and of the need for adequate public policy responses.

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