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"I'm afraid there is no money...good luck!"
"good luck, carry on cutting...with care."
Contrast the previous Government's approach with ours. They raised false hopes by promising the public that they would spend money on local projects that they could never afford to get off the ground, even under their own spending plans. We on the other hand have been candid about the scale of the task. We have made it impossible to fiddle the economic figures to suit our Budgets, and we are taking responsible and measured action on historically unprecedented levels of borrowing.
Mr Deputy Speaker (Mr Lindsay Hoyle): Order. Many hon. Members wish to get in. We have another statement to follow and there is business after that. I will certainly try to call as many hon. Members as possible, but if we can have quick questions and succinct answers, that will be of benefit to all.
Michael Fallon (Sevenoaks) (Con):
Is it not pretty clear that some of those projects were hastily scribbled cheques on a long overdrawn account? Would not today's painful announcement have been completely
unnecessary if Labour had carried out a proper comprehensive spending review last autumn, building into it a sustainable reserve?
Danny Alexander: The hon. Gentleman is absolutely right. If there had been a spending review, we would not be in this position now. As it is, out of the £34 billion of commitments that the previous Government made in that period, we have had to cancel £2 billion and put £9 billion into the spending review. The choice is obvious: profligacy on the one side, responsibility on the other.
Jon Trickett (Hemsworth) (Lab): There will be fury in Wakefield and my constituency, where people are expecting schools to be rebuilt and where we absolutely must have the 70 additional hospital beds to make proper provision. Any cancelled patient operations as a result of today's decisions will be laid entirely at the right hon. Gentleman's door. His party have joined with the other coalition party in being the party of mass unemployment. Some 300,000 building workers are already out of work. What is his estimate of the increased unemployment that he will produce as a result of his statement today?
Danny Alexander: I understand that some of these decisions are difficult for communities and that there will be genuine anger, which the hon. Gentleman has expressed. However, that anger should be directed at those on his own Front Bench who took irresponsible decisions that could not be afforded. We are now putting that matter right.
Mark Tami (Alyn and Deeside) (Lab): The previous Labour Government agreed launch-aid investment for the Airbus A350, which will help to secure tens of thousands of jobs in the UK. Can the Chief Secretary confirm that that will be paid in full and that he will not revisit the matter?
Tom Brake (Carshalton and Wallington) (LD): I had hoped to hear the words "better health care closer to home" and "St Helier hospital" in the Chief Secretary's statement. Can he update us on the position in relation to that hospital project?
Danny Alexander: We have considered a number of hospital projects against affordability and value for money criteria. It has been agreed that the Epsom and St Helier, Royal Liverpool, Royal National Orthopaedic and Pennine acute hospital schemes will go ahead.
Mr Tom Watson (West Bromwich East) (Lab): There is a curious part in the right hon. Gentleman's statement on the successor deterrent extension to concept phase long-lead items on Trident. What is the value of that, and can he explain why he did not tell the House that he is reviewing Trident? Does he not know what he is doing, or is he embarrassed and ashamed?
Danny Alexander: The hon. Gentleman knows perfectly well that, in the context of renewing the deterrent, the coalition has agreed a value-for-money review. In the context of that, spending £67 million on long-lead items in advance of the value-for-money review being completed would be utterly irresponsible.
Danny Alexander: We are facing a difficult spending round for two reasons: first, we have the largest peacetime budget deficit since the war-£155 billion-with an 8% structural deficit, which is larger than had previously been estimated; and secondly, the previous Government took irresponsible spending decisions at the end of their time in office and that has added to the pressure on Departments in the spending review. I am seeking to relieve that pressure in today's statement.
Ann Coffey (Stockport) (Lab): In the last Parliament, the then Secretary of State for Transport agreed to part-fund the A6 bypass-a road that is important in relieving congestion on the A6 in my constituency. Will the Chief Secretary agree to meet me and other Members of Parliament who have an interest in the scheme, so that we can discuss with him the merits of the project?
Mr Kevan Jones (North Durham) (Lab): I note from the right hon. Gentleman's statement that a commitment has been given on crucial equipment for military operations in Afghanistan. However, can he confirm to the House today that he will also give a full commitment to the announcement that I made before the election on the £30 million for the Army's recovery capabilities, the costs of the armed forces compensation scheme and the extension of the veterans mental health pilots?
Danny Alexander: As I said in my statement, Departments will make clear the projects that have been approved, but protecting spending on front-line services in the armed services and support for our troops on the front line in Afghanistan is a priority for this Government.
Mr David Burrowes (Enfield, Southgate) (Con): Does not the shadow Chief Secretary's delay in coming to the Chamber for today's statement characterise the previous Government's delay in taking the tough decisions that are needed, and did not his response characterise their refusal to say sorry for the mess that they left this country in?
Danny Alexander: The hon. Gentleman makes a good point, although I would not wish to cast aspersions on the shadow Chief Secretary's reasons for the timing of his arrival in the Chamber. That would be discourteous. However, it is fair to say that a spending review was delayed by the previous Government because they did not want to face up to the fact that some difficult decisions had to be made.
Angela Smith (Penistone and Stocksbridge) (Lab): The Sheffield Forgemasters loan would have helped place the UK at the forefront of global nuclear production and enabled Forgemasters to install the country's first 15,000-tonne forging press, thus reducing our dependence on foreign imports. Is the Government's decision not a political one, made out of spite because South Yorkshire voted Labour, rather than a decision based on the long-term interest of UK manufacturing?
Danny Alexander: No, none of the decisions was motivated in the way that the hon. Lady suggests. I have received representations from Members from a number of political parties on this matter. The key issues are affordability and value for money, and that project does not meet those tests. However, we continue to be supportive of it and officials will continue to work with the company to help it to try to secure private investment, which we think is perfectly justifiable for that worthwhile project.
Andrew Percy (Brigg and Goole) (Con): In the run-up to the general election, Labour Ministers trotted up the M1 to my constituency to make all sorts of promises on issues that they had done nothing about for 13 years. Does the Chief Secretary agree that, instead of coming here and feigning anger today, Labour Members should walk out of that door and go to constituencies such as mine to apologise for raising people's hopes about projects that they never intended to fund?
Danny Alexander: The hon. Gentleman is absolutely right. It is easy for people to write cheques when they know they are going to bounce. Labour raised hopes in communities that certain projects would go ahead, for which there simply is no money left. As the shadow Chief Secretary said, there is no money left, and that should have been the approach that guided those decisions, not the need of Members to save their own seats.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP): How much does this review bring into question private finance initiatives or public-private partnerships that, at their inception, had bogus public sector comparators and have cost the public purse a lot more over the period? Will the Chief Secretary also ensure that there is no threat to the service provided by search-and-rescue helicopters, despite the suspension of procurement for helicopters? That service is vital to island communities such as mine.
Danny Alexander: I will say two things to the hon. Gentleman. First, his point about PFI is not within the scope of this statement. However, in the context of the spending review, we will have to look at every single way in which public money is spent-including the operation of PFI-to ensure that we are getting value for money and not spending taxpayers' money unnecessarily when the spending settlement is going to be so tight.
The hon. Gentleman will see, when he reads the statement in the Library, that the search-and-rescue helicopter replacement is one of projects whose cost-effectiveness will be reviewed by the Ministry of Defence and the Department for Transport. Obviously, they will produce their report as and when that process has been completed.
Duncan Hames (Chippenham) (LD): In the light of the Chief Secretary to the Treasury's statement and of the fact that this will be a fixed-term Parliament, will he introduce constraints to prevent a similar spending spree in the run-up to the next general election?
Danny Alexander: I am grateful to the hon. Gentleman for his question, and I understand the motivation behind it. Given the scale of the challenge that we face in the form of the enormous structural deficit and the need to bring down that deficit further and faster than the previous Government proposed, I suspect that that task will consume all our time in the Treasury over the next five years, without having to worry about the question that he has raised.
Bob Blackman (Harrow East) (Con): In the run-up to the election, we could hardly move for Labour Ministers making all sorts of spending commitments. Will the Chief Secretary tell us how many of them were subjected to value-for-money tests?
Danny Alexander: Having found the piece of paper that I was looking for earlier, I can tell the hon. Gentleman that a substantial number of those projects were agreed to very close to the election. In the week before the election was called, the Kent Thameside strategic transport programme was agreed, as were the Birmingham magistrates court programme, the Outukumpu project, Building Schools for the Future in Cumbria and the Sheffield retail quarter. That was all done in that one week before the election.
Derek Twigg (Halton) (Lab): The Chief Secretary has made a serious accusation in saying that Labour Ministers deliberately agreed expenditure or programmes of action that were not properly funded. If that were the case, the permanent secretary would have asked for a ministerial letter of direction. Will he place before the House the ministerial letters of direction for all the projects that he has referred to?
Danny Alexander: Having looked at the state of the books and seen the plans that the previous Government set out-at least in headline terms-to cut £50 billion from public spending over the course of this Parliament, I do not see how any Minister could responsibly have made those spending commitments and expected them all to be met after the election.
Robert Halfon (Harlow) (Con): Is the Minister aware that, under the previous Government, the Department for Communities and Local Government spent £134,000 on luxury sofas? Is not that an example of the obscene waste that has led to the tough decisions that we have to make today?
Danny Alexander: I was not aware of that Department's spending on luxury sofas-perhaps I should have been. It is precisely that kind of expenditure on which we need to bear down heavily in the context of the spending review and through the efficiency and reform group that we have established, to ensure the maximum amount of space in Departments' budgets to spend on the front-line services that Members on both sides of the House care about.
Mr Dave Watts (St Helens North) (Lab): Can I try to get a straight answer to a straight question? What assessment has been made of the impact of this announcement on jobs and growth, and will the Chief Secretary publish that assessment and put it in the Library?
Danny Alexander: The position on that is as I set out to the shadow Chief Secretary: the biggest risk to jobs and growth in this country is failing to take appropriate action to deal with the deficit. That is the context of this Government's policy. If we continued with the irresponsible habits of the previous Government, we would soon be in a great deal worse a position than the one in which we now find ourselves.
Danny Alexander: That is at least partly the case. The challenge that we now face is how to tackle the fundamental economic problems that this country faces. The most serious economic challenge that we face is the scale of the deficit. We have seen in countries elsewhere in Europe and further afield the consequences of failing to act on fiscal consolidation. If we fail to act, the problems for jobs and growth and the prospects for our economy will be a great deal worse than they are today.
Mr Denis MacShane (Rotherham) (Lab): In 1979, the then Government started destroying South Yorkshire's industry, and the right hon. Gentleman is truly an heir of that Government. Does he realise that the name of liberal democracy must hang its head in shame in Sheffield, now that Sheffield Forgemasters has no future? His right hon. Friend the Deputy Prime Minister can now send back his Independent Parliamentary Standards Authority travel allowances, because he will never be welcome in Sheffield or South Yorkshire again.
Danny Alexander: I would say two things to the right hon. Gentleman. If he looks at the programmes in the Department for Business, Innovation and Skills, he will see that a number of grants to industry have been approved, having been judged on the tests of value for money and affordability. Also, as the Government make progress over the next few months and years, he will see that protecting areas that are particularly dependent on the public sector and that have been disproportionately affected will be a key priority for us.
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