HC Deb 20 July 2000 vol 354 cc608-41
Mr. Deputy Speaker (Sir Alan Haselhurst)

I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts:

4.54 pm
Mr. David Ruffley (Bury St. Edmunds)

Before I begin my remarks on public expenditure, I would very much like to endorse the comments from Members on both sides of the House celebrating—that is the right word—the magnificent speech from the hon. Member for Tottenham (Mr. Lammy). It was eloquent; it had charm, style and grace; it was intensely moving. Given the hon. Gentleman's great skill and charm, I trust that he will pursue his remarks on the disconnection from the political process of younger people in this country. I am sure that he will have a valuable contribution to make in that and many other areas.

This week's spending review document should have had a subtitle—"Return to Labour tax and spend". We have seen a set of propositions from the Labour Chancellor which invited us to believe several things. These were very much the kind of propositions that old Labour invited the British public to believe. "We can have high levels of spending and the tax burden does not have to go up to finance that". "We can have high levels of public spending but ordinary hard-working families will not have to pay more tax to finance that". "We can have high levels of public spending and big Labour spending figures that are credible, believable and deliverable and will automatically result in better frontline services".

Those are ridiculous propositions now and they were ridiculous 20 years ago. All Conservative Members know that there is no such thing as a free Labour spending splurge. Someone has to pay for it. Who pays for it? Let us refer to those who must pay rates of interest. In the coming financial year, we will see real terms growth in spending of about 6.7 per cent. That means that about 40 per cent. of the British economy will be growing at nearly 7 per cent.

As Goldman Sachs observed today, it is clear that that will crowd out private sector economic activity. Those who are assiduous enough will have read the minutes of the Monetary Policy Committee at its last meeting, at which it was observed that this spending splurge could lead to inflationary pressures unless the private sector slows down. If it does not slow down, the MPC has made it perfectly clear that there will be upward pressure on interest rates. If there is upward pressure on interest rates, mortgage payers and manufacturing exporters will suffer. These things are not spoken about by Labour Members because they are a cost—there is a cost attached to this spending.

In response to a question on whether there is any room for reducing tax under these fiscal projections, the National Institute for Economic and Social Research and the Institute for Fiscal Studies have observed today that there is not. There is no prospect of money being returned to the British people who have had their pockets picked for three years by the Chancellor and the Labour Government. There is no prospect in the three years of CSR2 of any return of their money through even modest tax reductions.

We do not have to talk about future tax increases from today. We only have to look at the way in which the typical hard-working family has paid more tax over the past three years. As the House of Commons Library has shown, the average family will be paying about £670 a year extra tax. That is made up of council tax, which is rising at nearly four times the rate of inflation; personal pension contributions, which will have to rise by more than £200 a year on average to pay for the £5 billion a year raid by the Chancellor in his first Budget in 1997; over £200 following the loss of married couples allowance; and £200 a year following the loss of mortgage interest relief. The list goes on, making a grand total of nearly £700. Therefore, the people have been paying already for spending, but they also know that that spending has not resulted in better public services. They have been taxed more, but less has been delivered.

I should like to say something about that canard—the £16 billion, a figure that the Labour party will try, I believe unsuccessfully, to lodge in the public mind as being a Tory "cut". Let me explain why that is a fantasy fiscal figure. It is bogus because the £43 billion extra that the Labour party suggests it will spend at the end of four years from now is obviously not going to be delivered. That is the view of many outside commentators, my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke) and my right hon. Friend the Member for Kensington and Chelsea (Mr. Portillo). They agree, as we all do on the Conservative Benches, that those are figures four years out. Plenty of things can happen before then.

I am always reminded on these occasions, when I look at Labour fiscal numbers and the preposterous distortions of the truth that they try to foist on the British public in relation to our policy, that a lie is halfway around the world before the truth has got its shoes on. That will not be the case with the bogus £16 billion figure. One cannot have cuts of £16 billion if one does not know what the actual spend will be. I do not believe that £43 billion is what, in practice, will be delivered.

Dr. Ladyman

May I remind the hon. Gentleman that a Conservative party briefing paper identified the £16 billion?

Mr. Ruffley

It is not a document that I have seen. I understand from hon. Friends that it has been, as usual—no surprises there—completely distorted by the Labour party, but the £16 billion is a canard that is being thrown around and debated, not with much success, by the Labour party. I have explained why it is a bogus figure. Those cuts do not materialise because the money that the Government say that they will spend has not materialised. I do not know how much will be delivered, but we know one thing: it will not be spent wisely or well.

We know that because the Labour party and those on the Treasury Bench have been in a bit of a mess about the whole idea of comprehensive spending reviews. First, it said that they would have a three-year planning horizon. I am afraid that we had only two years of CSR1, announced in July 1998, because its third year has now become the first year of CSR2—that is to say, 2001–02.

It gets even worse. Last year, emergency cheques were doled out busting the limits that the Government had said that they were setting. The idea that we have a prudent Chancellor who has a three-year time horizon has been exploded. It is a myth. It is simply not true.

Then we have that work of fiction: the publication of the public service agreements. That was a bit of a laugh. The Government started out with several hundred targets and said that they would measure them over the lifetime of the Parliament, so that the public and the public services could see how that extra money was being spent. They have had to slash the number of targets, many of which were inappropriate. We do not have a basis on which to measure what was happening at the start of the Parliament with what is happening at the end of it because they have changed the basis of the PSAs. Muddle and confusion abound.

We were told that the allocations set out in the document for CSR2 were going to be informed by the results of the PSAs in CSR1. In other words, they would see how that money was spent and whether Departments hit targets—if they did not, sanctions would have to be taken and the allocations would be tied to performance. We all know that the numbers announced in the document bear no relation whatever to the PSA targets and whether they have been met in the past two years. Everyone in Whitehall knows it.

Mr. Timms

It was always the intention that the first year of the new spending review and the last year of the previous spending review would overlap. That was the intention set out at the beginning of the spending review process. The CSR targets relate to the full three years, which finish at the end of the 2002 year.

Mr. Ruffley

I am afraid that the Minister has not explained why there were so many PSA targets, which were inappropriate, ludicrous and had to be scrapped. We now have no basis on which to measure performance over the Parliament. That is something that no Minister has sought to deny. I notice that he did not seek to deny it in his intervention.

Mr. Timms

I am happy to deny it. As I have said, the targets apply to the full three-year period of the CSR. At the end of that time, the hon. Gentleman will be able to see what has been achieved.

Mr. Ruffley

What the Minister omits to mention is the targets at the beginning of the PSA process and the targets now are different because the targets are being slimmed down and changed. He cannot seriously be seeking to deny that. If he does, I suggest that he speaks to the Chief Secretary, who will put him right on that basic fact.

We were told by the Chancellor this week in his statement on that new money, which may or may not materialise: At every stage, money will be tied to output and to performance.—[Official Report, 18 July 2000; Vol. 354, c. 220.] Perhaps the Government can make it clear whether a poorly performing public service will receive a cut by way of a sanction if it does not meet targets, or whether its failure will be rewarded by more money. There is confusion at the heart of the public spending philosophy of the Treasury. That is yet another question that has not been answered in the Chamber, much less in the Select Committee on the Treasury, on which I sit. We had an inquiry into PSAs. Answer came there none.

I draw the House's attention to the way in which the non-delivery of the Government, their hike in taxes and failure to deliver front-line services adequately have affected my rural constituents in the towns of Stowmarket and Bury St. Edmunds. We have seen a decline in police numbers. In 1996–97, the last year of the previous Government, there were 1,185 policemen in the Suffolk constabulary. This year, there are 1,165. Suffolk health authority has received the joint worst health spending increase. I have gone to the Secretary of State for Health to raise that matter. There was no real adequate explanation.

We have seen across first, middle and upper schools an increase in class sizes. Only the other day a written answer provided me with the information that for middle schools in Suffolk, the average class size is 23.8 compared with 23.7 two years ago and that for upper and secondary schools the average class size is 21.2 compared with 20.8 in 1998. These are facts which are not lost upon my rural constituents.

We also realise that we are getting a raw deal on the A14. According to a written answer this week the number of fatalities on that treacherous stretch at Haughley bends has doubled within 2 years. We urgently need expensive, safety work. We need the Highways Agency to commit resources so that there are not more deaths, but all we get are warm words.

We must look carefully at this spending round to ensure that rural areas are not overlooked as they have been so tragically and, in my view, grotesquely in the first three years of this Parliament. That offence is worsened by the way in which the Government invite us to believe things that simply are not true. They say that taxes have not increased; they have. They say that services are getting better; they are not.

For those reasons I must profess my profound scepticism about this document. We in the Opposition make it clear that whatever additional resources may or may not be available in the next two years—a three year horizon in the comprehensive spending review—when we are in government we will spend them more wisely and better, and we shall get more money to the frontline of our vital public services.

5.10 pm
Mr. David Crausby (Bolton, North-East)

First, I echo the congratulations that have been heaped on my hon. Friend the Member for Tottenham (Mr. Lammy) for his maiden speech. He will no doubt be here for many years and I trust that he will maintain his humility and hang on to his sense of gratitude to the people who sent him here.

I am grateful for the opportunity briefly to contribute to this debate on public expenditure. It allows me the opportunity to comment on the widespread welcome that my constituents will afford to the radical increase in public investment which the Chancellor announced in his statement on Tuesday. I warmly welcome his conclusions because his comprehensive spending review sets out a wise and responsible direction for the Government to go in—a direction that will deliver the Government's long-term aspirations of a strong, healthy economy, efficient, comprehensive public services and, most important of all, social justice for all our citizens.

The ability to deliver all that while providing stable economic growth coupled with low inflation and the promotion of a dynamic, growing economy which employs our people in ever increasing numbers and prosperity is a remarkable tribute to the Chancellor's handling of the economy. The public investment proposed will be a real boost for Bolton and, indeed, for the rest of the country. It sets us on the road to delivering the social justice that we have always stood for. Wise and prudent public spending is what responsible, democratic government should be all about.

The Chancellor's proposals are essential for Britain. Our country has so much to offer and so much wealth, yet we still have far too many pockets of poverty and deprivation. So much still needs to be done in health, education, transport and, above all, in the reduction of crime, along with the apprehension and prosecution of criminals.

The proposals are especially important to my constituency, where there is a particular demand for all these areas of public service. However, there is an exceptional obligation on us when it comes to the provision of health care. The recent performance indicators, for example, released by the Department of Health last week, demonstrated a massive north-south divide in health care and confirmed that Bolton was one of the worst places for heart attacks. The Bolton hospital trust comes bottom in a table of 56 similar hospitals, with 20 per cent. of those who are admitted with a heart attack between the ages of 35 and 74 dying within 30 days. That is unacceptable for a modern health service. When we enact the Chancellor's promise of 6.1 per cent. growth above inflation in health funding over the next five years, I expect that we will also take the opportunity to equalise the provision of health care across the nation.

One of the consequences of Bolton's getting such a poor financial deal is that many of my constituents who suffer from kidney disease are forced to travel to Hope hospital in Salford for dialysis treatment. Only today, I heard from a constituent who has to wait 60 days for cataract treatment. That will all be helped by the decision to build a new surgical theatre for eye operations in Bolton. However, it is simply wrong that such an essential and basic provision should not already exist in Bolton.

The additional resources made available this week will, I hope, rectify the inequalities in health care between the regions. We will, at long last, have a health service that will be the envy of the world again.

The acid test of any Government's commitment to the NHS is their willingness to deliver the necessary resources. Almost everyone accepts that increased spending on the nation's health service is essential. So how can the shadow Chancellor argue that the rate of spending in Britain should increase by 2 per cent. and not 3.3 per cent. without accepting that the consequences will mean a £16 billion reduction in his spending plans? That view is not simply taken from a Conservative document—we heard it said on television. Where will the right hon. Gentleman find his £16 billion without devastating health and education?

New developments and increased public aspirations will, in any event, continuously increase the demand for health care. Perhaps we will never be able to meet those demands entirely, but to argue for cuts in public expenditure when it impacts on life and death is callous and irresponsible.

I enthusiastically support the review. It has been long awaited, and it is not before time. Such a truly comprehensive review is welcome, and clearly demonstrates the difference between a Labour Government and a possible Conservative Government. That is how it should be. The voters are entitled to be offered distinct political choices at elections.

This week's events have provided such a choice. They demonstrate clearly that if constituents believe in public services efficiently delivered within a strong economy, they should choose Labour whenever they have the opportunity. If, alternatively, they believe in increasing privatisation of the national health service, encouraging non-public sector education for their children and leaving public transport to the rigours of the free market so as to cut taxes for the wealthy, they should, of course, support the Conservatives. If they do not know what they believe but desperately want the best of both worlds, they are perfectly entitled to vote Liberal Democrat. However people choose to vote in the end, they were given a choice on Tuesday, and I welcome that.

I am convinced that the tough decisions that the Government have taken during their first three years in office have equipped us with a stable platform on which we can build. This week's comprehensive spending review will enable us to create a Britain that will not only be fit for the future but fit for its people. It has my committed support, and I commend it to the House.

5.18 pm
Mr. Tim Collins (Westmorland and Lonsdale)

Let me begin by adding to what has quite rightly been a chorus of approval for the excellent maiden speech of the hon. Member for Tottenham (Mr. Lammy). I apologise to him and to you, Mr. Deputy Speaker, for the fact that an urgent constituency matter meant that I had to watch the hon. Gentleman's speech on a monitor rather than seeing it from within the Chamber. However, I heard enough of his speech to realise that all the subsequent comments made by right hon. and hon. Members on both sides of the House about its excellence and quality and the very high calibre of contributions that we must now regularly expect from the hon. Gentleman were perfectly right and well judged.

I think that the hon. Gentleman will be an ornament to the House and that he will do himself, his party and Parliament a great deal of credit in the years to come.

On Tuesday, the Chancellor of the Exchequer announced an extra £43 billion of public expenditure, and said that it would transform the nature of public services. I suspect that I was not alone in having an overwhelming sense of déjà. It is only two years since the Chancellor of the Exchequer announced an extra £40 billion of public expenditure and told us that that would transform public services and dramatically change the nature of health and education provision. The Government would like the public to believe that, this time, the £43 billion is real and that, of course, the £40 billion from the previous review was the product of some double and triple counting of which they are a little ashamed. The problem for the Government—on this as on so many other fronts—is that their credibility has been comprehensively demolished by their successive experiments in the world of spin and by the way in which all their actions have been exaggerated; figures have been counted twice or three times, or openly fiddled.

It normally takes us a few weeks to get a grip on the sheer scale of the tortuous process through which this Chancellor arrives at the figures, but it is already clear, 48 hours after his statement, that several of the figures that he announced were—to put it at the mildest—a little controversial. For example, the Chancellor announced with great glee that there would be a substantial percentage increase in the expenditure of the Ministry of Agriculture, Fisheries and Food. However, it turns out that that is possible only because, in the first year, the Chancellor had recalculated the baseline by taking out about 20 per cent. that had previously been included.

The Chancellor undertook a similar exercise in respect of Scottish spending. My hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) made a similar point on defence expenditure. Indeed, he could have gone further; assumptions on defence spending are based on the expectation of asset sales, including the dubious process whereby the Government propose to privatise the Defence Evaluation and Research Agency. Those assumptions are rather difficult to believe.

The problems with the Government's spending plans do not simply reside in the fact that the public have grown used to disbelieving any figure produced by the Chancellor or the Prime Minister. If the Government seriously intend to initiate such a substantial increase in public expenditure, there could be grave macro-economic consequences. Two days ago, the City editor of the Evening Standard noted that the Chancellor had set in train a process that was likely to lead to a recession. He pointed out that, based on the Chancellor's public spending plans, we should be lucky to avoid a recession.

I do not know whether that prediction is correct, but I do know that the 12 unbroken years of economic growth that the Chancellor assumes will continue until the end of the CSR2 period hardly ever occurred in the UK throughout the whole of the previous century. His assumptions are extremely optimistic. It will be interesting to see whether the Treasury Minister who winds up the debate can guarantee that the Government's spending plans will be met in all economic circumstances.

I suspect that Treasury Ministers will not be prepared to give that guarantee. It is thus clear that the total figure of £43 billion will be, at best, hypothetical by the end of the planning period. That figure is conditional and no one should base any real expectations or hopes on it. I fear that many vulnerable people and deserving causes throughout the land have been cruelly deceived into believing that their fortunes will dramatically improve, whereas in fact, much of that public expenditure is not guaranteed.

The hon. Member for Edinburgh, North and Leith (Mr. Chisholm) made an interesting point. He said that the review was a politically significant moment; he believed that we had come to the end of two decades during which high public expenditure was regarded as politically unpopular. He hoped that we were entering a period when, for as far ahead as we could foresee, the state would consume more than 40 per cent. of the nation's wealth every year.

That is indeed a politically significant moment—in part, for the reasons given by the hon. Gentleman. Indeed, the Secretary of State for International Development was widely reported in today's newspapers as saying that the new bit of new Labour had fallen off. She said: The bit that's going wrong is the "new" bit.

The essence of the new bit was that we were led to believe that the governing party did not believe in high levels of public expenditure for their own sake any more—that they were converted to the view that outputs matter more than inputs, that they did not believe in tax and spend for the sake of it, and that they had moved away from the old-style socialist singalong beliefs in the bigger state, bigger government, bigger spend and bigger tax.

It turns out that that is simply not true. It turns out that old attitudes are reasserting themselves, and after two or three years of the present Government, when they have come under sustained criticism because they have failed on so many fronts, they are going back to their old instincts—their old belief, "If in trouble, spend and tax your way out of it". But in fact, the history of every Labour Government has been that when they did let rip in spending and taxing, it has not been the solution to their problems but has resulted in the termination of their public support and their ejection from office.

This is therefore a truly significant political moment. It is the moment when the old division lines between the parties—between a Conservative party that believes that one can grow public services within a growing economy but that one can do so best, indeed only, by reducing taxes and allowing people to keep more of what they own, and a Labour Government who believe in spending more and taxing more for the sake of it—are becoming very much clearer.

I was intrigued by several of the announcements that we have had since the Chancellor's statement, and by their implications for the quality of the public services on which my constituents can expect to rely in future. My constituents have become very sceptical about what this Government's announcements mean in practice. Two years ago, they heard the announcements of the extra expenditure for health and education. Since then, they have found that their waiting times have actually lengthened.

There are now 11 people in the Morecambe Bay health authority area who have been waiting for more than a year for a heart bypass operation. That is a vital, lifesaving operation, and people in my constituency and the surrounding area are waiting more than a year for it.

My constituents were told that the Government believed in high quality transport, yet one of their very first acts was to cancel the desperately needed A590 bypass project at High and Low Newton. Even though the project had funding and planning permission and was ready to roll at the time of the last general election, it was axed in its entirety. This afternoon, the Deputy Prime Minister made a speech in which he said that there would be 100 bypasses, but he then made it clear that he would not tell anyone what they were, where they were or when they would happen; so that seems to be another example of spin for the sake of spin.

We have heard repeated reannouncements of the same thing. Very often, the Government have claimed credit for things so old that they had nothing whatever to do with this Government. They have repeatedly reannounced the upgrading of the west coast main line—which is to happen thanks to Railtrack and Virgin Trains—started under the previous Government. They claim credit for the Jubilee line extension in London, a project that was wholly pushed through under the previous Government.

The Prime Minister regularly claims credit—indeed, he did so in his famous leaked memo—for the introduction of a policy of "three strikes and you're out" for burglars. Not only was that policy brought in under the previous Government, but the legislation was passed in 1996 and not implemented by the present Government in their first two years in office; and yet the Prime Minister expects the nation to be grateful to them for implementing it.

The problem that the country faces with any of the Government's public expenditure plans is that time and again we read wonderful headlines and there is a great attempt at spin, but very little actually happens on the ground that people have the chance to see in their local area.

The hon. Member for Edinburgh, North and Leith said something else that was very interesting. He claimed that these public spending plans were unique in British history because they were delivered without higher taxes. We have seen very dramatically higher taxes underlying the present Government's spending plans. There has been a 44 per cent. increase in the petrol price paid by many of my constituents, who have absolutely no choice but to use their car, for whom it is not a luxury item but a necessity.

Mr. Vernon Coaker (Gedling)

What are you doing about it?

Mr. Collins

I voted against the tax increase on petrol. I suspect that the hon. Gentleman voted for the tax increase on petrol, and therefore that he will be paying the political price for that, come the next general election.

My constituents and those of many other hon. Members on both sides of the House are paying higher taxes because of the abolition of the married couples allowance, because of the abolition of mortgage interest tax relief, and, as my hon. Friend the Member for Bury St. Edmunds (Mr. Ruffley) pointed out in his superb speech, because of the extra taxes on pensions. We have seen taxes going through the roof, but consistently, whether in south lakeland or throughout the country, we have seen no improvement in services. If the Government expect that this time people will believe that there is £43 billion of spending, let me tell them that people might have believed them the first time when they announced spending of £40 billion, but they will not be fooled by the same bit of spin spun twice by the same unreliable spin merchants.

5.30 pm
Mrs. Janet Dean (Burton)

First, I add my congratulations to my hon. Friend the Member for Tottenham (Mr. Lammy) on his maiden speech, which we all recognised was extremely moving. I am sure that he will have a long and distinguished career in the House.

I am pleased to have the opportunity to take part in the debate. This week's announcement of the increase in funding for our basic services is widely welcomed. We have already seen increased Government spending beginning to turn round the decline in services that we saw under the Conservative Government.

We have been accused of spin, as if the extra funding is not real. I can say that it is real. When I talk to head teachers in my constituency, I hear of the improvements that are taking place in our schools. When I talk to constituents, I know that they welcome improved public transport in rural areas and the extra money for our health service.

I served as a county councillor for 16 years, and I witnessed the rise in class sizes year on year. In the early 1980s, children were being taught in classes of fewer than 30 pupils. However, by the time that the Conservatives left office, many class sizes were approaching 40. We have kept our election pledge and we are well on the way to seeing all class sizes for five, six and seven-year-olds below 30. The extra funding announced this week will help to tackle the problem of larger class sizes for older children.

I welcome the extra direct funding to our schools announced by my right hon. Friend the Chancellor of the Exchequer. That is not because I want to see the work of local education authorities undermined, as the Opposition would advocate. Direct funding will help to reduce the gap between authorities like Staffordshire and those which have traditionally been funded at a higher level. It is a great pity that in areas like Staffordshire, the value of the extra Government expenditure on education has not always been appreciated.

The emphasis in the media has been on the disparity between Staffordshire's standard spending assessment and that of other counties. It is important that we address the problem by making changes to the funding formula as soon as possible. I make that plea again.

Perhaps we should spin a little more and get the message over that our schools funding is improving, and that our schools are feeling the benefit of the increased spending, both revenue and capital. On a recent visit to Ryecroft middle school in Rocester in my constituency, I heard from the head teacher of the improvements that have taken place. These included complete roof replacement with new deal funding, a new double mobile classroom from basic needs capital funding, electrical work as a result of the new deal and the refurbishment soon of all cloakrooms, again from new deal money. In addition, the school recently received an extra £30,000 from my right hon. Friend the Chancellor. That will boost the resources that are available to provide a good education for the children in the school.

When I spoke to the head teacher of a junior school in Burton, I heard that the £9,000 direct cash payment this year had enabled the school to retain a teacher who would otherwise have been displaced because of falling rolls.

For years, when I was a member of the county council, we were not able to maintain the fabric of school buildings. We knew that we should be doing more, but we did not have the money. Many capital projects seemed dreams for the future. We knew that we were not spending enough to maintain our building stock. There are now building projects and improvements at many schools in my constituency.

I was talking to one of my former county colleagues recently. I heard how it has taken quite a change of culture to realise that money can be spent and jobs can be done which previously we could only dream of doing.

I look forward to seeing the effect on our schools of the further extra funding that was announced this week. However, it is not only in education that we are beginning to see the benefits of the increased public spending under Labour. Last week, I had a phone call in my Burton office from a lady who had just returned from taking a relative to the accident and emergency unit at Queen's hospital in Burton, and who had been very impressed by the way that it looked and the work that had been done on the reception. Her relative had commented on the kindness of the treatment, and they were both surprised that she had been treated quite quickly. That lady praised the Labour Government and recognised that we are having to clear up the mess left by the Tories.

It was good to hear that the money provided by the Government to refurbish the accident and emergency unit at Queen's hospital is appreciated. It is also good to know that people recognise that, even with unprecedented increased spending on health, we cannot put right the problems of the health service overnight. It takes time to train doctors and nurses, but we are getting waiting lists down. At Queen's hospital, a special team has been set up to ensure that targets are met and I was delighted to visit the hospital, along with the Under-Secretary of State for Health, my hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart), to thank staff for their hard work.

We have much to do to bring the national health service up to the standard that Labour Members want. We need to reduce waiting lists further and we need to reduce waiting times. I welcome the commitment shown by my right hon. Friend the Chancellor, which has meant that my health authority, South Staffordshire, has received a total increase in its allocation for the current year of 8.7 per cent., giving it a real-terms increase of 6 per cent.

I hope that, as with education standard spending assessments, the Government will continue to review the formula for health spending, which puts South Staffordshire health authority low down in the funding league. It is also important that the anomaly within the health authority, which means that my constituency is poorly funded compared with the rest of the authority, is also addressed.

I want to express my appreciation at the announcement of increased funding for law and order. Staffordshire police had to make cuts in the number of officers last year, because of continued restraints on the budget while the Government were maintaining Conservative spending plans and reducing the burden of national debt. However, I am pleased that Staffordshire will be able to recruit 83 more officers over the next two years from the 5,000 extra that were announced some time ago. Like my hon. Friend the Member for High Peak (Mr. Levitt), I am even more pleased that a further 4,000 extra—in addition to the original 5,000—have been announced and that there will be even more recruits in Staffordshire. I certainly hope that Staffordshire receives a fair share of that funding.

Today's announcement on transport spending was equally welcome. It will bring improved finance to all forms of transport. The extra money that has been provided for road maintenance will continue to help to address the deterioration of our highway infrastructure. I have no doubt that, when repairs hold up traffic, it will cause frustration to motorists; I am sure that we shall receive complaints about that. However, it is vital that we start to catch up on the road maintenance backlog caused by years of underspend by the previous Government.

I remember well the frustration that we felt when I was a member of Staffordshire county council and the vice-chair of highways because we were not able to maintain our road network, just as we were not able to maintain our building stock. We could see the deterioration in the roads year on year, and it was a particular problem in Staffordshire because the county is at the hub of the country's traffic movements.

The Government's increased spending on rural public transport has enabled new services to be provided. The 1986 deregulation of public transport brought with it a loss of services to rural areas, and I welcome the increase in evening services and the greater access to villages that the new money has already brought. Of course, in rural areas, it is not possible to make provision for all transport needs by public transport, but it is right that those without transport should be given greater freedom and that those who seek alternatives to the car should be able to access such services wherever possible.

The extra £800,000 a year which has already been made available to Staffordshire for rural transport has brought new services. One can now even travel from the town of Uttoxeter to other parts of the county on Sunday morning, which has not been possible for more than 25 years. I know that the increase in the annual allocation from £60 million to £95 million will bring even greater improvements.

My constituency includes the town of Burton-upon-Trent whose problems, in some ways, are similar to those of many inner cities. The inner wards are deprived, but are benefiting from the new deal and we are getting young people back into work. I am very pleased that Burton has been accepted as an area that can bid for a sure start scheme which, again, is good news for the Government. As my constituency is semi-rural, I know well the problems faced by the agricultural community, including the legacy of BSE and, in the northern area of my constituency, cattle testing positive for TB, which is a great concern to many other constituencies.

Great changes are needed in the industry, and I welcome the increase in the agricultural budget announced by the Chancellor. I know that my constituents will welcome warmly the public spending announcements this week, and I believe that we can now see that the Chancellor's prudence has enabled money to be made available to improve our public services and address the underspending that we inherited. The difference between Labour plans and Conservative policies is now plain for all to see. The Conservatives would cut public expenditure by £16 billion and would have a two-tier health service, but then they voted against the NHS when it was formed.

I welcome the additional investment in our services, which is vital to ensure that those services are there when people need them and is fundamental in ensuring a civilised and fair society.

5.42 pm
Mr. Andrew Tyrie (Chichester)

First, may I congratulate the hon. Member for Tottenham (Mr. Lammy) on his maiden speech. I am sorry that he is not here at the moment, although I quite understand, as he is probably having a well earned cup of tea. He delivered an outstanding maiden speech, one of the best that I have heard since I came to the House, although that was not very long ago. Nevertheless, I have heard quite a few maiden speeches.

I was very interested in and sympathetic to what the hon. Gentleman said about the need for representation of his highly multicultural constituency. He also spoke about the declining interest in politics in his area. I hope that he is wrong, but it is a matter to which we should all pay careful attention. I trust that, as a House, we can all do something about the decline in interest in political activity—if, indeed, that is what is going on.

My hon. Friend the Member for Westmorland and Lonsdale (Mr. Collins) also gave an outstanding speech, and made many crucial political points. I shall not go over that ground again, but his two key points were that, year after year, we have been spun a yarn about the level of public spending. Huge announcements are made, but we do not know exactly how much is really being spent. At the same time, taxation has been steadily increasing, despite the fact that we were told that it was not. The plain fact is that taxes are going up.

Part of that spinning is reflected in poor Government documentation. We may still have a strong economy, but we already have banana republic-style Government documents to back it up. Last week, the Government's annual report announced the completion of a sports academy that has never even been started. Now we have the spending review document. If, for example, one looks up the Ministry of Defence in the index, one is told to turn to page 59. However, when one does so, one finds the Home Office section instead. One might then have a go at finding the Home Office from the index. One is told to look at page 51, but one will find something completely different there—the Department of Health.

Lest we be in any doubt about what the document is about, we might look at the spine. The cover says that the document is about spending, but the spine says that it is another Budget. I really think that something should be done to sharpen up the Government's publications, which are a symptom of a wider phenomenon. I had a small hand in trying to write to Red Books some years ago, but this Red Book, like its predecessor, is completely incomprehensible to me. Even to cognoscenti of Red Books—perhaps I could classify myself as one such—much of it is gibberish. Nobody could possibly work out from this document what is going on in the economy; it is a scandal and a disgrace.

All the beacons and milestones that have been used in the past to try to assess what is happening in the economy have been removed, and a load of new definitions have been brought in which are extremely difficult to disentangle and understand, even for experts in the City. That was a plea for better documentation. This document cost a lot of money; I wonder how many will be pulped.

Caroline Flint

How many copies of "The Common Sense Revolution" have been pulped this week?

Mr. Tyrie

I do not have that number at my fingertips.

Mr. Loughton

The spending review document costs £32.

Mr. Tyrie

My hon. Friend says that this excellent publication costs £32, and I should not think that W. H. Smith sells many documents that badly edited.

I want to address three relatively serious questions, and although I do not want to upset my hon. Friends, I think that my questions will not be too party political and controversial.

Mr. Andrew Love (Edmonton)

In that case, the hon. Gentleman has not made a very good start.

Mr. Tyrie

That is a good point. Most sedentary comments are made by people who are too afraid to stand up and make them, but that one sounds reasonable.

I want to ask three questions, and then have a go at answering them. First, is this increase in public expenditure sustainable? Secondly, will the money be well spent? Thirdly, will the spending increase have other consequences for the economy?

Outwardly, the position on sustainability looks good. Debt repayment is taking place, which must be good news. Debt repayment was 1.6 per cent. of GDP over the past two years. We cannot know about the delivery of projections, but let us consider what is happening now. The debt repayment makes fiscal policy look tight, but I remind the House that in the 1980s debt repayment was a little higher, at 1.7 per cent. of GDP. I seem to remember that there was a bit of asset price inflation then, and we have that again in the economy at the moment. There is rather less of it, but the same storm signals can be seen. I was in the Treasury in the late 1980s, and in retrospect it is clear that fiscal policy was too loose and we should have been repaying more debt. I ask the House whether we should be repaying more debt now.

Hon. Members may ask how a country repaying debt could suddenly have its fiscal so policy shaken out of kilter. The answer, which the Government do not like to talk about, is economic cycles, and in particular, the change in their nature in recent decades. The length of cycles is growing, and the gap between troughs is widening. We used to have three or five-year cycles; now it seems that we have cycles that last a decade or more. It appears that we are now eight years into the upswing of this cycle, which has lasted almost as long as the previous cycle, which had a nine-year upswing.

We are likely to see greater levels of volatility in the future. There are many reasons for that. I shall not go into those now, but one reason why that volatility has been concealed recently is the introduction of new technology, which has created uniquely benign, non-inflationary economic circumstances. I do not know whether that will last. Frankly, I think that it must be a one-off shift, and that when it unwinds we will find ourselves with an economy that is precariously close to a resumption of inflationary pressure.

The Government's rhetoric is that they have abolished the business cycle and brought an end to boom and bust. I do not usually make predictions, because that is a dangerous game, but I will make one: I can guarantee that after this boom there will be a bust; after this recovery, there will be a boom phase and a recession. I guarantee that. I hope that that is firmly recorded in Hansard. It has always happened in history, and it will happen again.

Mr. Love

Will the hon. Gentleman give way?

Mr. Tyrie

If the hon. Gentleman will forgive me, I want to make progress. If I succeed, I shall let him in later.

How deep will the downturn be? I do not know, but the arithmetic could turn nasty very quickly, much faster than in previous downturns, except perhaps the last one. There are good reasons for that. The main one is that in a deregulated economy, and in an economy with a much higher private sector share of GDP than in earlier periods of the post-war era, tax revenues collapse much more severely, and public expenditure commitments increase much more sharply, the latter because such a high proportion of public spending is non-discretionary—much higher than it was in the 1950s and 1960s. My guess is that the arithmetic is quite vulnerable to a downturn.

The second question that I posed was whether the money was being well spent. It was a big mistake to announce huge increases in spending in so many areas, without having drawn up clear plans for using the money more effectively. Let us examine what is going on in health. Huge increases in health spending have been announced, without plans to introduce better management in the health service.

The last time there were such huge increases, they were Conservative increases of almost identical size, although only for two years rather than the five years to which the Government are committed, on a scale of 5 or 6 per cent. in real terms per annum. However, that was accompanied by the introduction of the internal market. Many hon. Members may not like the internal market, but the evidence published every year by the Department of Health is overwhelming that the introduction of the internal market increased efficiency in the health service overall, even though many health service workers did not like it.

I fear that the Government have little idea how to go about restructuring the health service to get a bigger bang for their bucks. There are only two routes to greater efficiency in public sector spending. One is managerialism—that is, creating a shadow private management structure, which is what we did, to some degree—and indeed, the Government have attempted to do that in one or two areas. The other route is privatisation or contracting out.

There is no third way to improve the quality of management output in the public sector. There is a way that can be described as different, which is the statist route, which I fear may result from the introduction of tsars, diktats and attempts to manage from the top down. That method of management in major public sector institutions was tried in a host of economies in the post-war era, and was still being tried until recently in eastern Europe. It has been a disaster wherever it has been tried. It requires planning on a grand scale, and planning has always failed, wherever it has been tried.

I worry about whether the money will be well spent. [Interruption.] I am tempted to welcome the Treasury Whip, the hon. Member for Nottingham, North (Mr. Allen), to the Chamber.

The third question that I posed was what the long-term consequences of an increase in spending might be for the economy. The balance between the public and the private sector cannot simply be arbitrarily altered. When it is altered, there is a one-off frictional cost and, in the longer term, a larger public sector always risks crowding out private sector activity. In other words, there may be a price to be paid in economic growth forgone for increasing the size of the public sector.

The Government's response to that point is to claim that they are engaged in investment, not public spending. If they believe that we will get investment from the increase in public spending, they should back their rhetoric in the outer years by writing into the Red Book a higher figure for long-term growth. However, they do no such thing. In the Red Book, growth remains the same for the whole run of years. They do not believe their rhetoric; they do not believe that higher public sector investment will lead to better economic performance.

The only increase that the Government made—from 2.25 per cent. to 2.5 per cent. in the long-run growth rate—was written in last year. Clearly it can only be attributed to the changes that we made to the economy. The Government do not believe that their increase in spending will genuinely increase growth. They believe in their spending for other, perfectly laudable reasons. However, the rhetoric of investment is just rhetoric. It will provide no overall increase in economic return. Some aspects will show a net increase, but others will not. There will be a crowding-out effect, which will more than compensate for any such increases.

I have little time left, but I emphasise that there is a risk of the announcements being unsustainable. They are vulnerable to an economic downturn, and the increases may trigger lower growth; they certainly will not increase it. The growth assumption is a key point, and is precarious and vulnerable to fluctuations in the economic cycle.

I shall end with two brief points. First, in western economies everywhere, the scope for higher sustained public spending is less than it has ever been. The penalty for excessive borrowing is now more heavily policed by the markets, and taxes will become increasingly difficult to collect as tax bases become more footloose.

My second point is about the relationship between fiscal and monetary policy. [Interruption.] I have got the message about the time. If the Chancellor genuinely believed that we should become part of economic and monetary union, he could do that by repaying more debt, creating room for lower interest rates and therefore allowing the exchange rate to fall. He has not done that—

Mr. Deputy Speaker (Mr. Michael J. Martin)

Order. Now the hon. Gentleman has my message. Time is up.

5.57 pm
Caroline Flint (Don Valley)

I begin by declaring an interest as a member of the Denaby sure start board in my constituency. I am pleased to be called to speak in the debate today. I pay tribute to my hon. Friend the Member for Tottenham (Mr. Lammy), who spoke most eloquently about his constituency's needs. He represents a metropolitan and diverse seat, but when he spoke about his constituents' life chances and their right to aspire to fulfil their potential, his words reflected the message that I give my constituents. I represent a former mining constituency in South Yorkshire. Over years of Tory rule, the people there saw their life chances cruelly savaged and their means of working and surviving taken away.

Only under this Government are the people of South Yorkshire beginning to experience real evidence of hope for change. Communities were left with little employment; the opportunities for investment and excitement through creating jobs, training and opportunities are finally available on their doorstep. That is vital for my constituents.

Much has been made of the word spin recently. I have never heard so many Conservative Members in a spin and out of touch with the real world. I do not recognise some of the communities that they describe when I consider the amount of money that has been invested in schools in my area, in refurbishing housing through repairs and central heating and through providing inside toilets. Hundreds of homes in the Doncaster area had no inside toilets. The release of capital receipts has enabled us to make changes. Conservative Members may never have experienced or represented such a world. However, many of my hon. Friends and I represent such constituencies, and we want to change them for the better.

Conservative Members do not know whether they are guaranteeing more or pledging less; whether to call us reckless spenders or the bearers of empty promises; whether they would cut taxes or petrol duties. In The Sun yesterday, the Leader of the Opposition devoted many words to the way in which petrol prices affect those who own cars. However, despite all the points that he made in that column, he did not even imply that he was prepared to cut petrol duties. Anyone who drives a car, including me, should listen carefully to Conservative Members' weasel words: what they say is not necessarily what they will do. Indeed, they will not even say what they will do. They are caught between their leader in name and their leader in waiting, who are on opposite sides of a roundabout. They are not sure which way to face.

Mr. Tyrie

Will the hon. Lady give way?

Caroline Flint

I want to make progress, but I shall come back to the hon. Gentleman shortly.

Mr. Loughton

She will not.

Caroline Flint

Yes, I will.

The spending round is not about spin; it is about £43 billion. It is about the child in Denaby Main whose young mother has never had the opportunities enjoyed by Conservative Members. Some people have never had au pairs, private schooling or regular holidays. [Interruption.] The hon. Member for East Worthing and Shoreham (Mr. Loughton) sighs, but such people cannot buy their way out of the system into which they have been born and they depend on the public services that we provide for them. The spending round is about that child getting the opportunities that she deserves, a chance to fulfil her potential and a second or third chance to prosper at school rather than being written off in the Tories' opted-out, excluded, exam-failed world, which consigned many kids to woodwork, detention and an early exit from the school system.

Children may get a fair go at getting a decent life, thanks to the Government. That is nothing to do with spin or photo calls. Their health, education and very life chances will be transformed by the Government's investment in public services. That investment will provide a sure start in life—we will work on that with parents and agencies—as well as child care, early access to books, early education, regular health checks and the means to tackle the drugs and violence that exist in many communities. Investment will go to estates that can be modernised, to achieve policing that is close to the community and to raising a school's standards.

Our investment means that a child will be able to enter a school that spends £430 more per pupil than in 1997. That school may have a thriving after-school scheme thanks to the Government's investment in an early years partnership as well as the latest information technology equipment, literacy and numeracy hours and teachers who are motivated by the resources that we are putting into schools and into their pay packets. The spending round is about people creating services that provide the opportunity for security and a decent life; it is about changing people's lives for the better. Like many of my hon. Friends, I feel privileged that the policies that we make here change the lives of the people in the communities that we represent.

My constituents, including the pensioners, depend heavily on public services. Above all other groups, pensioners depend on our health service and our transport system. They also depend on us to fight crime. Their housing needs to be modernised. They, too, will benefit from this round of investment, which is also about the buses that link a necklace of villages to the heart of Doncaster. Those buses provide the link with Doncaster royal infirmary, which has a modernised accident and emergency unit and a ground-breaking breast cancer centre. The health service waiting list has been cut by a third since the general election.

Many of my constituents depend on their local authority to modernise the ageing homes that were left unattended due to stupid Treasury rules imposed under the Conservatives. The homes of hundreds of my constituents are getting new double glazing and new central heating and are being rewired thanks to Labour. [Interruption.] I am sorry if Conservative Members find that tedious, but they have never had to live in a cold, damp or badly heated house, running up unnecessarily costly bills. Thanks to the Government's investment in regeneration, fighting crime, youth offending schemes and bail projects, we are beginning to win the battle against those who make people's lives a misery.

Mr. Tyrie

I find all this stuff about us never having experienced cold homes a bit odious. I remember going to my grandmother's house during the miner's strike with a calor gas stove to heat up a brick to prevent her from getting hypothermia. That home did not have central heating, as I recall.

Caroline Flint

At that time, mining was in decline throughout Europe and it was unfortunate that then Prime Minister did not address the decline in coal and reinvest in South Yorkshire and other coal mining areas, as France did in the Ruhr valley. Instead, she engaged in a head to head with the industry and many innocent people and families were left desperate for many years.

Mr. Tyrie

Will the hon. Lady give way?

Caroline Flint

No, I will not.

Mr. Tyrie


Caroline Flint

No, I will not give way.

I am pleased that the Government are addressing the energy issues that face us in the 21st century. We finally have a Government who have put together a package to deal with the illnesses and diseases from which many of my constituents suffer and which nearly 20 years of Tory Government did nothing to address. I am glad that a Labour Government are dealing with that.

I represent a part of the country with the lowest disposable income in the UK. The area's gross domestic product is only three quarters of that of the average region in Europe. The previous Government refused to deal with that and did not support South Yorkshire's application for objective 1 status. This Government have done so, and we aim to ensure that those figures do not continue into the future. I hope that, with the additional funding that has been announced this week for the regional development agencies, Yorkshire Forward will make a real difference to the people of South Yorkshire. I know that the role of regional leadership places huge demands on Yorkshire Forward, but I want the agency to come out of its shell and ensure that it is worthy of the investment being made in it.

We should be reminded of the Tory Government's legacy. They thought that mass unemployment was inevitable. They destroyed long-standing jobs without creating new ones; they refused to back South Yorkshire for objective 1 funding; and they sought to drive women back into the home. The only growth under the Tory Government was that in violent crime. Their only gift was that of a holiday to those who burgled our homes and mugged people on the street, who never saw the inside of a court room, let alone a prison cell. The Conservative Government were out of touch. Their great offering to Don Valley was to close our major industries and offer us no hope.

Doncaster and Don Valley have hope for the future. Under the announcements made this week, we shall gain more than £80 million, which can be invested in local services, and £24 million in my constituency. All that would be under threat, should the Tories ever return to power.

I agree with the hon. Member for Chichester (Mr. Tyrie) in one respect: the Government must ensure that the money that they provide is spent wisely and that adequate checks are made to see that funding is used in the best way possible. We must ensure that the partnerships that we establish do not waste time in delivering the services that people want. Just as the Government provide three years' notice of funding, that should be copied at local level. In order to be sustainable, child care projects need the comfort of three years' funding if child care is to improve.

The Government are clearly providing a huge amount of resources in all sorts of areas that benefit the people whom I represent. However, we must tackle the issue of how that money is spent so that it benefits local people. In some areas, we must streamline the bureaucracy or look at how the Government offices work to see whether they are monitoring the situation. If necessary, we must remind local agencies of their duty to ensure that they spend their time not holding meetings and committees and carrying out administration, but ensuring that people see what the Government are providing and that the resources meet local people's needs.

Mr. William Cash (Stone)

Will the hon. Lady give way?

Caroline Flint

No, I shall not give way because I am conscious of the lack of time.

The course that we have charted is about a vision of sustainability for the future. It is about looking not just to the next general election, but to five or 10 years' time. In many areas, it will take time to build services that we can all be proud of. I can vouch for the fact that we have seen the benefits of the first three years of this Government. Until we have a general election, the money that has been announced will ensure that we can invest even further in the resources and services that my constituents so badly need.

6.9 pm

Sir Robert Smith (West Aberdeenshire and Kincardine)

I want to contribute briefly to the debate, further to the remarks made by the hon. Member for Edinburgh, North and Leith (Mr. Chisholm).

First, on behalf of the Liberal Democrats, I congratulate the hon. Member for Tottenham (Mr. Lammy) on his excellent maiden speech. He seemed to be able to bring his speech to a natural conclusion just when he was about to be called to order. He will look at Hansard tomorrow and see all the congratulations, but I assure him that this place is extremely tolerant and he does not always have to live up to the standard that he has set in his maiden speech.

I shall come back to the provocation of the hon. Member for Edinburgh, North and Leith, which made me take part in the debate.

The hon. Member for Chichester (Mr. Tyrie) gave an important warning that we should consider the wider economic situation, because we live in a far more inter-dependent economic world, where grand gestures from Governments are far less likely to go unpunished than they used to be. There is an interesting contradiction in some of the arguments put by Conservative Members. They first referred to previous announcements from the Chancellor when they had looked at the funny money figures and found that there was actually no new money, and then they referred to warnings from the Bank of England that Government spending will cause inflation. Either it is real money, which will cause inflation, or it is funny money, which will not.

It is important to recognise that we need a far more open way of examining the figures. The spending review document, with all its mistakes, does not inform the public about what is happening to their money and how it is being spent. We need a far better debate that informs the public. If we are to have investment in public services—which is what I believe people voted for at the last election when they saw what was happening to their schools and hospitals—we need an honest and open debate on how the public finances will achieve that.

In my constituency, we still need additional investment to pay for the teachers to do the teaching. Teachers have disappeared from schools, and specialist teachers need to come back and provide the previous level of service.

There is a problem with stop-go investment. The hon. Member for Sevenoaks (Mr. Fallon) talked about the problem faced by one of his constituents who was trying to get an MRI scan. We need professionals to run the scanners, but if we are not training enough professionals we will not have the people to employ even with the extra money. The lack of planning and foresight in the recruitment and training of new graduates is a serious strain on many of the professions in the health service. There will not be a miracle cure, and the public need to know that there is a long way to go to get the health service into a stable and effective format.

Sadly, the hon. Member for Edinburgh, North and Leith is no longer present. He referred to the three strands of Liberal Democrat thinking on the Barnett formula. For the record, I shall bring them together into one. At the passing of the Scotland Act 1998, the Liberal Democrats made it clear that we wanted a period of stability, and that we should build on the recommendation of the constitutional convention, which was that the Barnett formula should be the basis of funding in the new Scottish Parliament. We said that we would stand by that for 10 years. However, in the long run, we need fiscal responsibility to go with political devolution. Financial devolution requires us to review the way in which we fund the nations and regions of the United Kingdom, and to recognise the need to devolve financial responsibility. That does not remove the requirement for a needs assessment to ensure that the parts of the United Kingdom that are seriously challenged and face serious extra costs are not also affected by an equalisation formula.

The second point raised by the hon. Member for Edinburgh, North and Leith concerned the report on poverty produced by the Select Committee on Scottish Affairs. As a member of that Committee, I am glad that some hon. Members have already read it since it was published yesterday. I look forward to the Government's response to its recommendations.

While recognising the importance of the working families tax credit in tackling poverty, I am concerned that in the long run employers may see it as an employment subsidy. If people get the working families tax credit, why should employers increase their wages when they know that the state will make up their take-home pay? What is the Treasury doing to monitor the impact of the working families tax credit on wage levels? Does it have any contingency plans if an effect is spotted?

6.14 pm
Mr. Mark Todd (South Derbyshire)

I am sorry to have missed the maiden speech by my hon. Friend the Member for Tottenham (Mr. Lammy), but I was taking part in a debate in Westminster Hall. I shall read his contribution in Hansard with interest. It was clearly not to be missed.

I welcome the benefits of public spending in my constituency in the past three years. The most noticeable impact has been on the quality of the built environment of schools that serve South Derbyshire. I recently attended with pride the laying of the foundation stone for a new, replacement infant school at Newhall funded by the new deal for schools. That programme is opposed by both Opposition parties, as it was funded by the windfall levy.

I first visited that school just before the 1992 general election. Then it was a collection of 20-year-old temporary units with ceilings held up by pit props. The outside toilets were temporary structures which smelt of urine. Sadly, the 1992 general election gave the people of South Derbyshire no hope for change and we had another five years of Tory Government in which little changed for that school. The temporary buildings were occasionally patched and repaired and the worst were replaced by slightly more modern temporary structures.

With the election of the new Labour Government hopes rose. After an initial disappointment in the first new deal round, a visit to the then Schools Minister, now the Secretary of State for Trade and Industry, by the head teacher, the chair of governors and myself prompted a successful bid which will provide a new school and an arts centre for the neighbouring William Allitt secondary school. It is but one of the projects awarded in my area. Altogether well over £6 million has been committed to school improvements in South Derbyshire since Labour was elected in 1997. That contrasts with the last year of the Tory Government, when slightly less than £100,000 was spent on schools in my area and we thought ourselves extremely lucky to achieve that. Therefore, it is clear why I hold great store by what the Government seek to do in public spending and have little regard for the criticisms and comments that we have heard thus far in this debate and debates earlier this week.

With that amount of money committed to new school buildings in South Derbyshire we can start to provide an environment to match the quality of teaching that is already offered to our children, and indeed to my own son.

I wish to make some broader comments on public spending, how we prioritise it and how we manage it. While we would mostly subscribe to the necessity of focusing resources on need, we must recognise three disciplines that should be followed. First, it is easy to confuse need with failure and to siphon scarce resources into areas where need indicators show deprivation, but where analysis shows poor strategy and badly managed delivery. I thus welcome the increased emphasis on performance targets and the greater concern shown for the better co-ordination, management and use of resources.

Secondly, our tools to identify need must be subtle. I represent a constituency with relatively low needs indicators overall, but with pockets of deprivation. Thus it seldom attracts special programme support. We have no action zones, no sure start and no early excellence centres. Although my constituents understand the need to help areas of deprivation, they are frustrated by their inability to attract resources to provide additional services in the less prosperous areas of South Derbyshire such as parts of the Hartshorne ward.

Thirdly, we must always recognise that the raising of public money for public spending and its use involve an unspoken pact with citizens. While prioritising and targeting are a duty of Government, we must recognise that all citizens expect a basic level of support and service. We must be careful to strike a balance lest we damage that compact. There are many examples. Although one recognises the need to target resources to schools with exceptional costs and needs, wide variances in funding per pupil of well over 10 per cent. in the primary sector are hard to justify to local taxpayers. Likewise, it is hard to explain why Derbyshire should continue to have far fewer police officers per head of population than the average county. One might also draw out examples in our social security system where targeting negates the concept of mutual insurance—that we all pay collectively to cover risk and expect reasonable payment.

I am also concerned about how we manage public spending. We have learned that commitments to spend, particularly when private finance initiatives are involved, do not mean actual delivery of projects. We must clearly devote more attention to developing skills in managing public spending and in particular in managing complex projects. Civil service reform and development of political skills, where they relate to project management, are critical.

I applaud the spending review and welcome the disciplines within it. It offers the prospect of further qualitative and quantitative improvements in service for my constituents. I have spoken of my pride in one key development in my area—certainly the greatest pride that I have experienced as a Member of Parliament—and I am confident that, with this spending review, there will be many more occasions on which I can feel that same pride in the achievements of this Government.

6.20 pm
Dr. Stephen Ladyman (South Thanet)

This debate has included some remarkable contributions. The first on which I want to comment is that of my hon. Friend the Member for Tottenham (Mr. Lammy), which was an inspiring maiden speech.

Some other remarkable speeches have come from the Opposition Benches. We have heard Conservative Member after Conservative Member blaming the Government for decisions that were taken when their party was in office and are now feeding through into the system, or even decisions that were taken by Conservative county councils when they were asked to prioritise their spending.

One Conservative Member talked about waiting lists for heart surgery. It takes 12 to 15 years to train a heart surgeon. If there are no heart surgeons now, it is not this Government's fault. The new deal is good, but it is not good enough to get people from the dole to heart surgery in two years. Conservative Members should be more honest than to blame the Government for seeds that they sowed while they were in power.

Mr. Collins

Will the hon. Gentleman give way?

Dr. Ladyman

I am sorry, but I really do not have time.

We also heard a remarkable contribution from the hon. Member for Truro and St. Austell (Mr. Taylor). When I pointed it out to him that the Liberal Democrat manifesto did not promise huge amounts of extra money for health—it promised £350 million, funded through a change in national insurance contributions—he said that that was on top of growth. He seems to have forgotten that he and I shared a radio studio shortly after my right hon. Friend the Chancellor's first Budget, when he accused my right hon. Friend of allowing the country to plummet into recession and doing nothing about it. He intended there to be no growth. If the Liberal Democrats had been running the country, we would have had £350 million from national insurance contributions and nothing else.

Mr. Matthew Taylor

Will the hon. Gentleman give way?

Dr. Ladyman

No, I really cannot, because of the shortage of time. It had been my intention, if I had had 15 minutes, to go through all the Opposition arguments and destroy every single one, but unfortunately I have time for only a quick canter through the comprehensive spending review from the point of view of South Thanet.

Several hon. Members have mentioned the £16 billion cuts that the Conservatives are proposing in a document that they have produced, but it has not been mentioned that the document not only talks about the need for that saving but details how much that would mean per constituency, and even helpfully provides the figures per region. It identifies that £2.3 billion of savings have to be made in the south-east.

The hon. Member for Sevenoaks (Mr. Fallon) talked about road improvements in Kent. What chance does he have of getting improved roads in Kent if a further £2.3 billion of cuts has to be made?

The Thanet district of my constituency has one of the highest levels of unemployment in England. Somebody told me that the latest figures show that it is back to having the second highest unemployment rate in England, despite a huge cut in unemployment in the past three years and the fact that things are moving in the right direction.

We have assisted area status, so we can give grants to new investors, but one of the arguments that I have urged on Ministers is that, before we give grants for businesses to move into areas of high unemployment, we should ask what stops them moving in of their own volition, without grants. In the case of the Thanet district, the missing ingredients are improvements on two small pieces of road, and a new railway line.

If we had those improvements to road and rail services, we would be able to build a sustainable economy within a short space of time. The CSR and the announcement on transport spending today give us, for the first time, real hope that we might be able to get the roads and the improved railway line. I will be banging on the Minister's door to make sure he realises how important it is that some of that money comes our way when the announcements are made in December. It is already the number one priority in Kent and I hope very much that we will have good news in December.

The Chancellor promised that he would make sure that objective 2 funding was matched. We have objective 2 funding in Thanet, and that promise of match funding will release a huge amount of extra money to spend on utilities and infrastructure which will help bring down unemployment.

We have a lot of science-based industries in my constituency. The £1 billion pound investment programme in science is to be welcomed. I would like to appeal to all secondary schools in my constituency and others that when they get their £50,000, £60,000 or £70,000 they spend a large part of it on new science facilities and improving laboratories genuinely to inspire our young people to get into science.

One of the things that I have noticed since coming to the House is how many lawyers there are. I have nothing against lawyers, but with great respect to them the law does not put bread and butter on the nation's table. That is done by science and technology and increasingly it will be done by the knowledge-based industries and new technology.

Mr. Tyrie

Does the hon. Gentleman think that there are too many lawyers at No. 10?

Dr. Ladyman

No. I think we have exactly the right number of lawyers in No. 10 and exactly the right lawyers as well.

I wish to draw the attention of the House to the announcement of the £80 million that is being put towards the cost of cleaning up Chernobyl. That is welcome and essential money. It means that in terms of cleaning up nuclear waste and contamination in the former Soviet Union, we are among the leaders in the world. I remind the House and the Government that the estimate for cleaning up the former Soviet Union and bringing nuclear facilities there up to western standards is £1 trillion. By my calculations, the £80 million we have contributed still leaves us £999,920 million short of the target.

I am not suggesting that the United Kingdom should be providing all that money, although UK companies would win a lot of the business. However, we should go to the United Nations and work hard to have that money matched by other nations so that we start to get the sort of contribution to make a real impact on the clean-up programme. If we do not do that, Chernobyl might not be the last such accident.

I can say with my hand on my heart that the CSR gives my constituency real hope for the future. We hope that within a reasonable space of time we can start to aspire to bring down unemployment to the UK average, and perhaps one day we might even be on our way to the level of Kent generally.

6.29 pm
Mr. Heathcoat-Amory

By leave of the House, I should like to wind up the debate.

It has been a good debate on all sides. I think that it has made genuine progress in scrutinising the Chancellor's announcement on Tuesday and in getting behind some of the figures and the assumptions on which they are based.

The debate was notable, too, for the outstanding maiden speech by the hon. Member for Tottenham (Mr. Lammy), who spoke movingly of his predecessor, Bernie Grant, and described the varied nature of his new constituency and its people. He made it clear that he did not regard himself as a member of any black caucus or sectoral group, but wished to represent all the people of Tottenham. His only controversial note perhaps was when he claimed to represent the best football team in London. I cannot arbitrate on that, but I look forward to debating other matters with him in due course. This afternoon, he earned the good wishes of the House.

Other Labour Members spoke about the spending totals and their hope that they would translate into better services for their constituents. They were ignoring the risks inherent in the process. They certainly ignored the taxes that are paying for it. They entirely underestimate the resentment caused among many people, including many low-income groups, by the relentless increase in the burden of taxation.

We believe that Labour Members are ignoring the importance of effectiveness in public spending, which is odd because the Labour manifesto emphasised the point that it is not how much we spend but how we spend; that is just as important.

Mr. Casale

In his earlier speech, the right hon. Gentleman said that the Government would be judged on their promises. Of course we have a proud record and will be pleased to stand on that, by contrast with the myriad broken promises under the previous Government, which led to their being voted out of office; but does his party intend to keep the promise of £16 billion of spending cuts?

Mr. Heathcoat-Amory

Of course there is no £16 billion-worth of expenditure cuts. The point has been well made by my hon. Friends, as well as by me in my earlier speech, which I think the hon. Gentleman heard.

What we were probing—my hon. Friends did so most effectively—was the question of delivery. We are entitled to do that because it is the Government themselves who emphasise the importance of measuring outputs, rather than cash spent. It is they who set up two years ago the system of public service agreements, so we are entitled to ask whether those agreements have worked. We gave many examples of where the targets have been not only missed, but in some cases quietly expunged or forgotten.

I gave the specific example of the Home Office objective. I hope that the Minister refers to it in his winding-up speech. A specific quantifiable objective in the Home Office about the time taken to assess and to complete asylum seeker applications does not appear in the departmental report, which vacuously referred instead to the need for everyone concerned with the subject to work more closely together.

After the Chief Secretary to the Treasury gave evidence to the Select Committee on the Treasury and the report was published, he was asked by my hon. Friend the Member for Sevenoaks (Mr. Fallon) how many targets had been met. He said that he did not know; he asked one of his officials to give the answer. The official agreed that they had not all been met, but thought that the targets that had not been met were not very important—so now we know that the target to get crime down is no longer very important. Asylum seekers are not very important either. When he was further pressed on the penalties attaching to this failure he said that in extreme cases civil servants could be sacked. We suggest that in extreme cases it is Ministers who should be sacked. They publish these targets and they should stand by them.

In the few minutes left to me I want to refer to some of the outstanding speeches from this side of the House. My hon. Friend the Member for Sevenoaks described graphically the problems of the lack of delivery in Kent and made the good point that we have a new form of economic distortion—the Government tax, and overtax, for a number of years and then open the purse strings and go on a spending spree. We have discovered a new form of stop-go which is highly damaging to public finances and the whole process of planning and delivery.

My hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) described problems with education and crime in London. He rightly criticised the Chancellor's curious remark about defence in his statement on Tuesday, when he asserted that in recent years Britain's defence forces have taken on a new and valued role in international peacekeeping and in conflict prevention.—[Official Report, 18 July 2000: Vol. 354, c. 221.] It is not new at all. Has the Chancellor forgotten the war we fought to regain the Falklands, the Gulf war, and the many peacekeeping ventures overseas? This is another example of the Government trying entirely to disown the past, as though with new Labour have come new defence forces, new tasks, new peacekeeping. What rubbish. All that has been going on for many years with a great degree of professionalism, backed up by Conservative Governments.

In London we have had the not-so-surprising news that the mayor is not happy with the settlement. As the Evening Standard puts it, Ken Rages Against Tube "Stitch Up". The hon. Member for Brent, East (Mr. Livingstone) has discovered that he will suddenly be stung with the £104 million bill for cost overruns on the Jubilee line and that he has not got the money that he was promised.

Dr. Ladyman

Will the right hon. Gentleman give way?

Mr. Heathcoat-Amory

I am sorry but I do not have time. The hon. Gentleman spoke in his time and I am sorry that I cannot reply in detail to his remarks. This is almost as interesting.

The Deputy Prime Minister hit back: Doesn't this just show that you can't trust Ken? Has he only just discovered that? We knew it years ago.

Mr. Coaker

So did we.

Mr. Heathcoat-Amory

When the brothers fall out, they do not do it by half measures. They were going to get together earlier this year. A photocall was planned between the hon. Member for Brent, East and the Under-Secretary of State for the Environment, Transport and the Regions, the hon. Member for Streatham (Mr. Hill), who describes himself as the Minister for London. They were to get together in a new show of togetherness over what was called the "generous" settlement, but that was cancelled when the mayor of London said that he was "too busy" after all. So I am afraid that that has not taken place. Instead, we get allegation and counter-allegation as the so-called generous sums disintegrate when anyone tries to pick them up.

My hon. Friends also talked about the macro-economic risks being run by the settlement. My hon. Friend the Member for Bury St. Edmunds (Mr. Ruffley) in particular emphasised the huge risks being run by the Government, who are relying on continued growth in the economy and think that they have abolished the business and trade cycles. My hon. Friend is absolutely right to say that there is simply no room in the economy for both the private and public sectors to grow in the way indicated. Public expenditure in total is set to grow over the next four years by £99 billion. That must be at the expense of private consumption, investment and growth.

That very point has been picked up by the Bank of England—members of the Monetary Policy Committee have spotted it. They say that unless we shrink the private sector and cut consumption, we will have an inflationary problem on our hands. Interest rates will go up, the exchange rate will strengthen further and we will again have a very real macro-economic problem.

My hon. Friend the Member for Westmorland and Lonsdale (Mr. Collins) pointed out that triple accounting and the spin put on all the past figures have completely blown any credibility or reputation for straightforwardness and truth that the Government hope to enjoy. He, too, believed it highly questionable that we will ever see the much trumpeted £43 billion of extra expenditure going to front-line services.

That point was also made by my hon. Friend the Member for Chichester (Mr. Tyrie), with his usual technical mastery. He also made the point that the Government are frittering away the efficiency gains that they inherited from the previous Government in areas such as health. They are going backwards when it comes to delivery and efficiency, and no amount of gross expenditure in the world will compensate for that inability to turn taxpayers' money into the services that people want.

It has been amply demonstrated in this short debate that the second comprehensive spending review will be no more successful than the first. The same sort of money has been promised—it was £40 billion two years ago and it is £43 billion now. The same outputs and results have been promised.

I do not know what has happened to the Cabinet Committee—we did not hear anything about that today. Presumably the Government will resurrect an important spending tsar, who will clamp down and remove money from Departments that fail. In a year or two, when they do fail, the Government will say, "We never really meant that—it was all much too difficult and embarrassing."

We have seen the same old reliance on the economy continuing to deliver the growth so that the Labour party can tax it for their expenditure ambitions. All we can say is that the result will be just the same—disillusionment, and another spectacular failure to deliver.

6.42 pm
The Financial Secretary to the Treasury (Mr. Stephen Timms)

We have had a very interesting debate—I can agree with the right hon. Member for Wells (Mr. Heathcoat-Amory) about that. We have been offered a clear choice this afternoon—investment with Labour, or cuts with the Tories. That is the choice before Britain. We have heard not a word from Conservative Members about where the £16 billion-worth of cuts would fall.

Our first task after the election—the foundation for everything else that we wanted to do—was to secure a new stability in the economy. That stability was not only to give individuals, families and businesses the chance to plan their long-term future, but to spur on the creation of new investment and jobs and prosperity. That is what we are delivering—a platform of stability and steady growth, with inflation low and the public finances firmly and sustainably under control.

As a consequence, more people are in work than ever before in the history of the United Kingdom. In Scotland, more people are in work than since England won the world cup, as my hon. Friend the Member for Edinburgh, North and Leith (Mr. Chisholm) said. Across the United Kingdom, there are 1 million vacancies on offer.

Inflation in Britain has been lower for longer than at any time in the past 30 years. In contrast with the deficit of £28 billion in the public finances in 1997, in the last financial year we made debt repayments of £18 billion.

We have built a strong, credible platform of economic stability, and we are determined to keep it that way. Now, building on that greater stability and a stronger work ethic based on opportunity and responsibility, we need to take the next leap and ensure that the benefits of this new prosperity are enjoyed by not just a few, but by all. We want a Britain where everybody is able not just to work, but to work their way up, to gain promotion, to start a business if they want to, to become self-employed, to upgrade their skills throughout their working life and to do as well as their talents and potential allow.

We are putting to rest for good the legacy of decades of under-investment across our public services and setting our sights on the long-term national ambitions that we have set ourselves for the first decade of the new century.

I shall refer to several of the contributions to the debate. First, like almost every other speaker, I congratulate my hon. Friend the Member for Tottenham (Mr. Lammy) on a moving and effective maiden speech. He paid an effective tribute to his predecessor, Bernie Grant, whom I first knew when he was an employee of Newham council. My hon. Friend's election slogan was From Tottenham and for Tottenham. He spoke with great feeling of the community in which he grew up and that he now represents. We all very much look forward to hearing more from him in the years ahead.

My hon. Friends the Members for High Peak (Mr. Levitt), for Burton (Mrs. Dean) and for South Derbyshire (Mr. Todd) all referred to improvements to schools in their constituencies. My hon. Friend the Member for High Peak mentioned 30 major improvements in his area. My hon. Friend the Member for South Derbyshire told us about the rebuilding of William Allitt school and about an arts centre for the adjoining secondary school. Throughout the country, 17,000 schools—a huge number—have benefited from the new deal for schools, with funding of £1.375 billion.

My hon. Friend the Member for High Peak made the point that, whereas there had been 30 major improvements in his constituency, none at all had been made in the previous Tory decade. That contrast demonstrates the change that has taken place during the past three years.

The right hon. Member for Wells made the criticism that staff numbers in the Inland Revenue had been rising. The right hon. Gentleman has us bang to rights. I confess that staff numbers in the Inland Revenue did grow—from 55,400 in 1996–97 to 63,800 last year. That is a rise of 8,400. However, that was because the Inland Revenue took over functions from the Department of Social Security. The national insurance contributions office is now part of the Inland Revenue so, during the same period, staff numbers in the DSS fell by 11,000. The overall staffing of central Government Departments is lower than it was in 1997—by 30,000.

Mr. Heathcoat-Amory

As I pointed out, those figures do not stack up as an explanation. Since 1997, the number of staff in the Inland Revenue has risen by 12,500; the number of staff in the DSS dropped by only 9,000. There is a net increase in the two Departments of 3,500.

Mr. Timms

The figures are as I set them out. Overall, the staffing of central Government Departments is lower, by 30,000, than it was in 1996–97—contrary to the impression given by the right hon. Gentleman.

The hon. Member for Truro and St. Austell (Mr. Taylor) spoke about the overall amount of Government spending. It is true that total managed expenditure as a proportion of gross domestic product is lower than it was under the previous Administration. However, the key point is the change in the nature of that spending—significantly more is being spent on those services that we have identified as priorities and less on the costs of worklessness and debt. Our commitment was to make that important transformation and we are achieving it.

Mr. Matthew Taylor

I, too, gave figures that excluded debt repayment and social security, although my point was valid even for departmental expenditure.

Mr. Timms

As the hon. Gentleman is aware, we are achieving substantial increases in public spending on key public services to deliver—as he pointed out—important real-terms rises. I shall say more about the effect of that in a moment.

The hon. Members for Sevenoaks (Mr. Fallon) and for Bury St. Edmunds (Mr. Ruffley) and the right hon. Member for Wells seemed to misunderstand the targets set in the comprehensive spending review. Those targets will stand for the whole period of the review—1999 to 2002. We are monitoring them throughout that period. We are reporting regularly on them and we will continue to do so until the end of the CSR period. My right hon. Friend the Chief Secretary told the Select Committee on the Treasury that we are either delivering or on track to deliver 90 per cent. of the targets that were set, and we shall continue to keep that process closely under review until the end of the CSR period.

Of course, for the new spending review there are new targets. Things have changed and new targets have been set. That is a reflection of the improvements that have been made since the beginning of the CSR period. But the point that Opposition Members made—that targets set in the CSR are no longer being monitored—is quite wrong. They are being monitored, and they will continue to be monitored until right at the end of the CSR period.

Mr. Tyrie

The Minister said that there will be a new set of targets with the new spending review. Does that mean that next year, when we have a new review of spending as I am sure that we shall, all the existing targets will be torn up?

Mr. Timms

No. The hon. Gentleman, with many of his hon. Friends, seems fundamentally to misunderstand the process. The comprehensive spending review was for three years—1999 to 2002—and the last year of the comprehensive spending review becomes the first year of the new spending review process. That is the basic fact that quite a number of Opposition Members appear not to have grasped.

My hon. Friend the Member for Jarrow (Mr. Hepburn) made an eloquent plea for shipbuilding. Last year, the Government established the shipbuilding forum to work with the industry on boosting the competitiveness of United Kingdom shipyards. The recommendations of that forum are being considered, and the conclusions will be reported in due course.

The hon. Member for Ruislip-Northwood (Mr. Wilkinson) and several Opposition Members have made it very clear that they support the spending cuts proposed by the shadow Front-Bench team, but the hon. Gentleman did not tell the House where he believes that those cuts should fall. There was not a word about that. Many Opposition Members said that there should be less spending than is proposed. None of them, however, proposed any categories where those savings could be achieved.

The hon. Gentleman was also mistaken about the reaction of the Monetary Policy Committee and the City to the announcements. Let me refer him to some of the remarks that have been made since the spending review announcement.

Mark Millar of Morgan Stanley said that there are no obvious interest rate implications for the market at present. The fiscal position this current year seems to be tighter than originally thought. But no surprises … there is no big news for rates. Robert Barrie of Credit Suisse First Boston said: All of us who watch these things, the MPC included, will have been prepared for the sorts of numbers he has spoken about today … Remember we are in budget surplus at the moment and if you measure fiscal policy that way he's still running a fairly tight policy and will do so throughout this period. Many statements have been made along those lines.

My hon. Friend the Member for Edinburgh, North and Leith drew attention to the need for us to look at the way that housing benefit works, and I agree with him about that. The hon. Member for Bury St. Edmunds was one of those who agreed that there was a need for cuts, but again he did not tell us where any of the cuts should come from. My hon. Friend the Member for Bolton, North-East (Mr. Crausby) welcomed the additional resources for the health service.

My hon. Friend the Member for Don Valley (Caroline Flint) welcomed the housing improvements that have been achieved in her constituency. Through the spending review, 500,000 houses will be brought up to a decent standard by 2004. I am glad that she latched on to that very important element of the spending review.

The hon. Member for West Aberdeenshire and Kincardine (Sir R. Smith) asked about the effect of the working families tax credit on wages. The key thing is that the taper with working families tax credit is less, at 55 per cent., than it was with family credit, and I believe that the position is the reverse of what he was fearing.

My hon. Friend the Member for South Thanet (Dr. Ladyman) quite rightly said that road schemes in Kent certainly would not survive a programme of £16 billion of cuts.

However, let us just have a look at education. Average increases in education spending will be 5.4 per cent. a year for the next three years. That means that, at long last, the rate of increase in investment in state schools will start to keep pace with the rate of increase that we have seen for years in the private school sector. We want to more than double capital spending in cash terms on education to £1.5 billion by 2003–04. We shall have decently funded schools at last, after two decades of underinvestment. That is a huge breakthrough, and is a consequence of the way in which the economy has been managed over the past three years. It means that instead of spending more and more on debt charges and unemployment benefits, we can now spend on our schools. We shall be able to devote to them the sort of resources that should have been available to them for the past 20 years. That is the historic breakthrough that this week's announcement achieves.

What is the Tory party's response? It is exactly what it has always been—cuts. I think that we have been given a sort of assurance about health service spending. Let us take that at face value and accept for the purposes of the debate that at least the Tory party will change its spots and match our spending commitments on health. However, where would the Tory party find its £16 billion-worth of spending cuts that central office announced yesterday? We know the answer. There would be cuts in education, law and order and transport, the services in which the Tories have always under-invested. We have had decades of underinvestment in our schools. Now, for the first time in a generation, we have a chance to put that right. What is the response of the Tory party? It is one of cuts. It would take us back to the bad old days that Britain rejoiced to be liberated from in 1997.

My right hon. Friend the Chief Secretary to the Treasury said at the start of the debate that in the five years of our two spending reviews, education spending would rise in real terms by more than it increased during the 18 years of Tory government. That is the scale of what we have achieved.

On unemployment, the Tories would scrap the new deal, which has helped to deliver the highest number of people in work in our history, the lowest rate of unemployment for 20 years and the lowest rate of long-term youth unemployment in a generation. They say that the new deal is a waste. No, it is not.

For example, building on its long-term partnership with the city council, the diocese of Birmingham helped to deliver the new deal voluntary sector option. The diocese was asked to find a new deal placement for a youngster who was shortly due in court on 117 counts of burglary. He was placed on a project to improve a church hall, and he struck up a friendship with a part-time church administrator. When the time came for him to appear in court on the charges of burglary, the administrator spoke up for him and asked that he should be given another chance. He was given that chance and the project was completed to a high standard. The young man has gone straight, and he is now setting up a business of his own. At the ceremony to mark the conclusion of the work, one of those who turned up was the young man's mother. She met the church administrator and said: When you went to court to plead for my son to keep his job, you saved his life.

The Tories say that it is a waste—that is, giving people who have never had a chance the prospect of a decent future. It means work instead of welfare. It enables people to set up a business instead of ending up in prison. The new deal has made all that possible yet the Tories say that it is a waste. No, the truth is that it is bringing about the changes that Britain needs. The number of young people out of work for six months or more is down now to 50,000, and that total is falling. It reached 500,000 under the previous Government. We now have the lowest number of people in that position for a generation, and it is less than at any time under the Tory Government.

Surely all of us can see the huge benefits for everybody now that so many of our young people are familiar with the habits and disciplines of work. So many of them were robbed of that experience for so long. We are all better off for the change.

The personal adviser service is working with my constituents on the new deal for disabled people. The week before last, a disabled man found a job after five years of unemployment. We need more of that, not abolition. An independent assessment shows that the new deal is largely paying for itself through reduced benefits and additional tax revenue.

In the past, every time the economy started to deliver, the Tories blew it. They blew the proceeds of North sea oil and privatisation on current spending instead of investment. That is why the costs of failure spiralled under the previous Government—the bills for unemployment and for debt interest. We are locking in the new stability for good. We are using the proceeds of the spectrum auction to pay off debt. That is why the unemployment and debt bills have been turned into extra resources in the long term for our priority services—health, education, transport and policing. That is what people want.

There have been 1 million extra jobs since the election, 100,000 more small firms and a new culture of enterprise. For the first time in a generation, we have the resources that will deliver for public services. I refer to health, education, law and order, transport and housing. We have made our choice, and that is for investment. The Tories have made their choice—

It being Seven o'clock, the motion for the Adjournment of the House lapsed, without Question put.