HC Deb 10 July 1997 vol 297 cc1059-60
5. Mr. Edward Davey

To ask the Chancellor of the Exchequer if he will commission the National Audit Office to examine the assumptions contained within the departmental spending plans published in the "Financial Statement and Budget Report 1997–98"; and if he will make a statement. [6181]

The Chief Secretary to the Treasury (Mr. Alistair Darling)

My right hon. Friend the Chancellor asked the National Audit Office to examine the key assumptions underlying the fiscal projections in the Budget which he announced on 2 July. This was the first time that any Government had done that; the Chancellor has indicated that he sees a continuing role for the NAO in future Budgets, but the arrangements for that have not yet been made.

Mr. Davey

When the previous Chancellor announced his last set of spending plans, they were widely seen as unrealistic. The present Chancellor has said that there will be high inflation for the next few years, and his cash spending plans are widely seen as totally unreachable. Will the Chief Secretary commission the National Audit Office to review the current Chancellor's spending plans, or tell us which services or programmes he will cut to meet the "eye-wateringly tight" planning totals?

Mr. Darling

The hon. Gentleman is returning to a now-familiar theme of the Liberal Democrats. Let me make the position clear: we fought and won the election on the basis that we would put the public finances on a sound and proper footing. We will do that, although that means that tough decisions have to be made. I repeat the point that my right hon. Friend the Chancellor made to the hon. Member for Gordon (Mr. Bruce) a few moments ago. In terms of health and education, we have provided a real-terms increase in spending.

I have no wish to fall out with the Liberal Democrats, but they are being a little opportunistic—not for the first time, perhaps. In terms of capital expenditure, they asked us to spend £500 million, and we are spending £1.3 billion on schools. They asked us to spend £900 million on the health service, and we are spending £1.2 billion. When we announced those totals, their immediate response was, "That is not enough". I caution the hon. Gentleman and ask him to bear in mind the fact that some of us have responsibility for the economy and cannot call for opportunistic spending at every opportunity.

Mr. Sheldon

Since the Comptroller and Auditor General is an Officer of the House, is it not splendid that my right hon. Friend the Chancellor is getting his views and, I hope, aiming to expand that role in the future?

Mr. Darling

My right hon. Friend has substantial experience of these matters. We want to use the National Audit Office more. It is independent of Government, although the Auditor is an Officer of the House. The public would respect Governments all the more if they planned their Budget forecasts on realistic assumptions, and that is what we did. The unrealistic assumptions of the previous Government have led to some of the problems that we now have to clear up.

Mr. Heathcoat-Amory

Will the Chief Secretary come clean about the real cut in public expenditure announced in the Budget? Does he agree that the higher inflation that the Government are now predicting for the years ahead means higher costs for all public services, yet no more cash is allocated for those years? Does he agree with independent calculations that this means a £3 billion cut in real public expenditure this year and a £5.25 billion cut next year? Will he confirm these figures, which flow directly from the Red Book published by his Government?

Mr. Darling

Welcome to the new friends of public spending. The Conservatives are now telling us, in effect, that the figures that they left us do not add up. The right hon. Gentleman must accept that we have inherited a difficult financial position, largely because of the actions of the Government of which he was a member until he resigned 12 months before the election. Frankly, we will take no lectures from the Conservative Opposition on the conduct of the public finances. We are prepared to take hard decisions to ensure that public spending is on a proper footing for the rest of this Parliament.