HC Deb 13 July 2000 vol 353 cc1070-83 12.57 pm
The Prime Minister (Mr. Tony Blair)

Thank you, Madam Speaker. With your permission, I would like to make a statement on the annual report published by the Government earlier today.

Our first and primary responsibility was to get the economic fundamentals right—the building blocks that will make Britain stronger and fairer. Inflation is at 2.2 per cent.—within our inflation target of 2.5 per cent.—and an inherited £28 billion deficit was turned into a £16 billion surplus by last year. Unemployment is down and 1 million jobs have been created since May 1997. Real take-home pay is up by about 8 per cent., and when spending on areas that we want to spend money on, such as children and pensions, is taken out, welfare spending is falling for the first time in decades. But none of that has come without serious, grown-up choices—Bank of England independence, taking the politics out of people's mortgages, and tough action to clear the deficit. I know that some of those decisions, such as the rises in fuel duty, were unpopular, but they were necessary.

Interest rates over the years of this Government have averaged 6 per cent. In the previous 18 years, they averaged 10 per cent. That change makes the average mortgage holder £160 a month better off. That stability has been fought for and is on course to being won. Now we must make the next choice: to invest in this country's future. I believe that the people of this country understand that Britain is a chronically underinvested nation. For 18 years, transport, health and education were starved of the funds that they needed. In education, for example, the real-terms increase during the 18 years of Conservative government was only 1.5 per cent. a year. If we want opportunity and security for all in a world of change, we now have to invest in our essential infrastructure and public services. This Government are committed to that investment.

There has been investment to repair and renovate 11,000 schools, with 6,000 more to come; more money for books; money for computers; money for paying teachers more; and thousands more schools linked to the internet. We have seen a dramatic rise in standards in primary schools, but the next challenge is to see the same big rises in standards in secondary education and universities. The priorities remain education, education, education, and our response will be investment, investment, investment. Guaranteed.

In the health service, we are meeting our target on in-patient waiting. We must now get sustained falls in out-patient waiting. By the end of this year, all accident and emergency departments that need to be rebuilt or refurbished will receive such treatment. The first new hospital has already opened in Carlisle, and 37 more infrastructure projects amounting to more than £25 million each are on their way in England alone. There are new services, such as NHS Direct and walk-in centres. As a result of the March Budget, the national health service is finally getting the funds that it needs. It has benefited from the biggest sustained increase in its history. Again, however, we know that there is much more to do.

The Jubilee line and the docklands light railway show what our transport system could be like. Moreover, there are additional train and bus services, and new rolling stock is starting to come into use. But, in many parts of Britain, our transport infrastructure urgently needs substantial extra investment. We admit that. The 10-year transport plan, which will be published shortly, will show how it can be done.

The Government are committed to a society of opportunity for all and responsibility from all. Crime is down since 1997, particularly car crime and burglary—in some areas, spectacularly so. [Interruption.]

Madam Speaker

Order. We have all had our fun; the House must now settle down.

The Prime Minister

Violent crime, however, is rising. We need more police; we will get them. We need new ways in which to tackle drugs; we will get those too. We need tougher action against drug dealers; we are legislating against them.

In all those areas, we should recognise the immense efforts of millions of public servants—school teachers, police, NHS staff and civil servants—because their work makes our country richer.

We are a Government committed to social justice. Thanks in part to the minimum wage, the working families tax credit and the biggest-ever rise in child benefit—[Interruption.] Opposition Members do not want to hear the facts. [HON. MEMBERS: Hear, hear! Here's John; come on, John."] Perhaps the Opposition will cheer this. By the end of the current Parliament, 1.2 million children will be lifted out of poverty. But there is still a long way to go before we can achieve our goal of ending child poverty altogether.

I am well aware of the focus on the 75p rise in the basic state pension. If that was all that the Government had done for pensioners, people would have every right to be angry; but it is not. We chose, deliberately, to get most help to the poorest, through the new minimum income guarantee. About 2 million pensioners have gained, some considerably, by around £15 to £18 per week. We have abolished eye test charges. We have introduced the winter allowance, which now stands at £150. We have given free television licences to pensioners aged 75 and over. In total, an extra £6.5 billion will be spent on pensioners during the current Parliament—£6.5 billion above what the last Government planned. Again, however, I am the first to say that there is more to be done, and step by step, as the country can afford it, we will do it.

This year also saw the best inward investment figures in our country's history. Around the world, people are seeing the strong economic fundamentals that exist in Britain. They see a good business environment, described recently by the Economist Intelligence Unit as the second best in the world.

This Government are committed to a positive and constructive role in Europe. At the Lisbon summit, we helped to set a new economic course for Europe. Most recently, the Chancellor of the Exchequer turned around the entire debate on tax in Europe. We are leading the debate in Europe on defence. We will maintain a policy on the euro that is designed in our national economic interest, and is good for British jobs, British industry and British investment.

There are many other areas in which we can chart progress. Hand guns are banned. Land mines are banned. Hereditary peers are at last on their way out. There are paid holidays for the first time. As for the arts, funding is increasing, quality is improving, and our international reputation is a credit to Britain. When they want it, employees have the right to be represented by a trade union. We are starting to cancel third-world debt. The strategic defence review is allowing Britain to count for more in the world.

The annual report shows that 104 of our 177 manifesto commitments have been met, that 71 are on course, and that two are not timetabled. Of course there is more to do. We have been in government for three years. There are 1 million more in work, true, but many thousands of jobs are still lost as a result of industrial change. We now have the best-ever results in our primary schools, true, but our secondary schools are still nowhere near the level of the best in the world. We have an extra 10,000 nurses in the health service, true, but we need many more, and we need cancer and heart surgeons too. The incidence of domestic burglary has fallen by 20 per cent. in three years, true, but violent crime is still increasing.

A lot has been done, but a lot more needs to be done, and this Government will do it. We will deliver the stability. We will deliver the investment that the country needs. We will deliver opportunity for all in a civic society founded on rights and responsibilities.

Our purpose is to build a Britain that is strong, modern and fair. Under this Government, at long last, economic prosperity and fairness are no longer seen as opponents; they are seen as partners in the process of building the Britain of the future.

Mr. William Hague (Richmond, Yorks)

I must begin by thanking the Prime Minister for delivering a statement of such excitement that at least two Cabinet Ministers were present for the start of it. Only this Prime Minister, when accused of being all talk and no delivery, would try to talk his way out of it. Only he, when accused of being all spin and no substance, would try to spin his way out of trouble. Only he, when accused of being all gloss and gimmicks, would attempt to rebut the charge by publishing a glossy brochure, which is yet another gimmick from his Government of gimmicks.

This is the third annual report. The first was entitled, "So what do you think?"; the second was called,"So, what are we doing?"; the third should accurately be called, "So what on earth are we going to do now?" We have all learned what to expect from the Prime Minister's annual reports.

I shall give hon. Members extracts from these reports, because the Prime Minister has not done so. First, there is the banal.

The UK is home to 59 million people. Thanks very much for that staggering piece of information. Then there is the completely untrue. Page 46 of today's annual report states that, as part of the delivery of the Government's vision, this year saw the opening of the UK Sports Institute, providing world-class facilities, coaching and support in Sheffield. As everyone in Sheffield knows, not a brick has been laid. No such institute has been opened, and the whole thing is now to be sited in London. How are we to believe any of this rubbish? No wonder only 49,000 copies were sold last year, 41,000 of which were bought by the Government. It is not exactly Harry Potter, is it—although it requires as much imagination to believe it?

Then there is the ridiculous. Last year's report said: The Dome at Greenwich will provide the focus for the country and the rest of the world. This year's report says that the dome remains controversial. Then there are the missing items. There is room this year for a full-page picture of a man on a telephone, but there is no space to mention the Chancellor's £5 billion tax on pension funds, the thousands of criminals released from jail early by the Home Secretary, or the complete collapse of the Foreign Secretary's ethical foreign policy.

Then we have more of the blatantly untrue. In the previous two reports, but not in this year's, the Government provided a helpful list of their claims of progress on their manifesto pledges. Last year they made some interesting claims. For instance: Develop an integrated transport policy. Done. It is true that the Deputy Prime Minister integrated petrol price rises with traffic jams. Hold referendum on any EMU decision. Kept. Did we all miss something? Have we had a referendum?

  • Referendum on voting systems. On course.
  • …EU enlargement. Done.
  • CAP reform. On course.
  • Back the 2006 World Cup bid. On course.
That is last year.

This year, the helpful list has disappeared and in its place the interested reader has to visit 177 different web pages in order to add them up. We can see some of the changes. The integrated transport policy has now become: Improving transport is a key priority for the Government. What happened? Last year it was all done and integrated. Now it has disintegrated. Holding a referendum on voting systems has become: The timing of a referendum has not yet been decided. Last year it was all on course. The 2006 world cup bid now reads: The final decision is 6 July 2000. Is anyone updating the Government's website? Could that be a job for an out-of-work press secretary?

Is not today's report—this rubbish, this complete detachment from reality that we have been given—yet another signal that the Prime Minister lives in a fantasy world in which the dome is a great success, everyone wants to abolish section 28, everyone wants to adopt the euro and everyone believes figures produced by the Chancellor? Even when the report makes a claim that is true, it avoids the whole truth. It claims that 1 million jobs have been created in the past three years but does not mention that in the previous three years, under the previous Government, 1.1 million jobs were created. Does the Prime Minister think that we are all citizens in some Soviet village waiting to hear the glorious news about tractor production and willing to overlook the fact that no tractors have actually arrived?

Is not the truth that the Prime Minister and the Chancellor have repeatedly announced £19 billion for this and £21 billion for that, and that they have little or nothing to show for it? The majority in the country have been asked to pay again and again for services that are getting worse. Now the Government expect everyone to throw their hats in the air as they announce more fantasy figures pretending to know what will happen to the economy in four years' time and throwing all prudence to the winds.

Yesterday, as the Prime Minister threw some ludicrous figures around, he announced his own estimation of increased taxes—if he is allowed to go on governing—of £16 billion. Cannot we now be certain of two things: with this Prime Minister, services will not get any better but taxes will keep going up? If he wants to fight an election on that, we are happy to do so.

Is there not a massive contrast between his ridiculous claims and the daily experience of the mainstream majority of people in this country? Is there not a massive contrast between this self-congratulatory nonsense and the annual report that would be written by the people of Britain? Would not an annual report produced by the people of Britain say that the Prime Minister promised to improve the NHS and cut waiting lists, but the waiting list for the waiting list has doubled? Would not an annual report by the people of Britain say that he promised to be tough on crime, but he has been weak on crime and it is going up? Would not an annual report by the people of Britain say that he promised to cut class sizes, but class sizes in secondary schools have gone up? Would it not say that he promised to keep taxes down, but he has piled billions of pounds of stealth taxes on to hard-working families? Would it not say that he has comprehensively failed to deliver on public services?

Instead of this report, should we not have a real report on the Government? No tax increases at all—abandoned. Twenty-four hours to save the NHS—abandoned. An ethical foreign policy—abandoned. Broken promises—done. Weak leadership—done. Split on the euro—done. The slow slide from admiration to fascination to disillusion to contempt—on course.

The Prime Minister

As ever with the right hon. Gentleman, the jokes were very good, but when he got to policy, he fell apart. When he told us what he wanted to do with the country, one word was rather curiously missing—"guarantee". Where was it? The situation is even better than I said yesterday. Let me read what he wrote in his "Common-sense Revolution" statement in October 1999 to his party conference: Those guarantees will provide a concrete assurance for voters—and a necessary discipline on future Conservative Ministers when promises look difficult to keep. The right hon. Gentleman cannot keep his promises as Leader of the Opposition, never mind in government. What would an annual report on him look like? The five guarantees that he put forward last October are now falling apart.

When the right hon. Gentleman finally got to policy, he started to talk about £16 billion. Let us return to that and explain to him what his shadow Chancellor has done. I do not think that he realises. Let us take him through it. On Thursday—[HON. MEMBERS: "Answer".] I am answering the question. The right hon. Gentleman attacked me on—[Interruption.]

Madam Speaker

Order. Mr. Paterson, we shall have a little less noise.

The Prime Minister

Conservative Members will have to listen to me. They attack me for not investing enough in schools, hospitals, transport and the police. Right. We are going to be putting in investment in all these areas. The right hon. Gentleman says that we do not intend to do that. I shall read to him what the shadow Chancellor said last Thursday and explain it to him. The right hon. Member for Kensington and Chelsea (Mr. Portillo) said: Mr. Brown has set an unsustainable course for government spending. So he is opposed to that. He then said: Mr. Brown plans to raise spending by 3.3 per cent. every year while the economy is predicted to grow by just over 2 per cent. Have we got those figures? They are 3.3 and 2 per cent. The right hon. Gentleman's shadow Chancellor added that his commitment for a future Conservative Government was to make sure that overall public spending…would grow less quickly than the economy as a whole. Are Conservative Members following this? There will be a 3.3 per cent. increase with us and 2 per cent. with them. That means one third off the comprehensive spending review figures next Tuesday. Cuts of one third would be £16 billion.

Mr. Hague

Of taxes.

The Prime Minister

No, £16 billion of extra investment. The right hon. Gentleman does not understand that his shadow Chancellor has agreed to cut that figure from his spending plans. I shall tell the House what that would mean if it happened. If spending was cut by that amount, there would be no extra investment in schools, hospitals, police or transport.

When the right hon. Gentleman finally got to policy, he mentioned two points. As for class sizes, our pledge was to cut them for five, six and seven-year-olds in primary schools. We have done that. It is correct that in secondary schools there is a 0.2 of a pupil per class rise since we took office. That follows 10 years of rises under Conservative Governments. However, our pledge was first to reduce class sizes for five, six and seven-year-olds.

If the right hon. Gentleman really wants to act against crime, perhaps he will explain why last night the shadow Cabinet resiled from its promise to support us on legislation to deal with football hooligans and is not now going to back that legislation. If he is complaining about police numbers, the only way of increasing them is putting in investment. He is now pledged to cut the very investment that is necessary to do that.

As I have said, the right hon. Gentleman was fine when he was making his jokes, comments and one-liners. The trouble is that when we get back to policy, while he has been spending his time making the jokes, the shadow Chancellor has spent his time making the policy. As a result, from now until election day every Conservative Member will have to explain how he or she can cut £24 million from each constituency. They will be hounded until they do, and then the right hon. Gentleman will learn the difference between good jokes and good judgment.

Mr. Charles Kennedy (Ross, Skye and Inverness, West)

Since we have the Prime Minister to thank for this scintillating parliamentary experience for us all, does he agree that, from the briefest scan of his statement, what is linguistically interesting is that "but" appears no less than 12 times? That perhaps tells us a little about the content. Now—[Interruption.]

Madam Speaker

Order. The House must come to order—all of you!

Mr. Kennedy

The Prime Minister's opening statement was a good deal more factual than what we heard from the leader of the Tory party a few minutes ago, however. Does the Prime Minister agree that if any of us could write an annual report about ourselves, we would probably want to be reasonably self-congratulatory, but to acknowledge that things could get better—[Interruption.] After the Romsey by-election things can only get better for the Conservatives. If this is to be a meaningful exercise in future, would it not be better for the Government to produce an annual report, make an oral statement and take questions, but for the report to be based on an independent audit of what the Government of the day have done and delivered in the preceding year? As a result, would the House not take the exercise with a degree of seriousness that it frankly does not command at the moment?

The Prime Minister

The right hon. Gentleman is right to say that I stress the "buts"; I do so because they are important. What is clear is that there has been significant progress in many of the areas and towards the objectives that we have set ourselves. I am the first one to admit, however, that we have a lot more to do. What is important is that people understand that we have made significant in-roads—for example, halving long-term unemployment. That is a big gain, but thousands of people are still without jobs. It is important that people understand that in primary schools, class standards are going up and we are getting the investment into school buildings, but there is a lot more to do in our secondary schools and universities. I could take people to parts of the national health service where there are examples of excellent practice—GP surgeries and hospitals, where there are standards of excellence. However, it is also true to say that there are parts of the country where that is not the case. We need to tackle those problems. I am saying that we are setting out a vision and a direction for the Government, which is stability first, then getting people off benefit and into work, and getting the investment in our future that we need, while at the same time ensuring that we are providing that opportunity for all and responsibility from all which are the basis of a decent civic society. Yes, of course, there is a lot more that we can do, but we can be genuinely proud of what we have done in three years.

Several hon. Members


Madam Speaker

Before I call Back Benchers, may I say this? A number of Members on both sides of the House came in very late when the Prime Minister was halfway through his statement—indeed, I have a list of them all here. I regard this House as being full of honourable Members. Do me the honour of not standing to be called if you came in late. I know you came in late and you know you came in late.

Mr. Peter L. Pike (Burnley)

Does the Prime Minister accept that the publication of this annual report underlines in simple language the key message that this Government, in just over three years, have delivered a tremendous amount to the people by making this country a better and a fairer place for the majority? Is not the key message that the Government also accept that there is more to do and that there is a commitment to do more? Should we not at the same time reflect on the fact that it is only just over three years since the previous Government, now the Opposition, went out of office after 18 years of abject failure during which they destroyed many things for the majority of people?

The Prime Minister

Briefly, I mentioned three things—the new deal for the unemployed, the minimum wage, and the working families tax credit and rises in child benefit. Those are all measure that are not merely right in themselves but that help to create a greater sense of social unity rather than the social division of the Conservative years.

Mr. John Redwood (Wokingham)

We were delighted to read that the spinner was about to repent, but after that vacuous performance we know that the Government are all spin and no substance. Will the Prime Minister explain why he is ripping off the motorist at the petrol pump? Has he read in his own annual report that the Government now say that most journeys will continue to be made by road, not public transport? Will he now admit that he is not pricing the motorist off the road and that he should have voted with the Conservative Opposition against the last round of petrol tax increases?

The Prime Minister

May I first congratulate the right hon. Gentleman on his new position in the Conservative party? Nothing has made us more pleased in recent times than that. As for petrol prices, let us get one thing clear. Over the past year, I have accepted entirely our responsibility for the fuel duty rise in the first two years and have explained the reason: we needed to clear the deficit and to ensure that the economy was on a stable course. In the past year, the vast bulk of that has come through the rise in oil prices. I am still, however, waiting—even a nod of the head will do—to know whether the Conservatives are pledged to cut fuel duty or not. No. Frozen in immobility. Therefore, with the greatest of respect, I do not think that the public will take the right hon. Gentleman's criticisms very seriously.

Mr. Dale Campbell-Savours (Workington)

May I remind my right hon. Friend of the state of the nation three years after the Tories were elected in 1979? We are talking about 1982. There were 3 million people out of work, factories were closing all over Britain and there was civil disobedience and fires in our major cities. Let us not forget what happened in Toxteth. It was going on all over the country. The Tories were at 27 per cent. in the opinion polls in that year: 1982. It was the lowest reported poll of any Government since polling began.

The Prime Minister

Of course, the Conservative record was not merely the 3 million unemployed, but the way they increased poverty in our society; the way they deprived many people of opportunity; the way that they meant that investment in our public services did not come on; the boom and bust, with two recessions—the deepest recessions that this country has had—and a doubling in crime. I am afraid that it is not merely the utterly shambolic state of the Conservative party today that is the problem for the Conservatives. It is also their record. That is something of which we shall also remind the country.

Mr. Peter Brooke (Cities of London and Westminster)

Can the Prime Minister give the House a preliminary explanation of the illustration on page 24?

The Prime Minister

No, I cannot, but I will write to the right hon. Gentleman.

Mr. Paul Marsden (Shrewsbury and Atcham)

If the Leader of the Opposition would like some substance and reality behind the Government's annual report, perhaps I could provide him with some. Is my right hon. Friend aware that Royal Shrewsbury hospital is receiving £1 million-worth of new cancer care equipment, as well as a newly refurbished accident and emergency unit, both of which we were denied by the Tories?

The Prime Minister

Of course, that is absolutely right. What is fascinating is that the last thing that Conservative Members want to do is talk about policy. We had almost 10 minutes from the Leader of the Opposition and he barely mentioned a policy at all. Now they cannot even ask questions on any policy area. The moment that they are put on the spot on policy, they cannot answer a question at all, but what my hon. Friend says is absolutely right. That £1 million investment going into his hospital, but that is £1 million investment that, were the Conservative party elected, with its commitment to cut spending by £16 billion, could not go ahead.

Mr. Alex Salmond (Banff and Buchan)


Hon. Members

Oh, no.

Mr. Salmond

Labour Members should keep taking the tablets on page 24—or perhaps it is the latest Scottish opinion polls that they are worried about.

Does the Prime Minister recall the Deputy Prime Minister once telling the House that more people believed in Santa Claus than the claimant figures on unemployment? Why then is the document so complacent about unemployment figures? Is it not the case that, in Scotland, the International Labour Organisation figures, the ones that the Government used to believe in, have risen by 6,000 over the past year; that manufacturing employment is down 47,000 since the general election and now stands at its lowest level since the industrial revolution; and that the number of employees in full-time employment has declined since the last general election? Are any of those facts wrong? Why does none of them appear in the document? Do not the unemployed, instead of being offered soft soap, deserve an answer to those hard facts?

The Prime Minister

As for the point on the ILO figures, we published those figures for the very reasons that the hon. Gentleman has given. As for unemployment, we accept entirely that there are still too many people unemployed. However, we are proud of the fact that so many people are back in work. We are proud, too, that because of policies such as the new deal—which the Scottish National party did not support—we have been able to give people who have been on benefits for years and years their first ever chance of a job.

In the end, politics is a choice. The very worst thing that could happen to the Scottish people would be to end up taking the road that the hon. Gentleman wants them to go down, wrenching Scotland out of the United Kingdom, and ending up with business and industry losing thousands of jobs as a result. We accept entirely—we do in the annual report, and I do now—that we have to do much more on jobs. However, certainly, it is this Government who are doing that, and it is the hon. Gentleman's party that would put all that at risk.

Mr. David Winnick (Walsall, North)

Is it not a fact that far too many people in our country—millions, in fact—are disadvantaged from birth onwards because of poverty and education limitations? Does my right hon. Friend agree that it is absolutely essential for a Labour Government to continue to reverse what happened in the Tory years—the increase in inequalities and the deliberate widening of the gap between the social classes?

As for the national minimum wage—which, obviously, I would like to see increased—does my right hon. Friend recall that the Tories fought it at every possible opportunity? They made us sit up all night to debate that legislation, and they fought it as a matter of principle. Despite what they say now, we cannot trust them not to reverse it should they be re-elected to office.

The Prime Minister

Of course that is right. Conservative Members used to tell us that the moment we introduced the minimum wage, jobs would flood out of the country and there would be a massive rise in unemployment. Indeed, I think the Leader of the Opposition said that the minimum wage was the greatest job-destroying thing that any Government could possibly do. Now, in yet another somewhat humiliating policy U-turn, he has had to say that he wants the minimum wage to stay under the Conservatives. We shall examine very carefully the small print of that commitment.

My hon. Friend was right in another respect. As a result of the changes that we have made, there are 1 million fewer children in poverty at the end of this Parliament than there were when it began. That is a record of which we really can be proud.

Mr. Nicholas Winterton (Macclesfield)

May I tell the Prime Minister, with every respect, that his statement is about the Government's annual report? Although I would love the Conservative and Unionist party to be in government, it is his report with which the House should concern itself. Is it his view that depriving pension funds of £5 billion annually is a way of encouraging people to provide for their own retirement? By introducing that measure, is he not driving people ever more back on to the state and making them ever less dependent on their own savings?

The Prime Minister

No, I do not accept that. Since we came to office, stock market increases—which I think amount to 38 or 39 per cent—have substantially increased the value of those funds. We did make the change to dividend tax credits. However, we did that not only for reasons of public finance but because—from next year onwards, I think—there will be a significant flow back to companies in reduced corporation-tax receipts.

In the end, it is a matter of taking the decisions that are necessary to produce stability in the economy. When we produce that stability, we grow the economy. We have also avoided the recession that many Conservative Members predicted, and are now able to look ahead to years of steady growth. As I said, the stock market has been buoyant under this Government. Now, we are able—this is very important for pensioners and for everyone else—to get the investment into health care and the national health service that pensioners and others desperately need.

Mrs. Irene Adams (Paisley, North)

Will the Prime Minister take it from me that many figures have been bandied about today? The hon. Member for Banff and Buchan (Mr. Salmond), the leader of the Scottish National party, told us that, since the general election, Scotland has lost 47,000 manufacturing jobs. Is my right hon. Friend aware that, between 1979 and 1997, in my constituency—in just one parliamentary constituency—we lost 30,000 manufacturing jobs? Those losses were delivered by a Government whom the SNP helped to deliver to this country. Since 1997, long-term unemployment in my constituency has fallen by 53 per cent. Will the Prime Minister give my constituents a guarantee that getting people back to work will remain a top priority?

The Prime Minister

My hon. Friend is right to remind the House of the history of the SNP bringing about the previous Conservative Government. I can give her an assurance that we will certainly continue to tackle long-term unemployment. There has been a very substantial fall, but there is a lot more that we need to do.

Mr. Graham Brady (Altrincham and Sale, West)

Does the Prime Minister accept the estimate of the National Institute for Economic and Social Research that 80 per cent. of people coming off the new deal and into work would have found work without the new deal, or does he accept the Government's earlier estimate that only 60 per cent. would have found work without the new deal?

The Prime Minister

I think that I should correct the hon. Gentleman on what the national institute said. In fact, it said that 160,000 people had been helped off benefit and into work, that youth unemployment would have been double what it is today without the new deal and that, contrary to some reports, the new deal has been a success. I happen to know, and I suggest that the hon. Gentleman visits some of the young people who have been on the new deal. Those young people had absolutely no chance at all of getting a job. They were virtually unemployable. They have been given proper training and proper skills and they are in work. That is one of the reasons, as the national institute points out, why long-term youth unemployment has fallen by 70 per cent. Some of us remember the Government whom the hon. Gentleman used to support, who put up unemployment in this country, who said that it was a price worth paying and who turned their back on thousands of British citizens who deserve the chance to get on.

Mr. Dennis Skinner (Bolsover)

Is my right hon. Friend aware that he should not spend too much time worrying about what the Opposition have to say about spending surpluses because they were experts in building up very large deficits? As for the account from the front, the story is that the first Labour Government did not get a full second term because they finished up with more unemployment at the end than there was at the beginning. The second Labour Government fell foul of the same problem. The third Labour Government, in which I served, finished up with more unemployment at the end than at the beginning. There is a very high prospect that this Government will end up with around 1 million more jobs than when we started. That is good news, but it is not spread evenly around the country. We need to do more for the peripheral areas where the manufacturing base has been denuded. Finally, there are about 12 or 18 months to go before my right hon. Friend calls the next general election. This annual report shows a move in the right direction. My right hon. Friend should keep listening to the Labour and trade union movement and people like Jack Jones, the pensioners leader, and he will pull it off.

The Prime Minister

On my hon. Friend's first point about the deficit, he is absolutely right. The Conservatives doubled the national debt. Indeed, when we came to office we were paying more in interest payments on the debt than we were spending on the school system. One of the reasons why my right hon. Friend the Chancellor has been able to announce today that we are able to increase spending within the overall Budget figures is precisely the diminution of interest payments on the debt. That is a significant step forward. It is also significant that today the Labour party—and the Labour Government—is the party of economic competence. That is a change from many years. As for jobs, it is important that we carry on with what we are doing. My hon. Friend is right to say that we must make sure that the message on jobs and the action on jobs gets spread to every single corner of the country. Some areas have suffered big industrial change affecting mining and other traditional industries and desperately need greater help. We will make sure that they get it.

Mr. Andrew Robathan (Blaby)

The annual report says that it is intended to set out what we have done…and what needs to be…done. Let me remind the Prime Minister of one thing that he has done. He issued a new ministerial code in which he wrote: I should like to reaffirm my strong personal commitment to restoring the bond of trust between the British people and their government… I will expect all Ministers to work within the letter and the spirit of the Code. Does the right hon. Gentleman not he agree that he needs to stand by his words and enforce the code? Is not his right hon. Friend the Deputy Prime Minister clearly in breach of paragraph 113, which refers to trade unions, by accepting the tenancy of a flat worth at least £1,000 a month to him?

The Prime Minister

First, the hon. Gentleman knows that that complaint has been dismissed. However, what is interesting and significant about the Opposition today is that they are making not a squeak on schools, hospitals or any other important matter. The House hears only pathetic little smears from a party that is not just unfit for government, but increasingly unfit for opposition.

Kali Mountford (Colne Valley)

When my right hon. Friend is considering where and how to make investments such as those reported in the annual report, does he take account of the effect on the 59 million people who receive the benefits of accident and emergency departments and cancer treatments, or of computers and books in schools? The list goes on and on. Or does he take account of acts of war and of God? What is it—people or pestilence?

The Prime Minister

I assure my hon. Friend that the investment that we have announced is the investment that we will carry out.

Mr. Stephen O'Brien (Eddisbury)

By happy coincidence, it is almost exactly a year since the Conservative party won the Eddisbury by-election, with an increased majority. I have spent my year travelling around the many schools in my constituency. Why does the annual report make no mention of the collapse of morale and enthusiasm among teachers as a result of initiative overload, interference and the imposition of centralisation? Is that not yet another example of spin over substance, and of the Government's contempt for the British people?

The Prime Minister

It is quite something when the Opposition have to congratulate themselves on holding seats that they managed to hold by a small margin. As for schools, nothing would harm teachers' morale more than cutting back on the extra investment that we are putting in. Does the hon. Gentleman mean to say that schools in his constituency did not welcome the extra money that they got in the Budget? I bet they did welcome it. As a result of the commitments made by the shadow Chancellor, schools know that that investment would go if a Conservative Government were elected. The hon. Gentleman is saying that the additional investment that we are making—in schools, hospitals, transport and the police—is unsustainable. [Interruption.] They have just shouted out, "Not deliverable." There it is: it is not deliverable by them, but it is deliverable by us.

Mr. Michael Clapham (Barnsley, West and Penistone)

My right hon. Friend will be aware that, when this Government came to power, there were 13.4 million people living in poverty, including 4 million children. Does he agree that those figures show the previous Conservative Government's total indifference to the neediest families in the country?

The Prime Minister

The figures do show that. Poverty and social division grew and, as a result, so did welfare spending. The previous Conservative Government increased welfare spending by an average of 4 per cent. in real terms, year on year on year. In fact, they increased welfare spending more than they increased spending on schools and hospitals. Because this Government are cutting unemployment, we are getting benefit payments down. If the extra money that we have deliberately made available for pensioners and child benefit is taken out, it is clear that welfare bills are falling. What the Tories did was not just unfair, it was inefficient and went against the basic requirement of a modern economy—that we use and develop the talents of all our people, and not just of the few.

Mr. David Heath (Somerton and Frome)

I thought page 24 was some sort of opinion poll. Is there anything in this annual report for rural areas? It seems to me that there is not. Three and a half years into this Government, many rural areas are still saddled with a Conservative distribution formula that causes our schools and schoolchildren to lose out. When is something going to be done about that, and when will we have an annual report that says that resources are fairly distributed across the whole country?

The Prime Minister

Of course, there are things in the report for rural areas, noticeably the increased investment in transport. I was talking yesterday about the issue of rural post offices and how important that is as well. Rural areas, too, benefit from a strong economy. But I understand that we need to do more in areas such as the one that the hon. Gentleman represents. In particular, we need to do more investing in the essential infrastructure of the country. I believe that we now have the resources, through economic stability, the fall in debt repayments and the fall in unemployment benefit claimants, to put that investment in.

Several hon. Members


Madam Speaker

Order. We shall now move on.